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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
FRONTIER CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Notes:
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[LOGO OF FRONTIER COMMUNICATIONS]
Frontier Corporation
Proxy Statement
Frontier Center
180 South Clinton Avenue
Rochester, New York 14646-0700
Annual Meeting
Notice of Annual Meeting
of Common Shareholders
Please Join Us In Celebrating
Frontier Corporation's 100 Years of Doing Business
Date:
Thursday, April 29, 1999
Time:
10:00 a.m., Pacific Time
Place:
Grand Ballroom
Hotel Nikko San Francisco
222 Mason Street
San Francisco, California 94102
Record Date:
March 1, 1999
Meeting Agenda:
1. Election of Directors
2. Ratification of Appointment of Auditors
3. Any other matters that properly come before the
meeting or any adjournments of the meeting.
By-Law Amendments:
Effective December 15, 1998, the Board of Directors
amended Article II, Section 2, of the By-Laws to set
the number of Directors constituting the entire Board
at twelve.
Sign Language Interpreters:
The meeting will be sign language interpreted for the
hearing impaired.
Electronic Copies of Proxy Statement and
Annual Report:
A copy of this proxy statement and the Company's Annual Report are also
available on the Company's web site which can be reached at:
http://www.frontiercorp.com
Admission to the Meeting:
An admission card will be required to gain entry to the meeting. If you are
planning to attend the Annual Meeting, please check the appropriate box on the
proxy card. We will then send your admission card to you. A map identifying the
location of the meeting place appears on the back cover of the proxy statement.
Vote:
Your vote is very important. Please either vote electronically or sign and date
the enclosed proxy card and return it promptly in the enclosed return envelope,
whether or not you expect to attend the meeting. If you do not specify your
choices when you vote, it will be understood that you wish to have your shares
voted in accordance with the Board of Directors' recommendations. You may revoke
your proxy and vote in person if you decide to attend the meeting.
By Action of the Board of Directors,
/s/ Josephine S. Trubek
Josephine S. Trubek
Corporate Secretary
Rochester, New York
March 12, 1999
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Table of Contents
Proxy Statement
1 . Proxy Solicitation
1 . Voting at the Annual Meeting
2 . Proposal 1--Election of Directors
2 . Nominees for Director
5 . Information about the Board of Directors
6 . Stock Ownership of Management, Directors
and Certain Beneficial Owners
7 . Section 16(a) Beneficial Ownership
Reporting Compliance
8 . Report of Committee on Directors
9 . Report of Committee on Management
11 . Performance Graph
12 . Compensation of Company Management
12 . Summary Compensation Table
13 . Option/SAR Grants in Last Fiscal Year
13 . Individual Grants in 1998 Table
14 . Aggregated Option/SAR Exercises in Last Fiscal
Year and Fiscal Year-End Option/SAR Values Table
15 . Long-Term Incentive Plans-Awards in Last
Fiscal Year Table
16 . Pension Plan Table
17 . Employment Contracts
17 . Business Transactions and Relationships
18 . Compensation Committee Interlocks and
Insider Participation in Compensation Decisions
18 . Indemnification of Certain Persons
18 . Proposal 2--Ratification of Public Accountant
18 . 2000 Annual Meeting--Future Proposals
of Shareholders
19 . Other Matters
<PAGE>
Proxy Statement
1999 Annual Meeting of Common Shareholders of Frontier Corporation
Proxy Solicitation
When and where will the Annual Meeting be held?
The Annual Meeting will be held on April 29, 1999, at 10:00 a.m., Pacific Time
in the Grand Ballroom of the Hotel Nikko San Francisco, 222 Mason Street, San
Francisco, California 94102, or at any later time, if adjourned. The purposes of
the Annual Meeting are stated in the attached Notice of Annual Meeting of Common
Shareholders.
Who is soliciting proxies and for what purpose?
The Board of Directors of Frontier Corporation, a New York corporation, is
soliciting proxies for use at the annual meeting of holders of the Company's
$1.00 par value common stock. This proxy statement will refer to Frontier
Corporation as the "Company" and the annual meeting as the "Annual Meeting". We
are sending you this proxy statement and the enclosed proxy card and alternative
electronic voting instructions in connection with the Board's solicitation so
that you may vote your shares.
The Company will pay the cost of proxy solicitation. In addition to the
solicitation of proxies by mail, some officers and employees of the Company,
without additional compensation, may contact you personally or by telephone,
Internet or electronic mail, facsimile, telegraph or cable, to solicit your
proxy. The Company will also request brokerage houses, nominees, custodians and
fiduciaries to forward soliciting materials to the beneficial owners of stock
held of record and will reimburse such persons for forwarding such materials. In
addition, the Company has retained Innisfree M&A Incorporated, New York, New
York, to aid in the solicitation of proxies at a fee of $6,000 plus
reimbursement for out-of-pocket expenses incurred by that firm on behalf of the
Company.
The principal executive offices of the Company are located at 180 South
Clinton Avenue, Rochester, New York 14646. The main telephone number is
(716) 777-1000.
Voting at the Annual Meeting
Is my vote important?
Whether or not you plan to attend our Annual Meeting, please take the time to
vote your shares as soon as possible. Your prompt voting by telephone,
electronically or by mail may save the Company the expense of a second mailing.
Each proxy which is properly completed will be voted at the Annual Meeting. If
you return a proxy by mail, or vote by telephone or electronically over the
Internet and do not specify your vote, your shares will be voted as recommended
by the Board of Directors. Specifically, if your proxy does not specify a
choice, your shares will be voted for the election of all the Directors
nominated in the proxy and in favor of ratification of the election of
PricewaterhouseCoopers LLP as public accountant.
What are the methods of voting?
All shareholders may vote by mail. SHAREHOLDERS OF RECORD CAN ALSO VOTE BY
TELEPHONE OR ELECTRONICALLY OVER THE INTERNET. Shareholders who hold their
shares through a bank or broker can vote by telephone or electronically over the
Internet if that option is offered by the bank or broker.
. Voting by mail. Shareholders may sign, date and mail their proxies in the
postage-paid envelope provided. If you sign, date and mail your proxy card
without indicating how you want to vote, your proxy will be voted as
recommended by the Board of Directors.
. Voting by telephone or Internet. Shareholders of record may vote by using the
toll-free number listed on the proxy card or electronically over the Internet.
Telephone and/or Internet voting is also available to shareholders who hold
their shares through a Frontier Corporation benefit plan. The telephone and
Internet voting procedures are designed to verify shareholders through use of
a Control Number that is provided on each proxy card. Both procedures allow
you to vote your shares and to confirm that your shares have been properly
recorded. If you do not indicate how you want to vote, your proxy will be
voted as recommended by the Board of Directors. Please see your proxy card for
specific instructions.
