<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Alltel Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Alltel Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
<PAGE>
ALLTEL CORPORATION
One Allied Drive Little Rock, Arkansas 72202
Telephone (501) 905-8000
www.alltel.com
March 22, 1999
Dear Stockholder:
The 1999 Annual Meeting of Stockholders of ALLTEL Corporation will be held on
Thursday, April 22, 1999, for the purposes set forth in the accompanying
notice. The matters to be voted upon are explained in the proxy statement
included with the notice.
It is important that you complete and return your proxy as promptly as
possible, or vote via the Internet or by telephone in accordance with the
instructions set forth on the proxy card.
Sincerely,
Joe T. Ford
Chairman and
Chief Executive Officer
<PAGE>
ALLTEL CORPORATION
Notice of Annual Meeting of Stockholders
April 22, 1999
To the Stockholders of
ALLTEL Corporation:
Notice Is Hereby Given That the 1999 Annual Meeting of Stockholders of
ALLTEL Corporation ("ALLTEL") will be held in Arkansas' Excelsior Hotel,
Ballroom Level, Three Statehouse Plaza, Little Rock, Arkansas 72201, on
Thursday, April 22, 1999, at 11:00 a.m. (local time), for the following
purposes:
1. To elect directors to the class whose term will expire in 2002.
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
A copy of the Annual Report for the calendar year 1998 has been mailed to
each stockholder receiving this Notice.
Only holders of the Common Stock and of each series of the voting Cumulative
Preferred Stock, $25 par value, of record at the close of business on February
22, 1999, are entitled to notice of and to vote at the meeting or at any
adjournment thereof; holders of unexchanged stock certificates of companies
previously acquired by ALLTEL are entitled to notice of the meeting and shall
be entitled to vote if they have exchanged their stock certificates for ALLTEL
certificates by April 22, 1999.
Little Rock, Arkansas By Order of the Board of Directors,
March 22, 1999 FRANCIS X. FRANTZ,
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE FILL IN, SIGN, DATE,
AND RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE, OR VOTE VIA THE
INTERNET OR BY TELEPHONE IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ON THE
PROXY CARD.
<PAGE>
ALLTEL Corporation
One Allied Drive
Little Rock, Arkansas 72202
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ALLTEL Corporation ("ALLTEL") to be used
at its 1999 Annual Meeting of Stockholders to be held on Thursday, April 22,
1999, and at any adjournment or adjournments thereof. Shares represented by
properly executed proxies will be voted at the meeting. If a choice is
specified by a stockholder, the proxy will be voted in accordance with that
choice. Any proxy may be revoked at any time if it has not already been
exercised.
This Proxy Statement is being mailed to stockholders beginning on March 22,
1999.
The close of business on February 22, 1999, has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote
at the meeting or any adjournment thereof. On the record date, there were
outstanding and entitled to vote 280,035,657 shares of Common Stock and
340,792 shares of voting Cumulative Preferred Stock; up to 1,066,144
additional shares of Common Stock would be entitled to vote in the event the
unexchanged stock certificates of companies previously acquired by ALLTEL were
exchanged for ALLTEL certificates by April 22, 1999.
On all matters to be acted upon at the meeting, each share of Common Stock
is entitled to one vote per share, and each share of voting Cumulative
Preferred Stock is entitled to one vote per share (share for share with the
holders of the Common Stock). Under Delaware law and ALLTEL's Restated
Certificate of Incorporation, if a quorum is present at the meeting (a) the
five nominees for election as directors for the term ending in 2002 who
receive the greatest number of votes cast for the election of directors at the
meeting by the shares present in person or by proxy and entitled to vote shall
be elected directors for the term ending in 2002 and (b) any other matters
submitted to a vote of the stockholders must be approved by the affirmative
vote of the majority of shares present in person or by proxy and entitled to
vote on the matter. In the election of directors, any action other than a vote
for a nominee will have the practical effect of voting against the nominee.
Abstention from voting will have the practical effect of voting against any of
the other matters because the abstention results in one less vote for
approval. Broker nonvotes on one or more matters will have no impact because
they are not considered "shares present" for voting purposes.
ELECTION OF DIRECTORS
The ALLTEL Board of Directors presently consists of fourteen members divided
into three classes, two of which consist of five members and one of which
consists of four members. Messrs. John R. Belk, Charles H. Goodman, W.W.
Johnson, Frank E. Reed, and William H. Zimmer, currently members of the class
whose term expires in 1999, are nominees for election at the 1999 Annual
Meeting for the term ending in 2002. Following the election of directors at
the Annual Meeting, the Board of Directors will consist of fourteen members
divided into three classes, two of which will consist of five members (the
class of 2000 and the class of 2002), and one of which will consist of four
members (the class of 2001).
Unless otherwise directed, the persons named in the accompanying form of
proxy will vote that proxy for the election of the five persons named below,
with each to hold office for a term of three years until the 2002 Annual
Meeting or until his or her successor is elected and qualified. In case any
nominee is unable to serve (which is not anticipated), the persons named in
the proxy may vote for another nominee of their choice. For each nominee and
each director whose term expires in 2000 and 2001, there follows a brief
listing of principal occupations for at least the past five years, other major
affiliations, ALLTEL Board Committees, and age. The year in which each such
person was initially elected as an ALLTEL director is also set forth below
(which, in the case of each of Messrs. Joe T. Ford and Emon A. Mahony, is the
year in which his directorship commenced with ALLTEL's predecessor company,
Allied Telephone Company). Mr. Scott T. Ford is the son of Mr. Joe T. Ford.
<PAGE>
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NOMINEES -TERM ENDING 2002
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John R. Belk, President of Finance, Systems & Operations of
Belk, Inc., Charlotte, North Carolina (a department store
retailer); from February 24, 1997 to May 4, 1998, President
and Chief Operating Officer of Belk Stores Services, Inc.;
prior to February 24, 1997, Senior Vice President of Belk
Stores Services, Inc. Director of Ruddick Corporation.
Director of ALLTEL since 1996. Member of Compensation and
Audit Committees. Age 40.
[PHOTO]
Charles H. Goodman, Vice President of Henry Crown and
Company (a diversified investment company). Director of
General Dynamics Corporation. Director of ALLTEL since July
1, 1998. Member of Pension Trust Investment Committee. Age
65.
[PHOTO]
W. W. Johnson, Chairman of the Executive Committee and
Director of Bank of America Corporation, Charlotte, North
Carolina (a bank holding company). Director of The Liberty
Corporation. Director of ALLTEL since 1990. Member of
Executive and Compensation Committees. Age 68.
[PHOTO]
Frank E. Reed, Non-management Chairman of the Board of
Directors of 360(degrees) Communications Company from March
1996 until July 1, 1998; former President and Chief
Executive Officer of Philadelphia National Bank. Director of
Harleysville Group, Inc. Director of ALLTEL since July 1,
1998. Member of Pension Trust Investment Committee. Age 63.
[PHOTO]
William H. Zimmer, Retired; prior to July 1, 1995, Vice
Chairman and Director of Cincinnati Financial Corporation,
Cincinnati, Ohio (an insurance holding company). Director of
ALLTEL since 1985. Chairman of Audit Committee and member of
Executive Committee. Age 68.
