<PAGE>
Filed pursuant to Rule 424(b)2
Registration No. 33-64307
PROSPECTUS SUPPLEMENT
(To Prospectus Dated January 26, 1996)
$300,000,000
FRONTIER CORPORATION
[LOGO OF FRONTIER]
7 1/4% NOTES DUE 2004
The 7 1/4% Notes due 2004 (the "Notes") of Frontier Corporation ("Frontier" or
the "Company") being offered hereby will mature on May 15, 2004. Interest on
the Notes will be payable semiannually on May 15 and November 15 of each year,
commencing November 15, 1997. The Notes will be redeemable as a whole or in
part, at the option of the Company at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of the Notes to be redeemed
and (ii) the sum of the present values of the Remaining Scheduled Payments (as
defined herein) discounted to the redemption date on a semiannual basis at the
Treasury Rate (as defined herein) plus 10 basis points, together in either
case with accrued interest to the date of redemption. See "Description of
Notes--Optional Redemption" and "Description of Debt Securities--Redemption of
Securities" in the accompanying Prospectus.
As of March 31, 1997, the Company had outstanding aggregate liabilities of
$1.3 billion that would have ranked pari passu with the Notes and no
outstanding debt to which the Notes would have ranked senior in right of
payment. In addition, the Notes will be structurally subordinated to all
existing and future liabilities, including trade payables, of the Company's
subsidiaries.
The Notes will be represented by one or more Global Securities registered in
the name of a nominee of The Depository Trust Company ("DTC"), as Depositary.
Beneficial interests in the Global Securities will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
and its participants. Except as provided herein, individual Notes will not be
issued. See "Description of Notes--Book-Entry System." Settlement for the
Notes will be made in immediately available funds. The Notes will trade in the
Depositary's Same-Day Funds Settlement System until maturity, and secondary
market trading activity for the Notes will therefore settle in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds. See "Description of Notes--Same-Day
Settlement and Payment."
SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THE ACCOMPANYING PROSPECTUS FOR
CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH
IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT COMPANY(1)(2)
<S> <C> <C> <C>
Per Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99.966% .625% 99.341%
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $299,898,000 $1,875,000 $298,023,000
</TABLE>
- -------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from May 27, 1997 to date of delivery.
(2) Before deducting expenses payable by the Company estimated at $300,000.
The Notes are offered subject to receipt and acceptance by the Underwriters,
to prior sale and to the Underwriters' right to reject any order in whole or
in part and to withdraw, cancel or modify the offer without notice. It is
expected that delivery of the Notes will be made in book-entry form through
the facilities of The Depository Trust Company on or about May 27, 1997.
SALOMON BROTHERS INC LEHMAN BROTHERS
CHASE SECURITIES INC. MORGAN STANLEY & CO.
INCORPORATED
THE ACTIVITIES OF THE UNDERWRITERS IN CONNECTION WITH THIS TRANSACTION ARE
JOINTLY LED BY SALOMON BROTHERS INC AND LEHMAN BROTHERS.
The date of this Prospectus Supplement is May 21, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES, INCLUDING
PURCHASES OF THE NOTES TO STABILIZE THEIR MARKET PRICE AND PURCHASES OF THE
NOTES TO COVER SOME OR ALL OF A SHORT POSITION IN THE NOTES MAINTAINED BY THE
UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES SEE "UNDERWRITING".
STATEMENT REGARDING FORWARD LOOKING INFORMATION
From time to time, information provided by the Company, including written
and oral statements made by its representatives, may contain forward-looking
information as defined in the Private Securities Litigation Reform Act of
1995. All statements, other than statements of historical facts, which address
activities, events or developments that the Company expects or anticipates
will or may occur in the future, including such things as expansion and growth
of the Company's business, future capital expenditures and the Company's
business strategy, are forward-looking statements. In reviewing such
information, it should be kept in mind that actual results may differ
materially from those projected or suggested in such forward-looking
information. This forward-looking information is based on various factors and
was derived utilizing numerous assumptions. Many of these factors have
previously been identified in filings or statements made by or on behalf of
the Company.
Important assumptions and other important factors that could cause actual
results to differ materially from those set forth in the forward-looking
information include: international, national and local general economic and
market conditions; demographic changes; the size and growth of the overall
telecommunications market; the ability of the Company to sustain, manage or
forecast its growth; the size, timing and mix of purchases of the Company's
products; new product and service development and introduction; changes in
consumer preferences; existing governmental regulations; adverse publicity;
dependence on distributors; liability and other claims asserted against the
Company; competition; the loss of significant customers or suppliers;
fluctuations and difficulty in forecasting operating results; changes in
business strategy or development plans; business disruptions; general risks
associated with doing business outside of the United States, including,
without limitation, import duties, tariffs, quotas and political instability;
the ability to attract and retain qualified personnel; the ability to protect
trademarks, patents and other intellectual property; the use of proceeds from
the offering; and other factors referenced or incorporated by reference in
this Prospectus Supplement or the attached Prospectus. GIVEN SUCH
UNCERTAINTIES, PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE
ON SUCH FORWARD-LOOKING STATEMENTS. The Company disclaims any obligation to
update any such factors or to publicly announce the results of any revisions
to any of the forward-looking statements contained or incorporated by
reference herein to reflect future events or developments.
THE COMPANY
Frontier Corporation ("Frontier" or the "Company") provides long distance,
local and wireless telecommunications services to commercial and residential
customers. Previously known as Rochester Telephone Corporation, the Company is
currently the fifth largest provider of long distance services in the United
States.
The Company offers long distance services in the United States and Great
Britain. Frontier's long distance products include switched and dedicated
services, toll-free services, conference calling and calling card services. In
1996, long distance operations generated approximately 73% of Frontier's total
revenues and approximately 50% of its operating income, excluding non-
recurring charges. Prior to 1995, local telephone operations were responsible
for generating a majority of the Company's revenues. However, as the result of
a series of acquisitions of long distance carriers completed by the Company
during 1995, Frontier has become a provider of predominantly long distance
services. In October, 1996, the Company announced its agreement to join Qwest
Communications as a partner in Qwest's construction of a $2 billion nationwide
fiber optic network (the
S-2
<PAGE>
"Qwest/Frontier Fiber Optic Network"). When completed in late 1998, the
network will interconnect almost 100 cities, include approximately 13,000
route miles and provide the Company with nationwide connectivity. The network
is expected to reduce Frontier's cost of transmission and increase the
Company's transmission speed and reliability.
The Company provided local telephone services to approximately 975,000
access lines as of December 31, 1996. During 1996, local telephone operations
generated approximately 25% of Frontier's total revenues and approximately 50%
of its operating income, excluding non-recurring charges. The Company's local
telephone operations consist primarily of two segments: Rochester Telephone
Corp. and Frontier's Regional Operations, which are comprised of 33 telephone
companies in 13 states. As of December 31, 1996, Rochester Telephone Corp.
served approximately 532,000 access lines and the Company's Regional
Operations together served more than 443,000 access lines. In the fourth
quarter of 1996, the Company began offering facilities-based competitive local
exchange services as an Alternative Local Exchange Carrier ("A-LEC") in the
New York City region. As an A-LEC, Frontier will be able to offer customers in
that region integrated local, long distance and wireless services.
The Company provides wireless services through two separate entities.
Frontier owns a 50% interest in the Upstate Cellular Network ("UCN"), a joint
venture with Bell Atlantic/Nynex Mobile in upstate New York and Pennsylvania.
The Company manages UCN, which holds licenses covering approximately 5.1
million people and is accounted for by the Company under the equity method. In
addition, Frontier owns and manages certain other cellular properties, which
together hold licenses covering nearly 300,000 people.
STRATEGY
The Company's strategy is centered around satisfying customer needs by
providing a single source for bundled and integrated telecommunication
solutions and services, primarily to small and medium sized businesses. These
bundled services can include long distance, local and wireless telephone
services, service enhancements and special features, and other selected
products and services. Many of these services will be provided by Company
owned businesses and facilities. Others will be provided through resale and/or
strategic partnerships and alliances.
The Company's primary market focus is on small and medium sized businesses,
many of whom have voice, data, and enhanced telecommunications needs and are
likely to value a single source provider. Over time, these needs are expected
to become more sophisticated as this business segment continues to increase
its consumption of data services. The Company also serves, on a limited basis,
other telecommunication markets, such as residential consumers and other
carriers.
The Qwest/Frontier Fiber Optic Network is a key component of the continuing
implementation of the Company's strategy as the Company expects that ownership
of the network will assure access to a cost effective and efficient means of
delivering integrated products to customers, and will also help expedite the
development and deployment of new services.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below are the Company's ratio of earnings to fixed charges for the
three months ended March 31, 1997 and each of the last five fiscal years. The
ratio of earnings to fixed charges for the Company is computed by dividing
earnings by fixed charges.
S-3
<PAGE>
For purposes of computing this ratio, earnings is defined as consolidated
income before taxes, extraordinary items and cumulative effect of changes in
accounting principles adjusted to include (i) fixed charges, (ii) the income
(losses) of majority-owned partnerships, and (iii) undistributed income
(losses) of investments accounted for by the equity method. Fixed charges are
defined as the sum of (i) total interest costs, both expensed and capitalized,
(ii) amortization of debt issuance costs and discounts and premiums related to
indebtedness, and (iii) the interest component of rent expense.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ---------------------------------
1997(1) 1996(2) 1995(3) 1994(4) 1993 1992
------------ ------- ------- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges........................ 0.2 4.3 4.0 4.9 3.5 2.5
</TABLE>
- --------
(1) Included in earnings for the three month period ended March 31, 1997 was a
one-time pre-tax charge of $96.6 million related primarily to certain
network costs no longer required for long distance traffic volumes, offset
by a pre-tax gain of $18.7 million related to the sale of the Company's
69.5% interest in the South Alabama Cellular Communications Partnership.
If such charges/gains had not occurred, the ratio of earnings to fixed
charges would have been 3.6:1.
(2) Operating results for 1996 include a $48.8 million pre-tax charge
resulting from the curtailment of certain Company pension plans ($28.0
million) and an adjustment to write-off nonrecoverable product development
costs relating to proprietary software ($20.8 million). Additionally,
results for 1996 include pre-tax costs relating to union negotiations at
the Company's largest telephone operating subsidiary ($2.8 million),
offset by a pre-tax gain of $5.0 million as a result of the Company's sale
of its minority investment in a Canadian long distance company. If such
charges/gains had not occurred, the ratio of earnings to fixed charges
would have been 4.8:1.
(3) Included in earnings for 1995 is a one-time pre-tax acquisition related
charge of $114.2 million associated with the integration of the Company's
1995 acquisitions. This charge is offset by the non-taxable gain of $4.8
million resulting from the sale of one of the Company's telephone
subsidiaries. If such charges/gains had not occurred, the ratio of
earnings to fixed charges would have been 5.3:1.
(4) Operating results for 1994 include the pre-tax gain relating to the sale
of Minot Telephone of $11.3 million. If this gain had not occurred, the
ratio of earnings to fixed charges would have been 4.8:1.
USE OF PROCEEDS
The net proceeds of the offering of the Notes, estimated to be $297.7
million, will be used for the purpose of financing a portion of the Company's
share of the cost of the Qwest/Frontier Fiber Optic Network. Pending such use,
the net proceeds from the sale of the Notes will be used to repay $297.7
million principal amount of the Company's commercial paper. As of May 21,
1997, such commercial paper had a blended interest rate of 5.61% and had
maturities ranging from May 27 to June 6, 1997.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company
at March 31, 1997 on a historical basis and on a pro-forma basis, as adjusted
to give effect to the issuance of the Notes and the application of the
estimated net proceeds therefrom as described under "Use of Proceeds". For
additional information as to the capitalization of the Company, see the
"Selected Financial Data" below and Management's Discussion and Analysis of
Financial Condition and Results of Operations and the consolidated financial
statements of the Company and the related notes thereto incorporated by
reference herein.
