<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):
[X] No fee required
[_] 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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[_] 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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(4) Date Filed:
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Notes:
<PAGE>
LOGO
30 South Wacker Drive
Chicago, Illinois 60606
NOTICE OF 1998 ANNUAL MEETING AND PROXY STATEMENT
February 27, 1998
Dear Shareowner:
We 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 15, 1998, at 9:30 a.m.
At the meeting we will elect ten directors and vote on the appointment of
independent public accountants and two shareowner proposals. Each of these
matters is described in 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 a chance 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.
If you are a shareowner of record and you plan to attend the meeting, please
keep the admission ticket and map that are attached to the form of proxy sent
to you with this notice and proxy statement. Please also check the box on the
form of proxy that indicates that you plan to attend the meeting. If your
shares are held by a broker or a bank and you do not receive an admission
ticket, please bring proof of your ownership of Ameritech shares to be
admitted to the meeting.
Whether or not you plan to attend in person, we ask that you read the
material on the following pages and vote your shares on the matters that will
come before the meeting. Record holders of Ameritech shares can vote their
shares by using a toll free telephone number or the Internet. Instructions for
using these convenient services are set forth on the enclosed proxy card. Of
course, you also may vote your shares by marking your votes on the enclosed
proxy card, signing and dating it and mailing it in the postage-paid envelope.
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 VOTE AS SOON
AS POSSIBLE BY TELEPHONE, ON THE INTERNET OR BY MAILING YOUR PROXY CARD.
Sincerely,
LOGO
Richard C. Notebaert
Chairman and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
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 15, 1998, AT 9:30
A.M., to consider and take action with respect to the following matters:
1. Election of ten Directors to serve for a term of one year;
2. The appointment of Arthur Andersen LLP as independent public
accountants for the Company for the year ending December 31, 1998;
3. A shareowner proposal regarding cumulative voting in elections of
Directors;
4. A shareowner proposal regarding post-meeting reports on annual
meetings; and
5. Such other business as may properly come before the meeting or any
adjournment thereof.
The record date for the annual meeting is February 17, 1998. Only
shareowners of record at the close of business on that date can vote at the
meeting. 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.
February 27, 1998 BY ORDER OF THE BOARD OF DIRECTORS,
LOGO
Bruce B. Howat, Secretary
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROXY AND VOTING INFORMATION............................................... 1
ELECTION OF DIRECTORS...................................................... 2
Nominees for Election at this Meeting.................................... 2
Directors Whose Present Terms Continue Until 1999........................ 4
Meetings of the Board.................................................... 5
Committees of the Board.................................................. 5
Compensation of Directors................................................ 6
Officer and Director Stock Ownership..................................... 7
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.............. 7
SHAREOWNER PROPOSAL REGARDING CUMULATIVE VOTING............................ 8
SHAREOWNER PROPOSAL REGARDING POST-MEETING REPORTS......................... 9
OTHER BUSINESS............................................................. 9
EXECUTIVE COMPENSATION..................................................... 10
Compensation Committee................................................... 10
Report of Compensation Committee......................................... 10
Shareowner Return Performance Graph...................................... 13
Summary Compensation Table............................................... 14
Long Term Incentive Plans................................................ 15
Option Grants in 1997.................................................... 15
Option Exercises in 1997 and Option Values at December 31, 1997.......... 16
Pension Plans............................................................ 16
Employment Contracts and Change-In-Control Arrangements.................. 18
SUBMISSION OF 1999 SHAREOWNER PROPOSALS.................................... 20
ADDITIONAL INFORMATION..................................................... 20
</TABLE>
<PAGE>
AMERITECH CORPORATION PROXY STATEMENT
30 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
PROXY AND VOTING INFORMATION
The Board of Directors of Ameritech Corporation (referred to as "Ameritech"
or the "Company" or "we" in this proxy statement) is soliciting your proxy for
use at the 1998 Annual Meeting. This proxy statement and the form of proxy are
being mailed to shareowners beginning on February 27, 1998.
WHO CAN VOTE. Holders of Ameritech Common Stock of record at the close of
business on February 17, 1998 may vote at the Annual Meeting. On that date,
1,100,101,966 shares of Ameritech Common Stock were issued and outstanding and
entitled to be voted at the meeting. Each share entitles the holder to one
vote.
HOW YOU CAN VOTE. Shareowners of record can give proxies by calling a toll
free telephone number, by using the Internet or by mailing their signed proxy
cards. The telephone and Internet voting procedures are designed to
authenticate shareowners' identities, to allow shareowners to give their
voting instructions and to confirm that shareowners' instructions have been
recorded properly. Ameritech has been advised by counsel that the procedures
that have been put in place are consistent with the requirements of applicable
law. Specific instructions for shareowners of record who wish to use the
telephone or Internet voting procedures are set forth on the enclosed proxy
card.
If you are a participant in the Ameritech Direct Services Investment Plan,
the proxy card represents the number of full and fractional shares in your
plan account, as well as other shares registered in your name. If you are 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.
If you return your form of proxy but do not specify on the form how you want
to vote your shares, we will vote them FOR the election of all nominees for
Director set forth under "Election of Directors" on the following pages, FOR
the appointment of Arthur Andersen LLP as our independent public accountants,
and AGAINST the two shareowner proposals described below.
REVOCATION OF PROXIES. You can revoke your proxy at any time before the
voting at the meeting by sending written notice of the revocation to the
Secretary of the Company, by submitting another proxy that is properly signed
and bears a later date or by voting in person at the meeting.
YOUR VOTE IS CONFIDENTIAL. The Board of Directors has adopted a policy to
ensure that all shareowners have the right to confidential treatment of their
votes. The policy provides that no proxies, voting instructions or ballots
will be made available for examination by, nor will the particular vote of any
shareowner be disclosed to, the Company, its directors, officers or employees
or any third party, except (i) as necessary to tabulate and certify results of
voting, (ii) as necessary to meet applicable legal requirements and to assert
or defend claims of or against us, (iii) if there is a proxy solicitation by
someone else in opposition to a solicitation by the Board, (iv) if the
shareowner has made a written comment on his or her proxy, voting instruction
or ballot, or (v) if the shareowner expressly requests or consents to
disclosure of his or her vote in writing. The policy also provides that votes
will be tabulated by our transfer agent or another independent party and that
we will engage an independent inspector of elections to inspect the tabulation
of votes and certify the results of the voting.
