SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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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 or
Section 240.14a-12
Southwestern Bell Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
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[ ] $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.
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(SBC LOGO) Notice of 1995
Annual Meeting
and Proxy Statement
Southwestern Bell Corporation
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
TO BE HELD ON APRIL 28, 1995
TO THE HOLDERS OF COMMON STOCK OF SOUTHWESTERN BELL CORPORATION:
The 1995 Annual Meeting of Shareowners of Southwestern Bell
Corporation ("SBC"), a Delaware Corporation, will be held at
9:00 a.m. on Friday, April 28, 1995, at the George R. Brown
Convention Center, 1001 Avenida de las Americas, Houston, Texas.
The purposes of the meeting are:
1.To elect five Directors to serve three-year terms;
2.To ratify the appointment of Ernst & Young LLP as independent
auditors of SBC for 1995;
3.To approve a management proposal to amend the Restated
Certificate of Incorporation to change the name of the company
to SBC Communications Inc.;
4.To act on shareowner proposals; and
5.To act upon such other matters as may properly come before the
meeting.
Holders of Common Stock of record at the close of business on
February 28, 1995, are entitled to vote at the meeting and any
adjournment of the meeting. A list of the shareowners of SBC as
of the close of business on February 28, 1995, will be available
for inspection during business hours from April 13 through
April 27, 1995, at 9051 Parkwest, Room 1200, Houston, Texas, and
will also be available at the Annual Meeting.
By Order of the Board of Directors
/s/ Judith M. Sahm
Judith M. Sahm
Secretary
March 14, 1995
IMPORTANT NOTICE
IF YOU DO NOT PLAN TO ATTEND THE ANNUAL MEETING TO VOTE YOUR
SHARES, PLEASE COMPLETE, DATE, SIGN AND PROMPTLY MAIL THE
ENCLOSED PROXY CARD IN THE RETURN ENVELOPE PROVIDED. NO POSTAGE
IS NECESSARY IF IT IS MAILED IN THE UNITED STATES. ANY PERSON
GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME, AND
SHAREOWNERS WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR
PROXIES AND VOTE IN PERSON.
PROXY STATEMENT
SOUTHWESTERN BELL CORPORATION
175 E. HOUSTON
SAN ANTONIO, TEXAS 78205
Annual Meeting of Shareowners
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Southwestern
Bell Corporation ("SBC") for use at the 1995 Annual Meeting of
Shareowners of SBC. The meeting will be held at 9:00 a.m. on
Friday, April 28, 1995, at the George R. Brown Convention Center,
1001 Avenida de las Americas, Houston, Texas. The purposes of
the meeting are set forth in the Notice of Annual Meeting of
Shareowners. This Proxy Statement and the accompanying proxy
card are being mailed beginning March 14, 1995, to shareowners of
record of SBC's common stock ("Common Stock") at the close of
business on February 28, 1995. Each share entitles the
registered holder to one vote. As of January 31, 1995, there
were 606,751,567 shares of Common Stock outstanding.
All shares represented by proxies will be voted by the
individuals designated on the enclosed proxy card, all of whom
are members of the Directors' Proxy Committee, in accordance with
the shareowners' directions. If the proxy card is signed and
returned without specific directions with respect to the matters
to be acted upon, the shares will be voted in accordance with the
recommendations of the Board of Directors described below, except
for shares held under certain employee benefit plans as described
in more detail later. Any shareowner giving a proxy may revoke
it at any time before such proxy is voted at the meeting by
giving written notice of revocation to SBC's Secretary, by
submitting a later-dated proxy, or by attending the meeting and
voting in person. The Chairman of the Board and Chief Executive
Officer will announce the closing of the polls during the Annual
Meeting. All proxies must be received prior to the closing of
the polls in order to be counted.
A shareowner may designate a person or persons to act as the
shareowner's proxy other than those persons designated on the
proxy card. The shareowner may do so by striking out the names
appearing on the enclosed proxy card, inserting the name or names
of another person or persons, and delivering the signed card to
such person or persons. The person(s) designated by the
shareowner must present the signed proxy card at the meeting in
order for the shares to be voted.
If a shareowner is a participant in SBC's Dividend Reinvestment
Plan, the proxy card will represent the number of full shares
held in the Dividend Reinvestment account together with any
shares registered in the participant's name. If a shareowner is
a participant in SBC's PAYSOP, Savings Plan ("SP"), or the
Savings and Security Plan ("SSP"), the proxy will also serve as a
voting instruction for the trustees of those plans for all
accounts registered in the same name. If proxy cards
representing shares in the SP and SSP are not received, those
shares will be voted in the same proportion as the shares for
which signed cards are returned by other participants. Shares in
the PAYSOP, however, cannot be voted unless the card is signed
and returned.
The cost of soliciting proxies will be borne by SBC. Officers,
agents and employees of SBC and its subsidiaries and other
solicitors retained by SBC may, by letter, by telephone or in
person, make additional requests for the return of proxies and
may receive proxies on behalf of SBC. Brokers, nominees,
fiduciaries and other custodians will be requested to forward
soliciting material to the beneficial owners of shares and will
be reimbursed for their expenses. SBC has retained Georgeson &
Company, Inc., to aid in the solicitation of proxies, at a fee of
$19,000, plus expenses.
Shareowners representing 40 percent of the Common Stock
outstanding and entitled to vote must be present or represented
by proxy in order to constitute a quorum to conduct business at
the meeting. A list of eligible voters will be available at the
Annual Meeting. The following proposals are expected to be
submitted to the shareowners at the 1995 Annual Meeting: the
election of Directors; the ratification of the appointment of
Ernst & Young LLP as independent auditors of SBC; the approval of
a management proposal to amend the Restated Certificate of
Incorporation to change the name of the company; and three
shareowner proposals.
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND RETURN YOUR PROXY
CARD PROMPTLY SO THAT A QUORUM MAY BE REPRESENTED AT THE MEETING.
HIGHLIGHTS OF THE MEETING WILL BE INCLUDED IN THE SECOND QUARTER
REPORT TO SHAREOWNERS, WHICH WILL BE MAILED IN AUGUST 1995.
If you plan to attend the meeting in person, please bring the
admission ticket (which is attached to the proxy voting card) to
the Annual Meeting. Shareowners who do not have admission
tickets will be admitted upon presentation of identification at
the door. Anyone requiring special services for the hearing
impaired or physically disabled should contact the Corporate
Manager-Financial Communications at 210-351-2136 in advance of
the meeting to arrange for these services.
Board of Directors
The Board of Directors is responsible for the management and
direction of SBC and for establishing broad corporate policies.
Regular meetings of the Board of Directors are held each month
except February, May, August and October. The Board held nine
meetings in 1994, including a special meeting held in February.
In addition, members of the Board of Directors are kept informed
of SBC's business by various reports and documents given to them
regularly, as well as by operating and financial reports
presented by the Chairman of the Board and other Officers at
meetings of the Board of Directors and committees of the Board.
Board Committees
From time to time, the Board establishes permanent standing
committees and temporary special committees to assist the Board
in carrying out its responsibilities. The Board has established
six standing committees of Directors, the principal
responsibilities of which are described below. The biographical
information included later in this Proxy Statement identifies
committee memberships held by each Director.
THE AUDIT COMMITTEE met three times in 1994. It consists of
seven non-employee Directors. The Audit Committee recommends to
the Board the appointment of a firm to serve as independent
auditors, subject to ratification by the shareowners at the
Annual Meeting. The independent auditing firm examines the
accounting records of SBC and its subsidiaries for the coming
year. The Audit Committee periodically reviews the adequacy and
effectiveness of SBC's internal system of accounting controls and
financial reporting procedures with representatives of the
independent auditors and with the corporate internal auditors.
The Audit Committee also examines the results of the annual audit
of the financial statements and the recommendations of the
independent auditors pertaining to accounting practices, policies
and procedures followed by SBC.
THE CORPORATE DEVELOPMENT COMMITTEE met four times in 1994. It
consists of five non-employee Directors and one employee
Director. The purpose of the Corporate Development Committee is
to examine proposed acquisitions and similar new ventures and to
advise management with regard to the expansion or disposition of
SBC's businesses through mergers, acquisitions, sales and similar
transactions.
THE CORPORATE PUBLIC POLICY AND ENVIRONMENTAL AFFAIRS COMMITTEE
met three times in 1994. It consists of six non-employee
Directors. The Corporate Public Policy and Environmental Affairs
Committee examines corporate policy and provides guidance and
perspective to SBC management on major public issues, including
corporate governance, legislative and environmental matters and
SBC's compliance program.
THE EXECUTIVE COMMITTEE did not meet in 1994. It consists of
four non-employee Directors and one employee Director. The
Executive Committee's primary function is to assist the Board of
Directors by acting upon matters when the Board is not in
session. The Committee has the full power and authority of the
Board to the extent permitted by law, including the power and
authority to declare a dividend or to authorize the issuance of
Common Stock.
THE FINANCE/PENSION COMMITTEE met six times in 1994. It consists
of five non-employee Directors and one employee Director. This
Committee is responsible for recommending investment policy,
making recommendations to the Board of Directors as to methods of
financing the operations of SBC and its subsidiaries and
overseeing the investments of SBC's employee benefit plans.
THE HUMAN RESOURCES COMMITTEE met seven times in 1994. It
consists of four non-employee Directors. The Human Resources
Committee oversees the management of human resources activities
of SBC, including compensation for senior management and the
design of employee pension and savings plans. The Committee
reviews and makes recommendations to the Board with respect to
compensation of Directors. The Committee also advises the Board
with respect to the nomination of members to the Board of
Directors to be elected at the Annual Meeting or to be appointed
by the Board to fill vacancies that may occur during the period
between Annual Meetings.
In recommending Board candidates, this Committee seeks
individuals of proven judgment and competence who are outstanding
in their chosen fields, and it considers factors such as
anticipated participation in Board activities, education,
geographic location and special talents or personal attributes.
Shareowners who wish to suggest qualified candidates should write
to the Secretary, Southwestern Bell Corporation, 175 E. Houston
Street, Room 1140, San Antonio, Texas 78205, stating in detail
the qualifications of such persons for consideration by the
Committee.
Members of the Board of Directors
Under SBC's Bylaws, the Board of Directors has the authority to
determine the size of the Board, not to exceed 21 Directors, and
to fill vacancies. The Board of Directors of SBC presently
consists of 15 members, one of whom is an SBC executive officer.
