<PAGE>
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
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NYNEX Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
PROXY STATEMENT
Notice of Annual Meeting of Share Owners
The 1995 Annual Meeting of Share Owners of NYNEX Corporation ("NYNEX") will be
held at the Westchester County Center, Tarrytown Road, White Plains, New York,
on Wednesday, May 3, 1995 at 10:30 A.M., for the following purposes:
. To elect four Directors;
. To ratify the appointment of auditors to audit NYNEX's consolidated
financial statements for the fiscal year 1995;
. To approve amendments to the NYNEX Stock Option Plans;
. To approve the NYNEX Executive Officer Short Term Incentive Plan; and
. To act upon such other matters, including four Share Owner proposals
regarding the classified Board of Directors, charitable contributions, number
of Director nominees, and non-employee Director pensions, as may properly come
before the Meeting.
Holders of record of shares of Common Stock of NYNEX at the close of
business on Monday, March 6, 1995 will be entitled to vote at the Meeting
and any adjournment thereof.
/s/ R. F. Burke
R. F. Burke
Executive Vice President and Secretary
March 20, 1995
YOUR VOTE IS IMPORTANT
- ----------------------
Whether or not you intend to be present at the Meeting, please sign and date
the enclosed proxy and return it in the enclosed prepaid envelope.
NYNEX
NYNEX Corporation
1095 Avenue of the Americas
New York, New York 10036
<PAGE>
Table of Contents
PROXY STATEMENT
Voting of Shares 1
Stock Ownership of Directors and Executive Officers 2
Board of Directors 2
Election of Directors (Item A on Proxy Card) 3
Ratification of Appointment of Auditors
(Item B on Proxy Card) 6
Board of Directors' Proposal to Approve Amendments to
the NYNEX Stock Option Plans (Item C on Proxy Card) 6
Board of Directors' Proposal to Approve the
NYNEX Executive Officer Short Term Incentive Plan 8
(Item D on Proxy Card)
Share Owners' Proposals: (Items 1-4 on Proxy Card)
#1 Repeal of Board Classification 9
#2 Charitable Contributions Listing 10
#3 Increase Number of Director Nominees 11
#4 Repeal Non-Employee Director Pension Plan 12
Other Matters to Come Before the Meeting 13
Submission of Director Nominations, Proposals or
Other Business at Share Owner Meetings 13
Executive Compensation:
Committee on Benefits Report on Executive Compensation 14
Summary Compensation Table/1994 Option Exercises 17
1994 Option Grants/1994 Long Term Awards 18
Pension Table 19
Executive Retention Agreements and
Executive Severance Pay Plan 19
Share Owner Return Performance Graph 20
Other Information 20
<PAGE>
NYNEX PROXY STATEMENT 1
PROXY STATEMENT
This proxy statement and the accompanying proxy voting instruction card ("proxy
card") are being mailed, beginning March 20, 1995, to owners of shares of Common
Stock ("Shares") of NYNEX Corporation ("NYNEX") in connection with the
solicitation of proxies by the Board of Directors for the 1995 Annual Meeting of
Share Owners ("Meeting") in White Plains, New York. This proxy procedure is
necessary because many of NYNEX's Share Owners, who live throughout the United
States and in many foreign countries, will not be able to attend the Meeting.
Proxies are solicited to give all Share Owners an opportunity to vote. Shares
can be voted at the Meeting only if the Share Owner is represented by proxy or
is present in person (see "Voting of Shares" below).
If you plan to attend the meeting, please mark the appropriate box on the proxy
card and detach and retain the accompanying admission ticket. Beneficial owners
can obtain admission at the door by presenting a legal proxy or other proof of
ownership, such as a bank or broker account statement, the day of the meeting.
No Share Owner will be permitted into the meeting without a ticket or proper
identification.
Your vote is important. Any proxies or ballots received subsequent to the
adjournment of the Meeting will not be included in the vote tabulation.
Accordingly, whether or not you plan to attend the Meeting, you are urged to
execute and return the accompanying proxy card as soon as possible. If you do
attend, you may vote by ballot at the Meeting, thereby canceling any proxy vote
previously given.
Share Owners who are receiving more than one Annual Report may discontinue
mailing of the duplicate copies by marking the appropriate box on the proxy card
of the selected accounts. This will help reduce the expense of printing and
mailing duplicate materials but will not affect the mailing of dividend checks,
dividend reinvestment statements, special notices and proxy materials.
VOTING OF SHARES
The holders of a majority of the outstanding Shares entitled to vote, present in
person or represented by proxy, will constitute a quorum for the transaction of
business. Each Share represented is entitled to one vote on all matters properly
brought before the Meeting. Where a quorum is present, the vote of the holders
of a majority of Shares present in person or by proxy and entitled to vote will
decide any question voted upon, and the four nominees for Director receiving the
highest number of votes will be elected as Directors. For purposes of
determining whether a proposal has received a majority vote, abstentions will be
included in the vote totals with the result that an abstention has the same
effect as a negative vote. In instances where brokers are prohibited from
exercising discretionary authority for beneficial owners who have not returned a
proxy (so-called "broker non-votes"), those Shares will not be included in the
vote totals and, therefore, will have no effect on the vote.
When proxies are returned properly executed, the Shares represented will be
voted by the Proxy Committee of the Board of Directors in accordance with Share
Owners' directions. You are urged to specify your choices by marking the
appropriate boxes on the enclosed proxy card. If the proxy is executed and
returned without specifying choices, the Shares will be voted by the Proxy
Committee as recommended by the Board of Directors. A Share Owner giving a proxy
has the power to revoke it at any time before it is voted at the Meeting by
submitting a written revocation to NYNEX or by attending the Meeting and voting
by ballot at the Meeting.
A Share Owner wishing to give a proxy to someone other than the Proxy Committee
should cross out all three committee members' names appearing on the enclosed
proxy card and insert the name(s) of another person or persons (not more than
three). In addition, the "Vote Limitations" box should be marked. The executed
proxy must be returned as indicated or presented at the Meeting by the Share
Owner or the person(s) representing the Share Owner.
For a Share Owner who is a participant in the NYNEX Corporation Dividend
Reinvestment and Stock Purchase Plan, the proxy card represents the number of
full Shares in the participant's dividend reinvestment plan account as well as
Shares registered in the participant's name. For a Share Owner who is a
participant in the NYNEX Corporation Savings Plan for Salaried Employees or the
NYNEX Corporation Savings and Security Plan (Non-Salaried Employees), the proxy
will serve as a voting instruction for the trustees of those Plans. If proxies
representing Shares in the NYNEX Corporation Savings Plan for Salaried Employees
or the NYNEX Corporation Savings and Security Plan (Non-Salaried Employees) are
not executed and returned, those Shares will be voted by the trustees in the
same proportion as the Shares for which executed proxies are returned by other
participants.
In accordance with NYNEX's Policy on Confidential Voting, proxies, ballots and
voting tabulations are available for examination only by the independent
Inspector(s) of Election and tabulators. The vote of any Share Owner cannot be
disclosed to the Board of Directors or management of NYNEX except as may be
required by law and in other limited circumstances.
On January 31, 1995, there were 424,151,061 Shares outstanding and, to the
knowledge of NYNEX, no person owned beneficially more than 5% of the outstanding
Shares. Share holdings of NYNEX Directors and Executive Officers can be found on
page 2 of this proxy statement.
A list of Share Owners eligible to vote will be available for examination by
Share Owners for any purpose germane to the Meeting at 1113 Westchester Avenue,
White Plains, New York, from April 19 through May 2, 1995, and at the
Westchester County Center on the day of the Meeting.
<PAGE>
2 NYNEX PROXY STATEMENT
STOCK OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth beneficial ownership of Shares of NYNEX Common
Stock by each Director, named Executive Officer, and all Directors and Executive
Officers as a group, as of January 31, 1995. These Shares represent less than
one percent of the outstanding shares of NYNEX Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership
------------------------------------
Shares Subject
Total Number to Options*
of Shares (included in Total)
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<S> <C> <C>
John Brademas 700 0
Randolph W. Bromery 920 0
Raymond F. Burke 102,720(1) 75,216
Richard L. Carrion (2) 0 0
John J. Creedon 3,406(3) 0
William C. Ferguson 373,460(1) 278,836
Stanley P. Goldstein 2,400 0
Helene L. Kaplan 2,400 0
Elizabeth T. Kennan 1,175 0
Edward E. Phillips 1,653 0
Donald J. Sacco 49,018(1) 33,128
Frederic V. Salerno 164,694(1) 122,224
Ivan G. Seidenberg 142,190(1) 107,858
Walter V. Shipley 2,400 0
John R. Stafford 2,100 0
All Executive Officers
and Directors (as a group) 1,381,089(1) 1,008,307
========================================================================
</TABLE>
* Shares subject to acquisition through exercise of stock options within 60
days.
(1) Includes Shares held in the NYNEX Corporation Savings Plan for Salaried
Employees.
(2) Elected to the Board of Directors effective February 16, 1995.
(3) Includes 1,700 NYNEX Shares held by a non-profit foundation with respect
to which Mr. Creedon shares voting and investment power and as to which
Mr. Creedon disclaims beneficial ownership.
NYNEX has instituted stock ownership guidelines for all Executive Officers.
These guidelines require ownership (subject to certain transition requirements)
of NYNEX stock equal to three times annual salary for the Chief Executive
Officer; two times annual salary for a Vice Chairman and those Executive
Officers reporting directly to the Chief Executive Officer; and one times annual
salary for all other Executive Officers.
BOARD OF DIRECTORS
The Board of Directors is responsible for the overall affairs of NYNEX, although
it is not involved in day-to-day operating details. Directors are kept informed
of NYNEX's business by various reports and documents given to them regularly, as
well as by operating and financial reports presented by the Chairman of the
Board and other Officers at meetings of the Board of Directors and committees of
the Board.
Regular meetings of the Board of Directors are held each month, excluding
August, and special meetings are called when required. The Board of Directors
held eighteen meetings in 1994. On average, the Directors attended approximately
96% of the aggregate number of meetings of the Board of Directors and committees
of the Board; no Director attended fewer than 75% of such meetings.
The Board of Directors has adopted a tenure policy for Directors which
establishes 70 as the retirement age for non-employee Directors, as well as for
any Director who was the Corporation's Chief Executive Officer. A Director who
reaches retirement age shall retire from the Board not later than the next
Annual Meeting, regardless of any unexpired term of office. The policy also
provides that a non-employee Director who discontinues his or her principal
employment, business or professional relationship, or continues in a less
responsible capacity, shall offer to submit his or her resignation, but may, at
the request of the Chairman of the Board, following consultation with the
Nominating and Board Affairs Committee, continue as a Director. A Director who
is an Officer of the Corporation (other than the Chief Executive Officer) shall
resign at the same time as he or she ceases to be an Officer.
Committees Of The Board
The Board of Directors has established six standing committees: an Executive
Committee, Audit Committee, Committee on Benefits, Nominating and Board Affairs
Committee, Finance Committee and Public Responsibility Committee.
The Executive Committee, composed of one employee Director and four non-employee
Directors, has responsibility for activities in those areas not assigned to
other committees of the Board of Directors and may exercise the full power and
authority of the Board of Directors to the extent permitted by Delaware law. The
Executive Committee held no meetings in 1994.
The Audit Committee, composed of four non-employee Directors, is responsible for
recommending to the Board of Directors the accounting firm to be employed by
NYNEX as its independent auditors. The Audit Committee's duties include
consulting with NYNEX's independent auditors concerning the scope of the audit
and reviewing the results of their examination. The Audit Committee also
consults with the independent auditors with regard to the adequacy of internal
controls and meets with appropriate corporate personnel to review internal
auditing programs and findings. In 1994, the Audit Committee held six meetings.
The Committee on Benefits, composed of four non-employee Directors, is
responsible for reviewing and approving for presentation to the Board of
Directors compensation for Officers who are members of the senior management
compensation group ("Senior Managers"), administering the NYNEX management
incentive plans, keeping informed as to the administration and management of
NYNEX's employee benefit plans, and insuring that the actions of Officers and
benefit plan administrators are in the best interest of the participants in, and
beneficiaries of, such benefit plans. The Committee on Benefits also approves or
disapproves the presentation of proposed new trusteed employee benefit plans and
material changes to such benefit plans to the Board of Directors and, further,
recommends to the Board of Directors new benefit plans and programs, and
amendments thereto, which exclusively benefit
<PAGE>
NYNEX PROXY STATEMENT 3
Senior Managers. No member of the Committee on Benefits is eligible to receive
benefits under any of such benefit plans. The Committee on Benefits met on five
occasions in 1994.
The Nominating and Board Affairs Committee, composed of three non-employee
Directors, makes recommendations to the Board of Directors concerning the
selection of candidates as nominees for election as Directors and advises on all
directorship practices. In recommending candidates for the Board of Directors,
the committee seeks individuals who have the experience and expertise which will
allow them to contribute significantly to NYNEX's success. The committee's goal
is to create a Board that is diverse and balanced in its membership, consistent
with NYNEX's equal employment opportunity policy. NYNEX Directors must have
integrity and independence and be willing to represent all Share Owners rather
than a special interest or constituency. Directors must also be willing to
commit the necessary time and energy to prepare for, attend and participate in
Board and Committee meetings. The Nominating and Board Affairs Committee held
three meetings in 1994. Share Owners who wish to suggest qualified candidates
should write to the Secretary of NYNEX Corporation at 1095 Avenue of the
Americas, New York, New York 10036, stating in detail the qualifications of such
persons for consideration by the committee.
COMPENSATION OF DIRECTORS
Directors who are not employees receive an annual retainer of $25,000 and a fee
of $1,200 for each Board of Directors' and committee meeting attended. Non-
employee Directors who serve as chairpersons of the committees of the Board of
Directors receive an additional annual retainer of $3,000. Non-employee
Directors may elect to defer the receipt of all or a part of their fees and
retainers. Amounts so deferred earn interest, compounded quarterly, at a rate
equal to the average interest rate for ten-year United States Treasury notes for
the previous quarter.
Under the NYNEX Stock Plan for Non-Employee Directors, each non-employee
Director is granted 100 shares of NYNEX Common Stock on an annual basis. Non-
employee Directors elected by the Board of Directors to fill vacancies and newly
created directorships in the interim between Annual Meetings receive a prorated
grant based upon the number of full or partial months such Director will serve
between his or her election and the next Annual Meeting. A committee of the
Board, consisting of not more than three Directors who are not eligible to
receive grants, administer and interpret the plan.
Non-employee Directors are entitled to reimbursement for out-of-pocket expenses
incurred in connection with attendance at Board of Directors and committee
meetings. In addition, NYNEX provides non-employee Directors with travel
accident insurance when on NYNEX business. The total cost of the travel accident
insurance policy for 1994 was approximately $1,900.
Under the NYNEX Non-Employee Director Pension Plan, each non-employee Director
who serves on the Board of NYNEX, or any of its subsidiaries, and retires from
the NYNEX Board with a minimum of five years' combined service on such Boards as
a non-employee Director qualifies for a yearly pension equal to 50% of the
Director's annual retainer fee (excluding the retainer received for chairing a
committee of the Board). Pension payments increase by 10% of the annual retainer
fee for each additional year served up to 100% of such fee. The pension is
adjusted to reflect the first subsequent increase, if any, in the annual
retainer for service on the Board following the Director's retirement. Such
pension is payable to a qualified Director upon (i) retirement from the NYNEX
Board and (ii) the attainment of age 65.
Directors are eligible to participate in the Directors' Charitable Award
Program, which is designed to acknowledge the service of Directors and to
recognize the mutual interest of NYNEX and its Directors in supporting worthy
educational and charitable institutions. Under the program, NYNEX will
contribute up to $1 million to tax-exempt organization(s) designated by a
Director, payable over a ten-year period, on behalf of a participating Director
who retires or attains age 65 (whichever occurs later) after five years of
service on the Board of NYNEX, or dies or becomes disabled while serving as a
Director. All charitable deductions accrue to NYNEX and the individual Directors
derive no financial benefit from the program. NYNEX has purchased life insurance
on the Directors, naming NYNEX as beneficiary, which is expected to recover the
costs of contributions and the premium payments.
Directors who are also employees of NYNEX or one of its subsidiaries receive no
remuneration for serving as Directors.
ELECTION OF DIRECTORS
(Item A on Proxy Card)
The Board of Directors presently consists of thirteen members, divided into
three classes, with the terms of each class staggered so that the term of one
class expires at each Annual Meeting of Share Owners. On May 3, 1995, Mr. John
J. Creedon, a Director since 1983, will retire in accordance with the previously
described tenure policy and it is anticipated that the Board of Directors will
be reduced on that occurrence to twelve members.
The terms of Directors in one class, consisting of four Directors, expire at the
1995 Annual Meeting. Unless otherwise instructed on the proxy card, the Proxy
Committee intends to vote for the election of the four nominees to three-year
terms expiring at the 1998 Annual Meeting, in each case subject to the tenure
policy described on page 2. These nominees have been selected by the Board on
the recommendation of the Nominating and Board Affairs Committee. If any nominee
becomes unable or unwilling to serve at the time of the Meeting, the Shares
represented by proxy will be voted for the remaining nominees and for any
substitute nominee(s) designated by the Board. The Board of Directors does not
anticipate that any nominee will be unavailable to serve.
The following sets forth information regarding principal occupation, other major
affiliations, NYNEX committee memberships and age, for the four nominees and
each Director continuing in office.
<PAGE>
4 NYNEX PROXY STATEMENT
NOMINEES FOR ELECTION AT THIS MEETING
Class II--To terms expiring at 1998 Annual Meeting
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Photograph of Richard L. Carrion, Chairman of the Board and Chief
Richard L. Carrion Executive Officer of BanPonce Corporation (bank holding
company) since 1990; President and Chief Executive
Officer of Banco Popular de Puerto Rico (1986-1990).
Director of Pueblo International, Inc. Director of NYNEX
since February 16, 1995. Age 42.
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Photograph of Stanley P. Goldstein, Chairman of the Board and Chief
Stanley P. Executive Officer of Melville Corporation since 1987;
Goldstein President (1985-1993). Director of NYNEX since 1990; member
of Audit Committee and Finance Committee. Age 60.
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Photograph of Edward E. Phillips, Retired Chairman of the Board of New
Edward P. England Mutual Life Insurance Company (1978-July 1993);
Phillips Chief Executive Officer (1978-1991). Director of New England
Mutual Life Insurance Company and New England Investment
Companies. Director of NYNEX since 1983; member of Executive
Committee, Finance Committee and Chairperson of Nominating
and Board Affairs Committee. Age 67.
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Photograph of Walter V. Shipley, Chairman of the Board and Chief Executive
Walter V. Shipley Officer of Chemical Banking Corporation since 1994;
President (1992-1993); Chairman of the Board and Chief
Executive Officer (1983-1991). Director of Champion
International Corporation and The Reader's Digest
Association, Inc. Director of NYNEX since 1983; member of
Executive Committee, Nominating and Board Affairs Committee
and Chairperson of Finance Committee. Age 59.
INCUMBENT MEMBERS OF BOARD OF DIRECTORS
Class III--Terms expiring at 1996 Annual Meeting
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Photograph of Randolph W. Bromery, President, Springfield College since
Randolph W. 1992. Commonwealth Professor Emeritus, University of
Bromery Massachusetts-Amherst; Commonwealth Professor of Geophysics
(1979-1992). President of Geoscience Engineering Corporation
since 1983. Chancellor, Massachusetts Board of Regents of
Higher Education (1990-1991). Interim President, Westfield
State College (1988-1990). Director of Exxon Corporation,
John Hancock Mutual Life Insurance Company and Chemical
Banking Corporation. Director of NYNEX since 1986; member of
Executive Committee, Audit Committee and Committee on
Benefits. Age 69.
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Photograph of Helene L. Kaplan, Of Counsel to the firm of Skadden, Arps,
Helene L. Kaplan Slate, Meagher & Flom since 1990. Counsel to the firm of
Webster & Sheffield (1986-1990). Director of The May
Department Stores Company, Chemical Banking Corporation,
Metropolitan Life Insurance Company and Mobil Corporation.
Director of NYNEX since 1990; member of Committee on
Benefits and Public Responsibility Committee. Age 61.
<PAGE>
NYNEX PROXY STATEMENT 5
Photograph of Ivan G. Seidenberg, President and Chief Executive Officer of
Ivan G. NYNEX since January 1, 1995, Vice Chairman since 1991; Chief
Seidenberg Operating Officer of NYNEX (March - December 1994);
Executive Vice President and President of NYNEX Worldwide
Information and Cellular Services Group (1990-1991); Senior
Vice President (1988-1990); Vice President (1986-1988).
Director of AlliedSignal Inc., Melville Corporation and
Scholastic, Inc. Director of NYNEX since 1991; member of
Public Responsibility Committee. Age 48.
Class I--Terms expiring at 1997 Annual Meeting
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Photograph of John Brademas, President Emeritus, New York University since
John Brademas 1992; President (1981-1992). Director of Loews Corporation,
Texaco Inc. and Scholastic, Inc. Director of NYNEX since
1991; member of Audit Committee and Public Responsibility
Committee. Age 68.