QUORUM AND REQUIRED VOTES. A quorum will be present if the holders of a
majority of the shares of Ameritech Common Stock issued and outstanding and
entitled to vote are present in person or represented by proxy at the meeting.
Ten directors will be elected at the meeting by a plurality of all the votes
cast at the meeting, which means that the ten nominees for Director who
receive the most votes will be elected. The votes of a majority of the shares
of shareowners who are either present in person or represented by proxy at the
meeting are required to approve other proposals.
<PAGE>
On the election of Directors, you may either vote for, or withhold your vote
from, each nominee. You may abstain from voting on all proposals other than
the election of Directors. Abstentions are counted as "shares present" at the
meeting for the purpose of determining whether a quorum is present and
abstentions will have the effect of a vote against any proposal as to which
they are specified. Proxies submitted by brokers that do not indicate a vote
for some of the proposals because they do not have discretionary voting
authority on those proposals and they have not received instructions from
their customers on those proposals (sometimes called "broker non-votes") are
not considered to be "shares present" and will not affect the outcome of the
vote.
ELECTION 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 is currently composed of thirteen members. In 1996,
shareowners approved an amendment to the Certificate of Incorporation of
Ameritech that eliminated the division of the Board of Directors into three
classes, with one class of Directors elected each year for a three-year term.
Instead all Directors are now elected for one year terms as their current
terms expire. The terms of ten Directors expire in 1998 and all of those
Directors have been nominated for re-election to terms expiring in 1999.
Beginning in 1999 all Directors will be elected annually. If for any reason
any of the nominees for election at this meeting 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 ONE YEAR TERMS EXPIRING IN 1999):
LOGO DONALD C. CLARK, 66, Chairman Emeritus of Household
International, Inc., Prospect Heights, Illinois (financial
services), since 1996. Mr. Clark served as Chairman and
Chief Executive Officer of Household International, Inc.
from 1984 to 1994 and as Chairman of the Board from 1994 to
1996. He is a Director of Warner-Lambert Co., Scotsman
Industries, Inc., Armstrong World Industries, Inc. and The
PMI Group Inc. Mr. Clark is a member of the Compensation
Committee and the Finance Committee.
Director since 1989.
LOGO MELVIN R. GOODES, 62, 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, Chase Manhattan Corporation and
Unisys Corporation. Mr. Goodes is Chairman of the Nominating
Committee and a member of the Executive Committee and the
Finance Committee.
Director since 1994.
2
<PAGE>
LOGO HANNA HOLBORN GRAY, PH.D., 67, 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). Dr. Gray is a member of the Nominating
Committee. She also is a Director of the Ameritech
Foundation.
Director since 1983.
LOGO JAMES A. HENDERSON, 63, 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., Ryerson Tull, Inc., Rohm and Haas Co. and
Landmark Communications, Inc. Mr. Henderson is Chairman of
the Audit Committee and a member of the Compensation
Committee and the Executive Committee. He also is a Director
of the Ameritech Foundation.
Director since 1983.
LOGO ARTHUR C. MARTINEZ, 58, Chairman and Chief Executive Officer
of Sears, Roebuck and Co., Hoffman Estates, Illinois
(merchandising), since 1995. Mr. Martinez served as Chairman
and Chief Executive Officer of the Sears Merchandise Group
from 1992 to 1995 and as Vice Chairman of Saks Fifth Avenue
from 1990 to 1992. He is a Director of Sears, Roebuck and
Co., Amoco Corporation and the Federal Reserve Bank of
Chicago. Mr. Martinez is Chairman of the Finance Committee
and a member of the Audit Committee and the Executive
Committee.
Director since 1995.
LOGO JOHN B. MCCOY, 54, Chairman and Chief Executive Officer of
BANC ONE CORPORATION, Columbus, Ohio (bank holding company),
since 1987. He is a Director of BANC ONE CORPORATION,
Cardinal Health, Inc., First USA Paymentech, Inc. and the
Federal Home Loan Mortgage Corporation. Mr. McCoy is
Chairman of the Compensation Committee and a member of the
Audit Committee and the Executive Committee.
Director since 1991.
LOGO JOHN D. ONG, 64, Chairman Emeritus of The BFGoodrich
Company, Akron, Ohio (chemical and aerospace products),
since 1997. Mr. Ong served as Chairman of the Board of
BFGoodrich from 1979 to 1997 and as Chief Executive Officer
from 1979 to 1996. Mr. Ong is a Director of Asarco
Incorporated, Cooper Industries, Inc., Defiance, Inc., The
Geon Company, The Kroger Company and TRW Inc. He is a member
of the Compensation Committee and the Nominating Committee.
Director since 1983.
3
<PAGE>
LOGO A. BARRY RAND, 53, Executive Vice President, Operations of
Xerox Corporation, Stamford, Connecticut (document
processing products and services), since 1992. Mr. Rand
served as President of the Xerox United States Marketing
Group from 1987 to 1992. 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.
LOGO LAURA D'ANDREA TYSON, 50, Professor and holder of the Chair
endowed by the Class of 1939 in the Economics Department and
the Haas School of Business Administration at the University
of California at Berkeley, since 1996. Dr. Tyson served as
National Economic Adviser to the President of the United
States from March 1995 to December 1996 and as Chair of the
White House Council of Economic Advisers from 1993 to 1995.
She also served as a member of the President's National
Security Council and Domestic Policy Council. Dr. Tyson was
Director of the Institute of International Studies from 1990
to 1992, and Research Director of The Berkeley Roundtable on
the International Economy from 1986 to 1992, at the
University of California, Berkeley, where she was also a
professor of economics and business administration. She is a
Director of Kodak Corporation and Morgan Stanley, Dean
Witter, Discover & Co. Dr. Tyson is a member of the Audit
Committee and the Finance Committee.
Director since 1997.
LOGO JAMES A. UNRUH, 56, Retired Chairman of the Board and Chief
Executive Officer of Unisys Corporation, Blue Bell,
Pennsylvania (information services, technology and
software), since 1997. Mr. Unruh served as Chairman of the
Board and Chief Executive Officer of Unisys from 1990 to
1997. He is a Director of The Prudential Insurance Company
of America. Mr. Unruh is a member of the Audit Committee and
the Finance Committee.