SBC's Bylaws provide for a classified Board of Directors under
which there are three classes of Directors, all of which are as
equal in number as possible. The class to which each Director
has been assigned is designated as Group A, Group B or Group C.
The term of office of Group B Directors will expire at the 1995
Annual Meeting, Group C at the 1996 Annual Meeting, and Group A
at the 1997 Annual Meeting. The SBC Board intends to nominate at
the 1995 Annual Meeting the five persons listed as nominees for
Group B, all of whom are incumbent Directors, for election to
three-year terms of office expiring at the 1998 Annual Meeting.
Mr. Robert G. Pope retired as a Director and as an officer of
SBC, effective March 31, 1994. SBC's Bylaws provide that the
classes of Directors shall be as equal in number as possible;
however, the retirement of Mr. Pope created a vacancy in Group B
and an imbalance between the classes. In order to make the
classes equal in size, the Board, at its June 24, 1994, meeting,
elected Mr. Jack S. Blanton to the vacancy created by Mr. Pope's
retirement, and Mr. Blanton simultaneously withdrew as a Group A
Director, resulting in each class having five Directors.
Immediately thereafter, the Board voted to reduce its size to 15
members. There are no vacancies on the Board.
Biographical information about the Directors is provided on pages
6 - 8. Except as otherwise noted, Directors who are shown as
officers or partners of other corporations, institutions or firms
have held the positions indicated, or have been officers of the
organizations indicated, for more than the last five years.
Directors' ownership of Common Stock is shown on the table on
page 10.
(Black and white photographs of each individual Director are placed
to the left of the biographical information in the printed document.)
DIRECTORS TO BE ELECTED AT THE 1995 ANNUAL MEETING
(GROUP B)
JACK S. BLANTON, age 67, is Chairman, Houston Endowment, Inc.,
and has served in this capacity since December 1990, and is
President and Chief Executive Officer of Eddy Refining Company,
Houston, Texas. Mr. Blanton was Chairman of the Board and Chief
Executive Officer of Scurlock Oil Company, a wholly owned
subsidiary of Ashland Oil, Inc., from 1983 to 1988. Mr. Blanton
has been a Director of SBC since October 1983. He served as a
Director of Southwestern Bell Telephone Company from 1977 to
1983. Mr. Blanton is a Director of Ashland Oil, Inc.; Baker
Hughes Incorporated; Burlington Northern Inc.; and Pogo Producing
Company. He is the Chairman of the Human Resources Committee and
a member of the Executive Committee.
AUGUST A. BUSCH III, age 57, is Chairman of the Board and
President of Anheuser-Busch Companies, Inc., St. Louis, Missouri.
Mr. Busch has been a Director of SBC since October 1983. He
served as a Director of Southwestern Bell Telephone Company from
1980 to 1983. Mr. Busch is a Director of Anheuser-Busch
Companies, Inc.; Emerson Electric Co.; and General American Life
Insurance Company; and an Advisory Member of the Boards of
Directors of Grupo Modelo, S.A. de C.V., and Diblo, S.A. de C.V.
He is a member of the Corporate Development Committee, the
Executive Committee and the Human Resources Committee.
TOM C. FROST, age 67, is Chairman of the Board and Chief
Executive Officer of Cullen/Frost Bankers, Inc., San Antonio,
Texas. Mr. Frost has been a Director of SBC since October 1983.
He served as a Director of Southwestern Bell Telephone Company
from 1974 to 1983. Mr. Frost is a Director of Cullen/Frost
Bankers, Inc. He is the Chairman of the Finance/Pension
Committee and a member of the Corporate Development Committee and
the Executive Committee.
JESS T. HAY, age 64, is Chairman of The Texas Foundation for
Higher Education, Dallas, Texas, and has served in this capacity
since February 1987. Mr. Hay was Chairman and Chief Executive
Officer of Lomas Financial Corporation from 1969 until his
retirement in December 1994. Mr. Hay has been a Director of SBC
since April 1986. He is a Director of The Dial Corp; Exxon
Corporation; Lomas Financial Corporation; Lomas Mortgage USA,
Inc.; and Trinity Industries, Inc. He is a member of the Audit
Committee and the Human Resources Committee.
BOBBY R. INMAN, age 63, Admiral, United States Navy, Retired.
Admiral Inman was Chairman and Chief Executive Officer of
Westmark Systems, Inc., Austin, Texas, from January 1987 through
December 1989. Admiral Inman served as Vice Admiral, United
States Navy, and Director, National Security Agency, from 1977 to
1981, and as Admiral, United States Navy, and Deputy Director,
Central Intelligence Agency, from 1981 to 1982. He has been a
Director of SBC since March 1985. Admiral Inman is a Director of
Fluor Corporation; Science Applications International
Corporation; Temple-Inland Inc.; and Xerox Corporation. He is a
member of the Finance/Pension Committee and the Human Resources
Committee.
DIRECTORS SERVING UNTIL THE 1996 ANNUAL MEETING
(GROUP C)
JAMES E. BARNES, age 61, is Chairman of the Board and Chief
Executive Officer, MAPCO Inc., Tulsa, Oklahoma, and has served in
this capacity since January 1992. Mr. Barnes was Chairman of the
Board, Chief Executive Officer and President of MAPCO Inc. from
May 1986 through December 1991. Mr. Barnes has been a Director
of SBC since November 1990. Mr. Barnes is a Director of BOK
Financial Corp.; Kansas City Southern Industries, Inc.; and MAPCO
Inc. He is a member of the Audit Committee and the Corporate
Development Committee.
SYBIL C. MOBLEY, age 69, is Dean of The School of Business and
Industry at Florida A&M University, Tallahassee, Florida. Dr.
Mobley has been a Director of SBC since May 1989. She is a
Director of Anheuser-Busch Companies, Inc.; Champion
International Corporation; Dean Witter, Discover & Co.; Hershey
Foods Corporation; and Sears, Roebuck & Co. She is a member of
the Audit Committee and the Corporate Public Policy and
Environmental Affairs Committee.
HASKELL M. MONROE, JR., age 63, is Professor of History at The
University of Missouri-Columbia, Columbia, Missouri, and has
served in this capacity since July 1987. Dr. Monroe was also
Chancellor at the University of Missouri-Columbia, Columbia,
Missouri, from July 1987 through December 1991. He has been a
Director of SBC since October 1983. Dr. Monroe served as a
Director of Southwestern Bell Telephone Company from 1982 to
1983. He is the Chairman of the Corporate Public Policy and
Environmental Affairs Committee and a member of the
Finance/Pension Committee.
PATRICIA P. UPTON, age 56, is President and Chief Executive
Officer of Aromatique, Inc., Heber Springs, Arkansas. Mrs. Upton
has been a Director of SBC since June 1993. She is a member of
the Audit Committee and the Corporate Public Policy and
Environmental Affairs Committee.
EDWARD E. WHITACRE, JR., age 53, is Chairman of the Board and
Chief Executive Officer of SBC and has served in this capacity
since January 1990. Mr. Whitacre has been a Director of SBC
since October 1986. He is a Director of Anheuser-Busch
Companies, Inc.; Burlington Northern Inc.; Emerson Electric Co.;
and May Department Stores Company. He is the Chairman of the
Executive Committee and a member of the Corporate Development
Committee and the Finance/Pension Committee.
DIRECTORS SERVING UNTIL THE 1997 ANNUAL MEETING
(GROUP A)
CLARENCE C. BARKSDALE, age 62, is Vice Chairman, Board of
Trustees, Washington University, St. Louis, Missouri, and has
served in this capacity since July 1989. Mr. Barksdale was
Chairman of the Board and Chief Executive Officer of Centerre
Bancorporation from 1978 to 1988 and Chairman of the Board of
Centerre Bank N.A. from February 1985 through December 1988.
Mr. Barksdale was Vice Chairman of Boatmen's Bancshares, Inc.,
from January through June 1989. He has been a Director of SBC
since October 1983. Mr. Barksdale served as a Director of
Southwestern Bell Telephone Company from 1982 to 1983. He is a
member of the Audit Committee and the Corporate Public Policy and
Environmental Affairs Committee.
RUBEN R. CARDENAS, age 64, is an attorney whose Professional
Limited Liability Company is a Partner in the law firm of
Cardenas, Whitis & Stephen, L.L.P., McAllen, Texas. Mr. Cardenas
has been a Director of SBC since October 1983. He served as a
Director of Southwestern Bell Telephone Company from 1975 to
1983. Mr. Cardenas is a Director of Cullen/Frost Bankers, Inc.
He is the Chairman of the Audit Committee and a member of the
Corporate Public Policy and Environmental Affairs Committee.
MARTIN K. EBY, JR., age 60, is Chairman of the Board and Chief
Executive Officer and President of The Eby Corporation, Wichita,
Kansas. Mr. Eby has been a Director of SBC since June 1992. He
is a Director of Intrust Financial Corporation and Intrust Bank,
N.A. He is a member of the Audit Committee and the Corporate
Development Committee.
CHARLES F. KNIGHT, age 59, is Chairman and Chief Executive
Officer of Emerson Electric Co., St. Louis, Missouri. Mr. Knight
has been a Director of SBC since October 1983. He served as a
Director of Southwestern Bell Telephone Company from 1974 to
1983. Mr. Knight is a Director of Anheuser-Busch Companies,
Inc.; The British Petroleum Company p.l.c., London, England;
Emerson Electric Co.; and International Business Machines
Corporation. He is the Chairman of the Corporate Development
Committee and a member of the Executive Committee and the
Finance/Pension Committee.
CARLOS SLIM HELU, age 55, is Chairman of the Board of Grupo
Carso, S.A. de C.V., Mexico, and since January 1991 has been
Chairman of the Board of Telefonos de Mexico, S.A. de C.V.,
Mexico. Ing. Slim has been a Director of SBC since
September 1993. He is a Director of Telefonos de Mexico, S.A. de
C.V. He is a member of the Corporate Public Policy and
Environmental Affairs Committee and the Finance/Pension
Committee.
Compensation of Directors
Directors who are also employees of SBC or its subsidiaries
receive no cash compensation for serving as Directors or as
members of Board committees. Directors who are not employees of
SBC or its subsidiaries receive a $35,000 annual retainer, $1,500
for each Board meeting attended and $1,200 for each committee
meeting attended. Excluding employee Directors, the chairman of
each committee receives an additional annual retainer of $5,000.
Directors may elect to defer the receipt of all or part of these
fees and retainers and earn a variable rate of interest, adjusted
quarterly, equal to the average rate paid on commercial paper
issued by SBC and its subsidiaries.
