<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
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Ameritech Corporation
.............................................................................
(Name of Registrant as Specified In Its Charter)
Bruce Howat-Mary Brooks
..............................................................................
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................
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: _/
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
_/ Set forth the amount on which the filing fee is calculated and state how
it was determined.
[ ] 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>
LOGO
30 South Wacker Drive
Chicago, Illinois 60606
NOTICE OF 1994 ANNUAL MEETING AND PROXY STATEMENT
March 1, 1994
Dear Shareowner:
The directors and officers of your company cordially invite you to attend the
annual meeting of Ameritech's shareowners, which will be held in the Arthur
Rubloff Auditorium of The Art Institute of Chicago, on Wednesday, April 20,
1994, at 9:30 a.m.
If you plan to attend the meeting, please keep the admission ticket and map
that are attached to the form of proxy accompanying this notice and proxy
statement and check the appropriate box on the form of proxy.
Whether or not you plan to attend in person, please mark your votes on the
enclosed proxy card, sign and date it and mail it in the postage-paid envelope
as soon as possible.
At the meeting we will elect four Directors and vote on ratification of the
appointment of independent public accountants and two shareowner proposals, as
described in the formal notice of the meeting and proxy statement appearing on
the following pages.
We also will report on the progress Ameritech has made in its first ten years
and the transformation of our business to a market-focused business unit
structure. There will be a period of informal discussion in which shareowners
will have an opportunity to comment or ask questions. After the meeting, you
are invited to be our guest and tour the magnificent exhibits of The Art
Institute of Chicago.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING, WHETHER OR
NOT YOU ATTEND THE MEETING IN PERSON AND REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU TO COMPLETE AND MAIL
THE ENCLOSED PROXY CARD.
Sincerely,
LOGO LOGO
William L. Weiss Richard C. Notebaert
Chairman of the Board President and Chief Executive
Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
APRIL 20, 1994
The Annual Meeting of Shareowners of Ameritech Corporation will be held at
the Arthur Rubloff Auditorium of The Art Institute of Chicago, Columbus Drive
and Monroe Street, Chicago, Illinois, on Wednesday, April 20, 1994, at 9:30
a.m., to consider and take action with respect to the following matters:
1. Election of four Directors to serve for a term of three years;
2. Ratification of the appointment of Arthur Andersen & Co. as
independent public accountants for the Company for the year ending
December 31, 1994;
3. Shareowner proposal regarding cumulative voting in elections of
Directors;
4. Shareowner proposal regarding electing all Directors annually; and
5. Such other business as may properly come before the meeting or any
adjournment thereof.
Holders of Common Stock of record at the close of business on February 22,
1994 are entitled to notice of, and to vote at, the meeting or any adjournment
thereof. A list of such holders will be open to the examination of any
shareowner, for any purpose germane to the meeting, at the offices of Ameritech
Corporation, 30 South Wacker Drive, Chicago, Illinois, for a period of ten days
prior to the meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
LOGO
Bruce B. Howat
Secretary
March 1, 1994
<PAGE>
AMERITECH CORPORATION
30 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
PROXY STATEMENT
The Board of Directors of Ameritech Corporation (hereinafter called
"Ameritech" or the "Company") solicits your proxy for use at the 1994 Annual
Meeting of Shareowners to be held on April 20, 1994, and urges you to complete
and return your proxy card promptly. A proxy may be revoked at any time prior
to the voting at the meeting by submitting a later dated proxy or by giving
written notice of such revocation to the Secretary of the Company.
Holders of Ameritech Common Stock of record at the close of business on
February 22, 1994 are entitled to vote at the Annual Meeting. On that date,
547,617,122 shares of Ameritech Common Stock were issued and outstanding. Each
share entitles the holder to one vote. The persons appointed by the enclosed
proxy card have advised the Board of Directors that it is their intention to
vote at the meeting in compliance with the instructions on the proxy cards
received from shareowners and, if no contrary instruction is indicated on the
proxy card, for the election of the persons nominated to serve as Directors and
in accordance with the recommendations of the Board of Directors on the other
matters brought before the meeting, as described herein.
If a shareowner is a participant in the Ameritech Shareowner Dividend
Reinvestment and Stock Purchase Plan, the proxy card represents the number of
full and fractional shares in the dividend reinvestment plan account, as well
as other shares registered in the participant's name. If a shareowner is a
participant in the Ameritech Savings Plan for Salaried Employees ("SPSE"), the
Ameritech Savings and Security Plan for Non-Salaried Employees ("SSP") or
certain employee savings plans of affiliated companies, the proxy card will
also serve as a voting instruction for the trustees of those plans where all
accounts are registered in the same name. If voting instructions are not
received for shares in SPSE or SSP, those shares will be voted in the same
proportion as the shares in those plans for which voting instructions are
received.
The four Directors to be elected at the Annual Meeting will be elected by a
plurality of the votes cast by the shareowners present in person or by proxy
and entitled to vote. With regard to the election of Directors, votes may be
cast for or withheld from each nominee. Votes that are withheld will have no
effect on the outcome of the election because Directors will be elected by a
plurality of votes cast.
Abstentions may be specified on all proposals submitted to a shareowner vote
other than the election of Directors. Abstentions will be counted as present
for purposes of determining the existence of a quorum regarding the proposal on
which the abstention is noted. Thus, abstentions on any of the Company's
proposal to ratify the appointment of the independent public accountants or the
shareowner proposals will have the effect of a vote against such proposal.
Under the rules of the New York Stock Exchange, brokers who hold shares in
street name have the authority to vote on certain routine matters on which they
have not received instructions from beneficial owners. Brokers holding shares
of Ameritech Common Stock in street name who do not receive instructions are
entitled to vote on the election of Directors and ratification of the
appointment of the independent public accountants. However, brokers may not
vote shares held for customers on any of the shareowner proposals without
specific instructions from such customers. Under applicable Delaware law,
"broker non-votes" on any such proposal (where a broker submits a proxy but
does not have authority to vote a customer's shares on such proposal) will be
considered not entitled to vote on that proposal and thus will not be counted
in determining whether such proposal receives a majority of the shares of
Ameritech Common Stock present and entitled to vote at the Annual Meeting.
Therefore, broker non-votes with respect to any proposal submitted to
shareowners at the Annual Meeting by the Company or by shareowners set forth in
this proxy statement will have no effect on the outcome of such proposal,
although broker non-votes are counted in determining the existence of a quorum.
This proxy statement and the enclosed proxy card are being first mailed to
shareowners on or about March 3, 1994.
ELECTION OF DIRECTORS
The Board of Directors is presently composed of fifteen members. The
Certificate of Incorporation of Ameritech divides the Board of Directors into
three classes, as nearly equal in size as possible, with one class
<PAGE>
of Directors elected each year for a three-year term. The terms of the
Directors in one class, which is composed of six of the Directors, expire in
1994. Two members of that class will retire from the Board as of the Annual
Meeting. The remaining four of those Directors have been nominated for re-
election. If for any reason any of these nominees becomes unable or is
unwilling to serve at the time of the meeting, the persons named in the
enclosed proxy card will have discretionary authority to vote for a substitute
nominee or nominees. It is not anticipated that any nominee will be unavailable
for election.
The following sets forth information as to each nominee for election at this
meeting and each Director continuing in office, including his or her age,
present principal occupation, other business experience during the last five
years, directorships in other publicly held companies, membership on committees
of the Board of Directors and period of service as a Director of Ameritech.
NOMINEES FOR ELECTION AT THIS MEETING TO TERMS EXPIRING IN 1997:
DONALD C. CLARK, 62, Chairman of the Board and Chief
Executive Officer of Household International, Inc., Prospect
Heights, Illinois (financial services), since 1984, Chief
Executive Officer since 1982 and President from 1977 to
1988. Mr. Clark is a Director of Household International,
Inc., Warner-Lambert Co., Schwitzer Inc. and Scotsman
Industries, Inc. He is Chairman of the Finance Committee and
a member of the Executive Committee and the Compensation
Committee.
Director since 1989.
MELVIN R. GOODES, 58, Chairman and Chief Executive Officer
of Warner-Lambert Company, Morris Plains, New Jersey
(pharmaceuticals and consumer products), since 1991. Mr.