Director since 1995.
DIRECTORS WHOSE PRESENT TERMS CONTINUE UNTIL 1999:
LOGO SHELDON B. LUBAR, 68, 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., Jeffries & Co. and MGIC Investment
Corp. He is a member of the Compensation Committee and the
Finance Committee. Mr. Lubar also is a Director of the
Ameritech Foundation.
Director since 1993.
4
<PAGE>
LOGO LYNN M. MARTIN, 58, 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 a 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 is a Director of Harcourt General, Inc., Ryder
System, Inc., The Procter & Gamble Corporation, TRW, Inc.
and certain Dreyfus Funds. Ms. Martin is a member of the
Finance Committee and the Nominating Committee.
Director since 1993.
LOGO RICHARD C. NOTEBAERT, 50, Chairman, President and Chief
Executive Officer of Ameritech since 1994. Mr. Notebaert
served as President and Chief Executive Officer of Ameritech
in 1994, as President and Chief Operating Officer from 1993
to 1994 and as Vice Chairman in 1993. He served as President
of Ameritech Services, Inc. (a wholly-owned subsidiary of
Ameritech's five state telephone companies) from 1992 to
1993, and as President of Ameritech's Indiana Bell
subsidiary from 1989 to 1992. Mr. Notebaert is a Director of
Sears, Roebuck and Co. He is Chairman of the Executive
Committee.
Director since 1993.
MEETINGS OF THE BOARD
The Board of Directors met eight times in 1997. The average attendance at
the aggregate number of Board and committee meetings was 87% in 1997. 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 held during
the period for which he or she was a Director, except Dr. Gray, who attended
70% of such meetings, Mr. Rand, who attended 66% of such meetings, and Dr.
Tyson, who attended 58% of such meetings.
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 two times in 1997.
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 highest paid officers of Ameritech. This committee met three times in
1997.
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 1997.
5
<PAGE>
The Finance Committee reviews and makes recommendations to the Board with
respect to the financial policies, plans and procedures of the Company, the
financial implications of proposed corporate actions and matters concerning
dividend reinvestment and stock purchase plans. This committee also reviews
and authorizes investments in and advances to subsidiaries and is responsible
for reviewing the policies, plans and procedures of the Company with respect
to the investment and management of the assets of the Company's pension,
savings and other employee benefit plans. The Finance Committee met two times
in 1997.
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
1997.
The committee memberships of each nominee and continuing Director are set
forth in his or her biographical information above.
COMPENSATION OF DIRECTORS
Directors who are not employees of Ameritech or its subsidiaries 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. If no such rate is established, the interest rate
is 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 that 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. The value of Common Stock units is based on the fair
market value of Ameritech common shares at the time of payment. Directors can
receive deferred amounts 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. Directors will receive
deferred amounts 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 3,000 shares of Ameritech Common Stock
after each Annual Meeting at which Directors are elected. Each grant of stock
is accompanied by a payment to offset the increase in the Directors' federal,
state and local tax liabilities resulting from such grant and payment. The
maximum number of grants to a Director is six. The plan also provides for
grants up to the maximum number of shares in the event of certain specified
changes in the beneficial ownership of Ameritech voting stock or in the
composition of the Board of Directors and certain mergers or consolidations
involving Ameritech. The Company also provides non-employee Directors travel
accident insurance when on Company business.
6
<PAGE>
OFFICER AND DIRECTOR STOCK OWNERSHIP
The following table sets forth beneficial ownership of Ameritech Common
Stock, as of February 17, 1998, by each Director and nominee, the chief
executive officer, the four next highest paid executive officers in 1997 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. Allen,
Mr. Campbell, Mr. Notebaert, Mr. Richards and Mr. Shaffer 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, 1997
(adjusted for the two-for-one stock split effective on December 31, 1997).
<TABLE>
<CAPTION>
TOTAL
NAME OWNERSHIP(*)
---- ------------
<S> <C>
Barry K. Allen.................................................... 102,845
W. Patrick Campbell............................................... 287,506
Donald C. Clark................................................... 29,576
Melvin R. Goodes.................................................. 13,000
Hanna Holborn Gray................................................ 19,208
James A. Henderson................................................ 24,800
Sheldon B. Lubar.................................................. 34,428
Lynn M. Martin.................................................... 16,444
Arthur C. Martinez................................................ 11,000
John B. McCoy..................................................... 24,000
Richard C. Notebaert.............................................. 964,659
John D. Ong....................................................... 18,342
A. Barry Rand..................................................... 14,857
Thomas E. Richards................................................ 71,060
Oren G. Shaffer................................................... 220,493
Laura D'Andrea Tyson.............................................. 3,100
James A. Unruh.................................................... 11,000
All of the above and other executive officers as a group (27 per-
sons)............................................................ 2,701,631
</TABLE>
- - --------
* Includes shares of Ameritech Common Stock which may be acquired within 60
days after February 17, 1998 through the exercise of stock options granted
under our long term incentive plans. The persons who have such options and
the number of shares which may be so acquired are as follows: Mr. Allen,
82,259; Mr. Campbell, 284,172; Mr. Notebaert, 907,109; Mr. Richards,
70,310; Mr. Shaffer, 219,979; and all executive officers as a group,
2,308,074.
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 audit the
consolidated financial statements of the Company for the current year ending
December 31, 1998. 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.
7
<PAGE>
SHAREOWNER PROPOSAL REGARDING CUMULATIVE VOTING
Mrs. Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Suite 215, Washington,
D.C. 20037, record owner of 360 shares of the Common Stock of the Company, has
given notice that she plans to introduce the following resolution at the
meeting and has asked that the following statement of reasons for its
introduction be printed in this proxy statement:
"RESOLVED: That the stockholders of Ameritech, assembled in Annual Meeting
in person and by proxy, hereby request the Board of Directors to take the
necessary steps to provide for cumulative voting in the election of
directors, which means each stockholder shall be entitled to as many votes
as shall equal the number of shares he or she owns multiplied by the number
of directors to be elected, and he or she may cast all of such votes for a
single candidate, or any two or more of them as he or she may see fit."
"REASONS: Many states have mandatory cumulative voting, so do National
Banks."