This Proxy Statement and Form of Proxy are being first sent to Shareholders on
March 12, 1999.
1
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How do I revoke my proxy?
Whether you vote by mail, by telephone, or electronically over the Internet, you
may later revoke your proxy by:
. sending a written statement to that effect to the
Corporate Secretary of the Company;
. submitting a properly signed proxy at a later date;
. voting by telephone at a later time;
. voting by Internet at a later time; or
. voting in person at the Annual Meeting.
What is the record date, vote required and method
of counting votes?
The close of business on March 1, 1999 is the Record Date for determination of
the shareholders entitled to notice of, and to vote at, the Annual Meeting. On
that date there were 172,277,729 shares of the Company's $1.00 par value common
stock outstanding and entitled to vote at the meeting. You are entitled to cast
one vote for each share held as of the Record Date on matters properly brought
before the Annual Meeting. Both the hard-copy proxy card and the electronic
voting proxy card contain spaces for you to indicate if you wish to abstain on
one or more of the proposals or to withhold authority to vote for one or more
nominees for Director. The telephone voting prompts also provide a mechanism for
you to abstain or withhold authority to vote. The following is an explanation of
the vote required and the method of counting votes for each of the items to be
voted on at the Annual Meeting.
ITEM 1--Election of Directors. Directors are elected by a plurality of the votes
cast and the twelve nominees receiving the highest number of votes will be
elected. Shares represented by your proxy will be voted in accordance with the
directions you specify on the proxy card or that you specify electronically
either by telephone or the Internet. Votes withheld in connection with the
election of one or more of the nominees for Director will not be counted as
votes cast in connection with that nominee's election.
ITEM 2--Ratification of public accountant. The public accountant is ratified by
a majority of the votes cast, so the affirmative vote of a majority of shares
voted in person or by proxy is required for approval of this item. Abstentions
are not counted in determining the votes cast in connection with the
ratification of the public accountant.
The New York Stock Exchange allows brokerage firms holding shares for the
benefit of their clients to vote in their discretion on behalf of their clients
with respect to "discretionary items" if the clients have not furnished voting
instructions within ten days of the shareholder meeting. The election of
Directors and the ratification of the public accountant are discretionary items
with respect to which brokerage firms may vote. If your broker does not vote
your shares, those broker "non-votes" will not be considered as votes cast.
Is there any other business for the meeting?
The Board knows of no other matters to be presented for shareholder action at
the meeting. If other matters are properly brought before the meeting, the
persons named in the accompanying proxy card intend to vote the shares
represented by them in accordance with their best judgment.
PROPOSAL 1--ELECTION OF DIRECTORS
Your Board of Directors recommends a vote "FOR" all nominees.
Nominees for Director
The Board of Directors nominates the twelve persons named on pages 3 and 4 for
election to the Board of Directors. All of these people are currently Directors
of the Company, and their terms of office all expire on the date of the Annual
Meeting. If elected, each will serve until the Annual Meeting of Shareholders to
be held in 2000 or until such time as his or her respective successor is
elected. The Board believes that all of the persons it has nominated will be
available and willing to serve as Directors. The accompanying proxy will be
voted for the election of these nominees, unless authority to vote for one or
more nominees is withheld. If any nominee is unable to serve, the shares
represented by all valid proxies will be voted for the election of any
substitute nominee designated by the Board or its Executive Committee, or the
Board may fill the vacancy at a later date after selecting a person it believes
is appropriate.
The principal occupation and business experience of each nominee for election
at the Annual Meeting appears next to that person's photograph.
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[PHOTO]
Patricia C. Barron, 56, is Executive in Residence and Senior Fellow of Stern
School of Business, New York University, one of the nation's leading academic
institutions. She has held this position since October 1998. From May 1997 to
June 1998 she was Corporate Vice President, Business Operations Support, Xerox
Corporation, a manufacturer of office systems and equipment, and held this
position since May 1997. From February 1994 until May 1997, she was President,
Xerox Engineering Systems. She is a Director of Aramark Corporation, Quaker
Chemical Corporation, Reynolds Metals Corporation, and TeleFlex Corporation. She
has been a Director of the Company since 1990.
[PHOTO]
Raul E. Cesan, 51, is President and Chief Operating Officer, Schering-Plough
Corporation, a worldwide researcher, manufacturer and marketer of pharmaceutical
and health care products and has held this position since November 1998. From
September 1994 to November 1998 he was President, Schering-Plough
Pharmaceuticals and Executive Vice President, Schering-Plough Corporation. From
September 1992 through September 1994, he was President, Schering
Laboratories--U.S. Pharmaceutical Operations. He has been a Director of the
Company since 1995.
[PHOTO]
Joseph P. Clayton, 49, is Chief Executive Officer and President of the Company
and has held this position since August 1997. He also served as the Company's
President and Chief Operating Officer from June 1997 to August 1997. From March
1992 until December 1996 he was Executive Vice President, Marketing and Sales--
Americas and Asia, Thomson Consumer Electronics, a worldwide leader in the
consumer electronics industry. He has been a Director of the Company since 1997.
[PHOTO]
Brenda E. Edgerton, 49, is Senior Vice President and Chief Financial Officer,
C&S Wholesale Grocers, Inc., the United States' third largest wholesale
distributor of food to retail markets. She has held this position since November
1998. From May 1996 to October 1998 she served as Vice President--Business
Development, Campbell Soup Company, a manufacturer of prepared convenience
foods. From May 1994 to May 1996, she held the position Vice President, Finance
- --U.S. Soup, and from August 1989 through April 1994, she was Vice President and
Treasurer, Campbell Soup Company. She has been a Director of the Company since
1993.
[PHOTO]
Jairo A. Estrada, 51, is President and Chief Executive Officer of EMRALD
Enterprises, a private investment firm. He has served in this capacity since
June 1996. Until December 1995, he was Chairman of the Board and Chief Executive
Officer of Garden Way Incorporated, a company which manufactures outdoor power
equipment, as well as Chairman of the Board of Stairmaster, which manufactures
exercise equipment. He is Chairman of the Board of Mercer Management, Inc., and
a member of the Board of Flow Management Technologies, Inc. Mr. Estrada has been
a Director of the Company since 1989.