Goodes served as President and Chief Operating Officer of
Warner-Lambert from 1985 to 1991. He is a Director of
Warner-Lambert Company, Chemical Banking Corporation (and
its subsidiary, Chemical Bank) and Unisys Corporation.
Director since 1994.
JAMES A. HENDERSON, 59, President and Chief Operating
Officer of Cummins Engine Company, Inc., Columbus, Indiana
(heavy-duty diesel engines, parts and related products),
since 1977. Mr. Henderson is a Director of Cummins Engine
Company, Inc., Inland Steel Industries, Inc., Rohm and Haas
Co. and Landmark Communications, Inc. He is Chairman of the
Compensation Committee and a member of the Nominating
Committee. Mr. Henderson also is a Director of the Ameritech
Foundation.
Director since 1983.
JOHN B. MCCOY, 50, Chairman and Chief Executive Officer of
BANC ONE CORPORATION, Columbus, Ohio (bank holding company),
since 1987. Mr. McCoy served as President and Chief
Executive Officer of BANC ONE CORPORATION from 1984 to 1987.
He is a Director of BANC ONE CORPORATION, Cardinal
Distribution, Inc., Tenneco Inc. and the Federal Home Loan
Mortgage Corporation. Mr. McCoy is Chairman of the Audit
Committee and a member of the Executive Committee and the
Compensation Committee.
Director since 1991.
2
<PAGE>
DIRECTORS WHO WILL RETIRE AS OF THE ANNUAL MEETING:
RICHARD M. GILLETT, 70, Retired Chairman, Old Kent Financial
Corporation, Grand Rapids, Michigan (bank holding company),
since 1988. Mr. Gillett served as Chairman of the Board of
Old Kent Financial Corporation from 1972 to 1988. He is a
Director of Ball Corporation and Foremost Corporation of
America. He is a member of the Executive Committee, the
Audit Committee and the Nominating Committee.
Director since 1983.
WILLIAM L. WEISS, 64, Chairman of the Board and Chief
Executive Officer of Ameritech from Ameritech's
incorporation in 1983 to January 1994 and Chairman of the
Board since January 1994. Mr. Weiss served Illinois Bell
Telephone Company as its Chairman and Chief Executive
Officer from 1982 to 1983 and as its President and Chief
Executive Officer from 1981 to 1982. Mr. Weiss will retire
as an officer of the Company on May 31, 1994. Mr. Weiss is a
Director of Abbott Laboratories, The Quaker Oats Company,
Merrill Lynch & Co. and Tenneco Inc. He is Chairman of the
Executive Committee. Mr. Weiss also is a Director of the
Ameritech Foundation.
Director since 1983.
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 1995:
WESTON R. CHRISTOPHERSON, 68, Retired Chairman, Northern
Trust Corporation, Chicago, Illinois (bank holding company),
since 1990. Mr. Christopherson served as Chairman of the
Board and Chief Executive Officer of Northern Trust
Corporation from 1984 to December 1989 and as Chairman of
the Board until April 1990. Mr. Christopherson was Chairman
and Chief Executive Officer of Jewel Companies, Inc. (food
and drug retailing) from 1980 to 1984. He is a Director of
Encyclopedia Britannica Inc., GATX Corporation and The
Quaker Oats Company. Mr. Christopherson is a member of the
Audit Committee and the Compensation Committee.
Director since 1983.
HANNA HOLBORN GRAY, PH.D., 63, President Emeritus and
Professor of History, University of Chicago, Chicago,
Illinois. Dr. Gray served as President of the University of
Chicago from 1978 to 1993. She is a Director of Atlantic
Richfield Company, Cummins Engine Company, Inc. and J. P.
Morgan & Co. Incorporated (and its subsidiary, Morgan
Guaranty Trust Company of New York). She is a member of the
Nominating Committee. Dr. Gray also is a Director of the
Ameritech Foundation.
Director since 1983.
JOHN D. ONG, 60, Chairman of the Board and Chief Executive
Officer of The BFGoodrich Company, Akron, Ohio (chemical and
aerospace products), since 1979. Mr. Ong is a Director of
The BFGoodrich Company, Asarco Incorporated, Cooper
Industries, Inc., The Geon Company and The Kroger Company.
He is Chairman of the Nominating Committee and a member of
the Executive Committee and the Compensation Committee.
Director since 1983.
3
<PAGE>
LOUIS J. RUTIGLIANO, 55, Vice Chairman of Ameritech since
1991. Mr. Rutigliano served as Executive Vice President-
Corporate Strategy from 1989 to 1991 and as President and
Chief Executive Officer of Wisconsin Bell, Inc. (a
subsidiary of Ameritech) from 1987 to 1989. He is a Director
of Simplicity Manufacturing Inc. and Telecom Corporation of
New Zealand Limited (24.8% owned by Ameritech). Mr.
Rutigliano is a member of the Executive Committee and the
Finance Committee. Mr. Rutigliano has announced that he will
retire as Vice Chairman and as a Director of Ameritech in
June 1994.
Director since 1991.
A. BARRY RAND, 49, Executive Vice President, Operations of
Xerox Corporation since February 1992. Mr. Rand served as
President of the Xerox United States Marketing Group from
1987 to 1992. He has been a corporate officer of Xerox since
1985. Mr. Rand is a Director of Honeywell Inc., Abbott
Laboratories, the College Retirement Equities Fund (CREF)
and the U.S. Chamber of Commerce. He is a member of the
Audit Committee and the Nominating Committee.
Director since 1993.
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 1996:
RICHARD H. BROWN, 46, Vice Chairman of Ameritech since
January 1993. Mr. Brown served as President of Illinois Bell
Telephone Company (a subsidiary of Ameritech) from 1990 to
1993. Prior to joining Illinois Bell, he was an officer of
United Telecommunications, Inc., serving as Senior Vice
President from 1987 to 1989 and Executive Vice President of
United Telecom and U.S. Sprint from 1989 to 1990. Mr. Brown
is a Director of The Upjohn Company. He also is President of
the Ameritech Foundation.
Director since 1993.
SHELDON B. LUBAR, 64, Founder and Chairman of Lubar & Co.
(private investment and venture capital firm) and Chairman
and Chief Executive Officer of Christiana Companies, Inc.
(operating and investment company with businesses in
refrigerated warehousing and logistics). Mr. Lubar is a
Director of Massachusetts Mutual Life Insurance Company,
Firstar Corporation, Briggs & Stratton Corporation,
Christiana Companies, Inc. and MGIC Investment Corp. He is a
member of the Audit Committee and the Finance Committee.
Director since 1993.
LYNN M. MARTIN, 54, Chair of the Council for the Advancement
of Women and Advisor to the firm of Deloitte & Touche since
June 1993. Ms. Martin assumed the Davee chair at the J.L.
Kellogg Graduate School of Management, Northwestern
University, in September 1993. She also served as fellow at
the Kennedy School of Government, Harvard University, in
1993. Ms. Martin served as United States Secretary of Labor
from February 1991 to January 1993. She served as a member
of the U.S. House of Representatives from Illinois for five
terms from 1981 to 1990. She also served in the Illinois
House of Representatives from 1977 to 1979 and the Illinois
Senate from 1979 to 1981. She is a Director of Harcourt
General, Inc., Ryder Systems, Inc. and the Dreyfus
Corporation. Ms. Martin is a member of the Finance Committee
and the Nominating Committee.
Director since 1993.
4
<PAGE>
RICHARD C. NOTEBAERT, 46, President and Chief Executive
Officer of Ameritech since January 1994. Mr. Notebaert
served as President and Chief Operating Officer of Ameritech
from June 1993 to January 1994 and Vice Chairman from
January 1993 to June 1993. He served as President of
Ameritech Services, Inc. (a wholly-owned subsidiary of
Ameritech's five state telephone companies) from June 1992
to January 1993, as President of Ameritech's Indiana Bell
subsidiary from 1989 to 1992 and as President of Ameritech
Mobile Communications, Inc. from 1986 to 1989. Mr. Notebaert
is a member of the Finance Committee.
Director since 1993.
