<PAGE>
<PAGE>
SCHEDULE 14C
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14c-5(d)(2))
[x] Definitive Information Statement
FRONTIER COMMUNICATIONS OF NEW YORK, INC.
(Name of Registrant as Specified in Charter)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11.
1) Title of each class of securities to which transaction applies:
- ----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- ----------------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
- ----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- ----------------------------------------------------------------
(5) Total fee paid:
- ----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
<PAGE>
(FRONTIER LOGO)
145 North Main Street
Monroe, New York 10950
FRONTIER COMMUNICATIONS OF NEW YORK, INC.
a Frontier Corporation company
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
- ----------------------------------------------------------------
To the Holders of Preferred and Common Stock of
FRONTIER COMMUNICATIONS OF NEW YORK, INC.:
The Annual Meeting of the shareowners of Frontier
Communications of New York, Inc. ("Company") will be held in
Conference Room C of Frontier Corporation, 180 South Clinton
Avenue, Rochester, New York 14646 on Thursday, May 9, 1996, at
ten o'clock in the morning, for the following purposes:
1. To elect 3 directors for the ensuing year; and
2. To transact such other business as may properly come
before the meeting or any adjournment or adjournments
thereto.
The Board of Directors has fixed the close of business on
Thursday, March 21, 1996 as the record date for the determination
of shareowners entitled to notice of and to vote at said meeting.
By Order of the Board of Directors,
Josephine S. Trubek
Secretary
March 27, 1996
- ----------------------------------------------------------------
<PAGE>
<PAGE>
INFORMATION STATEMENT
This Information Statement is being mailed on or about
March 27, 1996 to the holders of record of Frontier
Communications of New York, Inc.'s $4.50 par value Common Stock
and $100.00 par value Preferred Stock as of the close of business
on March 21, 1996, which is the record date for the determination
of shareowners entitled to notice of and to vote at the Annual
Meeting of Shareowners to be held on Thursday, May 9, 1996, at
ten o'clock in the morning in Conference Room C of Frontier
Corporation, 180 South Clinton Avenue, Rochester, New York 14646.
The principal executive offices of Frontier Communications
of New York, Inc. are located at 180 South Clinton Avenue,
Rochester, New York 14646 and the phone number is
(716) 777-1000.
As of March 21, 1996, the Company had outstanding 506,758
shares of Common Stock and 24,934 shares of Preferred Stock.
The table below sets forth information concerning the only
persons, entities or groups which the Company believes are the
beneficial owners of more than five percent of the outstanding
shares of either the Common or Preferred Stock.
Amount and Percent Percent of
Nature of of Class Aggregate
Name and Address Beneficial as of Voting
Title of Class of Beneficial Owner Ownership 3/21/96* Power
- -------------- ------------------- --------- -------- -----
Common Stock, Frontier Corporation 506,758 100.0% 95.3%
par value 180 South Clinton Avenue
$4.50 per share Rochester, NY 14646
Preferred Stock, Travelers Indemnity Co. 6,240 25.0% 1.2%
par value 1 Tower Square
$100 per share Hartford, CT 06115
- --------------
*With respect to the Common Stock set forth, Frontier
Corporation has sole voting, investment and dispositive power.
With respect to the Preferred Stock, the Company believes that
Travelers Indemnity Co. has sole voting, investment and
dispositive power.
<PAGE>
<PAGE>
No Forms 3, 4 or 5 were furnished to the Company during 1995.
Frontier Corporation had no transactions in the Company's Common
Stock during 1995.
At the meeting each shareowner is entitled to cast one vote
for each share of Preferred Stock and one vote for each share of
Common Stock held as of the record date. The Preferred Stock and
the Common Stock will be aggregated as a single class of stock
for purposes of all of the votes to be taken at the meeting.
Since three directors will be elected, each share will be able to
be voted for or against each director. Abstentions and broker
non-votes will not be counted as votes against the slate of
directors.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
ELECTION OF DIRECTORS
Three directors, constituting the entire Board, are to be
elected to hold office for a term of one year and until their
successors shall have been elected and shall have qualified.