"In addition, many corporations have adopted cumulative voting."
"Last year the owners of 189,336,166 shares (adjusted for the two-for-one
stock split effective December 31, 1997), representing approximately 24.5%
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 AND RECOMMENDS A VOTE
AGAINST IT FOR THE FOLLOWING REASONS:
The proponent submitted the same proposal for the 1991, 1992, 1993, 1994,
1995, 1996 and 1997 Annual Meetings and it was opposed by the owners of 83.1%,
81.1%, 78.2%, 79.7%, 72.8%, 77.7% and 75.5%, 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. This permits 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. Having Directors who owe their
positions to special groups of shareowners could interfere with the
effectiveness of the Board and could be contrary to the interests of the
Company and its shareowners as a whole.
The majority of state legislatures, including the State of Delaware, the
state in which Ameritech is incorporated, do not require cumulative voting.
The majority of companies listed on the New York Stock Exchange do not elect
Directors by cumulative voting. The Board of Directors believes that the
present method of electing Directors is appropriate to ensure that Directors
will represent all the shareowners and not a particular group.
Under the corporation law of the State of Delaware, the action recommended
in this proposal could be taken only if the Board of Directors recommended an
amendment to the Company's Certificate of Incorporation establishing
cumulative voting and directed that the amendment be submitted to a vote of
the Company's shareowners. The Company's Board of Directors has not
recommended, and does not recommend, such an amendment. Therefore, a vote in
favor of this proposal would be only an advisory recommendation to the Board
of Directors that it take steps to initiate such an amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THIS PROPOSAL.
8
<PAGE>
SHAREOWNER PROPOSAL REGARDING POST-MEETING REPORTS
John J. Gilbert and Margaret R. Gilbert, 29 East 64th Street, New York, New
York 10021-7043, owners individually of 128 shares and 274 shares,
respectively, of the Company's Common Stock and, together as trustees and
representatives of a family interest, owners of an aggregate of 4,778 shares,
Martin Glotzer, 7061 N. Kedzie, Chicago, Illinois 60645, owner of 16 shares,
and Edith Rudy and Edward Rudy, Box 7077, Yorkville Station, New York, New
York 10128-7077, owners of 1,020 shares, have advised us that they will cause
the following resolution to be introduced at the meeting and have requested
that the following statement of reasons be included in this proxy statement:
"RESOLVED: That the stockholders of Ameritech, assembled in annual
meeting in person and by proxy, hereby request that following the annual
meeting the management issue an improved post-meeting report which shall
include a brief resume of questions and answers of general interest, a
summary of the discussion, identification of participants, and the actual
vote in terms of shares for and against all resolutions."
"REASONS"
"Stockholders are entitled to accurate information as to what transpires
at the Annual Meeting, so they can act for their joint interest. If
stockholders cannot act together they cannot act effectively." (quote from
Judge John J. Biggs, Jr. United States Federal Court in Delaware in the
famous Transamerica case.)
"We believe that the post-meeting report at Ameritech could be improved."
"If you agree, please mark your proxy for this resolution; otherwise it
is automatically cast against it, unless you have marked to abstain."
THE BOARD OF DIRECTORS DOES NOT SUPPORT THIS PROPOSAL AND RECOMMENDS A VOTE
AGAINST IT FOR THE FOLLOWING REASONS:
We believe that Ameritech does an excellent job of communicating with its
shareowners through our annual report, other periodic reports, press releases,
filings with the Securities and Exchange Commission and meetings with
securities analysts.
We also believe that printing and mailing a separate report to shareowners
specifically devoted to the Annual Meeting proceedings, which are often of a
routine nature, is an unnecessary and inappropriate expense. We encourage news
coverage of our Annual Meeting and, if a particularly noteworthy event takes
place at the Annual Meeting, we will make sure our shareowners and the public
receive timely notice of it and we won't wait until a complete post-meeting
report can be printed. For those shareowners who are particularly interested
in the Annual Meeting proceedings, we make available upon request a full
transcript of the Annual Meeting for the nominal charge of $5 per copy to
cover preparation and mailing. We also make information on the Annual Meeting
available on the Internet. We believe this method of communicating regarding
the Annual Meeting serves the interests of all of our shareowners better than
mandating the expense of printing and mailing a post-meeting report to all
shareowners.
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 on those matters in accordance with their judgment as to the best
interests of the Company.
9
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is responsible for
overseeing the Company's executive compensation programs. The Committee
approves all pay plans and changes in those plans. 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 the Company began, we have designed and administered executive
compensation programs to link pay to Company performance and to make sure that
the interests of executives are the same as your interests as shareowners.
These goals are expressed in the following guiding principles of the Company's
compensation programs:
. A significant percent of pay will be determined by the Company's annual
and long term financial performance, including the creation of value for
shareowners.
. Compensation programs will be designed to encourage and balance short
term operational goals with long term strategic plans.
. Total compensation will be competitive with the telecommunications
industry and with other major U.S. companies to allow us to attract,
retain and motivate high caliber employees. A greater percentage of
compensation will be performance-based and variable (as opposed to fixed
compensation) than competitive practice might suggest.
. Compensation programs will be designed to encourage stock ownership by
executives.
There are three elements to the Company's compensation program: annual base
salary, annual cash bonus incentives and long term incentives. Each of these
elements is consistent with the goals of our compensation programs. Annual
incentives are directed toward specific financial measures, including earnings
growth and revenue growth, with each of the targets calling for improved
results year-over-year. Long term incentives focus on total return to
shareowners (stock price appreciation plus dividends).
An important consideration in the design of the Company's compensation
programs is the use of incentives to encourage stock ownership by management.
Under the Ameritech long term incentive plans we can make grants in the form
of performance-based restricted stock, restricted stock, performance units and
stock options. 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, we have established stock 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, 1997, 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 should be at about the
median in the group of companies we compare our compensation with and that
target annual cash compensation (salary plus target bonus) and long-term
incentives should be somewhat higher since payments from these plans are tied
to Company performance. The group of companies we use for comparison purposes
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
10
<PAGE>
multiple industries as opposed to the smaller peer group comprised of the
other four Regional Holding Companies and GTE Corporation 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 other communications companies.
Although competitive practices are viewed importantly, the Company and the
Compensation Committee believe that the most important considerations in
setting annual compensation are individual merit and the Company's financial
performance.