<TABLE>
<CAPTION>
MARCH 31, 1997
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN MILLIONS)
<S> <C> <C>
Short-Term Debt......................................... $ 5.9 $ 5.9
Long-Term Debt
Notes................................................. 300.0
Other long-term debt.................................. 710.0 431.8(1)
-------- --------
Total long-term debt.................................. $ 710.0 $ 731.8
Total shareowners' equity............................... $1,012.1 $1,012.1
Total capitalization.................................... $1,728.0 $1,749.8
Total debt/total capitalization......................... 41.4% 42.2%
</TABLE>
- --------
(1) The estimated net proceeds from the debt offering of $297.7 million will be
used to repay a portion of the Company's commercial paper, which is
included in long-term debt, until such time as additional payments are
required to be made to Qwest for the construction of the Qwest/Frontier
Fiber Optic Network.
SELECTED FINANCIAL DATA
Set forth below are summary historical financial and other data with respect
to the Company for each of the five years in the period ended December 31,
1996. This information is derived from the consolidated financial statements of
the Company, which have been audited by Price Waterhouse LLP, independent
accountants, and should be read in conjunction with the information and audited
consolidated statements and related notes and Management's Discussion and
Analysis of Financial Condition and Results of Operations contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996. The
summary historical financial data and other data for the three month periods
ended March 31, 1997 and 1996 are unaudited, and, in the opinion of the
Company's management, include all adjustments necessary for a fair presentation
of such information. Such unaudited information should be read in conjunction
with Management's Discussion and Analysis of Financial Condition and Results of
Operations and other information and the consolidated financial statements
contained in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997.
S-5
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31, (1)
-------------------------- ------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL DATA:
LONG DISTANCE
COMMUNICATIONS
SERVICES:
Revenues............... $ 401,135 $ 486,102 $1,888,259 $1,480,313 $1,010,425 $ 790,139 $ 635,912
Operating (Loss)
Income:
Operating Income before
Acquisition Related
and Other Charges..... 12,470 63,255 230,658 210,462 161,107 105,048 62,918
Acquisition Related and
Other Charges (2)...... (96,600) (20,823) (91,448)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Operating (Loss)
Income................ $ (84,130) $ 63,255 $ 209,835 $ 119,014 $ 161,107 $ 105,048 $ 62,918
---------- ---------- ---------- ---------- ---------- ---------- ----------
Depreciation and
Amortization........... 22,368 19,518 83,322 61,593 39,290 32,490 22,334
Capital Expenditures... 55,930 37,230 186,906 68,265 41,668 30,884 20,453
LOCAL COMMUNICATIONS
SERVICES:
Revenues............... 163,330 158,442 643,013 621,725 609,678 593,871 567,272
Operating Income:
Operating Income before
Acquisition Related
and Other Charges..... 59,714 50,851 215,638 198,281 180,250 162,847 137,101
Acquisition Related and
Other Charges (2)...... (23,100) (10,249) (3,300)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Operating
Income................ $ 59,714 $ 50,851 $ 192,538 $ 188,032 $ 180,250 $ 159,547 $ 137,101
---------- ---------- ---------- ---------- ---------- ---------- ----------
Depreciation and
Amortization........... 27,285 25,149 102,350 104,419 108,588 112,523 100,692
Capital Expenditures... 15,356 19,462 101,342 73,766 60,711 89,823 114,930
CORPORATE AND OTHER:
Revenues............... 8,946 10,605 44,297 41,653 47,442 53,438 49,060
Operating (Loss)
Income:
Operating (Loss) Income
before Acquisition
Related and Other
Charges............... (1,884) (2,254) (9,589) (10,274) (15,731) (12,958) 4,832
Acquisition Related and
Other Charges (2)...... (4,900) (12,542)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Operating (Loss)
Income................ $ (1,884) $ (2,254) $ (14,489) $ (22,816) $ (15,731) $ (12,958) $ 4,832
---------- ---------- ---------- ---------- ---------- ---------- ----------
Depreciation and
Amortization........... 862 1,021 4,274 3,697 5,445 3,763 2,194
Capital Expenditures... 6,733 5,308 22,554 20,544 11,356 3,135 1,891
CONSOLIDATED:
Revenues............... 573,411 $ 655,149 $2,575,569 $2,143,691 $1,667,545 $1,437,448 $1,252,244
Operating (Loss)
Income:
Operating Income before
Acquisition Related
and Other Charges..... 70,300 111,852 436,707 398,469 325,626 254,937 204,851
Acquisition Related and
Other Charges (2)...... (96,600) (48,823) (114,239) (3,300)
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Operating (Loss)
Income................ $ (26,300) $ 111,852 $ 387,884 $ 284,230 $ 325,626 $ 251,637 $ 204,851
---------- ---------- ---------- ---------- ---------- ---------- ----------
(Loss) Income Before
Extraordinary Items
and Cumulative Effect
of Changes in
Accounting Principles. $ (13,561) $ 65,141 $ 217,944 $ 144,768 $ 187,254 $ 128,644 $ 107,025
Consolidated Net (Loss)
Income................. $ (13,561) $ 57,123(3) $ 209,926(3) $ 22,083(4) $ 180,057(5) $ 121,154(6) $ 105,953(7)
Depreciation and
Amortization........... $ 50,515 $ 45,688 $ 189,946 $ 169,709 $ 153,323 $ 148,766 $ 125,220
Capital Expenditures... $ 78,019 $ 62,000 $ 310,802 $ 162,575 $ 113,735 $ 123,842 $ 137,274
OTHER DATA:
EBITDA (8)............. 120,815 157,540 626,653 568,178 478,949 403,703 330,071
EBITDA margin (8)...... 21.1% 24.0% 24.3% 26.5% 28.7% 28.1% 26.4%
Current ratio.......... 1.02 1.11 1.12 1.04 2.20 1.04 0.88
Debt to Capitalization
(9).................... 41.4% 38.4% 39.1% 41.0% 41.2% 44.6% 52.6%
Pre-tax interest
coverage (10).......... (0.4)(11) 9.6 8.2 5.5 6.7 4.3 3.0
Financial Position:
Identifiable assets.... $2,268,992 $2,154,715 $2,221,520 $2,108,592 $2,060,794 $1,721,545 $1,679,743
Working Capital........ 11,005 51,468 51,131 18,934 368,128 11,674 (42,840)
Total debt............. 715,884 616,782 681,296 633,738 666,515 586,669 694,803
Total shareowners'
equity................. 1,012,113 990,634 1,060,353 911,495 949,329 727,725 616,377
</TABLE>
S-6
<PAGE>
- --------
(1) The Company completed several acquisitions during the periods presented.
During 1995, seven long distance companies were acquired and accounted for
as purchases which may affect the comparability of the data on a year-to-
year basis. During 1995, the Company also merged with two additional long
distance companies, including ALC Communications Corporation, in
transactions that were accounted for as poolings of interests. The
consolidated financial statements have been restated for all periods prior
to the mergers to include the accounts and operations of the pooled
companies.
(2) Acquisition Related and Other Charges includes the following:
1997--A charge of $96.6 million was recorded in the first quarter primarily
related to excess network capacity.
1996--The Company recorded a $48.8 million charge relating to the
curtailment of certain Company pensions ($28.0 million) and a $20.8
million write-off of unrecoverable product development costs for its
conference calling product line.
1995--The Company recorded a $114.2 million charge associated with the
integration of a number of long distance companies acquired, including
ALC Communications Corporation.
1993--A charge of $3.3 million was recorded to write-off one-half of the
costs deferred as part of a project to redesign customer account
records and customer billing systems. The project was abandoned after
it was determined that the project cost would be substantially greater
than original estimates.
(3) Includes a $8.0 million post-tax charge for the cumulative effect of
adopting Financial Accounting Standard No. 121 (FAS 121) "Accounting for
the Impairment of Long-Lived Assets to Be Disposed Of".
(4) Includes post-tax extraordinary charges of $112.1 million resulting from
the discontinuance of FAS 71 "Accounting for the Effects of Certain Types
of Regulation", a post-tax extraordinary loss on the retirement of debt of
$9.0 million and a post-tax cumulative effect charge of $1.5 million
relating to the adoption of FAS 116, "Accounting for Contributions
Received and Contributions Made."
(5) Includes a post-tax cumulative effect charge of $7.2 million for the
adoption of FAS 112, "Employers' Accounting for Postemployment Benefits".
(6) Includes a post-tax extraordinary loss on retirement of debt of $7.5
million.
(7) Includes a post-tax extraordinary loss on retirement of debt of $1.1
million.
(8) "EBITDA" is defined as income before income taxes, extraordinary items and
cumulative effect of changes in accounting principles plus interest
expense and depreciation and amortization, less interest income, gain on
sales of assets, equity earnings and other. For purposes of this
calculation, EBITDA excludes the non-recurring charges described in
footnotes 1-4 on page S-4. EBITDA is not a substitute for operating and
cash flow data as determined in accordance with generally accepted
accounting principles. EBITDA margin is calculated by dividing EBITDA by
revenue.
(9) Debt includes the current portion of long-term debt, long-term debt and
capitalized lease obligations. Capitalization includes debt and
shareowners' equity.
(10) Pre-tax interest coverage is defined as net income before extraordinary
items and cumulative effect of changes in accounting principles plus
income taxes and net interest expense divided by gross interest expense.
Net interest expense includes capitalized interest.
(11) Excluding non-recurring charges as described in footnote 1 on page S-4,
pre-tax interest coverage is 5.6 times.
S-7
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set
forth in the Prospectus, to which description reference is hereby made.
GENERAL
The Notes will be limited to an aggregate principal amount of $300,000,000
and will mature on May 15, 2004. The Notes will be Senior Securities (as
defined in the Prospectus) and will rank equally with all other unsecured and
unsubordinated indebtedness of the Company. The Notes will bear interest at
the rate per annum set forth on the cover page of this Prospectus Supplement
from May 27, 1997 or from the most recent interest payment date to which
interest has been paid or provided for, payable semiannually in arrears on May
15 and November 15 of each year (each an "Interest Payment Date"), beginning
November 15, 1997, to the persons in whose names the Notes are registered at
the close of business on the May 1 or November 1, as the case may be, next
preceding such Interest Payment Date. The Notes will be subject to defeasance
as described in "Description of Debt Securities--Discharge, Defeasance and
Covenant Defeasance" in the accompanying Prospectus. Principal of and interest
on the Notes and premium, if any, will be payable at the office of The Chase
Manhattan Bank, as trustee (the "Trustee"), maintained for such purposes in
New York, New York. Payment of the purchase price of each Note may be made,
and the payment of the principal of and interest and premium, if any, on the
Notes will be made, only in U.S. dollars. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Notes will not be subject
to any sinking fund. Except under the limited circumstances described below
under "Global Securities; Book-Entry System", individual Notes in definitive
form will not be issued. See the Prospectus for a detailed summary of
additional provisions of the Notes and of the Indenture dated as of May 21,
1997 between the Company and the Trustee (the "Indenture") under which the
Notes will be issued. The Company will have no obligation to pay any
additional amounts on the Notes in respect of any tax, assessment or
governmental charge.