Non-employee Directors may receive pension payments for life
following their retirement from the Board. A non-employee
Director must have served on the Board for five years prior to
retirement to be eligible to receive payment. Eligible
non-employee Directors will receive, in quarterly installments,
annual amounts equal to 10 percent of the annual retainer
(exclusive of Board and committee meeting fees) in effect at the
time of termination of Board service, multiplied by the number of
years of service, not to exceed 10 years. If a participant dies
prior to the expiration of 10 years from his or her date of
retirement, his or her beneficiary will be entitled to receive
the payments for the remainder of the 10-year period. If an
eligible non-employee Director dies while still serving on the
Board, a pre-retirement death benefit will be paid as though the
individual had retired on the date of death.
SBC provides each non-employee Director with travel accident
insurance while the Director is on SBC business, along with
$100,000 of group life insurance. The total premiums during 1994
for these policies were $750 for the travel accident insurance
and $7,020 for the group life insurance. Directors also received
certain telecommunications services and equipment from
subsidiaries of SBC or were reimbursed for such services and
equipment provided by other companies. The value of
telecommunications services and equipment received, or for which
reimbursement was provided, together with amounts necessary to
offset the Directors' federal tax liabilities, computed at
maximum marginal rates, including tax surcharges, resulting from
such services and benefits, averaged $8,640 per non-employee
Director in 1994. Employee Directors receive similar services
and equipment in connection with their service as officers of
SBC.
Each non-employee Director who joins the Board after August 1,
1994, will receive 1,000 shares of restricted stock of SBC upon
joining the Board, together with amounts necessary to offset the
Director's federal tax liabilities resulting from the grant,
computed at maximum marginal rates, including tax surcharges.
All shares of stock will be restricted from sale for a period of
five years from grant or until the recipient ceases being a
Director, whichever occurs first. Each incumbent non-employee
Director who held office on August 1, 1994, also received the
same benefit.
COMMON STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth the beneficial ownership of Common
Stock as of December 31, 1994, by each Director and each officer
named in the Compensation Charts on pages 26-31. As of that
date, the Directors and officers listed both individually and as
a group owned less than one percent of the outstanding Common
Stock.
Shares of Common Stock Total
Voting and Options Beneficial
Investment to Ownership
---- Power ---- Sole Purchase (including
Name of Voting Common options)
Beneficial Owner Sole Shared Power Stock
(1)
Edward E. 200,173 15,834 577 317,068 533,652
Whitacre, Jr.
James R. Adams 93,191 19,815 745 82,182 195,933
Clarence C. 3,000 0 0 0 3,000
Barksdale
James E. Barnes 1,000 2,000 0 0 3,000
Jack S. Blanton 16,000 35,000 0 0 51,000
(2)
August A. Busch 4,126 144 0 0 4,270
III
Royce S. Caldwell 15,928 8,122 194 50,444 74,688
Ruben R. Cardenas 8,264 0 0 0 8,264
William E. Dreyer 26,906 6,514 54 51,764 85,238
Martin K. Eby, 10,000 0 0 0 10,000
Jr.
Charles E. Foster 19,194 7,526 672 71,852 99,244
Tom C. Frost 5,026 88 0 0 5,114
Jess T. Hay 10,000 0 0 0 10,000
Bobby R. Inman 1,600 0 0 0 1,600
Charles F. Knight 7,000 0 0 0 7,000
Sybil C. Mobley 1,679 0 0 0 1,679
Haskell M. 1,009 4,338 0 0 5,347
Monroe, Jr.
Carlos Slim Helu 1,000 0 0 0 1,000
Patricia P. Upton 1,215 0 0 0 1,215
All executive
officers and
Directors as a
group (consisting 477,740 131,798 3,748 751,134 1,364,420
of 24 persons,
including those
named above)
Shares held by officers in the Savings Plan are included in the
table as of November 30, 1994. Additional shares may have been
accumulated under this plan since that date.
(1) Represents presently exercisable employee stock options and
those which will become exercisable within 60 days of the date of
this table.
(2) Of the reported shares, Mr. Blanton disclaims beneficial
ownership of 15,000 shares which are held by Mr. Blanton as
Trustee for the benefit of family members.
VOTING
Each share of Common Stock represented at the Annual Meeting is
entitled to one vote on each matter properly brought before the
meeting. Except as otherwise noted below, all matters submitted
at the Annual Meeting shall be determined by a majority of the
votes cast. Shares represented by proxies that are marked
"withhold authority" with respect to the election of one or more
nominees for election as Directors, proxies that are marked
"abstain" on other proposals, and proxies that are marked to deny
discretionary authority on other matters will not be counted in
determining whether a majority vote was obtained in such matters.
If no directions are given and the signed card is returned, the
members of the Director's Proxy Committee will vote the shares
for the election of all listed nominees and in accordance with
the Directors' recommendations on the other subjects listed on
the proxy card, and at their discretion on any other matter that
may properly come before the meeting. In instances where brokers
are prohibited from exercising discretionary authority for
beneficial owners who have not returned proxies to the brokers
(so-called "broker non-votes"), those shares will not be included
in the vote totals and, therefore, will have no effect on the
vote.
As described more fully later in this Proxy Statement, the Board
of Directors will submit to the Shareowners at the 1995 Annual
Meeting a proposal to amend SBC's Restated Certificate of
Incorporation to change the company name to SBC Communications
Inc. Under Delaware law, in order for a proposal to amend the
Restated Certificate of Incorporation to pass, a majority of the
outstanding shares of Common Stock entitled to vote on the
proposal must approve the amendment. In this instance,
abstentions and broker non-votes will have the same effect as a
vote against the proposal.
ELECTION OF DIRECTORS
(Item 1 on Proxy Card)
The following Group B Directors have been nominated by the Board
of Directors on the recommendation of the Human Resources
Committee for election to three-year terms of office that will
expire at the 1998 Annual Meeting:
Jack S. Blanton Jess T. Hay
August A. Busch III Bobby R. Inman
Tom C. Frost
Shares represented by the accompanying form of proxy will be
voted for the election of the nominees, unless other instructions
are shown on the proxy card. If one or more of the nominees
should at the time of the meeting be unavailable or unable to
serve as a Director, the shares represented by the proxies will
be voted to elect the remaining nominees and any substitute
nominee or nominees designated by the Board. The Board knows of
no reason why any of the nominees would be unavailable or unable
to serve.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES
LISTED IN GROUP B ABOVE.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(Item 2 on Proxy Card)
Subject to shareowner ratification, the Board of Directors, upon
recommendation of the Audit Committee, has appointed the firm of
Ernst & Young LLP to serve as independent auditors of SBC for the
fiscal year ending December 31, 1995. This firm has audited the
accounts of SBC since 1983 and the accounts of Southwestern Bell
Telephone Company for many years. If shareowners do not ratify
this appointment, the Board will consider other independent
auditors. One or more members of Ernst & Young LLP are expected
to be present at the Annual Meeting and will be available to
respond to questions.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
DIRECTORS' PROPOSAL TO APPROVE THE CHANGE IN THE COMPANY'S NAME
(Item 3 on Proxy Card)
Your Board of Directors proposes and recommends to the
Shareowners for their approval an amendment to SBC's Restated
Certificate of Incorporation to change the name of the
corporation by amending Article One to read: "The name of the
corporation is SBC Communications Inc."
Southwestern Bell Corporation has been a prominent name in
communications since its divestiture in 1984 from the American
Telephone and Telegraph Company (now AT&T Corp.). This name was
an appropriate choice for your company at that time since almost
all of its revenues were derived from its telephone subsidiary,
Southwestern Bell Telephone Company. However, because of the
diversification of your company beyond its geographical and local
telephone exchange origins, your Board believes it is time to
adopt a new name for the parent company and to acknowledge its
place as an international provider of a wide variety of
communications goods and services.
Your Board does not intend to change the name of your company's
telephone subsidiary, Southwestern Bell Telephone Company, which
provides local exchange, network access and intraLATA toll
services within the five-state region of Arkansas, Kansas,
Missouri, Oklahoma and Texas. This name, in use since 1917, is a
valuable asset, widely recognized and associated with
reliability, quality, strength and responsive customer service.
However, the original rationale for using the Southwestern Bell
name as part of the parent company's name no longer holds. The
parent company has aggressively expanded beyond the provision of
local telephone service, with the result that its non-telephone
company businesses now provide approximately 35 percent of the
parent company's net income, and that figure is expected to
continue to grow. Your company's wireless communications
subsidiary now operates in Chicago, Washington, D.C., Boston,
Baltimore, upper New York state (including Rochester, Syracuse,
Buffalo and Albany), Dallas/Fort Worth, and St. Louis, as well as
in numerous other communities. Other subsidiaries have interests
in telecommunications, cable television, publishing or other
communications operations in Mexico, England, France, Australia
and Israel. Another subsidiary provides telephone equipment
across the United States and in several foreign countries. Your
company has expanded far beyond its southwestern origins.
To recognize the proud history of the company and yet acknowledge
the company's move beyond its geographical and business origins,
your Board recommends the adoption of SBC Communications Inc. as
the company's new name. The new name already enjoys some
recognition in the marketplace. SBC has been our stock exchange
ticker symbol since 1984 and has been used in a variety of
applications. For example, several of our subsidiaries,
including our international subsidiary, SBC International, Inc.,
use SBC in their name. In addition, since October 1994, your
company has been doing business under the proposed new name.
The company has also adopted a new logo incorporating the
initials SBC, which appears on the cover of this proxy statement.
The new logo replaces the old Bell symbol, which will continue to
be used by our telephone company and certain other subsidiaries.
Your Board believes the new name and logo reflect the fact that
our company has grown from a regional telephone service provider
to a multi-faceted global communications business.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
PROPOSAL TO AMEND ARTICLE ONE OF SBC'S RESTATED CERTIFICATE OF
INCORPORATION TO READ: "THE NAME OF THE CORPORATION IS SBC
COMMUNICATIONS INC."
SHAREOWNER PROPOSAL A
(Item 4 on Proxy Card)
Bertram H. Behrens of 17300 Bismark Road, White Lake, Wisconsin
54491, the owner of 60 shares of Common Stock, has indicated he
intends to propose the following resolution for action at the
Annual Meeting:
My stockholders proposal is a very simple - but important - one.
It is this:
That beginning with the election (by the stockholders) of any new
non-employee directors to the Board of Directors, no "retirement
pay" or "pension" be paid to them. This is not to apply to those
presently on the board or presently receiving "retirement pay" or
"pension," but it is to apply to any new non-employee director.