In 1997, annual cash compensation targets for executives were increased by
approximately 4.5% which, based on survey data, is consistent with other
companies with which we compare our compensation. Mr. Notebaert's base salary
increased 10.2% in 1997 over 1996 to bring his salary more in line with the
competitive market rate for a chief executive officer. His total salary and
bonus increased because of this salary increase and the Company's improved
performance compared to return on assets and revenue targets, which produced a
cash bonus for 1997 above the targeted level.
In 1997, special grants of stock options were made to the seven members of
the Company's Management Committee other than Mr. Notebaert. To further
strengthen the linkage between compensation and long term performance, these
stock options have a substantially longer than normal waiting period before
they can be exercised. These options become exercisable in equal installments
of one-third each on the fifth, sixth and seventh anniversaries of the date of
grant.
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
create 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 1997, for
example, about 81% of the Company's chief executive officer's total
compensation was dependent on incentive factors and thus was variable with
performance. Because of increases in revenues and return on assets in 1997,
the actual incentive bonus awards for 1997 were above the targeted amounts.
Performance targets established for the annual incentive awards are based on
internal financial goals. Awards granted under the Company's long term
incentive plans ("LTIP") are 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. This group
of companies is a part of the broad cross section of 65 major corporations
referred to above. Factors that are considered by the Compensation Committee
in determining the number of option shares granted annually to each executive
include individual merit, the competitive market for his or her position and
the potential value of an option share and the dividend equivalents
attributable to such shares using the expected grant price.
The Compensation Committee believes strongly in the continued focus of the
LTIP on total return to shareowners. Since 1994, the Compensation Committee
has approved annual grants under the LTIP that reinforce this focus by
providing participating executives grants of stock options with dividend
equivalents. 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 five years after the grant date or following the exercise
of the options, whichever is sooner, but only if the stock price at the time
of distribution exceeds the exercise price of the option.
The LTIP payout shown in the Summary Compensation Table for the year 1995
for Mr. Notebaert is from a prior long term incentive award of performance-
based restricted stock. The payout was based on Ameritech's
11
<PAGE>
five-year average percentile ranking on total return to shareowners as
compared to the total returns of approximately 100 companies the size and risk
characteristics of which most nearly compared with those of Ameritech. The
LTIP payouts shown in the Summary Compensation Table for 1996 and 1997 for Mr.
Notebaert are from a prior grant of restricted stock that was not performance
based.
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. To maximize the corporate tax deduction, the Management
Committee Short Term Incentive Plan and the Long-Term Stock Incentive Plan
were approved by shareowners in 1995 and 1997, respectively, and comply with
Section 162(m) of the Internal Revenue Code. Performance based awards made
pursuant to these Plans qualify for the tax deduction. Additionally, the
Company has a voluntary deferral plan which permits salary deferred under the
plan to be exempt from the limit on tax deductibility. Although the Committee
intends to maximize the corporate tax deduction, it believes that Ameritech
must attract and retain qualified executives to manage the Company and that,
in some instances, the loss of a tax deduction may be a necessary and
appropriate trade-off. The Committee believes it is appropriate to pay Mr.
Notebaert a base salary in excess of $1 million to maintain competitiveness
with the comparator group of companies described above. In 1997, Mr.
Notebaert's compensation slightly exceeded the threshold for deductibility
under Section 162(m) because of the base salary in excess of $1 million and
other non-cash services described under "Other Annual Compensation" in the
Summary Compensation Table that follows.
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 other 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
John B. McCoy, Chairman
Donald C. James A.
Clark Henderson
Sheldon B. John D. Ong
Lubar
12
<PAGE>
SHAREOWNER RETURN PERFORMANCE GRAPH
Set forth below is a graph comparing the cumulative total returns (assuming
an investment of $100 on December 31, 1992 and reinvestment of dividends) of
Ameritech, the average of the other four remaining Regional Holding Companies
("RHCs") formed along with Ameritech in the AT&T divestiture effective January
1, 1984 (Bell Atlantic Corporation, BellSouth Corporation, SBC Communications
Inc. and US West Communications Group) and GTE Corporation ("Peer Group
Index"), and the Standard & Poor's 500 Composite Stock Index ("S&P 500") from
December 31, 1992 through December 31, 1997. NYNEX Corporation and Pacific
Telesis Group, which were included in the Peer Group Index in last year's
shareowner Return Performance Graph, have been removed from the Peer Group
Index since they were acquired during the last fiscal year and have ceased to
be publicly traded. The two former RHCs have been replaced in this year's Peer
Group Index by GTE Corporation.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
LOGO
<TABLE>
<CAPTION>
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ameritech............. $100 $113 $125 $190 $203 $278
Peer Group Index...... $100 $116 $108 $168 $168 $232
S&P 500............... $100 $110 $111 $153 $189 $251
</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, 1997, Ameritech has provided its shareowners with a cumulative
total return of 1,463%. This performance compares to a 1,026% total return for
the Peer Group Index and a 819% return for the S&P 500 over the same fourteen-
year period.
13
<PAGE>
SUMMARY COMPENSATION TABLE
The table below shows the compensation for the last three years of the Chief
Executive Officer and four next highest paid executive officers of Ameritech
as of December 31, 1997 for services in all capacities to the Company and its
subsidiaries. Numbers of shares and market prices of Ameritech Common Stock
are adjusted for the two-for-one stock split effective December 31, 1997.