RANKING
As of March 31, 1997, the Company had outstanding aggregate liabilities of
$1.3 billion that would have ranked pari passu with the Notes and no
outstanding debt to which the Notes would have ranked senior in right of
payment. In addition, the Notes will be structurally subordinated to all
existing and future liabilities, including trade payables, of the Company's
subsidiaries.
OPTIONAL REDEMPTION
The Notes will be redeemable as a whole or in part, at the option of the
Company at any time and from time to time, on not less than 30 or more than 60
days' notice mailed to registered Holders thereof, at a redemption price equal
to the greater of (i) 100% of the principal amount of the Notes to be redeemed
or (ii) the sum of the present values of the Remaining Scheduled Payments (as
defined below) thereon discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate (as defined below) plus 10 basis points, together in either case with
accrued interest on the principal amount being redeemed to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity (computed as of the
second business day immediately preceding such redemption date) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new
S-8
<PAGE>
issues of corporate debt securities of comparable maturity to the remaining
term of the Notes. "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for
U.S. Government Securities" or (ii) if such release (or any successor release)
is not published or does not contain such prices on such business day, (A) the
average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (B) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations or (C) if the
Trustee is able to obtain only one Reference Treasury Dealer Quotation from
the Reference Treasury Dealers, such Quotation. "Reference Treasury Dealer
Quotations" means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer as of 5:00 p.m., New York City time on the third
business day preceding such redemption date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Lehman
Brothers Inc., Chase Securities Inc. and Morgan Stanley & Co. Incorporated and
their respective successors; provided, however, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"), the Company shall substitute therefor another
nationally recognized investment banking firm that is a Primary Treasury
Dealer.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if such redemption date is not an
Interest Payment Date with respect to such Note, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to such redemption date.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Notes called for redemption shall have been made
available on such redemption date, such Notes will cease to bear interest on
the date fixed for such redemption specified in such notice, and the only
right of Holders of the Notes will be to receive payment of the redemption
price. See "Description of Debt Securities--Redemption of Securities" in the
accompanying prospectus.
COVENANTS
See "Description of Debt Securities--Merger, Consolidation or Sale" and "--
Certain Covenants" in the Prospectus for a description of certain covenants
that will be applicable to the Company under the terms of the Notes and the
Indenture. In addition to such covenants, the terms of the Notes will include
the following covenant:
Restrictions on Liens. If at any time the Company or any of its subsidiaries
mortgages, pledges or otherwise subjects to or permits to exist any Lien (as
defined below) on the whole or any part of any property or assets now owned or
hereafter acquired by it, except as hereinafter provided, the Company will (or
will cause such subsidiary to) secure the outstanding Notes and, if the
Company elects, any other obligations of the Company ranking on a parity with
the Notes, equally and ratably with the indebtedness or obligations secured by
such mortgage, pledge or other Lien, for as long as any such indebtedness or
obligation is so secured. The foregoing covenant does not apply to (a) the
creation, extension, renewal or refunding of purchase-money mortgages or
liens, (b) landlords' liens, (c) liens with respect to the sale or financing
of accounts or chattel paper, (d) liens to which any property or asset
acquired by the Company or such subsidiary is subject as of the date of its
acquisition, (e) the making of any deposit or pledge to secure public or
statutory obligations or with any
S-9
<PAGE>
governmental agency at any time required by law in order to qualify the
Company or such subsidiary to conduct its business or any part thereof or in
order to entitle it to maintain self-insurance or to obtain the benefits of
any law relating to worker's compensation, unemployment insurance, old age
pensions or other social security, or with any court, board, commission, or
governmental agency as security incident to the proper conduct of any
proceeding before it, or (f) other Liens not otherwise permitted securing
obligations in an aggregate amount not to exceed $25 million.
As used above, "Lien" means any lien, mortgage, pledge, security interest,
charge, or encumbrance of any kind (including any conditional sale or other
title retention agreement or any lease in the nature thereof, any capital
lease obligation and any sale and lease back transaction) and any agreement to
give or refrain from giving any lien, mortgage, pledge, security interest,
charge, or other encumbrance of any kind.
GLOBAL SECURITIES; BOOK-ENTRY SYSTEM
The Notes will be represented by one or more Global Securities registered in
the name of the nominee of the Depositary. Each Global Security will be issued
in a denomination equal to the outstanding Notes represented thereby and will
be held by or on behalf of the Depositary. Beneficial interests in the Global
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its participants. Except as
provided below, Notes in definitive form will not be issued.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under New York Banking
law, a "banking organization" within the meaning of New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities for its participating organizations
(the "Participants") and to facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations (including the Underwriters). Indirect access to
the Depositary's system also is available to others such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (the "Indirect
Participants"). Beneficial owners of the Notes that are not Participants or
Indirect Participants who desire to purchase, sell or otherwise transfer
ownership of, or other interest in, the Notes may do so only through
Participants and Indirect Participants. The rules applicable to the Depositary
and its Participants are on file with the Commission.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amount
of the individual Notes represented by such Global Security to the accounts of
the Participants that are so designated by the Underwriters (as defined
below). The laws of some states require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such limits and
such laws may impair the ability to transfer beneficial interests in a Global
Security.
Payments with respect to the Global Securities will be made by the paying
agent to the Depositary or any successor depositary, or its nominee. The
Company expects that any such Depositary, or its nominee, upon receipt of any
payment of principal or of interest on the Global Securities will credit the
accounts of its Participants with payments in amounts proportionate to such
Participants' ownership interest in the Global Securities. Beneficial owners
of the Notes will receive distributions of principal and interest in
proportion to their beneficial ownership through the Participants.
Consequently, any payments to beneficial owners of the Notes will be subject
to the terms, conditions and time of payment required by the Depositary, the
Participants and Indirect Participants, as applicable. The Company expects
that such payments will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers registered in "street name." Such payments will be the
responsibility of such Participants and Indirect Participants. Neither the
Company, the Trustee, nor any paying agent will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in the Notes or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
S-10
<PAGE>
Under the rules, regulations and procedures creating and affecting the
Depositary and its operations, the Depositary is required to make book-entry
transfers among Participants on whose behalf it acts with respect to the Notes
and is required to receive and transmit distributions of principal and
interest on the Notes. Participants and Indirect Participants with which
beneficial owners of the Notes have accounts similarly are required to make
book-entry transfers and receive and transmit such payments on behalf of their
respective beneficial owners of the Notes. Accordingly, although beneficial
owners of the Notes will not possess certificated Notes, beneficial owners
will receive payments and will be able to transfer their interests.
Since it is anticipated that the only holder of the Notes will be the
Depositary or its nominee, beneficial owners of the Notes will not be
recognized as holders of the Notes under the Indenture unless certificated
definitive Notes are issued. So long as the Notes are represented by the
Global Securities, beneficial owners of the Notes will only be permitted to
exercise the rights of holders of the Notes indirectly through the
Participants who in turn will exercise such rights through the Depositary.
If the Depositary is at any time unwilling, unable or ineligible to continue
as depositary and a successor depositary is not appointed by the Company
within 90 days, the Company will issue individual Notes in definitive form in
exchange for the Global Securities representing the Notes. In addition, the
Company may at any time and in its sole discretion determine not to have the
Notes represented by Global Securities and, in such event, will issue
individual Notes in definitive form in exchange for the Global Securities
representing the Notes. Furthermore, if the Company so specifies with respect
to the Notes, an owner of a beneficial interest in a Global Security
representing Notes may, on terms acceptable to the Company, the Trustee, and
the Depositary, receive individual Notes of such series in exchange for such
beneficial interests. In any such instance, an owner of a beneficial interest
in a Global Security will be entitled to physical delivery of individual Notes
of the series represented by such Global Security equal in principal amount to
such beneficial interest and to have such Notes registered in its name.
Individual Notes so issued will be issued as certificated securities in
denominations of $1,000 and integral multiples thereof.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds or the equivalent.
The Notes will clear in the Depositary's Same-Day Funds Settlement System
until maturity, and secondary market trading activity in the Notes that is
effected through the Depositary will therefore be required by the Depositary
to settle in immediately available funds.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated May 21, 1997 (the "Underwriting Agreement") among Frontier and the
Underwriters named below (the "Underwriters"), Frontier has agreed to sell to
the Underwriters, and each of the Underwriters has severally agreed to
purchase, the principal amount of Notes set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF THE NOTES
- ------------ ----------------
<S> <C>
Salomon Brothers Inc........................................... $107,500,000
Lehman Brothers Inc............................................ 107,500,000
Morgan Stanley & Co. Incorporated.............................. 50,000,000
Chase Securities Inc........................................... 35,000,000
------------
Total........................................................ $300,000,000
============
</TABLE>
In the Underwriting Agreement the several Underwriters have agreed, subject
to the terms and conditions set forth therein, to purchase all of the Notes
offered hereby if any Notes are purchased.
S-11
<PAGE>
Frontier has been advised by the Underwriters that the Underwriters propose
initially to offer the Notes to the public at the public offering price set
forth on the cover page of this Prospectus Supplement, and to certain dealers
at such price less a concession not in excess of .375% of the principal amount
of the Notes. The Underwriters may allow, and such dealers may reallow, a
concession to certain other dealers not in excess of .25% of the principal
amount of the Notes. After the initial public offering, the public offering
price and such concessions may be changed from time to time.
The Notes will not have an established trading market when issued. The Notes
are not listed on any securities exchange. The Underwriters may make a market
in the Notes, but the Underwriters are not obligated to do so and may
discontinue any market-making at any time without notice. There can be no
assurance as to the development or liquidity of a trading market for any Notes.
The Underwriting Agreement provides that Frontier will indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
In connection with this offering, certain Underwriters and selling group
members and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Notes. Such
transactions may include stabilization transactions effected in accordance with
Rule 104 of Regulation M under the Securities Exchange Act of 1934, as amended,
pursuant to which such persons may bid for or purchase Notes for the purpose of
stabilizing their market price. The Underwriters also may create a short
position for their respective accounts by selling more Notes in connection with
this offering than they are committed to purchase from the Company, and in such
case may purchase Notes in the open market following completion of this
offering to cover all or a portion of such short position. In addition, Salomon
Brothers Inc, on behalf of the Underwriters, may impose "penalty bids" under
contractual arrangements between the Underwriters whereby it may reclaim from
an Underwriter (or dealer participating in this offering) for the account of
the Underwriters, the selling concession with respect to Notes that are
distributed in this offering but subsequently purchased of the account of the
Underwriters in the open market. Any of the transactions described in this
paragraph may result in the maintenance of the price of the Notes at a level
above that which might otherwise prevail in the open market. None of the
transactions described in this paragraph is required, and, if they are
undertaken, they may be discontinued at any time.
Certain Underwriters and their affiliates have from time to time provided,
and may in the future provide, investment banking and commercial banking
services to the Company and its affiliates, for which they received or will
receive customary fees. The Chase Manhattan Bank, which is Trustee for the
Notes and an affiliate of Chase Securities Inc., one of the Underwriters, is
Agent and a lender under a $350 million revolving credit facility with the
Company.
LEGAL MATTERS
The legality of the Notes will be passed upon for the Company by Martin T.
McCue, Vice President Legal and Planning of the Company, and certain legal
matters will be passed upon for the Underwriters by Cleary, Gottlieb, Steen &
Hamilton, New York, New York.
