<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-8612
AMERITECH CORPORATION
(Incorporated under the laws of the State of Delaware)
30 S. Wacker Drive, Chicago, Illinois 60606
I.R.S. Employer Identification Number 36-3251481
Telephone Number - (800) 257-0902
At April 30, 1996, 553,407,165 common shares were outstanding.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
---- ----
<PAGE>2
AMERITECH CORPORATION AND SUBSIDIARIES
Part I - Financial Information
The following condensed consolidated financial statements have been
prepared by Ameritech Corporation (Ameritech or the Company) pursuant
to the rules and regulations of the Securities and Exchange Commission
(SEC) and, in the opinion of the Company, include all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
statement of results for each period shown. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such SEC rules and
regulations. The Company believes that the disclosures made are
adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's latest Annual
Report on Form 10-K.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Millions, except per share amounts)
(Unaudited)
Three Months Ended
March 31
--------------
1996 1995
---- ----
Revenues................................. $ 3,567 $ 3,146
------- -------
Operating Expenses
Employee-related expenses.............. 936 880
Depreciation and amortization.......... 574 526
Other operating expenses............... 1,091 863
Restructuring credit................... -- (256)
Taxes other than income taxes.......... 144 144
------- -------
2,745 2,157
------- -------
Operating income......................... 822 989
Interest expense......................... 124 118
Other income, net........................ 51 34
------- -------
Income before income taxes............... 749 905
Income taxes............................. 271 326
------- -------
Net income............................... $ 478 $ 579
======= =======
Earnings per common share................ $0.86 $1.05
===== =====
Dividends declared per common
share................................... $0.53 $0.50
===== =====
Average common shares outstanding
(millions).............................. 554.8 552.3
===== =====
See Notes to Condensed Consolidated Financial Statements.
<PAGE>3
AMERITECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
Mar. 31, 1996 Dec. 31, 1995
------------- -------------
(Unaudited) (Derived from
Audited
Financial
Statements)
ASSETS
- ------
Current assets
Cash and temporary cash investments........ $ 164 $ 131
Receivables, net........................... 2,782 2,774
Material and supplies...................... 207 205
Prepaid and other.......................... 328 342
------- -------
3,481 3,452
------- -------
Property, plant and equipment............... 30,948 30,874
Less, accumulated depreciation............. 17,770 17,417
------- -------
13,178 13,457
------- -------
Investments, primarily international........ 2,383 1,497
Other assets and deferred charges........... 3,741 3,536
------- -------
Total assets ............................... $22,783 $21,942
======= =======
LIABILITIES AND SHAREOWNERS' EQUITY
- -----------------------------------
Current liabilities
Debt maturing within one year.............. $ 3,024 $ 2,138
Accounts payable........................... 1,434 1,792
Other...................................... 1,962 1,831
------- -------
6,420 5,761
------- -------
Long-term debt.............................. 4,439 4,513
------- -------
Deferred credits and other long-term liabilities
Accumulated deferred income taxes.......... 788 782
Unamortized investment tax credits......... 198 208
Postretirement benefits other than pensions 2,951 2,967
Other...................................... 705 696
------- -------
4,642 4,653
------- -------
Shareowners' equity
Common stock, par value $1;2.4 billion
shares authorized, 588,110,000 issued in 1996
and 587,612,000 issued in 1995......... 588 588
Proceeds in excess of par value............ 5,687 5,613
Reinvested earnings........................ 2,393 2,209
Treasury stock, at cost (33,685,000 shares
in 1996 and 33,773,000 shares in 1995)... (1,033) (986)
Deferred compensation...................... (266) (329)
Currency translation adjustment............ (93) (85)
Other, net................................. 6 5
------- -------
7,282 7,015
------- -------
Total liabilities and shareowners' equity... $22,783 $21,942
======= =======
See Notes to Condensed Consolidated Financial Statements.
<PAGE>4
AMERITECH CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
Three Months Ended
March 31
-------------
1996 1995
---- ----
Cash Flows from Operating Activities
Net Income ................................... $ 478 $ 579
Adjustments to net income
Restructuring credit, net of tax............ -- (160)
Depreciation and amortization............... 574 526
Deferred income taxes, net.................. (7) 18
Investment tax credits, net................. (10) (12)
Capitalized interest........................ (7) (3)
Provision for uncollectibles................ 80 44
Change in accounts receivable............... (85) 129
Change in material and supplies............. (11) 12
Change in certain other current assets...... 13 24
Change in accounts payable.................. (359) (384)
Change in certain other current liabilities. 148 43
Change in certain other noncurrent
assets and liabilities.................... (41) (75)
Other....................................... 8 (25)
------- -------
Net cash from operating activities............ 781 716
------- -------
Cash Flows from Investing Activities
Capital expenditures.......................... (457) (361)
Additional investments........................ (877) (6)
Other investing activities, net............... 3 (2)
------- -------
Net cash from investing activities............ (1,331) (369)
------- -------
Cash Flows from Financing Activities
Net change in short-term debt................. 863 (80)
Retirement of long-term debt.................. (10) (11)
Dividend payments (294) (276)
Proceeds from reissuance of treasury stock.... 84 56
Repurchase of common stock.................... (101) --
Other financing activities, net............... 41 1
------- -------
Net cash from financing activities............ 583 (310)
------- -------
Net increase (decrease) in cash and
temporary cash investments................... 33 37
Cash and temporary cash investments,
beginning of period.......................... 131 74
------- -------
Cash and temporary cash investments,
end of period................................ $ 164 $ 111
======= =======
See Notes to Condensed Consolidated Financial Statements.
<PAGE>5
AMERITECH CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
--------------
NOTE 1: Work Force Restructuring
As announced in March 1994, Ameritech restructured its existing
nonmanagement work force, reducing the work force by 11,500 employees
during 1994 and 1995. As a result of the restructuring, a gain of
$256 million or $160 million after-tax was recorded in the first three
months of 1995, resulting primarily from settlement gains from lump
sum pension payments from the Ameritech Pension Plan to former
employees. No restructuring charges or credits were recorded in the
first three months of 1996.
The Company recorded additional restructuring charges in the fourth
quarter of 1995, primarily for the consolidation of data centers and
additional work force reductions. See further discussion in
Management's Discussion and Analysis below.
NOTE 2: Increase in Authorized Common Shares
At the 1996 Annual Meeting of shareowners, held on April 17, 1996,
shareowners approved a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of common
stock from 1.2 billion to 2.4 billion.
Note 3: Belgacom Investment
In March 1996, a consortium led by Ameritech closed its strategic
consolidation agreement with Belgacom S.A., the national
telecommunications operator of Belgium. The consortium purchased from
the Belgian government a 49.9 percent stake in Belgacom S.A., with
Ameritech acquiring a 35 percent consortium share, Tele Danmark A/S 33
percent, Singapore Communications Limited 27 percent and certain
Belgian investors the remaining 5 percent. The purchase price was
73.3 billion Belgian francs, or about $2.5 billion. Ameritech
invested about $865 million for its 35 percent allocable consortium
share, or about 17.5 percent of Belgacom S.A.
Note 4: Subsequent Event -- Information Technology
Effective May 1, 1996, the Company commenced a ten-year agreement with
Integrated Systems Solutions Corporation (ISSC, a wholly owned
subsidiary of IBM) to perform certain information technology services
currently being performed by Ameritech. ISSC will also be responsible
for the consolidation of the Company's data centers.
Initially, to perform this service, ISSC will be using existing
computers owned or leased by the Company, but over time, ISSC may
utilize any data processing equipment it acquires or leases, as long
as ISSC meets the criteria specified in the agreement. Over 600
Ameritech management employees will be offered employment with ISSC.
The terms of the agreement require payments to ISSC not to exceed $200
million in any year. Actual charges to the Company may increase or
decrease based in part upon usage, growth and other data processing
requirements of the Company. During the initial years, scheduled
payments to ISSC include reimbursements of lease payments on existing
computers leased by the Company. The Company may terminate the entire
agreement upon payment of a predetermined fee, which varies based on
the reason for termination and the year initiated. The information
technology restructuring charge recorded by the Company in December
1995 is consistent with this ten year agreement.
<PAGE>6
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 vs.
THREE MONTHS ENDED MARCH 31, 1995
RESULTS OF OPERATIONS
- ---------------------
For the three months ended March 31, 1996, net income was $478 million
or $0.86 per common share on 554.8 million average common shares
outstanding. This represented a 17.4 percent decrease in net income
and an 18.1 percent decrease in earnings per common share from the
comparable prior year period for which net income was $579 million or
$1.05 per common share on 552.3 million average common shares
outstanding.
Results for the three months ended March 31, 1995 included an after-
tax restructuring credit of $160 million or $0.29 per common share
related to net settlement gains associated with lump-sum payments from
the nonmanagement pension plan to former employees pursuant to the
work force restructuring program.
Excluding the workforce restructuring credit in 1995, net income for
the three months ended March 31, 1996 of $478 million would have
represented an increase of 14.2 percent over the net income of $419
million for the three months ended March 31, 1995. Earnings per
common share would have been $0.86 and $0.76 per common share,
respectively, an increase of 13.2 percent.
- ----------------------------------------------------------------------
Revenues
- --------
Total revenues for the three months ended March 31, 1996 increased
13.4 percent over the comparable prior year period to $3,567 million.
The increase was primarily attributable to higher network usage
volumes due to access line growth, volume increases in cellular
services due to cellular subscriber growth, increased security
monitoring revenues resulting from the October 1995 acquisition of The
National Guardian Corporation, as well as higher equipment sales.
Rate reductions at the landline communications subsidiaries partially
offset these increases.
- ----------------------------------------------------------------------
Local service
- -------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $1,465 $1,330 $ 135 10.2
The increase in local service revenues for the three months ended
March 31, 1996 was primarily attributable to higher network usage
volumes which increased revenues by $127 million. The increased
network usage volume resulted principally from growth in the number of
access lines, which increased 4.5 percent or 833,000 lines to
19,275,000 from 18,442,000 as of March 31, 1995, and greater sales of
call management services such as Call Forwarding and Caller ID.
<PAGE>7
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
Network access
- --------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Interstate
- ----------
Three Months Ended $ 579 $ 562 $ 17 3.0
Intrastate
- ----------
Three Months Ended $ 140 $ 137 $ 3 2.2
The increase in interstate network access revenues for the three
months ended March 31, 1996 was due primarily to an increase of $53
million resulting from higher network usage. This increase was
partially offset by net rate reductions of $32 million. Minutes of
use related to interstate calls for the three months ended March 31,
1996 increased 9.3 percent over the comparable prior year period.
The increase in intrastate network access revenues for the three
months ended March 31, 1996 was primarily due to a $31 million
increase resulting from higher network usage, offset by price
reductions of $22 million. Intrastate network access revenues also
decreased by $6 million in the first quarter of 1996 due to a
reclassification of certain revenues to the long distance revenue
category. Minutes of use related to intrastate calls for the three
months ended March 31, 1996 increased 13.1 percent over the comparable
prior year period.