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Photograph of William C. Ferguson, Chairman of the Board of NYNEX since
William C. October 1989; Chief Executive Officer (June 1989-December
Ferguson 1994); President (June-September 1989); Vice Chairman of the
Board (1987-1989). Director of General Re Corporation, CPC
International Inc. and Viacom Inc. Director of NYNEX since
1987; Chairperson of Executive Committee. Age 64.
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Photograph of Elizabeth T. Kennan, President of Mount Holyoke College
Elizabeth T. since 1978. Director of Northeast Utilities, Kentucky Home
Kennan Mutual Life Insurance Company, Kentucky Home Life Insurance
Company, Putnam Funds, Inc. and Talbots Inc. Director of
NYNEX since 1984; member of Nominating and Board Affairs
Committee and Chairperson of Audit Committee. Age 57.
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Photograph of Frederic V. Salerno, Vice Chairman of the Board-Finance and
Frederic V. Business Development of NYNEX since March 1, 1994; President
Salerno of NYNEX Worldwide Services Group, Inc. (1991-March 1994);
President and Chief Executive Officer of New York Telephone
Company (1987-1991). Director of Avnet Inc., Orange and
Rockland Utilities, Inc., The Bear Stearns Companies Inc.
and Viacom Inc. Director of NYNEX since 1991; member of
Finance Committee. Age 51.
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Photograph of John R. Stafford, Chairman of the Board, President and Chief
John R. Stafford Executive Officer of American Home Products Corporation
since 1986; President (1981-1990; 1994-present). Director of
AlliedSignal Inc., Chemical Banking Corporation and
Metropolitan Life Insurance Company. Director of NYNEX since
1989; member of Finance Committee and Chairperson of
Committee on Benefits. Age 57.
<PAGE>
6 NYNEX PROXY STATEMENT
RATIFICATION OF APPOINTMENT OF AUDITORS
(Item B on Proxy Card)
Subject to Share Owner ratification, the Board of Directors, upon recommendation
of the Audit Committee, has reappointed the firm of Coopers & Lybrand L.L.P.
("Coopers & Lybrand"), Certified Public Accountants, as independent auditors to
audit the consolidated financial statements of NYNEX for the fiscal year 1995.
Coopers & Lybrand has audited NYNEX's financial statements since NYNEX's
incorporation in 1983.
One or more representatives of Coopers & Lybrand are expected to be present at
the Meeting. They will have the opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
If Share Owners do not ratify the appointment of Coopers & Lybrand, other
certified public accountants will be considered by the Board of Directors upon
recommendation of the Audit Committee.
Your Board of Directors recommends a vote FOR ratification.
DIRECTORS' PROPOSAL TO APPROVE AMENDMENTS TO THE NYNEX STOCK OPTION PLANS
(Item C on Proxy Card)
Your Board of Directors recommends approval of certain amendments to the NYNEX
1995 Stock Option Plan (the "1995 Stock Option Plan") and an amendment to the
1990 Stock Option Plan (the "1990 Stock Option Plan").
The 1990 Stock Option Plan was the predecessor plan to the 1995 Stock Option
Plan. The provisions of the 1990 Stock Option Plan, as amended, are similar in
all material respects to the provisions of the 1995 Stock Option Plan, as
amended, except that under the 1990 Stock Option Plan, stock options could not
be granted after December 31, 1994. There are 258 participants remaining in the
1990 Stock Option Plan.
Effective as of January 1, 1995, the Board of Directors clarified and amended
the 1995 Stock Option Plan, subject to Share Owner approval. The changes
encompassed an amendment to increase the total number of shares of Common Stock
("Shares") which may be issued under the Stock Option Plan in light of the
intention of discontinuing future grants under the NYNEX Senior Management Long
Term Incentive Plan (the "Long Term Plan"), clarification of the provision
relating to the exercise period following retirement and disability, an
amendment to give the Chief Executive Officer of NYNEX the discretion to provide
for a post-termination exercise period following cessation of employment other
than by reason of retirement, disability, death or certain transfers, and a
change in the maximum number of stock options that may be granted in any one
year to proxy-named Executive Officers of NYNEX in order to comply with Section
162(m) of the Internal Revenue Code of 1986, as amended ("Code"). Effective as
of January 1, 1995, the Board also amended the 1990 Stock Option Plan similarly
to the 1995 Stock Option Plan, subject to Share Owner approval, to give the
Chief Executive Officer of NYNEX the discretion to provide for a post-
termination exercise period in certain circumstances.
In May 1994, NYNEX Share Owners approved the NYNEX 1995 Long Term Incentive
Program (the "Incentive Program"), which includes but is not limited to the 1995
Stock Option Plan as well as the NYNEX Long Term Incentive Plan and the NYNEX
1987 Restricted Stock Award Plan. The purpose of the Incentive Program is to
promote the long term financial interest of NYNEX by attracting, motivating and
retaining individuals possessing outstanding ability and furthering the identity
of interests of participating employees with those of the Share Owners. These
individuals are the ones who are charged with the future success and prosperity
of NYNEX and enhancing the value of NYNEX for the benefit of all Share Owners.
The Incentive Program is administered and interpreted by the Committee on
Benefits ("Committee"), which is composed of not less than two Directors, all of
whom are "disinterested persons" within the meaning of the Securities Exchange
Act of 1934 ("Exchange Act"). The Committee designates the Senior Managers and
other management employees of NYNEX and its subsidiaries who will be the
participants ("Participants") in the Incentive Program. Awards under the
Incentive Program may include stock options ("Options"), Stock Appreciation
Rights ("SARs") and other amounts that are valued in whole or in part by
reference to Shares. Continued participation in the Incentive Program is subject
to forfeiture in the event a Participant's employment with NYNEX is terminated.
The Committee has the power to rescind all rights to payments of any kind under
the Incentive Program, exclusive of amounts voluntarily deferred, to those
Participants summarily dismissed for actions of a deliberate and detrimental
nature to NYNEX.
Under the 1995 Stock Option Plan, the Committee has full power to grant Options
subject to the provisions of the plan and, in its discretion, determines the
number of Shares subject to any such Options, the dates after which Options may
be exercised, in whole or in part, and the terms and conditions of the Options
(including whether SARs shall be provided with respect to an Option). Options
may be granted under the 1995 Stock Option Plan, either as Incentive Stock
Options ("ISOs") which comply with the requirements of Section 422 of the Code,
or any successor provision, or Options which do not meet such requirements
("Nonstatutory Options"), or a combination of both. The purchase or option price
per Share, as determined by the Committee, shall not be less than the fair
market value of the Share on the date of the grant of the Option. The fair
market value for this purpose is the mean of the high and low sales prices of
the Common Stock as quoted on the New York Stock Exchange Composite Transaction
Listing for the date as of which value is to be determined.
<PAGE>
NYNEX PROXY STATEMENT 7
The 1995 Stock Option Plan, as amended, provides that the total number of Shares
for which Options may be issued may not exceed 20,000,000, subject to adjustment
as set forth in the 1995 Stock Option Plan. Shares delivered under the 1995
Stock Option Plan are authorized and unissued shares, or treasury shares.
Options which terminate by expiration, cancellation, forfeiture, surrender or
otherwise without the issuance of Shares are available for future grants under
the 1995 Stock Option Plan.
Currently, there are 177 Participants in the 1995 Stock Option Plan. The 1995
Stock Option Plan, as amended, limits the maximum number of Shares for which
Options may be granted in any one year (a) to the Chief Executive Officer of
NYNEX and (b) to each of the other Executive Officers required to be named in
NYNEX's proxy statement with respect to the preceding year, pursuant to the
proxy rules promulgated under the Exchange Act, to 250,000.
Except as described below, no Option shall be exercisable prior to the first
anniversary of the date the Option is granted nor may an ISO be exercised later
than the tenth anniversary of the date of its grant. In accordance with the
amendments to the 1995 Stock Option Plan and the 1990 Stock Option Plan, each
Option held by a participant who ceases to be employed by a participating NYNEX
company other than by reason of retirement, disability, death or transfer to
Bell Communications Research, Inc. terminates on the date of cessation of
employment, unless the Chief Executive Officer of NYNEX shall determine, in his
or her sole discretion at the time of such cessation, to provide for an exercise
period ending not later than the fifth anniversary of the cessation of
employment. If a participant ceases to be employed by a participating NYNEX
company by reason of retirement or disability, each Option held by such
Participant shall be exercisable until the later of (i) the fifth anniversary of
the cessation of employment or (ii) the fifth anniversary of such Participant's
death if death occurs within five years after cessation of employment, but in no
event after its expiration date. The aggregate fair market value (determined as
of the date the Option is granted) of the Shares for which any Participant may
first exercise ISOs granted under the Stock Option Plan and all other stock
option plans of NYNEX and/or its subsidiaries, in any calendar year, shall not
exceed $100,000 or such other amounts or limitations as may be provided from
time to time by the Code and any other regulations promulgated thereunder.
In instances where Shares have been surrendered in full or partial payment of an
exercise, a new grant of Nonstatutory Options may be made concurrently, with the
number of Options granted equal to the number of Shares surrendered. A grant
made under these circumstances will be exercisable after six months, have an
Option price equal to the fair market value of the Common Stock on the date of
the new grant and have the same expiration date as a Nonstatutory Option.
SARs may be granted to Participants but only in conjunction with Options. An
Option or portion thereof may be exercised through election of a SAR only if
such Option or portion thereof has been designated as exercisable in this
alternative manner, such Option or portion thereof is otherwise exercisable and
the fair market value of a share of the Common Stock on the date of exercise
exceeds the option price. Upon exercise of a SAR, a Participant will receive an
amount in cash or Shares equal in value to the excess of the fair market value
of the Common Stock on the date of exercise over the fair market value on the
date of grant, multiplied by the number of Shares as to which the SAR is
exercised.
In the event of a change in control of NYNEX, as defined below, the Incentive
Program generally provides for the acceleration of applicable exercise dates and
vesting periods for the Options and other awards granted to Participants under
the Incentive Program. This is done so as to maintain the rights of the
Participants. Thus, outstanding Options and SARs would become immediately
exercisable. A change of control would occur if any person or group of persons
becomes an owner of at least 15% of the NYNEX voting stock, any person or group
of persons acquires at least 15% of the total voting power of NYNEX stock as a
result of a tender offer not approved by the NYNEX Board of Directors, or during
any period of 24 consecutive months members of the Board of Directors at the
beginning of such period, together with new Directors nominated or appointed
during that period by a vote of at least two-thirds of existing Directors, cease
to comprise a majority of the Board of Directors.
Effective January 1, 1994, Section 162(m) of the Code generally denies a tax
deduction to any publicly-held corporation for compensation that exceeds $1
million paid to any proxy-named executive in a taxable year, subject to an
exception for "performance-based compensation" as defined in the Code. Options
granted under the 1995 Stock Option Plan and the 1990 Stock Option Plan should
qualify for the exception as "performance-based compensation."
NYNEX believes that under current federal tax laws, the grant of Options and/or
SARs, will not result in any tax liability for NYNEX. NYNEX will be entitled to
subsequent deductions to the extent, and only to the extent, that participants
recognize ordinary income upon exercise of Options or SARs. A Participant must
generally recognize ordinary income (i) equal to the difference between the
exercise price and the fair market value of a Share on the date of exercise of a
Nonstatutory Option or SAR and (ii) equal to the cash received pursuant to a
dividend equivalent payment at the time of such receipt. A Participant will
generally have no taxable income upon exercising an ISO. If the Participant does
not dispose of Shares acquired pursuant to the exercise of an ISO within two
years of the grant or one year of the exercise, any gain or loss realized on
their subsequent disposition will be capital gain or loss. If such holding
period requirements are not satisfied, the Participant will generally realize
ordinary income at the time of disposition in an amount equal to the excess of
the fair market value of the Shares on the date of exercise (or if less, the
amount realized upon disposition) over the option price. Any
<PAGE>
8 NYNEX PROXY STATEMENT
remaining gain is taxed as long- or short term capital gain. Any payment, or
acceleration of the payment, of awards under the Incentive Program because of a
change in control may cause part or all of the amount paid, to be treated as an
"excess parachute payment" under the Code which would not be deductible by NYNEX
and would subject the employee to a 20% excise tax. Special tax rules and
elections apply under certain circumstances which may affect the timing and the
measurement of income recognized in connection with awards under the Incentive
Program, particularly in the case of Officers subject to Section 16(b) of the
Exchange Act, and which may affect the calculation of an employee's alternative
minimum tax.
The Board of Directors may amend, suspend or terminate the Incentive Program,
including the 1995 Stock Option Plan, or any portion thereof at any time. The
Committee may amend the Incentive Program to the extent necessary for the
efficient administration of the Incentive Program, to make it practically
workable or to conform to the provisions of any federal or state law or
regulation. No award can be made under the Incentive Program after December 31,
1999. The Committee may amend the terms of any outstanding award, including an
Option, in any manner not inconsistent with the terms of the Incentive Program.
In no event may any amendment, suspension or termination of the Incentive
Program or any amendment of the terms of any award impair the rights of any
Participant without his or her consent, except that if the Participant, while
otherwise eligible for payment or accrual of a benefit under the Incentive
Program: (a) has, without the consent of NYNEX or any subsidiary, become
associated with, is employed by, renders services to, or owns a substantial
interest in any business that is competitive with NYNEX or its subsidiaries; or
(b) has divulged or appropriated to his or her own use or to the use of others
any secret or confidential information or knowledge pertaining to the business
of NYNEX or its subsidiaries obtained by the Participant while employed by any
of them, then his or her participation in the Incentive Program shall
immediately cease and all undistributed awards previously made to him or her
under the Incentive Program and all rights to payments of any kind under the
Incentive Program, exclusive of any amount voluntarily deferred, shall be
immediately forfeited.
The foregoing descriptions of the Incentive Program, the 1995 Stock Option Plan
and the 1990 Stock Option Plan are qualified in their entirety by reference to
the text of such plans, copies of which have been filed with the Securities and
Exchange Commission ("SEC").
The amendments to the 1995 Stock Option Plan and the 1990 Stock Option Plan were
adopted by the Board of Directors, effective January 1, 1995, subject to the
approval of the Share Owners. Such approval requires the affirmative vote of the
holders of a majority of the Shares present, in person or by proxy, and entitled
to vote at the Meeting.
Your Board of Directors recommends a vote FOR this proposal.
DIRECTORS' PROPOSAL TO APPROVE THE NYNEX EXECUTIVE OFFICER SHORT TERM INCENTIVE
PLAN
(Item D on Proxy Card)
Your Board of Directors recommends approval of the NYNEX Executive Officer Short
Term Incentive Plan ("Short Term Plan"). The Board approved and adopted the
Short Term Plan, effective January 1,1995, in order to comply with Section
162(m) of the Code, subject to Share Owner approval.
The Short Term Plan is an annual bonus plan designed to provide certain
Executive Officers of NYNEX and its subsidiaries with incentive compensation
based upon the achievement of pre-established performance goals. The Short Term
Plan serves as an important vehicle to measure the yearly performance of
Executive Officers and to reward them for the actual results achieved during the
year. Currently, there are approximately 48 Executive Officers who are eligible
to be selected to participate in the Short Term Plan. Subject to Share Owner
approval, for 1995 only Messrs. Ferguson, Seidenberg, Salerno, Burke and Sacco
have been selected to participate. The Short Term Plan is designed to comply
with Section 162(m) of the Code, which limits the tax deductibility by NYNEX of
compensation paid to proxy-named executives in excess of $1 million, except to
the extent such compensation was paid pursuant to a plan complying with Section
162(m) which is approved by Share Owners.
Under the Short Term Plan, for each calendar year ("Award Year"), the Committee
sets a maximum award for each eligible Executive Officer. A maximum award may
not exceed 200 percent of the Executive Officer's annual base salary in effect
on the first day of the year, but in no event, $2 million per Executive Officer.
The Committee also establishes performance measures in accordance with the Short
Term Plan for each participant. The performance may relate to a particular area
of the business for which the participant is responsible, to NYNEX as a whole,
or a combination of both. The Committee establishes a payout table which will
determine the percentage of the maximum award which will be paid out based upon
the achievement of the predetermined performance goals.
The performance goals may include one or more of the following performance
measures for a calendar year:
a. Financial performance of NYNEX and its consolidated subsidiaries. Such
financial performance may only include NYNEX Net Income (i.e., percentage of Net
----
Income commitment achieved after required adjustments described below),
NYNEX Cash Flow Return on Investment and/or Return to Share Owners as compared
to the six other Regional Holding Companies.
b. Service performance of NYNEX, i.e., a weighted average of NYNEX subsidiaries'
----
results.
The maximum awards, payout table and performance goals will be determined prior
to the beginning of the calendar year in which the performance will be measured,
except with respect to 1995. During this first year of the Short Term Plan,
these designations may be made on or before April 1, 1995.
<PAGE>
NYNEX PROXY STATEMENT 9
Notwithstanding the foregoing, in the future, if the deductibility by NYNEX of
the compensation would still be allowed under Section 162(m) of the Code, then
these designations may be made by the Committee after the beginning of the
calendar year.
After the end of the calendar year, the Committee will review the performance
measurements and determine the percentages of the maximum awards which will be
paid out under the Short Term Plan in accordance with the payout tables
established by the Committee. The performance measurements, to the extent
appropriate, must be adjusted to compensate for extraordinary changes which may
have occurred during the year, including extraordinary items, accounting
changes, income from discontinued operations, and the impact of material events
that have been publicly disclosed. The Committee may elect to forgo any or all
adjustments so long as the awards remain deductible under Section 162(m). The
Committee may also reduce or eliminate any payout, but it may not increase a
payout under the Short Term Plan.
Notwithstanding any provision in the Short Term Plan to the contrary, the Short
Term Plan may only be operated in a manner that would allow all awards under
such Plan to be deductible by NYNEX under Section 162(m) of the Code.
The foregoing description of the Short Term Plan is qualified in its entirety by
reference to the text of such plan, a copy of which has been filed with the SEC.
The Short Term Plan was adopted by the Board of Directors, effective January 1,
1995, subject to the approval of the Share Owners. Such approval requires the
affirmative vote of the holders of a majority of the Shares present, in person
or by proxy, and entitled to vote at the Meeting.
Your Board of Directors recommends a vote FOR this proposal.
SHARE OWNERS' PROPOSALS
Proponents have stated they intend to have the following proposals presented at
the Meeting. The proposals and supporting statements are quoted below. Approval
of a Share Owner Proposal serves only as a recommendation to the Board of
Directors to take the necessary steps to initiate such action as called for. The
Board of Directors has concluded it cannot support these proposals for the
reasons given.
Share Owner Proposal 1:
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, N.W.,
Suite 215, Washington, D.C. 20037, record owner of 120 shares of NYNEX Common
Stock, has stated that she intends to have the following proposal presented at
the Meeting.
"RESOLVED: 'That the shareholders of NYNEX recommend that the Board of Directors
take the necessary steps to reinstate the election of directors ANNUALLY,
instead of the stagger system which was recently adopted.'"
The supporting statement by the proponent is:
"REASONS: 'Until recently, directors of NYNEX were elected annually by all
shareholders.
'The great majority of New York Stock Exchange listed corporations elect all
their directors each year.
'This insures that ALL directors will be more accountable to ALL shareholders
each year and to a certain extent prevents the self-perpetuation of the Board.
'Last year the owners of 108,848,530 shares, representing approximately 35.3% of
shares voting, voted FOR this proposal.
'If you AGREE, please mark your proxy FOR this resolution.'"
- --------------------------------------------------------------------------------
Your Board of Directors recommends a vote AGAINST this proposal.
The Board of Directors notes that the proponent has submitted an identical
proposal yearly, commencing with the 1988 Annual Meeting. The Board of Directors
continues to believe, for reasons stated below, that a classified board is in
the best interests of NYNEX and its Share Owners.
Currently, under NYNEX's Classified Board Provision, the number of Directors in
each class is as nearly equal in number as possible, with each Director serving
for three years and with one class being elected each year. This provision is
similar to those which have been adopted by the stockholders of many major
corporations. In the opinion of the NYNEX Directors, a classified Board of
Directors facilitates continuity and stability of leadership and policy by
assuring that experienced personnel familiar with NYNEX and its business will be
on the Board of Directors at all times. The classified Board of Directors is
also intended to prevent precipitous changes in the composition of the NYNEX
Board and, thereby, serves to moderate those changes in NYNEX policies, business
strategies and operations which the Board of Directors does not deem to be in
the best interests of NYNEX and its Share Owners. Board classification is
intended to encourage any person seeking to acquire control of the Corporation
to initiate such an action through arm's-length negotiations with management and
the Board of Directors, who are in a position to negotiate a transaction which
is fair to all NYNEX Share Owners.
If approved, the proposal would serve as a recommendation to the Board of
Directors to take the necessary steps to reinstate the annual election of all
Directors. Such steps would include the repeal of the Classified Board Provision
in the NYNEX Restated Certificate of Incorporation, which requires the
affirmative vote of fully 75% of the outstanding Shares entitled to vote at a
subsequent meeting of Share Owners.
Your Board of Directors urges that Share Owners vote AGAINST this proposal.