Shareowner's Supporting Statement
According to the 1994 proxy statement, "Directors who are not
employees of the Corporation or its subsidiaries receive a
$35,000 annual retainer." A non-employee director must be on the
Board for five years before being eligible for "retirement pay"
or "pension," but then upon leaving the firm he receives for life
10% of the $35,000 for each year on the Board! For being on the
Board for five years he receives 50% of $35,000; for six years he
receives 60% of $35,000, etc. Boy! Does he ever have it made!
Most of us work a lifetime for that kind of "retirement pay" or
"pension"!
And usually a director is not only a director on one board; he's
a director on several boards. For example, in the 1994
Southwestern Bell Corporation election of directors the six
non-employee directors were all on the boards of other firms in
addition to Southwestern Bell. One of them was on four other
boards. Think of the kind of money some of the former directors
are making just with retirement pay! We stockholders must put
our foot down and put a stop to this ridiculous retirement pay.
The Board of Directors met eight times in 1993. In my opinion
all they do anyway is to rubber-stamp what the full-time
employees ask them to. We stockholders must protect our own
interests and vote "yes" to this proposal
YOUR DIRECTORS' POSITION
Your Board of Directors believes that the best interests of your
company are served by having talented and experienced individuals
serving as outside Directors. To attract and retain these highly
sought-after individuals, SBC must provide a competitive total
compensation package. Retirement benefits are a common element
of Director compensation at large corporations. A 1993 survey by
a nationally recognized compensation and benefits consulting firm
found that over 70 percent of the Fortune 150 industrial
companies provide retirement plans to their outside Directors.
In addition, each of the other major telecommunications carriers,
including Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific
Telesis, U S West, AT&T Corp., GTE and MCI, offer similar
retirement packages.
SBC believes that including retirement benefits in the total
package of compensation for Directors is appropriate. The
retirement plan provides each Director who has served at least
five years a pension equal to 10 percent of their annual retainer
for each year of service, not to exceed their retainer at
retirement, which is presently $35,000. This is a modest benefit
in light of the responsibility, commitment and challenge of the
position. Each Director brings to the company proven experience
and judgment that is so critical to guide SBC in an ever more
increasingly complex business environment. The company makes
retirement plans available to substantially all of its employees,
and it is appropriate to make retirement benefits available to
the Directors as well.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THIS SHAREOWNER PROPOSAL.
SHAREOWNER PROPOSAL B
(Item 5 on Proxy Card)
Theodore F. Vick of 5245 E. Enrose St., Mesa, Arizona 85205, the
holder of 252 shares of Common Stock, has indicated he intends to
propose the following resolution for action at the Annual
Meeting:
Be It Resolved:
That, in the future, we recommend the Board of Directors should:
1) Limit total compensation paid annually to any one employee
to a maximum of one million dollars; and
2) Limit stock options to a number whose potential realizable
gain, considering an annual 10 percent appreciation over ten
years, not exceed one million dollars; and
3) Base pensions solely on annual base salary, excluding any
other compensation; and
4) Take all legal steps available to bring existing agreements
and contracts within the scope of this proposal
Shareowner's Supporting Statement
I, as a shareholder, in approving previous incentive and pension
proposals neither contemplated nor envisioned annual multimillion
dollar bonuses; stock option awards having potential gain of
multimillion dollars; annual pensions totaling more than a million
dollars would be the outcome.
HOW EMPLOYEES HAVE FARED
Employees have been reduced by 13,500.
The nation's poor and homeless are growing in number and the middle
class is shrinking, but corporate executive compensation is
reaching new highs.
Historically the number of employees on the payroll has been a
measure of the corporation's success and future growth. Today they
herald its reduction as a measure of management's accomplishments
and results in greater compensation.
HOW SHAREHOLDERS HAVE FARED
Book Value/Share increased $.97 cents from 1984 to 1993, 8.28% in
ten years; an average of less than 1% a year.
Debt Ratio increased 8.5% from 1984 to 1993; $524,000,000 or
$.87/share.
Dividend grew $.58, from $.93 to $1.51; however, in the last three
years the annual increase has fallen to average of 3% from 6.8% in
the prior six years, a reduction in growth of 44%.
Operating Income vs. Operating Revenue:
Decreased 4.7% from 1984 to 1993; $492,000,000; $.82/share this
has taken place though:
1) Network access lines increased 24% since 1984
2) Access minutes use increased 64% since 1985
3) Cellular customers increased 2 hundred fold
4) Long distance messages increased 46%
5) Employees have decreased (18.7%)
Assuming average wage of $25,317/employee, a potential
operating revenue increase of $341,779,500; $.57/share.
HOW EXECUTIVES HAVE FARED
CEO 1993 compensation (Business Week) was 149 times average factory
workers' earnings ($25,317).
Southwestern Bell Compensation Packages Include:
1) Base salary
2) Annual cash bonus
3) Stock options
4) Long term incentive plans
5) Other annual compensation
6) All other compensation
7) Pension plans
8) Senior management supplemental retirement income plan
9) Control severance agreements.
HOW TOP 5 EXECUTIVES HAVE FARED
Potential
% Realizable Value
Compensation Inc. Projected of Stock
1993 Over Annual Options/SARs
1991 Pension Granted in 1993 at
Benefits SEC Assumed
Appreciation of
10%
Whitacre $ 4,436,687 93 $ 1,651,400 $ 18,660,679
Pope 2,415,733 54 731,700 6,509,655
Adams 1,965,792 46 530,200 3,623,050
Dreyer 1,213,397 87 351,400 2,990,728
Foster 1,149,705 76 390,100 3,771,834
CONCLUSION
The number of incentive plans is too many and too lenient in their
interpretation when measuring meeting of goals. Overly generous
compensation awards result.
It is time for us to voice our opinion on compensation limits used
for senior management. Seeking guide lines would be a prudent
board policy since the guide lines would reflect the views of the
real owners, the shareholders.
YOUR DIRECTORS' POSITION
Your Board of Directors strongly disagrees with the proponent's
view of your company and of how our shareowners have fared. SBC
has delivered excellent results for its shareowners, producing a
total return of 741 percent (stock price appreciation plus
reinvested dividends) since its divestiture from AT&T Corp. in
1984 -- the best of any of the regional Bell companies and
significantly better than the 405 percent total return for the
Standard & Poor's 500 Index during the same period. Total return
is one of the best means by which a shareowner can measure his or
her success, yet it is conspicuously absent from the proponent's
analysis.
The proponent also ignores other financial results that typically
play key roles in evaluating the company's performance,
including, for example, the company's dramatic increases in
earnings. Through its earnings strategies, your company has
registered double-digit percentage earnings increases in each of
the past three years, 14.9 percent in 1994 alone, a record
unmatched by any other former Bell company. Your company has
achieved this performance by anticipating and responding to
changes in a difficult operating environment, which in recent
years has included technological advances, regulatory changes and
an expansion of competition and markets. Your company has met
these challenges by controlling costs, focusing on improved
service and diversifying into high-growth areas such as wireless
services and international communications.
While avoiding any reference to these significant results, the
proponent relies on misleading data that bears little relevance
to the proposal. An examination of book values or debt ratios,
taken out of the context of the overall financial results, has
little value. Moreover, the proponent's discussion of book
values and debt ratios ignores the impact of changes in the
accounting standards relating to postretirement benefits,
postemployment benefits and income taxes, which were mandated for
all U.S. corporations. These accounting changes affected the
financial results beginning in 1993, limiting the value of direct
comparisons between 1984 and 1993 financial results. For
example, without the change in the accounting rules, the book
value of the company for 1993 would have been $16.15 per share,
an increase of $4.44 per share or 37.9 percent over 1983 (not the
8.28 percent increase put forth by the proponent), and the debt
ratio would have decreased to 41.38 percent (not increased by 8.5
percent as indicated by the proponent).
The proponent also asserts that the dividend increases in the
last three years have "fallen to average of 3% from 6.8% in the
prior six years." The proponent fails to recognize that a
reduction in the rate of dividend growth allows the company to
invest more funds in its business, including diversification and
expansion efforts -- growth that we believe will increase our
earnings and our long term returns to our shareowners.
Similarly, as we have expanded into new operating areas and faced
new competition and tough regulatory bodies, our operating
margins have narrowed; however, as shown by our earnings and
stock growth, your company's responses to these challenges have
allowed it to continue to add significant value for our
shareowners.
Your Board of Directors believes that the company could not have
achieved this success without the highly talented group of
employees who serve the company. Your Board of Directors
believes it is in the best interests of the company and its
shareowners that the company be served by experienced and proven
officers and employees. To attract and retain these highly
sought-after individuals, the company provides a competitive
compensation package (described beginning on page 21) developed
in consultation with a nationally recognized compensation and
benefits consulting firm.
Moreover, in recent years your Board has placed significantly
more emphasis on incentive-based compensation. This is
compensation which is only paid if specific performance
objectives are achieved, rewarding our management and employees
only when our shareowners benefit. When the company's
performance objectives are not met, this compensation is reduced
or eliminated. Similarly, when shareowners reap rewards through
the exceptional performance of our employees, your Board believes
these employees should be appropriately rewarded.
Your Board believes it is crucial that it retain the flexibility
to develop compensation programs which are designed to encourage
the building of value for our shareowners. It is only in this
way that your company may attract and retain those persons who
are most likely to develop and execute the strategies necessary
to enhance the investment each of us has in SBC.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THIS SHAREOWNER PROPOSAL.
SHAREOWNER PROPOSAL C
(Item 6 on Proxy Card)
Rabbi Benno M. Wallach of 19803 White Dove Trail, P.O. Box 246,
Crosby, Texas 77532, the owner of 1,000 shares of Common Stock,
has indicated he intends to propose the following resolution for
action at the Annual Meeting:
WHEREAS it is the corporation's current practice to report
stockholders' votes on proposals submitted at the annual meeting
as either affirmative or negative, and
WHEREAS such reportage may present a distorted perspective of the
true desires of the stockholders, therefore be it hereby
RESOLVED, that it is the sense of the shareholders that their
interest will best be served if the outcome of the voting at the
corporation's annual meeting, and all future annual meetings,
will be reported in the following manner:
A. The number of votes cast affirmatively by voting stockholders
for a specific proposal, and the percentage of the total vote
this constitutes; and
B. The number of votes cast by voting stockholders against a
specific proposal, and the percentage of the total vote this
constitutes; and
C. The number of votes cast as abstentions on a specific
proposal by voting stockholders; and the percentage of the total
vote this constitutes; and
D. The number of votes cast by management, either affirmatively
or negatively, on behalf of stockholders who did not avail
themselves of the right to vote, and the percentage of the total
vote this constitutes,
AND BE IT FURTHER RESOLVED that to effectuate such reporting the
shareowners request the appropriate corporate decision makers to
institute above outlined procedures beginning with the reporting
of the voting results of the 1995 annual meeting.