- ----------------------------------------------------------------------
Long distance service
- ---------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 376 $ 350 $ 26 7.4
The increase in long distance service revenues for the three months
ended March 31, 1996 was primarily attributable to an increase of $18
million resulting from higher network usage, combined with an increase
of $6 million related to the transfer of certain revenues from the
intrastate network access category.
<PAGE>8
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
Cellular, directory and other
- -----------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $1,007 $ 767 $ 240 31.3
The increase in cellular, directory and other revenues for the three
months ended March 31, 1996 was attributable to cellular revenue
growth resulting from a 42.7 percent increase in subscribers from
1,432,000 at March 31, 1995 to 2,043,000 at March 31, 1996. Paging
revenues also increased as a result of a 21.7 percent increase in
subscribers from 659,000 at March 31, 1995 to 802,000 at March 31,
1996. Revenues from the security monitoring business and equipment
sales also contributed to the increase. Increased security monitoring
revenues resulted primarily from the October 1995 acquisition of The
National Guardian Corporation.
- ----------------------------------------------------------------------
Operating expenses
- ------------------
Total operating expenses for the three months ended March 31, 1996
increased by $588 million or 27.3 percent from the prior year. The
increase was largely attributable to the work force restructuring
which resulted in a credit of $256 million ($160 million after-tax) in
the first quarter of 1995 related to settlement gains resulting from
lump-sum pension payments to former employees. Operating expenses
also increased in the first quarter of 1996 due to increased employee-
related expenses and cost of sales in growth-related businesses, such
as cellular and security monitoring services, and from equipment
sales.
- ----------------------------------------------------------------------
Employee-related expenses
- -------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 936 $ 880 $ 56 6.4
The increase in employee-related expenses for the three months ended
March 31, 1996 was primarily attributable to increased employee levels
in the cellular, long distance, cable TV and security monitoring
businesses, resulting in increased expenses of $46 million, as well as
an increase of $26 million related to higher wage rates and bonus
accruals for employees at the landline communications subsidiaries.
These increases were partially offset by $16 million related to lower
force levels and lower overtime expenses in the landline
communications business.
There were 65,502 employees at March 31, 1996, compared with 62,094 at
March 31, 1995. The increase is due to growth in the cellular and
security monitoring businesses, as well as staffing for new businesses
such as long distance and cable TV.
<PAGE>9
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
Depreciation and
amortization
- ------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 574 $ 526 $ 48 9.1
The increase in depreciation and amortization expense for the three
months ended March 31, 1996 was primarily due to higher plant
balances. Amortization of intangibles from acquisitions also
contributed to the increase.
- ----------------------------------------------------------------------
Other operating expenses
- ------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $1,091 $ 863 $ 228 26.4
The increase in other operating expenses for the three months ended
March 31, 1996 was largely attributable to growth-related cost of
sales and business volume increases at the cellular and security
monitoring services operations, as well as cost of sales increases
related to increased equipment sales. Costs associated with long
distance, personal communications services and cable TV also resulted
in expense increases, as did higher uncollectibles, advertising and
distributor commission expenses resulting from increased marketing and
sales efforts.
Restructuring credit
- --------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ -- $(256) $ 256 (100.0)
As discussed in Note 1, the Company significantly reduced its
nonmanagement work force during 1994 and 1995 by 11,500 employees.
New employees with different skills were added during this period to
accommodate growth and meet staffing requirements for new business
opportunities. As of March 31, 1995, 9,428 employees had left the
Company, with 313 leaving in the first quarter of 1995. A pretax,
noncash settlement gain of $256 million was recorded in the first
quarter of 1995, associated with lump-sum pension payments to former
employees. No restructuring charges or credits were recorded in the
first quarter of 1996.
<PAGE>10
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
Taxes other than income taxes
- -----------------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 144 $ 144 $ -- --
Taxes other than income taxes remained constant compared with the
prior year period. Increases in capital stock and gross receipts
taxes were fully offset by a decrease in property taxes for the
current quarter.
- ----------------------------------------------------------------------
Other Income and Expenses
- -------------------------
Interest expense
- -----------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 124 $ 118 $ 6 5.1
The increase in interest expense for the three months ended March 31,
1996 was primarily attributable to higher interest of $5 million on
short-term debt due to higher balances, partially offset by the impact
of lower average interest rates.
- ----------------------------------------------------------------------
Other income, net
- -----------------
Change
March 31 Income Percent
----------
(dollars in millions) 1996 1995 (Expense) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 51 $ 34 $ 17 50.0
Other income, net includes equity earnings, interest income and other
nonoperating items. Other income, net increased for the three months
ended March 31, 1996 due to an increase in equity earnings from
international investments.
- ----------------------------------------------------------------------
Income taxes
- ------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 271 $ 326 $ (55) (16.9)
The decrease in income taxes in the three months ended March 31, 1996
as compared to the prior year period was primarily attributable to the
decrease in pretax earnings related to the revenue and expense items
previously discussed.
<PAGE>11
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
FINANCIAL CONDITION AND OTHER MATTERS
- -------------------------------------
Capital expenditures
- --------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 466 $ 365 $ 101 27.7
The increase in capital expenditures for the three months ended March
31, 1996 related primarily to higher capital expenditures at the
landline and wireless communications subsidiaries to accommodate
growth.
- ----------------------------------------------------------------------
Dividends declared
- -------------------
March 31 Increase Percent
----------
(dollars in millions) 1996 1995 (Decrease) Change
------------------- ---- ---- -------- ------
Three Months Ended $ 294 $ 276 $ 18 6.5
On March 20, 1996, the Board of Directors declared a quarterly
dividend of $0.53 per common share, a 6.0 percent increase over the
$0.50 per common share declared in the same quarter in the prior year.
- ----------------------------------------------------------------------
Debt ratio
- ----------
The debt ratio was 50.6 percent as of March 31, 1996, compared with
48.7 percent as of December 31, 1995. The increase is largely
attributable to an increase in short-term debt used to finance the
Belgacom investment in March 1996 (Note 3), partially offset by the
increase in reinvested earnings.
- ----------------------------------------------------------------------
Ratio of earnings to fixed charges
- ----------------------------------
The ratio of earnings to fixed charges for the three months ended
March 31 was 5.72 in 1996 and 7.37 in 1995. The ratio in 1995 was
favorably affected by a credit of $256 million for work force
restructuring. The work force restructuring program was largely
funded by the Ameritech Pension Plan.
The computations of the ratio of earnings to fixed charges for the
five years ended December 31, 1995 have been restated. The ratio, as
adjusted, for the years ended December 31, 1995, 1994, 1993, 1992 and
1991 was 6.45, 4.40, 5.29, 4.50 and 3.61, respectively. The impact of
the restatement was not significant and was made to be consistent with
unregulated enterprises.
<PAGE>12
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
Other Matters
- --------------
Telecommunications Act of 1996
- ------------------------------
The Telecommunications Act of 1996 was signed into law by the
President on February 8, 1996. This legislation defines the
conditions under which Ameritech will be permitted to offer interLATA
long distance service and provides certain mechanisms intended to
facilitate local exchange competition. This legislation, in addition
to allowing Ameritech to offer interLATA long distance services, will
allow competitors into the Company's traditional local exchange
markets. Management believes the legislation gives the Company an
opportunity to expand its revenue base by providing long distance
services, while retaining lower-margin access revenues as other local
service providers, acting as resellers, continue to use Ameritech's
network facilities.
On April 19, 1996 the Federal Communications Commission (FCC) issued a
notice of proposed rulemaking seeking comment on proposed rules
opening local telephone markets to competition. The FCC has until
August 8, 1996 to issue the new rules.
- ----------------------------------------------------------------------
Information Technology
- --------------
As a result of the agreement executed with ISSC (see Note 4), the
Company expects its future employee-related costs to decrease from
what otherwise would have been incurred and contracted services
(included in other operating expenses) to increase as services are
provided to the Company by ISSC. Further, depreciation expense
associated with computer assets will moderate as ISSC eventually
replaces, at its cost, hardware requirements to manage the Company's
data processing needs.
<PAGE>13
AMERITECH CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont'd.)
AMERITECH CORPORATION AND SUBSIDIARIES
Part II - Other Information
- ---------------------------
Item 4 Submission of Matters to a Vote of Security Holders.
- ------ ---------------------------------------------------
(a) The 1996 Annual Meeting of Shareowners was held on April 17,
1996.
The number of common shares present at the Annual Meeting in
person or by proxy and voting and withholding authority to vote
in the election of Directors was 459,297,616 or 82.63 percent
of the common shares of Ameritech outstanding on February 20,
1996, the record date for the Annual Meeting.
(b) The following nominees, having received the FOR votes set
opposite their respective names, constituting a plurality of
the votes cast at the Annual Meeting for the election of
Directors, were duly elected Directors of the Company for a
three-year term.
DIRECTORS FOR WITHHELD
--------- --- --------
Sheldon B. Lubar 447,572,226 11,725,390
Lynn M. Martin 447,263,636 12,033,980
Richard C. Notebaert 447,821,017 11,476,599
The largest percentage of shares withheld from voting with
respect to any nominee for director was 2.620 percent. The
terms of office of the following Directors continued after the
meeting: Donald C. Clark, Melvin R. Goodes, Hanna Holborn
Gray, Ph.D., James A. Henderson, Arthur C. Martinez, John B.
McCoy, John D. Ong, A. Barry Rand and James A. Unruh.
(c) Shareowners ratified the appointment of Arthur Andersen LLP, as
independent public accountants, to examine the consolidated
financial statements for the current year ending December 31,
1996. The vote was 451,288,612 shares FOR and 4,508,800 shares
AGAINST, with 3,500,204 shares abstaining.
Shareowners also approved a proposal to amend the Company's
Certificate of Incorporation to increase the number of
authorized shares of common stock from 1.2 billion to 2.4
billion. The vote was 379,660,122 shares FOR the proposal and
73,914,640 shares were voted AGAINST the proposal, with
5,722,854 shares abstaining.
A proposal to provide for the election of all Directors
annually was approved. A total of 376,252,392 shares were
voted FOR the proposal, 23,682,618 shares were voted AGAINST,
5,071,302 shares abstained and 54,291,304 broker non-votes were
recorded. This proposal will affect all Directors elected on
or after May 1, 1996 with current Directors fulfilling their
current terms.
(d) A proposal by a shareowner to provide for cumulative voting in
the election of Directors was not approved. A total of
82,252,593 shares were voted FOR the proposal, 286,652,142
shares were voted AGAINST, 36,101,577 shares abstained and
54,291,304 broker non-votes were recorded.
<PAGE14
Item 6 Exhibits and Reports on Form 8-K.
- ------ ---------------------------------
(a) Exhibits
--------
3(i) Certificate of Incorporation of the Company as amended
on April 30, 1996.
11a Statement re: Computation of primary earnings per
share of the three months ended March 31, 1996 and
1995.