<PAGE>
10 NYNEX PROXY STATEMENT
Share Owner Proposal 2:
Mr. Hans R. Reinisch, 155 West 68th Street, New York, New York 10023, record
owner of 800 shares of NYNEX Common Stock, has submitted the following proposal:
"RESOLVED: 'That the NYNEX Corporation specifically list in its annual report
all donations and contributions made to charitable and not-for-profit
organizations by NYNEX and any subsidiaries, and that the total amount
contributed during the course of the year be stated as a separate item in the
financial tables of the annual report--especially since this is a very large
amount nearing the $20 million mark!'"
"SUPPORTING STATEMENT: 'At recent annual meetings, a number of fellow
shareholders strongly supported my contention that a list of charitable
contributions could easily be printed on one page of the annual report, except
for smaller matching contributions for employees' donations. And despite the
expected opposition by the Board of Directors to this and other shareholder
resolutions, the number of shares voted in favor of my resolution has nearly
doubled during the past few years.
'In annual reports of the corporation and other corporate publications, dozens
of pages of photography and art work are printed at great cost, providing no
particular useful information to shareholders or potential investors, yet the
Board and management continue to claim that it would be too "costly" and
"burdensome" to provide only a one-page listing of contributions.
'The claim of "cost" is an outright misrepresentation of the facts and is a
blatant attempt to try and hide from as many shareholders as possible many of
the questionable donations that are being made.
'For example, the NYNEX Board of Directors has refused to explain why a retired
officer of the corporation was given a $100,000 donation so that she could start
her own foundation-a foundation, obviously, with no proven track record.
'And why does the foundation of one of the most partisan of Senators, Robert
Dole, receive a $5,000 donation year after year--and then he turns around and is
able to make a $5,000 donation to Oliver North's Senate campaign? Shareholder
money should not be used in partisan ways. Why should only Senator Dole's
favorite charity be supported--no matter how worthy it might be?
'Similarly, NYNEX refuses to contribute to Planned Parenthood because its
policies are too controversial, yet, on the other hand, it is perfectly willing
to support equally controversial religious-sponsored institutions which are
strongly opposed to a woman's right to choose.
'And why, for example, are so few Jewish institutions recipients of NYNEX
Foundation support? This question was to be answered but half a year after the
1994 annual meeting no answer was forthcoming.
'No, it is not our intention to question each and every contribution and
decision made by the NYNEX Foundation. However, under a veil of secrecy lasting
many years, a clear pattern of favoritism and questionable donations has
emerged. Full disclosure in the annual report may induce the Foundation to be
more even-handed and equitable in the distribution of funds, which, after all,
belong to the shareholders.
'The $16 - $20 million distributed annually to charities in behalf of NYNEX
shareholders should be done more equitably and better reflect the diversity of
the shareholders and customers of NYNEX.'"
Your Board of Directors recommends a vote AGAINST this proposal.
The NYNEX contributions process is conducted in an entirely open manner with
full disclosure. The Board has long recognized that contributions information
should be available to NYNEX Share Owners and NYNEX has made that information
available. However, the Annual Report to Share Owners is intended to be a
synopsis of business activity in a given year rather than a detailed accounting.
Therefore, we have consistently highlighted and described NYNEX's philanthropic
programs and contributions in a detailed Corporate Responsibility Report
available to all Share Owners upon request. This report describes the grant
programs and the contribution guidelines pursuant to which these programs are
selected. Moreover, specific listings of corporate contributions are fully
disclosed, as required, to federal and state regulatory agencies and are
available to the public on request. The Board of Directors believes that to go
beyond the aforementioned policy, that is, to provide detailed information to
the over one million NYNEX Share Owners, when not more than a few hundred have
expressed an interest, would not be prudent or practical.
In 1994, the NYNEX family of companies made charitable grants totaling
approximately $19 million, reflecting NYNEX's strong commitment to corporate
social responsibility. In addition, NYNEX has instituted programs that encourage
and recognize employee participation in community service, resulting in many
thousands of employee hours devoted to charitable work without compensation. The
Board of Directors is justifiably proud of NYNEX's philanthropic efforts and
will continue to share this information with interested parties.
Your Board of Directors urges that Share Owners vote AGAINST this proposal.
<PAGE>
NYNEX PROXY STATEMENT 11
Share Owner Proposal 3:
Mr. Richard A. Dee, 115 East 89th Street, New York, New York 10128, record owner
of 128 shares of NYNEX Common Stock, has submitted the following proposal:
"NYNEX stockholders voted on this proposal for the first time last year.
32,793,024 shares (11%) were voted in favor. Its approval will provide NYNEX
stockholders with a choice of director candidates.
"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.
"Approval of this Corporate Governance proposal will enable NYNEX stockholders
to 'duly elect' representatives whose qualifications and stated intentions they
favor.
"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 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 interests.
"As long as incumbents are allowed to select and to propose only the number of
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 Nominating and Board Affairs Committee 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 will 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."
- -------------------------------------------------------------------------------
Your Board of Directors recommends a vote AGAINST this proposal.
NYNEX believes that the appropriate role of the Directors is to provide the
NYNEX Share Owners with a slate of Director candidates whom the Directors
believe, in their best judgment, to be the most qualified and who are ready,
willing and able to oversee the management of the affairs of NYNEX. It is not
the role of the Directors to create a political environment, such as this
proposal would foster, in which nominees compete with each other for the
available directorships.
The Board of Directors views the present nominating process to be the most
practical means of ensuring that individuals with appropriate qualifications
continue to serve on the NYNEX Board of Directors. The Nominating and Board
Affairs Committee of the Board serves a critical function for NYNEX and its
Share Owners by selecting only those nominees possessing the quality and skills
necessary and appropriate for service on the NYNEX Board. In this manner, the
composition of the Board will remain diverse and balanced in experience and
expertise.
To the extent that the NYNEX Share Owners wish to suggest qualified candidates,
there are appropriate procedures in place, as set forth on page 3 of this proxy
statement. Also, in this regard, liberalized proxy rules permit virtually
unfettered discussion among Share Owners and a slate of Directors proposed by
one or more Share Owners which could include nominees selected by the Directors
as well as those selected by such Share Owners.
The present system of nominating a slate of Director candidates limited to the
number of Directors to be elected is in keeping with the Board's fiduciary
responsibility of advising Share Owners on matters upon which they are asked to
vote. This proposal, if enacted, would preclude the Board from fulfilling its
duty. The Board of Directors believes that the present nominating process should
be preserved.
Your Board of Directors urges that Share Owners vote AGAINST this proposal.
<PAGE>
12 NYNEX PROXY STATEMENT
Share Owner Proposal 4:
Mr. Lawrence Filiberto, 66 First Avenue, Massapequa, New York 11762, owner of
128 shares of NYNEX Common Stock, has submitted the following proposal:
"RESOLVED, that the shareholders assembled in person and by proxy, recommend (i)
that all future non-employee directors not be granted pension benefits and (ii)
current non-employee directors voluntarily relinquish their pension benefits."
"SUPPORTING STATEMENT: Aside from the usual reasons, presented in the past,
regarding 'double dipping,' that is, outside (non-employee) directors who are in
almost all cases amply rewarded with their pension at their primary place of
employment, and in many instances, serving as outside pensioned directors with
other companies, there are other more cogent reasons that render this policy as
unacceptable.
"Traditionally, pensions have been granted in both the private and public
sectors for long term service. The service component usually represents a
significant number of hours per week. The practice of offering pensions for
consultants is a rarity. Outside directors' service could logically fit the
definition of consultants, and pensions for this type of service is an abuse of
the term.
"But more importantly, outside directors, although retained by corporate
management, namely the C.E.O., are in reality representatives of shareholders.
Their purpose is to serve as an impartial group to which management is
accountable. Although outside directors are certainly entitled to compensation
for their time and expertise, pensions have the pernicious effect of
compromising their impartiality. In essence, pensions are management's grants to
outside directors to insure their unquestioning loyalty and acquiescence to
whatever policy management initiates, and at times, serving their own self-
interests. Thus, pensions become another device to enhance and entrench
management's controls over corporate policies while being accountable only to
themselves. As a founding member of the Investors Rights Association of America,
I feel this practice perpetuates a culture of corporate management 'cronyism'
that can easily be at odds with shareholder and company interests.
"A final note in rebuttal to management's contention that many companies offer
their outside directors pensions, so they can attract and retain persons of the
highest quality. Since there are also companies that do not offer their outside
directors pensions, can management demonstrate that those companies that offer
pensions have a better performance record then their nonpensioned peers? In
addition, do we have any evidence of a significant improvement in corporate
profitability with the advent of pensions for outside directors?"
"I URGE YOUR SUPPORT, VOTE FOR THIS RESOLUTION."
- --------------------------------------------------------------------------------
Your Board of Directors recommends a vote AGAINST this proposal.
The Board of Directors believes that it is in the best interests of NYNEX and
its Share Owners to attract and retain the most qualified individuals to serve
as NYNEX Directors. To accomplish this task, NYNEX must offer a compensation
package that is competitive with the compensation packages offered by other
major companies, the vast majority of which, studies by independent benefit
consulting firms indicate, offer non-employee director pension benefits. The
NYNEX Director compensation package, in its present form, is designed to place
total Director compensation within the median paid by comparable companies and
the Board believes that to remove a vital component of compensation that the
pension program provides would place the company at a distinct disadvantage in
attracting qualified Director candidates.
The availability of pensions to Directors is not predicated solely on enhancing
their overall compensation package. The NYNEX Non-Employee Director Pension
Plan, as described on page three of this Proxy Statement, requires non-employee
Directors to serve a minimum of five years to attain eligibility, with full
pension vested only after ten years of service. Tenure-based pensions such as
this are a preferred form of compensation in that they are not entitlements -
they must be earned, thereby encouraging long term service and promoting greater
continuity and stability within the Board. In the opinion of the Board of
Directors, the present Non-Employee Director Pension Plan is fair, appropriate
and consistent with industry standards and should be retained.
Your Board of Directors urges that Share Owners vote AGAINST this proposal.
<PAGE>
NYNEX PROXY STATEMENT 13
OTHER MATTERS TO COME BEFORE THE MEETING
An address by the Chairman is planned, followed by a general discussion period
during which Share Owners will have an opportunity to ask questions about the
business of NYNEX.
If any matter not described herein should come before the Meeting, the Proxy
Committee of the Board of Directors will vote the Shares represented by it in
accordance with its best judgment. At the time this proxy statement went to
press, NYNEX knew of no other matters which might be presented for Share Owner
action at the Meeting, with the exception of matters omitted from this proxy
statement pursuant to the rules and regulations of the SEC.
SUBMISSION OF DIRECTOR NOMINATIONS, PROPOSALS OR OTHER
BUSINESS AT SHARE OWNER MEETINGS
Proposals intended for inclusion in next year's proxy statement should be sent
to the Secretary of NYNEX Corporation, 1095 Avenue of the Americas, New York,
New York 10036, and must be received by November 20, 1995.
Share Owners who do not submit proposals for inclusion in the proxy statement
but who intend to present a proposal, nomination for Director, or other business
for consideration at any meeting of Share Owners are required to notify the
Secretary of NYNEX of their intentions and provide certain other information in
advance of such meeting, in accordance with the procedures detailed in the NYNEX
By-Laws. Share Owners interested in making any nomination or proposal should
request a copy of the By-Laws from the Secretary of NYNEX.
<PAGE>
14 NYNEX PROXY STATEMENT
COMMITTEE ON BENEFITS REPORT ON
EXECUTIVE COMPENSATION
TO OUR SHARE OWNERS:
A primary role of the Committee on Benefits ("Committee") is to determine and
oversee the administration of compensation for NYNEX's Executive Officers. In
this capacity, the Committee is dedicated to ensuring that NYNEX's compensation
policies and practices are used effectively to support the achievement of
NYNEX's short- and long term business objectives. In carrying out its
responsibilities, the Committee reviews the recommendations of compensation
consulting firms engaged by NYNEX. There are several principles that guide the
Committee in its decision-making capacity. The Committee:
. Maintains a total compensation perspective on executive pay in judging the
appropriateness of rewards for NYNEX's Executive Officers.
. Emphasizes a pay-for-performance philosophy, ensuring that overall
compensation paid to Executive Officers reflects the fulfillment of NYNEX's key
goals.
. Supports the use of multiple compensation plans to optimize the role of the
executive compensation program in balancing NYNEX's short- and long term
interests.
. Targets executive compensation levels at rates that are consistent with
levels at comparable companies ("Comparable Companies"), consisting of the six
other Regional Holding Companies, as well as 123 large industrial companies with
revenues in excess of $1 billion, and 24 industrial companies with sales of
approximately $15 billion, selected by compensation consulting firms advising
the Committee.
. Encourages NYNEX stock ownership by Executive Officers with the objective of
strengthening the common interests of management and Share Owners, thereby
promoting the maximization of Share Owner value.
NYNEX's Executive Officer compensation program is described below. The Committee
believes that this program is structured to recognize the performance and
contribution of individual Executive Officers, as well as to attract, retain and
motivate top quality management talent and to support effectively NYNEX's
business goals and human resources' strategies.
DESCRIPTION OF EXECUTIVE COMPENSATION POLICIES
It is NYNEX's policy to target executive compensation to reflect compensation
practices of Comparable Companies. This policy is implemented through a
comprehensive compensation program consisting of elements to recognize
individual merit, encourage NYNEX stock ownership and provide incentives to
achieve corporate performance goals. These elements exist in the context of a
reward system that includes salary, short term incentive compensation and long
term incentive compensation opportunities.
Based upon survey data from compensation consulting firms, NYNEX's Executive
Officer compensation for 1993 was compared to median 1993 executive compensation
at Comparable Companies. This data indicated that NYNEX Executive Officers'
salaries paid in 1993 were approximately 4% above, short term awards paid in
1993 were 6% above, long term grants made in 1993 were 8% above, and total
compensation was 2% above that paid by Comparable Companies. The Committee used
this comparison to assist it in setting 1994 salary levels, short term and long
term award target levels and stock option grants.
Effective January 1, 1994, Section 162(m) of the Internal Revenue Code of 1986
(the "Code") generally denies a tax deduction to any publicly-held corporation
for compensation that exceeds $1 million paid to any proxy-named executive in a
taxable year, subject to an exception for "performance-based compensation" as
defined in the Code and subject to certain transition provisions. Compensation
paid to such NYNEX Executive Officers for 1994 will continue to be tax-
deductible since no such amount will exceed the $1 million limit. Compensation
for such NYNEX Executive Officers for 1995 received under the NYNEX Executive
Officer Short Term Incentive Plan should qualify for the "performance-based
compensation" exception if the Share Owners approve such plan. Gains on the
exercise of nonqualified stock options granted through December 31, 1994 will
also be deductible under the transition rules, and subsequent stock option
grants should qualify for the "performance-based compensation" exception. The
Committee reserves the right to pay compensation that is not tax-deductible if
it is determined to be in the best interests of NYNEX and its Share Owners.
SALARY. The Committee reviews the salary of each Executive Officer annually. In
- ------
assessing whether salary increases are warranted, the Committee considers any or
all of the following factors: performance on the job, internal compensation
equity, external pay practices for Comparable Companies and the Executive
Officer's level of responsibility, experience and expertise.
NYNEX's executive compensation policy is to target Executive Officer salaries at
levels that reflect salaries paid by Comparable Companies. In determining salary
levels paid by Comparable Companies, NYNEX reviews a number of executive
compensation surveys conducted by various consulting firms which include the
companies shown in the Share Owner Return Performance Graph. Generally, target
level salaries for individuals new to a position are attained over time and
reflect individual performance and merit.
SHORT TERM INCENTIVE PLAN. NYNEX adheres to a pay-for-performance philosophy
- -------------------------
through the operation of its Senior Management Short Term Incentive Plan. Plan
participants have the opportunity to earn incentive compensation each year based
on two factors:
. Corporate achievement of established annual performance goals.
. Individual contribution and performance.
Corporate Performance. Each year, the Committee reviews management's suggestions
and then recommends for Board of Directors' ("Board") approval performance
goals, the achieve-
<PAGE>
NYNEX PROXY STATEMENT 15
ment of which will define NYNEX's success for the upcoming fiscal year. The
Committee also reviews and recommends to the Board threshold, target and maximum
levels of performance for determining the ultimate payment of awards. For this
purpose, threshold means the level of performance below which no incentive
awards will be paid; target means the level of performance at which the standard
incentive awards will be paid; maximum means the level of performance above
which no incremental incentive awards will be paid.
For 1994, 45% of the maximum short term incentive award was a function of
corporate results as measured by net income and 30% reflected the Committee's
assessment of identifiable progress with respect to matters of strategic
importance to the success of NYNEX, each accorded approximately equal weight:
broadband deployment, establishment of Video Entertainment Services (VES),
business and Personal Communications Services (PCS) cellular consortium,
regulatory and legislative relationships, passage of Modification of Final
Judgement (MFJ) and cable relief legislation, implementation of growth and
single enterprise branding strategies, provision of developmental opportunities
for employees, realization of process re-engineering quality improvements and
cost reductions. The latter included: RediServ SM deployment, process re-
engineering systems development and deployment initiatives, shift in force to
proactive repair, and work center deployment. There are no other factors the
Committee considered in determining short term incentive compensation except
individual performance, as discussed in the following paragraph. Achievement of
these corporate performance goals results in the payment of a standard award
which is equal to one-half of the maximum short term incentive award payable.
When performance results exceed the target level, the short term incentive award
payment will be greater than the standard award, up to a maximum of 75% of the
total short term award payable. Conversely, when performance results are below
the target level, the payment will be less than the standard incentive award.
When performance falls short of the threshold level, no incentive award would be
paid on the basis of corporate performance.
Individual Performance. Plan participants may receive up to 25% of the maximum
short term incentive award in recognition of outstanding individual contribution
to corporate performance. However, the sum total of a participant's incentive
award payments in recognition of corporate performance plus awards paid as a
result of individual performance may not exceed 100% of the total short term
award payable.
The short term incentive awards for the proxy-named executives are reflected in
the "Bonus" column of the Summary Compensation Table contained in this proxy
statement. For the 1994 performance year, the Committee determined that the net
income target objective level had not been achieved and awarded 24% of the
maximum short term incentive award for this factor. The Committee also
determined that significant actions were taken during 1994 regarding the
strategic objectives, but that the target objective level had not been achieved,
and therefore awarded 22% of the maximum short term incentive award for this
factor, for a total payout of 46% of the maximum award payable to Executive
Officers.
LONG TERM INCENTIVE PLANS. Each year, the Committee recommends to the Board for
- -------------------------
approval grants of long term incentive awards to Executive Officers. The
Committee establishes a target award based on an assessment of the average long
term award levels at Comparable Companies. Long term incentive opportunities
reinforce NYNEX's policy of requiring stock ownership by Executive Officers in
support of building Share Owner value. In this regard, the Senior Management
Long Term Incentive Plan, the Stock Option Plan and the Restricted Stock Award
Plan provide awards that reflect NYNEX's return to its Share Owners.
SENIOR MANAGEMENT LONG TERM INCENTIVE PLAN. Plan participants have the
opportunity to earn incentive compensation over a four-year performance period
based on two factors, each accorded equal weight:
. Return to share owners
. Corporate achievement of strategic objectives
Return to Share Owners. Payment of one-half of the target award is determined by
reference to NYNEX's total return to Share Owners (stock price growth and
dividends paid over a four-year period) as compared with the returns generated
by the six other Regional Holding Companies. A top relative ranking of NYNEX
yields awards equal in size to one-half of the maximum long term incentive
awards payable under this plan. Lower rankings of NYNEX generate proportionally
smaller awards.
Strategic Objectives. Payment of the remaining one-half of the target award
reflects the Committee's assessment of management's effectiveness during the
four-year period in positioning NYNEX for future success. In conducting its
assessment, the Committee considered: regulatory and legislative progress,
business growth and focus, customer service and quality, and employee-related
issues, each accorded approximately equal weight. The Committee can recommend to
the Board for its approval payment of up to one-half of the maximum long term
incentive award payable under this plan for strategic accomplishments.
Awards are paid at the completion of each performance period in a combination of
cash and shares of NYNEX stock. Participants may elect the extent to which they
are paid in stock. However, to encourage stock ownership among Executive
Officers, a minimum of one-half of the value of the award must be paid in NYNEX
stock.
For the 1991-1994 performance period, the Committee determined that NYNEX's
total return to Share Owners over the period relative to the other six Regional
Holding Companies was at the target level and therefore awarded 37% of the
maximum long term incentive award for this factor. The Committee determined that
there was significant progress in implementing NYNEX's strategic objectives
under adverse economic conditions, that the target objective level had been
<PAGE>
16 NYNEX PROXY STATEMENT
achieved, and therefore awarded to Executive Officers a payout of 37% of the
maximum long term award for this factor, for a total payout of 74% of the
maximum award payable to Executive Officers.
STOCK OPTION PLAN. Stock options provide Executive Officers with the opportunity
to acquire an equity interest in NYNEX and to participate in the creation of
Share Owner value as reflected in growth in the price of NYNEX Common Stock.