S-12
<PAGE>
PROSPECTUS DATED JANUARY 26, 1996
PROSPECTUS
$500,000,000
FRONTIER CORPORATION
DEBT SECURITIES, PREFERRED STOCK, COMMON STOCK AND SECURITIES WARRANTS
----------------
Frontier Corporation (the "Company") may from time to time offer in one or
more series of (i) unsecured debt securities ("Debt Securities"), (ii) shares
of its Class A Preferred Stock, par value $100.00 per share (the "Class A
Preferred Stock"), (iii) shares of its Cumulative Preferred Stock, par value
$100.00 per share (the "Cumulative Preferred Stock"; the Class A Preferred
Stock and Cumulative Preferred Stock are sometimes hereinafter collectively
referred to as the "Preferred Stock"), (iv) shares of its common stock, $1.00
par value (the "Common Stock"), and (v) warrants exercisable for Common Stock
("Securities Warrants"), with an aggregate public offering price of up to
$500,000,000 (or its equivalent based on the exchange rate at the time of
sale) in amounts, at prices and on terms to be determined at the time of
offering. The Debt Securities, Preferred Stock, Common Stock and Securities
Warrants (collectively, the "Securities") may be offered, separately or
together, in separate series in amounts, at prices and on terms to be
described in one or more supplements to this Prospectus (a "Prospectus
Supplement").
With respect to the Debt Securities, the specific title, aggregate principal
amount, form (which may be registered or bearer, or certificated or global),
maturity, rate (or manner of calculation thereof) and time of payment of
interest, terms for redemption at the option of the Company or repayment at
the option of the holder, any sinking fund provisions and any conversion
provisions will be set forth in the applicable Prospectus Supplement. Except
as set forth in the applicable indenture or in one more indentures
supplemental thereto, the applicable indenture will not contain any provisions
that would limit the ability of the Company to incur indebtedness or that
would afford holders of Debt Securities protection in the event of a highly
leveraged or similar transaction involving the Company or in the event of a
change of control. The terms of the Preferred Stock, including the specific
designation, any dividend, liquidation, redemption, conversion, voting and
other rights, and all other specific terms of the Preferred Stock will be set
forth in the applicable Prospectus Supplement. In the case of the Common
Stock, the specific number of shares and issuance price per share will be set
forth in the applicable Prospectus Supplement. In the case of the Securities
Warrants, the duration, offering price, exercise price and detachability, if
applicable, will be set forth in the applicable Prospectus Supplement. The
applicable Prospectus Supplement will also contain information, where
applicable, about material United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Securities
covered by such Prospectus Supplement.
The Securities may be offered directly by the Company, through agents
designated from time to time by the Company, or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement with, between or among them, will be set forth, or will
be calculable from the information set forth, in an accompanying Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Securities.
SEE "RISK FACTORS" ON PAGE 4 FOR CERTAIN FACTORS RELATING TO AN INVESTMENT
IN THE SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE DATE OF THIS PROSPECTUS IS JANUARY 26, 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files, reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected at the Public Reference Section maintained
by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and the following regional offices of the Commission: 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, the Company's Common
Stock is listed on the New York Stock Exchange and such reports, proxy
statements and other information concerning the Company can be inspected at
the offices of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission a registration statement on Form
S-3 (the "Registration Statement"), of which this Prospectus is a part, under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Securities offered hereby. This Prospectus does not contain portions of
the information set forth in the Registration Statement, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. Statements contained in this Prospectus as to the contents of any
contract or other documents are not necessarily complete, and in each
instance, reference is made to the copy of such contract or documents filed as
an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference and the exhibits and schedules thereto. For
further information regarding the Company and the Securities, reference is
hereby made to the Registration Statement and such exhibits and schedules
which may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the Exchange
Act with the Commission and are incorporated herein by reference.
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1994 (which incorporates by reference certain information from the Company's
Proxy Statement relating to the Annual Meeting of Shareholders held on April
26, 1995), as amended by Amendment No. 1 on Form 10-K/A;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1995, as amended by Amendment No. 1 on Form 10-Q/A;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1995;
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995; and
5. The Company's Current Reports on Form 8-K, dated February 13, 1995;
February 21, 1995; February 27, 1995; March 17, 1995 (as amended by two
current reports filed on Form 8-K/A); April 9, 1995; April 10, 1995 (three);
April 12, 1995; May 11, 1995; May 17, 1995; August 16, 1995 (two); November
14, 1995 (which includes the restatement of the Company's Annual Report for
the year ended December 31, 1994 to include the pooling of interests with ALC
Communications Corporation); and November 21, 1995.
All documents filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to termination
of the offering of all Securities to which this Prospectus relates shall be
deemed to be incorporated by reference in this Prospectus and shall be part
hereof from the date of filing of such document.
2
<PAGE>
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in
this Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), in any
accompanying Prospectus Supplement relating to a specific offering of
Securities or in any other subsequently filed document that is also
incorporated or deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus or any accompanying Prospectus Supplement. Subject to the
foregoing, all information appearing in this Prospectus and each accompanying
Prospectus Supplement is qualified in its entirety by the information
appearing in the documents incorporated by reference.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon their
written or oral request, a copy of any or all of the documents incorporated
herein by reference (other than exhibits to such documents, unless such
exhibits are specifically incorporated by reference in such documents).
Written requests for such copies should be addressed to the Company's
Corporate Secretary at Frontier Corporation, 180 South Clinton Avenue,
Rochester, New York 14646-0700, telephone number (800) 836-0342.
Unless the context otherwise requires, as used herein, the term "Company"
means Frontier Corporation, a New York business corporation, and its
consolidated subsidiaries.
3
<PAGE>
THE COMPANY
Frontier Corporation, formerly known as Rochester Telephone Corporation (the
"Company"), is a major U.S. diversified telecommunications firm. The Company
has grown from its roots as a local exchange telephone company in Rochester,
New York to a company that operates 34 local exchange companies in 13 states,
a major nationwide long distance company, and several wireless properties. The
Company is now the fifth largest long distance carrier in the United States.
The Company is a provider of integrated telecommunications services to more
than two million customers through its local, long distance and wireless
communications operations.
The Company's executive offices are located at 180 South Clinton Avenue,
Rochester, New York 14646-0700, and its telephone number is (716) 777-1000.
RISK FACTORS
Prospective investors should carefully consider, among other factors, the
matters described below.
COMPETITION
It is anticipated that approximately 70% of the Company's revenues will be
derived from long distance operations. While the Company's management believes
that the long distance segment of the telecommunications market has the
potential to provide significant enhancements to shareholder value, there are
competitive risks associated with long distance operations. Legislation is now
being considered by Congress which, if passed and signed into law by President
Clinton, may permit the entry of the regional Bell telephone operating
companies ("RBOCs") into long distance operations outside the regions served
by their local exchange operations immediately upon enactment, and thereafter
within their regions upon action by the Federal Communications Commission.
Each one of the RBOCs has assets and revenues in excess of the assets and
revenues of the Company and they are therefore expected to be significant
participants in the long distance market.
The long distance market today is dominated by three major carriers, AT&T
Corp., MCI Communications Corporation, and Sprint Corporation, all of which,
as well as the fourth largest carrier, WorldCom, Inc. (formerly known as LDDS
Communications, Inc.), own national switching and transmission networks. While
the Company owns switching facilities in many places across the country, its
owned transmission facilities (fiber optic and digital microwave networks)
tend to be regional in nature. Thus, the Company's ability to compete is
dependent on the willingness of their larger competitors and others to make
available to the Company on favorable terms long term leases and/or purchase
of transmission capacity.
In addition, recently adopted and proposed regulatory changes in the pending
federal legislation and in many of the states in which the Company's local
exchange companies operate make it clear that the local exchange business is
or will soon be open to intensifying competition. Such competition is a key
assumption underlying the Company's "Open Market Plan" approved by the New
York State Public Service Commission and the Company's shareholders in
December 1994, under which the Rochester local exchange telephone market was
opened to competition, in exchange for reduced regulation of the Company's
local exchange telephone operations in that market, including price cap
regulation. In many areas, the incumbent local exchange company may be
required to continue as the "provider of last resort" subject to stricter
rules than those applying to newer entrants into the same local market. The
Company's strategy is to provide integrated communications solutions for its
customers which can include bundled long distance, wireless, local and other
services, rather than continue the company's historic reliance on the local
exchange business for the bulk of the Company's revenues and profits.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds of the Securities are intended to be used to provide funds for the
general corporate purposes of the Company.
4
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges and the ratio of earnings to combined
fixed charges and preferred stock requirements for the nine months ended
September 30, 1995 and each of the last five fiscal years for the Company are
presented below. The ratio of earnings to fixed charges for the Company is
computed by dividing earnings by fixed charges. The ratio of earnings to
combined fixed charges and preferred stock dividend requirements is computed
by dividing earnings by the sum of fixed charges and preferred stock dividend
requirements.
For purposes of computing these ratios, earnings is defined as consolidated
pretax income adjusted to include (i) fixed charges, (ii) the income (losses)
of majority-owned partnerships, and (iii) undistributed income (losses) of
investments accounted for by the equity method. Fixed charges are defined as
the sum of (i) fixed interest costs, both expensed & capitalized, (ii)
amortization of debt issuance costs and discounts and premiums relating to
indebtedness, and (iii) the interest component of rent expense. Preferred
stock requirements represent the amount of pretax earnings required to cover
any preferred stock dividend requirements and the accretion in carrying value
of redeemable preferred stock.
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED DECEMBER 31,
ENDED ------------------------
SEPTEMBER 30,
1995(1) 1994 1993 1992 1991 1990
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 3.6 4.9 3.5 2.5 2.5 1.8
Ratio of earnings to combined fixed
charges and
preferred stock requirements........... 3.5 4.8 3.4 2.3 2.2 1.5
</TABLE>
- --------
(1) Included in earnings for the nine month period ended September 30, 1995
was a one-time pretax acquisition related charge of $114.2 million
associated with the integration of the Company's 1995 acquisitions as well
as the cost directly associated with effecting the merger with ALC
Communications Corporation. If such a charge had not occurred, the ratios
of earnings to fixed charges and earnings to combined fixed charges and
preferred stock dividend requirements would have been 5.6 and 5.5,
respectively.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which this Prospectus and any applicable Prospectus
Supplement may relate. The particular terms of the Debt Securities being
offered and the extent to which such general provisions may apply will be set
forth in the applicable Indenture or in one or more indentures supplemental
thereto and described in a Prospectus Supplement relating to such Debt
Securities. The Forms of the Senior Indenture (as defined herein) and the
Subordinated Indenture (as defined herein) have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company and
may be either senior Debt Securities ("Senior Securities") or subordinated
Debt Securities ("Subordinated Securities"). The Debt Securities will be
issued under one or more indentures (the "Indentures"). Senior Securities and
Subordinated Securities will be issued pursuant to separate indentures
(respectively, a "Senior Indenture" and a "Subordinated Indenture"), in each
case between the Company and a trustee (a "Trustee"). The Indentures will be
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"TIA"). The statements made under this heading relating to the Debt Securities
and the Indentures are summaries of the anticipated provisions thereof, do not
purport to be complete and are qualified in their entirety by reference to the
Indentures and such Debt Securities. All section references appearing herein
are to sections of each Indenture unless otherwise indicated and capitalized
terms used but not defined below shall have the respective meanings set forth
in each Indenture.
The indebtedness represented by Subordinated Securities will be subordinated
in right of payment to the prior payment in full of the Senior Debt (as
defined below) of the Company as described under "--Subordination."