[PHOTO]
2
<PAGE>
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DIRECTORS -- TERM ENDING 2000
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Joe T. Ford, Chairman of the Board and Chief Executive
Officer of ALLTEL. Director of The Dial Corporation and
Textron Inc. Director of ALLTEL since 1960. Chairman of
Executive Committee. Age 61.
[PHOTO]
Dennis E. Foster, Vice Chairman of the Board of ALLTEL; from
March 7, 1996 to July 1, 1998, President, Chief Executive
Officer, and Director of 360(degrees) Communications
Company; prior to March 7, 1996, President and Chief
Operating Officer of Cellular and Wireless Division of
Sprint Corporation. Director of Salient 3 Corporation.
Director of ALLTEL since July 1, 1998. Age 58.
[PHOTO]
Scott T. Ford, President and Chief Operating Officer of
ALLTEL; from April 24, 1997 to July 1, 1998, President of
ALLTEL; from January 31, 1996 to April 24, 1997, Executive
Vice President of ALLTEL; prior to January 31, 1996,
Assistant to the Chairman, Stephens Group, Inc. Director of
ALLTEL since 1996. Age 36.
[PHOTO]
John P. McConnell, Chairman and Chief Executive Officer and
Director of Worthington Industries, Inc., Columbus, Ohio
(engaged in metal processing and manufacturing); from June
1993 to September 1996, Vice Chairman and Chief Executive
Officer and Director of Worthington Industries, Inc.
Director of ALLTEL since 1994. Member of Audit and
Nominating Committees. Age 45.
[PHOTO]
Josie C. Natori, Chief Executive Officer of The Natori
Company, New York, New York (upscale fashion house with
offices in Paris, New York, and Manila). Director of
Manhattanville College, the Educational Foundation of
Fashion Industries, The Philippine American Foundation, and
Calyx & Corolla. Trustee of Asia Society & Asian Cultural
Council. Director of ALLTEL since 1995. Member of Nominating
Committee. Age 51.
[PHOTO]
3
<PAGE>
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DIRECTORS -- TERM ENDING 2001
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Lawrence L. Gellerstedt, III, Chairman, Chief Executive
Officer, President and Director of American Business
Products, Inc., Atlanta, Georgia; from March 30, 1998 to May
8, 1998, Chief Executive Officer and President of American
Business Products, Inc.; from January 1, 1998 to March 30,
1998, Chairman and Director of Beers Construction Company,
Atlanta, Georgia; prior to January 1, 1998, Chairman and
Chief Executive Officer and Director of Beers Construction
Company. Director of SunTrust Bank, Atlanta, and Rock Tenn
Company. Director of ALLTEL since 1994. Chairman of
Compensation Committee. Age 42.
[PHOTO]
Michael Hooker, Chancellor of the University of North
Carolina, Chapel Hill, North Carolina; prior to 1995,
President of Bennington College, Vermont. Director of
Centura Bank, Rocky Mount, North Carolina. Director of
ALLTEL since July 1, 1998. Member of Audit Committee. Age
53.
[PHOTO]
Emon A. Mahony, Jr., Chairman of the Board of Arkansas
Oklahoma Gas Corporation, Fort Smith, Arkansas; Vice
President, Secretary, and Director of Mahony Corporation;
Partner in EAM LLC; prior to July 1996, President of
Arkansas Oklahoma Gas Corporation. Director of ALLTEL since
1980. Member of Executive Committee and Chairman of Pension
Trust Investment Committee. Age 57.
[PHOTO]
Ronald Townsend, Communications Consultant, Jacksonville,
Florida; prior to October 1, 1996, President of Gannett
Television Group, Gannett Co., Inc., Arlington, Virginia.
Director of Bank of America Corporation. Director of ALLTEL
since 1992. Chairman of Nominating Committee and member of
Pension Trust Investment Committee. Age 57.
[PHOTO]
During 1998, there were eight meetings of ALLTEL's Board of Directors. All
of the directors attended 75% or more of the meetings of the Board and Board
Committees on which they served. The standing Committees of the Board are the
Executive Committee, Audit Committee, Compensation and Incentive Stock Option
Committee, Pension Trust Investment Committee, and Nominating Committee. The
functions of the Audit, Compensation, and Nominating Committees are described
below.
The Audit Committee held three meetings during 1998. This Committee meets
with ALLTEL's independent public accountants, internal auditors, financial
executives, and general counsel; reviews the scope and results of audits by
the internal auditors and the independent public accountants; recommends
nomination of independent public accountants to the Board; reviews procedures
for internal auditing; reviews management responses to audit reports; reviews
the implementation of ALLTEL's compliance program; and reviews various other
matters, including the adequacy of internal controls and security, application
of new accounting rules, reporting of risks and contingencies, and other
issues that may from time to time be of concern to the Committee or to the
members of the Board.
4
<PAGE>
The Compensation Committee held four meetings during 1998, at which it
reviewed and made recommendations to the Board with respect to fixing
compensation of and benefits for ALLTEL's principal officers. Members of the
Compensation Committee serve as members of the Incentive Stock Option
Committee, which met twice during the year.
The Nominating Committee held two meetings during 1998. The Nominating
Committee is responsible for making recommendations to the Board of Directors
concerning the size and composition of the Board and the selection of
candidates as nominees for election as directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Set forth below is certain information, as of February 22, 1999, with respect
to any person known to ALLTEL to be the beneficial owner of more than 5% of
any class of ALLTEL's voting securities, all of which are shares of Common
Stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of
Title of Class of Beneficial Owner of Beneficial Ownership Class
- -------------- ------------------- ----------------------- ----------
<S> <C> <C> <C>
Common Stock Stephens Group, Inc. 16,300,144 shares (sole 5.82
111 Center Street voting and investment
Little Rock, AR 72201 power)
Common Stock FMR Corp. 15,078,023 shares (sole 5.38
82 Devonshire Street investment power)
Boston, MA 02109
</TABLE>
Set forth below is certain information, as of February 22, 1999, as to shares
of each class of ALLTEL equity securities beneficially owned by each of the
directors, each of the executive officers identified in the Summary
Compensation Table on page 11, and by all directors and executive officers of
ALLTEL as a group. Except as otherwise indicated by footnote, all shares
reported below are shares of Common Stock, and the nature of the beneficial
ownership is sole voting and investment power:
5
<PAGE>
<TABLE>
<CAPTION>
Name of Amount and Nature Percent of Class
Beneficial Owner of Beneficial Ownership (if 1% or more)
---------------------------- ----------------------- ----------------
<S> <C> <C> <C>
Directors John R. Belk 21,442(a) --
Lawrence L. Gellerstedt, III 23,467(a) --
Charles H. Goodman 5,730,793(b)(c) 2.05%
Michael Hooker 19,394(a)
W. W. Johnson 38,309(a) --
Emon A. Mahony, Jr. 76,978(d)(e) --
John P. McConnell 24,242(d) --
Josie C. Natori 21,780(a) --
Frank E. Reed 28,812(a)
Ronald Townsend 15,715(a) --
William H. Zimmer 35,336(a) --
Named Joe T. Ford 966,801(f) --
Executive Dennis E. Foster 222,777(f) --
Officers Scott T. Ford 114,214(f)
Jeffrey H. Fox 56,150(f) --
Kevin L. Beebe 99,929(f) --
All Di-
rectors
and Exec-
utive
Officers 8,136,541(g) 2.91%
as a
Group
</TABLE>
- ----------------
(a) Includes shares that the indicated persons have the right to acquire
(through the exercise of options) on or within 60 days after February 22,
1999, as follows: John R. Belk (20,000); Lawrence L. Gellerstedt, III
(23,225); Michael Hooker (16,660); W.W. Johnson (38,067); Josie C. Natori
(21,538); Frank E. Reed (16,660); Ronald Townsend (15,300); and William H.