Management of the Company and Frontier Corporation propose to
nominate Mr. Ronald L. Bittner, Mr. Louis L. Massaro and Mr.
Marvin C. Moses, all of whom are presently directors for the
ensuing year. Management has no reason to believe that the
persons named will be unable or decline to serve if elected.
The Company does not have a standing audit, nominating or
compensation committee or any committees performing similar
functions.
Directors receive no remuneration or compensation for service
as a director of the Company.
<PAGE>
<PAGE>
During the year ended December 31, 1995, the Board held three
meetings. All of the directors attended at least 75% or more of
the meetings which they were eligible to attend. At the Annual
Meeting held on May 17, 1995, 100% of the Common Stock was
present in person or by proxy. None of the Preferred Stock was
present. All of the Common Stock was voted for the election of
Mr. Ronald L. Bittner, Mr. Jeremiah T. Carr and Mr. Louis L.
Massaro to the Board. During 1995, Mr. Jeremiah T. Carr resigned
as Director of the Company and Mr. Marvin C. Moses was elected to
the Board of Directors of the Company.
Information Concerning Directors and Executive Officers
- -------------------------------------------------------
The table below sets forth information concerning the
principal occupations and business experience of the nominees,
current directors and officers of the Company. Frontier
Corporation ("FC") is the parent of the Company. Rochester
Telephone Corp. ("RTC"), Frontier Communications International
Inc. ("FCI"), and Frontier Network Systems Inc. ("FNS"), are
affiliates of the Company.
The officers and directors of the Company serve until the
next Annual Meeting of the Board of Directors following the
Annual Meeting of Shareowners and/or until their successors are
elected.
<PAGE>
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Occupations During Past 5 Director Officer
Years and Other Directorships* Age Since Since
- --------------------------------------------------------------------
Ronald L. Bittner.................... 54 August 1992 ---
Mr. Bittner is a director of the Company. prior thereto
He is Chairman, President and Chief July 1981 to
Executive Officer of FC since November 1995 January 1987
(and for the period April 1993 to August
1995); from August 1995 to November 1995
he was Chairman and Chief Executive Officer
of FC; from February 1992 to April 1993 he
was President and Chief Executive Officer
of FC; and from May 1988 to February 1992
he was Executive Vice President and President-
Telecommunications Group of FC. Mr. Bittner
is also a director of FC.*
Jeremiah T. Carr..................... 53 November November
Mr. Carr was a director of the Company 1993 to 1993 prior
from November 1993 to October 1995. October thereto
Additionally, he is President and Chief 1995 prior February
Executive Officer of the Company since thereto
November 1993. Mr. Carr is also a director February
and Chairman of RTC and Senior Corporate 1992 to
Vice President of FC since May 1995; from February
January 1995 to May 1995 he was President 1993
and Chief Executive Officer of RTC and
President Telephone Group; from November
1993 to December 1994 he was Corporate
Vice President and President-Telephone
Group of FC; from February 1993 to November
1993 he was Corporate Vice President and
President Telephone Operations of FC; from
February 1992 to February 1993 he was
President Rochester Telephone Operations;
from October 1991 to February 1992 he was
President of Rotelcom; from January 1990 to
October 1991 he was Vice President General
Manager-NYS, and President FNS.
<PAGE>
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Occupations During Past 5 Director Officer
Years and Other Directorships* Age Since Since
- --------------------------------------------------------------------
Louis L. Massaro .................... 49 February February
Mr. Massaro is a director of the Company. 1993 1993
Additionally, he was Secretary of the
Company from February 1993 to October 1995.
Mr. Massaro is also Executive Vice President
and Chief Administrative Officer of FC since
August 1995; from December 1994 to August
1995 he was Corporate Vice President of FC;
from February 1993 to December 1994 he was
Corporate Vice President and Treasurer of FC;
from September 1991 to February 1993 he was
Corporate Vice President and President-
Rochester Operations; and from May 1988 to
September 1991 he was Vice President-
Telecommunications Group.