11b Statement re: Computation of fully diluted earnings
per share for the three months ended March 31, 1996 and
1995.
11c Statement re: Computation of primary earnings per share
for the three years ended December 31, 1995.
11d Statement re: Computation of fully diluted earnings
per share for the three years ended December 31, 1995.
12 Computation of ratio of earnings to fixed charges for
the three months ended March 31, 1996 and March 31,
1995, and for the five years ended December 31, 1995.
27 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
On April 16, 1996, a Current Report on Form 8-K dated April
16, 1996 was filed under Item 5, Other Events, to report
Ameritech's earnings for the first quarter 1996.
<PAGE>15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Ameritech Corporation
Date: May 9, 1996 By /s/ Betty F. Elliott
------------------------
Betty F. Elliott
Vice President and Comptroller
(Principal Accounting Officer)
State of Delaware
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "AMERITECH CORPORATION", FILED IN THIS OFFICE ON THE
THIRTIETH DAY OF APRIL, A.D. 1996, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/Edward J. Freel
Edward J. Freel, Secretary of State
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERITECH CORPORATION
A Delaware Corporation
AMERITECH CORPORATION, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of
Delaware (hereinafter referred to as the "Company"), does hereby
certify that:
FIRST: that, at a meeting of the Board of Directors of the
Company held on August 16, 1995 the following resolutions were
unanimously adopted setting forth a proposed amendment to the
Certificate of Incorporation of the Company, declaring said amendment
to be advisable and directing that said amendment be considered and
submitted to a vote at the next annual meeting of the stockholders of
the Company.
RESOLVED, that it is hereby declared advisable to amend the
Certificate of Incorporation of the Company by revising Section
B.3. of Article EIGHTH to eliminate the division of the Board of
Directors into three classes elected for three-year terms and to
substitute therefor a provision requiring all Directors to be
elected annually, such that said Section B.3. of Article EIGHTH
of the Company's Certificate of Incorporation reads in its
entirety as follows:
"B.3. Tenure. Each Director elected prior to May 1, 1996
shall hold office for the term of three years for which that
director was elected, and each director elected on or after May
1, 1996 shall hold office until the next annual meeting of
shareowners and until that director's successor is elected and
qualified or until that director's earlier resignation or
removal."
RESOLVED FURTHER, that it is hereby directed that the
foregoing proposed amendment to Section B.3. of Article EIGHTH
of the Company's Certificate of Incorporation be considered and
submitted to a vote at the next annual meeting of the
shareowners of the Company.
SECOND: that, at a meeting of the Board of Directors of the
Company held on December 20, 1995, the following resolutions were
unanimously adopted setting forth a proposed amendment to the
Certificate of Incorporation of the Company, declaring said amendment
to be advisable and directing that said amendment be considered and
submitted to a vote at the next annual meeting of the stockholders of
the Company:
RESOLVED, that it is hereby declared advisable to amend the
Certificate of Incorporation of the Company by revising
paragraph A.1. of Article FOURTH thereof to read in its entirety
as follows:
"A.1. Classification of Authorized Shares. The total number of
all classes of stock which the Corporation shall have authority to
issue is two billion four hundred sixty million (2,460,000,000), of
which thirty million (30,000,000) shares, $1.00 par value per share,
are to be of a class designated Preferred Stock ("Preferred Stock"),
thirty million (30,000,000) shares, $1.00 par value per share, are to
be of a class designated Preference Stock ("Preference Stock"), and two
billion four hundred million (2,400,000,000) shares, $1.00 par value per
share, are to be shares of Common Stock ("Common Stock").
RESOLVED FURTHER, that it is herevy directed that the foregoing
proposed amendment to the Certificate of Incorporation of the Company
be considered and submitted to a vote at the next annual meeting of
the stockholders of the Company.
THIRD: that an annual meeting of the stockholders of the Company
was duly called and held on April 17, 1996, upon notice in accordance with
Section 222 of the General Corporation Law of the State of Delaware.
FOURTH: that at said annual meeting, a majority of the outstanding
stock entitled to vote thereon was voted in favor of the amendments to the
Certificate of Incorporation of the Company set forth in paragraphs FIRST
and SECOND above, and each of said amendments was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, the said AMERITECH CORPORATION has caused
this Certificate to be signed by Richard C. Notebaert, its Chairman
of the Board and Chief Executive Officer, and attested by Bruce B.
Howat, its Secretary, this 25th day of April, 1996.
AMERITECH CORPORATION
By: /s/ Richard C. Notebaert
Richard C. Notebaert
Chairman of the Board, President
and Chief Executive Officer
ATTEST:
/s/ Bruce B. Howat
Bruce B. Howat
Secretary
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF AMERICAN INFORMATION TECHNOLOGIES
CORPORATION FILED IN THIS OFFICE ON THE TWENTY-SIXTH DAY OF APRIL,
A.D. 1991, AT 10:01 O'CLOCK A.M.
/s/ Michael Harkins
Michael Harkins, Secretary of State
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN INFORMATION TECHNOLOGIES CORPORATION
A Delaware Corporation
AMERICAN INFORMATION TECHNOLOGIES CORPORATION, a corporation
organized and existing under and by virtue of the General Corporation
Law of the State of Delaware, does hereby ceritify that:
FIRST: that at a meeting of the Board of Directors of AMERICAN
INFORMATION TECHNOLOGIES CORPORATION held on January 16, 1991,
resolutions were duly adopted setting forth a proposed amendment to
the Certificate of Incorporation of said corporation, declaring said
amendment be considered and submitted to a vote at the next annual
meeting of the stockholders of said corporation. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that it is hereby declared advisable to amend the
Certificate of Incorporation of the Company by revising Article
FIRST thereof to read in its entirety as follows:
"FIRST. The name of the Corporation is AMERITECH
CORPORATION."
RESOLVED FURTHER, that it is hereby directed that the
foregoing proposed amendment to the Certificate of Incorporation
of the Company be considered and submitted to a vote at the next
annual meeting of the stockholders of the Company.
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an annual meeting of the stockholders of said corporation
was duly called and held on April 17, 1991, upon notice in accordance
with Section 222 of the General Corporation Law of the State of
Delaware, at which meeting a majority of the outstanding stock
entitled to vote thereon was voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, said AMERICAN INFORMATION TECHNOLOGIES
CORPORATION has caused this certificate to be signed by William H.
Springer, its Vice Chairman and Chief Financial and Administrative
Officer, and attested by Bruce B. Howat, its Secretary, this 26th day
of April, 1991.
AMERICAN INFORMATION TECHNOLOGIES
CORPORATION
By: /s/ William H. Springer
William H. Springer, Vice Chairman
and Chief Financial and Administrative
Officer
ATTEST:
By: /s/Bruce B. Howat
Bruce B. Howat, Secretary
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF AMERICAN INFORMATION TECHNOLOGIES
CORPORATION FILED IN THIS OFFICE ON THE FIFTEENTH DAY OF MAY, A.D.
1989, AT 10 O'CLOCK A.M.
/s/ Michael Harkins
Michael Harkins, Secretary of State
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN INFORMATION TECHNOLOGIES CORPORATION
A Delaware Corporation
AMERICAN INFORMATION TECHNOLOGIES CORPORATION, a corporation
organized and existing under and by virtue of the General Corporation
Law of the State of Delaware (hereinafter referred to as the
"Company", does hereby certify that:
First: that, at a meeting of the Board of Directors of the
Company held on January 17, 1989, the following resolutions were
adopted setting forth a proposed amendment to the Certificate of
Incorporation of the Company, declaring said amendment to be
advisable and directing that said amendment be considered and
submitted to a vote at the next annual meeting of the stockholders of
the Company:
RESOLVED, that it is hereby declared advisable to amend the
Certificate of Incorporation of the Company by revising
paragraph A.1. of Article FOURTH thereof to read in its entirety
as follows:
"A.1. Classification of Authorized Shares. The total number of
shares of all classes of stock which the Corporation shall have
authority to issue is one billion two hundred sixty million
(1,260,000,000), of which thirty million (30,000,000) shares,
$1.00 par value per share, are to be of a class designated
Preferred Stock ("Preferred Stock"), thirty million (30,000,000)
shares, $1.00 par value per share, are to be of a class
designated Preference Stock ("Preference Stock"), and one
billion two hundred million (1,200,000,000) shares, $1.00 par
value per share, are to be shares of Common Stock ("Common
Stock")."
RESOLVED FURTHER, that it is hereby directed that the
foregoing proposed amendment to the Certificate of Incorporation
of the Company be considered and submitted to a vote at the next
annual meeting of the stockholders of the Company.
Second: that an annual meeting of the stockholders of the
Company was duly called and held on April 19, 1989, upon notice in
accordance with Section 222 of the General Corporation Law of the
State of Delaware.
Third: that at said annual meeting, a majority of the
outstanding stock entitled to vote thereon was voted in favor of the
amendment to the Certificate of Incorporation of the Company set
forth in paragraph First above, and said amendment was duly adopted
in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the said American Information Technologies
Corporation has caused this Certificate to be signed by William L.
Weiss, its Chairman of the Board and Chief Executive Office, and
attested by Bruce B. Howat it Secretary, this 1st day of May, 1989.
AMERICAN INFORMATION TECHNOLOGIES
CORPORATION
By: /s/ William L. Weiss
William L. Weiss, Chairman of the Board
and Chief Executive Officer
ATTEST:
By: /s/Bruce B. Howat
Bruce B. Howat, Secretary
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF STOCK DESIGNATION OF AMERICAN INFORMATION TECHNOLOGIES
CORPORATION FILED IN THIS OFFICE ON THE TWENTY-NINTH DAY OF DECEMBER,
A.D. 1988, AT 10 O'CLOCK A.M.
/s/ Michael Harkins
Michael Harkins, Secretary of State
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERENCE STOCK
of
AMERICAN INFORMATION TECHNOLOGIES CORPORATION
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware
We, Thomas P. Hester, Senior Vice President and General
Counsel, and Bruce B. Howat, Secretary, of Ameritech Information
Technologies Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, the
Board of Directors on December 21, 1988 adopted the following
resolution creating a series of 3,000,000 shares of Preference Stock
designated as Series A Junior Participating Preference Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Certificates of Incorporation, a series of Preference Stock of the
Corporation be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences designation and
amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation and Amount. There shall a series of
Preference Stock of the Corporation which shall be designated as
"Series A Junior Participating Preference Stock", $1.00 par value,
and the number of shares constituting such series shall be 3,000,000.
Such number of shares may be increased or decreased by resolution of
the Board of Directors; provided, however, that no decrease shall
reduce the number of shares of Series A Junior Participating
Preference Stock to a number less than that of the shares then
outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preference Stock ranking prior and
superior to the shares of Series A Junior Participating Preference
Stock with respect to dividends, the holders of shares of Series A
Junior Participating Preference Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in
cash to holders of record on the last business day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Junior Participating
Preference Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $.25 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $1.00 per share, of the Corporation (the
"Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preference Stock. In the
event the Corporation shall at any time following December 30, 1988
(i) declare any dividend on Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
amount to which holders of shares of Series A Junior Participating
Preference Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying
each such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preference Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided, however, that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $.25
per share on the Series A Junior Participating Preference Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preference Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue on such shares of Series A Junior Participating Preference
Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preference
Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior
Participating Preference Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series A Junior Participating Preference Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A.