Under the terms of the plan, the option exercise price is equal to 100% of the
fair market value of NYNEX Common Stock on the date of option grant, thereby
ensuring that plan participants will derive benefits only as Share Owners
realize corresponding gains. To ensure a long term perspective, options have a
10-year term and become exercisable at the cumulative rate of one-third per year
for the first three years. The number of options the Committee may grant in a
plan year to the Chief Executive Officer and other proxy-named Executive
Officers is limited by the plan, in each case, to 250,000 options. The actual
number of options granted is based upon competitive compensation practices, as
reflected in the surveys of the compensation consulting firms, and the
individual Executive Officer's performance compared to the performance of the
other Executive Officers.
RESTRICTED STOCK AWARD PLAN. The Committee also administers the Restricted Stock
Award Plan and determines the key employees to whom Restricted Stock Awards will
be granted, the number of Shares with respect to which Restricted Stock Awards
will be made, the applicable restriction periods and any other terms and
conditions of each award. The purpose of the Plan is to attract and retain
selected individuals of exceptional skill. The grant criteria reflect the
Committee's assessment of the requirements for hiring and retaining the
particular individual. Restricted Stock Awards were granted in 1994 to certain
NYNEX Executive Officers, including Messrs. Seidenberg, Salerno, Burke and Sacco
but excluding Mr. Ferguson.
RATIONALE FOR CHIEF EXECUTIVE OFFICER ("CEO")
COMPENSATION IN LAST FISCAL YEAR
SALARY. The CEO's salary is based solely upon competitive compensation
practices. Mr.Ferguson was named CEO of NYNEX in June 1989. During the
subsequent three and one-half year period, Mr. Ferguson's salary was in
progression toward his target salary rate and reached his target salary rate on
January 1, 1993. At the end of 1993, the Committee recommended to the Board a
3.5% salary increase, as in the case of each NYNEX Executive Officer's target
salary rate, to maintain competitive parity and to remain near the median for
Comparable Companies during 1994.
SHORT TERM INCENTIVE COMPENSATION. Mr. Ferguson's available short term award is
a function of salary and is based upon similar compensation of CEOs of
Comparable Companies. For 1994 performance, the Committee recommended to the
Board a short term incentive payment to Mr. Ferguson of 79% of the available
short term award, which included a 25% increment attributable to individual
performance. The Committee's recommendation recognized that significant actions
were taken in 1994 designed to position NYNEX for the future. These included:
entry into the programming and video delivery business, expanding the scope of
the wireless business, obtaining a stipulation agreement in New York to move to
an incentive-based regulatory plan, winning court relief from the cable act to
allow NYNEX to provide cable TV within the region, reaching unprecedented labor
contract extensions that were heralded as national models by the Secretary of
Labor, and making significant progress in the process re-engineering
initiatives.
LONG TERM INCENTIVE COMPENSATION. Mr. Ferguson's available long term incentive
awards are also a function of salary and are based on compensation practices for
similar jobs in the marketplace. As discussed above under the heading Senior
Management Long Term Incentive Plan, return to Share Owners and strategic
objectives are each accorded equal weight in determining long term incentive
compensation. In 1995, the Committee recommended to the Board a long term award
for the 1991-1994 performance period under the Senior Management Long Term
Incentive Plan. As noted in the preceding paragraph cited above, it was the
Committee's assessment that there was significant progress in implementing
NYNEX's strategic objectives under adverse economic conditions. The Committee
believes that such strategic accomplishment should serve as a platform for
future business success and resultant appreciation of Share Owner's investment
over the long term. The Committee also weighed the financial performance of
NYNEX (total return to Share Owners) over the period relative to the other six
Regional Holding Companies, which was slightly above the target level.
In January 1994, the Committee awarded Mr. Ferguson options to purchase 87,126
shares of NYNEX Common Stock at a price of $39.88 per share. The number of
options granted reflected the Committee's assessment of competitive compensation
practices and Mr. Ferguson's individual contribution toward the achievement of
NYNEX's strategic objectives, as set forth above under the Short Term and Long
Term Incentive Plans.
SUMMARY
The Committee is responsible for reviewing, monitoring and approving for
presentation to the non-employee Directors of the Board, for their approval, all
compensation decisions affecting NYNEX Executive Officers. The Committee
endeavors to have the entire remuneration paid to Executive Officers be
consistent with NYNEX's interest in providing market competitive compensation
opportunities, reflective of its pay-for-performance philosophy, and supportive
of its short term and long term business mission. We will continue to actively
monitor the effectiveness of NYNEX executive compensation plans and assess the
appropriateness of executive pay levels to assure prudent use of NYNEX
resources.
John R. Stafford, Randolph W. Bromery
Chairperson
John J. Creedon Helene L. Kaplan
<PAGE>
NYNEX PROXY STATEMENT 17
SUMMARY COMPENSATION TABLE
The following table shows, for the fiscal years ending December 31, 1992, 1993,
and 1994, the cash compensation, as well as certain other compensation, paid or
accrued to the named Executive Officers by NYNEX and its subsidiaries.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
---------------------------------- -------------------------------------
Awards Payouts
------------------------- ----------
Restricted Securities Long Term All Other
Name and Principal Position Stock Underlying Incentive Compen-
at December 31, 1994 Year Salary($) Bonus($) Other($)(1) Awards($)(2) Options(#) Payouts($) sation($)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William C. Ferguson 1994 800,000 885,000 210,194 0 87,126 511,351 32,751
Chairman of the Board and 1993 773,000 526,000 103,446 0 84,180 120,605 31,671
Chief Executive Officer 1992 700,000 700,000 86,253 0 77,216 332,626 28,728
Ivan G. Seidenberg 1994 540,000 189,000 62,598 380,520 40,248 231,312 26,371
President, Chief
Operating Officer 1993 474,000 222,000 46,267 0 38,892 37,170 20,052
and Vice Chairman of
the Board 1992 411,000 384,500 35,120 0 33,896 87,507 17,168
Frederic V. Salerno 1994 491,000 278,000 64,636 380,520 40,248 233,478 26,967
Vice Chairman of the Board 1993 474,000 313,500 47,459 0 38,892 57,326 20,661
Finance and Business
Development 1992 460,000 326,000 40,091 0 33,896 150,983 19,128
Raymond F. Burke 1994 362,000 247,000 37,906 271,520 24,768 135,833 13,910
Executive Vice President 1993 350,000 175,000 31,852 0 23,940 37,404 14,750
General Counsel and
Secretary 1992 340,000 234,000 27,494 0 20,196 103,143 14,328
Donald J. Sacco 1994 317,000 128,300 28,357 226,000 19,758 95,650 18,312
Vice President -
Human Resources 1993 291,000 117,000 23,287 0 19,092 21,829 12,389
1992 266,000 160,600 18,991 0 13,560 65,090 11,334
====================================================================================================================================
</TABLE>
(1) This amount includes dividend equivalents paid pursuant to the Senior
Management Long Term Incentive Plan; amounts reimbursed for the payment of
taxes in connection with certain personal benefits; and, in the case of Mr.
Ferguson only, perquisites and other personal benefits of which $41,980 was
for personal use of the corporate aircraft.
(2) Granted pursuant to Executive Retention Agreements, effective January 3,
1994, or in the case of Mr. Salerno, an employment agreement, effective
August 1, 1994. On December 30, 1994, the number and value of all
outstanding grants of restricted stock held by named Executive Officers
were as follows: Mr. Seidenberg 9,961/$368,557; Mr. Salerno 9,961/$368,557;
Mr. Burke 7,108/$262,996 and Mr. Sacco 5,196/$218,892. These figures
include dividends that have been reinvested in additional restricted
shares.
(3) Company contributions to tax-qualified and nonqualified savings plans, plus
the value of premiums paid by NYNEX for split-dollar life insurance
coverage. The Company contributions to the tax-qualified savings plan for
Messrs. Ferguson, Seidenberg, Salerno, Burke and Sacco were $6,750, $5,708,
$5,524, $5,430, and $6,750, respectively. The company contributions to the
nonqualified savings plan for Messrs. Ferguson, Seidenberg, Salerno, Burke
and Sacco were $26,001, $15,274, $13,641, $8,480 and $6,680, respectively.
The amount of the dollar benefit for 1994 projected on an actuarial basis
($5,389 for Mr. Seidenberg, $7,802 for Mr. Salerno and $4,882 for Mr.
Sacco) represents the excess of the amount needed to fund the death benefit
under the split-dollar life insurance policy.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1994 AND 1994 FY-END OPTION VALUES
The following table shows information with respect to the named Executive
Officers concerning the exercise of options to purchase shares of NYNEX Common
Stock during 1994 and unexercised stock options held as of the end of 1994.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at 1994 Options at 1994
Fiscal Year-End Fiscal Year-End($)(1)
Shares Acquired Value --------------------------- ---------------------------
Name of Individual on Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William C. Ferguson 0 0 195,996 168,984 277,943 43,240
Ivan G. Seidenberg 0 0 70,180 77,474 103,767 18,981
Frederic V. Salerno 0 0 84,546 77,474 113,489 18,981
Raymond F. Burke 0 0 52,248 47,460 69,422 11,310
Donald J. Sacco 0 0 15,658 37,006 15,613 7,574
=================================================================================================================
</TABLE>
(1) Amounts reflect potential gains on outstanding options based upon the
December 30, 1994 average stock price of $37.00.
<PAGE>
18 NYNEX PROXY STATEMENT
OPTION GRANTS IN FISCAl YEAR 1994
The following table contains information concerning the grant of options under
the NYNEX 1990 Stock Option Plan to the named Executive Officers during 1994.
<TABLE>
<CAPTION>
Number of
Securities % of Total
Underlying Options
Options Granted to Exercise or Grant Date
Granted Employees Base Price Expiration Present
Name of Individual (#)(1) in 1994 ($/Share)(2) Date(3) Value($)(4)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William C. Ferguson 87,126 6.196 39.88 1/13/04 369,414
Ivan G. Seidenberg 40,248 2.862 39.88 1/13/04 170,652
Frederic V. Salerno 40,248 2.862 39.88 1/13/04 170,652
Raymond F. Burke 24,768 1.762 39.88 1/13/04 105,016
Donald J. Sacco 19,758 1.405 39.88 1/13/04 83,774
==============================================================================================
</TABLE>
(1) The date of grant for options subject to this footnote is January 14, 1994.
(2) The exercise price of the option is equal to the fair market value of NYNEX
Shares on the date of grant of the options. The exercise price may be paid in
cash, or by tendering already owned NYNEX Shares with a fair market value on the
date of exercise equal to the exercise price. For exercises where NYNEX Shares
have been tendered in payment of the exercise price, a new grant of options will
be made equal to the number of Shares tendered. A grant made under these
circumstances will have an exercise price equal to the fair market value on the
date of such exercise and grant.
(3) Options expire ten years from date of grant. Options become one-third
exercisable one year after the date of grant, two-thirds exercisable two years
after the date of grant, and fully exercisable three years after the date of
grant. To the extent not already exercisable, the options become fully
exercisable in the event of a "change in control", as defined in the NYNEX 1990
Stock Option Plan.
(4) As permitted by SEC rules, the Black-Scholes method of option valuation has
been used to determine grant date present value. The assumptions used in the
Black-Scholes option valuation calculation are: estimated future annual stock
price volatility of 0.165; risk-free rate of return 6.02%; and estimated future
dividend yield of 5.92%. NYNEX does not advocate or necessarily agree that the
Black-Scholes' method, or any other method permitted by the SEC, can properly
determine the value of an option. However, no gain to the optionees is possible
without an increase in the stock price, which will benefit all Share Owners.
Thus, a zero increase or decrease in stock price, compared to the exercise
price, will not produce any gain for the optionee.
LONG TERM INCENTIVE PLAN AWARDS IN FISCAL YEAR 1994
The following table provides information concerning awards made to the named
Executive Officers during 1994 under the NYNEX Senior Management Long Term
Incentive Plan. Each performance share awarded represents the right to receive
an amount of cash and NYNEX Shares based upon the degree of achievement of
financial and strategic objectives, as established by the Board of Directors for
the performance period 1994-1997.
<TABLE>
<CAPTION>
Estimated Future Payouts under
Number of Performance or Non-Stock Price-Based Plans(1)
Shares, Units Other Period ------------------------------
or Other Until Maturation Threshold Target Maximum
Name of Individual Rights or Payout (#) (#) (#)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William C. Ferguson 14,521 4 Years 7,261 14,521 21,782
Ivan G. Seidenberg 6,708 4 Years 3,354 6,708 10,062
Frederic V. Salerno 6,708 4 Years 3,354 6,708 10,062
Raymond F. Burke 4,128 4 Years 2,064 4,128 6,192
Donald J. Sacco 3,293 4 Years 1,647 3,293 4,940
============================================================================================
</TABLE>
(1) Payouts of awards are tied to achieving relative levels of return to Share
Owners (stock price growth and dividends paid over the four-year period 1994-
1997, as compared to a peer group of the six Regional Holding Companies) and
achievement of specified strategic objectives. The target amount will be earned
if 100% of the objectives are achieved, the threshold amount if 50% of the
objectives are achieved, and the maximum amount if the objectives are exceeded
by 50%.
<PAGE>
NYNEX PROXY STATEMENT 19
PENSION TABLE
The following table shows the estimated annual benefits payable upon retirement
for the named Executive Officers in the compensation and years of service
classifications indicated under NYNEX's pension plans. Pensions are computed on
a straight-life annuity basis and are not reduced for Social Security or other
offset amounts. Participants receive a pension based upon average compensation
multiplied by the number of years service, times 1.6%. Average compensation is
determined by adding the average of the five highest Short Term Incentive Plan
awards received during the last ten years of employment, plus the total of the
last sixty full months of salary divided by five. Pensions may not exceed 60% of
the average compensation used in the pension formula.
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------
Average
Compensation 15 20 25 30 35 Maximum
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 $ 96,000 $128,000 $160,000 $192,000 $224,000 $240,000
500,000 120,000 160,000 200,000 240,000 280,000 300,000
600,000 144,000 192,000 240,000 288,000 336,000 360,000
700,000 168,000 224,000 280,000 336,000 392,000 420,000
800,000 192,000 256,000 320,000 384,000 448,000 480,000
900,000 216,000 288,000 360,000 432,000 504,000 540,000
1,000,000 240,000 320,000 400,000 480,000 560,000 600,000
1,100,000 264,000 352,000 440,000 528,000 616,000 660,000
1,200,000 288,000 384,000 480,000 576,000 672,000 720,000
1,300,000 312,000 416,000 520,000 624,000 728,000 780,000
1,400,000 336,000 448,000 560,000 672,000 784,000 840,000
1,500,000 360,000 480,000 600,000 720,000 840,000 900,000
1,600,000 384,000 512,000 640,000 768,000 896,000 960,000
==========================================================================================
</TABLE>
<TABLE>
<CAPTION>
Current Average Credited Years
Name of Individual Compensation* of Service*
- ----------------------------------------------------------
<S> <C> <C>
William C. Ferguson $1,270,900 42
Ivan G. Seidenberg** 655,047 28
Frederic V. Salerno 726,267 29
Raymond F. Burke 518,040 29
Donald J. Sacco 388,280 29
==========================================================
</TABLE>
* as of 12/31/94
** Although not currently service pension-eligible under the age and/or
service requirements of the NYNEX pension plans, the amounts shown for Mr.
Seidenberg are as if he were pension-eligible. In addition, pensions are subject
to a reduction for retirement prior to age 59.
Note: The Internal Revenue Code of 1986, as amended, limits the benefits
which may be paid from a tax-qualified retirement plan. As permitted by the
Employee Retirement Income Security Act of 1974, NYNEX has a non-qualified
pension plan to provide for the full payment of the above pensions when they
exceed tax-qualified limits. The pension amounts that exceed tax-qualified
limits will be accounted for by NYNEX as an operating expense.
EXECUTIVE RETENTION AGREEMENTS AND EXECUTIVE SEVERANCE PAY PLAN
On December 16, 1993, the Board of Directors approved the NYNEX Executive
Severance Pay Plan (the "Severance Plan") and the Executive Retention Agreement
(the "Agreement") to be entered into with certain NYNEX Executive Officers as
well as certain other Officers of NYNEX companies. The purpose of the Severance
Plan and the Agreement is to enable NYNEX and its subsidiaries to remain
competitive in attracting and retaining the very best executive talent. The
Agreement provides the Executive Officer with certain benefits, pursuant to the
Severance Plan, upon termination of employment under specified conditions.
Certain NYNEX Executive Officers, including Messrs. Seidenberg, Burke and Sacco
but excluding Mr. Ferguson and Mr. Salerno, entered into an Agreement with
NYNEX, effective January 3, 1994, for a term of employment at the pleasure of
the Chairman of the Board and Chief Executive Officer. Mr. Salerno entered into
an employment agreement with NYNEX for a term commencing August 1, 1994 through
December 31, 1996. A retention award consisting of a grant of restricted stock
was made to each such NYNEX Executive Officer at the time of signing the
Agreement. The value of the retention award equals 50% of the sum of the
Executive Officer's 1994 annual salary and the standard award granted under the
NYNEX Senior Management Short Term Incentive Plan for 1994 performance.
During the term of the Agreement, dividends on the restricted stock will be
reinvested in additional NYNEX restricted stock. The retention award
restrictions on the restricted stock shall lapse at the time of termination of
employment only if the Executive Officer voluntarily separates from employment
with the consent of the Chairman and Chief Executive Officer of NYNEX; dies; or
is terminated by NYNEX without cause during the term of the Agreement. In the
case of all other terminations, the restricted stock will be forfeited by the
Executive Officer.
<PAGE>
20 NYNEX PROXY STATEMENT
An Executive Officer who separates from active service with the consent of the
Chairman of the Board and Chief Executive Officer or is separated from active
service pursuant to the terms of the NYNEX Force Management Plan, and in either
case signs a separation agreement and release, or dies during the term of the
Agreement, shall be entitled to a severance payment. The severance payment will
be the value of the restricted stock, including reinvested dividends, which is
designated as the retention award in the Executive Officer's Agreement.
An Executive Officer will not receive benefits or payment under the Severance
Plan, if he or she is separated from active service for cause; is separated from
active service with an Employing Company that is sold and the Employing Company
hires or offers employment within 60 days of the Executive Officer's separation
from the Employing Company; or if the Executive Officer has an employment
agreement other than the Agreement with the Employing Company.
SHARE OWNER RETURN PERFORMANCE GRAPH
The following line graph compares the yearly percent change in the cumulative
total Share Owner return of NYNEX Common Stock against the cumulative total
return of the Standard & Poor's 500 Stock Index and the Regional Holding Company
peer group stock index for the period of five fiscal years (1990-1994).
[GRAPH APPEARS HERE]
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
<CAPTION>
Measurement period Peer Group
(Fiscal year Covered) NYNEX Index** S&P 500
- --------------------- ----- ---------- -------
<S> <C> <C> <C>
Measurement PT -
1989 $ 100.00 $ 100.00 $ 100.00
1990 82.5 97.7 96.8
1991 100.4 103.0 126.3
1992 109.6 116.4 135.9
1993 110.7 136.6 149.7
1994 107.7 132.6 151.6
</TABLE>
* Assumes $100 invested on December 31, 1989 in NYNEX Common Stock, Standard &
Poor's 500 Index and Peer Group Index, with all dividends reinvested; also
assumes retention by Pacific Telesis Group stockholders of the AirTouch
Communications stock spin-off, effective April 1, 1994.
** Composite of 6 Regional Holding Companies
Ameritech Corporation Bell Atlantic Corporation BellSouth Corporation
Pacific Telesis Group Southwestern Bell Corporation U S WEST, Inc.
OTHER INFORMATION
Solicitation of proxies is being made by management through the mail, in person
and by telephone and telegraph. NYNEX will be responsible for costs associated
with this solicitation. NYNEX has retained Kissel-Blake Inc., to aid in the
solicitation of proxies at a cost of approximately $21,000, plus reimbursement
of reasonable out-of-pocket expenses.
By order of the Board of Directors,
/s/ R. F. Burke
R. F. Burke
Executive Vice President and Secretary
March 20, 1995
<PAGE>
NYNEX PROXY STATEMENT 21
This document is printed entirely
on recycled paper.
<PAGE>
NYNEX 1995 STOCK OPTION PLAN
Dated: March, 1994
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
NYNEX 1995 Stock Option Plan
Article I Purpose................................... 3
Article II Definition................................ 3
Article III Shares Subject to the Plan................ 3
Article IV Administration............................ 4
Article V Eligibility............................... 4
Article VI Terms of Options.......................... 5
Article VII Limitations on Grants and Exercise of ISOs 9
Article VIII Adjustments............................... 9
Article IX Change in Control......................... 10
Article X Amendment and Termination of Plan......... 12
Article XI Government and Other Regulations.......... 12
Article XII Miscellaneous Provisions.................. 13
Article XIII Stockholder Approval and Effective Dates.. 13
</TABLE>
2
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NYNEX 1995 Stock Option Plan
Set forth below is the NYNEX 1995 Stock Option Plan:
Article I
Purpose
1.1 The purpose of NYNEX 1995 Stock Option Plan (the "Plan") is to
provide opportunities for selected key employees of NYNEX Corporation (the
"Company") and its subsidiaries to purchase shares of common stock of the
Company and to benefit from the appreciation thereof. The Plan is intended to
provide an increased incentive for these employees to contribute to the future
success and prosperity of the Company, thus enhancing the value of the stock for
the benefit of the Company's stockholders. In addition, the Plan is intended to
increase the ability of the Company to attract and retain individuals of
exceptional skill upon whom, in large measure, its sustained progress, growth
and profitability depend. The Plan replaces the predecessor NYNEX 1990 Stock
Option Plans which expires on December 31, 1994.