THE BOARD OF DIRECTORS
The business and affairs of Ameritech are managed under the direction of the
Board of Directors. The Board has responsibility for establishing broad
corporate policies and for the overall performance of Ameritech rather than
day-to-day operating details. Members of the Board of Directors are kept
informed of the Company's business by various reports and documents sent to
them each month, as well as by reports presented at meetings of the Board and
its committees by officers and employees of Ameritech and its subsidiaries.
The Board of Directors met nine times in 1993. The average attendance at the
aggregate number of Board and committee meetings was 94% in 1993 and no
Director attended fewer than 75% of the aggregate number of meetings of the
Board of Directors and the committees on which he or she served except for Mr.
Rand who, because of commitments that already existed when he joined the Board
in August 1993, attended 57% of the aggregate number of Board and committee
meetings he was eligible to attend in the last five months of 1993.
COMMITTEES OF THE BOARD
The Audit Committee, which is composed entirely of Directors who are not
officers or employees of Ameritech, reviews the Company's accounting functions,
operations and management and the adequacy and effectiveness of the internal
controls and internal auditing methods and procedures of the Company. The Audit
Committee recommends to the Board the appointment of the independent public
accountants for the Company, subject to ratification by the shareowners at the
Annual Meeting. In connection with its duties, the Audit Committee periodically
meets privately with the independent public accountants and with the Company's
internal auditors. The Audit Committee met three times in 1993.
The Nominating Committee advises and makes recommendations to the Board of
Directors on all matters concerning Board procedures and directorship
practices. The Nominating Committee reviews and makes recommendations to the
full Board concerning the qualifications and selection of candidates as
nominees for election as Directors. In recommending candidates, this committee
seeks individuals who possess broad training and experience in business,
finance, law, government, technology, education or administration and considers
factors such as personal attributes, geographic location and special expertise
complementary to the background and experience of the Board as a whole.
Shareowners who wish to suggest qualified candidates should write to the
Secretary of Ameritech at 30 South Wacker Drive, Chicago, Illinois 60606,
stating in detail the qualifications of such persons for consideration by the
Committee. The Nominating Committee met three times in 1993.
The Compensation Committee, which is composed entirely of Directors who are
not officers or employees of Ameritech, reviews and acts with respect to
pension, compensation and other employee benefit plans, approves the salary and
compensation of officers of Ameritech other than the five most highly
compensated officers and makes recommendations to the Board of Directors
concerning the salary and compensation of the Chairman of the Board, the
President, the Vice Chairmen, and any other officer who is or would be among
the five most highly compensated officers of Ameritech. This committee met four
times in 1993.
5
<PAGE>
The Finance Committee reviews and makes recommendations to the Board with
respect to the financial policies, plans and procedures of the Company, the
financial implications of proposed corporate actions and matters concerning
dividend reinvestment and stock purchase plans. This committee also reviews and
authorizes investments in and advances to subsidiaries and is responsible for
reviewing the policies, plans and procedures of the Company with respect to the
investment and management of the assets of the Company's pension, savings and
other employee benefit plans. The Finance Committee met three times in 1993.
The Executive Committee is authorized to exercise, during intervals between
meetings of the Board of Directors, the powers of the Board of Directors in the
management and direction of the business and affairs of the Company subject to
the provisions of the corporation law of the State of Delaware. The Executive
Committee met once in 1993.
The committee memberships of each nominee and continuing Director are set
forth in their biographical information above.
COMPENSATION OF DIRECTORS
Directors who are not employees receive an annual retainer of $38,000. Non-
employee Directors also receive additional annual retainers of $4,000 ($5,000
for chairmen) for each active committee (other than the Executive Committee) on
which they serve. Directors may elect to defer receipt of all or part of their
retainers in either cash units, Common Stock units or a combination of both.
Deferred cash units earn interest, compounded quarterly, at the rate
established by the Compensation Committee from time to time or, if no such rate
is established, at a rate equal to the average interest rate for ten-year
United States Treasury notes for the previous quarter. Deferred Common Stock
units are based on the number of Ameritech common shares which deferred
retainers or fees would purchase at the fair market value of Ameritech common
shares on the date the retainers or fees would otherwise be paid. Deferred
Common Stock accounts are credited on each dividend payment date for Ameritech
common shares with additional Common Stock units by dividing the aggregate cash
dividend which would have been paid if existing Common Stock units were actual
common shares by the fair market value of the Company's common shares as of the
dividend payment date. Deferred amounts are paid in cash, with the value of
Common Stock units based on the fair market value of Ameritech common shares at
the time of payment, in one payment or in up to ten equal annual installments
beginning on the first day of the calendar year following the year in which the
Director ceases to be a Director, or in a lump sum in the event of certain
specified changes in the beneficial ownership of Ameritech voting stock or in
the composition of the Board of Directors and certain mergers or consolidations
involving Ameritech. At the 1987 Annual Meeting, Ameritech's shareowners
approved the Ameritech Stock Retirement Plan for Non-Employee Directors, under
which each Director who is not an officer or employee of Ameritech or any of
its subsidiaries or affiliates is granted 1,500 shares of Ameritech Common
Stock after each Annual Meeting at which Directors are elected. Each grant of
stock is accompanied by a payment to offset the increase in the Directors'
Federal, state and local tax liabilities resulting from such grant and payment.
The maximum number of grants to a Director is six. The plan also provides for
grants up to the maximum number of shares in the event of certain specified
changes in the beneficial ownership of Ameritech voting stock or in the
composition of the Board of Directors and certain mergers or consolidations
involving Ameritech. The Company also provides non-employee Directors travel
accident insurance when on Company business.
6
<PAGE>
OFFICER AND DIRECTOR STOCK OWNERSHIP
The following table sets forth beneficial ownership of Ameritech Common Stock
as of February 22, 1994, by each Director and nominee, the chief executive
officer, the four other most highly compensated executive officers and all
Directors and executive officers as a group. Such beneficial ownership includes
shares held by certain family members, trusts and private foundations. The
persons shown below are deemed to have sole power to vote and dispose of such
shares. None of the persons nor the group shown below has beneficial ownership
of more than 1% of the outstanding shares of Ameritech Common Stock. Shares
shown as beneficially owned by Mr. Brown, Mr. Edwardson, Mr. Notebaert, Mr.
Rutigliano and Mr. Weiss and by all Ameritech officers as a group below include
shares held for their accounts in the Ameritech Savings Plan for Salaried
Employees as of December 31, 1993.
<TABLE>
<CAPTION>
TOTAL
NAME OWNERSHIP(*)
---- ------------
<S> <C>
Richard H. Brown.................................................. 116,249
Weston R. Christopherson.......................................... 10,894
Donald C. Clark................................................... 11,173
John A. Edwardson................................................. 81,447
Richard M. Gillett................................................ 10,804
Melvin R. Goodes.................................................. 500
Hanna Holborn Gray................................................ 9,604
James A. Henderson................................................ 12,400
Sheldon B. Lubar.................................................. 10,214
Lynn M. Martin.................................................... 1,500
John B. McCoy..................................................... 5,000
Richard C. Notebaert.............................................. 101,862
John D. Ong....................................................... 9,751
A. Barry Rand..................................................... 1,000
Louis J. Rutigliano............................................... 153,685
William L. Weiss.................................................. 529,070
All of the above and other executive officers as a group (28 per-
sons)............................................................ 1,402,084
</TABLE>
- --------
* Includes shares of Ameritech Common Stock which may be acquired within 60
days after February 22, 1994 through the exercise of stock options. The
persons who have such options and the number of shares which may be so
acquired are as follows: Mr. Brown, 22,866; Mr. Edwardson, 51,900; Mr.
Notebaert, 61,932; Mr. Rutigliano, 113,200; Mr. Weiss, 284,300; and all
executive officers as a group, 751,906.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen & Co., as independent public accountants, to examine
the consolidated financial statements of the Company for the current year
ending December 31, 1994 and to perform other appropriate accounting services.
Arthur Andersen & Co. has served as independent public accountants for the
Company since its organization.
A proposal will be presented at the meeting to ratify the appointment of
Arthur Andersen & Co. as Ameritech's independent public accountants. One or
more members of that firm are expected to be present at the Annual Meeting to
respond to questions and to make a statement if they desire to do so. If the
shareowners do not ratify this appointment by the affirmative vote of a
majority of the shares present in person or represented by proxy at the
meeting, other independent public accountants will be considered by the Board
upon recommendation of the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
7
<PAGE>
SHAREOWNER PROPOSALS
SHAREOWNER PROPOSAL REGARDING CUMULATIVE VOTING
Mrs. Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Suite 215, Washington, D.C.
