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Re: SBC buying AT&T

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  • ozob99
    here s the (at&t)internal release: From: AT&T Public Relations Sent: Wednesday, February 02, 2005 2:34 PM Subject: AT&T TODAY Special Edition - Q&A about the
    Message 1 of 6 , Feb 2, 2005
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      here's the (at&t)internal release:

      From: AT&T Public Relations
      Sent: Wednesday, February 02, 2005 2:34 PM
      Subject: AT&T TODAY Special Edition - Q&A about the AT&T/SBC Merger

      AT&T TODAY

      WEDNESDAY, FEBRUARY 2, 2005 – 2:30 p.m. EST

      *** SPECIAL EDITION ***

      AT&T and SBC Merger Q&A

      Frequently-asked questions, new Web site

      offer information about the merger of AT&T and SBC

      As promised in yesterday's all-employee audiocast, below is an initial
      set of Q&A about the announced merger of AT&T and SBC. We've tried to
      address some of the most frequently-asked questions received from
      employees in this first round of communication. We will provide
      additional Q&A as soon as possible, and will use AT&T TODAY to alert
      you that they're available.

      We're also launching a Merger Update Web site at: http://infocenter.
      att.com/merger/ to provide additional details and to archive
      communication on the merger. As the merger progresses, we want to be
      sure employees are informed every step of the way. Be sure to write
      us at the AT&T Employee Communications mailbox at:
      rm-attemployeecomm@... if you have questions we haven't
      answered. We can't reply to individuals but will address questions
      representative of employee interest.

      Financial & Strategic

      Why is SBC acquiring AT&T?
      The merger of SBC and AT&T is an important next step in the evolution
      of the global communications industry. It brings together two
      companies with complementary strengths, product sets and customer
      bases to capitalize on the opportunities afforded by America's
      evolving telecommunications industry in the Internet age. This deal
      is about being best positioned to compete in the new IP world. AT&T
      operates the most advanced, highest volume, global IP network in the
      world. The potential synergies from this transaction are substantial
      and very achievable. It gives AT&T the greater financial strength and
      stability it needs for success over the long term. It gives SBC a
      significant domestic and global presence in the governmental and
      large-business customer segments, an area where SBC has less presence
      today. We believe that SBC and AT&T have complementary strengths,
      assets and customer bases that, together, will help the company offer
      more advanced services to customers, grow revenues, and reduce
      expenses to a much greater extent, and more quickly, than would have
      otherwise been possible.

      What are the terms of the deal?

      Under the terms of the agreement, stockholders of AT&T will receive
      total consideration valued at $19.71 per share at the time the
      agreement was signed. That includes 0.77942 shares of SBC common
      stock for each common share of AT&T. Based on SBC's closing stock
      price on Jan. 28, 2005, this exchange ratio equals $18.41 per share.
      In addition, at the time of closing, AT&T will pay its stockholders a
      special dividend of $1.30 per share. Altogether, this is a $16
      billion transaction.

      Where will the expected $2 billion in annual cost savings come from?
      Almost all of the synergies are expected to come from reduced costs
      over and above expected cost improvements from the companies' ongoing
      productivity initiatives.

      · Nearly half of the total net synergies are expected to come
      from network operations and IT, as facilities and operations are

      · Approximately 25 percent are expected to come from the
      combined business services organizations, as sales and support
      functions are combined.

      · About 10 to 15 percent of the synergies are expected to come
      from eliminating duplicate corporate functions.

      · Approximately 10 to 15 percent of expected synergies come
      from revenues, as the combined company migrates service offerings to
      new customer segments.


      Will employees still receive a 2004 bonus and salary merit increase?

      Yes, as announced previously, qualified employees will receive a bonus
      for 2004 payable in March 2005 and a salary increase effective April
      1, 2005.

      Will there be a 2005 bonus plan?

      Yes, we'll soon send you information on the 2005 bonus plan, which
      would be payable in 2006 for qualified employees if we meet our

      Will the pending merger affect benefits for employees covered under
      the collective bargaining agreements?

      No, the terms of the current bargaining agreements will remain in

      Will the pending merger impact AT&T's management benefits prior to the
      close, and how soon after the close might benefits be changed?

      AT&T's benefit plans and programs will continue "business as usual"
      through the closing in accordance with their terms. Any decisions
      regarding benefits after the close will be made by SBC. However,
      under the merger agreement, SBC has agreed that employees and former
      employees for a period of time after the merger will have compensation
      and benefit plans and programs that are no less favorable in the
      aggregate than they have at AT&T. This commitment will continue to
      the end of the plan year (generally Dec. 31) following the first
      anniversary of the closing. For example, if the merger closes in
      2006, the commitment will generally apply through Dec. 31, 2007.

      Will the Rule of 65 continue to apply in 2005 and 2006?

      The expanded eligibility for retirement-related benefits (Rule of 65)
      applies to employees covered under the AT&T Force Management Program
      with scheduled off-payroll dates before Jan. 1, 2006. (Generally, to
      be eligible under the Rule of 65, the employee's age and years of
      service must total at least 65 at the off-payroll date.) Should the
      merger close in 2006, any extension of the Rule of 65 requires AT&T to
      consult with SBC, which we would plan to do. As more information
      becomes available, it will be communicated to employees.

      Are AT&T's pensions/cash balance accounts secure? Will the plans
      change because of the merger announcement prior to the close? Will
      the AT&T pension plans continue after the merger?