Shareowner's Supporting Statement
Under the current system of voting it is entirely possible that
management can impose its will on a proposal even though the
majority of the voting stockholders are opposed to it. While it
may be necessary to retain the current voting system in order to
carry on the orderly administration of the corporation's work,
the proposed system of reportage will indicate whether and in
what fashion management is actually carrying out the desires of
the stockholders. This method of reporting may also persuade
stockholders who usually do not vote, fearing that their votes
are unimportant, to avail themselves of the franchise in the
future.
If you agree, please mark your proxy FOR this proposal.
YOUR DIRECTORS' POSITION
Your Board of Directors believes this proposal would require an
unjustified expense of your company.
Under present practices, the company publicly reports shares
voted for and against all matters acted upon at the meeting, as
well as abstentions. This shareowner proposal would require the
company to also break down and separately count the different
methods used by shareowners to indicate their votes.
Specifically, the proxy card allows shareowners to instruct the
Proxy Committee as to how their shares are to be voted by
checking individual boxes for, against, or abstain with respect
to each proposal, or the shareowners may vote by signing the card
without checking the boxes. If the proxy card is signed without
boxes being checked, the proxy card expressly provides that the
shares will be voted in accordance with the recommendations of
your Board, also described on the proxy card. This proposal
would require the company to count and report the number of
shares voted by shareowners who check the boxes separately from
shareowners who voted solely by signature on the proxy cards.
The proposal would require the expenditure of over $100,000 in
additional tabulation and programming expenses to be able to
separately identify the methods by which shares were voted. Your
Board believes this would be an inappropriate use of the
company's assets. This method of voting is universally used and
accepted by publicly held companies and brokerage houses in the
United States. It serves no purpose to examine the personal
methods by which each of our one million shareowners provide
their voting directions.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THIS SHAREOWNER PROPOSAL.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Human Resources Committee, composed entirely of independent,
outside Directors, is responsible for establishing and
administering SBC's policies involving the compensation of
officers. No employee of SBC serves on the Committee. During
the 1994 fiscal year the members of the Committee were (and are
currently): Jack S. Blanton (Chairman), August A. Busch III,
Jess T. Hay and Admiral Bobby R. Inman. Mr. Busch is Chairman of
the Board and President of Anheuser-Busch Companies, Inc., where
Mr. Whitacre also serves as a member of the Board of Directors.
EXECUTIVE COMPENSATION
Report of the Human Resources Committee on Executive Compensation
The Human Resources Committee of the Board of Directors has
furnished the following report with respect to executive
compensation for 1994:
The Human Resources Committee's responsibilities include
establishing policies governing the compensation of officers and
other key executives of SBC and its subsidiaries. The Committee
is composed of four non-employee Directors.
The Committee's principal objective in establishing compensation
policies is to develop and administer a comprehensive program
designed to attract and retain outstanding managers who are most
likely to enhance the profitability of SBC and create value for
our shareowners. The policies are designed to attract and retain
high-quality executives, to encourage them to make career
commitments to SBC and to accomplish SBC's short and long term
objectives. To achieve these results, the Committee, in
consultation with a nationally recognized compensation and
benefits consulting firm, has developed a compensation program
that combines annual base salaries with annual and long term
incentives principally tied to the performance of SBC and SBC's
Common Stock. The principles used by the Committee in developing
the program include the following:
- In order to align the financial interests of SBC's
executives with those of SBC and its shareowners, a significant
portion of executive compensation should be "at risk" and tied to
the achievement of certain short and long term performance
objectives of SBC.
- Ownership of SBC's Common Stock by executives should be
encouraged through SBC's compensation program.
- Sustained superior performance by individual officers should
be recognized. Superior performance is defined as enhancing the
profitability of SBC and creating value for shareowners. This
may be demonstrated by actions such as increasing revenues,
reducing expenses, efficiently deploying capital, and improving
service and product quality, while always complying with the high
ethical standards established by SBC for the conduct of its
officers and employees.
The Committee is responsible for the establishment of
salaries and bonuses for officers of SBC, including Named
Officers employed by SBC. Similar compensation for officers of
subsidiaries, including any subsidiary officers who may be deemed
to exercise key policy-making activities on behalf of SBC, are
determined by the Boards of Directors of the subsidiaries using
recommendations and policies set out by the Committee. The
Committee is also responsible for determining long term awards
for the senior managers of SBC and its subsidiaries.
ANNUAL BASE SALARY The Committee has established a policy,
which it continued in 1994, that annual base salaries for
officers will be market-based; that is, the salaries will,
generally, be based upon a review of salaries for similar
positions in the 50th percentile of a group of companies with
similar revenues (the "Comparator Group"), developed in
consultation with the Committee's outside compensation
consultant. The majority of the companies selected for salary
comparison purposes are companies having telecommunications or
related operations for which compensation data is available.
Accordingly, the Comparator Group includes the companies in the
Stock Performance Graph on page 34, except for one company with
respect to which information was not available. Where an
officer's salary significantly differs from the market-based
salary, the Committee's objective is to move the officer's salary
gradually to the market-based salary for his or her position,
unless the officer has been assigned to a lower rated position
because of a particular need of the business. The Committee may,
at its discretion, choose to pay above the 50th percentile of the
market because of sustained superior performance.
INCENTIVES In order to create incentives for superior
efforts on behalf of SBC and to allow employees to share in the
success of SBC for which they are responsible, the Committee has
decided to make a significant portion of an officer's total
compensation dependent upon the annual and long term performance
of SBC.
Annual Incentives During 1994, officers and other key
executives, other than Mr. Whitacre, participated in an annual
incentive plan administered by the Committee. Under the plan,
each officer may receive an annual bonus contingent upon the
yearly performance of the SBC business to which the officer is
assigned.
A target award for each officer and the specific performance
objectives applicable to the officer, composed of an earnings
goal and a service goal, are established prior to the beginning
of the year. Earnings goals are given approximately three times
as much weight as service goals. Service goals are based upon
the quality of service provided by the company or its
subsidiaries as measured through surveys. The targets are set
with a view toward making an officer's combined target award and
base salary fall between the 50th and 75th percentile of the
Comparator Group, as determined by the Committee's outside
compensation consultant. Officers receive their full target
awards only if their respective earnings and service objectives
are met or exceeded. If less than the combined earnings and
service objectives are achieved, the target award will be reduced
in progressively increasing proportions. During 1994, the
combined earnings and service objectives established for each of
the Named Officers were exceeded.
As part of the annual incentive plan, the Committee has
discretion to award individual officers an additional amount
based upon the performance of SBC and its subsidiaries, an
overall evaluation of each officer's performance, and/or the
contribution of the officer to increasing shareowner value. For
the 1994 calendar year, the Committee made discretionary awards
to reflect the outstanding results achieved by SBC and its
subsidiaries and to recognize individual achievement.
Long Term Incentives SBC, since its inception, has provided
stock-based long term incentives to officers and other key
executives of SBC and certain subsidiaries through the Long Term
Incentive Plan. This element of the total executive compensation
program is intended to tie the executive's financial interests to
those of our shareowners through the establishment of long term
performance awards and the payment of awards in Common Stock or
in cash based upon the price of Common Stock. This plan rewards
the achievement of SBC's earnings goals as well as increases in
the price of SBC's Common Stock. The plan operates by granting
each officer, including all of the Named Officers, a specific
number of units, each equivalent in value to a share of Common
Stock, based on the total of all long term type awards granted to
approximately the 50th percentile of the Comparator Group, as
determined by the Committee's outside compensation consultant.
In addition, the Committee, at its discretion, may grant units
beyond the median to persons who have exhibited superior
performance during the prior year (these additional units are for
two-year performance periods). At the end of the performance
period, a percentage of the units, not to exceed 100 percent of
the units granted, is paid out (i.e., converted into Common Stock
and/or cash), equivalent to the average percentage achievement of
SBC's yearly earnings goals. No awards are paid out if SBC fails
to achieve 80 percent of its average earnings goals. Various
officers, including all of the Named Officers, received grants of
1994-1996 performance period units. In addition, based upon the
Committee's evaluation of their 1993 performances, including Mr.
Whitacre's, as excellent, the Committee made discretionary grants
of units for the 1994-1995 performance period. (The performance
objectives for the 1994-1996 and 1994-1995 units are described
below the table titled, "Long Term Incentive Plans - Awards in
Last Fiscal Year.")
In 1994, SBC's officers received the payout of the Long Term
Incentive Award for the 1991-1993 performance period. The
Committee determined that during this performance period SBC
exceeded the earnings goals set by the Committee. In accordance
with a predetermined formula, 100 percent of the target numbers
of units granted to the officers were distributed in the form of
cash and/or Common Stock, as elected by each officer. Each of
the Named Officers elected to receive his award half in Common
Stock and half in cash.
The Committee also recognizes the importance of stock options
as a means to further tie the executive's financial interests
directly to those of our shareowners. As a result, the Board
asked the shareowners to approve the 1992 Stock Option Plan,
which they did at the 1992 Annual Meeting. This program is
intended to link the executives' and shareowners' interests by
basing a portion of the executive's compensation on the
performance of SBC's Common Stock. To strengthen the linkage
between executives and shareowners, the Committee granted
additional options to the officers, including all of the Named
Officers, as well as mid-level executives, during the year. The
Committee decided to grant the options by level of
responsibility, rather than individualizing the grants. The
Committee granted each executive in a responsibility level the
same number of options as all other executives in the same level,
without regard to other compensation or the number of options or
shares then held by the executive.
The company also provides several alternatives for its managers
to invest a portion of their salaries and annual incentive awards
in SBC Common Stock, thereby giving these managers an even
greater stake in the performance of SBC. One such opportunity is
the Stock Savings Program, under which mid-level and upper-level
managers may receive stock options based upon the number of
shares purchased through the program with payroll deductions.
COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER The foregoing
criteria were applied by the Committee to determine the
compensation for the Chairman of the Board and Chief Executive
Officer, Mr. Whitacre, for the last fiscal year.