Junior Participating Preference Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preference Stock
shall entitle the holder thereof to one vote on all matters submitted
to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time following December 30, 1988 (i) declare
any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide on outstanding shares of Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of
shares of Series A Junior Participating Preference Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of share of Series A Junior Participating Preference Stock and the
holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preference Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period
on all shares of Series A Junior Participating Preference Stock
then outstanding shall have been declared and paid or set apart
for payment. During each default period, all holders of
Preference Stock, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preference Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preference Stock, if
any, to increase, in certain cases, the authorized number of
Directors shall be exercised unless the holders of thirty-three
and one-third percent (33-1/3%) in number of shares of
Preference Stock outstanding shall be present in person or by
proxy. The absence of a quorum of the holders of Common stock
shall not affect the exercise by the holders of Preference Stock
of such voting right. At any meeting at which the holders of
Preference Stock shall exercise such voting right initially
during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting,
to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required
number, the holders of the Preference Stock shall have the right
to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Preference Stock shall have exercised
their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall
not be increased or decreased except by vote of the holders of
Preference Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the
Series A Junior Participating Preference Stock.
(iii) Unless the holder of Preference Stock shall, during
an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order, or
any stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preference Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of
Preference Stock, which meeting shall thereupon be called by the
Chairman, a Vice-Chairman or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which
holders of Preference Stock are entitled to vote pursuant to
this paragraph (C) (iii) shall be given to each holder of record
of Preference Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not
earlier than 10 days and not later than 60 days after such order
or request or in default of the calling of such meeting within
60 days after such order or request, such meeting may be called
on similar notice by any stockholder or stockholders owning in
the aggregate not less than 10% of the total number of shares of
Preference Stock outstanding. Notwithstanding the provisions of
this paragraph (C) (iii), no such special meeting shall be
called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) In any default period the holders of Common Stock,
and other classes of stock of the Corporation if applicable,
shall continue to be entitled to elect the whole number of
Directors until the holders of Preference Stock shall have
exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preference Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (C) (ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. Reference in this paragraph
(C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preference Stock a class to
elect Directors shall cease, (y) the term of any Directors
elected by the holders of Preference Stock as a class shall
terminate, and (z) the number of Directors shall be such number
as may be provided for in the Certificate of Incorporation or By-
laws of the Corporation irrespective of any increase made
pursuant to the provisions of paragraph (C) (ii) of this Section
3 (such number being subject, however, to change thereafter in
any manner provided by law or in the Certificate of
Incorporation or By-laws of the Corporation). Any vacancies in
the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preference Stock shall have no special voting rights
and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preference
Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Junior Participating Preference Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preference Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preference Stock, except
dividends paid ratably on the Series A Junior Participating
Preference Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preference Stock,
provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Junior Participating Preference
Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Participating Preference Stock, except
in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under paragraph (A) of this Section, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preference Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of
Preference Stock and may be reissued as part of a new series of
Preference Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any voluntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preference Stock unless, prior thereto, the holders of shares of
Series A Junior Participating Preference Stock shall have received
$12,500 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders
of shares of Series A Junior Participating Preference Stock unless,
prior thereto, the holders of shares of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference
by (ii) 100 (as appropriately adjusted as set forth in subparagraph C
below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in
clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series A Liquidation Preference and Common
Adjustment in respect of all outstanding shares of Series A Junior
Participating Preference Stock and Common Stock, respectively,
holders of Series A Junior Participating Preference Stock and holders
of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the
ratio, on a per share basis, of the Adjustment Number to 1 with
respect to such Preference Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
preferred or preference stock, if any, which rank on a parity with
the Series A Junior Participating Preference Stock, then such
remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation
preferences.
(C) In the event the Corporation shall at any time following
December 30, 1988 (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Junior
Participating Preference Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the
aggregate amount of stock, securities, cash and/ or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event Corporation shall at any time (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Participating
Preference Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. Redemption. The shares of Series A Junior
Participating Preference Stock may be called for redemption by the
Corporation, at its option, by vote of the Board of Directors, in
whole but not in part, at any time, by paying therefor in cash an
amount equal to $12,500 per share, plus accrued and unpaid dividends
to the date fixed for redemption.
Section 9. Ranking. The Series A Junior Participating
Preference Stock shall rank junior to all other series of the
Corporation's Preferred Stock or Preference Stock as to the payment
of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the
Series A Junior Participating Preference Stock so as to affect them
adversely without the affirmative vote of the holders of a majority
or more of the outstanding shares of Series A Junior Participating
Preference Stock, voting separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
Preference Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders
of Series A Junior Participating Preference Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties
of perjury this 28th day of December, 1988.
AMERICAN INFORMATION TECHNOLOGIES
CORPORATION
By: /s/ Thomas P. Hester
Thomas P. Hester, Senior Vice President
and General Counsel
ATTEST:
By: /s/Bruce B. Howat
Bruce B. Howat, Secretary
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF AMENDMENT OF AMERICAN INFORMATION TECHNOLOGIES
CORPORATION FILED IN THIS OFFICE ON THE NINETEENTH DAY OF MAY, A.D.
1987, AT 10 O'CLOCK A.M.
/s/ Michael Harkins
Michael Harkins, Secretary of State
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN INFORMATION TECHNOLOGIES CORPORATION
A Delaware Corporation
AMERICAN INFORMATION TECHNOLOGIES CORPORATION, a corporation
organized and existing under and by virtue of the General Corporation
Law of the State of Delaware (hereinafter referred to as the
"Company"), does hereby certify that:
First: that, at a meeting of the Board of Directors of the
Company held on December 17, 1986, the following resolutions were
adopted setting forth a proposed amendment to the Certificate of
Incorporation of the Company, declaring said amendment to be
advisable and directing that said amendment be considered and
submitted to a vote at the next annual meeting of the stockholders of
the Company:
RESOLVED, that it is hereby declared advisable to amend the
Certificate of Incorporation of the Company by adding thereto a
new Article TWELFTH reading in its entirety as follows:
"TWELFTH. Directors of the Corporation shall have no personal
liability to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except (i)
for any breach of a director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of the General
Corporation Law of Delaware, or (iv) for any transaction from
which a director derived an improper personal benefit."
RESOLVED FURTHER, that it is hereby directed that the
foregoing proposed amendment to the Certificate of Incorporation
of the Company be considered and submitted to a vote at the next
annual meeting of the stockholders of the Company.
Second: that, at a meeting of the Board of Directors of the
Company held on January 21, 1987, the following resolutions were
adopted setting forth a proposed amendment to the Certificate of
Incorporation of the Company, declaring said amendment to be
advisable and directing that said amendment be considered and
submitted to a vote at the next annual meeting of the stockholders of
the Company:
RESOLVED, that it is hereby declared advisable to amend the
Certificate of Incorporation of the Company by revising
paragraph A.1. of Article FOURTH thereof to read in its entirety
as follows:
"A.1. Classification of Authorized Shares. The total number of
shares of all classes of Stock which the Corporation shall have
authority to issue is six hundred sixty million (660,000,000),
of which thirty million (30,000,000) shares, $1.00 par value per
share, are to be of a class designated Preferred Stock
("Preferred Stock"), thirty million (30,000,000) shares, $1.00
par value per share, are to be of a class designated Preference
Stock ("Preference Stock"), and six hundred million
(600,000,000) shares, $1.00 par value per share, are to be
shares of Common Stock ("Common Stock")."
RESOLVED FURTHER, that it is hereby directed that the
foregoing proposed amendment to the Certificate of Incorporation
of the Company be considered and submitted to a vote at the next
annual meeting of the stockholders of the Company.
Third: that an annual meeting of the stockholders of the
Company was duly called and held on April 15, 1987, upon notice in
accordance with Section 222 of the General Corporation Law of the
State of Delaware.
Fourth: that at said annual meeting, a majority of the
outstanding stock entitled to vote thereon was voted in favor of the
amendments to the Certificate of Incorporation of the Company set
forth in paragraphs First and Second above, and each of said
amendments was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the said American Information Technologies
Corporation has caused this Certificate to be signed by William L.
Weiss, its Chairman of the Board of Directors and Chief Executive
Officer, and attested by Bruce B. Howat, its Secretary, this 13th day
of May, 1987.
AMERICAN INFORMATION TECHNOLOGIES
CORPORATION
By: /s/ William L. Weiss
William L. Weiss, Chairman of the Board
and Chief Executive Officer
ATTEST:
By: /s/Bruce B. Howat
Bruce B. Howat, Secretary
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THAT THE ABOVE AND FOREGOING IS A TRUE AND CORRECT
COPY OF THE CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE OF
THE COMPANIES REPRESENTED BY "THE CORPORATION TRUST COMPANY", AS IT
APPLIES TO "AMERICAN INFORMATION TECHNOLOGIES CORPORATION" AS
RECEIVED AND FILED IN THIS OFFICE ON THE TWENTY-SEVENTH DAY OF JULY,
A.D. 1984, AT 4:30 O'CLOCK P.M.
/s/ Michael Harkins
Michael Harkins, Secretary of State
CERTIFICATE OF CHANGE OF ADDRESS OF
REGISTERED OFFICE AND OF REGISTERED AGENT
PURSUANT TO SECTION 134 OF TITLE 8 OF THE DELAWARE CODE
To: DEPARTMENT OF STATE
Division of Corporations
Townsend Building
Federal Street
Dover, Delaware 19903
Pursuant to the provisions of Section 134 of Title 8 of the
Delaware Code, the undersigned Agent for service of process, in order
to change the address of the registered office of the corporations
for which it is registered agent, hereby certifies that:
1. The name of the agent is: The Corporation Trust Company
2. The address of the old registered office was:
100 West Tenth Street
Wilmington, Delaware 19801
3. The address to which the registered office is to be changed is:
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
The new address will be effective on July 30, 1984.
4. The names of the corporations represented by said
agent are set forth on the list annexed to this certificate and
made a part hereof by reference.
IN WITNESS WHEREOF, said agent has caused this certificate
to be signed on its behalf by its Vice-President and Assistant
Secretary this 25th day of July, 1984.
THE CORPORATION TRUST COMPANY
(Name of Registered Agent)
By /s/ Virginia Colnell
(Vice-President)
STATE OF DELAWARE - DIVISION OF CORPORATIONS
CHANGE OF ADDRESS FILING FOR
CORPORATION TRUST AS OF JULY 27, 1984
DOMESTIC
2019375 AMERICAN INFORMATION TECHNOLOGIES CORPORATION
State of Delaware
Office of Secretary of State
I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE
DO HEREBY CERTIFY THAT THE ATTACHED IS A TRUE AND CORRECT COPY OF THE
CERTIFICATE OF INCORPORATION OF AMERICAN INFORMATION TECHNOLOGIES
CORPORATION FILED IN THIS OFFICE ON THE EIGHTEENTH DAY OF OCTOBER,
A.D. 1983, AT 10 O'CLOCK A.M.
