<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Ameritech Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
LOGO 30 South Wacker Drive
Chicago, Illinois 60606
NOTICE OF 1996 ANNUAL MEETING AND PROXY STATEMENT
March 1, 1996
Dear Shareowner:
The directors and officers of your company cordially invite you to attend the
annual meeting of Ameritech's shareowners, which will be held in the Arthur
Rubloff Auditorium of The Art Institute of Chicago, on Wednesday, April 17,
1996, at 9:30 a.m.
If you plan to attend the meeting, please keep the admission ticket and map
that are attached to the form of proxy accompanying this notice and proxy
statement and check the appropriate box on the form of proxy.
Whether or not you plan to attend in person, please mark your votes on the
enclosed proxy card, sign and date it and mail it in the postage-paid envelope
as soon as possible.
At the meeting we will elect three directors and vote on ratification of the
appointment of independent public accountants, two amendments to Ameritech's
Certificate of Incorporation, one increasing the authorized Common Stock and
the other changing the way we elect directors, and one shareowner proposal, as
described in the formal notice of the meeting and proxy statement appearing on
the following pages.
We also will report on the progress of Ameritech and comment on matters of
current interest. There will be a period of informal discussion in which
shareowners will have an opportunity to comment or ask questions. After the
meeting, you are invited to be our guest and tour the magnificent exhibits of
The Art Institute of Chicago.
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS MEETING, WHETHER OR
NOT YOU ATTEND THE MEETING IN PERSON AND REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. TO MAKE SURE YOUR SHARES ARE REPRESENTED, WE URGE YOU TO COMPLETE AND MAIL
THE ENCLOSED PROXY CARD.
Sincerely,
LOGO
Richard C. Notebaert
Chairman and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
APRIL 17, 1996
The Annual Meeting of Shareowners of Ameritech Corporation will be held at
the Arthur Rubloff Auditorium of The Art Institute of Chicago, Columbus Drive
and Monroe Street, Chicago, Illinois, on Wednesday, April 17, 1996, at 9:30
a.m., to consider and take action with respect to the following matters:
1. Election of three Directors to serve for a term of three years;
2. Ratification of the appointment of Arthur Andersen LLP as
independent public accountants for the Company for the year ending
December 31, 1996;
3. Amendment of the Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 1.2 billion to 2.4
billion;
4. Amendment of the Certificate of Incorporation to provide for annual
election of all directors;
5. Shareowner proposal regarding cumulative voting in elections of
Directors; and
6. Such other business as may properly come before the meeting or any
adjournment thereof.
Holders of Common Stock of record at the close of business on February 20,
1996 are entitled to notice of, and to vote at, the meeting or any adjournment
thereof. A list of such holders will be open to the examination of any
shareowner, for any purpose germane to the meeting, at the offices of Ameritech
Corporation, 30 South Wacker Drive, Chicago, Illinois, for a period of ten days
prior to the meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
LOGO
Bruce B. Howat
Secretary
March 1, 1996
<PAGE>
AMERITECH CORPORATION
30 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
PROXY STATEMENT
The Board of Directors of Ameritech Corporation (hereinafter called
"Ameritech" or the "Company") solicits your proxy for use at the 1996 Annual
Meeting of Shareowners to be held on April 17, 1996, and urges you to complete
and return your proxy card promptly. A proxy may be revoked at any time prior
to the voting at the meeting by submitting a later dated proxy or by giving
written notice of such revocation to the Secretary of the Company.
Holders of Ameritech Common Stock of record at the close of business on
February 20, 1996 are entitled to vote at the Annual Meeting. On that date,
555,849,707 shares of Ameritech Common Stock were issued and outstanding. Each
share entitles the holder to one vote. The persons appointed by the enclosed
proxy card have advised the Board of Directors that it is their intention to
vote at the meeting in compliance with the instructions on the proxy cards
received from shareowners and, if no contrary instruction is indicated on the
proxy card, for the election of the persons nominated to serve as Directors and
in accordance with the recommendations of the Board of Directors on the other
matters brought before the meeting, as described herein.
If a shareowner is a participant in the Ameritech Shareowner Dividend
Reinvestment and Stock Purchase Plan, the proxy card represents the number of
full and fractional shares in the dividend reinvestment plan account, as well
as other shares registered in the participant's name. If a shareowner is a
participant in the Ameritech Savings Plan for Salaried Employees ("SPSE"), the
Ameritech Savings and Security Plan for Non-Salaried Employees ("SSP") or
certain employee savings plans of affiliated companies, the proxy card will
also serve as a voting instruction for the trustees of those plans where all
accounts are registered in the same name. If voting instructions are not
received for shares in SPSE or SSP, those shares will be voted in the same
proportion as the shares in those plans for which voting instructions are
received.
The three Directors to be elected at the Annual Meeting will be elected by a
plurality of the votes cast by the shareowners present in person or by proxy
and entitled to vote. With regard to the election of Directors, votes may be
cast for or withheld from each nominee. Votes that are withheld will have no
effect on the outcome of the election because Directors will be elected by a
plurality of votes cast.
Abstentions may be specified on all proposals submitted to a shareowner vote
other than the election of Directors. Abstentions will be counted as present
for purposes of determining the existence of a quorum regarding the proposal on
which the abstention is noted. Thus, abstentions on any of the Company's
proposals to ratify the appointment of the independent public accountants and
to amend the Certificate of Incorporation in two respects or on the shareowner
proposal will have the effect of a vote against such proposal.
Under the rules of the New York Stock Exchange, brokers who hold shares in
street name have the authority to vote on certain routine matters on which they
have not received instructions from beneficial owners. Brokers holding shares
of Ameritech Common Stock in street name who do not receive instructions are
entitled to vote on the election of Directors, ratification of the appointment
of the independent public accountants and the proposal to increase the
authorized Common Stock. However, brokers may not vote shares held for
customers on the proposal for annual election of all Directors or on the
shareowner proposal without specific instructions from such customers. Under
applicable Delaware law, "broker non-votes" on any such proposal (where a
broker submits a proxy but does not have authority to vote a customer's shares
on such proposal) will not be included in the vote totals on that proposal.
Therefore, broker non-votes will affect the outcome of the proposal for annual
election of all Directors, which requires an affirmative vote of a majority of
the outstanding Common Stock, but will have no effect on the outcome of any
proposal requiring only a majority of shares present and entitled to vote,
although broker non-votes are counted in determining the existence of a quorum.
This proxy statement and the enclosed proxy card are being first mailed to
shareowners on or about March 1, 1996.
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is composed of twelve members. The Certificate of
Incorporation of Ameritech currently divides the Board of Directors into three
classes, as nearly equal in size as possible, with one class of Directors
elected each year for a three-year term. The terms of the Directors in one
class, which is composed of three of the Directors, expire in 1996 and all of
those Directors have been nominated for re-election. If for any reason any of
these nominees becomes unable or is unwilling to serve at the time of the
meeting, the persons named in the enclosed proxy card will have discretionary
authority to vote for a substitute nominee or nominees. It is not anticipated
that any nominee will be unavailable for election.
The following sets forth information as to each nominee for election at this
meeting and each Director continuing in office, including his or her age,
present principal occupation, other business experience during the last five
years, directorships in other publicly held companies, membership on committees
of the Board of Directors and period of service as a Director of Ameritech.
NOMINEES FOR ELECTION AT THIS MEETING TO TERMS EXPIRING IN 1999:
[PHOTO] SHELDON B. LUBAR, 66, Founder and Chairman of Lubar & Co.,
Milwaukee, Wisconsin (private investment and venture capital
firm), since 1977 and Chairman and Chief Executive Officer
of Christiana Companies, Inc., Milwaukee, Wisconsin
(operating and investment company with businesses in
refrigerated warehousing and logistics), since 1987. Mr.
Lubar is a Director of Massachusetts Mutual Life Insurance
Company, Firstar Corporation, Christiana Companies, Inc.,
Energy Ventures, Inc. and MGIC Investment Corp. He is a
member of the Audit Committee and the Finance Committee. Mr.
Lubar also is a Director of the Ameritech Foundation.
Director since 1993.