20037, record owner of 180 shares of the Common Stock of the Company, has given
notice that she plans to introduce the following resolution at the meeting and
has asked that the following statement of reasons for its introduction be
printed in this proxy statement:
"RESOLVED: That the stockholders of Ameritech, assembled in Annual Meeting
in person and by proxy, hereby request the Board of Directors to take the
necessary steps to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes
as shall equal the number of shares he or she owns multiplied by the number
of directors to be elected, and he or she may cast all of such votes for a
single candidate, or any two or more of them as he or she may see fit."
"REASONS: Many states have mandatory cumulative voting, so do National
Banks."
"In addition, many corporations have adopted cumulative voting."
"Last year the owners of 43,463,186 shares, representing approximately
21.8% of shares voting, voted FOR this proposal."
"If you AGREE, please mark your proxy FOR this resolution."
THE BOARD OF DIRECTORS DOES NOT SUPPORT THIS PROPOSAL.
The proponent submitted the same proposal for the 1991, 1992, and 1993 Annual
Meetings and it was opposed by the owners of 83.14%, 81.1% and 78.17%,
respectively, of the shares voted.
Each Director of the Company currently is elected by the holders of a
majority of the Company's outstanding shares, thereby permitting the Directors
to administer the affairs of the corporation for the benefit of all
shareowners. The Board of Directors continues to believe that cumulative voting
is undesirable because it is directed toward the election of one or more
directors by a special group of shareowners. The shareowner or special group
electing a director by cumulative voting may seek to have that director
represent the shareowner's or group's special interest rather than the
interests of the shareowners as a whole. This partisanship among directors and
voting on behalf of special interests could interfere with the effectiveness of
the Board and could be contrary to the interests of the Company and its
shareowners as a whole.
The majority of state legislatures, including the State of Delaware, the
state in which Ameritech is incorporated, do not require cumulative voting.
The majority of companies listed on the New York Stock Exchange do not elect
directors by cumulative voting. The Company's present method of electing
Directors is employed by most companies listed on the New York Stock Exchange
and the Board of Directors believes that this method is appropriate to ensure
that Directors will represent all the shareowners and not a particular group.
Under the corporation law of the State of Delaware, the action recommended in
this proposal could be taken only if the Board of Directors recommended an
amendment to the Company's Certificate of Incorporation establishing cumulative
voting and directed that the amendment be submitted to a vote of the Company's
shareowners. The Company's Board of Directors has not recommended, and does not
recommend, such an amendment. Therefore, a vote in favor of this proposal would
be only an advisory recommendation to the Board of Directors that it take steps
to initiate such an amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
8
<PAGE>
SHAREOWNER PROPOSAL REGARDING ELECTING ALL DIRECTORS ANNUALLY
Mr. Lewis D. Gilbert and Mr. John J. Gilbert, 1165 Park Avenue, New York, New
York 10128, the latter being a record holder of 64 shares of the Common Stock
of the Company, and together being record holders of 664 shares of Common Stock
as co-trustees and representing an additional family interest of 2,196 shares
of Common Stock and Martin Glotzer, 7061 N. Kedzie, Chicago, Illinois 60645,
record holder of 16 shares of Common Stock, have given notice that they will
cause the following resolution to be introduced at the meeting and have asked
that the following statement of reasons be printed in this proxy statement:
"RESOLVED: That the stockholders of Ameritech, assembled in annual meeting
in person and by proxy, hereby request that the Board of Directors take the
needed steps to provide that at future elections of directors new directors
be elected annually and not by classes as is now provided, and that on
expiration of present terms of directors their subsequent election shall
also be on an annual basis."
"REASONS"
"Strong support along the lines we suggest were shown at the 1992 annual
meeting when 25.9% of the votes cast, representing 38,882 accounts and a
total of 50,918,039 shares, were cast in favor of this proposal. The votes
against included unmarked proxies."
"LAC Minerals Ltd., Interco, Chemical Banking Corporation and Commonwealth
Edison Company of Chicago are among the latest companies to end their
stagger system of electing directors. In 1992 we withdrew our resolution on
the subject at Westinghouse after they agreed to end their stagger system
of electing directors. Chemical Bank's management, to its credit,
voluntarily ended theirs without a resolution."
"Because of the normal need to find new directors and because of the
environmental problems and many groups desiring to have directors who are
qualified on the subject, we think that ending the stagger system of
electing directors is the answer. In addition, some recommendations have
been made to carry out the Valdez 10 points. In our opinion, the 11th
should be to end the stagger system of electing directors and to have
cumulative voting."
"Recently Equitable Life Insurance Company, which is now called Equitable
Companies, converted from a policy owned company to a public stockholder
company. Thanks to AXA, the controlling French insurance company, not
wanting it they will not have a staggered board."
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
THE BOARD OF DIRECTORS DOES NOT SUPPORT THIS PROPOSAL.
This same proposal was presented at the 1987, 1988, 1989, 1990, 1991 and 1992
Annual Meetings, where it was voted against by 88.33%, 83.21%, 79.40%, 81.58%,
77.48% and 74.13%, respectively, of the shares voted. The Board of Directors
continues to believe that the current division of the Board into three classes,
with one class elected each year for a three-year term, provides continuity and
stability in the membership of the Board of Directors and in the policies
established by the Board, permitting new directors to become familiar with the
business of the Company and to benefit from the experience of the continuing
directors. A classified Board increases the likelihood that at all times at
least two-thirds of the members of the Board of Directors will have experience
and familiarity with the business, affairs and issues of the Company.
The Board of Directors also recognizes that it is possible for various
individuals or entities owning a significant but minority position in a
corporation to attempt to obtain actual control of the corporation, or to
further some other personal goal with respect to the corporation or its shares
or assets, by electing at a single annual meeting their own slate of directors.
Such an attempt, even if unsuccessful, can seriously disrupt the conduct of the
business of a corporation and cause it to incur substantial expense. The
Company's present
9
<PAGE>
method of electing Directors by classes promotes continuity of experience on
the Board, provides for an orderly succession of directors and would encourage
any unsolicited bidder for control of the Company to negotiate with the Board,
which can best represent the interests of all of the shareowners.
Election of directors by classes is a common practice that has been adopted
by many companies and currently exists at approximately 270 of the 500
companies comprising the 1993 Standard & Poor's 500 Stock Price Index. It is
specifically permitted by the laws of many states, including the State of
Delaware, as well as the rules of the New York Stock Exchange.
Under the corporation law of the State of Delaware, the state in which the
Company is incorporated, the action recommended in the proposal could be taken
only if the Board of Directors recommended an amendment to Article EIGHTH of
the Company's Certificate of Incorporation and directed that the amendment be
submitted to a vote of the Company's shareowners. The Company's Board of
Directors has not recommended, and does not recommend, such an amendment.
Therefore, a vote in favor of this shareowner proposal is only an advisory
recommendation to the Board of Directors that it take steps to initiate such an
amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
OTHER BUSINESS
The Board of Directors does not know of any further business to be presented
at the meeting. However, should any other matter requiring a vote of the
shareowners arise, the persons appointed by the enclosed proxy card intend to
vote thereon in accordance with their best judgment in the interest of the
Company.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors has oversight
responsibility for the Company's executive compensation programs. More
specifically, the Committee approves all pay plans and all changes therein. It
also approves performance targets for incentive awards. The Committee
recommends the compensation of the chief executive officer and the other four
most highly compensated executive officers, including the performance goals by
which their compensation is determined. The full Board of Directors is
responsible for acting on the recommendations of the Committee.
REPORT OF THE COMPENSATION COMMITTEE
Since its inception, the Company has designed and administered executive
compensation programs so that pay is linked to Company performance and so that
the interests of executives are aligned with the interests of shareowners. This
philosophy is articulated in the following guiding principles of the Company's
compensation programs:
. A significant percentage of pay will be determined by the Company's
annual and long term financial performance, including the creation of
shareowner value.
. Compensation programs will be designed to encourage and balance the
attainment of short term operational goals and long term strategic
initiatives.