/s/ Michael Harkins
Michael Harkins, Secretary of State
CERTIFICATE OF INCORPORATION
OF
AMERICAN INFORMATION TECHNOLOGIES CORPORATION
FIRST. The name of the Corporation is AMERICAN INFORMATION
TECHNOLOGIES CORPORATION.
SECOND. The address of its registered office in the State of
Delaware is 100 West Tenth Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is
the Corporation Trust Company.
THIRD. The nature of the business or purposes to be conducted
or promoted is to engage in a lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware.
FOURTH. A. Authorized Shares.
A.1. Classification of Authorized Shares. The total number of
shares of all classes of stock which the Corporation shall have
authority to issue is three hundred sixty million (360,000,000), of
which thirty million (30,000,000) shares, $1.00 par value per share,
are to be of a class designated Preferred Stock ("Preferred Stock"),
thirty million (30,000,000) shares, $1.00 par value per share, are to
be of a class designated Preference Stock ("Preference Stock"), and
three hundred million (300,000,000) shares, $1.00 par value per
share, are to be shares of Common Stock ("Common Stock").
A.2. Definitions. As used in this Article FOURTH or in any
resolution adopted by the Board of Directors providing for the issue
of any particular series of Preferred Stock or Preference Stock, the
following terms shall have the following meanings, respectively:
(a) The term "arrearages," whenever used in connection
with dividends on any shares of Preferred Stock or Preference
Stock, shall refer to the condition that exists as to dividends
which (i) have not been paid or declared and set apart for
payment to the date or for the period indicated, and (ii) are
cumulative (either unconditionally, or conditionally to the
extent that the conditions have been fulfilled); but the term
shall not refer to the condition that exists as to dividends, to
the extent that they are non-cumulative, on such shares which
shall not have been paid or declared and set apart for payment.
(b) The term "stock junior to the Preferred Stock,"
whenever used with reference to the Preferred Stock, shall mean
the Preference Stock, Common Stock and any other stock of the
Corporation over which the Preferred Stock has preference or
priority in the payment of dividends and in the distribution of
assets on any dissolution, liquidation or winding up of the
Corporation.
(c) The term "stock junior to the Preference Stock,"
whenever used with reference to the Preference Stock, shall mean
the Common Stock and any other stock of the Corporation over
which the Preference Stock has preference or priority in the
payment of dividends and in the distribution of assets on any
dissolution, liquidation or winding up of the Corporation.
(d) The term "subsidiary" means any corporation of which
at least a majority of the outstanding stock having by the terms
thereof ordinary voting power to elect a majority of the
directors of such corporation, irrespective of whether or not at
the time stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening
of any contingency, is, at the time of determination thereof,
directly or indirectly owned by the Corporation, or by one or
more subsidiaries of the Corporation, or by the Corporation and
one or more subsidiaries. As used in this definition, the term
"corporation" shall include comparable types of business
organizations authorized under the laws of any state, territory
or possession of the United States or any foreign country
however designated.
B. Preferred Stock Provisions.
B.1. Authority of the Board of Directors of the Corporation to
Issue in Series. Preferred Stock may be issued from time to time in
one or more series, each such series to have such designations,
preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions as are
expressed in this Article and in the resolution or resolutions
providing for the issue of such series adopted by the Board of
Directors as hereinafter provided. Subject to the provisions of this
Article, authority is hereby granted to the Board of Directors to
authorize the issue of one or more series of Preferred Stock and,
with respect to each series, to fix by resolution or resolutions
providing for the issue of each such series the following:
(a) the number of shares of such series, which may
subsequently be increased or decreased (but not below the number
of shares of such series then outstanding) by resolution of the
Board of Directors, and the distinctive designation thereof;
(b) the dividend rate or rates on the shares of such
series, the extent, if any, to which dividends shall cumulate
(and, if cumulative, the date or dates from which dividends
shall cumulate), the dates on which dividends, if declared,
shall be payable and any limitations, restrictions or conditions
on the payment of such dividends;
(c) the terms (including the price or prices), if any,
upon which all or part of the shares of such series may be
redeemed, and any limitations, restrictions or conditions on
such redemption;
(d) the amounts which the holders of the shares of such
series shall be entitled to receive upon any liquidation,
dissolution or winding up of the Corporation;
(e) the terms, if any, of any purchase, retirement or
sinking fund to be provided for the shares of such series;
(f) the terms, if any, upon which the shares of such
series shall be convertible into or exchangeable for shares of
any other series, class or classes, or other securities, whether
or not issued by the Corporation, and the terms of such
conversion or exchange;
(g) the voting powers, full or limited (not to exceed one
vote per share), if any, of the shares of such series;
(h) the restrictions, limitations and conditions, if any,
upon issuance of indebtedness of the Corporation so long as any
shares of such series are outstanding; and
(i) any other preferences and relative, participating,
optional or other special rights and qualifications, limitations
and restrictions not inconsistent with law, the provisions of
this Article or any resolution of the Board of Directors of the
Corporation pursuant hereto.
All shares of any one series of Preferred Stock shall be
identical with all other shares of the same series, except that
shares of any one series issued at different times may differ as to
the dates from which dividends thereon shall be cumulative.
So long as any shares of any series of the Preferred Stock shall
be outstanding, the resolution of the Board of Directors establishing
such series shall not be amended so as adversely to affect any of the
powers, preferences or rights of the holders of the shares of such
series, without the affirmative vote of the holders of at least a
majority, or such greater proportion as the Board of Directors may
set forth in the resolution establishing such series, of the shares
of such series outstanding at the time or as of a record date fixed
by the Board of Directors of the Corporation, but such resolution may
be amended with such vote.
B.2. Dividend Rights.
(a) The holders of the Preferred Stock of each series shall be
entitled to receive, when and as declared by the Board of Directors
of the Corporation, preferential dividends in cash payable at such
rate, from such date, and on such dividend payment dates and, if
cumulative, cumulative from such date or dates, as may be fixed by
the provisions of this Article or by the resolutions of the Board of
Directors providing for the issue of such series.
(b) So long as any of the Preferred Stock is outstanding, no
dividends (other than dividends payable in stock junior to the
Preferred Stock and cash in lieu of fractional shares in connection
with any such dividend) shall be paid or declared in cash or
otherwise, nor shall any other distribution be made, on any stock
junior to the Preferred Stock, unless
(i) there shall be no arrearages in dividends on Preferred
Stock for any past dividend period, and dividends in full for
the current dividend period shall have been paid or declared on
all Preferred Stock (cumulative and non-cumulative);
(ii) the Corporation shall have paid or set aside for
payment all amounts, if any, then or theretofore required to be
paid or set aside for all purchase, retirement and sinking
funds, if any, for the Preferred Stock of any series; and
(iii) the Corporation shall not be in default on any of its
obligations to redeem any of the Preferred Stock.
(c) So long as any of the Preferred Stock is outstanding, no
shares of any stock junior to the Preferred Stock shall be purchased,
redeemed or otherwise acquired by the Corporation or by any
subsidiary except in connection with a reclassification or exchange
of any stock junior to the Preferred Stock through the issuance of
other stock junior to the Preferred Stock, or the purchase,
redemption or other acquisition of any stock junior to the Preferred
Stock with proceeds of a reasonably contemporaneous sale of other
stock junior to the Preferred Stock, nor shall any funds be set aside
or made available for any sinking fund for the purchase, redemption
or other acquisition of any stock junior to the Preferred Stock,
unless
(i) there shall be no arrearages in dividends on Preferred
Stock for any past dividend period;
(ii) the Corporation shall have paid or set aside for
payment all amounts, if any, then or theretofore required to be
paid or set aside for all purchase, retirement and sinking
funds, if any, for the Preferred Stock of any series; and
(iii) the Corporation shall not be in default on any of
its obligations to redeem any of the Preferred Stock.
(d) Subject to the foregoing provisions and not otherwise, such
dividends (payable in cash, property or stock junior to the Preferred
Stock) as may be determined by the Board of Directors of the
Corporation may be declared and paid on the shares of any stock
junior to the Preferred Stock from time to time.
(e) Dividends shall not be declared or paid or set aside for
payment on any series of Preferred Stock unless there shall be no
arrearages in dividends on all other series of Preferred Stock for
any past dividend period and dividends in full for the current
dividend period shall have been paid or declared on all Preferred
Stock to the extent that such dividends are cumulative and any
dividends paid or declared when dividends are not so paid or declared
in full shall be shared ratably by the holders of all series of
Preferred Stock in proportion to such respective arrearages and
unpaid and undeclared current cumulative dividends.
If the date of any payment or declaration of any dividend or of
making any other distribution referred to in paragraph (b) above
shall be a dividend payment date for the Preferred Stock, the
reference in such paragraph to "the current dividend period" shall be
inapplicable for all of the purposes thereof.
B.3. Liquidation Rights.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, the holders of
Preferred Stock of each series shall be entitled to receive the full
preferential amount fixed by this Article or by the resolutions of
the Board of Directors of the Corporation providing for the issue of
such series, including any arrearages in dividends thereon to the
date fixed for the payment in liquidation, before any distribution
shall be made to the holders of any stock junior to the Preferred
Stock. After such payment in full to the holders of the Preferred
Stock, the remaining assets of the Corporation shall then be
distributed exclusively among the holders of any stock junior to the
Preferred Stock, according to their respective interests.
(b) If the assets of the Corporation are insufficient to permit
the payment of the full preferential amounts payable to the holders
of the Preferred Stock of the respective series in the event of a
liquidation, dissolution or winding up, then the assets available for
distribution to holders of the Preferred Stock shall be distributed
ratably to such holders in proportion to the full preferential
amounts payable on the respective shares.
(c) A consolidation or merger of the Corporation with or into
one or more other corporations or a sale of all or substantially all
of the assets of the Corporation shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary.
B.4. Status of Preferred Stock Purchased, Redeemed or
Converted. Shares of Preferred Stock purchased, redeemed or
converted into or exchanged for shares of any other class or series,
and unissued shares of any series of Preferred Stock which cease to
be designated as to series by reason of a decrease in the number of
shares of such series as herein provided, shall be deemed to be
authorized but unissued shares of Preferred stock undesignated as to
series.
B.5. Restrictions on Certain Corporate Action. Subject to the
provisions of Section E.4. of this Article FOURTH, so long as any
shares of the Preferred Stock shall be outstanding, the Corporation
shall not, without the affirmative vote of the holders of at least a
majority of the shares of the Preferred Stock outstanding at the time
or as of a record date fixed by the Board of Directors:
(a) create or authorize any class of stock ranking prior
to or on a parity with the Preferred Stock with respect to the
payment of dividends or the distribution of assets; or
(b) amend the Certificate of Incorporation of the
Corporation so as adversely to affect any of the preferences or
other rights of the holders of the Preferred Stock; provided,
however, that if any such amendment would adversely affect any
of the preferences or other rights of the holders of one or
more, but less than all, of the series of the Preferred stock
then outstanding, the affirmative vote of, and only of, the
holders of at least a majority of the shares of all series so
adversely affected, voting as a single class, shall be required.