Article II
Definition
2.1 As used in the Plan, the term "subsidiary" shall have the
meaning assigned to such term in Section 424 of the Internal Revenue Code of
1986, as amended (the "Code"), or any successor provision, and shall include any
corporation which becomes a subsidiary after the date of adoption of the Plan.
Article III
Shares Subject to the Plan
3.1 The total number of shares of common stock of the Company
("Common Stock") which may be issued under the Plan shall not exceed 20,000,000,
subject to adjustment in accordance with Article VIII of the Plan. These shares
may be authorized and unissued shares or Treasury shares, as the Board of
Directors of the Company (the "Board") may from time to time determine. If an
option granted under the Plan ("Option") or portion thereof shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares covered by such Option shall be available for future grants of Options.
For purposes of this Section 3.1. Options paid for through the delivery of
shares pursuant to Section 6.7(b) of the Plan shall be treated as having expired
or terminated without having been exercised in full. An Option, or portion
thereof, exercised through the election of a Stock Appreciation Right pursuant
to Section 6.8 of the Plan shall be treated, for the purposes of this Article,
as though the Option, or portion thereof, had been exercised through the
purchase of Common Stock, with the result that the shares of Common Stock
subject to the Option, or portion thereof, that was so exercised shall not be
available for future grants of Options.
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Article IV
Administration
4.1 The Plan shall be administered by the Committee on Benefits of
the Board (the "Committee"). The Committee shall be composed of not less than
two directors, all of whom are "disinterested persons" within the meaning of
Rule 16b-3 as promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
4.2 The Committee shall administer, construe and interpret the
Plan, establish and amend rules and regulations for administration of the Plan,
and perform all other acts relating to the Plan, including the delegation of
administrative responsibilities, which it believes reasonable and proper.
4.3 The Committee shall have full power to grant Options subject
to the provisions of the Plan, and shall, in its discretion, determine which
employees of the Company and its subsidiaries shall be granted Options, the
number of shares of Common Stock subject to any such Options, the dates after
which Options may be exercised, in whole or in part, and the terms and
conditions of the Options (including whether Stock Appreciation Rights described
in Section 6.8 of the Plan and/or Dividend Equivalent Rights described in
Section 6.9 of the Plan shall be provided with respect to an Option). No
employee of the Company or its subsidiaries shall have any claim or right to be
granted an Option, and there shall be no obligation on the part of the
Committee, in granting Options, to treat eligible employees uniformly.
4.4 The Plan limits the maximum number of Options that may be
granted in any one year (a) to the Chief Executive Officer of NYNEX and (b) to
each of the other Executive Officers required to be named in NYNEX's proxy
statement with respect to the preceding year, pursuant to the proxy rules
promulgated under the Exchange Act, to 250,000.
4.5 Any claim under the Plan by an employee to whom an Option was
granted ("Optionee") shall be presented to the Committee. The Committee shall
determine conclusively all questions arising out of or in connection with the
interpretation and administration of the Plan, and the Committee's decision
shall be final and binding on all parties.
Article V
Eligibility
5.1 Options may be granted to key employees of the Company and its
subsidiaries. Key employees will comprise, in general, those who contribute to
the management, direction and overall success of the Company and its
subsidiaries, including those who are members of the Board. Members of the Board
who are not employees of the Company or a subsidiary shall not be eligible for
Option grants.
4
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Article VI
Terms Of Options
6.1 Incentive and Nonstatutory Stock Options: In the discretion of
the Committee, Options may be granted as either (a) options that comply with the
requirements for an incentive stock option ("ISO") set forth in Section 422 of
the Code, or (b) options that do not comply with such requirements ("NSO").
Options which qualify as ISOs shall be designated as ISOs and other options
shall be designated as NSOs.
6.2 Option Agreement: All Options shall be evidenced by written
agreements executed by the Company and the Optionee (the "Option Agreements").
Option Agreements shall be subject to the applicable provisions of the Plan, and
shall contain such provisions as are required by the Plan and any other
provisions the Committee may prescribe which are not inconsistent with the Plan.
All Option Agreements shall include the nontransferability provisions of Section
6.11 of the Plan and shall specify the total number of shares of Common Stock
subject to each grant, the purchase price of a share of Common Stock under an
Option (the "Option Price"), the expiration date for the Option fixed by the
Committee ("Expiration Date"), and whether the Option is an ISO or an NSO.
6.3 Option Price: The Option Price shall not be less than the Fair
Market Value of a share of Common Stock on the Date the Option is granted. The
"Fair Market Value" shall be deemed, for all purposes under this Plan, to be the
mean between the high and low sale prices (rounded up to the nearest whole cent)
of the Common Stock as quoted by the New York Stock Exchange--Composite
Transactions listing for the date as of which value is to be determined, or if
there is no such quote for that date, then on the last preceding date on which
such quote was reported. In no event shall the Option Price be less than the par
value of a share of Common Stock.
6.4 Period of Exercise: The Committee shall determine the dates
after which Options may be exercised in whole or in part. If Options are
exercisable in installments, installments or portions thereof that are
exercisable and not exercised shall accumulate and remain exercisable. The
Committee may also amend an Option to accelerate the dates after which Options
may be exercised in whole or in part. However, except as set forth in Article
VIII and IX, no Option or portion thereof shall be exercisable prior to the
first anniversary of the date the Option is granted or after the Expiration
Date.
6.5 Expiration Date of ISO: The Expiration Date of an ISO may not
be later than the day preceding the tenth anniversary of the date on which the
ISO was granted.
6.6 Special Rules Regarding ISOs Granted to Certain Employees:
Notwithstanding any contrary provisions of Section 6.3 and 6.4 of the Plan, no
ISO shall be granted to any employee who, at the time the Option is granted,
owns (directly, or within the meaning of Section 424(d) of the Code) more than
ten percent of the total combined voting power of all classes of stock of the
Company or of any subsidiary, unless (a) the Option Price under such Option is
at least 110 percent of the Fair Market Value of a share of Common Stock on the
date the Option is granted and (b) the Expiration Date of such Option is a
5
<PAGE>
date not later than the day preceding the fifth anniversary of the date on which
the Option is granted.
6.7 Manner of Exercise and Payment: An Option, or portion thereof,
shall be exercised by delivery of a written notice of exercise to the Company
(on a form to be provided by the Company), and payment of the full price of
shares being purchased pursuant to the Option. An Optionee may exercise an
Option with respect to less than the full number of shares for which the Option
may then be exercised, but an Optionee must exercise the Option in full shares
of Common Stock. The Price of Common Stock purchased pursuant to an Option, or
portion thereof, may be paid:
a. in United States dollars in cash or by check, bank draft or money order
payable to the order of the Company;
b. through the delivery of shares of Common Stock with an aggregate Fair
Market Value on the date of exercise equal to the Option Price;
c. by an combination of the above methods of payment; provided, however,
that the Committee shall determine acceptable methods for tendering Common
Stock as payment upon exercise of an Option and may, in its discretion,
limit or prohibit the use of Common Stock to pay the Option Price;
d. in instances where Shares have been surrendered in full or partial
payment of an exercise, a new grant of Nonstatutory Options may be made
concurrently, with the number of Options granted equal to the number of
Shares surrendered. A grant made under these circumstances will be
exercisable after six months, have an Option price equal to the Fair Market
Value of Common Stock on the date of the new grant and have the same
expiration date as the Options being exercised.
6.8 Stock Appreciation Rights: The Committee may, in its discretion,
provide an Optionee with an alternate means of exercising an Option, or a
designated portion thereof, by granting the Optionee a Stock Appreciation Right.
With respect to an ISO, a Stock Appreciation Right may be provided only at the
time the Option is granted; with respect to an NSO, a Stock Appreciation Right
may be provided at or after the grant of the Option. A Stock Appreciation Right
is a right to receive, upon exercise of an Option or any portion thereof and in
lieu of the Optionee's right to purchase shares of Common Stock upon such
exercise, an amount equal to the excess of the Fair Market Value of a share of
Common Stock on the date of exercise over the Option Price, multiplied by the
number of shares of Common Stock that the Optionee would have received had the
Option or portion thereof been exercised through the purchases of shares of
Common Stock at the Option Price. An Option or portion thereof may be exercised
through election of a Stock Appreciation Right only if such Option or portion
thereof has been designated as exercisable in this alternative manner, such
Option of portion thereof is otherwise exercisable, and the Fair Market Value of
a share of Common Stock on the date of exercise exceeds the Option Price.
Payment of a Stock Appreciation Right shall, in the Committee's sole discretion,
by made:
a. in United States dollars in cash or by check, bank draft or money order
payable to the order of the Optionee;
6
<PAGE>
b. through the delivery of shares of Common Stock with and aggregate Fair
Market Value on the date of exercise equal to the amount payable with
respect to the Stock Appreciation Right;
c. by an combination of the above methods of payment.
6.9 Dividend Equivalent Rights: At the time an Option is granted, the
Committee may, in its discretion, grant Dividend Equivalent Rights with respect
to the Option. When such Dividend Equivalent Rights are granted, the Company
shall establish an account in the name of the Optionee (the "Account") to which
Dividend Equivalent amounts shall be credited to the extent provided
hereinafter. If an Option with Dividend Equivalent Rights is unexercised in
whole or in part on any dividend record date for Common Stock which occurs
during the five year period following the grant of the Option, the Account shall
be credited on the dividend record date with an amount equal to the dividend
declared on the number of shares of Common Stock equal to the number of shares
subject to such unexercised Option or the unexercised portion thereof
(regardless of whether such Option or portion thereof is currently exercisable).
Amounts credited to the Account shall accrue without interest or other earnings
thereon and shall be paid proportionately to the Optionee in cash at the time,
and only in the event that, the Option , or a portion thereof, is exercised
either through the purchase of Common Stock pursuant to Section 6.7 of the Plan
or the election of a Stock Appreciation Right pursuant to Section 6.8 of the
Plan. Any balance in the Account shall be forfeited if and when the related
Option expires unexercised or terminates for any reason provided for in the
Plan.
6.10 Withholding of Taxes: The Committee may, in its discretion, require an
Optionee to pay to the Company at the time of exercise, or at such later date as
the Committee shall specify, such amount as the Committee deems necessary to
satisfy the obligation of the Company or a subsidiary to withhold Federal, State
or local income or other taxes incurred by reason of the exercise, the transfer
of shares thereupon, or a subsequent disposition of the shares acquired by
exercise.
6.11 Nontransferability of Options: Each Option shall, during the
Optionee's lifetime, be exercisable only by the Optionee, and neither it nor any
right hereunder, including any Stock Appreciation Right provided under Section
6.8 of the Plan, shall be transferable otherwise than by will or the laws of
descent and distribution or be subject to attachment, execution or other similar
process. In the event of any attempt by the Optionee to alienate, assign,
pledge, hypothecate or otherwise dispose of an Option or of any right hereunder,
except as provided for herein, or in the event of any levy or any attachment,
execution or similar process upon the rights or interest hereby conferred, the
Company may terminate the Option by notice to the Optionee and the Option shall
thereupon become null and void.
6.12 Cessation of Employment of Optionee:
a. Cessation of Employment other than by Reason of Retirement, Disability,
Death or Certain Transfers: If an Optionee shall cease to be employed by
the Company or a subsidiary otherwise than by reason of Retirement,
Disability, death, or transfer to Bell Communications Research, Inc.
("BCR"), each Option held by the Optionee, together with
7
<PAGE>
all rights hereunder, shall terminate on the date of cessation of
employment, to the extent not previously exercised. For purposes of the
Plan:
(i) the term "Retirement" shall mean retirement with a Service Pension
as defined in the NYNEX Management Pension Plan, or, in the case of an
Optionee who subsequently becomes employed by BCR, retirement with a
Service Pension as defined in the Bell Communications Research
Management Pension Plan;
(ii) the term "Disability" shall mean permanent and total disability
as defined in Section 22(e)(3) of the Code; and
(iii) the transfer of an Optionee from the Company to a subsidiary,
from a subsidiary to the Company, or from one subsidiary to another
shall not be treated as a cessation of employment and shall not affect
Options previously granted under the Plan.
Notwithstanding the foregoing, the Chief Executive Officer of the
Company may determine at the time of such cessation of employment, in his or her
sole discretion, that the Option shall not terminate on the date of cessation of
employment but shall be exercisable, to the extent not previously exercised, for
a period ending not later than the fifth anniversary of the date of the
cessation of the Optionee's employment, provided, however, that in no event
shall an Option be exercisable after its Expiration Date.
b. Cessation of Employment by Reason of Transfer to BCR: If an Optionee
shall cease to be employed by the Company or a subsidiary by reason of a
transfer to BCR:
(i) such transfer shall not affect outstanding Options as long as the
Optionee remains employed by BCR;
(ii) if the Optionee shall cease to be employed by BCR by reason of a
transfer to the Company or any of its subsidiaries, outstanding
Options shall not be affected; and
(iii) if the Optionee shall cease to be employed by BCR for any
reason other than Retirement, Disability, death, or transfer to the
Company or a subsidiary, each Option held by the Optionee, together
with all rights hereunder, shall terminate on the date of cessation of
employment, to the extent not previously exercised.
c. Cessation of Employment by Reason of Retirement or Disability: If an
Optionee shall cease to be employed by the Company, a subsidiary, or BCR by
reason of Retirement or Disability, each Option held by the Optionee shall
be exercisable according to its terms until the later of: (i) the fifth
anniversary of the date of the cessation of the Optionee's employment, or
(ii) the fifth anniversary of the date of the Optionee's death if death
should occur within five years after cessation of employment, provided,
however, that in no event shall an Option be exercisable after its
Expiration Date. After the periods specified above, all such Options shall
terminate together with all rights
8
<PAGE>
hereunder, to the extent not previously exercised. Notwithstanding the
foregoing, if an Optionee shall cease to be employed by the Company, a
subsidiary, or BCR by reason of Disability or Retirement, each Option held
by the Optionee, together with all rights hereunder, shall immediately
terminate in the event that such Optionee, without the advance consent of
the Committee, should become associated with, employed by, render services
to or acquire an interest (other than an insubstantial interest as an
investor) in any business that is competitive with (i) the Company, an
subsidiary, or BCR, or (ii) a business in which the Company, an subsidiary,
or BCR has a substantial direct or indirect interest.
d. Cessation of Employment by reason of Death: In the event of the death
of the Optionee while employed by the Company, a subsidiary, or BCR, an
Option may be exercised at any time or from time to time prior to the
earlier of the Expiration Date, or the third anniversary of the date of the
Optionee's death.
e. Successors of Optionees: Any person or persons to whom an Optionee's
rights under an Option have passed by will or by the applicable laws of
descent and distribution shall be subject to all terms and conditions of
the Plan and the Option applicable to the Optionee.
6.13 Notification of Sales of Common Stock: Any Optionee who disposes of
shares of Common Stock acquired upon the exercise of an ISO either (a) within
two years after the date of the grant of the ISO under which the stock was
acquired or (b) within one year after the transfer of such shares to the
Optionee, shall notify the Company of such disposition and of the amount
realized upon such disposition.
Article VII
Limitation on Grants and Exercise of ISOs
7.1 The aggregate Fair Market Value (determined as of the date the Option
is granted) of the shares of Common Stock for which any employee may first
exercise ISOs granted under this Plan and all other stock option plans of the
Company and/or its subsidiaries, in any calendar year, shall not exceed $100,000
or such other amounts or limitation as may be provided from time to time by the
Code or any regulations promulgated thereunder.
Article VIII
Adjustments
8.1 If (a) the Company shall at any time be involved in a transaction to
which Section 424(a) of the Code or any successor provision is applicable; (b)
the Company shall declare a dividend payable in, or shall subdivide or combine,
its Common Stock; or (c) any other event shall occur which in the judgment of
the Committee necessitates action by way of adjusting the terms of the
outstanding Options, the Committee shall forthwith take any such action as
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in its judgment shall be necessary or desirable (i) to increase the number of
shares which may be issued under the Plan and (ii) to preserve the Optionee's
rights substantially proportionate to the rights existing prior to such event,
and to the extent that such action shall include an increase or decrease in the
number of shares of Common Stock subject to outstanding Options, the number of
shares available under Article III above shall be increased or decreased, as the
case may be, proportionately. Anything contained herein to the contrary
notwithstanding, upon the dissolution or liquidation of the Company, or upon any
merger or consolidation in which the Company is not the surviving corporation or
in which the Company survives only as a wholly owned subsidiary of any
corporation, each Option and related Stock Appreciation Right granted under the
Plan shall terminate; but, irrespective of whether or not the Option has been
outstanding for the one year period required under the provisions of Section 6.4
of the Plan, the Optionee shall have the right, immediately prior to such
dissolution, liquidation, merger or consolidation, to exercise his or her option
or related Stock Appreciation Right in whole or in part to the extent it shall
not have been exercised, without regard to any installment provisions.
8.2 The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. The judgment of the Committee with respect to any matter referred to
in this Article shall be conclusive and binding upon each Optionee, and
outstanding Option Agreements shall be deemed modified to the extent necessary
to reflect any such judgment. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an
Option.
Article IX
Change in Control
9.1 If a "Change in Control" occurs, then:
a. all Options and Stock Appreciation Rights previously granted to
Optionees under the Plan shall become fully exercisable as of the date of
the Change in Control, whether or not otherwise exercisable and vested as
of that date;
b. each Optionee whose employment by the Company and subsidiaries is
involuntarily terminated without cause (as defined below) during the
portion of the calendar year which remains following a Change in Control or
the two immediately following calendar years may exercise any Option or
Stock Appreciation Right previously granted to him or her under the Plan at
any time during the five years next following the date of his or her
termination of employment (or, if less, the period remaining on the
original term of the Option or Stock Appreciation Right); and
c. each Optionee who is deemed by the Committee to be a statutory officer
or insider subject to Section 16 of the Exchange Act may, at any time
during the ninety business days next following the Change in Control, in
lieu of exercising his or her Options, elect to receive a cash payment
equal to the positive difference between (x) the aggregate
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purchase price of the shares for which such election is made, and (y) the
highest aggregate Fair Market Value of the Common Stock with respect to
such shares which occurs during the period beginning thirty days prior to
the Change in Control and ending thirty days after the Change in Control,
or in the case of Incentive Stock Options the maximum permissible without
disqualifying such Options. In the event of an offer or exchange in which
fewer than all the shares which have been validly tendered or exchanged are
accepted, then the Committee may limit the number of shares subject to cash
payment in lieu of purchase to that portion of the shares that results from
multiplying the number of shares subject to options by a fraction, the
numerator of which is the number of shares of Common Stock acquired
pursuant to the offer or exchange and the denominator of which is the
number of shares tendered in response to such offer.
9.2 For purposes of this Article IX, the term "cause" means an Optionee's
willfully engaging in conduct materially injurious to the Company or any
subsidiary or the willful and continual failure by an Optionee to substantially
perform the duties assigned to him or her (other than any failure resulting from
the Optionee's incapacity due to physical injury or illness or mental illness),
which failure has not been corrected by the Optionee within thirty days after
receipt of a written notice from the Chief Executive Officer or Board of
Directors of his or her employer specifying the manner in which the Optionee has
failed to perform such duties. No act, or failure to act, by an Optionee shall
be deemed "willful" unless done, or omitted to be done, not in good faith and
without reasonable belief that such action or omission was in the best interest
of the Company and its subsidiaries.
9.3 For purposes of determining the rights of any Optionee under the Plan,
the term "Change in Control" means a change in the beneficial ownership of the
Company's voting stock or a change in the composition of the Company's Board of
Directors which occurs as follows:
a. any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Exchange Act) other than (i) a trustee or other fiduciary of
securities held under an employee benefit plan of the Company, or (ii) the
Optionee or any person acting in concert with the Optionee becomes a
beneficial owner, directly or indirectly, of stock of the Company
representing fifteen percent or more of the total voting power of the
Company's then outstanding stock;
b. a tender offer is made for the stock of the Company ,which has not been
approved by the Board of Directors of the Company, and the person making
the offer owns or has accepted for payment stock of the Company
representing fifteen percent or more of the total voting power of the
Company's stock; or
c. during any period of twenty-four consecutive months there shall cease to
be a majority of the Board of Directors comprised as follows: individuals
who at the beginning of such period constitute the Board of Directors and
any new Director(s) whose selection by the Board of Directors or nomination
for election by the Company's stockholders was approved by a vote of at
least two-thirds (2/3) of the Directors then
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still in office who either were Directors at the beginning of the period or
whose election or nomination for election was previously so approved.