. Total compensation will be targeted at competitive levels to allow the
Company to attract, retain and motivate high calibre employees; however,
a greater percentage of compensation will be performance-based and
variable (versus fixed compensation) than competitive practices might
suggest.
. Compensation programs will be designed to encourage stock ownership by
executives.
There are three elements to the Company's compensation program, each
consistent with the compensation philosophy: annual base salary, annual cash
bonus incentives and long term incentives. Both the annual and the longer term
incentives are directed toward specific financial measures, including earnings
growth, revenue growth, and total return to shareowners (stock price
appreciation plus dividends), with each of the targets calling for
progressively excellent results.
10
<PAGE>
An important consideration in the design of the Company's compensation
programs is the use of stock to encourage ownership by management. The
Ameritech long term incentive plans ("LTIP") may utilize performance based
restricted stock, performance units and stock options in making grants.
Beginning in 1991, all long term grants have been in the form of the Company's
stock. To support the Company's belief in stock ownership by executives, there
are in effect ownership guidelines for key managers which require stock
holdings that are proportionate to an individual's compensation and position in
the Company. As of December 31, 1993, the stock ownership of all of the
executive officers named in the Summary Compensation Table that follows
exceeded these guidelines.
Annual cash compensation (as reported in the "Salary" and "Bonus" columns of
the Summary Compensation Table that follows) is somewhat influenced by the pay
practices of comparable large corporations so that Ameritech remains reasonably
competitive with what others are doing. The Compensation Committee's current
view is that Ameritech salaries, annual cash compensation and long term
compensation should be at about the median of all companies in the comparator
group. The comparator group used in establishing the base salary, annual cash
compensation guidelines and long term grants is composed of a broad cross
section of major corporations in multiple industries as opposed to the smaller
peer group comprised of the six Regional Holding Companies ("RHCs") shown in
the Shareowner Return Performance Graph at the end of this section. The
Committee believes that this is appropriate considering that the Company
competes for executives in many industries, not solely with the RHCs. While
competitive practices are viewed importantly, the Company and the Compensation
Committee concur in the view that the most important considerations in setting
annual compensation are individual merit and the Company's financial
performance.
In 1993 we increased annual cash compensation targets for executives by
approximately 4% to maintain target total compensation at competitive levels
based on analysis of survey data of the comparator group companies described
above. Mr. Weiss' base salary increased 4.9% in 1993 over 1992 to bring his
salary more in line with the competitive market rate for his position. His
total annual salary and bonus increased because of the Company's improved
performance versus earnings and revenue targets, which produced a cash bonus
for 1993 above the targeted level.
Actual incentive bonus awards are made pursuant to the Company's Senior
Management Short Term Incentive Plan and are shown in the "Bonus" column in the
Summary Compensation Table that follows. These awards are either equal to, more
than, or less than targeted amounts depending on actual results compared with
the performance measures being used. Thus, the Company's incentive plans forge
a direct link between pay and performance, strengthened by the fact that the
greater portion of total compensation (annual salary plus annual bonus plus
long term awards) is determined by the incentive elements of an individual's
aggregate compensation rather than by salary. In 1993, for example, about 63%
of the Company's chief executive officer's total compensation was dependent on
incentive factors and thus was variable with performance. Because of increases
in revenues and net income in 1993, the actual incentive bonus awards for 1993
were above the targeted amounts.
Performance targets established for the annual and for the longer term
incentive plans are based not only on internal goals but, especially important
in terms of the current long term incentives, on the Company's performance
measured against comparator groups of other companies approved by the
Compensation Committee. The number of shares granted under the Company's long
term incentive plans ("LTIP") is based on periodic analysis of the competitive
total compensation and the long term incentive component of a comparator group
of approximately 25 high profile U.S. industrial companies that has been
followed by a recognized industry consultant for a number of years. A
percentage of target annual cash compensation to be delivered in the form of
long term compensation is established for each executive. The number of shares
required to deliver this compensation is determined by assigning a potential
present value to each option share and each restricted stock share using models
which consider factors such as the grant price and future stock price
appreciation targets. Since the assumptions used for each of these factors may
be different for each grant, the size of prior grants is not the most important
determinant of grant size. A grant
11
<PAGE>
was made in 1991 under the LTIP that included stock options granted at market
price and a performance based restricted stock grant that will pay out based on
Ameritech's five-year performance on total return to shareowners as compared to
the total return of approximately 100 companies the size and risk
characteristics of which most nearly compare with those of Ameritech. The
performance period for each payout calculation is a rolling five-year period.
The payout is determined by averaging the payouts calculated for each of the
five years. To earn a target payout for a given year, a 50th to 55th percentile
ranking for total shareowner return is required, and to earn a maximum payout,
a 75th percentile ranking is required. The first payout from the 1991 grant was
made in early 1994 for five years of performance through 1993. This payout was
slightly below the target level and below the 1992 LTIP payout based on
performance that was above the 60th percentile ranking for three of the five
years and below the threshold payout level for two of the years. Additional
payouts, if any, will be made in early 1995 and in early 1996. The LTIP payouts
reported in the Summary Compensation Table below for 1993 are from the 1991
LTIP grant, and the payouts reported for 1991 and 1992 are from a prior long
term grant made in 1988 and cover five years of performance through 1992. As
shown in the tables below, additional LTIP grants of stock options and
performance based restricted stock were made in 1993 to Mr. Notebaert and Mr.
Brown in connection with their promotions to corporate officer positions. No
new LTIP grants were made to Mr. Weiss in 1993 in view of his plans to retire
in 1994.
The Compensation Committee believes strongly in the continued focus of long
term incentive plans on total return to shareowners. Beginning in 1994, the
Compensation Committee approved new grants under the LTIP that continue this
focus by providing participating executives with a grant of stock options and
dividend equivalents. The number of options granted is based on competitive
analysis of market compensation rates and individual performance. The options
are granted at fair market value on the date of grant. Dividend equivalents
will be converted to share units and credited quarterly to a book account for
each participant. The share units will be paid in shares of stock if and when
the options are exercised at a price which exceeds the grant price.
As often as seems appropriate, but at least annually, the Compensation
Committee studies Ameritech's executive compensation programs to judge their
consistency with the Company's compensation philosophy, their support of the
Company's strategic and financial objectives and their market competitiveness.
The Company's performance targets will be changed from time to time so as to
maintain the most effective relationship between performance and compensation.
Recently enacted Section 162(m) of the Internal Revenue Code generally limits
the corporate tax deduction for compensation paid to executive officers named
in the Summary Compensation Table in the proxy statement to $1 million, unless
certain requirements are met. The Compensation Committee has carefully
considered the impact of this new tax code provision. The Committee has
determined that it is not necessary to modify any incentive plans at this time
since compensation paid to executive officers under current plans would either
be exempted under the transition provisions or be less than the $1 million
limit and, therefore, deductible. In the future, it is the Committee's intent
to modify compensation plans for the executive officers subject to the
deduction limit so the corporate tax deduction is maximized without limiting
the Committee's flexibility to attract and retain qualified executives to
manage the Company.