      The AT&T pension plans will not change as a result of the merger
      agreement. Individuals currently receiving pensions can be confident
      that there will be no disruption in receiving their monthly pension
      annuities from AT&T in accordance with the terms of AT&T's pension
      plans. You should be aware that under law, companies cannot reduce or
      eliminate a person's accrued and vested pension benefit under
      tax-qualified plans, such as AT&T's. In addition, AT&T's pension
      plans remain well funded. Pension funding is highly regulated under
      various Federal laws and our plans are fully in compliance with those
      funding rules. Any decisions regarding the pension plans after the
      merger closes will be made by SBC, subject to the commitments
      discussed above.

      What happens to any unvested AT&T restricted stock unit award?

      At the time of a change in control as a result of the merger closing,
      any unvested AT&T restricted stock unit award, granted on or before
      Feb. 3, 2005, would become free of all restrictions, limitations or
      conditions and become fully vested.

      Will my years of AT&T service be recognized at SBC?

      AT&T service will be recognized if employees become covered under
      SBC's compensation and benefit plans for eligibility, vesting and
      benefit accrual, with the exception of benefit accrual for defined
      benefit pension and other retirement plans.

      Merger Approval Process

      What approvals will be required?

      AT&T's shareowners, the FCC, the U.S. Department of Justice, various
      state regulatory agencies, and a small number of foreign approvals.

      How long do you anticipate regulatory approval will take?

      Because it brings together two companies with complementary strengths,
      product sets and customer bases, will help advance competition in
      several key areas, and will help revitalize America's
      telecommunications industry, we believe regulators will review it
      expeditiously. That could come as early as the first half of 2006.
      We intend to cooperate fully with their reviews and provide the
      information they request as quickly as possible.


      Where will the new company headquarters be located?
      The combined company will be headquartered in San Antonio, but will
      continue to maintain a strong employee presence in all of its key

      Should I contact my counterpart in SBC to begin the merger transition?

      No, we will communicate guidelines soon. Please remember, we are
      still separate companies and must continue to operate separately until
      the closing.

      Where can I learn more about the merger?

      We'll be communicating more information in the weeks and months ahead,
      but you can learn more now about the merger by going to the Merger
      Update Web site at: http://infocenter.att.com/merger/

      Cautionary Language Concerning Forward-Looking Statements

      This document contains forward-looking statements within the meaning
      of the U.S. Private Securities Litigation Reform Act. Forward-looking
      statements are statements that are not historical facts and are
      generally identified by the words "expects", "anticipates",
      "believes", "intends", "estimates" and similar expressions. These
      statements include, but are not limited to, financial projections and
      estimates and their underlying assumptions, statements regarding the
      benefits of the business combination transaction involving AT&T and
      SBC, including future financial and operating results and the plans,
      objectives, expectations and intentions of the combined. Such
      statements are based upon the current beliefs and expectations of the
      managements of AT&T and SBC and are subject to significant risks and
      uncertainties (many of which are difficult to predict and are
      generally beyond the control of AT&T and SBC) that may cause actual
      results to differ materially from those set forth in, or implied by,
      the forward-looking statements.

      The following factors, among others, could cause actual results to
      differ materially from those set forth in the forward-looking
      statements: the ability to obtain governmental approvals of the
      transaction on the proposed terms and schedule; the failure of AT&T
      shareholders to approve the transaction; the risk that the businesses
      will not be integrated successfully; the risk that the cost savings
      and any other synergies from the transaction may not be fully realized
      or may take longer to realize than expected; disruption from the
      transaction making it more difficult to maintain relationships with
      customers, employees or suppliers; competition and its effect on
      pricing, spending, third-party relationships and revenues. Additional
      factors that may affect future results are contained in SBC's and
      AT&T's filings with the Securities and Exchange Commission ("SEC"),
      which are available at the SEC's Web site http://www.sec.gov. Other
      than as required by applicable law, AT&T disclaims any obligation to
      update and revise statements contained in this presentation based on
      new information or otherwise.

      Additional Information

      In connection with the proposed transaction, SBC intends to file a
      registration statement, including a proxy statement of AT&T Corp., and
      other materials with the Securities and Exchange Commission (the
      "SEC"). Investors and AT&T shareholders are urged to read the
      registration statement, including the proxy statement, and other
      materials when they are available because they contain important
      information. Investors will be able to obtain free copies of the
      registration statement and proxy statement, when they become
      available, as well as other filings containing information about SBC
      and AT&T Corp., without charge, at the SEC's Internet site (http:
      //www.sec.gov). These documents may also be obtained for free from
      SBC by directing a request to SBC Communications Inc., Stockholder
      Services, 175 E. Houston, San Antonio,Texas 78258. Free copies of AT&T
      Corp.'s filings may be obtained by directing a request to AT&T Corp.,
      Investor Relations, One AT&T Way, Bedminster, New Jersey 07921.

      SBC, AT&T Corp. and their respective directors and executive officers
      and other members of management and employees may be deemed to be
      participants in the solicitation of proxies from AT&T shareholders in
      respect of the proposed transaction. Information regarding SBC's
      directors and executive officers is available in SBC's proxy statement
      for its 2004 annual meeting of stockholders, dated March 11, 2004, and
      information regarding AT&T Corp.'s directors and executive officers is
      available in AT&T Corp.'s proxy statement for its 2004 annual meeting
      of shareholders, dated March 25, 2004. Additional information
      regarding the interests of such potential participants will be
      included in the registration and proxy statement and the other
      relevant documents filed with the SEC when they become available.
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