[PHOTO]
Michael E. Faherty, 63, is an active investor in publicly traded securities and
in various venture capital and other private businesses. He is also the
principal of MICO, Inc., a general business consulting and contract executive
firm. In connection with this business, he has served as an executive for
various companies. Since 1994, he has served as Chairman of ECCS, Inc., a
provider of open systems-based networked computing solutions which incorporate
ECCS's mass storage enhancement products. From December 1994 until June 1996, he
was also ECCS's Chief Executive Officer. From January 1992 to January 1994, he
was President and Chief Executive Officer of Shared Financial Systems, Inc. He
has also served for varying periods of time as either Chief Executive or Chief
Operating Officer of Intec Corp., Information Magnetics, Cable &
3
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Wireless North America, Digital Sound Corporation, and BancTec, Inc. He is a
Director of BancTec, Inc., and of ECCS, Inc. Mr. Faherty has been a Director of
the Company since 1995.
[PHOTO]
Alan C. Hasselwander, 65, is Past Chairman of the Board of Rochester Telephone
Corporation (now Frontier Corporation). From February 1992 to April 1992, he was
Chairman of the Company. From July 1984 to February 1992, he was President and
Chief Executive Officer of the Company. He has been a Director of the Company
since 1984.
[PHOTO]
Eric Hippeau, 47, is Chairman and Chief Executive Officer of Ziff-Davis Inc., a
subsidiary of Softbank, Inc. Ziff-Davis Inc., is a leading integrated media and
marketing company focused on computing and Internet-related technology. Mr.
Hippeau has held this position since December 1993. Prior to that he held other
senior executive positions within Ziff-Davis. He is a Director of Ziff-Davis
Inc., Yahoo!, Inc., GeoCities, Inc., Herring Communications, Inc., and Softbank,
Inc. He has been a Director of the Company since 1998.
[PHOTO]
Robert Holland, Jr., 58, is the Chief Executive Officer of Workplace
Integrators, an office furniture distributor, and has held that position since
June 1997. From February 1995 until October 1996, he was Chief Executive Officer
of Ben and Jerry's Homemade, Inc., a manufacturer and marketer of premium ice
cream. From 1991 to 1995, he was Chairman and Chief Executive Officer of Rokher-
J, Inc., a business consulting firm. He is also a Director of The MONY Group,
Olin Corporation, Tricon Global Restaurants, Inc., Trumark Inc., A.C. Nielsen
Co., Lexmark International, Inc., and Lexmark International Group, Inc. Mr.
Holland has been a Director of the Company since 1995.
[PHOTO]
Douglas H. McCorkindale, 59, is Vice Chairman and President of Gannett Co.,
Inc., a nationwide diversified communications company and has held that position
since September 1997. Prior to that he held the position of Vice Chairman and
Chief Financial and Administrative Officer. He is a Director of Gannett Co.,
Inc., Continental Airlines, and a director or trustee of a number of investment
companies in the family of Prudential Mutual Funds. He has been a Director of
the Company since 1980.
[PHOTO]
James F. McDonald, 59, is President and Chief Executive Officer of Scientific-
Atlanta, Inc., a leading supplier of broadband communications systems,
satellite-based video, voice and data communications networks, and world-
wide customer service and support. Mr. McDonald has held that position since
July 1993. He is a Director of Scientific-Atlanta, Inc., Burlington Resources,
Inc., and American Business Products, Inc. He has been a Director of the Company
since 1998.
[PHOTO]
Dr. Leo J. Thomas, 62, retired in May 1996, from Eastman Kodak Company, a
manufacturer of imaging products. From September 1994 to May 1996, he held the
position of Executive Vice President, and from September 1991 to September 1994,
he was Group Vice President, Eastman Kodak Company. He is a Director of
Unigraphics, Inc. He has been a Director of the Company since 1984.
4
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INFORMATION ABOUT THE BOARD OF DIRECTORS
Board of Directors
The Board of Directors of the Company currently consists of twelve persons and
held seven meetings during 1998. All of the Directors attended at least 75% of
the total meetings of the Board and its committees which they were eligible
to attend.
Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the Board and
through the activities of its committees. The standing committees of the Board
are the Audit Committee, the Committee on Management, the Committee on
Directors and the Executive Committee. Committee membership as of the Record
Date is listed below.
Audit Committee
The members of the Audit Committee are:
. Jairo A. Estrada, Chair
. Patricia C. Barron
. Robert Holland, Jr.
This committee reviews the scope of audit activities and the financial reports
of the Company and reviews with management significant and material matters
which may result in either potential liability to the Company or significant
exposure to the Company. The Committee also makes reports and recommendations
with respect to audit activities, findings, and reports of the independent
public accountant and the internal audit staff of the Company. The Audit
Committee held five meetings in 1998.
Committee on Management
The members of the Committee on Management are:
. Dr. Leo J. Thomas, Chair
. Raul E. Cesan
. James F. McDonald
This committee is responsible for determining the compensation, benefits and
perquisites of all senior executive officers of the Company, with the exception
of the Chief Executive Officer, and for recommending the compensation, benefits
and perquisites of the Chief Executive Officer to the full Board after an
evaluation of his performance. This committee also develops and administers
executive compensation plans and reviews succession planning for the Company and
other significant human resources issues. The Committee on Management held eight
meetings in 1998.
Committee on Directors
The Committee on Directors serves as the nominating committee and is responsible
for corporate governance
issues. The Committee consists of:
. Michael E. Faherty, Chair
. Brenda E. Edgerton
. Eric Hippeau
. Douglas H. McCorkindale
This committee reviews all matters relating to the selection, qualification,
evaluation, and compensation of members of the Board of Directors and all
nominees to the Board. The Committee on Directors held seven meetings in 1998.
The Committee on Directors will consider nominations by shareholders. Such
suggestions should include sufficient biographical information so that the
Committee can appropriately assess a nominee's qualifications. This information
about a potential nominee would include, at a minimum:
. name and address
. business and other experience relevant to serving as a
member of Frontier's Board of Directors, and
. a listing of any other Boards on which the nominee may
be a member.
All submissions should be sent by a letter addressed to the Corporate
Secretary, Frontier Corporation, 180 South Clinton Avenue, Rochester, New York
14646-0700. Suggestions in connection with the 2000 Annual Meeting of Common
Shareholders must be received by October 29, 1999 in order to receive
consideration.
Executive Committee
The members of the Executive Committee are:
. Douglas H. McCorkindale, Chair
. Joseph P. Clayton
. Jairo A. Estrada
. Michael E. Faherty
. Alan C. Hasselwander
. Dr. Leo J. Thomas
The Chair of the Executive Committee serves as the lead outside director. The
Executive Committee possesses all of the powers of the Board of Directors except
those which, by law or the Company's By-Laws, cannot be delegated to it. The
Executive Committee met three times in 1998.