Zimmer (16,200).
(b) The nature of the beneficial ownership is shared voting and investment
power with respect to all of those shares other than 10,242 shares with
respect to which he has sole voting and investment power. Mr. Goodman
disclaims beneficial ownership of all shares except 20,242 shares owned by
him and his pro rata share of 780,201 shares owned by a partnership in
which he is a partner.
(c) Includes 10,000 shares that Mr. Goodman has the right to acquire (through
the exercise of options) on or within 60 days after February 22, 1999.
(d) Includes 22,000 shares that each of the indicated persons has the right to
acquire (through the exercise of options) on or within 60 days after
February 22, 1999.
(e) Includes 1,536 shares held by Mr. Mahony's spouse, with respect to which
Mr. Mahony has shared investment power and no voting power.
(f) Includes shares that the indicated persons have the right to acquire
(through the exercise of options) on or within 60 days after February 22,
1999, as follows: Joe T. Ford (388,000); Dennis E. Foster (173,826); Scott
T. Ford (68,000); Jeffrey H. Fox (50,000); and Kevin L. Beebe (92,656).
(g) Includes a total of 1,505,905 shares that members of the group have the
right to acquire (through the exercise of options) on or within 60 days
after February 22, 1999.
6
<PAGE>
COMPARATIVE STOCKHOLDER RETURN
Set forth below is a line graph showing a five-year comparison of cumulative
total stockholder return on Common Stock; the Standard & Poor's 500 Stock
Index; and an index of a group of peer issuers consisting of the following
companies: Ameritech Corporation, AT&T Corp., Bell Atlantic Corporation,
BellSouth Corporation, Cincinnati Bell Inc., Electronic Data Systems
Corporation, Frontier Corporation, GTE Corporation, SBC Communications Inc.,
Sprint Corporation, and U S West, Inc. (the "Peer Index"). The returns of the
group of peer issuers have been weighted according to their respective stock
market capitalizations at the beginning of each period for which returns are
indicated.
Comparison of Five-Year Cumulative Total Return*
[GRAPH APPEARS HERE]
<TABLE>
------------------------------------------------------------------------------------------------
<CAPTION>
ALLTEL S&P 500 Custom Peer
Group
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dec-93 $100.00 $100.00 $100.00
Dec-94 105.58 101.36 97.43
Dec-95 107.02 139.32 141.57
Dec-96 117.85 171.23 138.81
Dec-97 159.19 228.27 191.73
Dec-98 237.53 293.04 271.73
------------------------------------------------------------------------------------------------
</TABLE>
*Assumes that $100 was invested on the last trading day of 1993 and that all
dividends were reinvested.
7
<PAGE>
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
This report provides information concerning compensation determinations by
ALLTEL's Compensation Committee (the "Committee") for compensation reported
for 1998 with respect to ALLTEL's Chief Executive Officer and ALLTEL's other
executive officers, including the officers named in the compensation tables in
this Proxy Statement. In connection with those determinations, the Committee
reviewed compensation information from a group of 22 telecommunications and
information services companies that compete in ALLTEL's principal lines of
business, adjusted by regression analysis to account for the relative sizes of
ALLTEL and the comparison group. This comparison group is not identical to the
group of peer issuers identified in the Comparison of Five-Year Cumulative
Total Return graph on page 7.
The Committee is comprised entirely of independent, nonemployee directors,
none of whom has any "interlocking" relationships as defined for proxy
statement disclosure purposes.
Base Salaries
The Committee reviews the base salaries of ALLTEL's executive officers
annually and adjusts base salaries on the basis of the corresponding mean base
salaries of the comparison group and the Committee's subjective judgment of
each executive officer's performance during the prior year. The Committee does
not assign a precise weighting to the foregoing components. The executive
officers' base salaries in 1998 were approximately 6% below the corresponding
mean base salaries of the comparison group.
The Committee evaluated Mr. Joe T. Ford's base salary on the basis of Mr.
Ford's performance in 1997 (by reference to ALLTEL's "total return" to ALLTEL
stockholders during 1997 of 37.7%) and a comparison of Mr. Ford's 1997 base
salary to the mean salary of chief executive officers in the comparison group
(without assigning a precise weighting to the foregoing components). The
Committee believes that the greater portion of total compensation (annual
salary plus annual incentive plus long-term incentive awards) is determined by
the incentive elements of an individual's aggregate compensation rather than
by salary. Payments under these incentive plans are based upon the achievement
of annual and long-term performance goals and, accordingly, are "at risk."
Therefore, Mr. Ford's salary was not increased for 1998, as reflected in the
Summary Compensation Table on page 11.
Annual Incentives
ALLTEL's Performance Incentive Compensation Plan (the "Incentive Plan")
provides ALLTEL's executive officers with the opportunity to receive annual
cash incentive payments (calculated as a percentage of each executive
officer's base salary) if ALLTEL achieves certain financial performance
criteria established by the Committee at the beginning of each year. The
Committee establishes the criteria at three levels, "minimum", "target", and
"maximum" and, for each executive officer, corresponding percentages of base
salary for each level so that, if ALLTEL achieves the "target" level, the
executive officer's total direct compensation (base salary plus bonus) will
approximate the mean total direct compensation of corresponding officers of
the comparison group.
For 1998, the financial performance criteria were based exclusively on
earnings per share from operations, and the target level earnings per share
from operations amount was $2.01.
As reflected in the Summary Compensation Table, Mr. Joe T. Ford received a
$780,000 cash incentive payment under the Incentive Plan for 1998, which
reflects ALLTEL's achievement of the financial performance criteria at the
maximum level.
8
<PAGE>
Long Term Incentives
ALLTEL's Long-Term Performance Incentive Compensation Plan (the "Long-Term
Incentive Plan") provides ALLTEL's executive officers with the opportunity to
receive cash incentive payments based on a three-year measurement period
(calculated as a percentage of each executive officer's average annual salary
during that three-year period) if ALLTEL achieves any of three prescribed
levels of growth in earnings per share from operations during that period, a
"minimum" level, a "target" level, and a "maximum" level. The Committee
believes this plan design focuses ALLTEL's executive officers on ALLTEL's
long-term financial success.