The occurrence of a Change in Control shall not, of itself, result in a
termination of the Plan or affect any provisions of the Plan except as
specifically provided in this Article IX.
Article X
Amendment and Termination of Plan
10.1 The Board may at any time, or from time to time, suspend or terminate
the Plan in whole or in part or amend it in such respects as the Board may deem
appropriate, provided, however, that no such amendment shall be made which
would, without approval of the stockholders:
a. materially modify the eligibility requirements for receiving Options;
b. increase the total number of shares of Common Stock which may be issued
pursuant to Options, except as is provided for in accordance with Article
VIII of the Plan;
c. reduce the minimum Option Price;
d. extend the period of granting Options; or
e. materially increase in any other way the benefits accruing to
Optionees.
10.2 No amendment, suspension or termination of the Plan shall, without the
Optionee's consent, alter or impair any of the rights or obligations under any
Option theretofore granted to an Optionee under the Plan, except as provided in
Section 6.12(c) of the Plan, and further, if the Optionee has divulged or
appropriated to his or her own use or to the use of others any secret or
confidential information or knowledge, pertaining to the business of the
Company, a subsidiary, or BCR obtained by the Optionee while he or she was
employed by any of them, then each Option held by the Optionee, together with
all rights hereunder, shall immediately terminate.
10.3 The Committee may amend the Plan, subject to the limitations cited
above, in such manner as it deems necessary to permit the granting of Options
meeting the requirements of future amendments or issued regulations, if any, to
the Code.
Article XI
Government and Other Regulations
11.1 The obligation of the Company to issue or transfer and deliver shares
for Options exercised under the Plan shall be subject to all applicable laws,
regulations, rules, orders and approvals which shall then be in effect
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and required by governmental entities and the stock exchanges on which Common
Stock is traded. Any such issuance, transfer or delivery of shares may be
delayed until the above requirements are satisfied, and any shares distributed
under the Plan shall be subject to such restrictions and conditions on
disposition as the Committee, on the advice of counsel for the Company, shall
determine to be desirable or necessary under applicable law.
Article XII
Miscellaneous Provisions
12.1 Plan Does Not Confer Employment or Stockholder Rights: The right of the
Company and its subsidiaries to terminate (whether by dismissal, discharge,
retirement or otherwise) the Optionee's employment at any time at will, or as
otherwise provided by any agreement between the Company or a subsidiary and the
Optionee, is specifically reserved. Neither the Optionee nor any person entitled
to exercise the Optionee's rights in the event of the Optionee's death shall
have any rights of a stockholder with respect to the shares subject to each
Option, except to the extent that, and until, such shares shall have been issued
upon the exercise of each Option.
12.2 Use of Exercise Proceeds: Payments received from Optionees upon the
exercise of Options shall be used for the general corporate purposes of the
Company, except that any stock received in payment may be retired, or retained
in the Company's Treasury and reissued.
12.3 Indemnification: In addition to such other rights of indemnification
as they may have as members of the Board or the Committee, the members of the
Committee and the Board shall be indemnified by the Company against all costs
and expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except a judgment based upon a finding of bad faith;
provided that upon the institution of any such action, suit or proceeding a
Committee or Board member shall, in writing, give the Company notice thereof and
an opportunity, at its own expense, to handle and defend the same before such
Committee or Board member undertakes to handle and defend it on such member's
own behalf.
12.4 Applicable Law: The Plan shall be governed by Federal law and the laws
of the State of New York applicable to contracts made and to be performed in New
York.
Article XIII
Stockholder Approval and Effective Dates
13.1 This Plan has been adopted by the Board effective as of January 1,
1995. However, if the NYNEX 1995 Long Term Incentive Program is not approved
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within one year after the date of its adoption by the Board by the vote at a
meeting of the stockholders of the Company of the holders of a majority of the
outstanding shares of the Common Stock entitled to vote, this Plan and all
Options shall terminate at the time of that meeting of stockholders, or, if no
such meeting is held, after the passage of one year from the date the NYNEX 1995
Long Term Incentive Program was adopted by the Board. Options may not be granted
under the Plan after December 31, 1999.
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NYNEX 1990 STOCK OPTION PLAN
ARTICLE I
Purpose
1.1 The purpose of the NYNEX 1990 Stock Option Plan (the "Plan") is to
provide opportunities for selected key employees of NYNEX Corporation (the
"Company") and its subsidiaries to purchase shares of common stock of the
Company and to benefit from the appreciation thereof. The Plan is intended to
provide an increased incentive for these employees to contribute to the future
success and prosperity of the Company, thus enhancing the value of the stock for
the benefit of the Company's stockholders. In addition, the Plan is intended to
increase the ability of the Company to attract and retain individuals of
exceptional skill upon whom, in large measure, its sustained progress, growth
and profitability depend.
ARTICLE II
Definition
2.1 As used in the Plan, the term "subsidiary" shall have the meaning
assigned to such term in Section 425 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor provision, and shall include any
corporation which becomes a subsidiary after the date of adoption of the Plan.
ARTICLE III
Shares Subject to the Plan
3.1 The total number of shares of common stock of the Company ("Common
Stock") which may be issued under the Plan shall not exceed 4,000,000, subject
to adjustment in accordance with Article VIII of the Plan. These shares may be
authorized and unissued shares or Treasury shares, as the Board of Directors of
the Company (the "Board") may from time to time determine. If an option granted
under the Plan ("Option") or portion thereof shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares covered by
such Option shall be available for future grants of Options. For purposes of
this Section 3.1, Options paid for through the delivery of shares pursuant to
Section 6.7(b) of the Plan shall be treated as having expired or terminated
without having been exercised in full. An Option, or portion thereof, exercised
through the election of a Stock Appreciation Right pursuant to Section 6.8 of
the Plan shall be treated, for the purposes of this Article, as though the
Option, or portion thereof, had been exercised through the purchase of Common
Stock, with the result that the shares of Common Stock subject to the Option, or
portion thereof, that was so exercised shall not be available for future grants
of Options.
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ARTICLE IV
Administration
4.1 The Plan shall be administered by the Committee on Benefits of the
Board (the "Committee"). The Committee shall be composed of not less than three
directors, all of whom are "disinterested persons" within the meaning of Rule
16b-3 as promulgated under the Securities Exchange Act of 1934, as amended.
4.2 The Committee shall administer, construe and interpret the Plan,
establish and amend rules and regulations for administration of the Plan, and
perform all other acts relating to the Plan, including the delegation of
administrative responsibilities, which it believes reasonable and proper.
4.3 The Committee shall have full power to grant Options subject to the
provisions of the Plan, and shall, in its discretion, determine which employees
of the Company and its subsidiaries shall be granted Options, the number of
shares of Common Stock subject to any such Options, the dates after which
Options may be exercised, in whole or in part, and the terms and conditions of
the Options (including whether Stock Appreciation Rights described in Section
6.8 of the Plan and/or Dividend Equivalent Rights described in Section 6.9 of
the Plan shall be provided with respect to an Option). No employee of the
Company or its subsidiaries shall have any claim or right to be granted an
Option, and there shall be no obligation on the part of the Committee, in
granting Options, to treat eligible employees uniformly.
4.4 Any claim under the Plan by an employee to whom an Option was
granted ("Optionee") shall be presented to the Committee. The Committee shall
determine conclusively all questions arising out of or in connection with the
interpretation and administration of the Plan, and the Committee's decision
shall be final and binding on all parties.
ARTICLE V
Eligibility
5.1 Options may be granted to key employees of the Company and its
subsidiaries. Key employees will comprise, in general, those who contribute to
the management, direction and overall success of the Company and its
subsidiaries, including those who are members of the Board. Members of the
Board who are not employees of the Company or a subsidiary shall not be eligible
for Option grants.
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ARTICLE VI
Terms Of Options
6.1 Incentive and Nonstatutory Stock Options: In the discretion of the
Committee, Options may be granted as either (a) options that comply with the
requirements for an incentive stock option ("ISO") set forth in Section 422A of
the Code, or (b) options that do not comply with such requirements ("NSO").
Options which qualify as ISOs shall be designated as ISOs and other options
shall be designated as NSOs.
6.2 Option Agreement: All Options shall be evidenced by written
agreements executed by the Company and the Optionee (the "Option Agreements").
Option Agreements shall be subject to the applicable provisions of the Plan, and
shall contain such provisions as are required by the Plan and any other
provisions the Committee may prescribe which are not inconsistent with the Plan.
All Option Agreements shall include the nontransferability provisions of Section
6.11 of the Plan and shall specify the total number of shares of Common Stock
subject to each grant, the purchase price of a share of Common Stock under an
Option (the "Option Price"), the expiration date for the Option fixed by the
Committee ("Expiration Date"), and whether the Option is an ISO or an NSO.
6.3 Option Price: The Option Price shall not be less than the Fair
Market Value of a share of Common Stock on the date the Option is granted. The
"Fair Market Value" shall be deemed, for all purposes under this Plan, to be the
mean between the high and low sale prices (rounded up to the nearest whole cent)
of the Common Stock as quoted by the New York Stock Exchange--Composite
Transactions listing for the date as of which value is to be determined, or if
there is no such quote for that date, then on the last preceding date on which
such quote was reported. In no event shall the Option Price be less than the
par value of a share of Common Stock.
6.4 Period of Exercise: The Committee shall determine the dates after
which Options may be exercised in whole or in part. If Options are exercisable
in installments, installments or portions thereof that are exercisable and not
exercised shall accumulate and remain exercisable. The Committee may also amend
an Option to accelerate the dates after which Options may be exercised in whole
or in part. However, except as set forth in Article VIII, no Option or portion
thereof shall be exercisable prior to the first anniversary of the date the
Option is granted or after the Expiration Date.
6.5 Expiration Date of ISO: The Expiration Date of an ISO may not be
later than the day preceding the tenth anniversary of the date on which the ISO
was granted.
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6.6 Special Rules Regarding ISOs Granted to Certain Employees:
Notwithstanding any contrary provisions of Section 6.3 and 6.4 of the Plan, no
ISO shall be granted to any employee who, at the time the Option is granted,
owns (directly, or within the meaning of Section 425(d) of the Code) more than
ten percent of the total combined voting power of all classes of stock of the
Company or of any subsidiary, unless (a) the Option Price under such Option is
at least 110 percent of the Fair Market Value of a share of Common Stock on the
date the Option is granted and (b) the Expiration Date of such Option is a date
not later than the day preceding the fifth anniversary of the date on which the
Option is granted.
6.7 Manner of Exercise and Payment: An Option, or portion thereof,
shall be exercised by delivery of a written notice of exercise to the Company
(on a form to be provided by the Company), and payment of the full price of the
shares being purchased pursuant to the Option. An Optionee may exercise an
Option with respect to less than the full number of shares for which the Option
may then be exercised, but an Optionee must exercise the Option in full shares
of Common Stock. The price of Common Stock purchased pursuant to an Option, or
portion thereof, may be paid:
a. in United States dollars in cash or by check, bank draft or money order
payable to the order of the Company;
b. through the delivery of shares of Common Stock with an aggregate Fair
Market Value on the date of exercise equal to the Option Price;
c. by any combination of the above methods of payment; provided, however,
that the Committee shall determine acceptable methods for tendering Common
Stock as payment upon exercise of an Option and may, in its discretion,
limit or prohibit the use of Common Stock to pay the Option Price.
6.8 Stock Appreciation Rights: The Committee may, in its discretion,
provide an Optionee with an alternate means of exercising an Option, or a
designated portion thereof, by granting the Optionee a Stock Appreciation Right.
With respect to an ISO, a Stock Appreciation Right may be provided only at the
time the Option is granted; with respect to an NSO, a Stock Appreciation Right
may be provided at or after the grant of the Option. A Stock Appreciation Right
is a right to receive, upon exercise of an Option or any portion thereof and in
lieu of the Optionee's right to purchase shares of Common Stock upon such
exercise, an amount equal to the excess of the Fair Market Value of a share of
Common Stock on the date of exercise over the Option Price, multiplied by the
number of shares of Common Stock that the Optionee would have received had the
Option or portion thereof been exercised through the purchase of shares of
Common Stock at the Option Price. An Option or portion thereof may be exercised
through election of a Stock Appreciation Right only if such Option or portion
thereof has been designated as exercisable in this alternative manner, such
Option of portion thereof is otherwise exercisable, and the Fair Market Value of
a share of Common Stock on the date of exercise exceeds the Option Price.
Payment of a Stock Appreciation Right shall, in the Committee's sole discretion,
be made:
a. in United States dollars in cash or by check, bank draft or money order
payable to the order of the Optionee;
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b. through the delivery of shares of Common Stock with an aggregate Fair
Market Value on the date of exercise equal to the amount payable with
respect to the Stock Appreciation Right;
c. by any combination of the above methods of payment.
6.9 Dividend Equivalent Rights: At the time an Option is granted, the
Committee may, in its discretion, grant Dividend Equivalent Rights with respect
to the Option. When such Dividend Equivalent Rights are granted, the Company
shall establish an account in the name of the Optionee (the "Account") to which
Dividend Equivalent amounts shall be credited to the extent provided
hereinafter. If an Option with Dividend Equivalent Rights is unexercised in
whole or in part on any dividend record date for Common Stock which occurs
during the five year period following the grant of the Option, the Account shall
be credited on the dividend record date with an amount equal to the dividend
declared on the number of shares of Common Stock equal to the number of shares
subject to such unexercised Option or the unexercised portion thereof
(regardless of whether such Option or portion thereof is currently exercisable).
Amounts credited to the Account shall accrue without interest or other earnings
thereon and shall be paid proportionately to the Optionee in cash at the time,
and only in the event that, the Option, or a portion thereof, is exercised
either through the purchase of Common Stock pursuant to Section 6.7 of the Plan
or the election of a Stock Appreciation Right pursuant to Section 6.8 of the
Plan. Any balance in the Account shall be forfeited if and when the related
Option expires unexercised or terminates for any reason provided for in the
Plan.
6.10 Withholding of Taxes: The Committee may, in its discretion, require
an Optionee to pay to the Company at the time of exercise, or at such later date
as the Committee shall specify, such amount as the Committee deems necessary to
satisfy the obligation of the Company or a subsidiary to withhold Federal, State
or local income or other taxes incurred by reason of the exercise, the transfer
of shares thereupon, or a subsequent disposition of the shares acquired by
exercise.
6.11 Nontransferability of Options: Each Option shall, during the
Optionee's lifetime, be exercisable only by the Optionee, and neither it nor any
right hereunder, including any Stock Appreciation Right provided under Section
6.8 of the Plan, shall be transferable otherwise than by will or the laws of
descent and distribution or be subject to attachment, execution or other similar
process. In the event of any attempt by the Optionee to alienate, assign,
pledge, hypothecate or otherwise dispose of an Option or of any right hereunder,
except as provided for herein, or in the event of any levy or any attachment,
execution or similar process upon the rights or interest hereby conferred, the
Company may terminate the Option by notice to the Optionee and the Option shall
thereupon become null and void.
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6.12 Cessation of Employment of Optionee:
a. Cessation of Employment other than by Reason of Retirement, Disability,
Death or Certain Transfers: If an Optionee shall cease to be employed by
the Company or a subsidiary otherwise than by reason of Retirement,
Disability, death, or transfer to Bell Communications Research, Inc.
("BCR"), each Option held by the Optionee, together with all rights
hereunder, shall terminate on the date of cessation of employment, to the
extent not previously exercised. For purposes of the Plan:
(i) the term "Retirement" shall mean retirement with a Service Pension
as defined in the NYNEX Management Pension Plan, or, in the case of an
Optionee who subsequently becomes employed by BCR, retirement with a
Service Pension as defined in the Bell Communications Research
Management Pension Plan;
(ii) the term "Disability" shall mean permanent and total disability
as defined in Section 22(e)(3) of the Code; and
(iii) the transfer of an Optionee from the Company to a subsidiary,
from a subsidiary to the Company, or from one subsidiary to another
shall not be treated as a cessation of employment and shall not affect
Options previously granted under the Plan.
Notwithstanding the foregoing, the Chief Executive Officer of the
Company may determine at the time of such cessation of employment, in his
or her sole discretion, that the Option shall not terminate on the date of
cessation of employment but shall be exercisable, to the extent not
previously exercised, for a period ending not later than the fifth
anniversary of the date of the cessation of the Optionee's employment,
provided, however, that in no event shall an Option be exercisable after
its Expiration Date.
b. Cessation of Employment by Reason of Transfer to BCR: If an Optionee
shall cease to be employed by the Company or a subsidiary by reason of a
transfer to BCR:
(i) such transfer shall not affect outstanding Options as long as the
Optionee remains employed by BCR;
(ii) if the Optionee shall cease to be employed by BCR by reason of a
transfer to the Company or any of its subsidiaries, outstanding
Options shall not be affected; and
(iii) if the Optionee shall cease to be employed by BCR for any
reason other than Retirement, Disability, death, or transfer to the
Company or a subsidiary, each Option held by the Optionee, together
with all rights hereunder, shall terminate on the date of cessation of
employment, to the extent not previously exercised.
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c. Cessation of Employment by Reason of Retirement or Disability: If an
Optionee shall cease to be employed by the Company, a subsidiary, or BCR by
reason of Retirement or Disability, each Option held by the Optionee shall
be exercisable according to its terms until the later of: (i) the fifth
anniversary of the date of the cessation of the Optionee's employment, or
(ii) the fifth anniversary of the date of the Optionee's death if death
should occur within five years after cessation of employment, provided,
however, that in no event shall an Option be exercisable after its
Expiration Date. After the periods specified above, all such Options shall
terminate together with all rights hereunder, to the extent not previously
exercised. Notwithstanding the foregoing, if an Optionee shall cease to be
employed by the Company, a subsidiary, or BCR by reason of Disability or
Retirement, each Option held by the Optionee, together with all rights
hereunder, shall immediately terminate in the event that such Optionee,
without the advance consent of the Committee, should become associated
with, employed by, render services to or acquire an interest (other than an
insubstantial interest as an investor) in any business that is competitive
with (i) the Company, any subsidiary, or BCR, or (ii) a business in which
the Company, any subsidiary, or BCR has a substantial direct or indirect
interest.
d. Cessation of Employment by Reason of Death: In the event of the death
of the Optionee while employed by the Company, a subsidiary, or BCR, an
Option may be exercised at any time or from time to time prior to the
earlier of the Expiration Date, or the third anniversary of the date of the
Optionee's death.
e. Successors of Optionees: Any person or persons to whom an Optionee's
rights under an Option have passed by will or by the applicable laws of
descent and distribution shall be subject to all terms and conditions of
the Plan and the Option applicable to the Optionee.
6.13 Notification of Sales of Common Stock: Any Optionee who disposes of
shares of Common Stock acquired upon the exercise of an ISO either (a) within
two years after the date of the grant of the ISO under which the stock was
acquired or (b) within one year after the transfer of such shares to the
Optionee, shall notify the Company of such disposition and of the amount
realized upon such disposition.
ARTICLE VII
Limitation on Grants and Exercise of ISOs
7.1 The aggregate Fair Market Value (determined as of the date the Option
is granted) of the shares of Common Stock for which any employee may first
exercise Options granted under this Plan and all other stock option plans of the
Company and/or its subsidiaries, in any calendar year, shall not exceed $100,000
or such other amounts or limitation as may be provided from time to time by the
Code or any regulations promulgated thereunder.
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ARTICLE VIII
Adjustments
8.1 If (a) the Company shall at any time be involved in a transaction to
which Section 425(a) of the Code or any successor provision is applicable; (b)
the Company shall declare a dividend payable in, or shall subdivide or combine,
its Common Stock; or (c) any other event shall occur which in the judgment of
the Committee necessitates action by way of adjusting the terms of the
outstanding Options, the Committee shall forthwith take any such action as in
its judgment shall be necessary to preserve the Optionee's rights substantially
proportionate to the rights existing prior to such event and to the extent that
such action shall include an increase or decrease in the number of shares of
Common Stock subject to outstanding Options, the number of shares available
under Article III above shall be increased or decreased, as the case may be,
proportionately. Anything contained herein to the contrary notwithstanding,
upon the dissolution or liquidation of the Company, or upon any merger or
consolidation in which the Company is not the surviving corporation or in which
the Company survives only as a wholly owned subsidiary of any corporation, each
Option and related Stock Appreciation Right granted under the Plan shall
terminate; but, irrespective of whether or not the Option has been outstanding
for the one year period required under the provisions of Section 6.4 of the
Plan, the Optionee shall have the right, immediately prior to such dissolution,
liquidation, merger or consolidation, to exercise his or her option or related
Stock Appreciation Right in whole or in part to the extent it shall not have
been exercised, without regard to any installment provisions.
8.2 The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. The judgment of the Committee with respect to any matter referred
to in this Article shall be conclusive and binding upon each Optionee, and
outstanding Option Agreements shall be deemed modified to the extent necessary
to reflect any such judgment. Any such adjustment may provide for the
elimination of any fractional share which might otherwise become subject to an
Option.