<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 1997 $1,047,000 $1,570,500 $24,755 $ 0 306,600 $404,960 $341,172
Chairman, President 1996 $ 950,000 $1,006,288 $47,413 $ 0 740,000 $384,660 $373,664
& CEO 1995 $ 880,000 $1,029,750 $58,319 $ 0 270,000 $348,898 $280,654
Oren G. Shaffer 1997 $ 500,000 $ 509,250 $ 4,262 $ 0 370,000 $ 0 $254,384
Executive VP & Chief 1996 $ 450,000 $ 340,633 $ 412 $ 0 80,000 $ 0 $261,702
Financial Officer 1995 $ 440,000 $ 391,305 $ 6,885 $ 0 88,600 $ 0 $282,917
W. Patrick Campbell 1997 $ 491,800 $ 450,000 $ 7,512 $ 0 217,000 $ 0 $331,462
Executive VP--Corp. 1996 $ 475,000 $ 323,350 $ 9,683 $ 0 70,000 $ 0 $342,178
Strategy & Bus. Dev. 1995 $ 475,000 $ 245,424 $18,028 $ 0 88,600 $ 0 $393,640
Barry K. Allen 1997 $ 417,900 $ 470,250 $ 1,531 $ 0 280,000 $ 0 $100,702
Executive VP--Reg. & 1996 $ 346,500 $ 289,789 $ 4,860 $ 0 71,200 $ 0 $101,144
Wholesale Operations 1995 $ 131,882 $ 117,278 $20,254 $ 0 0 $ 0 $286,683
Thomas E. Richards 1997 $ 300,000 $ 337,500 $ 2,975 $ 0 270,000 $ 0 $147,311
Executive VP--Comm. 1996 $ 225,600 $ 143,244 $ 6,730 $ 0 101,400 $ 0 $154,782
& Info. Products 1995 $ 45,606 $ 35,269 $10,332 $ 0 3,000 $ 0 $ 30,000
</TABLE>
- - --------
(1)Mr. Allen rejoined the Company in July 1995 after a two-year absence. Mr.
Richards joined the Company in October 1995.
(2) Awards under the Management Committee Short Term Incentive Plan 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, 1997, the persons named in the table above held the
following shares of restricted stock with the following values (based on the
closing market price of Ameritech Common Stock on December 31, 1997): Mr.
Notebaert, 13,332 shares, $536,613; Mr. Shaffer, no shares, $0; Mr. Campbell,
no shares, $0; Mr. Allen, no shares, $0; and Mr. Richards, no shares, $0.
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 1997
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. SHAFFER MR. CAMPBELL MR. ALLEN MR. RICHARDS
---- ------------- ----------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C>
Earnings on Deferred
Compensation $ 68,623 $ 20,727 $ 26,358 $ 11,228 $ 1,945
Company Contributions to
Defined
Contribution Savings
Plans $ 42,461 $ 19,819 $ 22,068 $ 17,563 $ 12,114
Split Dollar Insurance
Premium Value $230,088 $213,838 $283,036 $ 71,911 $133,252
-------- -------- -------- -------- --------
Total All Other
Compensation $341,172 $254,384 $331,462 $100,702 $147,311
======== ======== ======== ======== ========
</TABLE>
14
<PAGE>
LONG TERM INCENTIVE PLANS
The Company's shareowners approved Long Term Incentive Plans ("LTIP") in
1985, 1989 and 1997. 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 in 1994 and
the 1989 LTIP was replaced by the 1997 LTIP. No new grants may be made under
the 1985 and 1989 LTIPs, but grants made prior to such expiration and
replacement 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 to the
officers named in the Summary Compensation Table above in 1997.
OPTION GRANTS IN 1997
The following table shows all grants of stock options to the officers named
in the Summary Compensation Table above in 1997 and adjusted to reflect the
two-for-one stock split effective December 31, 1997. The exercise price of all
such options was the fair market value on the date of grant.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(2)
- - ------------------------------------------------------------------------- ------------------------------------
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 306,600 1.78% $29.47 1/15/07 $0 $ 5,682,379 $ 14,400,263
Oren G. Shaffer 110,000 0.64% $29.47 1/15/07 $0 $ 2,038,688 $ 5,166,435
260,000 1.51% $35.28 6/19/07 $0 $ 5,768,725 $ 14,619,081
W. Patrick Campbell 87,000 0.51% $29.47 1/15/07 $0 $ 1,612,417 $ 4,086,180
130,000 0.75% $35.28 6/19/07 $0 $ 2,884,362 $ 7,309,540
Barry K. Allen 80,000 0.46% $29.47 1/15/07 $0 $ 1,482,682 $ 3,757,407
200,000 1.16% $35.28 6/19/07 $0 $ 4,437,480 $ 11,245,447
Thomas E. Richards 70,000 0.41% $29.47 1/15/07 $0 $ 1,297,347 $ 3,287,731
200,000 1.16% $35.28 6/19/07 $0 $ 4,437,480 $ 11,245,447
All Shareowners n/a n/a n/a n/a $0 $20,803,976,712 $52,721,361,597
All Optionees 17,226,368 100.00% $30.15 (avg) 2007 $0 $ 326,632,144 $ 827,749,983
Optionees Gain
as % of All
Shareowners Gain n/a n/a n/a n/a n/a 1.57% 1.57%
</TABLE>
- - --------
(1) Under the terms of the options granted to Messrs. Notebaert, Shaffer,
Campbell, Allen and Richards with a January 15, 2007 expiration date,
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 after the earlier of exercise of the option
or five years from the date of grant, but only if the then current market
price exceeds the exercise price. Dividend equivalents credited in 1997 on
options held by the persons named in the Summary Compensation Table above
were: Mr. Notebaert, 32,028 shares; Mr. Shaffer, 9,078 shares; Mr.
Campbell, 9,972 shares; Mr. Allen, 4,699 shares; and Mr. Richards, 5,608
shares.
(2) 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
15
<PAGE>
named officers or all optionees is possible without appreciation in the
price of the Company's Common Stock, which will benefit all shareowners.
For example, in order for Mr. Notebaert to realize the potential values for
the option grant of 306,600 shares 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 $48.00 and $76.44, respectively, as of the expiration date of
his option.
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; however,
the options for 260,000, 130,000, 200,000 and 200,000 shares granted
respectively to Messrs. Shaffer, Campbell, Allen and Richards and shown in the
table above do not become exercisable until the fifth, sixth and seventh
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.
No stock appreciation rights ("SARs") were granted in 1997. 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 EXERCISES IN 1997 AND OPTION VALUES AT DECEMBER 31, 1997
The following table provides information as to options exercised in 1997 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 31, 1997
(adjusted to reflect the two-for-one stock split effective on that date).
<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 0 n/a 632,932 1,056,600 $12,565,536 $13,032,848
Oren G.
Shaffer 0 n/a 107,936 452,864 $ 1,900,140 $ 3,638,926
W. Pat-
rick
Campbell 0 n/a 171,002 293,198 $ 3,269,729 $ 2,671,760
Barry K.
Allen 0 n/a 23,734 327,466 $ 260,362 $ 2,377,102
Thomas E.