Marvin C. Moses...................... 51 October 1995 ---
Mr. Moses is a director of the Company.
Mr. Moses is also a director*,Vice
Chairman and Chief Financial Officer of
FC since November 1995. From August 1995
to November 1995 he was Executive Vice
President and Chief Financial Officer of FC;
from October 1988 to August 1995 he was
Executive Vice President and Chief Financial
Officer of ALC Communications Corporation.
Martin Mucci......................... 35 --- February 1995
Mr. Mucci is Vice President and General
Manager of the Company since June 1995.
From February 1995 to June 1995 he was
Treasurer of the Company. Mr. Mucci is
also Treasurer of Rochester Telephone Corp.
since December 1994. From 1991 to June
1995 he was Vice President of Regulatory
and Finance for FC and prior thereto he
was Director of Regulatory and Finance for FC.
- ----------------------------------
* The directorship reported above is for a company whose
securities are publicly traded or which otherwise is or will be
required to file reports with the Securities and Exchange
Commission.
ALC Communications Corporation was the sixth largest
provider of long distance services in the United States when it
was acquired by FC in August 1995.
<PAGE>
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The nominees for directors and the officers of the Company
hold none of the Company's securities. Set forth below is the
tabulation indicating as of February 29, 1996, the shares of
$1.00 par value Common Stock of Frontier Corporation, the
parent company, beneficially owned by each director, each of
the named executive officers, and directors and officers of the
Company as a group.
Management and Directors Stock Ownership Table
----------------------------------------------
Total
Common Beneficial
Names Stock* Stock Options** Ownership
- ----------------- ------ ------------- ---------
Ronald L. Bittner 149,920 149,264 299,184
Jeremiah T. Carr 19,633 39,398 59,031
Louis L. Massaro 35,984 36,398 72,382
Marvin C. Moses 18,047 612,800 630,847
Directors and Executive
Officers as a Group 225,631 845,460 1,071,091
The individual directors, officers, and the directors
and officers as a group, do not own more than 1% of the
Common Stock of FC.
- -------------------------------
*Includes all shares with respect to which each
director or officer directly, through any contract,
arrangement, understanding, relationship or otherwise, has
or shares the power to vote or to direct voting of such
shares or to dispose or to direct the disposition of such
shares. Amounts in this column include restricted stock.
However, these amounts do not include shares which each
director or officer has the right to acquire pursuant to
options or other rights.
**Includes all shares which such persons have the right
to acquire within the following 60 days pursuant to options
or other rights. These amounts do not include shares which
such persons have the right to acquire more than 60 days in
the future.
<PAGE>
<PAGE>
COMPENSATION OF COMPANY MANAGEMENT
The tables that follow reflect the various forms of
compensation paid by FC to Mr. Carr, who was President and
CEO of the Company, as of December 31, 1995. Specifically,
these are salary, bonus, and FC stock options. Mr. Carr has
received no remuneration directly from the Company for his
services. The compensation reflected in the tables below
reflects only that portion of his compensation from FC which
was attributable to his services to the Company. For the
fiscal year ended December 31, 1995, no executive officer
received from any source compensation from the Company in
excess of $100,000 for services to the Company. On February
1, 1994, the Company paid George E. Lord, previously Vice
President and General Manager of the Company, a retirement
incentive of $43,200. Additionally, Mr. Lord, who completed
his pre-pension leave with the Company on August 13, 1994,
signed a three year Noncompete Agreement, which terminates
August 1997.
<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Long-Term
Compensation
---------------
Annual Compensation Awards Payouts**
------------------------ ------- -------
Securities
*Other Underlying
Name and Annual Options/ LTIP ***All other
Principal Salary Bonus Compensation SARs Payouts Compensation
Position Year ($) ($) ($) (#) ($) ($)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jeremiah T. Carr 1995 $22,877 $18,483 7,660 $5,956 $723
President and CEO 1994 $14,109 $ 9,275 $583 1,540 $4,750 $736
of the Company 1993 $ 1,783 $ 908 62 $ 835 $ 92
</TABLE>
* The amount reported in this column for 1994 includes
payment to Mr. Carr to offset income tax liabilities incurred
because he received additional income in recognition of certain
expenditures he made on behalf of the Company.