The Committee establishes the amounts of those potential payments so that,
if ALLTEL achieves the target level, the executive officers will receive net
total compensation (base salary plus Incentive Plan and Long-Term Incentive
Plan payments and stock option grants) that approximate the mean net total
compensation of corresponding officers of the comparison group. With respect
to cash incentive payments received by ALLTEL's executive officers for the
three-year measurement period of 1996-1998, the target level of growth in
earnings per share from operations established by the Committee was 6%. As
reflected in the Summary Compensation Table, Mr. Joe T. Ford received a
$438,750 cash incentive payment under the Long-Term Incentive Plan for 1998
with respect to the three-year measurement period of 1996-1998, which reflects
ALLTEL's achievement of the financial performance criteria at the maximum
level.
ALLTEL's 1994 Stock Option Plan allows ALLTEL's executive officers to
receive options to buy specified numbers of shares of Common Stock at the
market price on the date of grant. ALLTEL's 1998 Equity Incentive Plan permits
the granting of the following types of awards to ALLTEL's executive officers:
stock options, stock appreciation rights (either in tandem with stock options
or free-standing), restricted stock, performance shares conditioned upon
meeting performance criteria, and bonus shares. The Committee believes that
stock options and other performance-based equity incentives encourage and
reward effective management and assist in retaining management personnel who
add a high degree of value to ALLTEL that result in long-term creation of
stockholder value because options and other performance-based equity
incentives granted to ALLTEL executive officers will benefit them only if
ALLTEL's stock price appreciates or the performance criteria are met after the
date of the grant.
Deductibility Limits
Section 162(m) of the Internal Revenue Code generally does not allow a
deduction for annual compensation in excess of $1,000,000 paid to ALLTEL's
Chief Executive Officer or to any other ALLTEL officer or executive whose
individual compensation during the year would be required to be disclosed in
ALLTEL's annual proxy statement by reason of being among ALLTEL's four highest
compensated officers for the year (other than the Chief Executive Officer).
This limitation on deductibility does not apply to certain compensation,
including compensation that is payable solely on account of the attainment of
one or more performance goals. The Committee's policy is generally to preserve
the federal income tax deductibility of compensation and to qualify eligible
compensation for the performance-based exception in order for compensation not
to be subject to the limitation on deductibility imposed by Section 162(m) of
the Internal Revenue Code; the Committee may, however, approve compensation
that may not be deductible if the Committee determines that the compensation
is in the best interests of ALLTEL.
The Compensation Committee
Lawrence L. Gellerstedt, III, Chairman
John R. Belk
W. W. Johnson
9
<PAGE>
MANAGEMENT COMPENSATION
Compensation of Directors
Directors who are not officers of ALLTEL receive $40,000 as an annual base
fee and $1,500 for each Committee meeting attended. Directors may elect to
defer all or a part of their cash compensation under ALLTEL's deferred
compensation plan for directors.
Under the 1999 Nonemployee Directors Stock Compensation Plan, a portion of
each nonemployee director's annual base fee is paid in restricted shares of
Common Stock that are subject to forfeiture if the nonemployee director ceases
to be a director prior to the first day of the following year other than by
reason of death, disability, or retirement. The number of restricted shares of
Common Stock issued to each nonemployee director is determined by dividing the
market price of a share of Common Stock on the first business day of the year
into the portion of the annual retainer that is to be paid in restricted
shares. In 1999, 37.5% ($15,000) of the annual retainer is being paid by the
issuance of 242 restricted shares of Common Stock to each nonemployee
director. The Board of Directors may change the portion of the annual base fee
payable in restricted shares of Common Stock, at least six months prior to the
beginning of any year, and any nonemployee director may elect, at least six
months prior to the beginning of any year, to receive restricted shares of
Common Stock for a higher portion of the annual base fee than the portion
fixed by the Board. Unless terminated earlier by the Board of Directors, the
plan will continue until the 500,000 shares of Common Stock available under
the plan have been issued and vested.
Under the 1994 Stock Option Plan for Nonemployee Directors, as amended (the
"Directors Plan"), each nonemployee director automatically receives the
initial grant of an option to purchase 10,000 shares of Common Stock on the
date the person first becomes a nonemployee director, at an exercise price
equal to the closing market price of the Common Stock on that date. The
Director Plan also provides for the automatic grant, following the conclusion
of each annual meeting of stockholders, of an option to purchase 5,500 shares
of Common Stock to each nonemployee director (other than a director who was
elected at an annual meeting).
The option price of options granted under the Director Plan is the fair
market value of the Common Stock on the date the option is granted and is
payable in cash, already-owned Common Stock, or a combination of both. The
options vest and become exercisable on the day immediately preceding the next
annual meeting of stockholders following the date of grant or, if earlier, on
the death or disability of the holder or the occurrence of a "change of
control."
If a person ceases to be a nonemployee director, all vested options held by
the person continue to be exercisable for a period of six months or the
earlier expiration of the ten-year term of the option. Any options that have
not vested by the time the person ceases to be a nonemployee director may not
thereafter be exercised. The Director Plan will continue until the 1,000,000
shares of Common Stock available under the plan are issued, unless the plan is
earlier terminated by the Board of Directors.
10
<PAGE>
Compensation of Named Executive Officers
The following table shows the compensation, for each of the last three
years, of ALLTEL's Chief Executive Officer and of ALLTEL's other four most
highly compensated executive officers as of December 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Awards Payouts
------ -------
Other Long- Term
Annual Securities Incentive All Other
Compen- Underlying Plan Compen-
Name Principal Position Year Salary ($) Bonus ($) sation ($) Options (#) Payouts ($) sation ($)
---- ------------------ ---- ---------- --------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Joe T. Ford Chairman and CEO 1998 650,000 780,000 -0- -0- 438,750 3,192,114(a)
Chairman and CEO 1997 650,000 715,000 -0- 525,000 390,000 1,481,930
Chairman and CEO 1996 650,000 682,500 -0- 80,000 390,000 192,185
Dennis E. Foster Vice Chairman 1998 300,000(b) 1,658,379(c) -0- -0- 270,000 1,505,525(d)
Scott T. Ford President and COO 1998 450,000 506,250 -0- -0- 200,375 106,667(e)
President 1997 375,000 386,719 -0- 465,000 160,000 78,290
Exec. Vice President 1996 320,000 380,000 -0- 70,000 -0- -0-
Jeffrey H. Fox Group President -- 1998 400,000 360,000 -0- -0- 146,250 158,018(e)
Information Services
President--ALLTEL 1997 300,000 198,900 -0- 400,000 150,000 24,643
Information Services
President--ALLTEL 1996 275,000 215,938 -0- 50,000 -0- -0-
Information Services
Kevin L. Beebe Group President -- 1998 175,000(f) 833,983(g) -0- -0- 131,250 387,430(h)
Communications
</TABLE>
- ----------------
(a) Includes the following amounts: employer contributions to the ALLTEL
Profit Sharing Plan and ALLTEL Thrift Plan in the amount of $8,000;
allocated benefits under the ALLTEL Benefit Restoration Plan in the amount
of $79,750; dollar amount of premiums paid under supplemental split dollar
life insurance policies in the amount of $10,629; and "above-market"
earnings on deferred compensation in the amount of $3,093,735 (payment of
which is deferred until the deferred compensation is paid). The amount of
"above market" earnings on deferred compensation was substantially higher
for 1998 than in 1997 and 1996 because of ALLTEL's large stock price
appreciation during 1998 of 45.7%.