[PHOTO] LYNN M. MARTIN, 56, Chair of the Council for the Advancement
of Women and Advisor to the firm of Deloitte & Touche since
1993. Ms. Martin assumed the Davee Chair at the J.L. Kellogg
Graduate School of Management, Northwestern University, in
1993. She also served as fellow at the Kennedy School of
Government, Harvard University, in 1993. Ms. Martin served
as United States Secretary of Labor from February 1991 to
January 1993. She served as a member of the U.S. House of
Representatives from Illinois for five terms from 1981 to
1990. She also served in the Illinois House of
Representatives from 1977 to 1979 and the Illinois Senate
from 1979 to 1981. She is a Director of Harcourt General,
Inc., Ryder System, Inc., The Procter & Gamble Corporation,
TRW, Inc. and The Dreyfus Funds. Ms. Martin is a member of
the Finance Committee and the Nominating Committee.
Director since 1993.
[PHOTO] RICHARD C. NOTEBAERT, 48, Chairman of the Board, President
and Chief Executive Officer of Ameritech since April 1994.
Mr. Notebaert served as President and Chief Executive
Officer of Ameritech from January 1994 to April 1994, as
President and Chief Operating Officer from June 1993 to
January 1994 and as Vice Chairman from January 1993 to June
1993. He served as President of Ameritech Services, Inc. (a
wholly-owned subsidiary of Ameritech's five state telephone
companies) from June 1992 to January 1993, as President of
Ameritech's Indiana Bell subsidiary from 1989 to 1992 and as
President of Ameritech Mobile Communications, Inc. from 1986
to 1989. Mr. Notebaert is Chairman of the Executive
Committee.
Director since 1993.
2
<PAGE>
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 1997:
[PHOTO] DONALD C. CLARK, 64, Chairman of the Board of Household
International, Inc., Prospect Heights, Illinois (financial
services), since 1984. Mr. Clark served as Chairman and
Chief Executive Officer of Household International, Inc.
from 1984 to 1994. He is a Director of Household
International, Inc., Warner-Lambert Co., and Scotsman
Industries, Inc. Mr. Clark is Chairman of the Finance
Committee and a member of the Executive Committee and the
Compensation Committee.
Director since 1989.
[PHOTO] MELVIN R. GOODES, 60, Chairman and Chief Executive Officer
of Warner-Lambert Company, Morris Plains, New Jersey
(pharmaceuticals and consumer products), since 1991. Mr.
Goodes served as President and Chief Operating Officer of
Warner-Lambert from 1985 to 1991. He is a Director of
Warner-Lambert Company, Chemical Banking Corporation (and
its subsidiary, Chemical Bank) and Unisys Corporation.
Director since 1994.
[PHOTO] JAMES A. HENDERSON, 61, Chairman and Chief Executive Officer
of Cummins Engine Company, Inc., Columbus, Indiana (heavy-
duty diesel engines, parts and related products), since
1995. Mr. Henderson became Chief Executive Officer in 1994
and served as President and Chief Operating Officer of
Cummins Engine Company, Inc. from 1977 to 1994. He is a
Director of Cummins Engine Company, Inc., Inland Steel
Industries, Inc., Rohm and Haas Co. and Landmark
Communications, Inc. Mr. Henderson is Chairman of the
Compensation Committee and a member of the Audit Committee.
He also is a Director of the Ameritech Foundation.
Director since 1983.
[PHOTO] JOHN B. MCCOY, 52, Chairman and Chief Executive Officer of
BANC ONE CORPORATION, Columbus, Ohio (bank holding company),
since 1987. Mr. McCoy served as President and Chief
Executive Officer of BANC ONE CORPORATION from 1984 to 1987.
He is a Director of BANC ONE CORPORATION, Cardinal Health,
Inc., Tenneco Inc. and the Federal Home Loan Mortgage
Corporation. Mr. McCoy is Chairman of the Audit Committee
and a member of the Executive Committee and the Compensation
Committee.
Director since 1991.
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 1998:
[PHOTO] HANNA HOLBORN GRAY, PH.D., 65, President Emeritus and Harry
Pratt Judson Distinguished Service Professor of History,
University of Chicago, Chicago, Illinois, since 1993. Dr.
Gray served as President of the University of Chicago from
1978 to 1993. She is a Director of Atlantic Richfield
Company, Cummins Engine Company, Inc. and J. P. Morgan & Co.
Incorporated (and its subsidiary, Morgan Guaranty Trust
Company of New York). She is a member of the Nominating
Committee. Dr. Gray also is a Director of the Ameritech
Foundation.
Director since 1983.
3
<PAGE>
[PHOTO] ARTHUR C. MARTINEZ, 56, Chairman and Chief Executive Officer
of Sears, Roebuck & Co., Hoffman Estates, Illinois
(merchandising and real estate), since August 1995. Mr.
Martinez served as Chairman and Chief Executive Officer of
the Sears Merchandise Group from 1992 to 1995, as Vice
Chairman of Saks Fifth Avenue from 1990 to 1992 and as
Senior Vice President and Group Chief Executive of the
BATUS, Inc. Retail Division from 1987 to 1990. He is a
Director of Sears, Roebuck & Co. Mr. Martinez is a member of
the Compensation Committee and the Finance Committee.
Director since 1995.
[PHOTO] JOHN D. ONG, 62, Chairman of the Board and Chief Executive
Officer of The BFGoodrich Company, Akron, Ohio (chemical and
aerospace products), since 1979. Mr. Ong is a Director of
The BFGoodrich Company, Asarco Incorporated, Cooper
Industries, Inc., The Geon Company, The Kroger Company and
TRW Inc. He is Chairman of the Nominating Committee and a
member of the Executive Committee and the Compensation
Committee.
Director since 1983.
[PHOTO] A. BARRY RAND, 51, Executive Vice President, Operations of
Xerox Corporation, Stamford, Connecticut (document
processing and financial services), since 1992. Mr. Rand
served as President of the Xerox United States Marketing
Group from 1987 to 1992. He has been a corporate officer of
Xerox since 1985. Mr. Rand is a Director of Honeywell Inc.
and Abbott Laboratories. He is a member of the Audit
Committee and the Nominating Committee.
Director since 1993.
[PHOTO] JAMES A. UNRUH, 54, Chairman of the Board and Chief
Executive Officer of Unisys Corporation, Blue Bell,
Pennsylvania (information services, technology and
software), since 1990. Mr. Unruh served as President and
Chief Executive Officer of Unisys in 1990 and as President
and Chief Operating Officer from 1989 to 1990. He is a
Director of Unisys Corporation. Mr. Unruh is a member of the
Audit Committee and the Finance Committee.
Director since 1995.
THE BOARD OF DIRECTORS
The business and affairs of Ameritech are managed under the direction of the
Board of Directors. The Board has responsibility for establishing broad
corporate policies and for the overall performance of Ameritech rather than
day-to-day operating details. Members of the Board of Directors are kept
informed of the Company's business by various reports and documents sent to
them each month, as well as by reports presented at meetings of the Board and
its committees by officers and employees of Ameritech and its business units.
The Board of Directors met ten times in 1995. The average attendance at the
aggregate number of Board and committee meetings was 91% in 1995 and no
Director attended fewer than 75% of the aggregate number of meetings of the
Board of Directors and the committees on which he or she served.
4
<PAGE>
COMMITTEES OF THE BOARD
The Audit Committee, which is composed entirely of Directors who are not
officers or employees of Ameritech, reviews the Company's accounting functions,
operations and management and the adequacy and effectiveness of the internal
controls and internal auditing methods and procedures of the Company. The Audit
Committee recommends to the Board the appointment of the independent public
accountants for the Company, subject to ratification by the shareowners at the
Annual Meeting. In connection with its duties, the Audit Committee periodically
meets privately with the independent public accountants and with the Company's
internal auditors. The Audit Committee met three times in 1995.
The Compensation Committee, which is composed entirely of Directors who are
not officers or employees of Ameritech, reviews and acts with respect to
pension, compensation and other employee benefit plans, approves the salary and
compensation of officers of Ameritech other than the five most highly
compensated officers and makes recommendations to the Board of Directors
concerning the salary and compensation of the Chairman of the Board, President
and Chief Executive Officer and any other officer who is or would be among the
five most highly compensated officers of Ameritech. This committee met four
times in 1995.
The Executive Committee is authorized to exercise, during intervals between
meetings of the Board of Directors, the powers of the Board of Directors in the
management and direction of the business and affairs of the Company, subject to
the provisions of the corporation law of the State of Delaware. The Executive
Committee did not meet in 1995.