** The amounts reported in this column for 1995 includes
payment to Mr. Carr pursuant to FC's Performance Unit Plan.
*** "All Other Compensation" includes imputed income
from term life insurance coverage, and the Company's contribution
to both the tax qualified 401(K) and nonqualified defined
contribution plans. In 1994, this amount also includes a special
payment for a one time reimbursement of expenses incurred by Mr. Carr.
<PAGE>
<PAGE>
The following Option Grant table includes two columns
designated as "Potential Realized Value." The calculations
in those columns are based on hypothetical growth
assumptions, proposed by the Securities and Exchange
Commission, of 5% and 10% for stock price appreciation for
the option term. There is no way to anticipate what the
actual growth rate of FC's stock price will be.
<TABLE>
<CAPTION>
Options/SAR Grants in Last Fiscal Year
-------------------------------------
% of Total
Options/SARs
*Number of Granted to
Securities Employee Exercise Annual Rates of
Underlying in or Base Stock Appreciation
Options/SARs Fiscal Price Expiration for Option Term
Name Granted(#) Year ($/Share) Date 5%($) 10%($)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeremiah T. Carr 26,400 1.32% $21.875 3/13/05 $ 363,187 $ 920,386
President and CEO 60,000 3.00% $27.125 8/16/05 $1,023,526 $2,593,816
of the Company
</TABLE>
*FC stock options were awarded to Mr. Carr by FC for
services rendered to Frontier Corporation while serving in
various capacities, among which was his capacity as
President and CEO of Frontier Communications of New York,
Inc.
The option grants have the following material terms:
exercise price is the market price (based on the closing
price of FC's Common Stock on the New York Stock Exchange)
on the date of the option grant; 1/3 of the options granted
may be exercised commencing one year following the grant
date, a second 1/3 may be exercised commencing two years
following the grant date and the remaining 1/3 may be
exercised commencing three years following the grant date.
The option dates were March 13, 1995 and August 16, 1995.
Options may not be transferred other than by will or the
laws of descent and distribution. An option may be
exercised upon written notice to FC accompanied by payments
in full for the shares being acquired. In the event of a
"change of control" as defined by the FC Management Stock
Incentive Plan, all options become immediately vested and
exercisable.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year
And Fiscal Year-End Option/SAR Values
-------------------------------------
*Number of Securities *Value of Unexercised
Shares Underlying Unexercised In-The-Money
Acquired Options/SARs at FY End Options/SARS at FY End
on Value ------------------------ -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeremiah T. Carr - 0 - N/A 20,732 105,068 $226,864 $555,611
President and CEO
of the Company
</TABLE>
*Options are valued at the market value of FC Common
Stock at December 31, 1995, (closing price of $30.00) less
the per share option with exercise price, multiplied by the
number of exercisable/unexercisable options.
Long-Term Incentive Plans - Awards in Last Fiscal Year
------------------------------------------------------
Performance or Other
Number of Shares, Period Until
Units or Maturation
Name Other Rights (#) or Payout
- ------------------------------------------------------------
Jeremiah T. Carr 10,000 (1)
(1) Mr. Carr was awarded shares of restricted stock on
August 16, 1995 under FC Management Stock Incentive Plan
which is a long-term incentive plan. Vesting is subject to
stock price performance criteria as well as passage of time
and continued employment. No greater than one-third of the
award can be paid in either 1996 or 1997. The first one-third
will vest upon achievement of at least a $31.00 stock
price for twenty business days in a thirty business day
period. The remaining two-thirds will vest upon the
achievement of stock prices of $36.00 and $41.00. Recipients
of restricted shares have full voting rights on the shares
and are entitled to receive accumulated dividends when the
shares vest.