C. Preference Stock Provisions.
C.1. Authority of the Board of Directors of the Corporation to
Issue in Series. Preference Stock may be issued from time to time in
one or more series, each such series to have such designations,
preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions as are
expressed in this Article and in the resolution or resolutions
providing for the issue of such series adopted by the Board of
Directors as hereinafter provided. Subject to the provisions of this
Article, authority is hereby granted to the Board of Directors to
authorize the issue of one or more series of Preference Stock and,
with respect to each series, to fix by resolution or resolutions
providing for the issue of each such series the following:
(a) the number of shares of such series, which may, except
as otherwise provided in any resolution of the Board of
Directors of the Corporation providing for the issuance of a
series of Preferred Stock, subsequently be increased or
decreased (but not below the number of shares of such series
then outstanding) by resolution of the Board of Directors, and
the distinctive designation thereof;
(b) the dividend rate or rates on the shares of such
series, the extent to which dividends shall cumulate and, if
cumulative, the date or dates from which dividends shall
cumulate, the dates on which dividends, if declared, shall be
payable and any limitations, restrictions or conditions on the
payment of such dividends;
(c) the terms (including the price or prices), if any,
upon which all or any part of the shares of such series may be
redeemed, and any limitations, restrictions or conditions on
such redemption;
(d) the amounts which the holders of the shares of such
series shall be entitled to receive upon any liquidation,
dissolution or winding up of the Corporation;
(e) the terms, if any, of any purchase, retirement or
sinking fund to be provided for the shares of such series;
(f) the terms, if any, upon which the shares of such
series shall be convertible into or exchangeable for shares of
any other series, class or classes, or other securities, whether
or not issued by the Corporation, and the terms of such
conversation or exchange;
(g) the voting powers, full or limited (not to exceed one
vote per share), if any, of the shares of such series;
(h) the restrictions, limitations and conditions, if any,
upon issuance of indebtedness of the Corporation so long as any
shares of such series are outstanding; and
(i) any other preferences and relative participating,
optional or other special rights and qualifications, limitations
and restrictions thereof not inconsistent with law, the
provisions of this Article or any resolution of the Board of
Directors of the Corporation pursuant hereto.
All shares of any one series of Preference Stock shall be
identical with all other shares of the same series, except that
shares of any one series issued at different times may differ as to
the dates from which dividends thereon shall be cumulative.
So long as any shares of any series of the Preference Board
shall be outstanding, the resolution of the Board of Directors
establishing such series shall not be amended so as adversely to
affect any of the powers, preferences or rights of the holders of the
shares of such series, without the affirmative vote of the holders of
at least a majority, or such greater proportion as the Board of
Directors may set forth in the resolution establishing such series,
of the shares of such series outstanding at the time or as of a
record date fixed by the Board of Directors of the Corporation, but
such resolution may be so amended with such vote.
C.2. Dividend Rights.
(a) Subject to the rights of the holders of the Preferred Stock
and of any other series of Preference Stock, the holders of the
Preference Stock of each series shall be entitled to receive, when
and as declared by the Board of Directors of the Corporation,
preferential dividends in cash payable at such rate, from such date,
and on such dividend payment dates and, if cumulative, cumulative
from such date or dates, as may be fixed by the provisions of this
Article or by the resolutions of the Board of Directors providing for
the issue of such series.
(b) So long as any of the Preference Stock is outstanding, no
dividends (other than dividends payable in stock junior to the
Preference Stock and cash in lieu of fractional shares in connection
with any such dividend) shall be paid or declared in cash or
otherwise, nor shall any other distribution be made, on any stock
junior to the Preference Stock, unless
(i) there shall be no arrearages in dividends on
Preference Stock for any past dividend period, and dividends in
full for the current dividend period shall have been paid or
declared on all Preference Stock (cumulative and non-
cumulative);
(ii) the Corporation shall have paid or set aside for
payment all amounts, if any, then or theretofore required to be
paid or set aside for all purchase, retirement and sinking
funds, if any, for the Preference Stock of any series; and
(iii) the Corporation shall not be in default on any of
its obligations to redeem any of the Preference Stock.
(c) Subject to the foregoing provisions and not otherwise, such
dividends (payable in cash, property or stock junior to the
Preference Stock) as may be determined by the Board of Directors of
the Corporation may be declared and paid on the shares of any stock
junior to the Preference Stock from time to time.
(d) If the resolution of the Board of Directors establishing
any series of Preference Stock provides that dividends on the shares
of such series shall have priority over the payment of dividends on
the shares of any other series of Preference Stock, dividends on the
shares of such other series of Preference Stock shall not be paid
unless dividends on the series entitled to such priority shall have
been paid in full, including any arrearages which may exist with
respect thereto. Subject to any resolutions of the Board of
Directors establishing a priority or priorities as aforesaid,
dividends shall not be declared or paid or set aside for payment on
any series of Preference Stock unless there shall be no arrearages in
dividends on all other series of Preference Stock for any past
dividend period and been paid or declared on all other series of
Preference Stock to the extent that such dividends are cumulative and
any dividends paid or declared when dividends are not so paid or
declared in full shall be shared ratably by the holders of all series
of Preference Stock in proportion to such respective arrearages and
unpaid and undeclared current cumulative dividends.
If the date of any payment or declaration of any dividend or of
making any other distribution referred to in paragraph (b) above
shall be a dividend payment date for the Preference Stock, the
reference in such paragraph to "the current dividend period" shall be
inapplicable for all of the purposes thereof.
C.3. Liquidation Rights.
(a) Subject to the rights of the holders of the Preferred Stock
and of any other series of Preference Stock, in the event of any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of Preference Stock of each
series shall be entitled to receive the full preferential amount
fixed by this Article or by the resolutions of the Board of Directors
of the Corporation providing for the issue of such series, including
any arrearages in dividends thereon to the date fixed for the payment
in liquidation, before any distribution shall be made to the holders
of any stock junior to the Preference Stock. After such payment in
full to the holders of the Preference Stock, the remaining assets of
the Corporation shall then be distributed exclusively among the
holders of any stock junior to the Preference Stock, according to
their respective interests.
(b) If the resolution of the Board of Directors establishing
any series of Preference Stock provides that the full preferential
amount payable in the event of a liquidation, dissolution or winding
up of the Corporation with respect to such series shall be
distributed prior to the distribution of the preferential amount
payable with respect to any other series of Preference Stock, then no
such amount shall be distributed to the holders of the shares of such
other series unless the amount distributable on the series entitled
to such priority has been distributed in full. If the assets of the
Corporation are insufficient to permit the payment of the full
preferential amounts payable to the holders of the Preference Stock
of the respective series in the event of a liquidation, dissolution
or winding up, then the assets available for distribution to holders
of the Preference Stock shall be distributed first to the holders of
any series of Preference Stock in accordance with any priorities
established as aforesaid, and then ratably to the holders of the
remaining series of Preference Stock in proportion to the full
preferential amounts payable on the shares of such series.
(c) A consolidation or merger of the Corporation with or into
one or more other corporations or a sale of all or substantially all
of the assets of the Corporation shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary.
C.4. Status of Preference Stock Purchased, Redeemed or
Converted. Shares of Preference Stock purchased, redeemed or
converted into or exchanged for shares of any other class or series,
and unissued shares of any series of Preference Stock which cease to
be designated as to series by reason of a decrease in the number of
shares of such series as herein provided, shall be deemed to be
authorized but unissued shares of Preference Stock undesignated as to
series.
C.5. Restrictions on Certain Corporate Action. Subject to the
provisions of Section E.4. of this Article FOURTH, so long as any
shares of the Preference Stock shall be outstanding, the Corporation
shall not, without the affirmative vote of the holders of at least a
majority of the shares of the Preference Stock outstanding at the
time or as of a record date fixed by the Board of Directors:
(a) create or authorize any class of stock ranking prior to or
on a parity with the Preference Stock with respect to the payment of
dividends or the distribution of assets; or
(b) amend the Certificate of Incorporation of the Corporation
so as adversely to affect any of the preferences or other rights of
the holders of the Preference Stock; provided, however, that if any
such amendment would adversely affect any of the preferences or other
rights of the holders of one or more, but less than all, of the
series of the Preference Stock then outstanding, the affirmative vote
of, and only of, the holders of at least a majority of the shares of
all series so adversely affected, voting as a single class, shall be
required.
D. Common Stock Provisions.
D.1. Dividend Rights. Subject to provisions of law and the
preferences of the Preferred Stock and Preference Stock, the holders
of the Common Stock shall be entitled to receive dividends at such
times and in such amounts as may be determined by the Board of
Directors of the Corporation.
D.2. Voting Rights. The holders of the Common Stock shall have
one vote for each share held on each matter submitted to a vote of
the stockholders of the Corporation.
D.3. Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment or provision for payment of the debts and
other liabilities of the Corporation and the preferential amounts to
which the holders of the Preferred Stock and Preference Stock may be
entitled, the holders of the Common Stock shall be entitled to share
ratably in the remaining assets of the Corporation.
E. Other Provisions.
E.1. Authority for Issuance of Shares. The Board of Directors
of the Corporation shall have the authority to authorize the
issuance, from time to time without any vote or other action by the
stockholders, of any or all shares of stock of the Corporation of any
class at any time authorized, and any securities convertible into or
exchangeable for any such shares, in each case to such persons and
for such consideration and on such terms as the Board of Directors
from time to time in its discretion lawfully may determine; provided,
however, that the consideration for the issuance of shares of stock
of the Corporation having par value shall not be less than such par
value. Shares so issued, for which the full consideration determined
by the Board of Directors has been paid to the Corporation, shall be
fully paid stock, and the holders of such stock shall not be liable
for any further call or assessments thereon.
E.2. No Preemptive Rights. Unless otherwise provided in the
resolution of the Board of Directors providing for the issue of any
series of Preferred Stock or Preference Stock, no holder of shares of
any class of the Corporation or of any security or obligation
convertible into, or of any warrant, option or right to purchase,
subscribe for or otherwise acquire, shares of any class of the
Corporation, whether now or hereafter authorized, shall, as such
holder, have any preemptive right whatsoever to purchase, subscribe
for or otherwise acquire, shares of any class of the Corporation,
whether now or hereafter authorized.
E.3. Abandonment of Dividends and Distributions. Anything
herein contained to the contrary notwithstanding, any and all right,
title, interest and claim in and to any dividends declared, or other
distributions made, by the Corporation, whether in cash, stock or
otherwise, which are unclaimed by the stockholder entitled thereto
for a period of six years after the close of business on the payment
date, shall be and be deemed to be extinguished and abandoned; and
such unclaimed dividends or other distributions in the possession of
the Corporation, its transfer agents or other agents or depositories,
shall at such time become the absolute property of the Corporation,
free and clear of any and all claims of any persons whatsoever.