The Committee established Mr. Whitacre's annual base salary for
1994, targeted to the median base salary paid by companies in the
Comparator Group.
Mr. Whitacre's annual incentive bonus is determined under the
Key Executive Officer Short Term Incentive Plan, which was
approved by shareowners at the 1994 Annual Meeting. Under this
plan, Mr. Whitacre may receive an annual bonus contingent upon
the yearly performance of SBC. Annually, performance objectives,
which for 1994 were an earnings goal and a service goal, are
established for Mr. Whitacre in the same manner as the annual
incentive awards for other officers. Mr. Whitacre's target
award, which may not exceed two times his salary, is set with the
view of having the combined total of his base salary and 50
percent of his target award fall between the 50th and 75th
percentile of the Comparator Group. The Committee has determined
that if the company achieves its objectives, Mr. Whitacre will
receive 50 percent of his target award; if less than the stated
objectives are achieved, the award is reduced in progressively
increasing proportions. In addition, based on his performance
during the year, the Committee may adjust the award, but in no
event may it exceed the target amount.
During 1994, the earnings and service objectives established
for Mr. Whitacre were exceeded. In addition, the Committee
determined that Mr. Whitacre's performance during 1994 was of
exceptional benefit to the company. As a result, Mr. Whitacre
received 100 percent of his target amount.
With respect to the Committee's determination that Mr. Whitacre
performed exceptionally, it notes that during his tenure as
Chairman and Chief Executive Officer, Mr. Whitacre has led the
transformation of the company from a regional telephone company
to that of a diversified, international telecommunications
provider. By the end of 1994, approximately 35 percent of the
company's earnings came from operations outside of its telephone
subsidiary, the highest percentage of any former Bell holding
company. In addition, under Mr. Whitacre's leadership, the
company extended its record of consecutive annual earnings
increases to 11 years in 1994, a record unmatched by any other
former Bell holding company. During this same period, SBC's
total return (stock price appreciation plus reinvested dividends)
exceeded that of the Standard & Poor's 500 Index and every other
former Bell holding company.
The Committee believes that Mr. Whitacre's leadership was
crucial to SBC's success in 1994 in an industry characterized by
technological, regulatory and competitive changes. SBC's net
income (before extraordinary charges and the cumulative effects
of changes in accounting principles) increased 14.9 percent over
1993, SBC's third consecutive year of double-digit percentage
earnings growth; SBC's cellular subsidiary continued to acquire
significant cellular properties and achieved a market penetration
of 7.4 percent at year end, the best of any major U.S. cellular
company and more than double the industry average; and the number
of SBC's telephone subsidiary's access lines increased by 467,000
during 1994, the largest annual increase in the company's
history. Also during 1994, SBC increased its international
activity, acquiring an indirect 10 percent interest in one of
France's two cellular companies and being selected as a partner
in a major cellular venture in the Republic of Korea.
Mr. Whitacre, along with the other Named Officers, received
stock options and participated in the Long Term Incentive Plan.
These matters are discussed under "Long Term Incentives", above.
LIMIT ON DEDUCTIBILITY OF CERTAIN COMPENSATION In 1993
Congress adopted legislation that prohibited publicly held
companies, such as SBC, from deducting certain compensation paid
to a Named Officer that exceeds $1,000,000 during the tax year.
However, if a portion of the compensation is based upon the
attainment of performance goals set by the Committee pursuant to
plans approved by the shareowners, then the corresponding
deduction will not be limited by the legislation. In compliance
with this legislation, the Board of Directors adopted the Key
Executive Officer Short Term Incentive Plan (which was approved
by shareowners at the 1994 Annual Meeting), which will allow SBC
to continue to deduct compensation paid under the plan that might
otherwise be non-deductible. In addition, the Committee has
modified applicable plans to comply with the legislation and
retain the deductibility of executive compensation.
The Human Resources Committee:
Jack S. Blanton, Chairman Jess T. Hay
August A. Busch III Admiral Bobby R. Inman
<TABLE>
Summary Compensation Table
The Summary Compensation Table below contains information concerning annual and
long term compensation provided to the Chief Executive Officer and the other
four most highly compensated executive officers of SBC (the "Named Officers")
for services in all capacities to SBC, including service as an officer of
Southwestern Bell Telephone Company ("SWBT"), for the fiscal years ending
December 31, 1994, 1993 and 1992.
<CAPTION>
----- Long Term Compensation---
------- Annual Compensation------------------- -- Awards-------- -Payouts-
Number
Other Restric- of LTIP All Other
Name and Annual ted Securit- Payouts Compensa-
Principal Position Year Salary Bonus Compensation Stock ies (2) tion
Award(s) Underly- (3)
ing
Options
(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edward E. Whitacre, 1994 $ 762,000 $1,190,000 $ 260,705 $ 0 161,739 $ 1,948,146 $ 41,318
Jr.
Chairman of the 1993 $ 762,000 $1,124,000 $ 263,515 $ 0 290,197 $ 2,246,215 $ 40,957
Board and Chief
Executive Officer 1992 $ 642,000 $ 886,050 $ 208,132 $ 0 243,296 $ 1,363,562 $ 32,644
James R. Adams 1994 $ 428,000 $ 325,000 $ 144,629 $ 0 40,125 $ 842,897 $ 22,831
Group President 1993 $ 428,000 $ 399,000 $ 133,283 $ 0 56,691 $ 982,839 $ 22,670
1992 $ 416,000 $ 399,000 $ 127,708 $ 0 56,714 $ 737,383 $ 21,353
Royce S. Caldwell 1994 $ 325,000 $ 370,100 $ 88,281 $ 0 49,580 $ 366,544 $ 16,787
President and Chief 1993 $ 271,000 $ 234,000 $ 136,383 $ 0 45,455 $ 407,244 $ 14,423
Executive
Officer-SWBT 1992 $ 263,000 $ 187,500 $ 67,096 $ 0 45,130 $ 290,522 $ 13,583
William E. Dreyer 1994 $ 325,500 $ 303,000 $ 87,556 $ 0 31,568 $ 478,469 $ 15,624
Senior Executive 1993 $ 325,500 $ 283,500 $ 104,410 $ 0 46,504 $ 484,797 $ 15,190
Vice President-
External Affairs 1992 $ 301,000 $ 261,000 $ 58,926 $ 0 46,662 $ 349,343 $ 14,596
Charles E. Foster 1994 $ 306,000 $ 301,600 $ 67,658 $ 0 46,559 $ 406,837 $ 16,567
Group President 1993 $ 306,000 $ 258,400 $ 74,556 $ 0 58,757 $ 494,217 $ 16,532
1992 $ 266,000 $ 192,000 $ 59,425 $ 0 46,754 $ 356,242 $ 13,872
<FN>
(1) The number of options granted in 1992 has been
restated to reflect a two-for-one stock split in
May 1993, effected in the form of a stock
dividend. SBC has not issued any stock
appreciation rights to the Named Officers.
(2) The Long Term Incentive Plan ("LTIP") payout is
for the 1991-1993 performance period. All the
Named Officers elected to receive 50 percent of
their awards in SBC Common Stock and 50 percent
in cash. During this same time, the market
price of SBC Common Stock rose from $27.88 on
January 2, 1991, to $41.50 on December 31, 1993
(adjusted for the subsequent stock split),
resulting in an increase in the value of Common
Stock held by our shareowners of approximately
$8.2 billion.
(3) All Other Compensation for 1994 includes the
benefits imputed to the Named Officers with
respect to premiums on SBC-owned life insurance,
as determined in accordance with IRS guidelines.
For Messrs. Whitacre, Adams, Caldwell and Foster
these amounts were $4,742, $2,287, $1,835 and
$1,879, respectively. All other amounts
reported under this heading represent employer
matching contributions made to the Stock Savings
Plan.
</TABLE>
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
The purpose of the following table is to report exercises of stock options and stock
appreciation rights ("SARs") by the Named Officers during 1994 and the value of their
unexercised stock options and SARs as of December 31, 1994. None of the Named Officers
exercised stock options during 1994. SBC has not issued any SARs to the Named Officers
<CAPTION>
--Number of Securities-
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options at
Shares Year-End Fiscal Year-End (1)
Acquired Value ------------------- ---------------------------
Name on Exercise Realized Exercisa- Unexercis- Exercisable Unexercisable
able able
<S> <C> <C> <C> <C> <C> <C>
Edward E. 0 $0 310,824 391,738 $ 1,395,333 $ 570,203
Whitacre,
Jr.
James R. Adams 0 $0 74,152 84,124 $ 411,768 $ 109,078
Royce S. Caldwell 0 $0 47,060 93,579 $ 237,839 $ 109,078
William E. Dreyer 0 $0 50,559 75,567 $ 267,341 $ 109,078
Charles E. Foster 0 $0 62,094 90,558 $ 260,100 $ 109,078
<FN>
(1) Value of Unexercised Options based on the year end, December 30, 1994,
stock price of $40.375.
</TABLE>
<TABLE>
Option Grants in Last Fiscal Year
The table below contains estimated present value of the stock options as of
their issue date.
<CAPTION>
Number of
Securities Percent of
Underlying Total Exercise or
Options Options Base Price Expiration Grant Date
Name Granted Granted to ($/Share) Date Present Value
Employees in
Fiscal
Year(2)
<S> <C> <C> <C> <C> <C>
Edward E. 6,244 0.12% $ 40.375 02/01/04 $ 51,138
Whitacre, Jr.
150,000 (1) 2.91% $ 41.875 08/01/04 $ 1,485,000
5,495 0.11% $ 41.875 08/01/04 $ 56,708
James R. Adams 8,030 0.16% $ 40.375 02/01/04 $ 65,766
29,000 (1) 0.56% $ 41.875 08/01/04 $ 287,100
3,095 0.06% $ 41.875 08/01/04 $ 31,940
Royce S. Caldwell 3,384 0.07% $ 40.375 02/01/04 $ 27,715
44,000 (1) 0.85% $ 41.875 08/01/04 $ 435,600
2,196 0.04% $ 41.875 08/01/04 $ 22,663
William E. Dreyer 1,205 0.02% $ 40.375 02/01/04 $ 9,869
29,000 (1) 0.56% $ 41.875 08/01/04 $ 287,100
1,363 0.03% $ 41.875 08/01/04 $ 14,066
Charles E. Foster 9,758 0.19% $ 40.375 02/01/04 $ 79,918
29,000 (1) 0.56% $ 41.875 08/01/04 $ 287,100
7,801 0.15% $ 41.875 08/01/04 $ 80,506
<FN>
Reference to grants A, B and C in the following discussion
correspond to first, second and third grants of options,
respectively, listed opposite the name of each of the Named
Officers. The option values in the table represent the estimated
present value of the options as of their issue date. These
values were determined by a nationally recognized
compensation and benefits consulting firm in accordance with
the Black-Scholes option valuation model. The material
adjustments and assumptions incorporated in the Black-
Scholes model in estimating the value of the options include
the following:
Options were issued with an exercise price equal to the
fair market value of stock on the date of issuance.