<PAGE>
<PAGE>
REPORT OF BOARD OF DIRECTORS
No executive officer of the Company receives
remuneration directly from the Company for his services to
the Company. Instead, Frontier Corporation ("FC"), the
parent company, compensates executive officers for their
service to Frontier Communications of New York, Inc. This
compensation program is administered in accordance with the
compensation program of FC. Those persons who serve as
executive officers of the Company and who are also executive
officers of FC, participate in the executive compensation
program established by the FC Board of Directors Committee
on Management. Mr. Carr is an executive officer of FC. The
fundamental philosophy of FC's compensation program is to
offer performance-based compensation to its employees, while
rewarding those employees whose results enable FC to achieve
its vision. The executive compensation program, as a whole,
is designed to measure and enhance executive performance.
Four components are key to FC's executive compensation
program. Specifically, these are base salary, annual bonus,
a long-term incentive plan, and the FC stock incentive plan.
Combined, these four components are designed to provide
incentives and motivate key executives whose efforts and
related job performance will enhance the strategic well-being
of FC thereby maximizing value to shareowners. FC
believes its total executive compensation package, which is
reviewed on an annual basis, is designed to reward
performance, is reasonable in view of FC's consolidated
performance and the contribution of individual executive
officers to that performance, and is competitive with those
offered by comparable employers in the industry.
The first component of FC's executive compensation
program is base salary. The base salaries both of the
executive officers and of other employees were determined
after analysis of base salaries paid to persons having
similar responsibilities in other companies. Those salaries
were determined to be within that range of surveyed
salaries.
<PAGE>
<PAGE>
The second component of FC's executive compensation
program is an annual bonus. FC's annual bonus plan, the
Short Term Incentive Plan (STI), is designed to provide
superior compensation awards for outstanding executive
performance during the past year. The bonus awards have
been a function of individual performance and consolidated
results. The specified qualitative and quantitative
criteria used in determining bonus awards vary individually
and from year to year. These criteria, or targets, are
established as a means of measuring executive performance.
The corporate target for 1995, was an equally weighted
earnings per share and cash flow target established by the
Committee on Management of the Board of Directors of FC as
an incentive to improve the financial performance of the
firm and thus improve long-term FC stock performance. This
target was met. All of FC's executives participate in STI.
Persons who are not FC executives, yet are executive
officers of the Company, participate in a similar program.
The third component of the executive compensation
program is a long-term incentive plan. FC's long-term
incentive plan, the Performance Unit Plan (PUP), was
designed to motivate executives to improve FC stock
performance over three year cycles. The payout is based on
equally weighted measures of FC's stock appreciation over
the past three years as compared to a group of sixteen
telecommunications firms and as compared to the Standard &
Poor's 500 Index. The awards made to the executive
officers were based upon a review by the Committee on
Management of the above described performance elements. In
the Committee of Management's judgement, the long-term
incentive plan was not totally successful in linking
employee performance with increased shareowner value. The
Committee determined that stock-based compensation programs
provide a better incentive to link an executive's goals to
those of a shareowner. Therefore, beginning in 1994, PUP
was discontinued and the Committee used the stock-based
plans to align employee interests with the long-term
interests of shareowners. No new PUP grants were issued
in either 1994 or 1995, and the payouts for the 1993-1995
cycle represent the conclusion of this Plan.
<PAGE>
<PAGE>
The final component of the FC executive compensation is
a stock incentive plan. Stock plans are an important
component of executive compensation programs because they
are a compensation vehicle which ties long-term compensation
incentives directly to furthering the interests of
shareowners and improved corporate performance. FC's
Management Stock Incentive Plan is designed to align
executive compensation with the long-term performance of
FC's stock. Options issued in 1995 do not expire until
2005, and the exercise price is the value of the option on
the day the option was issued. All executive officers of FC
received options in 1995 based on their contribution to the
achievement of FC's long-term objectives, their relative
position in FC, and upon recommendation of the chief
executive officer of FC. Restricted stock awards issued in
1995 expire at December 31, 1998, and require that both
passage of time and performance criteria be satisfied for
vesting of shares to occur. An executive must continue to
be employed for vesting to occur as well as certain stock
price levels must also be achieved. No greater than one-third
of an executive's award can be paid in either 1996 or
1997. On the grant date the Company's stock price was
$27.1250 per share. The first one-third of the grant will
vest upon achievement of at least a $31.00 stock price for
twenty business days in a thirty business day period.