5
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Compensation of Directors
Directors who are not Company employees are paid an annual retainer and meeting
fees as follows:
. The annual retainer consists of 1,200 shares of Frontier Corporation common
stock. This amount is prorated if a Director begins service on other than the
date of the Annual Meeting.
. The meeting fee is $1,500 for each Board and/or committee meeting attended.
. The annual retainer for each committee chair consists of an additional 300
shares of Frontier Corporation common stock.
. New Directors also receive an additional one-time grant of 1,000 shares of
Frontier Corporation common stock which they must hold during their tenure on
the Board.
. The Lead Director receives additional compensation equal to the cash value of
1,200 shares of the Company's common stock. Mr. McCorkindale served as Lead
Director in 1998. It is currently expected that he will continue to serve in
this capacity in 1999.
. Directors may elect to defer payment of their fees to future years.
. Directors annually receive an option to purchase 4,000 shares of the
Company's common stock pursuant to the Company's Directors' Stock Incentive
Plan. This amount is prorated if a Director begins service on other than the
date of the Annual Meeting. These options expire ten years after issuance,
and the exercise price is the closing price of the stock on the day the
option was granted.
Mr. Hippeau received a grant of options for 2,000 shares at an exercise price
of $25.3125 on October 12, 1998. Mr. McDonald received a grant of options for
1,333 shares at an exercise price of $32.3125 on December 15, 1998. Each other
outside Director received a grant of options for 4,000 shares at an exercise
price of $28.625 per share on April 29, 1998.
Directors also receive cellular telephone equipment and service and other
nominal in-kind items.
STOCK OWNERSHIP OF
MANAGEMENT, DIRECTORS AND
CERTAIN BENEFICIAL OWNERS
In 1993, the Committee on Directors first established targets
for the minimum amounts of the Company's common stock which Directors should
own. These targets for stock ownership consider the length of a Director's
tenure on the Board. The 1998 target for Directors was the beneficial ownership
of 12,000 shares of the Company's common stock. Each Director has five years to
achieve this target, and all Directors with at least five years of service on
the Board have met the target. In 1999 the target for each outside Director
continues to be the beneficial ownership of at least 12,000 shares of the
Company's common stock.
Executive officers of the Company are also encouraged to own shares of the
Company. The recommended stock ownership level is based on each officer's
position in the organization and is a multiple of salary. Mr. Clayton and each
Executive Vice President has a stock ownership target which is the beneficial
ownership of Company common stock equal in value to four times his or her
respective salary. Each other executive officer has a target of beneficial
ownership of Company common stock equal in value to three times his or her
respective salary. Each executive officer is expected to achieve his or her
target by the later of January 1, 1999 or the fifth anniversary of his or her
appointment as an executive officer. All executive officers with at least five
years' tenure as an executive officer of the Company have met this target.
The following table sets forth the number of shares of the Company's common
stock beneficially owned by each Director and nominee, by each of the named
executive officers, and by Directors and officers of the Company as a group as
of February 12, 1999. No Director, officer or nominee beneficially owns more
than 1% of the Company's outstanding shares of common stock. The group's
aggregate holdings constitute approximately 1.3% of the Company's issued and
outstanding common stock.
6
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Management and Directors Stock Ownership Table as of February 12, 1999
- ----------------------------------------------------------------------
Total
Common Stock Beneficial
Name Stock(1) Options(2) Ownership
- ----------------------------------------------------------------------
Directors and Nominees:
Patricia C. Barron 13,234 15,399 28,633
Raul E. Cesan 9,099 7,999 17,098
Joseph P. Clayton 328,102 233,332 561,434
Brenda E. Edgerton 12,477 14,449 26,926
Jairo A. Estrada 28,773 15,999 44,772
Michael E. Faherty 98,639 24,333 122,972
Alan C. Hasselwander (3) 40,097 13,265 53,362
Eric Hippeau 15,846 0 15,846
Robert Holland, Jr. 9,559 7,666 17,225
Douglas H. McCorkindale 15,668 15,999 31,667
James F. McDonald 1,400 0 1,400
Dr. Leo J. Thomas 34,463 15,999 50,462
Named Executive Officers:
Robert L. Barrett 105,930 258,333 364,263
Joseph P. Clayton 328,102 233,332 561,434
Jeremiah T. Carr 57,856 232,732 290,588
Rolla P. Huff 152,613 0 152,613
Donna L. Reeves-Collins 9,499 100,232 109,731
Directors and Executive
Officers as a Group
(20 persons) 980,012 1,319,867 2,299,879
- ----------------------------------------------------------------------
(1) Includes all shares which each Director, nominee or officer directly, or
through any contract, arrangement, understanding, relationship or otherwise, has
or shares the power to vote or to direct the voting of such shares or to dispose
or to direct the disposition of such shares. Amounts in this column include both
vested and unvested restricted stock granted to selected executive officers.
However, these amounts do not include shares which each such person has the
right to acquire pursuant to options or other rights.
(2) Includes all shares which such persons have the right to acquire within the
sixty days following February 12, 1999, pursuant to options or other rights.
These amounts do not include shares which such persons have the right to acquire
more than sixty days after that date.
(3) Includes 1,480 shares owned by Mr. Hasselwander's spouse. Mr. Hasselwander
disclaims beneficial ownership of these shares.
Set forth below is the name, address and stock ownership of the only persons or
groups of persons known by the Company to own beneficially more than 5% of the
outstanding shares of common stock.
Stock Ownership of Certain Beneficial Owners as of December 31, 1998
- -------------------------------------------------------------------
Number of
Name and Address Shares of Percent
of Beneficial Owners Common Stock of Class
- -------------------------------------------------------------------
Delaware Management Holdings, Inc. (1) 11,512,972 6.71%
2005 Market Street
Philadelphia, Pennsylvania 19103
Scudder Kemper Investments, Inc. (2) 10,379,385 6.10%
345 Park Avenue
New York, New York 10154
- -------------------------------------------------------------------
(1) Delaware Management Holdings, Inc., filed with the Securities and Exchange
Commission a Schedule 13G, dated February 5, 1999, stating that it beneficially
owned in the aggregate 11,512,972 shares of the Company's common stock in its
capacity as the parent holding company of Delaware Management Business Trust. In
its Schedule 13G filing, Delaware Management Holdings, Inc., also disclosed that
with respect to the shares it beneficially owns, it has sole voting power with
respect to 10,965,172 shares, shared voting power with respect to 547,800
shares, sole dispositive power with respect to 11,512,972 shares, and shared
dispositive power with respect to 0 shares.