(b) Includes only amounts payable on or after July 1, 1998, the date
360(degrees) Communications Company ("360(degrees)") became a wholly-owned
subsidiary of ALLTEL (the "360(degrees) Merger Date").
(c) Includes only amounts payable on or after the 360(degrees) Merger Date.
(d) Includes the following amounts paid or allocated on or after the
360(degrees) Merger Date: $1,004,654 reimbursement paid in accordance with
Mr. Foster's Employment Agreement for excise tax under Section 4999 of the
Internal Revenue Code in respect of the "change in control" of
360(degrees) occasioned by 360(degrees) becoming a wholly-owned subsidiary
of ALLTEL (and for any excise, income, or employment tax resulting from
such reimbursement, successively, so as to offset the Internal Revenue
Code Section 4999 excise tax) imposed on payments to Mr. Foster; $206,812
in relocation expenses; $8,000 in employer contributions to the
360(degrees) Communications Company Retirement Savings Plan; $91,090 in
non-cash credits allocated to a non-qualified, defined contribution
restoration plan; and $194,969 in non-cash credits allocated to a
supplemental retirement arrangement as provided under Mr. Foster's
Employment Agreement with ALLTEL.
11
<PAGE>
(e) Includes the following amounts for Messrs. Scott T. Ford and Fox:
allocated benefits under the ALLTEL Benefit Restoration Plan in the
respective amounts of $41,720 and $31,401; employer contributions under
the ALLTEL Profit Sharing Plan and ALLTEL Thrift Plan in the amount of
$8,000 in each case; and "above-market" earnings on deferred compensation
in the respective amounts of $56,947 and $118,617 (payment of which is
deferred until the deferred compensation is paid). The amount of "above
market" earnings on deferred compensation was substantially higher for
1998 than in 1997 and 1996 because of ALLTEL's large stock price
appreciation during 1998 of 45.7%.
(f) Includes only amounts payable on or after the 360(degrees) Merger Date.
(g) Includes a signing bonus in the amount of $500,000.
(h) Includes the following amounts paid or allocated on or after the
360(degrees) Merger Date: $270,448 reimbursement in respect of excise (and
related) taxes paid in accordance with an agreement with 360(degrees) by
reason of a termination of Mr. Beebe's employment with 360(degrees);
$84,402 in relocation expenses; $3,200 in employer contributions made to
the 360(degrees) Communications Company Retirement Savings Plan; and
$29,380 in non-cash credits allocated to a non-qualified, defined
contribution restoration plan.
OPTION AND SAR GRANTS IN 1998
There were no stock option or stock appreciation right grants during 1998 to
ALLTEL's Chief Executive Officer or to any of ALLTEL's other four most highly
compensated executive officers.
OPTION EXERCISES IN 1998 AND 1998 YEAR-END OPTION VALUES
The following table shows information concerning stock option exercises
during 1998 by ALLTEL's Chief Executive Officer and by ALLTEL's other four
most highly compensated executive officers:
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at 1998 Year- In-the-Money
Shares Acquired End Options at 1998 Year-End
Name on Exercise (#) Value Realized ($) Exercisable/Unexercisable Exercisabled/Unexercisable ($)
- ---- --------------- ------------------ ------------------------- ------------------------------
<S> <C> <C> <C> <C>
Joe T. Ford 6,595 208,841 357,000/558,000 13,176,687/14,412,375
Dennis E. Foster 28,326 712,454 127,187/171,218 4,092,478/ 4,913,074
Scott T. Ford -0- -0- 41,000/494,000 1,157,813/12,765,625
Jeffrey H. Fox -0- -0- 30,000/420,000 851,875/10,832,500
Kevin L. Beebe -0- -0- 71,732/ 76,017 2,017,174/ 2,195,366
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS IN 1998
The following table shows information concerning the awards made during 1998
with respect to the three-year measurement period 1998 through 2000 to
ALLTEL's Chief Executive Officer and to ALLTEL's other four most highly
compensated executive officers under the ALLTEL Long-Term Performance
Incentive Plan (other than Dennis E. Foster, who will not be entitled to any
award with respect to the three-year measurement period 1998 through 2000):
12
<PAGE>
<TABLE>
<CAPTION>
Estimated Future Payouts*
-------------------------
PerformancePeriod
Name UntilPayout Minimum ($) Target ($) Maximum ($)
- ---- ----------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Joe T. Ford 3 years 227,500 455,000 682,500
Scott T. Ford 3 years 135,000 270,000 405,000
Jeffrey H. Fox 3 years 100,000 200,000 300,000
Kevin L. Beebe 3 years 87,500 175,000 262,500
</TABLE>
- ----------------
* Awards will be paid upon completion of the 2000 year on the basis of
ALLTEL's performance during the three year period 1998-2000 as determined by
ALLTEL's attainment of prescribed corporate and unit performance targets. The
Compensation Committee of the Board of Directors specified those corporate and
unit performance targets and the award levels for the indicated executive
officers (which are stated as a percentage of each executive officer's average
base salary during the 1998-2000 period). The estimated future payouts shown
above assume that each executive officer's average base salary during the
1998-2000 period would be the same as his base salary during 1998.
Executive Compensation Agreement with Mr. Joe T. Ford
Mr. Joe T. Ford is employed for a period extending to July 1, 2002, under a
contract with ALLTEL that provides for a minimum base annual salary plus any
incentive awards made under the Incentive Plan and the Long-Term Incentive
Plan (the "Incentive Plans"). If the Board of Directors discontinues either or
both of the Incentive Plans (or the application of either or both of them to
Mr. Ford) or should a change of control of ALLTEL occur, the contract provides
that Mr. Ford will receive, in the year in which such event occurs, an annual
salary equal to the greater of his minimum base annual salary plus the average
incentive awards made under the Incentive Plans over the preceding three years
or his 1991 base annual salary compounded at an annual rate of 3% from January
1, 1991, to the beginning of the year in which such event occurs; thereafter
Mr. Ford will receive an annual salary equal to the compensation paid during
the preceding year, compounded by minimum annual increases of 3%. The contract
provides for payment of disability benefits in amounts unaffected by that
disability through the end of the calendar year following the calendar year in
which the disability occurs and of a death benefit in the amount equal to Mr.
Ford's compensation for one year.
Assuming compensation at the 1998 level and retirement at the expiration of
the contract period, the estimated annual benefit to be received by Mr. Ford
is $1,171,082. The contract also provides that Mr. Ford may retire any time
prior to the expiration of the contract period. If Mr. Ford were to elect
early retirement, he would be entitled to retirement benefits under his
contract reduced in accordance with a formula. The contract provides that
those retirement benefits are in lieu of payments under ALLTEL's defined
benefit pension plan described below. The contract provides for payment of
survivorship benefits to Mr. Ford's wife, who would receive for her life 50%
of the annual retirement compensation to which Mr. Ford is entitled.