Richards 0 n/a 22,468 351,932 $ 253,534 $ 2,703,324
</TABLE>
- - --------
(1) Valued at $40.25 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, will receive the greater of the
benefit under the new formula or the old formula.
16
<PAGE>
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 YEARS OF SERVICE
AVERAGE --------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
------------ -------- -------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 600,000 $134,078 $178,770 $223,463 $268,155 $ 312,848 $ 357,540 $ 402,233
$ 800,000 $179,078 $238,770 $298,463 $358,155 $ 417,848 $ 477,540 $ 537,233
$1,000,000 $224,078 $298,770 $373,463 $448,155 $ 522,848 $ 597,540 $ 672,233
$1,200,000 $269,078 $358,770 $448,463 $538,155 $ 627,848 $ 717,540 $ 807,233
$1,400,000 $314,078 $418,770 $523,463 $628,155 $ 732,848 $ 837,540 $ 942,233
$1,600,000 $359,078 $478,770 $598,463 $718,155 $ 837,848 $ 957,540 $1,077,233
$1,800,000 $404,078 $538,770 $673,463 $808,155 $ 942,848 $1,077,540 $1,212,233
$2,000,000 $449,078 $598,770 $748,463 $898,155 $1,047,848 $1,197,540 $1,347,233
$2,200,000 $494,078 $658,770 $823,463 $988,155 $1,152,848 $1,317,540 $1,482,233
</TABLE>
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 (determined
using the current interest rate specified in the plan), under the formula that
became effective May 1, 1995.
<TABLE>
<CAPTION>
FINAL YEARS OF SERVICE
AVERAGE ----------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40 45
------------ -------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 600,000 $149,558 $182,189 $209,381 $231,135 $250,170 $266,485 $ 282,801
$ 800,000 $199,411 $242,919 $279,175 $308,180 $333,560 $355,314 $ 377,068
$1,000,000 $249,264 $303,648 $348,969 $385,225 $416,950 $444,142 $ 471,335
$1,200,000 $299,116 $364,378 $418,763 $462,271 $500,340 $532,971 $ 565,602
$1,400,000 $348,969 $425,108 $488,557 $539,316 $583,730 $621,799 $ 659,869
$1,600,000 $398,822 $485,837 $558,350 $616,361 $667,120 $710,628 $ 754,136
$1,800,000 $448,674 $546,567 $628,144 $693,406 $750,510 $799,456 $ 848,402
$2,000,000 $498,527 $607,297 $697,938 $770,451 $833,900 $888,285 $ 942,669
$2,200,000 $548,380 $668,026 $767,732 $847,496 $917,290 $977,113 $1,036,936
</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, 1997, Mr. Notebaert, Mr. Shaffer, Mr. Campbell, Mr. Allen
and Mr. Richards had 28, 3, 3, 2 and 2 years of service, respectively, for
purposes of the management pension plans. Prior to his two-year absence from
1993 to 1995, Mr. Allen had 19 years of service with the Company.
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.
17
<PAGE>
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. 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.
The Company entered into an employment agreement with Mr. Allen when he
rejoined the Company in July 1995. The agreement provides for a base salary of
$275,000 subject to adjustment in accordance with the Company's customary
practice. The agreement also provided for a special one-time bonus of $200,000
upon hire which is shown in the "All Other Compensation" column for 1995 in
the Summary Compensation Table above. Under the agreement, if Mr. Allen
voluntarily terminates his employment with the Company or if the Company
terminates Mr. Allen's employment for cause or unsatisfactory performance
prior to the fifth anniversary of the commencement of his employment, Mr.
Allen will repay this special bonus to the Company. The Company also agreed to
assume its obligations under the split-dollar and collateral assignment
agreements for life insurance policies originally purchased under the Key
Management Life Insurance and Estate Preservation Plans before he left the
Company in 1993. Additionally, the agreement provides a supplemental pension
arrangement for Mr. Allen if he retires at a time when he would have been
eligible for a service pension under the pension plan formula in effect prior
to May 1, 1995. Under this arrangement, Mr. Allen will receive a supplemental
non-qualified pension benefit equal to the difference between (A) the pension
benefit to which he would have been entitled at retirement, calculated using
the pre-May 1, 1995 formula and adjusted for amounts previously paid to Mr.
Allen under the Company's pension plans and (B) the amount actually payable to
Mr. Allen under the Company's pension plans upon retirement. If the Company
terminates Mr. Allen's employment without cause prior to the date when he
would have been eligible for a service pension under the pre-May 1, 1995
formula, the Company will pay Mr. Allen a severance benefit equal to the
difference between (A) the pension benefit he would have received had he
remained employed by the Company until his service pension eligible date
calculated using the pre-May 1, 1995 formula and adjusted for amounts
previously paid to Mr. Allen under the Company's pension plans and (B) the
amount actually payable to Mr. Allen under the Company's pension plans upon
termination of employment.
In 1997, the Company made special grants of stock options (shown in the
"Option Grants in 1997" table above) to Mr. Shaffer, Mr. Campbell, Mr. Allen,
Mr. Richards and three other members of the Company's Management Committee. In
connection with these stock option grants, Messrs. Shaffer, Campbell, Allen
and Richards, as well as the other three Management Committee members, agreed
that they would not compete with the Company or its subsidiaries, either
directly or as an employee of another firm, for a period of two years after
termination of their employment with the Company.
The Company has entered into agreements regarding change in control with
Messrs. Notebaert, Shaffer, Campbell, Allen and Richards 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 twelve
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 80% of such existing Directors, cease
18
<PAGE>
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, or a sale
of all or substantially all of the Company's assets to, any other company
(unless the voting stock outstanding immediately prior thereto continues to
represent more than 55% of the combined voting power of the Company or the
surviving entity thereafter or at least a majority 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, 1998, the aggregate amount
payable under these agreements if the employment of Messrs. Notebaert,
Shaffer, Campbell, Allen and Richards was terminated would be approximately
$33,372,000. 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 228 persons as of January 1, 1998, including Messrs. Notebaert,
Shaffer, Campbell, Allen and Richards 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.
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.