The Finance Committee reviews and makes recommendations to the Board with
respect to the financial policies, plans and procedures of the Company, the
financial implications of proposed corporate actions and matters concerning
dividend reinvestment and stock purchase plans. This committee also reviews and
authorizes investments in and advances to subsidiaries and is responsible for
reviewing the policies, plans and procedures of the Company with respect to the
investment and management of the assets of the Company's pension, savings and
other employee benefit plans. The Finance Committee met three times in 1995.
The Nominating Committee advises and makes recommendations to the Board of
Directors on all matters concerning Board procedures and directorship
practices. The Nominating Committee reviews and makes recommendations to the
full Board concerning the qualifications and selection of candidates as
nominees for election as Directors. In recommending candidates, this committee
seeks individuals who possess broad training and experience in business,
finance, law, government, technology, education or administration and considers
factors such as personal attributes, geographic location and special expertise
complementary to the background and experience of the Board as a whole.
Shareowners who wish to suggest qualified candidates should write to the
Corporate Secretary of Ameritech at 30 South Wacker Drive, Chicago, Illinois
60606, stating in detail the qualifications of such persons for consideration
by the Committee. The Nominating Committee met two times in 1995.
The committee memberships of each nominee and continuing Director are set
forth in their biographical information above.
OFFICER AND DIRECTOR STOCK OWNERSHIP
The following table sets forth beneficial ownership of Ameritech Common
Stock, as of February 20, 1996, by each Director and nominee, the chief
executive officer, the four other most highly compensated executive officers
and all Directors and executive officers as a group. Such beneficial ownership
includes shares held by certain family members, trusts and private foundations.
The persons shown in the following table are deemed to have sole power to vote
and dispose of such shares. None of the persons nor the group shown below has
beneficial ownership of more than 1% of the outstanding shares of Ameritech
Common Stock. Shares shown as beneficially owned by Mr. Campbell, Mr. Hester,
Mr. Notebaert, Mr. Shaffer and Ms. Wilson and by all Ameritech officers as a
group below include shares held for their accounts in the Ameritech Savings
Plan for Salaried Employees as of December 31, 1995.
5
<PAGE>
<TABLE>
<CAPTION>
TOTAL
NAME OWNERSHIP(*)
---- ------------
<S> <C>
W. Patrick Campbell............................................... 47,795
Donald C. Clark................................................... 13,677
Melvin R. Goodes.................................................. 3,500
Hanna Holborn Gray................................................ 9,604
James A. Henderson................................................ 12,400
Thomas P. Hester.................................................. 179,148
Sheldon B. Lubar.................................................. 13,214
Lynn M. Martin.................................................... 4,889
Arthur C. Martinez................................................ 2,500
John B. McCoy..................................................... 8,000
Richard C. Notebaert.............................................. 240,427
John D. Ong....................................................... 9,160
A. Barry Rand..................................................... 4,101
Oren G. Shaffer................................................... 19,263
James A. Unruh.................................................... 2,500
Rita P. Wilson.................................................... 14,940
All of the above and other executive officers as a group (31 per-
sons)............................................................ 927,851
</TABLE>
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* Includes shares of Ameritech Common Stock which may be acquired within 60
days after February 20, 1996 through the exercise of stock options. The
persons who have such options and the number of shares which may be so
acquired are as follows: Mr. Campbell, 47,386; Mr. Hester, 138,594; Mr.
Notebaert, 202,660; Mr. Shaffer, 19,154; Ms. Wilson, 14,940; and all
executive officers as a group, 677,146.
COMPENSATION OF DIRECTORS
Directors who are not employees receive an annual retainer of $41,000. Non-
employee Directors also receive additional annual retainers of $5,000 ($6,000
for chairmen) for each active committee (other than the Executive Committee) on
which they serve. Directors may elect to defer receipt of all or part of their
retainers in either cash units, Common Stock units or a combination of both.
Deferred cash units earn interest, compounded quarterly, at the rate
established by the Compensation Committee from time to time or, if no such rate
is established, at a rate equal to the average interest rate for ten-year
United States Treasury notes for the previous quarter. Deferred Common Stock
units are based on the number of Ameritech common shares which deferred
retainers would purchase at the fair market value of Ameritech common shares on
the date the retainers would otherwise be paid. Deferred Common Stock accounts
are credited on each dividend payment date for Ameritech common shares with
additional Common Stock units by dividing the aggregate cash dividend which
would have been paid if existing Common Stock units were actual common shares
by the fair market value of the Company's common shares as of the dividend
payment date. Deferred amounts are paid in cash, with the value of Common Stock
units based on the fair market value of Ameritech common shares at the time of
payment, in one payment or in up to ten equal annual installments beginning on
the first day of the calendar year following the year in which the Director
ceases to be a Director, or in a lump sum in the event of certain specified
changes in the beneficial ownership of Ameritech voting stock or in the
composition of the Board of Directors and certain mergers or consolidations
involving Ameritech. At the 1987 Annual Meeting, Ameritech's shareowners
approved the Ameritech Stock Retirement Plan for Non-Employee Directors, under
which each Director who is not an officer or employee of Ameritech or any of
its subsidiaries or affiliates is granted 1,500 shares of Ameritech Common
Stock after each Annual Meeting at which Directors are elected. Each grant of
stock is accompanied by a payment to offset the increase in the Directors'
Federal, state and local tax liabilities resulting from such grant and payment.
The maximum number of grants to a Director is six. The plan also provides for
grants up to the maximum number of shares in the event of certain specified
changes in the beneficial ownership of Ameritech voting stock or in the
composition of the Board of Directors and certain mergers or consolidations
involving Ameritech. The Company also provides non-employee Directors travel
accident insurance when on Company business.
6
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen LLP, as independent public accountants, to examine
the consolidated financial statements of the Company for the current year
ending December 31, 1996 and to perform other appropriate accounting services.
Arthur Andersen LLP has served as independent public accountants for the
Company since its organization.
A proposal will be presented at the meeting to ratify the appointment of
Arthur Andersen LLP as Ameritech's independent public accountants. One or more
members of that firm are expected to be present at the Annual Meeting to
respond to questions and to make a statement if they desire to do so. If the
shareowners do not ratify this appointment by the affirmative vote of a
majority of the shares present in person or represented by proxy at the
meeting, other independent public accountants will be considered by the Board
upon recommendation of the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT PUBLIC ACCOUNTANTS.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has unanimously approved and recommends to shareowners
that they consider and approve a proposal to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from one billion 200 million shares to two billion 400 million
shares. The Company's Certificate of Incorporation also presently authorizes 30
million shares of Preferred Stock and 30 million shares of Preference Stock,
which will not be changed by the proposed amendment. If the proposed amendment
is approved, the first paragraph, A.1., of Article FOURTH of the Company's
Certificate of Incorporation would be amended to read 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
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')."
As of February 20, 1996, the number of shares of the Company's Common Stock
issued and outstanding was 555,849,707, which is nearly one-half of the
currently authorized number of shares. The Board of Directors believes that the
increase in the number of authorized shares will benefit the Company by
improving its flexibility to consider further stock splits in the future and to
respond to future business opportunities and needs. The additional authorized
shares also will be available for issuance from time to time in connection with
the Company's Shareowner Dividend Reinvestment and Stock Purchase Plan,
employee benefit plans, possible financings, acquisitions of other companies or
other corporate purposes, or for issuance or exchange under the terms of the
distribution of preference stock purchase rights declared by the Company's
Board of Directors on December 21, 1988. Under certain circumstances, including
ownership by any person of 20% or more of the Company's Common Stock, such
preference stock purchase rights may entitle holders to purchase shares of
Common Stock, or, in the event of a subsequent merger of the Company or sale of
more than 50% of its assets, the common stock of the surviving or acquiring
corporation, having a value equal to two times the exercise price of the
rights. The Company's Certificate of Incorporation requires the affirmative
vote of the holders of 80% of all voting stock to approve an extraordinary
business transaction, including a merger or sale of 10% or more of the assets,
with an entity which holds 5% or more of the outstanding voting stock, unless
(i) the cash or fair market value of other property received by holders of the
Company's Common Stock is not less than the highest price per share paid by
such other entity in acquiring the Common Stock and not less than the book
value per share of the Common Stock, or (ii) the transaction is approved by
7
<PAGE>
80% of the Board of Directors. The Board of Directors currently is divided into
three classes, with one class elected each year, so that two succeeding annual
meetings would be required to change a majority of the Board of Directors.