E.4. Certain Amendments. Except as otherwise provided in this
Article or resolutions of the Board of Directors providing for the
issue of any series of Preferred Stock or Preference Stock, the
number of authorized shares of any class or classes of stock of the
Corporation may be increased or decreased (but to below the number of
shares of such series outstanding) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to
vote, voting as a single class.
FIFTH. Any action required or permitted to be taken by the
stockholders of the Corporation, whether voting as a class or
otherwise, must be taken at a duly called annual or special meeting
of the stockholders of the Corporation and may not be taken by
consent in writing of such stockholders, except that the Board of
Directors at any time may by resolution provide that the holders of
Preferred Stock or Preference Stock may take any action required or
permitted to be taken by such holders by consent in writing without a
meeting. Elections of directors need not be by written ballot.
SIXTH. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors of the Corporation is
expressly authorized to make, alter or repeal the By-laws of the
Corporation.
SEVENTH. The Corporation shall indemnify, in accordance with
and to the full extend now or hereafter permitted by law, any person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including, without
limitation, an action by or in the right of the Corporation), by
reason of his acting as a director, officer, employee or agent of, or
his acting in any other capacity for or on behalf of, the
Corporation, against any liability or expense actually and reasonably
incurred by such person in respect thereof. Such indemnification
provided by law or otherwise.
EIGHTH. Board of Directors.
A. General Powers of the Board of Directors. The business and
affairs of the Corporation shall be managed and controlled by or
under the direction of a Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things
as are not by law or by this Certificate of Incorporation directed or
required to be exercised or done by the stockholders of the
Corporation.
B. Number; Qualification; Tenure; Removal.
B.1. Number. The number of directors shall not be less than
three nor more than eighteen, the exact number of directors to be
fixed from time to time only by the vote of a majority of the entire
Board of Directors. No decrease in the number of directors shall
shorten the term of any incumbent director.
Notwithstanding the provisions of the foregoing paragraph,
whenever the holders of any class or series of Preferred Stock or
Preference Stock shall have the right, voting as a class or series or
otherwise, to elect directors, the then authorized number of
directors of the Corporation shall be increased by the number of the
additional directors so to be elected, and the holders of such
Preferred Stock or Preference Stock shall be entitled, as a class or
series or otherwise, to elect such additional directors. Any
directors so elected shall hold office until their rights to hold
such office terminate pursuant to the provisions of such Preferred
Stock or Preference Stock. The provisions of this paragraph shall
apply notwithstanding the maximum number of directors hereinabove set
forth.
B.2. Qualification. The Board of Directors may, by the vote of
a majority of the entire Board, prescribe qualifications of
candidates for the office of director of the Corporation, but no
director then in office shall be disqualified form office as a result
of the adoption of such qualifications.
B.3. Tenure. The directors shall be divided into three
classes: Class A, Class B and Class C. Such classes shall be as
nearly equal in number as possible. The term of office of the
initial Class A directors shall expire at the annual meeting of
stockholders in 1984, the term of office of the initial Class B
directors shall expire at the annual meeting of stockholders in 1985,
and the term of office of the initial Class C directors shall expire
at the annual meeting of stockholders in 1986, or thereafter in each
case when their respective successors are elected and have qualified.
At each annual election, the directors chosen to succeed those whose
terms then expire shall be identified as being of the same class as
the directors they succeed and shall be elected for a term expiring
at the third succeed and shall be elected for a term expiring at the
third succeeding annual meeting or thereafter when their respective
successors in each case are elected and have qualified. If the
number of directors is changed, any increase or decrease in directors
shall be apportioned among the classes so as to maintain all classes
as nearly equal in number as possible and any individual director
elected to any class shall hold office for a term which shall
coincide with the term of such class.
B.4. Removal. Prior to January 1, 1984, any director or the
entire Board of Directors may be removed, with or without cause, by
the holders of a majority of the shares then entitled to vote in an
election of directors. From and after January 1, 1984, no director
shall be removed from the Board of Directors by action of the
stockholders of the Corporation other than for cause. Whenever the
holders of any class or series of Preferred Stock or Preference Stock
are entitled to elect one or more directors, the provisions of this
section shall apply to the removal of such director or directors by
such stockholders.
For purposes of the foregoing provisions, cause for removal
shall exist only where the conduct of a director has been adjudicated
by a court of competent jurisdiction to constitute a breach of the
fiduciary duty owed by such director to the Corporation.
C. Vacancies. Vacancies and newly created directorships
resulting from any increase in the number of directors may be filled
by a majority of the directors then in office though less than a
quorum, and each director so chosen shall hold office until his
successor is elected and qualified or until his earlier resignation
or removal. If there are no directors in office, then an election of
directors may be held in the manner provided by law.
NINTH. Certain Voting Requirements.
A. Required Vote. The affirmative vote of the holders of 80%
of all shares of stock of the Corporation entitled to vote in an
election of directors, considered for the purposes of this Article
NINTH as one class (referred to in this Article NINTH as "voting
stock"), shall be required for the adoption or authorization of any
"extraordinary business transaction" (as hereinafter defined) with
any "other entity" (as hereinafter defined) if, as of the record date
for the determination of stockholders entitled to notice thereof and
to vote thereon, such other entity is the beneficial owner, directly
or indirectly, of at least 5% of the voting stock of the Corporation
(such an other entity is hereinafter referred to as an "interested
person"); provided, that such 80% voting requirement shall not be
applicable if:
1. the cash, or fair market value (as hereinafter defined)
of other consideration, to be received per share by common
stockholders of the Corporation in such an extraordinary
business transaction:
(a) is not less than the highest per share price
(including brokerage commissions and/or soliciting dealers'
fees) paid by such other entity in acquiring any of its
holdings of the Corporation's Common Stock;
(b) is not less than the book value per share of the
Corporation's then most recently published financial
statements; and
(c) a proxy statement responsive to the requirements
of the Securities Exchange Act of 1934, as amended, shall
be mailed to the common stockholders of the Corporation for
the purpose of soliciting stockholder approval of such
extraordinary business transaction and shall contain (i)
any recommendations as to the advisability of the
extraordinary business transaction which the continuing
directors (as hereinafter defined), or any of them, may
choose to state, and (ii) any opinions received by the
Board of Directors from independent experts as to the
fairness of the terms of the extraordinary business
transaction from the point of view of the remaining common
stockholders of the Corporation (such experts to be
selected by a majority of the continuing directors and to
be paid a reasonable fee for their services by the
Corporation); or
2. the extraordinary business transaction is approved by a
resolution adopted by the Board of Directors and receiving the
affirmative vote of 80% of the continuing directors of the
Corporation, provided that the continuing directors constitute a
majority of the Board of Directors.
The provisions of this Article NINTH shall also apply to an
extraordinary business transaction with any other entity which at any
time was an interested person, notwithstanding the fact that such
other entity has reduced its shareholdings below 5%if, as of the
record date for the determination of stockholders entitled to notice
of and to vote on the extraordinary business transaction, such other
entity as an "affiliate" (as hereinafter defined) of the Corporation.
B. Certain Definitions. As used in this Article NINTH, the
following terms shall have the following meanings, respectively:
1. The term "other entity" shall include any corporation,
person or other entity and any other entity with which it or its
"affiliate" or "associate" (as hereinafter defined) has any
agreement, arrangement or understanding, directly or indirectly,
for the purpose of acquiring, holding, voting or disposing of
stock of the Corporation, or which is its "affiliate" or
"associate" as those terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, as in effect on January 1, 1983, together
with the successors and assigns of such persons in any
transaction or series of transactions not involving a public
offering of the Corporation's stock within the meaning of the
Securities Act of 1933, as amended.
Another entity shall be deemed to be the beneficial owner
of any shares of stock of the Corporation which the other entity
(as defined above) has the right to acquire pursuant to any
agreement or upon the exercise of conversion rights, warrants or
options, or otherwise.
The outstanding shares of any class of stock of the
Corporation shall be deemed to include shares deemed owned
through the application of the preceding paragraph but shall not
include any other shares of stock which may be issuable pursuant
to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise.
2. The term "extraordinary business transaction" shall
include (a) any merger or consolidation of the Corporation with
or into any other corporation; (b) the sale, lease, exchange or
other disposition of all or any substantial part (meaning assets
which represent 10% or more of the total assets of the
Corporation as recorded on its books of account or 10% or more
of the going concern value of the Corporation as determined by
the Board of Directors) of the assets of the Corporation; and
(c) the sale or lease to the Corporation or any subsidiary, in
exchange for securities of the Corporation or any subsidiary, of
any assets having an aggregate fair market value of more than $5
million.
3. The term "continuing director" shall mean a person who
was a member of the Board of Directors of the Corporation prior
to the time that such other entity acquired more than 5% of the
voting stock of the Corporation, or a person designated (whether
before or after election as a director) to be a continuing
director by a majority of the continuing directors.
4. The "fair market value" of other consideration referred
to in Section A.1. shall be as determined in good faith by the
Board of Directors of the Corporation and concurred in by a
majority of the continuing directors.
5. In the event of a transaction in which the Corporation
is the surviving corporation, the term "other consideration to
be received" as used in Section A.1. shall mean Common Stock of
the Corporation retained by its existing stockholders.
C. Determination By the Board of Directors. A majority of the
continuing directors shall have the power and duty to determine for
the purposes of this Article NINTH, on the basis of information known
to them, whether:
1. such other entity beneficially owns more than 5% of the
outstanding shares of voting stock of the Corporation;
2. an other entity is an "affiliate" or "associate" of
another;
3. an other entity has an agreement, arrangement or
understanding with another; or
4. a particular transaction is an "extraordinary business
transaction" for the purposes of this Article NINTH.
D. Other Provisions. Nothing contained in this Article NINTH
shall be construed to relieve any other entity from any fiduciary
obligation imposed by law. The voting requirements of the Article
NINTH shall be in addition to the voting requirements imposed by law
or other provisions of this Certificate of Incorporation in favor of
certain classes of stock.
TENTH. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in any manner now or hereafter permitted or prescribed
by statute; provided, however, that no amendment shall change, repeal
or make inoperative any of the provisions of Article EIGHTH, Article
NINTH or this Article TENTH, unless such amendment receives the
affirmative vote of the holders of 80% of all shares of voting stock
of the Corporation; provided, further, that such 80% vote shall not
be required for any such amendment which is unanimously recommended
to the stockholders by the Board of Directors (a) at a time when no
other entity owns or to the knowledge of any director proposes to
acquire 5% or more of the Corporation's voting stock, or (b) if all
of such directors are continuing directors within the meaning of
Article NINTH.
ELEVENTH. The name and mailing address of the incorporator are
as follows:
Name Mailing Address
R. Victor Bernstein 195 Broadway
New York, New York 10007
IN WITNESS WHEREOF, the undersigned has executed and
acknowledged this Certificate of Incorporation of American
Information Technologies Corporation this 11th day of October 1983.