19
<PAGE>
SUBMISSION OF 1999 SHAREOWNER PROPOSALS
Proposals of shareowners intended to be presented at the annual meeting in
1999 must be received by the Secretary of Ameritech, 30 South Wacker Drive,
Chicago, Illinois 60606, not later than November 1, 1998 to be considered for
inclusion in the Company's 1999 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 D.F. King &
Co., Inc., 77 Water Street, New York, New York 10005, to assist in the
solicitation of proxies, primarily from brokers, banks and other nominees, for
an estimated fee of $17,500. 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 at the door of proof of ownership of Ameritech
shares.
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 OR, IF YOU WISH,
GIVE YOUR PROXY BY TELEPHONE OR THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON
THE PROXY CARD MAILED TO RECORD HOLDERS OF AMERITECH SHARES.
February 27, 1998 BY ORDER OF THE BOARD OF DIRECTORS,
LOGO
Bruce B. Howat, Secretary
20
<PAGE>
LOGO
LOGO
<PAGE>
PROXY
AMERITECH CORPORATION [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 15, 1998.
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 of The Art Institute of Chicago, Chicago,
Illinois, on April 15, 1998, 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 directions are not
given, the proxies will vote: for the election of the ten nominees listed on the
reverse side of this card; in accord with the Directors' recommendations on the
matters listed on the reverse side of this card; 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.
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.
To vote by telephone or Internet, please see the reverse side of this card. To
vote by mail, please sign and date this card on the reverse side and mail
promptly in the enclosed postage-paid envelope.
Comments:_______________________________________________________________________
________________________________________________________________________________
If you have written in the above space, please mark the "Comments" box on the
reverse side of this card.
Detach Proxy Card If You Are Voting by Mail and Return in Enclosed Envelope
- - --------------------------------------------------------------------------------
[LOGO]
Annual
Meeting of
Shareowners
April 15, 1998, 9:30 a.m.
Arthur Rubloff Auditorium
The Art Institute of Chicago
Columbus Drive and Monroe Street
Chicago, Illinois
Admission Ticket
for shareowner(s) and guests
[MAP OF EAST MONROE PARKING GARAGE APPEARS HERE]
Please Use Columbus Drive Entrance
The East Monroe Parking Garage, conveniently located on Columbus Drive at Monroe
Street, offers the most economical parking at $5.74 for 24 hours.
Additional parking, shown on the map below, is available on a first-come,
first-served basis.
[MAP OF ADDITIONAL PARKING APPEARS HERE]
1 = Art Institute of Chicago
Columbus Drive Entrance
2 = Citicorp Center
(Metra Union Pacific line)
3 = Chicago Union Station
(Metra Burlington Northern
Santa Fe, Milwaukee Road,
and Amtrak lines)
4 = Illinois Central Station
(Metra Electric line)
5 = LaSalle St. Station
(Metra Rock Island line)
- - -- Arrows indicate direction of one way streets
P = Parking
The following information for automobile travel covers access to the Chicago
area and the vicinity of the Art Institute:
North -- Take 41 South (Lake Shore Drive) to Monroe Street. Turn right on Monroe
and go one block to Columbus Drive.
Northwest -- Take I-90 or I-94 South to Monroe Street. Exit Monroe East and
proceed through downtown Chicago to Columbus Drive.
West -- Take I-290 East into downtown Chicago. Proceed to Columbus Drive and
turn left. Go north two blocks to Monroe.
Southwest -- Take I-55 Northeast to 41 North (Lake Shore Drive). Proceed to
Monroe Street East. Turn left on Monroe and go west one block to Columbus Drive.
South -- Take I-57 or I-90 North to I-94. Take I-94 North to Monroe Street East.
Proceed east into downtown Chicago to Columbus Drive.
<PAGE>
[X] Please mark your votes with an "X" using blue or black ink. 6688
This proxy, when properly executed, will be voted in the manner directed herein.
If directions are not given, this proxy will be voted FOR the election of
directors, FOR Proposal 2 and AGAINST Proposals 3 and 4.
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR
- - --------------------------------------------------------------------------------
1. Election of Directors 01 D. Clark 05 A. Martinez 08 A. Rand
02 M. Goodes 06 J. McCoy 09 L. Tyson
FOR WITHHELD 03 H. Gray 07 J. Ong 10 J. Unruh
[_] [_] 04 J. Henderson
FOR, except vote withheld from the following nominee(s):
________________________________________________________________________________
2. Appointment of Independent Public Accountants
FOR AGAINST ABSTAIN
[_] [_] [_]
- - --------------------------------------------------------------------------------
The Board of Directors recommends a vote AGAINST
- - --------------------------------------------------------------------------------
3. Shareowner Proposal on Cumulative Voting in Elections of Directors
FOR AGAINST ABSTAIN
[_] [_] [_]
4. Shareowner Proposal on Post-Meeting Reports on Annual Meetings
FOR AGAINST ABSTAIN
[_] [_] [_]
- - --------------------------------------------------------------------------------
Special Note
- - --------------------------------------------------------------------------------
Items on Other Side of Card
- - --------------------------------------------------------------------------------
Comments [_]
Vote Limitations [_]
- - --------------------------------------------------------------------------------
(For Multiple-Account Holders Only)
Discontinue Annual Report
Mailing for This Account [_]
Will Attend Annual Meeting [_]
- - --------------------------------------------------------------------------------
SIGNATURE(S) ___________________________________________ DATE ____________, 1998
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.
- - --------------------------------------------------------------------------------
[LOGO]
Ameritech Offers Phone or Internet Voting
24 hours a day, 7 days a week
On a touch-tone phone call toll-free 1-800-652-8683 (outside the US and
Canada call 201-324-0377) and you will hear these instructions:
- - -- Enter the last four digits of your social security number; and
- - -- Enter the control number from the box just below the perforation on the
proxy card.
- - -- You will then have two options:
OPTION 1: to vote as the Board of Directors recommends on all proposals; or
OPTION 2: to vote on each proposal separately.
- - -- Your vote will be repeated to you and you will be asked to confirm it.
Log onto the Internet and type: http://www.vote-by-net.com
- - -- Have your proxy card ready and follow the simple instructions.
Your electronic vote authorizes the named proxies to vote your shares to the
same extent as if you marked, signed, dated and returned the proxy card.
If you have voted by phone or Internet, do not return your proxy card.
THANK YOU FOR VOTING!