Employment Agreement with Mr. Dennis E. Foster
Mr. Foster is employed for a period extending to June 30, 2000, under a
contract with ALLTEL that became effective as of August 1, 1998. The contract
replaces Mr. Foster's employment agreement with 360(degrees) Communications
Company ("360(degrees)"), which became a wholly-owned subsidiary of ALLTEL on
July 1, 1998.
Under the contract, Mr. Foster will receive an annual base salary of at
least $600,000 per year and will be provided a target annual incentive
opportunity of not less than 75% of his annual base salary (with the award for
the period August 1, 1998 through December 31, 1998, pro rated) and the
opportunity to earn a long-term incentive award under ALLTEL's Long-Term
Performance Incentive Plan for the three year measurement periods 1996 through
1998 and 1997 through 1999, respectively, with a target incentive opportunity
of not less than 60% of his average year-end base salary. Mr. Foster received
a bonus in the amount of $1,000,000 on August 31, 1998. If he remains employed
through August 1, 1999, Mr. Foster also will receive a bonus in the amount of
$2,000,000.
13
<PAGE>
The contract also requires ALLTEL to provide Mr. Foster with supplemental
retirement benefits in the form of a non-qualified defined contribution
arrangement under which employer contribution credits for calendar years
ending prior to January 1, 2000, are allocated to a supplemental retirement
account. The amount of annual credits is based on an actuarially computed
value to provide an annual replacement ratio of 40% of Mr. Foster's final
compensation (annual base salary and annual target incentive) for his expected
life beginning at age 65, offset by the age 65 pension benefits provided by
certain former employers. The actuarial calculation is leveled so that future
contribution credits equate to a relatively level percentage of compensation.
If Mr. Foster remains employed through June 30, 2000, there will be an
additional credit to his supplemental retirement account of $5,000,000, less
the total of other credits occurring after June 30, 1998. The supplemental
retirement benefit attributable to credits occurring prior to July 1, 1998, is
fully vested. The supplemental retirement benefit attributable to credits
occurring after June 30, 1998, fully vests at the earliest of Mr. Foster's
termination of employment on June 30, 2000, or his death, disability,
involuntary termination without cause, or voluntary termination for good
reason during the term of the contract. Vested benefits are distributable in
installments following termination of employment unless Mr. Foster elects an
alternative form of distribution, which may include a lump sum. The
supplemental retirement benefits are backed by a rabbi trust to which
contributions are to be made at the time supplemental retirement credits to
the account occur.
If Mr. Foster remains employed until June 30, 2000, or his employment is
terminated earlier due to death, disability, involuntary termination without
cause, or voluntary termination for good reason, both he and his spouse will
receive post-retirement medical insurance benefits at the same cost and
coverage levels as then provided to senior executives of ALLTEL who are
actively employed (with a carve-out for Medicare benefits). This commitment is
subject to change or termination to the same extent the active employees' plan
is changed or terminated.
Mr. Foster is eligible for reimbursement of any excise tax under Section
4999 of the Internal Revenue Code in respect of the "change in control" of
360(degrees) associated with 360(degrees) becoming a wholly-owned subsidiary
of ALLTEL (and for any excise, income, or employment tax resulting from that
reimbursement, successively, so as to offset the Internal Revenue Code Section
4999 excise tax) imposed on payments to Mr. Foster from 360(degrees) or
ALLTEL.
Following the termination of Mr. Foster's employment for any reason, Mr.
Foster will be subject to provisions regarding nondisclosure of confidential
and proprietary information, noninterference, and a five-year non-competition
covenant. If Mr. Foster remains employed until June 30, 2000, or, at ALLTEL's
option, if Mr. Foster's employment is terminated prior to June 30, 2000, by
ALLTEL other than for cause, or by Mr. Foster, Mr. Foster is required to
provide consulting services to ALLTEL as an independent contractor for a one-
year term, for which Mr. Foster is to be paid $2,000,000 at the beginning of
the consulting term.
Change in Control Agreements
ALLTEL is a party to agreements with each of Messrs. Scott T. Ford, Fox, and
Beebe, which provide that if, following a "change in control," the executive's
employment terminates within twelve months (unless the termination is as a
result of death, by ALLTEL as a result of the executive's disability or for
"cause", or by the executive without "good reason") or if, after remaining
employed for twelve months, the executive's employment terminates during the
following three-month period (unless the termination is a result of death or
is by ALLTEL as a result of the executive's disability) (each of the foregoing
events being referred to as a "Payment Trigger"), ALLTEL is required to pay
the executive an amount equal to three times the sum of his base salary as in
effect immediately prior to the change in control or Payment Trigger and the
maximum amounts he could have received under the Incentive Plans for the
period commencing coincident with or most recently prior to the period in
which the change in control or Payment Trigger occurs, but reduced by any
other cash severance paid to him. ALLTEL also is required to make an
additional payment to the executive in the amount of any excise tax under
Section 4999 of the Internal Revenue Code as a result of any payments or
distributions by ALLTEL plus the amount of all additional income tax payable
by him as a result of such additional payments. Payments under the agreements
are covered by ALLTEL's "grantor trust" described below.
14
<PAGE>
Defined Benefit Pension Plan
ALLTEL maintains a trusteed, noncontributory, defined benefit pension plan
covering salaried and non-salaried employees under which benefits are not
determined primarily by final compensation (or average final compensation).
Under this pension plan, Messrs. Scott T. Ford and Beebe would have each
period of post-January 1, 1988, service credited at 1% of compensation, plus
.4% of that part of his compensation that exceeds the Social Security Taxable
Wage Base for such year. Service prior to 1988, if any, would be credited on
the basis of a percentage of his highest consecutive five-year average annual
base salary, equal to 1% for each year of service prior to 1982 and thereafter
increasing by .05% each year until 1988, but only prospectively, i.e., with
respect to service earned in such succeeding year; in addition, each of
Messrs. Scott T. Ford, and Beebe would receive an additional credit of .25%
for each pre-1988 year of service after age 55, subject to a maximum of 10
years' such credit, and would have added to his annual pension benefits an
amount equal to .4% of the amount by which his pre-1988 career average annual
base salary (three highest years) exceeds his Social Security covered
compensation, multiplied by his years of pre-1988 credited service. Various
benefit payment options are available on an actuarially equivalent basis,
including joint and survivor benefits. Compensation included in the pension
base includes cash awards under the Incentive Plans.
Assuming annual increases in compensation in future years of 5% per year,
continuation in the position he held during 1998, and retirement at age 65,
the estimated annual benefit under the pension plan for each of Messrs. Scott
T. Ford and Beebe is $55,568, and $44,974, respectively. (Messrs. Joe T. Ford,
Foster, and Fox, the only other executives included in the Summary
Compensation Table on page 11, currently are not participants in and are not
entitled to benefits under the pension plan.) Amounts shown are straight life
annuity amounts and include amounts payable under the defined benefit portion
of the ALLTEL Benefit Restoration Plan.