However, a proposal to amend the Certificate of Incorporation to provide for
annual election of all Directors annually has been recommended by the Board of
Directors and is described in the next section of this proxy statement.
Subject to the requirements and limitations of the New York Stock Exchange
and other stock exchanges on which the Company's Common Stock is listed,
authorized shares may be issued from time to time without action by the
Company's stockholders to such persons and for such consideration and on such
terms as the Board of Directors determines. The Company has no current plans to
issue shares for any purpose other than shares issued pursuant to the Ameritech
Shareowner Dividend Reinvestment and Stock Purchase Plan and upon exercise of
stock options granted to officers and employees under the Company's long term
incentive plans.
An affirmative vote by the holders of a majority of the outstanding Common
Stock entitled to vote at the meeting is required for the adoption of this
proposal to amend the Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL TO AMEND THE CERTIFICATE OF INCORPORATION
TO PROVIDE FOR ELECTION OF ALL DIRECTORS ANNUALLY
The Board of Directors has unanimously approved and recommends to shareowners
that they consider and approve a proposal to amend the Company's Certificate of
Incorporation to eliminate the current division of the Board of Directors into
three classes, with one class elected each year for a three-year term, and to
provide instead for the annual election of the entire Board of Directors in
future years as Directors' then-current terms expire. If the proposed amendment
is approved, Section B.3. of Article EIGHTH of the Company's Certificate of
Incorporation would be amended to read as follows:
"B.3. Tenure. Each Director elected prior to May 1, 1996 shall hold office
for the term of 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."
When Ameritech was originally incorporated in 1983 in connection with the
court-ordered divestiture by AT&T of its exchange telecommunications business,
its Certificate of Incorporation provided, as specifically permitted by the
laws of the State of Delaware (in which Ameritech is incorporated) and the
rules of the New York Stock Exchange, that the Board of Directors would be
divided into three classes, with one class elected each year for a three-year
term. At that time Ameritech, like many companies, believed that a "classified"
Board of Directors provides continuity and stability in the membership of the
Board of Directors and in the policies established by the Board and ensures
that new Directors will have an opportunity to become familiar with the
Company's business and benefit from the experience of the continuing Directors.
Beginning in 1987, and each year thereafter (except 1993), a proposal has
been submitted by shareowners and included in the Company's proxy material
urging the Board of Directors to take the necessary steps to "declassify" the
Board of Directors. In each of the prior years, the Board of Directors of
Ameritech recommended a vote by shareowners against the proposal for the
reasons stated above and in recognition of the fact that a classified board of
directors may make it more difficult for an individual or group owning a
significant but minority position to attempt to obtain actual control of a
corporation, or to further some other personal goal with respect to the
corporation or its shares or assets, by electing at a single meeting of
shareowners its own slate of Directors.
Ameritech's Board of Directors is of the opinion that the advantages of a
classified board set out above and in its statements in prior years continue to
exist. However, the Board of Directors also recognizes that a
8
<PAGE>
significant number of shareowners have voted to eliminate the classified board
and that many institutional holders now believe that annual election of all
Directors is appropriate in order to allow shareowners to annually register
their views on the performance of the board collectively and each director
individually. The Board of Directors does not believe that the advantages of a
classified board are sufficient to justify retaining it if to do so means being
in disagreement with a large percentage of the Company's shareowners. The Board
of Directors does believe that this issue should be decided by the shareowners.
Under Delaware law, an amendment to the Certificate of Incorporation must be
declared advisable by the Board of Directors before it is submitted to a vote
of the shareowners. Accordingly, the Ameritech Board of Directors has passed
the necessary resolution declaring the advisability of the amendment to provide
for annual elections of all Directors and formally recommending an affirmative
vote.
An affirmative vote by the holders of a majority of the outstanding Common
Stock entitled to vote at the meeting is required for the adoption of this
proposal to amend the Certificate of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
SHAREOWNER PROPOSAL REGARDING CUMULATIVE VOTING
Mrs. Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Suite 215, Washington, D.C.
20037, record owner of 180 shares of the Common Stock of the Company, has given
notice that she plans to introduce the following resolution at the meeting and
has asked that the following statement of reasons for its introduction be
printed in this proxy statement:
"RESOLVED: That the stockholders of Ameritech, assembled in Annual Meeting
in person and by proxy, hereby request the Board of Directors to take the
necessary steps to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes
as shall equal the number of shares he or she owns multiplied by the number
of directors to be elected, and he or she may cast all of such votes for a
single candidate, or any two or more of them as he or she may see fit."
"REASONS: Many states have mandatory cumulative voting, so do National
Banks."
"In addition, many corporations have adopted cumulative voting."
"Directors elected by cumulative voting might be more open to have an
annual meeting date where more outside independent owners could attend."
"Last year the owners of 113,000,490 shares, representing approximately
27.23% of shares voting, voted for my similar resolution."
"If you AGREE, please mark your proxy FOR this resolution."
THE BOARD OF DIRECTORS DOES NOT SUPPORT THIS PROPOSAL.
The proponent submitted the same proposal for the 1991, 1992, 1993, 1994 and
1995 Annual Meetings and it was opposed by the owners of 83.14%, 81.1%, 78.17%,
79.66% and 72.77%, respectively, of the shares voted.
Each Director of the Company currently is elected by the holders of a
majority of the Company's outstanding shares, thereby permitting the Directors
to administer the affairs of the corporation for the benefit of all
shareowners. The Board of Directors continues to believe that cumulative voting
is undesirable because it is directed toward the election of one or more
directors by a special group of shareowners. The shareowner or special group
electing a director by cumulative voting may seek to have that director
represent the shareowner's or group's special interest rather than the
interests of the shareowners as a whole. This partisanship among directors and
voting on behalf of special interests could interfere with the effectiveness of
the Board and could be contrary to the interests of the Company and its
shareowners as a whole.
The majority of state legislatures, including the State of Delaware, the
state in which Ameritech is incorporated, do not require cumulative voting. The
majority of companies listed on the New York Stock
9
<PAGE>
Exchange do not elect directors by cumulative voting. The Company's present
method of electing Directors is employed by most companies listed on the New
York Stock Exchange and the Board of Directors believes that this method is
appropriate to ensure that Directors will represent all the shareowners and not
a particular group.
Under the corporation law of the State of Delaware, the action recommended in
this proposal could be taken only if the Board of Directors recommended an
amendment to the Company's Certificate of Incorporation establishing cumulative
voting and directed that the amendment be submitted to a vote of the Company's
shareowners. The Company's Board of Directors has not recommended, and does not
recommend, such an amendment. Therefore, a vote in favor of this proposal would
be only an advisory recommendation to the Board of Directors that it take steps
to initiate such an amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
OTHER BUSINESS
The Board of Directors does not know of any further business to be presented
at the meeting. However, should any other matter requiring a vote of the
shareowners arise, the persons appointed by the enclosed proxy card intend to
vote thereon in accordance with their judgment as to the best interests of the
Company.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors has oversight
responsibility for the Company's executive compensation programs. More
specifically, the Committee approves all pay plans and changes therein. It also
approves performance goals for incentive awards, certifies the attainment of
goals, and approves the actual awards to the chief executive officer and the
other four most highly compensated executive officers. The Committee recommends
the base salary of the chief executive officer and the other four most highly
compensated executive officers to the full Board of Directors. The full Board
of Directors is responsible for acting on the recommendations of the Committee.
REPORT OF THE COMPENSATION COMMITTEE
Since its inception, the Company has designed and administered executive
compensation programs so that pay is linked to Company performance and so that
the interests of executives are aligned with the interests of shareowners. This
philosophy is articulated in the following guiding principles of the Company's
compensation programs:
. A significant percentage of pay will be determined by the Company's
annual and long term financial performance, including the creation of
shareowner value.
. Compensation programs will be designed to encourage and balance the
attainment of short term operational goals and long term strategic
initiatives.
. Total compensation will be targeted at competitive levels to allow the
Company to attract, retain and motivate high caliber employees; however,
a greater percentage of compensation will be performance-based and
variable (versus fixed compensation) than competitive practices might
suggest.
. Compensation programs will be designed to encourage stock ownership by
executives.
There are three elements to the Company's compensation program, each
consistent with the compensation philosophy: annual base salary, annual cash
bonus incentives and long term incentives. Both the annual and the longer term
incentives are directed toward specific financial measures, including earnings
growth, revenue growth and total return to shareowners (stock price
appreciation plus dividends), with each of the targets calling for
progressively excellent results.