EXHIBIT 11a
AMERITECH CORPORATION
COMPUTATION OF PRIMARY EARNINGS PER SHARE
Three Months Ended
March 31
-------------
1996 1995
---- ----
Net Income $478,345,000 $578,919,000
============ ============
Weighted average number of
shares outstanding 554,751,737 552,269,194
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 4,469,576 2,024,911
------------ ------------
Weighted average shares outstanding
on which primary earnings per share
are based 559,221,313 554,294,105
Primary earnings per share $0.86 $1.04
============ ============
This calculation is submitted in accordance with Regulation S-K,
Item 601 (b)11, although not required by footnote 2 to paragraph
14 of Accounting Principles Board opinion No. 15 because it
results in dilution of less than three percent.
EXHIBIT 11b
AMERITECH CORPORATION
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
Three Months Ended
March 31
-------------
1996 1995
---- ----
Net Income $478,345,000 $578,919,000
============ ============
Weighted average number of
shares outstanding 554,751,737 552,269,194
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 4,469,576 2,024,911
------------ ------------
Weighted average shares outstanding
on which fully diluted earnings
per share are based 559,221,313 554,294,105
Fully diluted earnings per share $0.86 $1.04
============ ============
This calculation is submitted in accordance with Regulation S-K,
Item 601 (b)11, although not required by footnote 2 to paragraph
14 of Accounting Principles Board opinion No. 15 because it
results in dilution of less than three percent.
EXHIBIT 11d
AMERITECH CORPORATION
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
1995 1994 1993
---- ---- ----
Net income (loss) after
extraordinary item $2,007,635,000 ($1,063,613,000) $1,512,798,000
============== ============== ==============
Weighted average number of
shares outstanding 553,621,693 549,238,304 544,076,354
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 4,997,613 1,606,099 1,503,542
Weighted average shares outstanding
on which fully diluted earnings
per share are based 558,619,306 550,844,403 545,579,896
Fully diluted earnings (loss)
per share $3.59 ($1.93) $2.77
This calculation is submitted in accordance with Regulation S-K, Item 601
(b)11, although not required by footnote 2 to paragraph 14 of Accounting
Principles Board opinion No. 15 because it results in dilution of less than
three percent.
Note: All share amounts have been restated for two-for-one stock split
effective December 31, 1993.
EXHIBIT 11d
AMERITECH CORPORATION
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
1995 1994 1993
---- ---- ----
Income before extraordinary item $2,007,635,000 $1,170,426,000 $1,512,798,000
============== ============== ==============
Weighted average number of
shares outstanding 553,621,693 549,238,304 544,076,354
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 4,997,613 1,606,099 1,503,542
Weighted average shares outstanding
on which fully diluted earnings
per share are based 558,619,306 550,844,403 545,579,896
Fully diluted earnings per share $3.59 $2.12 $2.77
============== ============== ==============
This calculation is submitted in accordance with Regulation S-K, Item 601
(b)11, although not required by footnote 2 to paragraph 14 of Accounting
Principles Board opinion No. 15 because it results in dilution of less than
three percent. Accordingly, reported EPS does not consider dilutive
securities.
Note: All share amounts have been restated for two-for-one stock split
effective December 31, 1993.
EXHIBIT 11c
AMERITECH CORPORATION
COMPUTATION OF PRIMARY EARNINGS PER SHARE
1995 1994 1993
---- ---- ----
Net income (loss) after
extraordinary item $2,007,635,000 ($1,063,613,000) $1,512,798,000
============== ============== ==============
Weighted average number of
shares outstanding 553,621,693 549,238,304 544,076,354
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 2,864,174 1,518,175 1,503,542
Weighted average shares outstanding
on which primary earnings per share
are based 556,485,867 550,756,479 545,579,896
Primary earnings (loss) per share $3.61 ($1.93) $2.77
============== ============== ==============
This calculation is submitted in accordance with Regulation S-K, Item 601
(b)11, although not required by footnote 2 to paragraph 14 of Accounting
Principles Board opinion No. 15 because it results in dilution of less than
three percent.
Note: All share amounts have been restated for two-for-one stock split
effective December 31, 1993.
EXHIBIT 11c
AMERITECH CORPORATION
COMPUTATION OF PRIMARY EARNINGS PER SHARE
1995 1994 1993
---- ---- ----
Income before extraordinary item $2,007,635,000 $1,170,426,000 $1,512,798,000
============== ============== ==============
Weighted average number of
shares outstanding 553,621,693 549,238,304 544,076,354
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 2,864,174 1,518,175 1,503,542
Weighted average shares outstanding
on which primary earnings per share
are based 556,485,867 550,756,479 545,579,896
Primary earnings per share $3.61 2.13 $2.77
============== ============== ==============
This calculation is submitted in accordance with Regulation S-K, Item 601
(b)11, although not required by footnote 2 to paragraph 14 of Accounting
Principles Board opinion No. 15 because it results in dilution of less than
three percent. Accordingly, reported EPS does not consider dilutive
securities.
Note: All share amounts have been restated for two-for-one stock split
effective December 31, 1993.
EXHIBIT 12
AMERITECH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
Three Months Ended
March 31
--------------
1996 1995
---- ----
EARNINGS
- --------
Income before interest, income taxes
and undistributed equity earnings.......... $ 854 $ 998
Preferred dividends of subsidiary (3)....... 3 2
Portion of rent expense representing
interest................................... 21 16
Michigan Single Business tax................ 9 9
------ ------
Total earnings (1) (2)...................... $ 887 $1,025
------ ------
FIXED CHARGES
- -------------
Interest expense............................ $ 124 $ 118
Preferred dividends of subsidiary........... 3 2
Capitalized interest........... 7 3
Portion of rent expense representing
interest expense........................... 21 16
------ ------
Total fixed charges......................... $ 155 $ 139
------ ------
Ratio of earnings to fixed charges.......... 5.72 7.37
==== ====
(1) The results for the first three months of 1995 reflect a $256
million pretax credit primarily from settlement gains resulting
from lump sum pension payments to former employees who left the
business in the nonmanagement work force restructuring. Costs
of the work force restructuring program were largely funded from
the Ameritech Pension Plan.
(2) Earnings represent income before income taxes and fixed charges.
Since the Michigan Single Business Tax (the Tax) and rental
expense have been deducted to arrive at income before interest
and income taxes, the Tax and the one-third portion of rental
expense considered to be fixed charges are added back.
(3) For purposes of the above computation, the preferred stock
dividend requirement of a subsidiary has been increased to an
amount representing the pretax earnings which would be required
to cover the dividend requirements.
EXHIBIT 12
AMERITECH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Millions)
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
EARNINGS
Income before interest, income taxes,
extraordinary item, cumulative
effect of change in accounting
principles and undistributed
equity earnings.............. $ 3,537 $ 2,162 $ 2,707 $ 2,470 $ 2,211
Preferred dividends of
subsidiary (3) ....... 9 2 -- -- --
Portion of rent expense representing
interest..................... 67 64 65 65 71
Michigan Single Business Tax.. 34 33 28 25 26
------- ------- ------- ------- -------
Total Earnings (1)(2)....... $ 3,647 $ 2,261 $ 2,800 $ 2,560 $ 2,308
======= ======= ======= ======= =======
FIXED CHARGES
Interest expense.............. $ 469 $ 435 $ 453 $ 496 $ 545
Preferred dividends of
.......subsidiary (3) ....... 9 2 -- -- --
Capitalized interest.. 20 13 11 8 23
Portion of rent expense representing
interest..................... 67 64 65 65 71
------- ------- ------- ------- -------
Total Fixed Charges......... $ 565 $ 514 $ 529 $ 569 $ 639
======= ======= ======= ======= =======
Ratio of earnings to fixed charges
and preferred dividends....... 6.45 4.40 5.29 4.50 3.61
======= ======= ======= ======= =======
(1) The results for 1995 reflect a $134.5 pretax credit primarily from
settlement gains resulting from lump sum pension payments from the
pension plan to former employees who left the business in the
nonmanagement work force restructuring, partially offset by $73.7
associated with increased force costs related to the restructuring
started in 1994, as well as a $58.1 charge recorded to write down
certain data processing equipment to net realizable value. Results
for 1994 reflect a $728.1 pretax charge associated with the
nonmanagement work force restructuring. Costs of the work force
restructuring program have largely been funded from the Ameritech
Pension Plan.
(2) Earnings are income before income taxes and fixed charges. Since
the Michigan Single Business Tax ("the Tax") and rental expense have
been deducted, the Tax and the one-third portion of rental expense
considered to be fixed charges are added back.
(3) For purposes of above computation, the preferred stock dividend
requirement of a subsidiary has been increased to an amount
representing the pretax earnings which would be required to cover the
dividend requirements.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
AMERITECH CORPORATION'S MARCH 31, 1996 CONSOLIDATED FINANCIAL STATEMENTS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 164,100
<SECURITIES> 0<F1>
<RECEIVABLES> 2,992,200
<ALLOWANCES> 210,300
<INVENTORY> 207,400
<CURRENT-ASSETS> 3,481,200
<PP&E> 30,948,500
<DEPRECIATION> 17,770,300
<TOTAL-ASSETS> 22,782,900
<CURRENT-LIABILITIES> 6,419,300
<BONDS> 4,439,100
0
0
<COMMON> 588,100
<OTHER-SE> 6,694,100
<TOTAL-LIABILITY-AND-EQUITY> 22,782,900
<SALES> 0<F2>
<TOTAL-REVENUES> 3,567,400
<CGS> 0<F3>
<TOTAL-COSTS> 2,745,300
<OTHER-EXPENSES> (50,500)
<LOSS-PROVISION> 80,100
<INTEREST-EXPENSE> 123,700
<INCOME-PRETAX> 748,900
<INCOME-TAX> 270,600
<INCOME-CONTINUING> 478,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 478,300
<EPS-PRIMARY> 0.86
<EPS-DILUTED> 0.86
<FN>
<F1>SECURITIES ARE NOT MATERIAL AND THEREFORE HAVE NOT BEEN STATED SEPARATELY
IN THE FINANCIAL STATEMENTS. THIS AMOUNT IS INCLUDED IN THE CASH TAG.
<F2>NET SALES OF TANGIBLE PRODUCTS IS NOT MORE THAN 10% OF TOTAL OPERATING
REVENUES AND THEREFORE HAS NOT BEEN STATED SEPARATELY IN THE FINANCIAL
STATEMENTS PURSUANT TO REGULATION S-X, RULE 5-03(B). THIS AMOUNT IS
INCLUDED IN THE "TOTAL REVENUES" TAG.
<F3>COST OF TANGIBLE GOODS SOLD IS INCLUDED IN COST OF SERVICE AND PRODUCTS
IN THE FINANCIAL STATEMENTS AND THE "TOTAL COST" TAG, PURSUANT TO
REGULATION S-X, RULE 5-03(B).
</FN>
</TABLE>