5
<PAGE>
Except as set forth in the applicable Indenture or in one or more indentures
supplemental thereto and described in a Prospectus Supplement relating
thereto, the Debt Securities may be issued without limit as to aggregate
principal amount, in one or more series, in each case as established from time
to time in or pursuant to authority granted by a resolution of the Board of
Directors of the Company or as established in the applicable Indenture or in
one or more indentures supplemental to such Indenture. All Debt Securities of
one series need not be issued at the same time and, unless otherwise provided,
a series may be reopened, without the consent of the Holders of the Debt
Securities of such series, for issuances of additional Debt Securities of such
series.
It is anticipated that each Indenture will provide that there may be more
than one Trustee thereunder, each with respect to one or more series of Debt
Securities. Any Trustee under an Indenture may resign or be removed with
respect to one or more series of Debt Securities, and a successor Trustee may
be appointed to act with respect to such series. In the event that two or more
persons are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any
other Trustee, and, except as otherwise indicated herein, any action described
herein to be taken by each Trustee may be taken by each such Trustee with
respect to the one or more series of Debt Securities for which it is Trustee
under the applicable Indenture.
The Prospectus Supplement relating to any series of Debt Securities being
offered will contain the specific terms thereof, including, without
limitation:
(1) The title of such Debt Securities and whether such Debt Securities
are Senior Securities or Subordinated Securities;
(2) The aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) The percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof;
(4) If convertible in whole or in part into Common Stock or Preferred
Stock, the terms on which such Debt Securities are convertible, including
the initial conversion price or rate (or method for determining the same),
the portion that is convertible and the conversion period, and any
applicable limitations on the ownership or transferability of the Common
Stock or Preferred Stock receivable on conversion;
(5) The date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
(6) The rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities
will bear interest, if any;
(7) The date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the dates on which any such
interest will be payable, the regular record dates for such interest
payment dates, or the method by which such dates shall be determined, the
persons to whom such interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;
(8) The place or places where the principal (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon the Company in respect of
such Debt Securities and the applicable Indenture may be served;
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(9) The period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, in whole or in part, at the option of the Company, if the Company
is to have such an option;
(10) The obligation, if any, of the Company to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, and the period or periods within which
or the date and dates on which, the price or prices at which and the other
terms and conditions upon which such Debt Securities will be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(11) If other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(12) Whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to a index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit
or units or composite currency or currencies) and the manner in which such
amounts shall be determined;
(13) Any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to Events of Default or covenants set
forth in the applicable Indenture;
(14) Whether such Debt Securities will be issued in certificate or book-
entry form;
(15) Whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(16) The applicability, if any, of the defeasance and covenant defeasance
provisions of Article Fourteen of the applicable Indenture;
(17) Whether and under what circumstances the Company will pay any
additional amounts on such Debt Securities in respect of any tax,
assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Debt Securities in lieu of mailing such payment;
(18) Whether the Company has any outstanding securities or liabilities
that are pari passu with the Debt Securities, and if so, identifying and
stating the principal amount of such securities (which will be indicated on
the cover page and elsewhere in the Prospectus Supplement);
(19) Whether the Debt Securities will be subordinated or pari passu to
the liabilities of the Company's subsidiaries (which will be indicated on
the cover page and elsewhere in the Prospectus Supplement);
(20) The amount of debt to which the Debt Securities will rank senior
(which will be indicated on the cover page and elsewhere in the Prospectus
Supplement); and
(21) Any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture (Section 301).
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Material federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Except as set forth in the applicable Indenture or in one or more indentures
supplemental thereto, the applicable Indenture will not contain any provisions
that would limit the ability of the Company to incur
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indebtedness or that would afford Holders of Debt Securities protection in the
event of a highly leveraged or similar transaction involving the Company or in
the event of a change of control. Reference is made to the applicable
Prospectus Supplement for information with respect to any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company that are described below, including any addition of a covenant or
other provision providing event risk or similar protection.
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Trustee,
the address of which will be stated in the applicable Prospectus Supplement;
provided that, at the option of the Company, payment of interest may be made
by check mailed to the address of the person entitled thereto as it appears in
the applicable register for such Debt Securities or by wire transfer of funds
to such person at an account maintained within the United States (Sections
301, 305, 306, 307 and 1002).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable regular record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than ten days prior to such Special Record Date, or may be paid at any
time in any other lawful manner, all as more completely described in the
Indenture (Section 307).
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount
and tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee referred to
above. In addition, subject to certain limitations imposed upon Debt
Securities issued in book-entry form, the Debt Securities of any series may be
surrendered for conversion or registration of transfer or exchange thereof at
the corporate trust office of the applicable Trustee. Every Debt Security
surrendered for conversion, registration of transfer or exchange must be duly
endorsed or accompanied by a written instrument of transfer. No service charge
will be made for any registration of transfer or exchange of any Debt
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the applicable Trustee) initially designated by the Company with respect to
any series of Debt Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each place of payment for such
series. The Company may at any time designate additional transfer agents with
respect to any series of Debt Securities (Section 1002).
Neither the Company nor any Trustee shall be required to (i) issue, register
the transfer of or exchange Debt Securities of any series during a period
beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business
on the day of mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof, called for
redemption, except the unredeemed portion of any Debt Security being redeemed
in part; or (iii) issue, register the transfer of or exchange any Debt
Security that has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305).
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MERGER, CONSOLIDATION OR SALE
The Company will be permitted to consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into, any other
entity provided that (a) either the Company shall be the continuing entity, or
the successor entity (if other than the Company) formed by or resulting from
any such consolidation or merger or which shall have received the transfer of
such assets shall expressly assume payment of the principal of (and premium,
if any) and interest on all of the Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
each Indenture; (b) immediately after giving effect to such transaction and
treating any indebtedness that becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred by the Company or
Subsidiary at the time of such transaction, no Event of Default under the
Indentures, and no event which, after notice or the lapse of time, or both,
would become such an Event of Default, shall have occurred and be continuing;
and (c) an officer's certificate and legal opinion covering such conditions
shall be delivered to each Trustee (Sections 801 and 803).
CERTAIN COVENANTS
Existence. Except as described above under "Merger, Consolidation or Sale",
the Company will be required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (charter and
statutory) and franchises; provided, however, that the Company shall not be
required to preserve any right or franchise if it determines that the
preservation thereof is no longer desirable in the conduct of its business and
that the loss thereof is not disadvantageous in any material respect to the
Holders of the Debt Securities.
Maintenance of Properties. The Company will be required to cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times (Section 1007).
Insurance. The Company will be required to, and will be required to cause
each of its Subsidiaries to, keep all of its insurable properties insured
against loss or damage at least equal to their then full insurable value with
insurers of recognized responsibility and, if described in the applicable
Prospectus Supplement, having a specified rating from a recognized insurance
rating service (Section 1008).
Payment of Taxes and Other Claims. The Company will be required to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (ii) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall not
be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings (Section 1009).
Provision of Financial Information. Whether or not the Company is subject to
Section 13 or 15(d) of the Exchange Act, the Company will be required, to the
extent permitted under the Exchange Act, to file with the Commission the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to such Sections 13 or
15(d) if the Company were so subject (the "Financial Information"), such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company also will
be required in any event (x) within 15 days of each Required Filing Date (i)
to transmit by mail to all Holders of Debt Securities, as their names and
addresses appear in the Security Register, without cost to such Holders,
copies of the Financial Information and (ii) to file with the Trustee copies
of the Financial Information, and (y) if filing such documents by the Company
with the
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Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, to
supply copies of such documents to any prospective Holder (Section 1010).
ADDITIONAL COVENANTS AND/OR MODIFICATIONS TO THE COVENANTS DESCRIBED ABOVE
Any additional covenants of the Company and/or modifications to the
covenants described above with respect to any Debt Securities or series
thereof, including any covenants relating to limitations on incurrence of
indebtedness or other financial covenants, will be set forth in the applicable
Indenture or an indenture supplemental thereto and described in the Prospectus
Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture will provide that the following events are "Events of
Default" with respect to any series of Debt Securities issued thereunder: (i)
default for 30 days in the payment of any installment of interest on any Debt
Security of such series; (ii) default in the payment of principal of (or
premium, if any, on) any Debt Security of such series at its maturity; (iii)
default in making any sinking fund payment as required for any Debt Security
of such series; (iv) default in the performance or breach of any other
covenant or warranty of the Company contained in the applicable Indenture
(other than a covenant added to the Indenture solely for the benefit of a
series of Debt Securities issued thereunder other than such series), continued
for 60 days after written notice as provided in the applicable Indenture; (v)
default in the payment of an aggregate principal amount exceeding $10,000,000
of any indebtedness of the Company or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such
indebtedness is secured, such default having occurred after the expiration of
any applicable grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not discharged
or such acceleration is not rescinded or annulled; (vi) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Company or any Significant Subsidiary or either
of its property; and (vii) any other Event of Default provided with respect to
a particular series of Debt Securities (Section 501).
If an Event of Default under any Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the Holders of not less than 25% of the
principal amount of the Outstanding Debt Securities of that series will have
the right to declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities or indexed securities, such
portion of the principal amount as may be specified in the terms thereof) of
all the Debt Securities of that series to be due and payable immediately by
written notice thereof to the Company (and to the applicable Trustee if given
by the Holders). However, at any time after such a declaration of acceleration
with respect to Debt Securities of such series (or of all Debt Securities then
Outstanding under any Indenture, as the case may be) has been made, but before
a judgment or decree for payment of the money due has been obtained by the
applicable Trustee, the Holders of not less than a majority in principal
amount of Outstanding Debt Securities of such series (or of all Debt
Securities then Outstanding under the applicable Indenture, as the case may
be) may rescind and annul such declaration and its consequences if (a) the
Company shall have deposited with the applicable Trustee all required payments
of the principal of (and premium, if any) and interest on the Debt Securities
of such series (or of all Debt Securities then Outstanding under the
applicable Indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the applicable Trustee and (b) all events of
default, other than the non-payment of accelerated principal (or specified
portion thereof), with respect to Debt Securities of such series (or of all
Debt Securities then Outstanding under the applicable Indenture, as the case
may be) have been cured or waived as provided in such Indenture (Section 502).
Each Indenture also will provide that the Holders of not less than a majority
in principal amount of the Outstanding Debt Securities of any series (or of
all Debt Securities then Outstanding under the applicable Indenture, as the
case may be) may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or (y) in
respect of a covenant or provision
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contained in the applicable Indenture that cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security affected
thereby (Section 513).
Each Trustee will be required to give notice to the Holders of Debt
Securities within 90 days of a default under the applicable Indenture unless
such default shall have been cured or waived; provided, however, that such
Trustee may withhold notice to the Holders of any series of Debt Securities of
any default with respect to such series (except a default in the payment of
the principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any
Debt Security of such series) if specified responsible officers of such
Trustee consider such withholding to be in the interest of such Holders
(Section 601).
Each Indenture will provide that no Holders of Debt Securities of any series
may institute any proceedings, judicial or otherwise, with respect to such
Indenture or for any remedy thereunder, except in the cases of failure of the
applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it (Section 507). This provision will not prevent, however,
any Holder of Debt Securities from instituting suit for the enforcement of
payment of the principal of (and premium, if any) and interest on such Debt
Securities at the respective due dates thereof (Section 508).