An important consideration in the design of the Company's compensation
programs is the use of stock to encourage ownership by management. The
Ameritech long term incentive plans may utilize performance-
10
<PAGE>
based restricted stock, performance units and stock options in making grants.
Since 1991, all long term grants have been in the form of the Company's stock.
To support the Company's belief in stock ownership by executives, there are in
effect ownership guidelines for key managers which require stock holdings that
are proportionate to an individual's compensation and position in the Company.
Newly hired and promoted executives are given a reasonable period of time to
achieve these guidelines. As of December 31, 1995, the stock ownership of each
of the executive officers named in the Summary Compensation Table that follows
either exceeded or was on track to meet these guidelines.
Annual cash compensation (as reported in the "Salary" and "Bonus" columns of
the Summary Compensation Table that follows) is somewhat influenced by the pay
practices of comparable large corporations so that Ameritech remains reasonably
competitive with what others are doing. The Compensation Committee's current
view is that Ameritech's salaries, annual cash compensation and long term
compensation should be at about the median of all companies in the comparator
group. The comparator group used in establishing the base salary, annual cash
compensation guidelines and long term grants is composed of a broad cross
section of approximately 65 major corporations in multiple industries as
opposed to the smaller peer group comprised of the six Regional Holding
Companies ("RHCs") shown in the Shareowner Return Performance Graph following
this report. The Committee believes that this is appropriate considering that
the Company competes for executives in many industries, not solely with the
RHCs. Although competitive practices are viewed importantly, the Company and
the Compensation Committee concur in the view that the most important
considerations in setting annual compensation are individual merit and the
Company's financial performance.
In 1995 we increased annual cash compensation targets for executives by
approximately 4.5% to maintain target total compensation levels based on
analysis of survey data of the comparator group companies described above. Mr.
Notebaert's base salary increased 18% in 1995 over 1994 to bring his salary
more in line with the competitive market rate for his position. His total
salary and bonus increased because of this salary increase and the Company's
improved performance versus return on assets and revenue targets, which
produced a cash bonus for 1995 above the targeted level.
Actual incentive bonus awards are made pursuant to the Company's Management
Committee Short Term Incentive Plan and are shown in the "Bonus" column in the
Summary Compensation Table that follows. These awards are either equal to, more
than, or less than targeted amounts depending on actual results compared with
the performance measures being used. Thus, the Company's incentive plans forge
a direct link between pay and performance, strengthened by the fact that the
greater portion of total compensation (annual salary plus annual bonus plus
long term awards) is determined by the incentive elements of an individual's
aggregate compensation rather than by salary. In 1995, 61% of the Company's
chief executive officer's total compensation was dependent on incentive factors
and thus was variable with performance. In 1994, 59% of his total compensation
was dependent on incentive factors. Because of increases in revenues and return
on assets in 1995, the actual incentive bonus awards for 1995 were above the
targeted amounts.
Performance targets established for the annual and for the long term
incentive plans are based not only on internal goals but, especially important
in terms of the current long term incentives, on the Company's performance
measured against comparator groups of other companies approved by the
Compensation Committee. The number of shares granted under the Company's long
term incentive plans ("LTIP") is based on periodic analysis of the competitive
total compensation and the long term incentive component of a comparator group
of approximately 25 high profile U.S. industrial companies that has been
followed by a recognized industry consultant for a number of years and is a
subset of the broad cross section of major corporations referenced above. A
percentage of target annual cash compensation to be delivered in the form of
long term compensation is established for each executive. The number of shares
required to deliver this compensation is determined by assigning a potential
value to each option share using the Black-Scholes valuation model and to each
restricted stock share using a model which considers factors such as the grant
price and future stock price appreciation targets. Since the assumptions used
in these models may be different for each grant, the size of prior grants is
not the most important determinant of grant size.
11
<PAGE>
A grant was made in 1991 under the LTIP that included stock options granted
at market price and a performance based restricted stock grant that is
distributed based on Ameritech's percentile ranking on total return to
shareowners as compared to the total return of approximately 100 companies the
size and risk characteristics of which most nearly compare with those of
Ameritech. The performance period for each of three installment distributions
is a rolling five-year period and the calculation is based on the average of
Ameritech's percentile rankings in the five years of the performance period. A
50th to 55th percentile ranking in total shareowner return is required to earn
a target distribution and a 75th percentile ranking is required to earn a
maximum distribution. The final distribution of performance based restricted
stock from the 1991 grant was made in early 1996 for five years of performance
through 1995 and was at the same target award level as the 1994 and 1995
distributions.
The Compensation Committee believes strongly in the continued focus of the
LTIP on total return to shareowners. Beginning in 1994, the Compensation
Committee has approved new annual grants under the LTIP that continue this
focus by providing participating executives with grants of stock options and
dividend equivalents. The first grant under this program was made in January
1994. The number of options granted is based on competitive analysis of market
compensation rates, the potential value of each option share as determined by
the Black-Scholes valuation model and individual performance. The options are
granted at fair market value on the date of grant. Dividend equivalents are
converted to share units and credited quarterly to a book account for each
participant. The share units will be paid in shares of stock only if and when
the options are exercised at a price which exceeds the grant price.
As often as seems appropriate, but at least annually, the Compensation
Committee studies Ameritech's executive compensation programs to judge their
consistency with the Company's compensation philosophy, their support of the
Company's strategic and financial objectives and their market competitiveness.
The Company's performance targets will be changed from time to time so as to
maintain the most effective relationship between performance and compensation.
Section 162(m) of the Internal Revenue Code generally limits the corporate
tax deduction for compensation paid to executive officers named in the Summary
Compensation Table in the proxy statement to $1 million, unless certain
requirements are met. The 1995 compensation of two of the executives named in
the Summary Compensation Table below exceeded the threshold for deductibility
under Section 162(m). In the case of Mr. Campbell, the excess was attributable
to a one-time bonus he received on the first anniversary of the commencement of
his employment under an agreement entered into when he joined the Company in
January 1994. In the case of Mr. Notebaert, the excess resulted from the final
distribution of the performance based restricted stock awarded in 1991, before
Section 162(m) and the regulations under it went into effect. The Management
Committee Short Term Incentive Plan approved by shareowners in 1995 complies
with Section 162(m) of the Internal Revenue Code and, therefore, awards under
this plan to members of the Company's Management Committee (currently the top
eight senior officers) for 1995 and subsequent years will qualify for the
corporate tax deduction. It is the Committee's intent to request shareowner
approval of future compensation plans for the executive officers subject to the
deduction limit as required by these regulations so the corporate tax deduction
is maximized without limiting the Committee's flexibility to attract and retain
qualified executives to manage the Company.
The Compensation Committee, which is composed entirely of Directors who are
not officers or employees of the Company, uses a professional compensation
consultant who is separate from consultants employed by the Company. This
consultant provides guidance in our deliberations and helps ensure equity and
fairness in the Company's practices.
THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
James A. Henderson, Chairman
Donald C. Clark John B. McCoy
Arthur C. Martinez John D. Ong
12
<PAGE>
SHAREOWNER RETURN PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total returns (assuming
reinvestment of dividends) of Ameritech, the average of the other six Regional
Holding Companies ("RHCs") formed along with Ameritech in the AT&T divestiture
effective January 1, 1984, Bell Atlantic Corporation, BellSouth Corporation,
NYNEX Corporation, Pacific Telesis Group (treating its spin-off of AirTouch
Communications in 1994 as a special, one-time dividend), SBC Communications
Inc. and US WEST, Inc. ("Peer Group Index"), and the Standard & Poor's 500
Composite Stock Index ("S&P 500") from December 31, 1990 through December 31,
1995.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
LOGO
<TABLE>
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ameritech............. $100 $101 $119 $143 $159 $175
Peer Group Index...... $100 $105 $110 $125 $130 $149
S&P 500............... $100 $130 $140 $153 $157 $166
</TABLE>
From November 21, 1983, the date on which Ameritech and the other RHCs began
trading on a "when issued" basis on the New York Stock Exchange, through
December 31, 1995, Ameritech has provided its shareowners with a cumulative
total return of 965%. This performance compares to a 457% total return for the
S&P 500 and an 829% return for the Peer Group Index over the same twelve-year
period.