The Compensation Committee, which is composed entirely of Directors who are
not officers or employees of the Company, uses a professional compensation
consultant who is separate from consultants employed by the Company. This
consultant provides guidance in our deliberations and helps ensure equity and
fairness in the Company's practices.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
James A. Henderson, Chairman
Weston R. Christopherson
Donald C. Clark
John B. McCoy
John D. Ong
12
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth information as to the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of Ameritech as of December 31, 1993 for services in all
capacities to the Company and its subsidiaries in 1991, 1992 and 1993. Numbers
of shares in the table and the footnotes thereto have been adjusted for the
two-for-one stock split declared in December 1993.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------- ---------------------- --------
NAME OTHER ALL
AND ANNUAL RESTRICTED OPTIONS/ OTHER
PRINCIPAL COMPEN- STOCK SARS LTIP COMPEN-
POSITION YEAR SALARY BONUS(1) SATION(2) AWARDS(3) (SHARES) PAYOUTS SATION(4)
--------- ---- -------- -------- --------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William L. Weiss 1993 $745,000 $757,600 $200,581 0 $507,865 $707,877
Chairman & CEO 1992 $710,000 $602,600 $121,434 $1,676,563(5) 100,000(6) $985,991 $714,195
1991 $710,000 $560,000 $156,150 159,700 $646,400 $649,414
Richard C. Notebaert 1993 $447,204 $351,000 $ 78,653 $ 729,375 11,466 $130,371 $121,188
President & COO 1992 $283,333 $236,100 $ 28,401 3,000 $206,892 $ 83,582
1991 $250,000 $238,100 $ 29,374 40,800 $136,537 $ 79,488
Richard H. Brown 1993 $423,212 $333,900 $144,654 $ 729,375 2,200 $189,266 $152,179
Vice Chairman 1992 $375,000 $320,900 $115,761 3,000 $393,690 $141,997
1991 $360,000 $258,700 $112,852 59,600 $259,706 $131,026
Louis J. Rutigliano 1993 $390,000 $302,100 $ 39,626 0 $194,460 $186,515
Vice Chairman 1992 $375,000 $267,800 $121,251 2,000 $313,005 $194,269
1991 $354,000 $231,300 $ 42,450 60,900 $206,600 $194,159
John A. Edwardson(7) 1993 $365,000 $279,800 $ 46,108 $ 437,625 0 $158,992 $128,500
Executive VP & 1992 $350,000 $247,200 $ 42,224 2,000 $ 0 $132,358
Chief Fin'l Officer 1991 $204,167 $124,500 $ 21,054 49,900 $ 0 $ 6,615
</TABLE>
- --------
(1) Awards under the Short Term Incentive Plan for Senior Managers, based on
corporate performance for the year. Payments are made in January of the next
year.
(2) Consists of earnings on long term awards and the value of transportation,
club memberships, financial counseling and wellness services and payments to
offset Federal, state and local tax liabilities attributable to these non-cash
services. The value of such non-cash services did not exceed $50,000 for any
individual in any year, except Mr. Rutigliano had $58,902 of such services in
1992, of which financial counseling was 36% and club membership was 51%, and
Mr. Weiss had $50,640 in 1991, of which financial counseling was 87%.
(3) At December 31, 1993, the persons named in the table above held the
following shares of restricted stock with the following values (based on the
closing market price of Ameritech Common Stock on December 31, 1993): Mr.
Weiss, 98,300 shares, $3,772,263; Mr. Notebaert, 35,866 shares, $1,376,358; Mr.
Brown, 81,866 shares, $3,141,608; Mr. Rutigliano, 18,500 shares, $709,938; and
Mr. Edwardson, 27,120 shares, $1,040,730. Shares shown as of December 31, 1993
included shares of performance based restricted stock distributed in January
1994 and reported in the "LTIP Payouts" column for 1993 in the table above.
Dividends are paid on restricted stock when and as paid on the Company's Common
Stock.
(4) Detail of amounts reported in the "All Other Compensation" column for 1993
is provided in the table below. Split dollar insurance represents the present
value of the interest projected to accrue for the employee's benefit on the
current year's insurance premium paid by the Company. The employee contributes
an amount equal to the value of the death benefit under the policy. Cumulative
net life insurance premiums paid are recovered by the Company at the later of
retirement or 15 (or in some cases 10) years.
<TABLE>
<CAPTION>
ITEM MR. WEISS MR. NOTEBAERT MR. BROWN MR. RUTIGLIANO MR. EDWARDSON
---- --------- ------------- --------- -------------- -------------
<S> <C> <C> <C> <C> <C>
. Earnings on Deferred
Compensation $ 55,109 $ 17,798 $ 45,543 $ 41,098 $ 10,451
. Dividend Equivalents
on Stock Options(6) $142,000 $ 0 $ 0 $ 0 $ 0
. Company Contributions
to Defined Contribution
Savings Plans $ 33,394 $ 19,781 $ 18,806 $ 17,494 $ 16,369
. Split Dollar Insurance
Premium Value $477,374 $ 83,609 $ 87,830 $127,923 $101,680
-------- -------- -------- -------- --------
Total All Other Com-
pensation $707,877 $121,188 $152,179 $186,515 $128,500
======== ======== ======== ======== ========
</TABLE>
13
<PAGE>
(5) Represents 50,000 shares of Restricted Stock which are subject to
restrictions on transfer and which will be forfeited if Mr. Weiss terminates
his employment prior to his retirement date of May 31, 1994.
(6) The option becomes exercisable as to 50,000 shares on May 31, 1994, at
which time Mr. Weiss will reach the normal retirement age of 65, and as to the
remaining 50,000 shares on May 31, 1997. Mr. Weiss has agreed to serve as a
consultant to the Company for five years after his retirement. If Mr. Weiss
leaves the Company prior to May 31, 1994 or fails or refuses to provide such
consulting services, the unexercisable portion of the option will be forfeited.
Dividend equivalents accrue on the option shares when and as dividends are paid
on the Company's Common Stock and will be paid in cash upon exercise or
expiration of the option.
(7) Mr. Edwardson's employment with the Company commenced in June 1991.
LONG TERM INCENTIVE PLANS
The Company's shareowners approved Long Term Incentive Plans in 1985 and
1989. These plans provide incentive compensation opportunities for officers and
other key employees in the form of stock options, stock appreciation rights,
restricted stock, restricted stock units and other forms consistent with the
objectives of the plans. The following three tables provide information as to
grants of stock options and restricted stock under the LTIP.
OPTION GRANTS IN 1993
The following table shows all grants of stock options to the officers named
in the Summary Compensation Table above in 1993 adjusted for the two-for-one
stock split declared in December 1993. The exercise price of all such options
was the fair market value on the date of grant. Stock options generally become
exercisable one year after the date of grant. In the event of a change in
control of the Company, options previously granted would be exercisable in
full. Upon exercise of an option, an officer purchases all or a portion of the
shares covered by the option by paying the exercise price multiplied by the
number of shares as to which the option is exercised, either in cash or by
surrendering common shares already owned by the officer.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ------------------------------------------------------------------------- -------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO PER SHARE
OPTIONS/SARS EMPLOYEES EXERCISE OR EXPIRATION
NAME GRANTED IN FISCAL YEAR BASE PRICE DATE 0% 5% 10%
---- ------------ -------------- ----------- ---------- ---- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
William L. Weiss 0 0% NA NA $ NA NA NA
Richard C.
Notebaert 11,446 2.331% $36.47 1/21/03 $ 0 $ 262,973 $ 666,425
Richard H. Brown 2,200 0.447% $36.47 1/21/03 $ 0 $ 50,457 $ 127,868
Louis J.
Rutigliano 0 0% NA NA NA NA NA
John A. Edwardson 0 0% NA NA NA NA NA
All Shareowners NA NA NA NA $ 0 $13,999,527,025 $35,482,596,611
All Optionees 491,934 100% $40.73 (avg) 2003 $ 0 $ 12,598,429 $ 31,931,435
Optionees Gain
as % of All
Shareowners Gain NA NA NA NA NA .090% .090%
</TABLE>
The dollar amounts under the 5% and 10% columns in the table above are the
result of calculations required by the Securities and Exchange Commission's
rules and therefore are not intended to forecast possible future appreciation
of the stock price of the Company. Although permitted by the SEC's rules, the
Company did not use an alternate formula for a grant date valuation because the
Company is not aware of any formula which will determine with reasonable
accuracy a present value based on future unknown or volatile factors. As shown
in the 0% column above, no gain to the named officers or all optionees is
possible without appreciation in the price of the Company's Common Stock, which
will benefit all shareowners. For example, in order for Mr. Notebaert to
realize the potential values set forth in the 5% and 10% columns in the table
above, the price per share of the Company's Common Stock (adjusted for the two-
for-one stock split) would be approximately $59.41 and $94.59, respectively, as
of the expiration date of his option.
14
<PAGE>
No stock appreciation rights ("SARs") were granted in 1993. A SAR entitles a
participant to receive, upon exercise of the SAR, an amount equal to the
difference, if any, between the exercise price per share and the fair market
value of a common share on the date of exercise, multiplied by the number of
shares as to which the SAR is exercised. The Company has in the past granted
SARs only in tandem with stock options, such that exercise of the option
reduces the number of shares as to which the SAR may be exercised and exercise
of the SAR cancels the option as to such number of shares.