Subsequent thirds will vest upon the achievement of stock
prices of $36.00 and $41.00.
Respectively submitted,
Ronald L. Bittner
Louis L. Massaro
March 21, 1996 Marvin C. Moses
<PAGE>
<PAGE>
PERFORMANCE GRAPH
All the Company's Common Stock is owned by FC and is
not traded. FC has sole voting, investment and dispositive
power relating to the Company's Common Stock. In addition,
incentive compensation for the Company's executive officers
is tied to FC's performance. For that reason, it would be
misleading to chart the performance of Frontier
Communications of New York, Inc. Instead, the following
graph charts FC's cumulative total shareowner return
performance against the performance of the Standard & Poor's
Telephone Index as well as against the Standard & Poor's 500
Index. A variety of factors may be used in order to assess
a corporation's performance. This Performance Graph, which
reflects FC's total return against the selected peer group,
reflects one such method. The performance of the Standard &
Poor's Telephone Index is weighted by stock market
capitalization of the companies within the peer group.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG FRONTIER, S&P TELEPHONE INDEX,
S&P 500 INDEX AND S&P LONG DISTANCE INDEX
S&P S&P S&P Long
Measurement period Telephone 500 Distance
(Fiscal year covered) Frontier Index Index Index
- --------------------- -------- ----- ----- ------
Measurement PT -
12/31/90 $100 $100 $100 $100
FYE 12/31/91 $116 $107 $130 $134
FYE 12/31/92 $135 $118 $140 $177
FYE 12/31/93 $177 $136 $155 $198
FYE 12/31/94 $172 $126 $157 $180
FYE 12/31/95 $254 $190 $215 $242
Compensation Committee Interlocks And Insider Participation
In Compensation Decisions
- -------------------------
None of the executive officers of Frontier
Communications of New York, Inc. receive remuneration
directly from the Company for their services as executive
officers. For that reason, the Board of Directors of the
Company has not deliberated upon executive officer
compensation. No executive officer of the Company has,
during 1995, or previously, served as a director or member
of the compensation committee of any other entity that has
an executive officer who serves or has served either as a
member of the Board of Directors of Frontier Corporation or
as a member of any Committee of that Board.
<PAGE>
<PAGE>
Interest of Management and Others in Certain Transactions
- ---------------------------------------------------------
Pursuant to an ongoing Agreement dated as of July 1,
1976 between the Company and FC ("Agreement"), during the
fiscal year ended December 31, 1995, FC provided various
administrative and operating services to the Company
including assistance in matters involving legal, corporate
management and finance. Pursuant to this Agreement and in
consideration for these services, the Company pays to FC (a)
all identifiable costs, including wages, employee benefits
(including benefits under FC's Pension Plan and Employees'
Retirement Savings Plan) and other expenses of FC incurred
in connection with the delivery of services to it; and (b) a
portion of common or mutually beneficial costs, which are
those costs associated with management functions providing
direction, oversight and support to the consolidated FC as a
whole and to FC's individual affiliates. These functions
include Executive Administration, Corporate Finance,
Corporate Accounting, Corporate Planning, Public Relations
and Internal Audit. All affiliates of FC bear a
representative share of these costs allocated on the basis
of their revenues, capitalization, common equity, and number
of employees. In 1995, the Company paid $1,828,831 to FC
for services rendered pursuant to the Agreement.
In 1995, the Company received $172,214 from FC for
reimbursement of wages, applicable benefits and other
expenses for a leased management employee's services as an
executive administrator to a non-for-profit organization in
the Rochester, New York area.