(2) Scudder Kemper Investments, Inc., filed with the Securities and Exchange
Commission a Schedule 13G, dated February 12, 1999, stating that it beneficially
owned in the aggregate 10,379,385 shares of the Company's common stock. In its
Schedule 13G filing, Scudder Kemper Investments, Inc., also disclosed that with
respect to the shares it beneficially owns, it has sole voting power with
respect to 4,207,085 shares, shared voting power with respect to 5,706,000
shares, sole dispositive power with respect to 10,270,285 shares, and shared
dispositive power with respect to 109,100 shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's Directors, executive officers and shareholders holding in excess
of 10% of the common stock are required to file reports with the Securities and
Exchange Commission and the New York Stock Exchange, with copies to the Company,
concerning ownership of and transactions in the Company's common stock. Based
solely on those reports furnished to the Company and related information, the
Company believes that all such filing requirements for 1998 were complied with
in a timely fashion with the exception of a single transaction by Donna L.
Reeves-Collins in November 1998 which was not timely reported on a Form 4.
7
<PAGE>
REPORT OF COMMITTEE ON DIRECTORS
Your Board formed the Committee on Directors in 1993 to focus the Board's
attention on corporate governance and to serve as the nominating committee.
Since then, the Committee initiated several actions designed to increase the
independence of the Board and to enhance the alignment of Directors' interests
with those of shareholders. Many of these actions were already reported to you
in prior proxy statements. During 1998, the Committee maintained its oversight
responsibilities with respect to corporate governance.
In adopting a set of Governance Guidelines, the Board sought to improve the
overall financial performance of the Company. The Guidelines, designed to serve
the best interests of the shareholders, establish the framework and standards
for Board operation. We review these annually and describe the main provisions
here.
Under the Governance Guidelines, the size of the Board is set between 9 and 14
members, each of whom is elected for a one-year term. Currently there are 12
members of the Board of Directors and each serves on at least one committee. We
expect 100 percent attendance with a minimum permitted attendance of 75 percent
of the meetings. All of your Directors met the attendance requirement in 1998.
The minimum number of Board meetings held each year is 5 and, for each
Committee, is 2.
There is a majority of independent outside Directors on the Board. All
Committees, except the Executive Committee, are composed entirely of independent
outside Directors. A majority of the Executive Committee members is independent
outside Directors. Generally, retirement age is 70. If a Director's primary job
changes, he or she submits a resignation to the Committee on Directors which,
after consideration, recommends whether or not to accept it. Retirement is
considered a job change in the context of this provision. The Chair of the
Executive Committee serves as Lead Director. In recognition of the additional
responsibilities of the Lead Director function, this Committee recommended that
the Lead Director receive additional compensation in an amount equal to the cash
value of 1,200 shares of the Company's common stock. This additional
compensation was approved by the full Board of Directors.
The Committee monitors the stock ownership of the members of the Board and
reports that all current outside Board members have met their respective stock
ownership target in effect at the end of 1998. The target may be reached over a
period of five years and is 12,000 shares.
In 1996, the Committee reviewed Board member compensation and determined that
a major shift was desirable to more closely align the Directors' interests with
those of the shareholders. Thus, the Committee recommended that beginning with
the 1996 compensation package, the full retainer paid to each Board member and
each Chair of a Committee would be in the form of shares of Frontier common
stock. The Board approved this plan, and subsequently the shareholders approved
this plan at the April 24, 1996 Annual Meeting of Shareholders. This plan
remains in effect for 1999.
In 1998, the Committee and the Board continued the practice of peer
evaluation. This process provides feedback to each Director and to the Board
with respect to strengths of the Board and areas for improvement. In alternate
years, the Board evaluates its effectiveness as a whole in a number of areas of
the Board's responsibility including the protection of shareholders' interests,
CEO performance review, strategic planning and management succession. This
Committee on Directors performed two searches in 1998 for new Directors and
successfully added two new members to your Company's Board.
Your Committee on Directors will continue to review annually the governance
standards and recommend improvements in governance to the full Board of
Directors. A complete copy of the Governance Guidelines is available from the
Corporate Secretary.
Respectfully submitted,
The Committee on Directors
Michael E. Faherty (Chair)
Brenda E. Edgerton
Eric Hippeau
Douglas H. McCorkindale
January 25, 1999
8
<PAGE>
REPORT OF COMMITTEE ON MANAGEMENT
Compensation Philosophy and Policy
The Committee on Management believes that it is imperative for Frontier to offer
an aggressive, competitive compensation program to motivate employees to build
wealth for shareholders. The executive compensation program is designed to
reward employees whose results enable the Company to achieve its vision. The
components of the program are:
. Base Salary
. Annual Incentive Plan (Bonus)
. Stock Incentive Plan
The executive compensation program is structured to attract and retain the
highest caliber executives. They are compensated based on the Company's
consolidated performance and the individual's contribution. The program is
designed to be competitive with compensation programs offered by comparable
employers. The Company retains William M. Mercer, Inc. to review its executive
compensation program on an annual basis. Information from this consulting firm,
other independent studies and public information concerning salary, bonus and
long-term incentive payments paid by companies in the telecommunications and
related industries are used by this Committee to determine an appropriate
compensation package for the Company's executives.
The analysis includes information from a peer group of twenty-seven companies
in the telephone, long distance, cable television, cellular and information
technology industries. This group includes most of the companies reported
in the Standard & Poor's Telephone Index and all of the companies reported in
the Standard & Poor's Long Distance Index, together with additional companies.
The Company's policy is to establish benchmarks at the median and 75th
percentile of the comparative companies and to reward results based on
performance. On a comparative basis, the base salary of the Company's CEO and
its other executives, on average, would be considered within the third quartile
of this group of peer companies.
Significant Actions During The Year
In January 1998, the Committee negotiated, with the Board's approval, a new
employment agreement with Mr. Clayton to reflect his duties as Chief Executive
Officer. The term of the agreement is for three years and defines the elements
of his compensation. The Committee also approved employment agreements during
the year with other executive officers of the Company which reflect their
respective duties and the elements of their compensation.
In February 1998, Louis Massaro, then Chief Financial Officer, retired from
the Company. Rolla P. Huff was hired in May 1998 to fill this role. As
components of his compensation package, Mr. Huff was awarded stock options and
restricted stock. Vesting of the restricted stock is predicated on both
continued employment and the achievement of specific stock price performance
targets.
Base Salary
The salaries of the executive officers are based on the executive's performance
and an analysis of base salaries paid executive officers having similar
responsibilities in other companies. This analysis included the companies in the
peer group of twenty-seven publicly-traded companies together with additional
companies from other industries with similar revenues and/or asset values. Mr.