Subject to provisions in each Indenture relating to its duties in case of
default, no Trustee will be under any obligation to exercise any of its rights
or powers under an Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under such Indenture, unless such
Holders shall have offered to the Trustee thereunder reasonable security or
indemnity (Section 602). The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of any series (or of all Debt
Securities then Outstanding under an Indenture, as the case may be) shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the applicable Trustee, or of exercising any trust
or power conferred upon such Trustee. However, a Trustee may refuse to follow
any direction which is in conflict with any law or the applicable Indenture,
which may subject such Trustee to personal liability or which may be unduly
prejudicial to the Holders of Debt Securities of such series not joining
therein (Section 512).
Within 120 days after the close of each fiscal year, the Company will be
required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the applicable Indenture and, if so, specifying each such
default and the nature and status thereof (Section 1011).
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted to be made
only with the consent of the Holders of not less than a majority in principal
amount of all Outstanding Debt Securities issued under such Indenture which
are affected by such modification or amendment; provided, however, that no
such modification or amendment may, without the consent of the Holder of each
such Debt Security affected thereby, (a) change the stated maturity of the
principal of, or any installment of interest (or premium, if any) on, any such
Debt Security; (b) reduce the principal amount of, or the rate or amount of
interest on, or any premium payable on redemption of, any such Debt Security,
or reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon declaration of acceleration of the maturity
thereof or would be provable in bankruptcy, or adversely affect any right of
repayment of the Holder of any such Debt Security; (c) change the place of
payment, or the coin or currency, for payment of principal or premium, if any,
or interest on any such Debt Security; (d) impair the right to institute suit
for the enforcement of any payment on or with respect to any such Debt
Security; (e) reduce the above-stated percentage of Outstanding Debt
Securities of any series necessary to modify or amend the applicable
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the applicable Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of
certain
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past defaults or certain covenants, except to increase the required percentage
to affect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security
(Section 902).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities of each series affected thereby will have the right to waive
compliance by the Company with certain covenants in such Indenture (Section
1013).
Modifications and amendments of an Indenture will be permitted to be made by
the Company and the respective Trustee thereunder without the consent of any
Holder of Debt Securities for any of the following purposes: (i) to evidence
the succession of another person to the Company as obligor under such
Indenture; (ii) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Debt Securities or to surrender any right or
power conferred upon the Company in the Indenture; (iii) to add Events of
Default for the benefit of the Holders of all or any series of Debt
Securities; (iv) to add or change any provisions of an Indenture to facilitate
the issuance of, or to liberalize certain terms of, Debt Securities in bearer
form, or to permit or facilitate the issuance of Debt Securities in
uncertificated form, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provisions of an Indenture, provided
that any such change or elimination shall become effective only when there are
no Debt Securities Outstanding of any series created prior thereto which are
entitled to the benefit of such provision; (vi) to secure the Debt Securities;
(vii) to establish the form or terms of Debt Securities of any series,
including the provisions and procedures, if applicable, for the conversion of
such Debt Securities into Common Stock or Preferred Stock; (viii) to provide
for the acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under an Indenture by more than one Trustee; (ix)
to cure any ambiguity, defect or inconsistency in an Indenture, provided that
such action shall not adversely affect the interests of Holders of Debt
Securities of any series issued under such Indenture in any material respect;
or (x) to supplement any of the provisions of an Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of
such Debt Securities, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect (Section 901).
Each Indenture will provide that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon declaration of acceleration of the maturity thereof, (ii) the principal
amount of any Debt Security denominated in a foreign currency that shall be
deemed Outstanding shall be the U.S. dollar equivalent, determined on the
issue date for such Debt Security, of the principal amount (or, in the case of
Original Issue Discount Security, the U.S. dollar equivalent on the issue date
of such Debt Security of the amount determined as provided in (i) above),
(iii) the principal amount of an indexed security that shall be deemed
Outstanding shall be the principal face amount of such indexed security
pursuant to the applicable Indenture, and (iv) Debt Securities owned by the
Company or any other obligor upon the Debt Securities or any affiliate of the
Company or of such other obligor shall be disregarded.
Each Indenture will contain provisions for convening meetings of the Holders
of Debt securities of a series (Section 1501). A meeting will be permitted to
be called at any time by the applicable Trustee, and also, upon request, by
the Company or the Holders of at least 10% in principal amount of the
Outstanding Debt Securities of such series, in any such case upon notice given
as provided in the Indenture. Except for any consent that must be given by the
Holder of each Debt Security affected by certain modifications and amendments
of an Indenture, any resolution presented at a meeting or adjourned meeting
duly reconvened at which a quorum is present may be adopted by the affirmative
vote of the Holders of a majority in the principal amount of the Outstanding
Debt Securities of that series; provided, however, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
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taken by the Holders of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Debt Securities of a series may be
adopted at a meeting or adjourned meeting or at which a quorum is present by
the affirmative vote of the Holders of such specified percentage in principal
amount of the Outstanding Debt Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of Debt Securities of any
series duly held in accordance with an Indenture will be binding on all
Holders of Debt Securities of that series. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the Holders
of not less than a specified percentage in principal amount of the Outstanding
Debt Securities of a series, the persons holding or representing such
specified percentage in principal amount of the Outstanding Debt Securities of
such series will constitute a quorum.
Notwithstanding the foregoing provisions, each Indenture will provide that
if any action is to be taken at a meeting of Holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
consent, waiver and other action that such Indenture expressly provides may be
made, given or taken by the Holders of a specified percentage in principal
amount of all Outstanding Debt Securities affected thereby, or the Holders of
such series and one or more additional series: (i) there shall be no minimum
quorum requirement for such meeting, and (ii) the principal amount of the
Outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action
shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under such Indenture.
SUBORDINATION
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Debt (Sections 1601 and 1602 of the Subordinated Indenture), but the
obligation of the Company to make payment of the principal and interest on
such Subordinated Securities will not otherwise be affected (Section 1608 of
the Subordinated Indenture). No payment of principal or interest will be
permitted to be made on Subordinated Securities at any time if a default on
Senior Debt exists that permits the Holders of such Senior Debt to accelerate
its maturity and the default is the subject of judicial proceedings or the
Company receives notice of the default (Section 1602 of the Subordinated
Indenture). After all Senior Debt is paid in full and until the Subordinated
Securities are paid in full, Holders will be subrogated to the right of
Holders of Senior Debt to the extent that distributions otherwise payable to
Holders have been applied to the payment of Senior Debt (Section 1607 of the
Subordinated Indenture). By reason of such subordination, in the event of a
distribution of assets upon insolvency, certain general creditors of the
Company may recover more, ratably, than Holders of Subordinated Securities.
Senior Debt will be defined in the Subordinated Indenture as the principal
of and interest on, or substantially similar payments to be made by the
Company in respect of, the following; whether outstanding at the date of
execution of the applicable Indenture or thereafter incurred, created or
assumed: (i) indebtedness of the Company for money borrowed or represented by
purchase money obligations, (ii) indebtedness of the Company evidenced by
notes, debentures, or bonds or other securities issued under the provisions of
an indenture, fiscal agency agreement or other agreement, (iii) obligations of
the Company as lessee under leases of property either made as part of any sale
and leaseback transaction to which the Company is a party or otherwise, (iv)
indebtedness of partnerships and joint ventures which is included in the
consolidated financial statements of the Company, and (v) indebtedness,
obligations and liabilities of others in respect of which the Company is
liable contingently or otherwise to pay or advance money or property or as
guarantor, endorser or otherwise, in each case other than (1) any such
indebtedness, obligation or liability referred to in clauses (i) through (v)
above as to which, in the instrument creating or evidencing the same pursuant
to which the same is outstanding, it is provided that such indebtedness,
obligation or liability is not superior in right of payment to the
Subordinated Securities or ranks
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pari passu with the Subordinated Securities, (2) any such indebtedness,
obligation or liability which is subordinated to indebtedness of the Company
to substantially the same extent as or to a greater extent than the
Subordinated Securities are subordinated, and (3) the Subordinated Securities.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will contain the approximate
amount of Senior Debt outstanding as of the end of the Company's most recent
fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may be permitted under the applicable Indenture to discharge
certain obligations to Holders of any series of Debt Securities issued
thereunder that have not already been delivered to the applicable Trustee for
cancellation and that either have become due and payable or will become due
and payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the applicable Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient
to pay the entire indebtedness on such Debt Securities in respect of principal
(and premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or
redemption date, as the case may be.
Each Indenture will provide that, if the provisions of Article Fourteen are
made applicable to the Debt Securities of or within any series pursuant to
Section 301 of such Indenture, the Company may elect either (a) to defease and
be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay additional amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge
with respect to payments on such Debt Securities, and the obligations to
register the transfer or exchange of such Debt Securities, to replace
temporary or mutilated, destroyed, lost or stolen Debt Securities, to maintain
an office or agency in respect of such Debt Securities and to hold moneys for
payment in trust) ("defeasance") (Section 1402) or (b) to be released from its
obligations with respect to such Debt Securities under certain specified
sections of Article Ten of such Indenture as specified in the applicable
Prospectus Supplement and any omission to comply with such obligations shall
not constitute an Event of Default with respect to such Debt Securities
("covenant defeasance") (Section 1403), in either case upon the irrevocable
deposit by the Company with the applicable Trustee, in trust, of an amount, in
such currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable at stated maturity, or
Government Obligations (as defined below), or both, applicable to such Debt
Securities which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient without
reinvestment to pay the principal of (and premium, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Company has delivered to the applicable Trustee an opinion of
counsel (as specified in the applicable Indenture) to the effect that the
Holders of such Debt Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of
counsel, in the case of defeasance, will be required to refer to and be based
upon a ruling of the Internal Revenue Service or a change in applicable U.S.
federal income tax law occurring after the date of the Indenture (Section
1404).
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the foreign currency in which the Debt Securities of such series are
payable, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation of the United States of America or such
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government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
Holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the Holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt (Section 101 of each Indenture).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to the applicable Indenture or the terms of such Debt
Security to receive payment in a currency, currency unit or composite currency
other than that in which such deposit has been made in respect of such Debt
Security, or (b) a Conversion Event (as defined below) occurs in respect of
the currency, currency unit or composite currency in which such deposit has
been made, the indebtedness represented by such Debt Security will be deemed
to have been, and will be, fully discharged and satisfied through the payment
of the principal of (and premium, if any) and interest on such Debt Security
as they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency, currency unit or
composite currency in which such Debt Security becomes payable as a result of
such election or such cessation of usage based on the applicable market
exchange rate. "Conversion Event" means the cessation of use of (i) a
currency, currency unit or composite currency both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international
banking community, (ii) the ECU both within the European Monetary System and
for the settlement of transactions by public institutions of or within the
European Communities or (iii) any currency unit or composite currency other
than the ECU for the purposes for which it was established. Unless otherwise
provided in the applicable Prospectus Supplement, all payments of principal of
(and premium, if any) and interest on any Debt Security that is payable in a
foreign currency that ceases to be used by its government of issuance shall be
made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because
of the occurrence of any Event of Default other than the Event of Default
described in clause (iv) under "Events of Default, Notice and Waiver" with
respect to certain specified sections of Article Ten of each Indenture (which
sections would no longer be applicable to such Debt Securities as a result of
such covenant defeasance) or described in clause (vii) under "Events of
Default, Notice and Waiver" with respect to any other covenant as to which
there has been covenant defeasance, the amount in such currency, currency unit
or composite currency in which such Debt Securities are payable, and
Government Obligations on deposit with the applicable Trustee, will be
sufficient to pay amounts due on such Debt Securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Default.
However, the Company would remain liable to make payment of such amounts due
at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the
Holders or the Company, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of
such Debt Securities and any restrictions on conversion.