At December 31, 1995, the Company had $8,900,000 of
long-term notes payable to FC; $3,000,000 at 6.25 percent
interest due on July 6, 2003 and $5,900,000 at 8.4 percent
due on January 1, 2005. All borrowings from the parent
company were used to retire long-term first mortgage bonds,
to take advantage of lower interest rates and to pay off a
short-term loan owed to Chemical Bank. The original debt
served to finance the Company's construction program prior
to 1989.
The Company purchases telephone equipment, supplies,
consulting services and switching products from Frontier
Network Systems Inc. ("FNS"), a nonregulated
telecommunications subsidiary of FC. In 1995, the Company
paid FNS $14,720 in connection with such purchases. The
Company also purchases cable and other supplies from
Anixter-Frontier, a joint venture between FNS and Anixter
Bros., Inc. In 1995, the Company paid Anixter-Frontier
$591,287 in connection with such purchases.
<PAGE>
<PAGE>
The Company purchases long distance services and leases
toll circuits from Frontier Communications International
Inc., a long distance telecommunications subsidiary of FC
held through an intervening wholly-owned subsidiary. In
1995, the Company paid Frontier Communications International
Inc. $108,784 in connection with such purchases.
The Company provides access service and leases fiber
optic cable facilities to Frontier Communications
International Inc. In 1995, the Company received $1,154,059
from Frontier Communications International Inc. in payment
for these services.
The Company provides access service and billing and
collection services to Frontier Long Distance of New York,
Inc., a long distance telecommunications subsidiary of FC.
In 1995, the Company received $1,703,049 from Frontier Long
Distance of New York, Inc. in payment for these services.
The Company purchases long distance services and leases toll
circuits from Frontier Long Distance of New York, Inc. In
1995, the Company paid Frontier Long Distance of New York,
Inc. $49,576 in connection with such purchases.
The Company contracts with Frontier InfoServices Inc.,
a directory publishing subsidiary of FC, to coordinate and
publish its annual telephone directory. In 1995, the Company
paid Frontier InfoServices Inc. $84,844 for such services.
The Company contracts with Frontier Information
Technologies Inc. ("FIT), an information services subsidiary
of FC, to provide and maintain its data processing systems.
In 1995, the Company paid FIT $2,712,427 for such services.
The Company provides office facilities, including utilities,
to FIT to perform the maintenance of the Company's data
processing system. In 1995, the Company received $272,582
from FIT in payment for rental of these office facilities.
The Company performs various accounting, billing,
customer services, benefits administration, and other
functions for Frontier Communications of Sylvan Lake, Inc.
("Sylvan"); Frontier Communications of AuSable Valley, Inc.
("AuSable"); Frontier Communications of Seneca-Gorham, Inc.
("Seneca-Gorham"); Frontier Communications of Pennsylvania,
Inc. ("PA"); Frontier Communications of Breezewood, Inc.
("Breezewood"); Frontier Communications of Canton, Inc.
("Canton"); Frontier Communications of Lakewood, Inc.
("Lakewood"); and Frontier Communications of Oswayo River,
Inc. ("Oswayo"). All are subsidiaries of FC, held either
directly or through intervening subsidiaries. In 1995, the
Company received $1,847,279 from Sylvan; $711,266 from
AuSable; $912,561 from Seneca-Gorham; $97,375 from PA;
$26,695 from Breezewood; $17,204 from Canton; $7,289 from
Lakewood; and $13,203 from Oswayo, in payment for these
services.
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OTHER MATTERS
No independent public accounting firm has been
recommended to shareowners for election because Frontier
Corporation, selects accountants for the consolidated
corporation including the Company. Representatives of Price
Waterhouse LLP, the principal accountant for the fiscal year
ending December 31, 1995 and the principal accountant for
the current year, are not expected to be present at the
shareowners meeting, nor are they expected to make any
statement at the Shareowners Meeting or to be available to
respond to appropriate questions.
The management of the Company knows of no matters to be
presented other than voting on the election of Directors.