The term of each option is 10 years (unless shortened
or forfeited due to termination of employment), but no
option may be exercised during the 12-month period
following the date of issuance.
The model assumed an interest rate of 5.97 percent in
calculating the value of the options in grant A and
7.24 percent for grants B and C. These interest rates
represent the interest rates on Treasury securities
with maturity dates corresponding to that of the option
terms. Volatility was calculated using daily stock
prices for the one-year period prior to the issuance
date, resulting in 23 percent volatility for grant A,
and 26 percent volatility for grants B and C. The
model reflected annual per share dividends at the date
of issuance of $1.51 per share for grant A, and $1.58
per share for grants B and C.
The present value of each option was reduced
approximately 4 percent for grants A and C, and
8 percent for grant B, to reflect the probability of
forfeiture due to termination prior to vesting, and
approximately 16 percent for grant A, 14 percent for
grant B, and 15 percent for grant C, to reflect the
probability of a shortened option term due to
termination of employment prior to the option
expiration date.
The ultimate value of the options will depend on the future
market price of SBC's stock, which cannot be forecast with
reasonable accuracy. The actual value, if any, an optionee
will realize upon exercise of an option will depend on the
excess of the market value of SBC's Common Stock over the
exercise price on the date the option is exercised.
(1)One-third of these options vest on each anniversary of
the grant date. As of December 31, 1994, none of these
options have vested.
(2) Based on a total of 5,155,660 options granted to
employees in 1994.
</TABLE>
<TABLE>
Long Term Incentive Plans--Awards in Last Fiscal Year
The table below reports long term units granted under the Long Term Incentive
Plan during 1994.
<CAPTION>
Number of Performance or Estimated Future Payouts
Shares, Units Other Period Under Non-Stock Price-Based Plans
or Until -------------------------------
Name Other Rights Maturation or Threshold Target Maximum
Payout
<S> <C> <C> <C> <C> <C>
Edward E. Whitacre, 20,677 1994-1996 16,542 20,677 20,677
Jr.
24,109 1994-1995 19,287 24,109 24,109
James R. Adams 9,195 1994-1996 7,356 9,195 9,195
3,477 1994-1995 2,782 3,477 3,477
Royce S. Caldwell 8,961 1994-1996 7,169 8,961 8,961
3,628 1994-1995 2,902 3,628 3,628
William E. Dreyer 6,950 1994-1996 5,560 6,950 6,950
3,602 1994-1995 2,882 3,602 3,602
Charles E. Foster 5,181 1994-1996 4,145 5,181 5,181
2,685 1994-1995 2,148 2,685 2,685
<FN>
This table reports units granted to the Named Officers during the last fiscal
year, applicable to the performance periods indicated. Each unit is equal in
value to one share of Common Stock. At the end of a performance period, a
percentage of the units are converted into cash and/or Common Stock, based upon
the achievement of performance levels. Each year's performance achievement is
expressed as a percentage and then averaged over the performance period. The
resulting percentage is applied to the target number of units to determine the
number of units which are actually converted. If SBC does not achieve at least
an 80 percent performance level average (which is equivalent to the threshold
award), the units become worthless and none are converted. The maximum number
of units that may be converted may not exceed 100 percent of the target number
of units.
For 1994, the performance level percentage was equal to the percentage of the
earnings objective achieved. For 1995 and subsequent years, the performance
objective will be based on a target Value Added. Value Added is defined as
earnings before interest and amortization of intangibles, minus a computed
charge for the capital invested in the company by holders of debt and equity.
For consistency in determining the average performance achievement, yearly Value
Added achievement levels are converted to percentages which are comparable to
earnings achievement percentages.
</TABLE>
PENSION PLANS
SBC has a noncontributory pension plan for management employees
known as the Pension Benefit Plan. Under the plan, retirement
for officers and other executives is mandatory at age 65.
Retirement before age 65 can be elected when specified age and
net credited service requirements are met. Annual pensions are
computed using the greater result of two separate formulas
(Formula A and Formula B). Subject to Internal Revenue Code
limitaitons on pay used to calculate pensions, under Formula A,
the pension is the sum of 1.6 percent of the average pay for the
five years ended December 31, 1993 (or any prior averaging period
if it would result in a higher benefit), multiplied by the number
of years of service through the end of the averaging period, plus
1.6 percent of pay subsequent to the averaging period. Under
Formula B, the pension is the sum of 1.6 percent of the average
pay for the five years ended December 31, 1990, multiplied by the
number of years of service prior to January 1, 1991 (with five
years of additional age and service), plus 1.6 percent of pay
from January 1, 1991, through December 30, 1991. Formula B was
adopted as part of an early retirement incentive in 1991.
Continued service or additional compensation or age after
December 30, 1991, will not result in any additional benefits
under Formula B. Pension amounts are not subject to reduction
for Social Security benefits or any other offset amounts. The
Internal Revenue Code places certain limitations on pensions that
may be paid under federal income tax qualified plans. Benefits
that are so limited are restored from the general funds of SBC.
Under the Pension Benefit Plan, the pay used to determine pension
amounts is computed without regard to compensation that has been
deferred under nonqualified deferral plans; however, the deferral
plans contain provisions that compensate the participants for any
loss of income from the pension plan. If they continue in their
current positions at their current levels of compensation and
retire at the mandatory retirement age of 65, the total estimated
annual pension amounts from the Pension Benefit Plan, together
with compensating payments under the nonqualified deferral plans,
and the net credited years service at retirement under the plan
for Messrs. Whitacre, Adams, Caldwell, Dreyer and Foster would be
$131,100 (44 years), $127,500 (42 years), $114,100 (41 years),
$50,700 (18 years) and $121,300 (40 years), respectively.
The Senior Management Supplemental Retirement Income Plan
establishes a target annual minimum retirement benefit for all
officers and certain senior managers (employees at the fifth
level of management and above) stated as a percentage of their
annual salaries and Short Term Incentive Awards averaged over a
specified averaging period described below ("Average Annual
Compensation"). The percentage is increased by .71 percent for
each year of actual service in excess of, or decreased by
1.43 percent for each year of actual service below, 30 years of
service for executive officers and other officers and 35 years of
service for other senior managers. Average Annual Compensation
is determined by averaging salaries and Short Term Incentive
Awards earned during the 36 consecutive month period out of the
last 120 months preceding retirement that generates the highest
average earnings. The target percentages of Average Annual
Compensation are: Chairman of the Board and Chief Executive
Officer, 75 percent; certain executive officers, 70 percent;
other executive officers and other officers, 60 percent; and
certain other senior managers, 50 percent. The Supplemental
Retirement Income Plan pays the difference, if any, between the
target amount and what would be payable under Formula A (or if
the individual is not eligible for an immediate pension under
Formula A, than the higher of Formula A or Formula B) of the Pension
Benefit Plan if the pension plan's payments were computed without
regard to deferrals. If they continue in their current positions
at their current levels of salary and short term incentive
targets and retire at the mandatory retirement age of 65, the
estimated annual amounts that will be paid in accordance with the
Senior Management Supplemental Retirement Income Plan for
Messrs. Whitacre, Adams, Caldwell, Dreyer and Foster would be
$1,683,600, $402,700, $414,200, $313,900 and $282,100,
respectively. To avert a loss of credit because of a break in
service, the company, in calculating Mr. Dreyer's benefits under
the plan, will recognize Mr. Dreyer's prior service with the
company and also recognize his prior service with a former
affiliate of the company (estimated to give him a total of 44
years of actual service at retirement).
CONTRACTS WITH MANAGEMENT
On January 27, 1989, the Board of Directors approved Change of
Control Severance Agreements (the "Agreements") with each of the
officers named in the summary compensation table as well as
certain other officers. The purpose of the Agreements is to
reinforce and encourage the officers to maintain objectivity and
a high level of attention to their duties without distraction
from the possibility of a change in control of SBC. These
Agreements provide that in the event of a change in control of
SBC, as that term is defined in the Agreements and summarized
below, each officer is entitled to certain benefits (the
"Severance Benefits") upon the subsequent termination or
constructive termination of his or her employment, unless such
termination is due to death, disability, or voluntary retirement;
or unless the termination is by SBC for cause (as defined in the
Agreements) or is by the officer for other than good reason (as
defined in the Agreements).
The Severance Benefits include the payment of the officer's full
base salary through the date of termination plus all other
amounts to which the officer is entitled under any compensation
plan of SBC in effect immediately prior to the change in control.
Also, each officer is entitled to a lump sum payment equal to
three (in the case of Messrs. Whitacre, Adams, Caldwell and
Foster) or two (in the case of Mr. Dreyer) times the sum of (a)
the officer's annual base salary in effect immediately prior to
termination, (b) the most recently paid amount under the Short
Term Incentive Plan and (c) the cash value of the Long Term
Incentive Plan target award applicable to each officer's salary
grade for the most current performance period. If any officer
should reach his normal retirement age prior to three years (for
Messrs. Whitacre, Adams, Caldwell and Foster) or two years (Mr.
Dreyer) following the change in control, the lump sum payment
would be reduced pro rata. Additionally, each officer will be
provided with life and health benefits, including supplemental
medical, vision and dental benefits, for three years from the
date of termination, if not otherwise entitled to the same.
In the event any payment or benefit received or to be received by
an officer in connection with a change in control or the
termination of his or her employment, whether pursuant to his or
her Agreement or otherwise (the "Total Payments"), would be
claimed to be an excess parachute payment as defined in the
Internal Revenue Code and thus subject to the 20 percent federal
excise tax, the amount of the benefits payable under his or her
Agreement will be reduced until the Total Payments are no longer
subject to such excise tax or until the payments under his or her
Agreement are zero, if such reduction results in the officer's
receipt of a greater net after-tax benefit than if such officer
had received the full severance benefits under the Agreement.