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REDEMPTION OF SECURITIES
The Indenture provides that the Debt Securities may be redeemed at any time
at the option of the Company, in whole or in part, at the Redemption Price,
except as may otherwise be provided in connection with any Debt Securities or
series thereof.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have
been made available on such redemption date, such Debt Securities will cease
to bear interest on the date fixed for such redemption specified in such
notice, and the only right of the Holders of the Debt Securities will be to
receive payment of the Redemption Price.
Notice of any optional redemption of any Debt Securities will be given to
Holders at their addresses, as shown in the Security Register, not more than
60 nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and the
principal amount of the Debt Securities held by such Holder to be redeemed.
If the Company elects to redeem Debt Securities, it will notify the Trustee
at least 45 days prior to the redemption date (or such shorter period as
satisfactory to the Trustee) of the aggregate principal amount of Debt
Securities to be redeemed and the redemption date. If less than all the Debt
Securities are to be redeemed, the Trustee shall select the Debt Securities to
be redeemed pro rata, by lot or in such manner as it shall deem fair and
appropriate.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depository identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
CAPITAL STOCK STRUCTURE
The Company has the authority to issue (i) 300,000,000 shares of Common
Stock, of which 157,068,862 shares were issued and outstanding as of the close
of business on October 31, 1995, (ii) 850,000 shares of Cumulative Preferred
Stock, issuable in series, of which a total of 227,288 shares, constituting
four series, were issued and outstanding as of the close of business on
October 31, 1995, and (iii) 4,000,000 shares of Class A Preferred Stock, none
of which were outstanding as of October, 31 1995 and which when issued, will
rank junior to the Cumulative Preferred Stock as to dividends or
distributions, and upon the liquidation, dissolution and winding up of the
Company.
DESCRIPTION OF COMMON STOCK
The following description of the Common Stock sets forth certain general
terms and provisions of the Common Stock to which any Prospectus Supplement
may relate, including a Prospectus Supplement providing that Common Stock will
be issuable upon conversion of Debt Securities or Preferred Stock of the
Company or upon the exercise of the Securities Warrants issued by the Company.
The statements below describing the Common Stock are in all respects subject
to and qualified in their entirety by reference to the applicable provisions
of the Company's Restated Certificate of Incorporation, as amended (the
"Charter"), and Bylaws.
DIVIDEND RIGHTS
Subject to the terms of any contractual restriction on the declaration or
payment of dividends, dividends may be declared and paid on the Common Stock
out of legally available surplus. However, no dividends may be
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paid on the Common Stock until accrued and unpaid dividends on the outstanding
series of Cumulative Preferred Stock have been paid or declared and funds set
aside for their payment.
The Company's ability to pay dividends is substantially dependent upon the
earnings and available cash flow of its subsidiaries and the availability of
such earnings to the Company by way of dividends, distributions, loans and
other advances. The provisions of the Open Market Plan include the prohibition
of dividend payments from a significant subsidiary of the Company, Rochester
Telephone Corp., to the Company in specified circumstances.
VOTING RIGHTS
The holders of Common Stock have exclusive voting rights of one vote for
each share held, subject to the voting rights of the outstanding Cumulative
Preferred Stock described below and any subsequent voting rights that may be
established for any other Preferred Stock by the Company's Board of Directors.
The holders of the Common Stock are not entitled to cumulative voting in the
election of directors.
When four or more quarterly dividends on the Cumulative Preferred Stock are
in arrears, and until such arrearages at full dividend rates have been paid or
declared and set apart for payment, the holders of the Cumulative Preferred
Stock as a class have the right to elect a majority of the Board of Directors.
In such event, the holders of the Common Stock have the right to elect only
the remaining directors.
LIQUIDATION RIGHTS
On any liquidation of the Company, the holders of the Cumulative Preferred
Stock will be entitled to their full par value per share plus accumulated
dividends. In addition, the holders of any other Preferred Stock issued after
the date of this Prospectus will be entitled to a liquidation preference equal
to at least the par value of such stock. After satisfaction of outstanding
liabilities and the preferential liquidation rights of the Preferred Stock,
the holders of Common Stock are entitled to share ratably in the distribution
of all remaining assets.
PREEMPTIVE RIGHTS
Holders of the Common Stock have no preemptive rights to purchase any stock
issued by the Company, any securities convertible into such stock, or any
rights or options to acquire such stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is The First National
Bank of Boston, 150 Royall Street, Canton, Massachusetts 02021.
THE RIGHTS AGREEMENT
On April 9, 1995, the Company's Board of Directors declared a dividend of
one preferred share purchase right (a "Right") for each outstanding share of
Common Stock. The dividend was payable on April 24, 1995 to the shareholders
of record on that date. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior Participating
Class A Preferred Stock, par value of $100.00 per share (the "Rights Preferred
Stock"), of the Company at a price of $80.00 per one-hundredth of a share of
Rights Preferred Stock, subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement dated as of April 9, 1995, as
the same may be amended from time to time (the "Rights Agreement"), between
the Company and The First National Bank of Boston, as Rights Agent.
The Rights are not exercisable until the earlier to occur of (i) ten days
following the first date of a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding shares of Common Stock
or such earlier date as a
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majority of the Board of Directors shall have become aware of the existence of
an Acquiring Person, or (ii) ten business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any
person or group of affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to make, a tender order
or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding shares of
Common Stock. The Rights will expire on April 24, 2005, unless such date is
extended or unless the Rights are earlier redeemed or exchanged by the
Company, in each case as described below.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right at the then
current exercise price of the Right, that number of shares of Common Stock
having a market value of two times the exercise price of the Right.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person which will have become void) will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the person with whom has engaged in the foregoing transaction (or its parent),
which number of shares at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of Common Stock, the Company's Board of Directors may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-hundredth of a share of Rights Preferred Stock (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges, per Right (subject to adjustment).
At any time prior to the time an Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right, subject to adjustment.
For so long as the Rights are then redeemable, the Company may, except with
respect to the redemption price, amend the Right in any manner. After the
Rights are no longer redeemable, the Company may, except with respect to the
redemption price, amend the Rights in any manner that does not adversely
affect the interest of holders of the Rights.
This summary description of the Rights summarizes the material terms of the
Rights but does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement which is an exhibit to the Company's Current
Report on Form 8-K dated April 9, 1995.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be described in such
Prospectus Supplement. The description of certain provisions of the Preferred
Stock set forth below and in any Prospectus Supplement does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Charter (including any amendment to the Charter relating to a series of the
Preferred Stock) which will be filed with the Commission and incorporated by
reference as an exhibit to the Registration Statement of which this Prospectus
is a part at or prior to the time of the issuance of such series of the
Preferred Stock.
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GENERAL
The Company is authorized to issue 4,000,000 shares of Class A Preferred
Stock, of which no shares were outstanding as of October 31, 1995, and 850,000
shares of Cumulative Preferred Stock, of which 227,288 shares were outstanding
as of October 31, 1995. The Company has established five separate series of
Cumulative Preferred Stock, which include 215,000 shares in the aggregate, and
a series of 3,000,000 shares of Class A Preferred Stock in connection with the
Rights Agreement.
Under the Charter, the Board of Directors (without further shareowner
action) may from time to time establish and issue one or more series of
Preferred Stock with such designations, powers, preferences or rights of the
shares of such series and the qualifications, limitations or restrictions
thereon.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference
is made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation and the number of shares offered; (ii) the amount of liquidation
preference per share; (iii) the initial public offering price at which such
Preferred Stock will be issued; (iv) the dividend rate (or method of
calculation), the dates on which dividends shall be payable and the dates from
which dividends shall commence to accumulate, if any; (v) any redemption or
sinking fund provisions; (vi) any conversion rights; and (vii) any additional
voting, dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions. The Preferred Stock
will, when issued for lawful consideration, be fully paid and nonassessable
and will have no preemptive rights.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred Stock
will, with respect to dividend rights and rights upon liquidation, dissolution
or winding up of the Company, rank (i) senior to all classes or series of
Common Stock and to all equity securities ranking junior to such Preferred
Stock; (ii) on a parity with all equity securities issued by the Company the
terms of which specifically provide that such equity securities rank on a
parity with the Preferred Stock; and (iii) junior to all equity securities
issued by the Company the terms of which specifically provide that such equity
securities rank senior to the Preferred Stock. As used in the Articles for
these purposes, the term "equity securities" does not include convertible debt
securities. The Series A Preferred Stock is junior to the Cumulative Preferred
Stock and any Preferred Stock established out of Series A Preferred Stock
shall be junior as to the Cumulative Preferred Stock. The rights of the
holders of each series of the Preferred Stock will be subordinate to those of
the Company's general creditors.
DIVIDENDS
Holders of shares of the Preferred Stock of each series shall be entitled to
receive, when, as and if declared by the Board of Directors of the Company,
out of assets of the Company legally available for payment, cash dividends at
such rates and on such dates as will be set forth in the applicable Prospectus
Supplement. Such rate may be fixed or variable or both. Each such dividend
shall be payable to holders of record as they appear on the stock transfer
books of the Company on such record dates as shall be fixed by the Board of
Directors of the Company, as specified in the Prospectus Supplement relating
to such series of Preferred Stock.
Dividends on any series of the Preferred Stock may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Directors of the Company
fails to declare a dividend payable on a dividend payment date on any series
of the Preferred Stock for which dividends are noncumulative, then the holders
of such series of the Preferred Stock will have no right to receive a dividend
in respect of the dividend period relating to such dividend payment date, and
the Company will have no obligation to pay the dividend accrued for such
period, whether or not dividends on such series are declared payable on any
future dividend payment date.
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So long as the shares of any series of the Preferred Stock shall be
outstanding, the Company may not declare or pay any dividends on any shares of
Common Stock of the Company or any other stock of the Company ranking as to
dividends or distributions of assets junior to such series of Preferred Stock
(the Common Stock and any such other stock being herein referred to as "Junior
Stock"), whether in cash or property or in obligations or stock of the
Company, other than Junior Stock which is neither convertible into, nor
exchangeable or exercisable for, any securities of the Company other than
Junior Stock, unless full dividends (including if such Preferred Stock is
cumulative, dividends for prior dividend periods) shall have been paid or
declared and set apart for payment on all outstanding shares of the Preferred
Stock of such series and all other classes and series of Preferred Stock of
the Company (other than Junior Stock).
Any dividend payment made on shares of a series of Preferred Stock shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
REDEMPTION
A series of Preferred Stock may be redeemable, in whole or from time to time
in part, at the option of the Company, and may be subject to mandatory
redemption pursuant to a sinking fund or otherwise, in each case upon terms,
at the times and at the redemption prices set forth in the Prospectus
Supplement relating to such series. Shares of the Preferred Stock redeemed by
the Company will be restored to the status of authorized but unissued shares
of Preferred Stock.
The Prospectus Supplement relating to a series of Preferred Stock that is
subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Stock does not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Stock of any series is payable only from
the net proceeds of the issuance of capital stock of the Company, the terms of
such Preferred Stock may provide that, if no such capital stock shall have
been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Stock shall automatically and mandatorily be converted into shares
of the applicable capital stock of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
So long as any dividends on shares of any series of the Preferred Stock or
any other series of preferred stock of the Company ranking on a parity as to
dividends and distribution of assets with such series of the Preferred Stock
are in arrears, no shares of any such series of the Preferred Stock or such
other series of Preferred Stock of the Company will be redeemed (whether by
mandatory or optional redemption) unless all such shares are simultaneously
redeemed, and the Company will not purchase or otherwise acquire any such
shares.