OPTION/SAR EXERCISES IN 1993 AND OPTION/SAR VALUES AT DECEMBER 31, 1993
The following table provides information as to options exercised in 1993 by
the officers named in the Summary Compensation Table above and the value
realized upon such exercises and as to the value of options held by such
officers at year end based on the closing price of the Company's Common Stock
on December 31, 1993, adjusted for the two-for-one stock split declared in
December 1993.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ACQUIRED AT YEAR END AT YEAR END (1)
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
William L.
Weiss 77,000 $1,702,989 231,068 153,232 $2,779,577 $864,171
Richard C.
Notebaert 0 NA 48,332 25,066 $ 443,655 $116,249
Richard H.
Brown 19,866 $ 184,308 3,000 22,066 $ 12,000 $139,347
Louis J.
Rutigliano 6,600 $ 161,139 91,718 21,482 $1,096,524 $152,358
John A.
Edwardson 0 NA 26,950 24,950 $ 224,005 $216,005
</TABLE>
- --------
(1) Valued at $38.5625 per share.
LONG TERM INCENTIVE AWARDS IN 1993
The following table shows long term incentive awards to the officers named in
the Summary Compensation Table above in 1993.
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE OR OTHER
SHARES, UNITS OR PERIOD UNTIL
NAME OTHER RIGHTS(1) MATURATION OR PAYOUT
- ---- ---------------- ------------------------
<S> <C> <C>
William L. Weiss...................... 0 NA
Richard C. Notebaert.................. 3,466 50% in 1995; 50% in 1996
Richard H. Brown...................... 666 50% in 1995; 50% in 1996
Louis J. Rutigliano................... 0 NA
John A. Edwardson..................... 0 NA
</TABLE>
- --------
(1) Awards of shares of performance based restricted stock (adjusted for the
two-for-one stock split declared in December 1993) that will pay out based
on Ameritech's performance over a five-year period on total return to
shareowners as compared to the total return of approximately 100 companies
the size and risk characteristics of which most nearly compare with those
of Ameritech. To earn a target payout a 50th to 55th percentile ranking is
required, and to earn a maximum payout of 150% a 75th percentile ranking is
required.
15
<PAGE>
PENSION PLANS
The following table illustrates the maximum annual benefits payable upon
retirement pursuant to the Company's non-contributory pension plan for
management employees for specified final average annual compensation and
specified years of service, assuming retirement at age 65 and payment as a
single-life annuity.
<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE
ANNUAL --------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 400,000 $ 89,240 $118,987 $148,734 $178,481 $208,228 $237,974 $267,721
600,000 134,240 178,987 223,734 268,481 313,228 357,974 402,721
800,000 179,240 238,987 298,734 358,481 418,228 477,974 537,721
1,000,000 224,240 298,987 373,734 448,481 523,228 597,974 672,721
1,200,000 269,240 358,987 448,734 538,481 628,228 717,974 807,721
1,400,000 314,240 418,987 523,734 628,481 733,228 837,974 942,721
</TABLE>
Under the management pension plan, annual pensions are computed on the basis
of final average compensation over a period of five years. Compensation
included in the pension plan base consists of salaries and actual Short Term
Incentive Plan awards (shown in the "Bonus" column of the Summary Compensation
Table above).
As of December 31, 1993, Mr. Weiss, Mr. Notebaert, Mr. Brown, Mr. Rutigliano
and Mr. Edwardson had 42, 24, 16, 28 and 3 years of service, respectively, for
purposes of the management pension plan.
Pension amounts are not subject to reductions for Social Security benefits or
other offset amounts. The Employee Retirement Income Security Act of 1974
("ERISA") places certain limitations on pensions which may be paid under
Federal income tax qualified plans. Pension amounts which exceed such
limitations, as well as pension amounts attributable to awards under the Short
Term Incentive Plan, are paid under a separate non-qualified plan as an
operating expense.
Management employees may elect to receive pension benefits under the
qualified plan and/or the non-qualified plan in a lump sum upon retirement
based on the present value of such pension benefits. The non-qualified pension
plan was amended in 1992 to provide for a lump sum payment as of December 31,
1992 to those participants in the non-qualified plan (including Messrs. Weiss
and Rutigliano) who are or will be as of December 31, 1994 eligible by reason
of age and length of service to receive a service pension, unless the
participant waived such payment of the accrued benefit.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company entered into an agreement with Mr. Weiss which provides that he
will serve as Chief Executive Officer of the Company, or in another appropriate
senior position, until May 31, 1994, at which time Mr. Weiss will reach the
normal retirement age of 65, and as a consultant to the Company for a period of
five years following his retirement. The agreement provides for a base salary
until May 31, 1994, determined annually by the Board of Directors based upon
Mr. Weiss' performance and the current market rate for comparable positions as
determined by the Board. Mr. Weiss also will continue to participate in the
Short Term Incentive Plan, with a target or standard award equal to 80% of his
base salary. If, after his retirement, the consulting services requested by the
Board require substantial time over an extended period, the Board will
determine a reasonable consulting fee for Mr. Weiss.
In January 1994, the Company entered into agreements regarding change in
control with Messrs. Weiss, Notebaert, Brown, Rutigliano, Edwardson and two
other senior executive officers. These agreements replaced similar agreements
entered into in 1989 with Messrs. Weiss and Rutigliano and certain other
executive officers who have since retired. Under these agreements, a "change in
control" occurs if (a) any person (other than an employee benefit plan of the
Company or the executive or persons acting in concert with the executive)
16
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becomes the beneficial owner of 20% or more of the Company's voting stock, (b)
a tender offer is made and the offeror owns or has accepted for payment 20% or
more of the Company's voting stock (unless the tender offer is approved by the
Company's Board of Directors before the offeror becomes the beneficial owner of
5% or more of the Company's voting stock), (c) during any period of twenty-four
consecutive months members of the Board 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 such existing Directors, cease to comprise a majority
of the Board of Directors, or (d) the shareowners of the Company approve a
merger or consolidation of the Company with any other company (unless the
voting stock outstanding immediately prior thereto continues to represent at
least 70% of the combined voting power of the Company or the surviving entity
thereafter or at least 50% of the Directors of the Company or the surviving
entity after the merger or consolidation were Directors of the Company prior
thereto). The agreements provide that the executive's compensation and employee
benefits will not be reduced following a change in control. The agreements also
provide that if the executive's employment with the Company is terminated under
certain circumstances the executive will continue to receive certain medical,
insurance and other employee benefits for a period of twenty-four months and
will receive a lump sum payment up to, but limited by the amount deductible for
income tax purposes under the Internal Revenue Code, the sum of (i) 2.99 times
the executive's annual salary rate in effect immediately prior to the change in
control and the executive's short term incentive award for the preceding year
plus (ii) the actuarial equivalent of the additional pension benefits the
executive would have accrued under the Company's qualified and non-qualified
pension plans if, on the date of termination, the executive had been credited
with two additional years of age, service and compensation under such plans.
These benefits will be provided to the executives other than Mr. Weiss and Mr.
Notebaert if the executive's employment is terminated involuntarily for any
reason other than death, disability or just cause during the twenty-four month
period following the change in control or voluntarily by the executive during
the thirty-day period beginning on the first anniversary of the change in
control and to Mr. Weiss and Mr. Notebaert if their employment is voluntarily
or involuntarily terminated (other than for death, disability or just cause)
during the twenty-four month period following the change in control. The
Company estimates that, if a change in control occurred as of January 31, 1994,
the aggregate amount payable under these agreements if the employment of
Messrs. Weiss, Notebaert, Brown, Rutigliano and Edwardson was terminated would
be approximately $12,357,000. The initial terms of these agreements expire on
December 31, 1994 and on such date and each December 31 thereafter they are
automatically extended for an additional one-year term unless the Company has
given notice by the preceding November 1 that the term will not be extended,
provided that the term continues for twenty-four months after a change in
control occurs.