SUMMARY COMPENSATION TABLE
The following table sets forth information as to the compensation of the
Chief Executive Officer and each of the other four most highly compensated
executive officers of Ameritech as of December 31, 1995 for services in all
capacities to the Company and its subsidiaries in 1993, 1994 and 1995. Numbers
of shares in
13
<PAGE>
the table and the footnotes thereto have been adjusted for the two-for-one
stock split declared in December 1993.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------- ------------------- --------
NAME OTHER ALL
AND ANNUAL RESTRICTED OPTIONS/ OTHER
PRINCIPAL COMPEN- STOCK SARS LTIP COMPEN-
POSITION(1) YEAR SALARY BONUS(2) SATION(3) AWARDS(4) (SHARES) PAYOUTS SATION(5)
----------- ---- -------- ---------- --------- ---------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard C. Notebaert 1995 $880,000 $1,029,750 $ 58,319 $ 0 135,000 $348,898 $280,654
Chairman, President 1994 $709,583 $ 754,200 $ 79,725 $ 0 126,000 $244,456 $264,214
& CEO 1993 $447,204 $ 351,000 $ 78,653 $729,375 11,466 $161,020 $121,188
W. Patrick Campbell 1995 $475,000 $ 245,424 $ 18,028 $ 0 44,300 $ 0 $393,640
Executive VP- 1994 $423,492 $ 298,600 $ 13,379 $ 0 44,300 $ 0 $958,707
Corp. Strategy 1993
Thomas P. Hester 1995 $365,000 $ 343,250 $ 33,929 $ 0 35,800 $302,418 $179,576
Executive VP & 1994 $350,000 $ 312,700 $ 37,403 $ 0 35,800 $212,023 $169,454
General Counsel 1993 $335,000 $ 263,000 $ 42,197 $240,694 0 $198,197 $168,602
Oren G. Shaffer 1995 $440,000 $ 391,305 $ 6,885 $ 0 44,300 $ 0 $282,917
Executive VP & 1994 $ 92,540 $ 77,400 $ 7,720 $ 0 11,100 $ 0 $ 0
Ch. Financial Off. 1993
Rita P. Wilson 1995 $305,000 $ 254,005 $ 412 $ 0 17,500 $ 0 $ 79,151
Senior VP-Corp. 1994 $ 50,833 $ 40,200 $ 0 $ 0 25,500 $ 0 $100,000
Communications 1993
</TABLE>
- --------
(1)Mr. Campbell joined the Company in January 1994. Mr. Shaffer joined the
Company in October 1994. Ms. Wilson joined the Company in November 1994.
(2) Awards under the Management Committee Short Term Incentive Plan for 1995
and the Senior Management Short Term Incentive Plan for years prior to 1995,
based on corporate performance for the year. Payments are made in January of
the next year.
(3)Consists of earnings on long term awards and payments to offset Federal,
state and local tax liabilities attributable to non-cash services for
transportation, parking, club memberships and financial counseling. The value
of such non-cash services did not exceed $50,000 for any individual in any
year.
(4)At December 31, 1995, the persons named in the table above held the
following shares of restricted stock with the following values (based on the
closing market price of Ameritech Common Stock on December 29, 1995): Mr.
Notebaert, 25,870 shares, $1,523,096; Mr. Campbell, no shares, $0; Mr. Hester,
11,688 shares, $688,131; Mr. Shaffer, no shares, $0; and Ms. Wilson, no shares,
$0. Shares shown as of December 31, 1995 include shares of performance based
restricted stock distributed in January 1996 and reported in the "LTIP Payouts"
column for 1995 in the table above. Dividends are paid on restricted stock when
and as paid on the Company's Common Stock.
(5)Detail of amounts reported in the "All Other Compensation" column for 1995
is provided in the table below. Split dollar insurance represents the present
value of the interest projected to accrue for the employee's benefit on the
current year's insurance premium paid by the Company. The employee contributes
an amount equal to the value of the death benefit under the policy. Cumulative
net life insurance premiums paid are recovered by the Company at the later of
retirement or 15 (or in some cases 10) years.
<TABLE>
<CAPTION>
ITEM MR. NOTEBAERT MR. CAMPBELL MR. HESTER MR. SHAFFER MS. WILSON
---- ------------- ------------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
. Earnings on Deferred
Compensation $ 44,900 $ 8,501 $ 66,936 $ 1,633 $ 0
. Company Contributions
to Defined
Contribution Savings
Plans $ 39,094 $ 22,506 $ 16,369 $ 19,800 $ 0
. Special Bonus $ 0 $250,000 $ 0 $ 28,500 $ 0
. Split Dollar Insurance
Premium Value $196,660 $112,633 $ 96,271 $232,984 $79,151
-------- -------- -------- -------- -------
Total All Other
Compensation $280,654 $393,640 $179,576 $282,917 $79,151
======== ======== ======== ======== =======
</TABLE>
14
<PAGE>
LONG TERM INCENTIVE PLANS
The Company's shareowners approved Long Term Incentive Plans ("LTIP") in 1985
and 1989. These plans provide incentive compensation opportunities for officers
and other key employees in the form of stock options, stock appreciation
rights, restricted stock, restricted stock units and other forms consistent
with the objectives of the plans. The 1985 LTIP expired on April 18, 1994 and
no new grants may be made thereunder, but grants made prior to such expiration
remain outstanding for their respective terms. The following two tables provide
information as to exercises and grants of stock options under the LTIP. No
grants other than stock options were made under the LTIP in 1995.
OPTION GRANTS IN 1995
The following table shows all grants of stock options to the officers named
in the Summary Compensation Table above in 1995. The exercise price of all such
options was the fair market value on the date of grant. Stock options generally
become exercisable as to one-third of the option shares on each of the first
three anniversaries of the date of grant. In the event of a change in control
of the Company, options previously granted would become exercisable in full.
Upon exercise of an option, an officer purchases all or a portion of the shares
covered by the option by paying the exercise price multiplied by the number of
shares as to which the option is exercised, either in cash or by surrendering
common shares already owned by the officer.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM
- ---------------------------------------------------------------------- ------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO PER SHARE
OPTIONS/SARS EMPLOYEES EXERCISE OR EXPIRATION
NAME GRANTED(1) IN FISCAL YEAR BASE PRICE DATE 0% 5% 10%
---- ------------ -------------- ----------- ---------- --- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard C.
Notebaert 135,000 2.10% $ 41.50 1/18/05 $0 $ 3,523,500 $ 8,928,900
W. Patrick Camp-
bell 44,300 0.69% $ 41.50 1/18/05 $0 $ 1,156,230 $ 2,930,002
Thomas P. Hester 35,800 0.56% $ 41.50 1/18/05 $0 $ 934,380 $ 2,367,812
Oren G. Shaffer 44,300 0.69% $ 41.50 1/18/05 $0 $ 1,156,230 $ 2,930,002
Rita P. Wilson 17,500 0.27% $ 41.50 1/18/05 $0 $ 456,750 $ 1,157,450
All Shareowners n/a n/a n/a n/a $0 $14,571,480,411 $36,929,924,508
All Optionees 6,436,980 100.00% $41.84 (avg) 2005 $0 $ 169,356,944 $ 429,217,826
Optionees Gain
as % of All
Shareowners Gain n/a n/a n/a n/a n/a 1.16% 1.16%
</TABLE>
- --------
(1) Under the terms of the options granted to Messrs. Notebaert, Campbell,
Hester and Shaffer and Ms. Wilson, dividend equivalents are credited
quarterly on the shares subject to the options by dividing the aggregate
cash dividend that would have been paid on such shares had they been
outstanding by the current market price of the Company's Common Stock. The
dividend equivalents will be distributed in the form of shares of stock
only if and when the options are exercised at a time when the current
market price exceeds the exercise price. Dividend equivalents credited in
1995 on options held by the persons named in the Summary Compensation Table
above were: Mr. Notebaert, 10,875 shares; Mr. Campbell, 3,714 shares; Mr.
Hester, 3,002 shares; Mr. Shaffer, 2,060 shares; and Ms. Wilson, 1,815
shares.