In the event that fewer than all of the outstanding shares of a series of
the Preferred Stock are to be redeemed, whether by mandatory or optional
redemption, the number of shares to be redeemed will be determined by lot or
pro rata (subject to rounding to avoid fractional shares) as may be determined
by the Company or by any other method as may be determined by the Company in
its sole discretion to be equitable. From and after the redemption date
(unless default shall be made by the Company in providing for the payment of
the redemption price plus accumulated and unpaid dividends, if any), dividends
shall cease to accumulate on the shares of the Preferred Stock called for
redemption and all rights of the holders thereof (except the right to receive
the redemption price plus accumulated and unpaid dividends, if any) shall
cease.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, then, before any distribution or payment shall be
made to the holders of any Junior Stock, the holders of each
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series of Preferred Stock shall be entitled to receive out of assets of the
Company legally available for distribution to shareowners, liquidating
distributions in the amount of the liquidation preference per share (set forth
in the applicable Prospectus Supplement), plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any accumulation
in respect of unpaid dividends for prior dividend periods if such Preferred
Stock does not have a cumulative dividend). After payment of the full amount
of the liquidating distributions to which they are entitled, the holders of
Preferred Stock will have no right or claim to any of the remaining assets of
the Company. In the event that upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Company
are insufficient to pay the amount of the liquidating distributions on all
outstanding shares of Preferred Stock and the corresponding amounts payable on
all shares of other classes or series of capital stock of the Company ranking
on a parity with the Preferred Stock in the distribution of assets, then the
holders of the Preferred Stock and all other such classes or series of capital
stock shall share ratably in any such distribution of assets in proportion to
the full liquidating distributions to which they would otherwise be
respectively entitled.
If liquidating distributions shall have been made in full to all holders of
shares of Preferred Stock, the remaining assets of the Company shall be
distributed among the holders of Junior Stock, according to their respective
rights and preferences and in each case according to their respective number
of shares. For such purposes, the consolidation or merger of the Company with
or into any other corporation, or the sale, lease or conveyance of all or
substantially all of the property or business of the Company, shall not be
deemed to constitute a liquidation, dissolution or winding up of the Company.
VOTING RIGHTS
Except as indicated below or in a Prospectus Supplement relating to a
particular series of the Preferred Stock, or except as required by applicable
law, holders of the Preferred Stock will not be entitled to vote for any
purpose.
As described in "Description of Common Stock--Voting Rights", when four or
more quarterly dividends on the Cumulative Preferred Stock are in arrears, and
until such arrearages at full dividend rates have been paid or declared and
set apart for payment, the holders of the Cumulative Preferred Stock as a
class have the right to elect a majority of the Board of Directors.
In addition, the affirmative vote of various proportions of the Cumulative
Preferred Stock is required to (1) increase the authorized amount of the
Cumulative Preferred Stock; (2) create shares having preferential rights equal
or superior to the Cumulative Preferred Stock; (3) issue any shares of
Cumulative Preferred Stock or any shares having preferential rights equal or
superior to the Cumulative Preferred Stock without compliance with certain
requirements as to earnings; and (4) create, alter or abolish any voting
rights or preferential rights or redemption provisions affecting the
Cumulative Preferred Stock adversely.
CONVERSION RIGHTS
The terms and conditions, if any, upon which shares of any series of
Preferred Stock are convertible into Common Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of shares of Common Stock into which the Preferred Stock is
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the holders of the Preferred Stock or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Preferred Stock will be set forth
in the applicable Prospectus Supplement.
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DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Common Stock.
Securities Warrants may be issued independently or together with any other
Securities offered by any Prospectus Supplement and may be attached to or
separate from such Securities. Each series of Securities Warrants will be
issued under a separate warrant agreement (each, a "Warrant Agreement") to be
entered into between the Company and a warrant agent specified in the
applicable Prospectus Supplement (the "Warrant Agent"). The Warrant Agent will
act solely as an agent of the Company in connection with the Securities
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Securities
Warrants. The following summaries of certain provisions of the Securities
Warrant Agreement and the Securities Warrants do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Securities Warrant Agreement and the Securities Warrant
certificates relating to each series of Securities Warrants which will be
filed with the Commission and incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part at or prior to the
time of the issuance of such series of Securities Warrants.
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including the following
where applicable: (i) the offering price; (ii) the aggregate number of shares
purchasable upon exercise of such Securities Warrants, the exercise price
(iii) the date, if any, on and after which such Securities Warrants and the
Common Stock will be transferable separately; (iv) the date on which the right
to exercise such Securities Warrants shall commence and the Expiration Date;
(v) any special United States federal income tax consequences; and (vi) any
other material terms of such Securities Warrants.
Securities Warrant certificates may be exchanged for new Securities Warrant
certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Securities Warrant agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrants to purchase Common Stock, holders of such Securities Warrants will
not have any rights of holders of Common Stock, including the right to receive
payments of dividends, if any, on such Common Stock, or to exercise any
applicable right to vote.
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
number of shares of Common Stock, at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus Supplement relating to the
offered Securities Warrants. After the close of business on the Expiration
Date (or such later date to which such Expiration Date may be extended by the
Company), unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
Agent payment as provided in the applicable Prospectus Supplement of the
amount required to purchase the Common Stock purchasable upon such exercise
together with certain information set forth on the reverse side of the
Securities Warrant certificate. Securities Warrants will be deemed to have
been exercised upon receipt of payment of the exercise price, subject to the
receipt within five (5) business days, of the Securities Warrant certificate
evidencing such Securities Warrants. Upon receipt of such payment and the
Securities Warrant certificate properly completed and duly executed at the
corporate trust office of the Securities Warrant agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon
as practicable, issue and deliver the Common Stock purchasable upon such
exercise. If fewer than all of the Securities Warrants represented by such
Securities Warrant certificate are exercised, a new Securities Warrant
certificate will be issued for the remaining amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
The Warrant Agreements may be amended or supplemented without the consent of
the holders of the Securities Warrants issued thereunder to effect changes
that are not inconsistent with the provisions of the Securities Warrants and
that do not adversely affect the interests of the holders of the Securities
Warrants.
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COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a
Common Stock Warrant are subject to adjustment in certain events, including
(i) payment of a dividend on the Common Stock payable in capital stock and
stock splits, combinations or reclassification of the Common Stock; (ii)
issuance to all holders of Common Stock of rights or warrants to subscribe for
or purchase shares of Common Stock at less than their current market price (as
defined in the Warrant Agreement for such series of Securities Warrants); and
(iii) certain distributions of evidences of indebtedness or assets (including
securities but excluding cash dividends or distributions paid out of
consolidated earnings or retained earnings or dividends payable other than in
Common Stock) or of subscription rights and warrants (excluding those referred
to above).
No adjustment in the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from consolidated earnings or
retained earnings. No adjustment will be required unless such adjustment would
require a change of at least 1% in the exercise price then in effect. Except
as stated above, the exercise price of, and the number of shares of Common
Stock covered by, a Common Stock Warrant will not be adjusted for the issuance
of Common Stock or any securities convertible into or exchangeable for Common
Stock, or carrying the right or option to purchase or otherwise acquire the
foregoing, in exchange for cash, other property or services.
In the event of any (i) consolidation or merger of the Company with or into
any entity (other than a consolidation or a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares
of Common Stock); (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of the Company; or (iii) reclassification,
capital reorganization or change of the Common Stock (other than solely a
change in par value or from par value to no par value), then any holder of a
Common Stock Warrant will be entitled, on or after the occurrence of any such
event, to receive on exercise of such Common Stock Warrant the kind and amount
of shares of stock or other securities, cash or other property (or any
combination thereof) that the holder would have received had such holder
exercised such holder's Common Stock Warrant immediately prior to the
occurrence of such event. If the consideration to be received upon exercise of
the Common Stock Warrant following any such event consists of common stock of
the surviving entity, then from and after the occurrence of such event, the
exercise price of such Common Stock Warrant will be subject to the same anti-
dilution and other adjustments described in the second preceding paragraph,
applied as if such common stock were Common Stock.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell the Securities to investors directly or
through agents. Direct sales to investors may be accomplished through
subscription rights distributed to the Company's shareowners. In connection
with the distribution of subscription rights to shareowners, if all of the
underlying Securities are not subscribed for, the Company may sell such
unsubscribed Securities directly to third parties or may engage the services
of an underwriter to sell such unsubscribed Securities to third parties. Any
underwriter or agent involved in the offer and sale of the Securities will be
named in the applicable Prospectus Supplement.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, or at prices related to the
prevailing market prices at the time of sale or at negotiated prices (any of
which may represent a discount from the prevailing market prices). The Company
also may, from time to time, authorize underwriters acting as the Company's
agents to offer and sell the Securities upon the terms and conditions as are
set forth in the applicable Prospectus Supplement. In connection with the sale
of Securities, underwriters may be deemed to have received compensation from
the Company in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Securities for whom they may act as
agent. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation
23
<PAGE>
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers, will be set
forth in the applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date or
dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Securities sold
pursuant to Contracts shall be not less nor more than, the respective amounts
stated in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Securities covered
by its Contracts shall not at the time of delivery be prohibited under the
laws of any jurisdiction in the United States to which such institution is
subject; and (ii) if the Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal amount of the
Securities less the principal amount thereof covered by the Contracts.
Certain of the underwriters and their affiliates may be customers of, engage
in transactions with and perform services for the Company and its Subsidiaries
in the ordinary course of business.
LEGAL MATTERS
The legality of the Debt Securities, the Preferred Stock, the Common Stock
and the Securities Warrants offered hereby will be passed upon for the Company
by Helen A. Zamboni, Esq., Corporate Counsel of the Company.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedule incorporated in this Prospectus by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994, and the audited
historical financial statements included on pages 23-57 of the Company's Form
8-K dated November 14, 1995 have been audited by Price Waterhouse LLP,
independent accountants, except as they relate to ALC Communications
Corporation, and insofar as they relate to ALC Communications Corporation, by
Ernst & Young LLP, independent accountants, whose reports therein are
incorporated by reference to the Company's Form 8-K dated November 14, 1995.
Such financial statements have been so included in reliance on the reports of
such independent accountants given on the authority of such firms as experts
in auditing and accounting.
24
<PAGE>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND IN THE PROSPECTUS
IN CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY FRONTIER OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH INFORMATION IS GIVEN
IN THIS PROSPECTUS SUPPLEMENT AND IN THE PROSPECTUS. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Statement Regarding Forward Looking Information............................ S-2
The Company................................................................ S-2
Ratio of Earnings to Fixed Charges......................................... S-3
Use of Proceeds............................................................ S-4
Capitalization............................................................. S-5
Selected Financial Data.................................................... S-5
Description of the Notes................................................... S-8
Underwriting............................................................... S-11
Legal Matters.............................................................. S-12
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 4
Risk Factors............................................................... 4
Use of Proceeds............................................................ 4
Ratios of Earnings to Fixed Charges........................................ 5
Description of Debt Securities............................................. 5
Capital Stock Structure.................................................... 16
Description of Common Stock................................................ 16
Description of Preferred Stock............................................. 18
Description of Securities Warrants......................................... 22
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Experts.................................................................... 24
</TABLE>
$300,000,000
FRONTIER CORPORATION
7 1/4% NOTES DUE 2004
[LOGO OF FRONTIER]
SALOMON BROTHERS INC
LEHMAN BROTHERS
CHASE SECURITIES INC.
MORGAN STANLEY & CO.
INCORPORATED
PROSPECTUS SUPPLEMENT
DATED MAY 21, 1997