Under the Ameritech Senior Management Severance Pay Plan, which became
effective January 1, 1989, Senior Managers of the Company and its subsidiaries
(approximately 54 persons as of February 1, 1994, including Messrs. Weiss,
Notebaert, Brown, Rutigliano and Edwardson if the agreements described above
are not in effect) will, so long as they are employed during the thirty-six
month period following a change in control (as defined above), continue to
receive a base salary at a rate not less than the rate in effect prior to the
change in control and to participate in short and long term incentive plans and
other employee benefit plans which are not materially less favorable than those
applicable immediately prior to the change in control. The Plan also provides
for a severance benefit to such Senior Managers, in an amount up to, but
limited by the amount deductible for income tax purposes under the Internal
Revenue Code, two times base salary as of the change in control, two times the
target short term incentive award for the year preceding the change in control
and the actuarial equivalent of the additional pension benefits the Senior
Manager would have accrued if he or she had two additional years of age,
service and compensation, in the event that the Senior Manager's employment is
terminated by the employer other than for cause or disability or by the Senior
Manager for good reason during the thirty-six months following a change in
control or at the Senior Manager's discretion during the thirty day period
following the first anniversary of the change in control.
In the event of a change in control (as defined above), the Company's benefit
plans provide that the short term incentive award for the year in which the
event occurs will be not less than the target award, all stock options
previously granted will become fully exercisable, the restrictions on
Restricted Stock previously granted will terminate, performance units under the
long term incentive plan will be immediately valued
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based on the highest fair market value of the Company's Common Stock during the
period beginning thirty days prior to and ending thirty days after the change
in control, compensation previously deferred will be paid in a lump sum unless
waived by the Senior Manager, and pension amounts under the non-qualified
pension plan will be held in a trust for the benefit of the employees entitled
to such pension amounts.
SHAREOWNER RETURN PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total returns (assuming
reinvestment of dividends) of Ameritech, the average of the other six regional
holding companies ("RHCs") formed along with Ameritech in the AT&T divestiture
effective January 1, 1984 (Bell Atlantic Corporation, BellSouth Corporation,
NYNEX Corporation, Pacific Telesis Group, Southwestern Bell Corporation and US
WEST, Inc.) ("Peer Group Index"), and the Standard & Poor's 500 Composite Stock
Index ("S&P 500") from December 31, 1988 through December 31, 1993.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG AMERITECH, PEER GROUP INDEX AND S&P 500 INDEX
<TABLE>
<CAPTION>
Measurement period AMERITECH PEER GROUP S&P 500
(Fiscal year Covered): Index Index
- ---------------------- --------- ---------- -------
<S> <C> <C> <C>
Measurement PT -
12/31/88 $100 $100 $100
FYE 12/31/89 $149 $157 $132
FYE 12/31/90 $154 $151 $128
FYE 12/31/91 $155 $159 $166
FYE 12/31/92 $184 $176 $179
FYE 12/31/93 $208 $210 $197
</TABLE>
From November 21, 1983, the date on which Ameritech and the other RHCs began
trading on a "when issued" basis on the New York Stock Exchange, through
December 31, 1993, Ameritech has provided its shareowners with a cumulative
total return of 535%. This performance compares to a 302% total return for the
S&P 500 and a 494% return for the average of the other six RHCs over the same
ten year period.
SUBMISSION OF 1995 SHAREOWNER PROPOSALS
Proposals of shareowners intended to be presented at the annual meeting in
1995 must be received by the Secretary of Ameritech, 30 South Wacker Drive,
Chicago, Illinois 60606, not later than November 1, 1994 to be considered for
inclusion in the Company's 1995 proxy material.
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ADDITIONAL INFORMATION
In addition to soliciting proxies through the mail, certain employees of
Ameritech and its transfer agent, First Chicago Trust Company of New York, may
solicit proxies in person and by telephone. Ameritech has retained Kissel-Blake
Inc., 25 Broadway, New York, New York 10004, to assist in the solicitation of
proxies, primarily from brokers, banks and other nominees, for an estimated fee
of $22,000. The cost of soliciting proxies will be borne by Ameritech. As is
customary, Ameritech will, upon request, reimburse brokers, banks, nominees,
custodians and other record holders for their out-of-pocket expenses of
forwarding proxy materials to the beneficial owners of the shares.
If you plan to attend the Annual Meeting in person, please retain the
admission ticket attached to the form of proxy accompanying this notice and
proxy statement. Shareowners who do not have admission tickets will be admitted
upon presentation of identification at the door.
Highlights of the meeting will be included in the quarterly report mailed to
shareowners on May 1, 1994.
The rules of the Securities and Exchange Commission require that an annual
report accompany or precede the proxy materials. However, no more than one
annual report need be sent to the same address. If more than one annual report
is being sent to your address and you wish to reduce the number of annual
reports you receive, please mark the Discontinue Annual Report Mailing box in
the Special Action area on the proxy card.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE THE ENCLOSED PROXY CARD AND MAIL IT
IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
BY ORDER OF THE BOARD OF DIRECTORS,
LOGO
Bruce B. Howat
Secretary
March 1, 1994
19
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AMERITECH LOGO
<PAGE>
P R O X Y
AMERITECH CORPORATION
30 South Wacker Drive, Chicago, Illinois 60606 [LOGO]
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON APRIL 20, 1994.
The undersigned hereby appoints William L. Weiss, Richard M. Gillett, Hanna
Holborn Gray, James A. Henderson, Lynn M. Martin, John D. Ong and A. Barry Rand,
and each of them, as proxies, with the powers the undersigned would possess if
personally present, and with full power of substitution, to vote all common
shares of the undersigned in Ameritech Corporation at the Annual Meeting of
Shareowners to be held in the Arthur Rubloff Auditorium at The Art Institute of
Chicago, Chicago, Illinois, on April 20, 1994, beginning at 9:30 a.m., and at
any adjournment thereof, upon all subjects that may properly come before the
meeting, subject to any directions indicated on the reverse side of this card.
IF NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE: FOR THE ELECTION OF THE
NOMINEES LISTED BELOW; IN ACCORD WITH THE DIRECTORS' RECOMMENDATIONS ON THE
MATTERS LISTED ON THE REVERSE SIDE OF THIS CARD AND DESCRIBED IN THE ENCLOSED
PROXY STATEMENT; AND 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.
Your vote for election of Directors may be indicated on the reverse side of this
card. Four Directors are to be elected at the meeting. The nominees of the Board
of Directors are Donald C. Clark, Melvin R. Goodes, James A. Henderson and John
B. McCoy.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR OTHERWISE TO P.O. BOX 8678, EDISON, NEW JERSEY,
08818-9166. IF YOU DO NOT SIGN AND RETURN A PROXY OR ATTEND THE MEETING AND VOTE
BY BALLOT, YOUR SHARES CANNOT BE VOTED.
This card also provides voting instructions for shares held in the dividend
reinvestment plan and, if registrations are identical, shares held in various
employee savings plans as described in the proxy statement.
Comments: ______________________________________________________________________
________________________________________________________________________________
If you have written in the above space, please mark the "Comments" box on the
reverse side of this card.
<PAGE>
- --------------------------------------------------------------------------------
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR PROPOSAL 2 AND AGAINST PROPOSALS 3 AND 4.
The Board of Directors recommends a vote FOR
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Ratification of
Directors [_] [_] Independent [_] [_] [_]
(see reverse) Accountants
FOR, EXCEPT VOTE WITHHELD FOR THE FOLLOWING NOMINEE(S): ________________________
The Board of Directors recommends a vote AGAINST
FOR AGAINST ABSTAIN
3. Shareowner Proposal on
Cumulative Voting in [_] [_] [_]
Elections of Directors
4. Shareowner Proposal on
Electing all Directors [_] [_] [_]
Annually
Special Note
ITEMS ON OTHER SIDE OF CARD
Comments [_]
Vote Limitations [_]
SPECIAL ACTION
Discontinue Annual Report Mailing for this Account [_]
Will Attend Annual Meeting [_]
SIGNATURE(S) ___________________________________________ DATE ___________, 1994
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- --------------------------------------------------------------------------------
<PAGE>
GRAPHICS APPENDIX
1. Page 18 of the Proxy Statement contains a graph comparing the cumulative
shareholder return on the Common Stock of the Company for the last five
fiscal years with the cumulative total return on the S&P 500 Index and an
index of peer companies selected by the Company.
2. Page 2 of the Proxy Statement contains photographs of each of
the four nominee directors of the Company for election at the Company's
1994 Annual Meeting of Stockholders, pages 3 through 5 contain photographs
of each of the other eleven directors of the Company.