The dollar amounts under the 5% and 10% columns in the table above are the
result of calculations required by the Securities and Exchange Commission's
rules and therefore are not intended to forecast possible future appreciation
in the stock price of the Company. As shown in the 0% column above, no gain to
the named officers or all optionees is possible without appreciation in the
price of the Company's Common Stock, which
15
<PAGE>
will benefit all shareowners. For example, in order for Mr. Notebaert to
realize the potential values set forth in the 5% and 10% columns in the table
above, the price per share of the Company's Common Stock would be approximately
$67.60 and $107.64, respectively, as of the expiration date of his option.
No stock appreciation rights ("SARs") were granted in 1995. An SAR entitles a
participant to receive, upon exercise of the SAR, an amount equal to the
difference, if any, between the exercise price per share and the fair market
value of a common share on the date of exercise, multiplied by the number of
shares as to which the SAR is exercised. The Company has in the past granted
SARs only in tandem with stock options, such that exercise of the option
reduces the number of shares as to which the SAR may be exercised and exercise
of the SAR cancels the option as to such number of shares.
OPTION/SAR EXERCISES IN 1995 AND OPTION/SAR VALUES AT DECEMBER 31, 1995
The following table provides information as to options exercised in 1995 by
the officers named in the Summary Compensation Table above, the value realized
upon such exercises and the value of options held by such officers at year end
based on the closing price of the Company's Common Stock on December 29, 1995.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ACQUIRED AT YEAR END AT YEAR END (1)
ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard
C.
Notebaert 4,300 $111,585 111,098 219,000 $2,749,462 $4,059,645
W. Pat-
rick
Campbell 0 n/a 14,767 73,833 $ 301,321 $1,372,333
Thomas P.
Hester 0 n/a 112,234 59,666 $3,440,283 $1,109,011
Oren G.
Shaffer 0 n/a 3,700 51,700 $ 71,910 $ 913,532
Rita P.
Wilson 0 n/a 8,500 34,500 $ 161,458 $ 626,978
</TABLE>
- --------
(1) Valued at $58.875 per share.
PENSION PLANS
The Company's management pension plans were amended effective May 1, 1995.
Under the plans as amended, employees earn pension credits for each year of
service and the pension benefit is calculated by multiplying the earned pension
credits by the employee's highest three-year average pay out of the last five
years of employment. Under the pension plan formula prior to May 1, 1995, the
benefit was calculated on the basis of fixed percentages of final average pay
above and below a Social Security "breakpoint" over the highest five years out
of the last 10 years of employment, multiplied by years of service. To qualify
for a service pension, employees had to meet specified age and service
requirements. The amended plans include a transition under which employees who
were service pension eligible or within five years thereof at the effective
date, including Mr. Notebaert and Mr. Hester, will receive the greater of the
benefit under the new formula or the old formula.
The following table illustrates the maximum annual benefits payable for
management employees for specified final average annual compensation and
specified years of service, assuming retirement at age 65 and payment as a
single-life annuity, under the formula in existence prior to May 1, 1995.
<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE
ANNUAL -----------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
------------ -------- -------- -------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 600,000 $134,135 $178,847 $223,559 $268,270 $312,982 $357,694 $ 402,405
800,000 179,135 238,847 298,559 358,270 417,982 477,694 537,405
1,000,000 224,135 298,847 373,559 448,270 522,982 597,694 672,405
1,200,000 269,135 358,847 448,559 538,270 627,982 717,694 807,405
1,400,000 314,135 418,847 523,559 628,270 732,982 837,694 942,405
1,600,000 359,135 478,847 598,559 718,270 837,982 957,694 1,077,405
1,800,000 404,135 538,847 673,559 808,270 942,982 1,077,694 1,212,405
</TABLE>
16
<PAGE>
The following table illustrates the maximum annual benefits payable for
specified final average annual compensation and specified years of service,
assuming retirement at age 65 and payment as a single-life annuity, under the
formula that became effective May 1, 1995.
<TABLE>
<CAPTION>
FINAL
AVERAGE YEARS OF SERVICE
ANNUAL --------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 600,000 $152,540 $185,822 $213,557 $235,744 $255,159 $271,799 $288,440
800,000 203,387 247,763 284,742 314,326 340,212 362,399 384,587
1,000,000 254,234 309,703 355,928 392,907 425,264 452,999 480,734
1,200,000 305,081 371,644 427,113 471,489 510,317 543,599 576,880
1,400,000 355,928 433,585 498,299 550,070 595,370 634,199 673,027
1,600,000 406,775 495,525 569,485 628,652 680,423 724,798 769,174
1,800,000 457,621 557,466 640,670 707,233 765,476 815,398 865,321
</TABLE>
Under the management pension plans (including a supplemental plan which is
not a "qualified" plan under the Internal Revenue Code) before and after the
May 1, 1995 amendments, compensation included in the pension plan base consists
of salaries and actual short term incentive plan awards (shown in the "Bonus"
column of the Summary Compensation Table above).
As of December 31, 1995, Mr. Notebaert, Mr. Campbell, Mr. Hester, Mr. Shaffer
and Ms. Wilson had 26, 1, 29, 1 and 1 years of service, respectively, for
purposes of the management pension plans.
Pension amounts are not subject to reductions for Social Security benefits or
other offset amounts. The Employee Retirement Income Security Act of 1974
("ERISA") places certain limitations on pensions which may be paid under
Federal income tax qualified plans. Pension amounts which exceed such
limitations, as well as pension amounts attributable to awards under the short
term incentive plans, are paid under a separate non-qualified plan as an
operating expense.
Under the pension plans as amended, benefits are payable in a lump sum but
employees may elect to receive them in the form of an annuity. Under the old
plan, management employees could elect to receive pension benefits under the
qualified plan and/or the non-qualified plan in a lump sum upon retirement
based on the present value of such pension benefits. The non-qualified pension
plan was amended in 1992 to provide for a lump sum payment as of December 31,
1992 to those participants in the non-qualified plan (including Mr. Hester) who
were as of December 31, 1994 eligible by reason of age and length of service to
receive a service pension, unless the participant waived such payment of the
accrued benefit.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company entered into an employment agreement with Mr. Campbell when he
joined the Company in January 1994. The agreement provides for a base salary of
$460,000 subject to adjustment in accordance with the Company's customary
practice. The agreement also provides for a special one-time bonus of $250,000
on the first anniversary of Mr. Campbell's employment, which is shown in the
"All Other Compensation" column for 1995 in the Summary Compensation Table
above. Under the agreement, if the Company terminates Mr. Campbell's employment
without cause prior to the fifth anniversary of the commencement of his
employment, the Company will pay Mr. Campbell a lump sum equal to eighteen
months of his base salary.
In 1995, the Board of Directors approved a supplemental pension arrangement
for Mr. Shaffer, who joined Ameritech as Chief Financial Officer at age 52 in
October 1994. Under this arrangement, Mr. Shaffer will receive supplemental
pension credits at the rate of 7% per year that will vest and be included in
his pension if Mr. Shaffer remains employed by the Company for at least five
years and becomes vested under the Ameritech Management Pension Plan.
17
<PAGE>
The Company has entered into agreements regarding change in control with
Messrs. Notebaert, Campbell, Hester and Shaffer, Ms. Wilson and the other three
members of the Management Committee. Under these agreements, a "change in
control" occurs if (a) any person (other than an employee benefit plan of the
Company or the executive or persons acting in concert with the executive)
becomes the beneficial owner of 20% or more of the Company's voting stock, (b)
a tender offer is made and the offeror owns or has accepted for payment 20% or
more of the Company's voting stock (unless the tender offer is approved by the
Company's Board of Directors before the offeror becomes the beneficial owner of
5% or more of the Company's voting stock), (c) during any period of twenty-four
consecutive months members of the Board at the beginning of such period,
together with new Directors nominated or appointed during that period by a vote
of at least two-thirds of such existing Directors, cease to comprise a majority
of the Board of Directors, or (d) the shareowners of the Company approve a
merger or consolidation of the Company with any other company (unless the
voting stock outstanding immediately prior thereto continues to represent at
least 70% of the combined voting power of the Company or the surviving entity
thereafter or at least 50% of the Directors of the Company or the surviving
entity after the merger or consolidation were Directors of the Company prior
thereto). The agreements provide that the executive's compensation and employee
benefits will not be reduced following a change in control. The agreements also
provide that if the executive's employment with the Company is terminated under
certain circumstances the executive will continue to receive certain medical,
insurance and other employee benefits for a period of twenty-four months and
will receive a lump sum payment up to, but limited by the amount deductible for
income tax purposes under the Internal Revenue Code, the sum of (i) 2.99 times
the executive's annual salary rate in effect immediately prior to the change in
control and the executive's short term incentive award for the preceding year
plus (ii) the actuarial equivalent of the additional pension benefits the
executive would have accrued under the Company's qualified and non-qualified
pension plans if, on the date of termination, the executive had been credited
with two additional years of age, service and compensation under such plans.