ARTICLE IX
Change in Control
9.1 If a "Change in Control" occurs, then:
a. all Options and Stock Appreciation Rights previously granted to
Optionees under the Plan shall become fully exercisable as of the date of
the Change in Control, whether or not otherwise exercisable and vested as
of that date;
b. each Optionee whose employment by the Company and subsidiaries is
involuntarily terminated without cause (as defined below) during the
portion of the calendar year which remains following a Change in Control or
the two immediately following calendar years may exercise any Option or
Stock Appreciation Right previously granted to him or her under the
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Plan at any time during the five years next following the date of his or
her termination of employment (or, if less, the period remaining on the
original term of the Option or Stock Appreciation Right); and
c. each Optionee who is deemed by the Committee to be a statutory officer
or insider subject to Section 16 of the Securities Exchange Act of 1934
may, at any time during the ninety business days next following the Change
in Control, in lieu of exercising his or her Options, elect to receive a
cash payment equal to the positive difference between (x) the aggregate
purchase price of the shares for which such election is made, and (y) the
highest aggregate Fair Market Value of the Common Stock with respect to
such shares which occurs during the period beginning thirty days prior to
the Change in Control and ending thirty days after the Change in Control,
or in the case of Incentive Stock Options the maximum permissible without
disqualifying such Options. In the event of an offer or exchange in which
fewer than all of the shares which have been validly tendered or exchanged
are accepted, then the Committee may limit the number of shares subject to
cash payment in lieu of purchase to that portion of the shares that results
from multiplying the number of shares subject to options by a fraction, the
numerator of which is the number of shares of Common Stock acquired
pursuant to the offer or exchange and the denominator of which is the
number of shares tendered in response to such offer.
9.2 For purposes of this Article IX, the term "cause" means an Optionee's
willfully engaging in conduct materially injurious to the Company or any
subsidiary or the willful and continual failure by an Optionee to substantially
perform the duties assigned to him or her (other than any failure resulting from
the Optionee's incapacity due to physical injury or illness or mental illness),
which failure has not been corrected by the Optionee within thirty days after
receipt of a written notice from the Chief Executive Officer or Board of
Directors of his or her employer specifying the manner in which the Optionee has
failed to perform such duties. No act, or failure to act, by an Optionee shall
be deemed "willful" unless done, or omitted to be done, not in good faith and
without reasonable belief that such action or omission was in the best interest
of the Company and its subsidiaries.
9.3 For purposes of determining the rights of any Optionee under the Plan,
the term "Change in Control" means a change in the beneficial ownership of the
Company's voting stock or a change in the composition of the Company's Board of
Directors which occurs as follows:
a. any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934) other than
(i) a trustee or other fiduciary of securities held under an employee
benefit plan of the Company, or
(ii) the Optionee or any person acting in concert with the Optionee
becomes a beneficial owner, directly or indirectly, of stock of the
Company representing fifteen percent or more of the total voting power
of the Company's then outstanding stock;
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b. a tender offer is made for the stock of the Company, which has not been
approved by the Board of Directors of the Company, and the person making
the offer owns or has accepted for payment stock of the Company
representing fifteen percent or more of the total voting power of the
Company's stock; or
c. during any period of twenty-four consecutive months there shall cease
to be a majority of the Board of Directors comprised as follows:
individuals who at the beginning of such period constitute the Board of
Directors and any new Director(s) whose election by the Board of Directors
or nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose election or
nomination for election was previously so approved.
The occurrence of a Change in Control shall not, of itself, result in a
termination of the Plan or affect any provision of the Plan except as
specifically provided in this Article IX.
ARTICLE X
Amendment and Termination of Plan
10.1 The Board may at any time, or from time to time, suspend or terminate
the Plan in whole or in part or amend it in such respects as the Board may deem
appropriate, provided, however, that no such amendment shall be made which
would, without approval of the stockholders:
a. materially modify the eligibility requirements for receiving Options;
b. increase the total number of shares of Common Stock which may be issued
pursuant to Options, except as is provided for in accordance with Article
VIII of the Plan;
c. reduce the minimum Option Price;
d. extend the period of granting Options; or
e. materially increase in any other way the benefits accruing to
Optionees.
10.2 No amendment, suspension or termination of the Plan shall, without the
Optionee's consent, alter or impair any of the rights or obligations under any
Option theretofore granted to an Optionee under the Plan, except as provided in
Section 6.12(c) of the Plan, and further, if the Optionee has divulged or
appropriated to his or her own use or to the use of others any secret or
confidential information or knowledge, pertaining to the business of the
Company, a subsidiary, or BCR obtained by the Optionee while he or she was
employed by any of them, then each Option held by the Optionee, together with
all rights hereunder, shall immediately terminate.
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10.3 The Committee may amend the Plan, subject to the limitations cited
above, in such manner as it deems necessary to permit the granting of Options
meeting the requirements of future amendments or issued regulations, if any, to
the Code.
ARTICLE XI
Government and Other Regulations
11.1 The obligation of the Company to issue or transfer and deliver shares
for Options exercised under the Plan shall be subject to all applicable laws,
regulations, rules, orders and approvals which shall then be in effect and
required by governmental entities and the stock exchanges on which Common Stock
is traded. Any such issuance, transfer or delivery of shares may be delayed
until the above requirements are satisfied, and any shares distributed under the
Plan shall be subject to such restrictions and conditions on disposition as the
Committee, on the advice of counsel for the Company, shall determine to be
desirable or necessary under applicable law.
ARTICLE XII
Miscellaneous Provisions
12.1 Plan Does Not Confer Employment or Stockholder Rights: The right of
the Company and its subsidiaries to terminate (whether by dismissal, discharge,
retirement or otherwise) the Optionee's employment at any time at will, or as
otherwise provided by any agreement between the Company or a subsidiary and the
Optionee, is specifically reserved. Neither the Optionee nor any person
entitled to exercise the Optionee's rights in the event of the Optionee's death
shall have any rights of a stockholder with respect to the shares subject to
each Option, except to the extent that, and until, such shares shall have been
issued upon the exercise of each Option.
12.2 Use of Exercise Proceeds: Payments received from Optionees upon the
exercise of Options shall be used for the general corporate purposes of the
Company, except that any stock received in payment may be retired, or retained
in the Company's Treasury and reissued.
12.3 Indemnification: In addition to such other rights of indemnification
as they may have as members of the Board or the Committee, the members of the
Committee and the Board shall be indemnified by the Company against all costs
and expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except a judgment based upon a finding of bad faith;
provided that upon the institution of any such action, suit or proceeding a
Committee or Board member shall, in writing, give the Company notice thereof and
an opportunity, at its own expense, to handle and defend the same before such
Committee or Board member undertakes to handle and defend it on such member's
own behalf.
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12.4 Applicable Law: The Plan shall be governed by Federal law and the
laws of the State of New York applicable to contracts made and to be performed
in New York.
ARTICLE XIII
Stockholder Approval and Effective Dates
13.1 This Plan has been adopted by the Board effective as of January 1,
1990. However, if the NYNEX 1990 Long Term Incentive Program is not approved
within one year after the date of its adoption by the Board by the vote at a
meeting of the stockholders of the Company of the holders of a majority of the
outstanding shares of the Common Stock entitled to vote*, this Plan and all
Options shall terminate at the time of that meeting of stockholders or, if no
such meeting is held, after the passage of one year from the date the NYNEX 1990
Long Term Incentive Program was adopted by the Board. Options may not be
granted under the Plan after December 31, 1994.
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NYNEX 1995 LONG TERM INCENTIVE PROGRAM
I. General
1. Effective Date of the Program. This 1995 Long Term Incentive Program
(the "Incentive Program") has been established by NYNEX Corporation, a Delaware
corporation (the "Company"), effective as of January 1, 1995, subject to
approval by the affirmative vote of a majority of the shares present or
represented by proxy at the Company's 1994 Annual Meeting of Stockholders.
2. Purpose. The purpose of the Incentive Program is to promote the long
term financial interests of the Company by attracting, motivating and retaining
individuals possessing outstanding ability and furthering the identity of
interests of participating employees with those of the Company's stockholders.
3. Awards. Awards under the Incentive Program may include Options, Stock
Appreciation Rights (but only if granted in conjunction with Options),
Restricted Stock, Performance Units, and Other Stock Units.
4. Administration. The Incentive Program shall be administered and
interpreted by the Committee on Benefits of the Board of Directors of the
Company (the "Committee") which is composed of not less than two Directors;
provided, however, that any action required or permitted to be taken by the
Committee may be taken by the Board of Directors of the Company. No member of
the Committee shall be eligible, or within one year prior to such membership
shall have been eligible, for an award under the Incentive Program. The
Committee may subject any Award or exercise under the Incentive Program or any
stock awarded under the Incentive Program to such conditions, limitations or
restrictions as the Committee determines to be appropriate for any reason.
5. Participation. The Committee shall designate the officers and other
management employees of the Company and its subsidiaries who shall be
participants ("Participants") in the Incentive Program. The Committee may make
any Award to a Participant under the Incentive Program in conjunction with any
other Award (including Awards previously made under this or any other incentive
plan). Notwithstanding any other provision of the Incentive Program, if a
Participant, while otherwise eligible for payment or accrual of a benefit under
the Incentive Program:
(a) has, without the consent of the Company or any subsidiary, become
associated with, is employed by,renders services to, or owns a substantial
interest in any business that is competitive with the Company or its
subsidiaries, or
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(b) has divulged or appropriated to his or her own use or to the use of
others any secret or confidential information or knowledge, pertaining to the
business of the Company or its subsidiaries obtained by the Participant while he
or she was employed by any of them, then, his or her participation in the
Incentive Program shall immediately cease and all undistributed Awards
previously made to him or her under the Incentive Program and all rights to
payments of any kind under the Incentive Program, exclusive of any amount
voluntarily deferred, shall be immediately forfeited.
6. Stock Subject to the Incentive Program. Shares of stock subject to the
Incentive Program shall be shares of the Company's common stock, par value $1.00
per share ("Common Stock"). The number of shares of Common Stock which may be
subject to Options or delivered in payment of Stock Appreciation Rights or
Restricted Stock or Performance Units or Other Stock Units under the Incentive
Program shall not exceed one-half of one percent (0.5%) of the outstanding
shares of Common Stock as of the first day of each calendar year for which the
Incentive Program is in effect in each such year, subject to adjustment in
accordance with paragraph I.8 of the Incentive Program.
All shares of Common stock available in any year which are not awarded under
the Incentive Program shall be available for award in subsequent years. Any
shares of Common Stock subject to any Award which terminates by expiration,
cancellation, forfeiture, surrender or otherwise without the issuance of such
shares or without payment therefore shall again be available for future Awards
under the Incentive Program. Either authorized and unissued shares or treasury
shares may be delivered under the Incentive Program.
7. Fair Market Value. For all purposes of the Incentive Program, the "Fair
Market Value" of a share of Common Stock shall be deemed to be the mean between
the high and low sales prices (rounded up to the nearest whole cent) of the
Common Stock as quoted on the New York Stock Exchange-Composite Transactions
listing for the date as of which value is to be determined, or if there is no
such quote for that date, then on the last preceding date on which such quote
was reported.
8. Changes in Capitalization. In the event of any change in the
outstanding shares of Common Stock by reason of any stock dividend or split,
recapitalization, merger, consolidation, combination or exchange of shares or
other similar corporate change, the number of shares of Common Stock subject to
the Incentive Program and the terms of all outstanding Awards shall be equitably
adjusted by the Committee. Such determination of the Committee shall be
conclusive; provided that in no event shall the Committee adjust the option
price to a price less than the par value of the Common Stock on the date of the
adjustment. Furthermore, if there is an adjustment in the number of shares,
cash in lieu of a fraction of a share shall be delivered in regard to any Award
under the Incentive Program; and, if an adjustment of the option price shall
result in a
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fraction of one cent, the next higher full cent shall be included in
such price in lieu of such fraction.
9. Change in Control.
(a) In the event of a Change in Control of the Company, as hereinafter
defined:
(i) all Options and Stock Appreciation Rights previously granted to
Participants under Part II of the Incentive Program shall become fully
exercisable as of the date of the Change in Control, whether or not exercisable
and vested as of that date;
(ii) each Participant whose employment by the Company and its
subsidiaries is involuntarily terminated without cause (as defined below) during
the portion of the calendar year which remains following a Change in Control or
the two immediately following calendar years may exercise any Option or Stock
Appreciation Right previously granted to him or her under Part II of the
Incentive Program at any time during the five years next following the date of
his or her termination of employment (or, if less, the period remaining on the
original term of the Option or Stock Appreciation Right);
(iii) each Participant who is deemed by the Committee to be a statutory
officer or insider subject to Section 16 of the Securities Exchange Act of 1934
may, at any time during the ninety business days next following the Change in
Control, in lieu of exercising his or her Options, elect to receive a cash
payment equal to the positive difference between (x) the aggregate purchase
price of the shares for which such election is made, and (y) the highest
aggregate Fair Market Value of the Common Stock with respect to such shares
which occurs during the period beginning thirty days prior to the Change in
Control and ending thirty days after the Change in Control, or in the case of
Incentive Stock Options the maximum permissible without disqualifying such
Options. In the event of an offer or exchange in which fewer than all of the
shares which have been validly tendered or exchanged are accepted, then the
Committee may limit the number of shares subject to cash payment in lieu of
purchase to that portion of the shares that results from multiplying the option
shares by a fraction, the numerator of which is the number of shares of Common
Stock acquired pursuant to the offer or exchange and the denominator of which is
the number of shares tendered in response to such offer;
(iv) any restricted period in effect as of the date of the Change in
Control shall end with respect to shares of Restricted Stock previously awarded
in accordance with Part III of the Incentive Program and, as soon as
practicable, such shares shall be distributed to Participants free of
restrictions;
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(v) the value of each Participant's Performance Units (awarded under Part
IV of the Incentive Program) for any performance period in effect as of the date
of the Change in Control shall be the greater of the amount determined under the
terms of the Incentive Program without regard to this paragraph I.9(a) or an
amount determined on the basis of (x) the percentage of the applicable corporate
performance goal (based upon which Performance Units are to be determined)
achieved as of the date of the Change in Control; (y) the highest Fair Market
Value of Common Stock on any date occurring during the period beginning thirty
days prior to the Change in Control and ending thirty days after the Change in
Control; and (z) dividends credited at a rate not less than the rate in effect
immediately prior to the Change in Control. In the event that a Participant's
employment is involuntarily terminated without cause during any performance
period in effect on the date of the Change in Control, an immediate cash
distribution of the value of his or her Performance Units (as determined in this
paragraph I.9(a)) shall be made to the Participant; and
(vi) the value of each Participant's Other Stock units (awarded under Part
V of the Incentive Program) which have not otherwise been distributed to the
Participant shall immediately become payable in cash to the Participant, and as
soon as practicable, such cash payment shall be made to each Participant.
(b) A "Change in Control" shall be deemed to have occurred if there is a
change in the beneficial ownership of the Company's voting stock or a change in
the composition of the Company's Board of Directors which occurs as follows:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934) other than (x) a trustee or other fiduciary
of securities held under an employee benefit plan of the Company, or (y) the
Participant or any person acting in concert with the Participant becomes a
beneficial owner, directly or indirectly, of stock of the Company representing
fifteen percent or more of the total voting power of the Company's then
outstanding stock:
(ii) a tender offer is made for the stock of the Company, which has not
been approved by the Board of Directors of the Company, and the person making
the offer owns or has accepted for payment stock of the Company representing
fifteen percent or more of the total voting power of the Company's stock; or
(iii) during any period of twenty-four consecutive months there shall cease
to be a majority of the Board of Directors comprised as follows: individuals
who at the beginning of such period constitute the Board of Directors and any
new Director(s) whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least two-
thirds (2/3) of the Directors then still in office who either were Directors at
the beginning of the period or whose election or nomination for election
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was previously so approved. The occurrence of a Change in Control shall not, of
itself, result in a termination of the Incentive Program or affect any provision
of the Incentive Program, except as specifically provided in this paragraph I.9.
(c) For purposes of this paragraph I.9, the term "cause" means a
Participant's willfully engaging in conduct materially injurious to the Company
or any subsidiary or the willful and continual failure by a Participant to
substantially perform the duties assigned to him or her (other than any failure
resulting from his or her incapacity due to physical injury or illness or mental
illness), which failure has not been corrected by him or her within thirty days
after receipt of a written notice from the Chief Executive Officer or Board of
Directors of his or her employer specifying the manner in which he or she has
failed to perform such duties. No act, or failure to act, by a Participant
shall be deemed "willful" unless done, or omitted to be done, not in good faith
and without reasonable belief that such action or omission was in the best
interest of the Company and its subsidiaries.
10. Withholding. Any payment of cash or issuance of Common Stock pursuant
to any provision of the Incentive Program shall be subject to the withholding of
income, employment and other taxes to the extent the Company or a subsidiary is
required to make such withholding. In the case of the issuance of shares of
Common Stock, the Participant may either pay the withholding related to such
shares directly or request that the Company retain, rather than issue to the
Participant, the number of shares having a Fair Market Value equal to the amount
to be withheld.
11. Transferability. Each Option, Stock Appreciation Right, Restricted
Stock Award, Performance Unit and Other Stock Unit, by its terms, may not be
transferred by a Participant other than by will or the laws of descent and
distribution and during the lifetime of a Participant any rights with respect
thereto shall be exercisable only by the Participant.
12. Amendment or Termination. The Board of Directors may amend, suspend or
terminate the Incentive Program or any portion thereof at any time. The
Committee may amend the Incentive Program to the extent necessary for the
efficient administration of the Incentive Program, or to make it practically
workable or to conform to the provisions of any federal or state law or
regulation. No award shall be made under the Incentive Program after December
31, 1999. The Committee may amend the terms of any outstanding Award in any
manner not inconsistent with the terms of the Incentive Program. In no event
may any amendment, suspension or termination of the Incentive Program or any
amendment of the terms of any Award impair the rights of any Participant,
without his or her consent, except as provided in paragraph I.5.
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13. Other Compensation and Benefits. Nothing contained herein shall be
construed to limit in any way the authority of the Company, the Board of
Directors of the Company and the Committee to provide for compensation and
benefits of employees of the Company and its subsidiaries in accordance with
applicable law.
II. Stock Options and Stock Appreciation Rights
1. Stock Options ("Options") may be granted to Participants in accordance
with the terms and conditions of the NYNEX 1995 Stock Option Plan (the "Plan")
either alone or in addition to other Awards granted under the Incentive Program.
The total number of shares of Common Stock for which Options may be issued shall
not exceed 20,000,000, subject to adjustment in accordance with Article VIII of
the Plan. The Plan limits the maximum number of Options that may be granted in
any one year (i) to the Chief Executive Officer of NYNEX and (ii) to each of the
other Executive Officers required to be named in NYNEX's Proxy Statement with
respect to the preceding year, pursuant to the Proxy rules promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act"), to 10% of the total number
of Options granted under the Plan in such year. Any Option granted under the
Incentive Program shall be evidenced by an Option Agreement in such form as the
Committee may from time to time approve. The Committee may grant Incentive
Stock Options, as described in Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"), or any successor provision, or Options which do
not meet such requirements ("Nonstatutory Stock Options"), or a combination of
both. Any such Option shall be subject to the following terms and conditions
and to such additional terms and conditions, not inconsistent with the
provisions of the Incentive Program, as the Committee shall deem desirable:
(a) Option Price. The purchase or option price per share purchasable under
an Option shall be determined by the Committee in its sole discretion; provided
that such purchase or option price shall not be less than the Fair Market Value
of the share on the date of the grant of the Option.
(b) Option Period. The term of each Option shall be fixed by the Committee
in its sole discretion; provided that no Incentive Stock Option shall be
exercisable after the expiration of ten years from the date the Option is
granted.
(c) Exercisability. Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant. Unless otherwise
determined by the Committee at or subsequent to grant, no Incentive Stock Option
shall be exercisable during the year ending on the day before the first
anniversary date of the granting of the Incentive Stock Option.
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(d) Method of Exercise. Subject to the other provisions of the Incentive
Program and any applicable Option Agreement, any Option may be exercised by the
Participant in whole or in part at such time or times, and the Participant may
make payment of the option price in such form or forms, including, without
limitation, payment by delivery of cash, shares of Common Stock or any
combination thereof, as the Committee may specify in the applicable Option
Agreement.
In instances where Shares have been surrendered in full or partial payment
of an exercise, a new grant of Nonstatutory Options may be made concurrently,
with the number of Options granted equal to the number of Shares surrendered. A
grant made under these circumstances will be exercisable after six months, have
an Option price equal to the Fair Market Value of Common Stock on the date of
the new grant and have the same expiration date as a Nonstatutory Option.
(e) Incentive Stock Options. In accordance with rules and procedures
established by the Committee, the aggregate Fair Market Value (determined as of
the time of grant) of the shares of Common Stock with respect to which Incentive
Stock Options held by any Participant which are exercisable for the first time
by such Participant during any calendar year under the Incentive Program (and
under any other benefit plans of the Company or any parent or subsidiary
corporation of the Company) shall not exceed $100,000 or, if different, the
maximum limitation in effect at the time of grant under Section 422A of the
Code, or any successor provision, and any regulations promulgated thereunder.
The terms of any Incentive Stock Option granted hereunder shall comply in all
respects with the provisions of Section 422A of the Code, or any successor
provision, and any regulations promulgated thereunder.