Clayton's base salary was adjusted in 1998 to reflect his responsibilities as
Chief Executive Officer. A further adjustment will be made to his salary in
February 1999. The level of Mr. Clayton's base salary was also based upon a
subjective assessment of his individual performance as well as overall corporate
performance as measured by actual financial and operating results versus pre-
established targets, strategic goals, and growth of the business. The base
salaries of the other executive officer positions, other than that of the Chief
Executive Officer, were set during 1998 and are commensurate with the respective
position's responsibilities. This Committee continues to review executive salary
levels in order to ensure competitiveness. Adjustments are planned to these
salaries to take effect beginning in February 1999.
In addition to benchmarking comparative companies' salaries, salary levels for
the executives were based upon a subjective assessment of each individual's
performance and responsibilities as well as overall corporate performance as
measured by actual earnings per share and revenue versus pre-established
targets, strategic goals and business and individual performance. No relative
weights are attributed to any specific measurement factors.
Annual Incentive Plan (Bonus)
The Company's annual incentive plan is a bonus plan designed to provide
performance-based compensation awards to executives for achievement during the
past year. For executive officers, annual incentive awards are a function of
individual performance and consolidated corporate results. Business
9
<PAGE>
unit performance is also a component of the annual incentive plan for certain of
those employees involved in line operations below the executive officer level.
All participants are subject to a discretionary adjustment, either positive or
negative, based on individual performance. The specified qualitative and
quantitative criteria employed by the Committee in determining annual incentive
awards vary individually and from year to year. These criteria, or targets, are
established as a means of measuring executive performance. The corporate targets
for 1998 were based upon earnings per share, revenue, operating income, customer
churn, and employee-initiated churn. Targets and weightings were established by
this Committee as an incentive to improve the financial performance of the firm
and thus improve long-term stock performance. Performance objectives and
associated payout opportunities were established at the beginning of the year
for executive officers. The objectives are identified as threshold, standard and
premier targets with standard performance yielding payouts at the median level
competitively. Actual overall 1998 corporate performance was between the
threshold and standard levels, and accordingly, there was a bonus payout for the
executives. Mr. Clayton's incentive bonus in the amount of $527,583 was
determined in accordance with these targets and was paid out in early 1999. One
executive who joined Frontier in 1998 received a guaranteed incentive bonus as
part of his initial compensation package.
Stock Incentive Plan
This Committee believes that stock-based plans are an important component of
executive compensation programs because they tie long-term compensation directly
to the interests of shareholders. The Company's Management Stock Incentive Plan
is designed to align executive compensation with long-term performance of the
Company's stock. Stock options issued in 1998 do not expire until 2008, and the
exercise price is the closing price of the stock on the day the option was
granted. This Committee makes a subjective determination of the specific stock
option grant to be awarded to each executive officer. The factors considered by
the Committee in making this determination are:
(a) the executive officer's past performance on previously set objectives;
(b) his or her expected future contribution to the long-term strategic goals
and objectives of the Company; and
(c) industry practices.
No relative weights are attributed to any of these factors. All executive
officers of the Company received options in 1998 based on their position in the
Company, their contribution to the achievement of the Company's long-term
objectives as assessed by Committee members based on their experience with the
executive officers, and upon the recommendation of the Chief Executive Officer.
Upon the recommendation of this Committee, Mr. Clayton received stock option
grants for 200,000 shares based upon these factors as well.
Restricted stock awards were granted to incent and retain certain of the named
executive officers. The awards were issued to them based upon their expected
contribution to the achievement of the Company's long-term objectives as
assessed by Committee members based on their experience with the executive
officers, and upon recommendation of the Chief Executive Officer. Restricted
stock awards issued to them in 1998 vest based upon stock performance and the
passage of time. Upon the recommendation of this Committee, the full Board of
Directors awarded Mr. Clayton a total of 300,000 shares of restricted stock.
Restricted stock awards to Mr. Clayton for 200,000 of these shares expire on
February 28, 2001 and on February 10, 2003 for the other 100,000 of these
shares. Executives, including Mr. Clayton, must continue to be employed by the
Company and specified stock price targets must be achieved by certain dates for
vesting to occur. Executives who leave the Company for any reason other than
retirement, death or disability forfeit all unvested awards. No greater than
one-third of an executive's award can be paid out in either 1999 or 2000. On
February 10, 1998, the grant date of Mr. Clayton's 300,000 shares of restricted
stock, the Company's stock price was $25.50 per share. Of this amount 66,666
shares vest upon the achievement of at least a $29.00 stock price for twenty
business days in a thirty business day period. Subsequent tranches will vest
upon achievement, for the same minimum duration, of stock prices of $34.00 and
$39.00. (See also footnote 1 to the Long-Term Incentive Plans--Awards in Last
Fiscal Year Table at page 15.)
Other Actions
The Committee believes that stock-based programs provide the best long-term
incentives, are excellent motivators and better align the efforts of employees
with the objectives of the shareholders. The Committee had previously
established stock ownership guidelines for the Company's executives. These
guidelines are described elsewhere in this proxy statement.
10
<PAGE>
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1
million per person for compensation paid to the five highest paid executive
officers unless certain requirements are met. The Management Stock Incentive
Plan, specifically as it relates to performance-based restricted stock, is
designed to comply with Section 162(m) requirements. The Committee favors a pay-
for-performance compensation program and intends to continue to review executive
compensation plans in consideration of the regulation.
No member of this Committee is a former or current officer or employee of the
Company or any of its subsidiaries.
Respectfully submitted,
The Committee on Management
Dr. Leo J. Thomas (Chair)
Raul E. Cesan
James F. McDonald
January 25, 1999
PERFORMANCE GRAPH
The following graph charts the Company's cumulative total shareholder return
performance against the Standard & Poor's Telephone Index, the Standard & Poor's
Long Distance Index and the Standard & Poor's 500 Index. A variety of factors
may be used in order to assess a corporation's performance. This Performance
Graph, which reflects the Company's total return against the selected peer
group, reflects one such method. The performance of the Standard & Poor's
Telephone Index and the Standard & Poor's Long Distance Index are weighted by
the stock market capitalization of the companies within each of these peer
groups. These same comparisons have been presented in the last three proxy
statements. The Company's common stock closing price on December 31, 1998 was
$34.00 per share.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Value of $100 invested
through the period ending: 0 1994 1995 1996 1997 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
. Frontier Corporation $100.00 $99.12 $140.05 $110.64 $120.47 $172.83
[] S&P 500 $100.00 $101.52 $139.72 $170.47 $228.48 $292.38
* S&P Long Distance $100.00 $88.93 $120.35 $120.66 $169.40 $281.94
/\ S&P Telephone $100.00 $92.06 $138.11 $139.01 $192.53 $280.79
- ----------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
COMPENSATION OF COMPANY MANAGEMENT
We have included the following tables and other information to help you
understand the compensation of the Company's executives. These tables reflect
the components of compensation paid the executive officers of Frontier
Corporation. Specifically, these include salary, bonus, stock options and a
long-term incentive plan. The Company does not provide its executives with stock
appreciation rights.