Under the Agreements, in general, change in control is deemed to
occur if (A) anyone (other than an employee benefit plan of SBC)
acquires more than 20 percent of SBC's stock, or (B) if within a
two year period, the individuals who were Board members at the
beginning of such period cease to constitute a majority of the
Board, or (C) either SBC's shareowners approve a merger or
consolidation which results in someone other than the shareowners
immediately prior thereto holding more than 20 percent of the
voting power of the surviving entity or the shareowners approve
the complete liquidation of SBC or the disposition of
substantially all of SBC's assets.
STOCK PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return*
SBC, S&P 500 and Peer Group
(Stock Performance Graph appears here.)
Data Points
in Dollars 1989 1990 1991 1992 1993 1994
SBC $100.00 $92.12 $111.64 $133.67 $155.54 $157.08
Standard &
Poor's 500 $100.00 $96.89 $126.28 $135.88 $149.52 $151.55
Index
Peer Group $100.00 $97.24 $99.77 $109.11 $128.49 $122.41
Assumes $100 invested on January 1, 1990, in SBC Common Stock,
Standard & Poor's 500 Index, and a Peer Group of other large U.S.
telecommunications companies (Ameritech Corporation, Bell
Atlantic Corporation, BellSouth Corporation, NYNEX, Pacific
Telesis Group and U S West, Inc.).
The index of Telecommunications Companies ("Peer Group") is
weighted according to the market capitalization of its component
companies at the beginning of each period. Total return equals
price appreciation plus reinvestment of dividends on a quarterly
basis.
SHAREOWNER PROPOSALS
Proposals of shareowners intended for presentation at the 1996
Annual Meeting must be received by SBC for inclusion in its Proxy
Statement and form of Proxy relating to that meeting by
November 14, 1995. Such proposals should be sent to the
Secretary of SBC at 175 E. Houston, Room 1140, San Antonio, Texas
78205.
Shareowners whose proposals are not included in the Proxy
Statement but who still intend to submit a proposal at the 1996
Annual Meeting, and shareowners who intend to submit nominations
for Directors at the meeting, are required to notify the
Secretary of SBC of their proposal or nominations and to provide
certain other information not less than 60 days, nor more than 90
days, prior to the meeting, in accordance with SBC's Bylaws.
Additional information may be obtained from the Secretary's
Office at the above address.
OTHER BUSINESS
The Board of Directors is not aware of any matters which will be
presented at the meeting for action on the part of shareowners
other than those described herein.
A COPY OF SBC'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE YEAR 1994 MAY BE OBTAINED WITHOUT
CHARGE UPON WRITTEN REQUEST TO THE ASSISTANT DIRECTOR-EXTERNAL
REPORTING, 175 E. HOUSTON, 9th FLOOR, SAN ANTONIO, TEXAS 78205.
By Order of the Board of Directors
/s/ Judith M. Sahm
Judith M. Sahm
Secretary
March 14, 1995
APPENDIX
(SBC LOGO) Southwestern Bell Corporation
Edward E. Whitacre, Jr.
Chairman and Chief Executive Officer
Dear Shareowner:
It is my pleasure to invite you to the 1995 Annual Meeting of
Shareowners of Southwestern Bell Corporation. The meeting will
be held at 9:00 a.m. on Friday, April 28, 1995, at the George R.
Brown Convention Center, 1001 Avenida de las Americas, Houston,
Texas. Admission to the meeting will begin at 8:00 a.m. A map
showing directions to the meeting site is shown on the reverse
side of this admission ticket. If you plan to attend, please
present this ticket for your admission to the meeting.
The enclosed Notice of Annual Meeting of Shareowners and the
Proxy Statement cover the formal business of the meeting, which
includes six proposals: the election of Directors, the
ratification of the appointment of the independent auditors, the
approval of the change in the company's name, and three
shareowner proposals. Also during the meeting, management will
address other corporate matters which may be of interest to you
as a shareowner.
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 be sure your shares are
represented, we urge you to complete and mail the attached proxy
card as soon as possible. If you attend the meeting and wish to
vote in person, the ballot that you submit at the meeting will
supersede your proxy.
Sincerely,
/s/ Edward E. Whitacre, Jr.
Edward E. Whitacre, Jr.
March 14, 1995
Detach Proxy Card Here
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(FACE OF PROXY CARD)
Your Directors recommend a vote "FOR" the Director proposals 1, 2, and 3.
1.Election of Directors
For _____ Withhold Authority _____ Exception_____
*Exception(s):__________________________________________
2. Ratification of Independent Auditors
For _____ Against _____ Abstain_____
3. Change of Company's Name
For _____ Against _____ Abstain_____
To have your shares voted for all Director nominees mark the "For" box on
item 1. To withhold authority to vote your shares for all nominees,
mark the "Withhold Authority" box. If you do not wish your shares
voted for a Authority" box. If you do not wish your shares voted
for a particular nominee, mark the "Exception" box and enter the
name(s) of the exception(s) in the space provided
Your Directors recommend a vote "AGAINST" the Shareowner proposals A, B and C
4. Shareowner Proposal A
For _____ Against _____ Abstain_____
5. Shareowner Proposal B
For _____ Against _____ Abstain_____
5. Shareowner Proposal C
For _____ Against _____ Abstain_____
If you have noted either an Address Change or Comments on the other side
of this card, please mark here. ____
Please sign exactly as name or names appear on this proxy If stock is
held jointly, each holder should sign. If signing as attorney,
trustee, executor, administrator, custodian guardian or corporate
officer, please give full title.
DATE_________________________________
SIGNATURE(S):_____________________________
Votes MUST be indicated (X) in Black or Blue ink
Please Sign, Date and Return the Proxy Card Promptly Using the Enclosed
Envelope
(Reverse of Letter to Shareowners)
Two maps detailing the location of the Annual Meeting will appear on the
reverse side of Mr. Whitacre's letter to shareowners:
Admission Ticket
Southwestern Bell Corporation
Annual Meeting of Shareowners
April 28, 1995
The George R. Brown Convention Center
1001 Avenida de las Americas
Houston, Texas 77010
(REVERSE OF PROXY CARD)
(Logo) Southwestern Bell Corporation PROXY/VOTING INSTRUCTION
CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING ON APRIL 28, 1995.
The undersigned hereby appoints Edward E. Whitacre, Jr., Ruben R.
Cardenas, Tom C. Frost and each of them, proxies, with full power
of substitution, to vote all common shares of the undersigned in
Southwestern Bell Corporation at the Annual Meeting of
Shareowners to be held on April 28, 1995, and at any adjournment
thereof, upon all subjects that may properly come before the
meeting including the matters described in the proxy statement
furnished herewith, subject to the directions indicated on the
reverse side of this card. IF SPECIFIC DIRECTIONS ARE NOT GIVEN
WITH RESPECT TO THE MATTERS TO BE ACTED UPON AND THE SIGNED CARD
IS RETURNED, THE PROXIES WILL VOTE FOR THE ELECTION OF ALL LISTED
NOMINEES AND IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS ON
THE OTHER SUBJECTS 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
exceptions in this paragraph, please mark the box for
"Exceptions" on the reverse side of this card in order to
expedite processing.)
The Board of Directors recommends a vote "FOR" each of the three
Director proposals and "AGAINST" each of the three Shareowner
proposals listed on the reverse side of this card.
The nominees for the Board of Directors are Jack S. Blanton,
August A. Bush III, Tom C. Frost, Jess T. Hay, and
Bobby R. Inman.
PLEASE SIGN ON THE REVERSE SIDE OF THIS CARD AND RETURN PROMPTLY
TO P.O. BOX 1138, NEWARK, N.J. 07101-9758. IF YOU DO NOT SIGN
AND RETURN A PROXY, OR ATTEND THE MEETING AND VOTE BY BALLOT,
YOUR SHARES CANNOT BE VOTED.
This proxy card also provides voting instructions for shares held
in the Dividend Reinvestment Plan and, if registrations are
identical, for shares held in the Savings Plan, Savings and
Security Plan, and PAYSOP.
SOUTHWESTERN BELL
CORPORATION
P.O. BOX 1138
Newark, N.J. 07101-9758
General comments:
(If you have written in the above space, please mark the box for
"Address Change/Comments" on the reverse side of this card so
that your comments can be directed to the appropriate group for
review.)
(Continued, and please sign on reverse side.)
APPENDIX
(Logo) Southwestern Bell Corporation
ANNUAL MEETING OF SHAREOWNERS TO BE HELD APRIL 28, 1995.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Edward E. Whitacre, Jr., Ruben R.
Cardenas, Tom C. Frost and each of them, proxies, with full power of
substitution, to vote all common shares of the undersigned in
Southwestern Bell Corporation at the Annual Meeting of Shareowners to
be held on April 28, 1995, and at any adjournment thereof, upon all
subjects that may properly come before the meeting including the
matters described in the proxy statement furnished herewith, subject
to the directions indicated on the reverse side of this card. IF
SPECIFIC VOTING DIRECTIONS ARE NOT GIVEN AND THE SIGNED CARD IS
RETURNED, THE PROXIES WILL VOTE FOR THE ELECTION OF ALL LISTED
NOMINEES AND IN ACCORDANCE WITH THE DIRECTORS' RECOMMENDATIONS ON THE
OTHER SUBJECTS LISTED ON THE REVERSE SIDE OF THIS CARD, AND AT THEIR
DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING.
The Board of Directors recommends a vote "FOR" each of the three
Director proposals and "AGAINST" each of the three Shareowner
proposals listed on the reverse side of this card.
The nominees for the Board of Directors are Jack S. Blanton,
August A. Bush III, Tom C. Frost, Jess T. Hay, and Bobby R. Inman.
(REVERSE SIDE OF CARD)
Directors recommend a vote "FOR" the Director proposals 1, 2, and 3.
1. Election of Nominees
For _____ Withhold _____ Exception_____
If you do not wish your shares voted for a particular nominee, mark the
"Exception" box and enter the name(s) of the exception(s) in the space
provided
__________________________________________
2. Ratification of Independent Auditors
For _____ Against _____ Abstain_____
3. Change of Company's Name
For _____ Against _____ Abstain_____
Directors recommend a vote "AGAINST" the Shareowner proposals A, B and C
4. Shareowner Proposal A
For _____ Against _____ Abstain_____
5. Shareowner Proposal B
For _____ Against _____ Abstain_____
5. Shareowner Proposal C
For _____ Against _____ Abstain_____
DATE_________________________________
SIGNATURE_____________________________
SIGNATURE_____________________________
IMPORTANT: Please sign your name(s) exactly as shown
hereon.
PLEASE SIGN, DATE AND RETURN YOUR PROXY TODAY