2. Stock Appreciation Rights may be granted to Participants, but only in
conjunction with Options, in accordance with the terms and provisions of the
NYNEX 1995 Stock Option Plan.
III. Restricted Stock
The Committee may grant Restricted Stock to Participants; provided,
however, that all such grants comply with the provisions of the NYNEX 1987
Restricted Stock Award Plan.
IV. Performance Units
The Committee may grant Performance Units, expressed in terms of shares of
Common Stock, to Participants provided, however, that all such grants comply
with the NYNEX Senior Management Long Term Incentive Plan or the NYNEX Long Term
Incentive Plan, as the case may be.
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V. Other Stock Units
1. Grant. Other Awards of shares of Common Stock and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, shares of
Common Stock ("Other Stock Units") may be granted hereunder to Participants.
Other Stock Units may be paid in shares of Common Stock, cash or any other form
of property as the Committee shall determine.
2. Conditions. Shares of Common Stock granted under this Section V may be
issued for no cash consideration or for such minimum consideration as may be
required by applicable law. Shares of Common Stock purchased pursuant to a
purchase right awarded under this Section V shall be purchased for such
consideration as the Committee shall in its sole discretion determine, which
shall not be less than the Fair Market Value of such shares as of the date such
purchase right is awarded.
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NYNEX
EXECUTIVE OFFICER SHORT TERM INCENTIVE PLAN
1. PURPOSE. The purpose of the NYNEX Executive Officer Short Term Incentive
Plan (hereinafter referred to as the "Plan") is to provide eligible Senior
Management (as defined in Section 3, below) of NYNEX Corporation (hereinafter
referred to as the "Company"), and its subsidiaries with incentive compensation
based upon the achievement of certain financial and service performance levels
for the Company and its subsidiaries (the Company and its subsidiaries
hereinafter from time to time shall be referred to as "Associated Companies").
It is intended that awards made under the Plan will qualify for the exception
for "performance-based compensation" under Section 162(m) of the Internal
Revenue Code of 1986, as amended, or any successor provision (the "Code").
Employees eligible to receive awards under the Plan (in accordance with Section
3, below) hereinafter shall be referred to as "Participants".
2. AWARDS. The Board of Directors of the Company (the "Board"), upon the
recommendation of the Committee on Benefits of the Board (the "Committee"), may
make awards in each calendar year with respect to the preceding year ("Award
Year"), in such amounts and to such of the eligible Senior Management of the
Company and its subsidiaries as the Committee may determine, subject to the
limitations of the Plan. The Board may determine not later than December 31 of
each Award Year the obligation to pay a minimum aggregate amount of such award
to be payable with respect to each Award Year no later than March 15 of the
succeeding year to the eligible Senior Management who must subsequently be
designated as recipients of the awards under the Plan. The Board, upon the
recommendation of the Committee, may also authorize and direct from time to
time, subject to the limitations of the Plan, that additional amounts be payable
on or before March 15 of the year succeeding the Award Year. Notwithstanding
any other provision of the Plan to the contrary, awards once determined by the
Board shall be irrevocable. Except as may otherwise be provided herein, one-
half of the awards made to each Participant shall be deferred pursuant to the
terms of the NYNEX Senior Management Account Balance Deferral Plan, and the
remaining one-half of such awards shall be paid in cash in the calendar year in
which the awards are granted except to the extent that a Participant has made an
election to defer the receipt of such portion of the awards pursuant to the
NYNEX Corporation Senior Management Incentive Award Deferral Plan.
The Committee shall approve a maximum award level ("Maximum Award") for each
Participant. A percentage of the Maximum Award for any Award Year varying from
zero (0%) percent to one hundred (100%) percent will be determined based upon
the levels of achievement during such Award Year of the criteria referred to in
subsections (a) and (b), below, affording appropriate weight to each criterion
as determined by the Board, upon the recommendation of the Committee. In the
case of each Participant, such award may be less (including no award) than such
percentage of the Maximum Award;
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provided, however, that no Maximum Award may exceed two hundred (200%) percent
of the Participant's annual base salary in effect on the first day of the Award
Year, and, in no event, $2,000,000.
The percentage of the Maximum Awards referred to above shall be based upon the
level of achievement during the Award Year with regard to one or more of the
following:
(a) financial performance criteria of the Company (and its consolidated
subsidiaries) (prepared, as appropriate, on the same basis as the financial
statements published for financial reporting purposes and determined in
accordance with Section 7(a), below); such financial performance may only
include NYNEX Net Income (i.e., percentage of Net Income commitment achieved
after required adjustments described in Section 4(a), below), NYNEX Cash Flow
Return on Investment and/or return to Share Owners as compared to the six other
Regional Holding Companies; and
(b) service performance criteria of the Company (and its consolidated
subsidiaries), i.e., a weighted average of NYNEX subsidiaries' results.
The Board, upon the recommendation of the Committee, shall establish the
performance criteria and levels referred to in subsections (a) and (b), above,
for each Award Year.
3. ELIGIBILITY
(a) Persons employed by the Company during an Award Year in active service at
a level above the fifth level of management, determined by the Board to be in
the Senior Management Compensation Group, and designated as Participants by the
Committee, shall be eligible to become Participants and receive awards under the
Plan for such Award Year (whether or not so employed or living at the date an
award is granted); provided that such employee has had at least three months of
active service during the Award Year with the Company or with the Company and
any other Associated Company at such a level, excluding any time the employee
was absent on account of disability and receiving any sickness or accident
disability benefits under any Company or Associated Company Sickness and
Accident Disability Benefit Plan ("disability benefits"). An employee shall not
be rendered ineligible to become a Participant in the Plan by reason of being a
member of the Board.
(b) In the event that any of the following circumstances occur, the Maximum
Award applicable to a Participant otherwise eligible to receive awards under the
Plan for an Award Year shall be prorated over the Award Year as follows:
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(i) entrance to or exit - prorate from the date
from a level of of entrance or exit
management eligible for to such level to the
awards after the nearest half month,
beginning of the Award
Year
(ii) modifications in the - prorate according to
salary rate the time of active
service at each
position rate to the
nearest half month,
(iii) receipt of disability - prorate to the day
benefits for more than based on time of
three months in an service while not
Award Year under the receiving disability
Company or other benefits,
Associated Company Plan.
(iv) receipt of disability - no reduction in the
benefits for three applicable Maximum
months or less in any Award,
Award Year under any
Company or other
Associated Company Plan
(v) retirement or - prorate to the date
resignation including of retirement or
resignation upon resignation,
transfer to another
Associated Company
(vi) leave of absence - prorate to the date
that such leave
commences (unless
otherwise provided by
the Board), or
(vii) death during an Award - prorate to the date
Year of death.
(c) With respect to Participants transferred between Associated Companies
during an Award Year, the Associated Company last employing the Participant
during such Award Year shall determine and pay the short term award, if any, for
that Award Year.
(d) Notwithstanding any other provision of this Plan to the contrary, a
Participant shall not be eligible to receive any awards under this Plan during
or subsequent to any Award Year in which the Participant is discharged by an
Associated Company for cause, the Board determines that such Participant engaged
in misconduct in connection with such
Participant's employment with such Associated Company, or the Participant,
without the consent of the Associated Company employing such Participant (or
after termination of such employment), becomes associated with, employed by or
renders services to, or
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owns an interest in, any business (other than as a shareholder with a
nonsubstantial ownership interest in such business) that is competitive with any
Associated Company or with any business with which any Associated Company has a
substantial direct or indirect interest, as determined by the Board. The
provisions of this subsection (d) shall be effective with respect to each
Participant to the extent not prohibited by applicable law.
(e) Notwithstanding any other provision of the Plan to the contrary, the
Board, upon the recommendation of the Committee, may reduce or eliminate awards
to a Participant who has been demoted and, where circumstances warrant, may
permit continued participation, proration or early payment (or a combination
thereof) of awards.
4. ADJUSTMENTS. Notwithstanding any other provision of the Plan to the
contrary:
(a) In order to preserve the incentive features of the Plan and to avoid
distortion in the operation of the Plan, the Board, upon the recommendation of
the Committee, shall make adjustments in the performance criteria established
for any Award Year under subsections (a) and (b) of Section 2, above (whether
before or after the end of the Award Year), to the extent that it deems
appropriate to compensate for extraordinary changes which may have occurred
during the year, including extraordinary items, accounting changes, income from
discontinued operations, and the impact of material events that have been
publicly disclosed. The Board, upon the recommendation of the Committee, may
elect to forgo any or all adjustments so long as the awards remain deductible
under Section 162(m) of the Code and may also reduce or eliminate, but not
increase, any payout under the Plan. Such adjustments shall be conclusive and
binding upon all parties concerned.
(b) In the event of any change in outstanding shares of the Company by reason
of any stock dividend or split, recapitalization, merger, consolidation,
combination or exchange or shares, distribution to shareholders, spin-off to
shareholders, significant disposition of assets or other similar corporate
change, the Board, upon the recommendation of the Committee, shall be authorized
to make such adjustments, if any, that it deems appropriate in the amount of
awards and the performance levels established under subsections (a) and (b) of
Section 2, above for any Award Year not then completed. Any and all such
adjustments shall be conclusive and binding upon all parties concerned.
5. OTHER CONDITIONS.
(a) No person shall have any claim or right to be granted an award under the
Plan and there shall be no obligation on behalf of an Associated Company for
uniformity of treatment among Participants or employees under the Plan. Awards
under the Plan may not be attached, assigned or alienated in any manner.
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(b) Neither the Plan nor any action taken hereunder shall be construed as
giving to any employee or Participant a claim or the right to be retained in the
employ of any Associated Company.
(c) The Company shall have the right to deduct from any award to be paid under
the Plan any Federal, state or local taxes required by law to be withheld with
respect to such payment.
(d) Notwithstanding any other provision of the Plan to the contrary, no awards
shall be made if at the time payment would have been made:
(i) the regular quarterly dividend on any outstanding common or preferred
shares of the Company has been omitted and not subsequently paid or there exists
any default in payment of dividends on any such outstanding shares;
(ii) the rate of dividends on common shares of the Company is lower than
any regular quarterly dividend paid during the Award Year, adjusted for any
change of the type referred to in Section 4, above; or
(iii) estimated consolidated net income of the Company for the twelve-
month period preceding the month that the awards would otherwise have been made
is less than the sum of (1) the amount of the awards to be made under the Plan
and similar plans of other Associated Companies ("Similar Plans") plus the
amount of payments and awards eligible for distribution under the NYNEX Senior
Management Long Term Incentive Plan (the "Long Term Plan") in that month and (2)
all dividends applicable to such period on an accrual basis, either paid,
declared or accrued at the most recently paid rate, on all outstanding common
and preferred shares of the Company.
In the event that net income available under clause (iii), above for awards
under the Plan, the Similar Plans and for payments and awards eligible for
distribution under the Long Term Plan is sufficient to cover part but not all of
such amounts, the following priority order shall be applied, pro rata within
each category:
(i) dividend equivalent payments under the Long Term Plan;
(ii) units eligible for distribution under the Long Term Plan; and
(iii) awards under the Plan and the Similar Plans.
(e) Except as may otherwise be provided by the Board, upon the recommendation
of the Committee, awards under the Plan shall be excluded in determining
benefits under any pension, retirement, disability, death, savings or other
benefit plan maintained by any Associated Company (except where otherwise
required by applicable law).
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6. DESIGNATION OF BENEFICIARIES. A participant may designate one or more
beneficiaries to receive all or part of the awards which may be granted to such
Participant under the Plan in the event of the Participant's death. A
designation of a beneficiary may be replaced by a new designation or may be
revoked by the Participant at any time. A designation or revocation of a
beneficiary shall be on a form to be provided by the Company for such purpose,
shall specify the portion of the amount to be received by each beneficiary
(where more than one beneficiary is designated), and shall be signed by the
Participant and delivered to the Company prior to the Participant's death.
In the event of the Participant's death, the amounts to be distributed under the
Plan with respect to which a designation of beneficiary has been made ( to the
extent it is valid and enforceable under applicable law) shall be distributed in
accordance with the Plan to the beneficiary or beneficiaries designated by the
Participant. In the event that a designated beneficiary predeceases the
Participant, the amount of the distribution that such designated beneficiary
would have been entitled to receive may be distributed to the estate of the
Participant, in which event the Associated Companies shall have no further
liability to anyone with respect to such distribution. Any award granted to a
Participant who is deceased and not subject to any beneficiary designation shall
be distributed to the Participant's estate. If there shall be any question as
to the legal right of any beneficiary to receive distribution under the Plan,
the amount in question may be paid to the estate of the Participant, in which
event the Associated Companies shall have no further liability to anyone with
respect to such amount.
7. PLAN ADMINISTRATION.
(a) The Committee shall have full power, authority and discretion to
administer and interpret the Plan and to establish rules for its administration.
The level of financial and service performance referred to in subsections (a)
and (b), respectively, of Section 2, above achieved for each Award Year and the
weight given to each criterion (in accordance with Section 2) shall be
conclusively determined by the Board, upon the recommendation of the Committee.
The Board and the Committee, in making any determinations under or referred to
in the Plan, shall be entitled to rely on opinions, reports or statements of
officers or employees of the Company and any other Associated Company and of
counsel, public accountants and other professional or expert persons.
(b) The Plan shall be governed by the internal laws of the State of New York,
applicable to contracts made and to be performed in New York, and applicable
Federal law.
8. CLAIMS AND APPEALS. Any claim under the Plan by a Participant, or anyone
claiming through a Participant, shall be presented to the Committee. Any person
whose claim under the Plan has been denied in whole or in part may, within 60
days after receipt of notice of denial, submit to the NYNEX Board a written
request for review of the decision denying the claim. The NYNEX Board or the
Committee shall determine
6
<PAGE>
conclusively for all parties all questions arising in connection with the
administration of, or the determination of benefits or awards under, the Plan
and their decision shall be final and binding on all parties.
9. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or terminate
the Plan at any time and from time to time, and such modification may affect
present and future Participants, provided that no modification shall adversely
affect the rights of Participants with respect to awards previously granted
under the Plan. Any such modification shall be effective at such date as the
Board may determine.
The Vice President-Human Resources, or equivalent, of the Company ( or any
successor to that officer's responsibilities), with the approval of the
Executive Vice President and General Counsel of the Company (or any successor to
that officer's responsibilities), is hereby authorized to make any changes to
the Plan necessary or advisable to comply with applicable law or government
regulations. Such a modification may affect Participants in the Plan at the
time as well as future Participants.
10. APPROVAL AND EFFECTIVE DATE. The Plan was approved by the Board on
February 16, 1995, subject to the approval of the stockholders of NYNEX at the
1995 Annual Meeting of Share Owners. The effective date of the Plan shall be
January 1, 1995.
7
<PAGE>
ADMISSION TICKET
[LOGO of NYNEX]
ANNUAL MEETING
OF
SHARE OWNERS
Wednesday, May 3, 1995
10:30 a.m. EDT
Westchester County Center
Bronx River Parkway & Central Avenue
White Plains, New York
If you are planning to attend the Annual Meeting, please
retain this ticket and mark the appropriate box on the proxy card.
DETACH PROXY CARD HERE
- --------------------------------------------------------------------------------
PROXY / VOTING INSTRUCTION CARD
[LOGO of NYNEX]
NYNEX Corporation
1095 Avenue of the Americas, New York, New York 10036
- --------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Share Owners on May 3, 1995.
The undersigned hereby appoints E.T. Kennan, E.E. Phillips and I.G. Seidenberg,
and each of them, proxies, with the powers the undersigned would possess if
personally present, and with full power of substitution, to vote all Shares of
the undersigned in NYNEX Corporation at the Annual Meeting of Share Owners to be
held at the Westchester County Center, White Plains, New York, on May 3, 1995,
and at any adjournment thereof, 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 as follows: (1) for the
election of all listed nominees: (2) in accordance with the Directors'
recommendations on the other subjects listed on the reverse side of this card:
and (3) at their discretion on any other matter that may properly come before
the meeting. (If you have indicated any changes or voting limitations in this
paragraph, please mark the "Vote Limitations" box on the reverse side of this
card in order to expedite processing.)
Your vote for the election of Directors may be indicated on the reverse side of
this card. Four Directors are to be elected at the meeting. Nominees are R.L.
Carrion, S.P. Goldstein, E.E. Phillips and W.V. Shipley.
Please sign on reverse side and return promptly in the enclosed envelope to P.O.
Box 9020, Boston, Massachusetts 02205-8651. If you do not sign and return a
proxy, or do not attend the meeting and vote by ballot, your Shares cannot be
voted.
This proxy also provides voting instructions for Shares held in the dividend
reinvestment plan and, if registrations are identical. Shares held in the
various employee stock purchase and savings plan described in the proxy
statement.
(If you have written on this side of the card, please mark the "Vote
Limitations" box on the reverse side.)
<PAGE>
[Maps of White Plains]
By Train: NYC to White Plains via Harlem Division - Metro North. Westchester
County Center is within 10 minutes walking distance, or you may take
the #1, 3, 5 or 6 Bee-Line Bus for one stop.
DETACH PROXY CARD HERE
- --------------------------------------------------------------------------------
[X] Please mark votes as in this example.
To vote your Shares for all Director nominees, mark the "For" box in Item A. To
withhold voting for all nominees, mark the "Withheld" box. If you do not wish
your Shares voted "For" a particular nominees, mark the "Exceptions" box and
enter the name(s) of the person you do not wish to vote for in the space
provided.
Directors recommend a vote "For"
A. Election of Directors FOR WITHHELD
[ ] [ ]
EXCEPTIONS
[ ]______________________________________
For all nominees except as noted above
B. Ratification of Auditors FOR AGAINST ABSTAIN
[ ] [ ] [ ]
C. Amendments to Stock Option Plans FOR AGAINST ABSTAIN
[ ] [ ] [ ]
D. Executive Officer Short Term Incentive Plan FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Directors recommend a vote "Against" the Share Owner proposals regarding
1. Repeat of Board Classification FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. Charitable Contributions Listing FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Increase Number of Director Nominees FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Elimination of Non-Employees Director Pension FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Annual Report
- -------------
Discontinue Mailing of Duplicate Report [ ]
Will Attend Annual Meeting [ ]
Vote Limitations on other side of card [ ]
You must return this card promptly to have your Shares voted. If you do attend
the meeting and decide to vote by ballot such vote will supersede this proxy. If
signing for a corporation or partnership or as agent, attorney or fiduciary
indicate the capacity in which you are signing.
Signature: Date:
-------------------- ------------.
<PAGE>
P R O X Y
NYNEX PROXY/VOTING INSTRUCTION CARD
NYNEX Corporation
1095 Avenue of the Americas, New York, New York 10036
- --------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors for the Annual
Meeting of Share Owners on May 3, 1995
The undersigned hereby appoints E.T. Kennan, E.E. Phillips and I.G. Seldenberg,
and each of them, proxies, with the powers the undersigned would possess if
personally present, and with full power of substitution, to vote all Shares of
the undersigned in NYNEX Corporation at the Annual Meeting of Share Owners to be
held at the Westchester County Center, White Plains, New York, on May 3, 1995,
and at any adjournment thereof, 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 as follows: (1) for the
election of all listed nominees; (2) in accordance with the Directors'
recommendations on the other subjects listed on the reverse side of this card;
and (3) at their discretion on any other matter that may properly come before
the meeting.
Your vote for the election of Directors may be indicated on the reverse side of
this card. Four Directors are to be elected at the meeting. Nominees are R.L.
Carrion, S.P. Goldstein, E.E. Phillips and W.V. Shipley.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE AND SIGN THE REVERSE SIDE.
<PAGE>
[X] Please mark votes as in this example.
To vote your Shares for all Director nominees, mark the "For" box in Item A. To
withhold voting for all nominees, mark the "Withheld" box. If you do not wish
your Shares voted "For" a particular nominee, mark the "Exceptions" box and
enter the name(s) of the person(s) you do not wish to vote for in the space
provided.
- --------------------------------------------------------------------------------
Directors recommend a vote "For"
- --------------------------------------------------------------------------------
FOR WITHHELD
A. Election of Directors [_] [_]
EXCEPTIONS
[_] _____________________________________
For all nominees except as note above
FOR AGAINST ABSTAIN
B. Ratification of Auditors [_] [_] [_]
C. Amendments to Stock Option Plans [_] [_] [_]
D. Executive Officer Short Term Incentive Plan [_] [_] [_]
- --------------------------------------------------------------------------------
Directors recommended a vote "Against"
the Share Owner proposals regarding
- --------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
1. Repeal of Board Classification [_] [_] [_]
2. Charitable Contributions Listing [_] [_] [_]
3. Increase Number of Director Nominees [_] [_] [_]
4. Elimination of Non-Employee Director Pensions [_] [_] [_]
You must return this card promptly to have your Shares voted. If you do attend
the meeting and decide to vote by ballot, such vote will supersede this proxy.
If signing for a corporation or partnership or as agent, attorney or fiduciary,
indicate the capacity in which you are signing.
Signature: _________________________________________ Date ___________________
Signature: _________________________________________ Date ___________________