The Report of the Committee on Management of the Board of Directors appears on
pages 9 through 11 of this proxy statement. This Report discusses the factors
taken into consideration in setting Mr. Clayton's compensation and the
compensation of the other executive officers. A Performance Graph showing the
performance of the Company's stock as compared to the Standard & Poor's 500
Index, the Standard & Poor's Telephone Index, and the Standard & Poor's Long
Distance Index appears on page 11 of this proxy statement.
Summary Compensation Table
The following table provides a summary of compensation paid to the CEO and the
other four most highly compensated executive officers of the Company for
services rendered to the Company and/or its subsidiaries over the past three
fiscal years. The indicated titles are those held by each named executive
officer as of January 31, 1999.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------------------------------------
SECURITIES
NAME OTHER ANNUAL UNDERLYING LTIP ALL OTHER
AND PRINCIPAL SALARY BONUS COMPENSATION OPTIONS/SARS PAYOUTS COMPENSATION
POSITION YEAR ($) ($) ($) (2) (#) ($) (3) ($) (4)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. P. CLAYTON /(1)/ 1998 $725,000 $527,583 $ 16,274 200,000 N/A $286,366
CEO AND PRESIDENT 1997 $364,583 $350,000 $ 0 500,000 N/A $475,535
FRONTIER CORPORATION 1996 N/A N/A N/A N/A N/A N/A
R. L. BARRETT /(1)/ 1998 $345,000 $150,627 $ 0 75,000 $522,932 $ 12,025
EXECUTIVE VICE PRESIDENT 1997 $322,500 $ 0 $ 0 50,000 N/A $ 4,638
FRONTIER CORPORATION AND 1996 $231,250 $ 0 $ 84,670 200,000 N/A $246,528
PRESIDENT--TECHNOLOGY
J. T. CARR
EXECUTIVE VICE PRESIDENT 1998 $400,000 $174,640 $ 0 100,000 $632,394 $ 5,622
FRONTIER CORPORATION 1997 $319,084 $ 0 $ 0 50,000 N/A $ 3,825
AND PRESIDENT-- 1996 $270,000 $ 0 $ 0 100,000 N/A $ 5,226
FRONTIER OPERATIONS
R. P. HUFF /(1)/ 1998 $218,750 $300,000 $ 31,188 350,000 N/A $141,579
EXECUTIVE VICE 1997 N/A N/A N/A N/A N/A N/A
PRESIDENT AND CHIEF 1996 N/A N/A N/A N/A N/A N/A
FINANCIAL OFFICER
FRONTIER CORPORATION
D. L. REEVES-COLLINS /(1)/ 1998 $275,000 $115,084 $110,713 75,000 N/A $ 47,081
SENIOR VICE 1997 $262,841 $ 65,520 $ 18,205 70,500 N/A $334,203
PRESIDENT AND PRESIDENT-- 1996 $146,035 $ 67,388 $ 0 25,000 N/A $ 42,868
FRONTIER SALES
==============================================================================================================================
</TABLE>
(1) Mr. Clayton became an employee on June 9, 1997 and was named President and
Chief Operating Officer effective June 16, 1997, Mr. Barrett was named Executive
Vice President effective March 26, 1996, and Mr. Huff became an employee on May
22, 1998 and was named Executive Vice President effective June 1, 1998. Prior to
those dates, none had received any remuneration for services to Frontier
Corporation or any of its subsidiaries. See also Long-Term Incentive Plans--
Awards in Last Fiscal Year Table at page 15. The amount reflected as 1997 salary
for Ms. Reeves-Collins includes a cost-of-living adjustment of $84,706 paid to
her in connection with her relocation, at that time, to California in her
position as Frontier Corporation's Vice-President-Western Region. The amounts
shown as bonus for Ms. Reeves-Collins in 1996 and in 1997 reflect commissions
paid to her in connection with her prior sales management positions with
Frontier's long distance business unit.
12
<PAGE>
(2) The amount reported in this column for 1996 includes $84,670 paid to Mr.
Barrett to offset income tax liabilities incurred by him. The amount reported in
this column for 1997 includes $18,205 paid to Ms. Reeves-Collins to offset
income tax liabilities incurred by her in 1996 and 1997. The amount reported in
this column for 1998 includes $16,274 paid to Mr. Clayton to offset income tax
liabilities incurred by him in 1998, $110,713 paid to Ms. Reeves-Collins to
offset income tax liabilities incurred by her in 1998, and $31,188 paid to Mr.
Huff to offset income tax liabilities incurred by him in 1998.
(3) The amounts reflect the dollar value of the portion of Mr. Barrett's and
Mr. Carr's restricted share grants which vested in 1998. The grants of these
restricted shares were reflected as Long-Term Incentive Plan Awards in the years
in which they were originally granted.
(4) "All Other Compensation" includes imputed income from term life insurance
coverage and the Company's contributions to both the tax-qualified 401(k) and
nonqualified defined contribution plans. For 1998, the dollar value of term life
insurance coverage premiums paid by the Company for the benefit of the named
executive officers was $22 for Mr. Clayton, $22 for Mr. Barrett, $22 for Mr.
Carr, $11 for Mr. Huff and $22 for Ms. Reeves-Collins. The Company's 1998
contributions on behalf of the named executive officers to the tax-qualified
401(k) and nonqualified defined contribution plans, respectively, were as
follows: $0 and $37,625 for Mr. Clayton; $2,956 and $9,047 for Mr. Barrett;
$5,600 and $0 for Mr. Carr; $800 and $4,766 for Mr. Huff; and $2,863 and $6,762
for Ms. Reeves-Collins. For Mr. Clayton, Mr. Huff and Ms. Reeves-Collins, "All
Other Compensation" also includes the reimbursement of relocation fees in the
respective amounts of $248,719, $136,002 and $37,434.
The following companion tables to the Summary Compensation Table list the
stock options granted during the 1998 fiscal year to the named executive
officers, their stock option exercises in 1998 and the aggregate options they
held at the end of 1998, long-term incentive plan restricted stock awards
granted during 1998, and the estimated retirement benefits which would be paid
to them at age 65.