Benefit Restoration Plan
Federal laws place certain limitations on pensions that may be paid under
federal income tax qualified plans. The ALLTEL Benefit Restoration Plan
provides for the payment to certain employees outside tax-qualified plans of
any amounts not payable under the tax-qualified plans by reason of limitations
specified in the Internal Revenue Code. Currently, under the ALLTEL Benefit
Restoration Plan, Messrs. Joe T. Ford, Scott T. Ford, Foster, Fox, and Beebe
are eligible for accruals with respect to benefits not payable under ALLTEL's
defined contribution plans, and Mr. Scott T. Ford is eligible for accruals
with respect to benefits not payable under ALLTEL's defined benefit pension
plan. Amounts accrued, if any, under the defined contribution portion of these
plans in 1998 for each of these executives are included in the Summary
Compensation Table on page 11.
Supplemental Executive Retirement Plan
ALLTEL maintains a non-qualified supplemental executive retirement plan (the
"SERP") in which certain employees designated by the Board of Directors,
including Messrs. Scott T. Ford, Fox, and Beebe, participate. The SERP
provides with respect to Messrs. Scott T. Ford, Fox, and Beebe that, upon
normal retirement at age 65 (or, if earlier, following a Payment Trigger that
occurs after the participant's early retirement date), the executive will
receive an annual benefit under the SERP, payable as a single life annuity,
equal to 60% of (A) if a Payment Trigger has not occurred, the greater of (i)
his total compensation for the calendar year preceding his retirement, or (ii)
his average annual total compensation for the three calendar years preceding
his retirement; or (B) if a Payment Trigger has occurred, the greater of (i)
the amount determined under (A) above (as if a Payment Trigger had not
occurred), or (ii) the sum of (a) his annual base salary in effect immediately
prior to the change in control (as defined in the change in control agreements
described above), the Payment Trigger, or his retirement date, whichever is
greatest, plus (b) the maximum amounts payable to him under specified
incentive compensation plans for the period coincident with or most recently
prior to the change in control, the Payment Trigger, or his retirement date,
whichever is greatest. The amount of the normal retirement benefit under the
SERP is not determined based on years of service.
15
<PAGE>
Each of Messrs. Scott T. Ford, Fox, and Beebe also is entitled to an early
retirement benefit under the SERP if he retires before becoming entitled to
the normal retirement benefit but after attaining the age of 60 with 15 or
more years of service or age 55 with 20 or more years of service or after a
Payment Trigger occurs (regardless of his years of service). The early
retirement benefit is calculated the same as the normal retirement benefit,
except that the percentage used in the calculation is 45% (increased ratably
for the number of years of his service after the early retirement date, up to
a maximum of 60%) rather than 60%.
If Messrs. Scott T. Ford, Fox, or Beebe dies after benefits commence, his
surviving spouse will receive 50% of the amount that he was receiving prior to
his death. If he dies while employed, his surviving spouse will receive 50% of
the amount that he would have received if he had retired on the day before
death. Following retirement, each of Messrs. Scott T. Ford, Fox, and Beebe
(and his spouse and dependents) also is entitled to receive post-retirement
medical benefits under the SERP together with reimbursement for any additional
taxes incurred as a result of the benefits being taxed less favorably than
they would have been if received by other retired employees. Payments to
Messrs. Scott T. Ford, Fox, and Beebe under the SERP are covered by ALLTEL's
"grantor trust" described below.
The retirement benefits payable under the SERP are reduced by certain
benefits paid under other qualified and nonqualified benefit plans. The
benefits under the SERP are not subject to offset for Social Security.
Assuming annual increases in compensation in future years of 5% per year,
retirement at age 65, and based on estimates of the benefits that reduce the
retirement benefits payable under the SERP, the estimated normal retirement
benefit under the SERP payable for each of Messrs. Scott T. Ford, Fox, and
Beebe is $27,972, $942,971, and $109,880, respectively.
Grantor Trust
ALLTEL maintains a "grantor trust" under Section 671 of the Internal Revenue
Code (the "Trust") to provide certain participants in designated compensation
and supplemental retirement plans and arrangements with greater assurance that
the benefits and payments to which those participants are entitled under those
plans and arrangements will be paid. Contributions by ALLTEL to the Trust are
discretionary. Prior to a "change of control" of ALLTEL (as defined in the
trust agreement for the Trust), benefits may not be paid from the Trust.
Following a "change of control" of ALLTEL, benefits and payments may be paid
from the Trust to the extent those benefits and payments are not paid by
ALLTEL or its successor. The assets of the Trust are subject to the claims of
the creditors of ALLTEL in the event ALLTEL becomes "insolvent" (as defined in
the trust agreement for the Trust).
16
<PAGE>
CERTAIN TRANSACTIONS
ALLTEL engaged Stephens Inc., an affiliate of Stephens Group, Inc., to
render investment banking and brokerage services to ALLTEL and its
subsidiaries during 1998, for which ALLTEL paid investment banking fees and
brokerage commissions totaling $6,127,675 to Stephens Inc. during the period
January 1, 1998, through December 31, 1998. Stephens Group, Inc. beneficially
owned, on February 22, 1999, 16,300,144 shares of Common Stock (see page 5).
ALLTEL engaged Fidelity Management Trust Company, a subsidiary of FMR Corp.,
to render record keeping services in connection with the 360(degrees)
Communications Inc. Retirement Savings Plan during 1998, for which ALLTEL paid
administrative fees totaling $70,308 to Fidelity Management Trust during the
period January 1, 1998, through December 31, 1998. FMR Corp. beneficially
owned, on February 22, 1999, 15,078,023 shares of Common Stock (see page 5).
ALLTEL believes that the transactions set forth above were conducted on
terms that are no less favorable to ALLTEL than could have been obtained from
unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires ALLTEL's
directors and executive officers, and persons who own more than ten percent of
ALLTEL's Common Stock, to file with the Securities and Exchange Commission
("SEC") and the New York Stock Exchange initial reports of ownership and
reports of changes in ownership of that Common Stock. To ALLTEL's knowledge,
based solely upon a review of copies of reports provided by those individuals
to ALLTEL and written representations of those individuals that no other
reports were required with respect to the year ended December 31, 1998, ALLTEL
believes that all of the foregoing filing requirements applicable to its
directors, executive officers, and greater-than-ten percent beneficial owners
have been met, except that Ronald Townsend, a director of ALLTEL, reported on
a Form 5 that he failed to report the exercise of options covering 3,000
shares of Common Stock on November 6, 1998, and the concurrent sale of those
shares, and John M. Mueller, Controller of ALLTEL, was 15 days late in filing
a Form 4 Report to report the February 13, 1998, sale of 4,000 shares of
Common Stock.