These benefits will be provided to the executives other than Mr. Notebaert if
the executive's employment is terminated involuntarily for any reason other
than death, disability or just cause during the twenty-four month period
following the change in control or voluntarily by the executive during the
thirty-day period beginning on the first anniversary of the change in control
and to Mr. Notebaert if his employment is voluntarily or involuntarily
terminated (other than for death, disability or just cause) during the twenty-
four month period following the change in control. The Company estimates that,
if a change in control occurred as of January 31, 1996, the aggregate amount
payable under these agreements if the employment of Messrs. Notebaert,
Campbell, Hester and Shaffer and Ms. Wilson was terminated would be
approximately $22,336,000. The initial terms of these agreements are one year.
On each December 31 thereafter they are automatically extended for an
additional one-year term unless the Company has given notice by the preceding
November 1 that the term will not be extended, provided that the term continues
for twenty-four months after a change in control occurs.
Under the Ameritech Corporate Resource Severance Pay Plan, which became
effective January 1, 1989, key executives of the Company and its subsidiaries
(approximately 215 persons as of January 1, 1996, including Messrs. Notebaert,
Campbell, Hester and Shaffer and Ms. Wilson if the agreements described above
are not in effect) will, so long as they are employed during the twenty-four
month period following a change in control (as defined above), continue to
receive a base salary at a rate not less than the rate in effect prior to the
change in control and be entitled to participate in short and long term
incentive plans and other employee benefit plans which are not materially less
favorable than those applicable immediately prior to the change in control. The
Plan also provides for a severance benefit to such executives, in an amount up
to, but limited by the amount deductible for income tax purposes under the
Internal Revenue Code, two times base salary as of the change in control, two
times the target short term incentive award for the year preceding the change
in control and the actuarial equivalent of the additional pension benefits the
executive would have accrued if he or she had two additional years of age,
service and compensation, in the event that the executive's employment is
terminated by the employer other than for cause or disability or by the
executive for good reason during the twenty-four months following a change in
control or at the executive's discretion during the thirty-day period following
the first anniversary of the change in control.
18
<PAGE>
In the event of a change in control (as defined above), the Company's benefit
plans provide that the annual incentive award for the year in which the event
occurs will be not less than the target award, all stock options previously
granted will become fully exercisable, the restrictions on Restricted Stock
previously granted will terminate, compensation previously deferred will be
paid in a lump sum unless waived by the executive, and pension amounts under
the non-qualified pension plan will be held in a trust for the benefit of the
employees entitled to such pension amounts.
SUBMISSION OF 1997 SHAREOWNER PROPOSALS
Proposals of shareowners intended to be presented at the annual meeting in
1997 must be received by the Secretary of Ameritech, 30 South Wacker Drive,
Chicago, Illinois 60606, not later than November 1, 1996 to be considered for
inclusion in the Company's 1997 proxy material.
ADDITIONAL INFORMATION
In addition to soliciting proxies through the mail, certain employees of
Ameritech and its transfer agent, First Chicago Trust Company of New York, may
solicit proxies in person and by telephone. Ameritech has retained Kissel-Blake
Inc., 25 Broadway, New York, New York 10004, to assist in the solicitation of
proxies, primarily from brokers, banks and other nominees, for an estimated fee
of $21,000. The cost of soliciting proxies will be borne by Ameritech. As is
customary, Ameritech will, upon request, reimburse brokers, banks, nominees,
custodians and other record holders for their out-of-pocket expenses of
forwarding proxy materials to the beneficial owners of the shares.
If you plan to attend the Annual Meeting in person, please retain the
admission ticket attached to the form of proxy accompanying this notice and
proxy statement. Shareowners who do not have admission tickets will be admitted
upon presentation of identification at the door.
The rules of the Securities and Exchange Commission require that an annual
report accompany or precede the proxy materials. However, no more than one
annual report need be sent to the same address. If more than one annual report
is being sent to your address and you wish to reduce the number of annual
reports you receive, please mark the Discontinue Annual Report Mailing box in
the Special Action area on the proxy card.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE THE ENCLOSED PROXY CARD AND MAIL IT
IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
BY ORDER OF THE BOARD OF DIRECTORS,
LOGO
Bruce B. Howat
Secretary
March 1, 1996
19
<PAGE>
[AMERITECH LOGO]
[RECYCLED PAPER LOGO]
<PAGE>
P R O X Y
AMERITECH CORPORATION [AMERITECH LOGO]
30 South Wacker Drive, Chicago, Illinois 60606
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL
MEETING ON APRIL 17, 1996.
The undersigned hereby appoints Richard C. Notebaert, Melvin R. Goodes, Hanna
Holborn Gray, Lynn M. Martin, John D. Ong and A. Barry Rand, and each of them,
as proxies, with the powers the undersigned would possess if personally present,
and with full power of substitution, to vote all common shares of the
undersigned in Ameritech Corporation at the Annual Meeting of Shareowners to be
held in the Arthur Rubloff Auditorium at The Art Institute of Chicago, Chicago,
Illinois, on April 17, 1996, beginning at 9:30 a.m., and at any adjournment
thereof, upon all subjects that may properly come before the meeting, subject to
any directions indicated on the reverse side of this card. IF NO DIRECTIONS ARE
GIVEN, THE PROXIES WILL VOTE: FOR THE ELECTION OF THE NOMINEES LISTED BELOW; IN
ACCORD WITH THE DIRECTORS' RECOMMENDATIONS ON THE MATTERS LISTED ON THE REVERSE
SIDE OF THIS CARD AND DESCRIBED IN THE ENCLOSED PROXY STATEMENT; AND AT THEIR
DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. IF YOU
HAVE INDICATED ANY CHANGES OR VOTING LIMITATIONS IN THIS PARAGRAPH, PLEASE MARK
THE "VOTE LIMITATIONS" BOX ON THE REVERSE SIDE OF THIS CARD.
Your vote for election of Directors may be indicated on the reverse side of this
card. Three Directors are to be elected at the meeting. The nominees of the
Board of Directors are Sheldon B. Lubar, Lynn M. Martin and Richard C.
Notebaert.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR OTHERWISE TO P.O. BOX 8678, EDISON, NEW JERSEY,
08818-9166. IF YOU DO NOT SIGN AND RETURN A PROXY OR ATTEND THE MEETING AND VOTE
BY BALLOT, YOUR SHARES CANNOT BE VOTED.
This card also provides voting instructions for shares held in the dividend
reinvestment plan and, if registrations are identical, shares held in various
employee savings plans as described in the proxy statement.
COMMENTS:_______________________________________________________________________
________________________________________________________________________________
If you have written in the above space, please mark the "Comments" box on the
reverse side of this card.
<PAGE>
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE. 6688
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR PROPOSALS 2, 3 AND 4 AND AGAINST PROPOSAL 5.
________________________________________________________________________________
The Board of Directors recommends a vote FOR
________________________________________________________________________________
1. Election of Directors (see reverse)
FOR WITHHELD
[_] [_]
FOR, except vote withheld from the following nominee(s):
______________________________________________________________________________
2. Ratification of Independent Public Accountants
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Charter Amendment to Increase Common Shares Authorized to 2.4 Billion
FOR AGAINST ABSTAIN
[_] [_] [_]
4. Charter Amendment to Provide for Annual Election of All Directors
FOR AGAINST ABSTAIN
[_] [_] [_]
________________________________________________________________________________
The Board of Directors recommends a vote AGAINST
________________________________________________________________________________
5. Shareowner Proposal on Cumulative Voting in Elections of Directors
FOR AGAINST ABSTAIN
[_] [_] [_]
________________________________________________________________________________
Special Note Comments [_]
_______________________________________
Items on Other Side of Card Vote Limitations [_]
________________________________________________________________________________
[For Multiple-Account Holders Only]
Discontinue Annual Report Mailing for
This Account [_]
Will Attend Annual Meeting [_]
________________________________________________________________________________
SIGNATURE(S) __________________________________________ DATE _____________, 1996
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee, guardian or
corporate officer, please give full title as such.