ANNUAL REPORT
The 1998 Annual Report, which includes financial statements and an outline
of ALLTEL's operations during 1998, was mailed to each stockholder receiving
this Proxy Statement. As a result of comments received from the SEC, there
were several changes made to the financial statements contained in that annual
report after it was mailed. These changes relate to presentation and expanded
disclosures to the financial statements and have been incorporated into the
financial statements included in ALLTEL's 1998 Form 10-K report. ALLTEL will
provide, without charge, to any person receiving a copy of this Proxy
Statement, upon written request, a copy of ALLTEL's Annual Report on Form 10-K
for the calendar year 1998, including the financial statements and the
financial statement schedules thereto, required to be filed with the SEC.
Those requests should be addressed to Dan Powell, Vice President-Investor
Relations, ALLTEL Corporate Services, Inc., One Allied Drive, Little Rock,
Arkansas 72202.
OTHER MATTERS
Stockholders who intend to present proposals at the 2000 Annual Meeting, and
who wish to have those proposals included in ALLTEL's Proxy Statement for the
2000 Annual Meeting, must be certain that those proposals are received by the
Corporate Secretary at One Allied Drive, Little Rock, Arkansas 72202, prior to
November 22, 1999. Such proposals must meet the requirements set forth in the
rules and regulations of the SEC in order to be eligible for inclusion in the
Proxy Statement for ALLTEL's 2000 Annual Meeting.
17
<PAGE>
The management and the Board of Directors of ALLTEL do not know of any other
matters that may come before the meeting. If any other matters properly come
before the meeting, however, it is the intention of the persons named in the
accompanying form of proxy to vote the proxy in accordance with their judgment
on those matters. Under ALLTEL's Bylaws, nominations for director may be made
only by the Board, or by an ALLTEL stockholder entitled to vote who has
delivered notice to ALLTEL not fewer than 90 days nor more than 120 days prior
to the first year anniversary of the immediately preceding year's annual
meeting. The Bylaws also provide that no business may be brought before an
annual meeting except as specified in the notice of the meeting or as
otherwise brought before the meeting by or at the direction of the Board or by
an ALLTEL stockholder entitled to vote who has delivered notice to ALLTEL
(containing certain information specified in the Bylaws) within the time
limits described above for delivering notice of a nomination for the election
of a director. These requirements apply to any matter that an ALLTEL
stockholder wishes to raise at an annual meeting other than in accordance with
the procedures in SEC Rule 14a-8. A copy of the full text of the Bylaw
provisions discussed above may be obtained by writing to the Corporate
Secretary, One Allied Drive, Little Rock, Arkansas 72202.
ALLTEL will bear the cost of solicitation of proxies. In addition to the use
of the mail, proxies may be solicited by officers, directors, and employees of
ALLTEL, personally or by telephone or electronic means. In the event the
management of ALLTEL deems it advisable, ALLTEL may engage the services of an
independent proxy solicitation firm to aid in the solicitation of proxies. The
fees paid by ALLTEL, in the event of such an engagement, likely would not
exceed $15,000. ALLTEL will pay persons holding stock in their names or those
of their nominees for their expenses in sending soliciting material to their
principals in accordance with regulations of the SEC and The New York Stock
Exchange, Inc.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS
ARE URGED TO FILL IN, DATE, SIGN, AND RETURN THE ACCOMPANYING PROXY IN THE
ENCLOSED ENVELOPE, OR VOTE VIA THE INTERNET OR BY TELEPHONE IN ACCORDANCE WITH
THE INSTRUCTIONS SET FORTH ON THE PROXY CARD.
Dated: March 22, 1999 By Order of the Board of
Directors,
FRANCIS X. FRANTZ,
Secretary
18
<PAGE>
ALLTEL CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
for the Annual Meeting of Stockholders on April 22, 1999
P The undersigned hereby appoints Joe T. Ford and Francis X. Frantz, or either
of them, with full power of substitution, as proxies to vote all of the
undersigned's shares of voting stock at the Annual Meeting of Stockholders
R on April 22, 1999, and at any and all adjournments thereof, in accordance
with and as more fully described in the Notice of Annual Meeting and the
Proxy Statement, receipt of which is acknowledged.
O
Election of Directors, Nominees:
X John R. Belk, Charles H. Goodman, W.W. Johnson, Frank E. Reed,
William H. Zimmer
Y You are encouraged to specify your choices by marking the appropriate boxes
on the reverse side, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations.
<PAGE>
[LOGO OF ALLTEL Annual Meeting of Stockholders 1999 ANNUAL MEETING
APPEARS HERE] Thursday, April 22, 1999 ADMISSION TICKET
11:00 a.m. local time
Arkansas' Excelsior Hotel
Ballroom Level
Three Statehouse Plaza
Little Rock, Arkansas
Please present this ticket for admittance of stockholder(s) named above.
Admittance will be based upon availability of seating.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Instructions for Voting Your Proxy
ALLTEL Corporation is now offering stockholders of record three alternative ways
of voting your proxies:
<S> <C> <C>
. By Telephone (using a touch-tone telephone) . Through the Internet (using a browser) . By Mail (traditional method)
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you had returned your
proxy card. We encourage you to use these cost effective and convenient ways of voting, 24 hours a day, 7 days a week.
- ------------------
TELEPHONE VOTING Available only until 5:00 p.m. Eastern time on April 21, 1999
- ------------------
. This method of voting is available for residents of the U.S. and Canada
. On a touch tone telephone, call TOLL FREE 1-800-644-5834, 24 hours a day, 7 days a week
. You will be asked to enter ONLY the control number shown below
. Have your proxy card ready, then follow the simple instructions
. Your vote will be confirmed and cast as you directed
- ------------------
INTERNET VOTING Available only until 5:00 p.m. Eastern time on April 21, 1999
- ------------------
. Visit our Internet voting website at http://cybervote.georgeson.com
. Enter the Company Number AND Control Number shown below and follow the instructions on your screen
. You will incur only your usual Internet charges.
- ------------------
VOTING BY MAIL
- ------------------
. Simply mark, sign and date your proxy card and return it in the postage-paid envelope
. If you are voting by telephone or the Internet, please do not mail your proxy card.
---------------------------- ----------------------------
COMPANY NUMBER CONTROL NUMBER
---------------------------- ----------------------------
TO VOTE BY MAIL, PLEASE DETACH PROXY CARD HERE
- ------------------------------------------------------------------------------------------------------------------------------
[X] Please mark
votes as in
this example.
This proxy, when properly executed, will be voted in the manner directed below. If no direction is made, this proxy will be voted
"FOR" Proposal 1.
- ----------------------------------------------------------------------
ALLTEL'S Board of Directors recommends a vote "FOR" proposal 1.
- ----------------------------------------------------------------------
1. Election of Directors (see reverse)
For, except vote withheld from the following
nominee(s): FOR WITHHOLD
_____________________________________ [ ] [ ]
DATE:___________________________, 1999
______________________________________
______________________________________
SIGNATURE(S)
IMPORTANT: Please sign exactly as your
name(s) appear(s) hereon. If you are acting
as attorney-in-fact, corporate officer or in
a fiduciary capacity, please indicate the
capacity in which you are signing.
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