Option/SAR Grants in Last Fiscal Year
The following table of Individual Grants includes a column designated as "Grant
Date Present Value." The calculations in this column are based on the
Black/Scholes Present Value Pricing Methodology. This is used to determine the
theoretical value of a stock option. The parameters used in this model are the
exercise or strike price, the term of the option or term to expiration, the
underlying stock price, the daily volatility of the stock, the prevailing
interest rate, and the stock's dividend rate.
INDIVIDUAL GRANTS IN 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE OR EXPIRATION
GRANTED FISCAL YEAR BASE PRICE DATE GRANT DATE VALUE
- -----------------------------------------------------------------------------------------------------------------------
NAME (#) (1) ($/SHARE) GRANT DATE
PRESENT VALUE ($)(3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
J. P. CLAYTON /(2)/ 200,000 4.11% $25.5000 2/10/08 $1,532,340
R. L. BARRETT /(2)/ 75,000 1.54% $25.5000 2/10/08 $ 574,628
J. T. CARR /(2)/ 100,000 2.06% $25.5000 2/10/08 $ 766,170
R. P. HUFF /(2)/ 200,000 4.11% $30.7500 5/22/08 $2,049,740
50,000 1.03% $33.3125 8/26/08 $ 594,630
100,000 2.06% $26.4375 10/19/08 $1,019,320
D. L. REEVES-COLLINS /(2)/ 75,000 1.54% $25.5000 2/10/08 $ 574,628
=======================================================================================================================
</TABLE>
(1) The options granted under the Management Stock Incentive Plan have the
following material terms: exercise price is the market price (based on
the closing price of the Company's common stock on the New York Stock Exchange)
on the date of the option grant; 1/3 of the options granted may be exercised
commencing one year following the grant date, a second 1/3 may be exercised
commencing two years following the grant date, and the remaining 1/3 may be
exercised commencing three years following the grant date. Options may not be
transferred other than by will or the laws of descent and distribution. An
option may be exercised upon written notice to the Company accompanied by
payment in full for the shares being acquired. In the event of a "change in
control" as defined by the Management Stock Incentive Plan, all options become
immediately vested and exercisable.
(2) Options were granted to Mr. Huff on May 22, 1998, August 26, 1998 and
19, 1998, at an exercise price equal to Frontier Corporation's closing stock
price on each date; such prices were, respectively, $30.75 per share, $33.3125
per share and $26.4375 per share. Options were granted to all other named
executive officers on February 10, 1998, at an exercise price equal to
Frontier's closing stock price on that date of $25.50 per share.
13
<PAGE>
(3) The Black/Scholes pricing model is a methodology by which to determine the
theoretical value of a stock option. The parameter assumptions used in the
model are as follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Grant Exercise Option Underlying Risk Free Expected Dividend
Date Price Term Stock Price Rate of Daily Yield
Return Volatility
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
2/10/98 $ 25.50 10 yrs. $ 25.50 5.570% .349 4.216%
5/22/98 $ 30.75 10 yrs. $ 30.75 5.640% .339 3.485%
8/26/98 $33.3125 10 yrs. $33.3125 5.200% .355 3.086%
10/19/98 $26.4375 10 yrs. $26.4375 4.670% .411 3.086%
===========================================================================================================================
</TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/
Shares Options/SARs at FY End SARs at FY End (2)
Acquired Value --------------------------------------------------------------
On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($)(1) (#) (#) ($) ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. P. Clayton 0 N/A 166,666 533,333 $2,427,074 $6,554,176
R. L. Barrett 0 N/A 149,999 175,001 $ 618,741 $1,250,009
J. T. Carr 26,400 $300,456 182,732 166,668 $1,325,982 $1,333,342
R. P. Huff 0 N/A 0 350,000 $ 0 $1,440,625
D. L. Reeves-Collins 0 N/A 75,232 116,668 $ 703,621 $1,005,217
==================================================================================================================================
</TABLE>
(1) Aggregate market value of the shares acquired or covered by the option less
the aggregate exercise price.
(2) Options are valued at the market value of Frontier Corporation common stock
at December 31, 1998, (closing price of $34.00) less the per share option
exercise price, multiplied by the number of exercisable/unexercisable options.
14
<PAGE>
Long-Term Incentive Plans Awards in Last Fiscal Year
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
Number of Performance or
Shares, Units Other Period
or Other Until Maturation
Name Rights (#) or Payout
- ---------------------------------------------------------------
<S> <C> <C>
J. P. Clayton 300,000 (1)
R. L. Barrett 0
J. T. Carr 0
R. P. Huff 150,000 (1)
D. L. Reeves-Collins 0
===============================================================
</TABLE>
(1) Messrs. Clayton and Huff each were awarded shares of restricted stock under
the Management Stock Incentive Plan which is a long-term incentive plan. Mr.
Clayton received all his shares on February 10, 1998. Mr. Huff received 100,000
shares on May 22, 1998 and 50,000 shares on October 19, 1998. Vesting is subject
to performance criteria as well as the passage of time and continued employment.
Recipients of restricted shares have full voting rights on the shares and are
entitled to receive accumulated dividends when the shares vest. In the event of
death, disability, or retirement, individuals (or their estates) will be
entitled to a distribution of restricted shares upon the achievement of the
vesting criteria, prorated to reflect their periods of active participation
during the grant term. In the event of a "change in control" as defined by the
Management Stock Incentive Plan, all restricted shares become immediately
vested. With respect to 200,000 shares of Mr. Clayton's award, the first third
will vest upon achievement of at least a $29.00 stock price for twenty business
days in a thirty business day period. The remaining two-thirds will vest upon
achievement of stock prices of $34.00 and $39.00 for twenty business days in a
thirty business day period. Shares which do not vest by February 28, 2001 are
forfeited, together with all dividends thereon. With respect to Mr. Huff's May
22, 1998 award of 100,000 restricted shares, the first third will vest upon
achievement of at least a $35.00 stock price for twenty business days in a
thirty business day period. The remaining two-thirds will vest upon achievement
of stock prices of $41.00 and $47.00 for twenty business days in a thirty
business day period; shares which do not vest by May 31, 2001 are forfeited,
together with all dividends thereon. With respect to Mr. Huff's October 19, 1998
award of 50,000 restricted shares, the first third will vest upon achievement of
at least a $29.00 stock price for twenty business days in a thirty business day
period. The remaining two-thirds will vest upon achievement of stock prices of
$32.00 and $35.00 for twenty business days in a thirty business day period;
shares which do not vest by October 31, 2001 are forfeited, together with all
dividends thereon. In the case of Mr. Clayton's 200,000 restricted shares and
all Mr. Huff's restricted shares, no greater than one-third of the award can be
paid in either 1999 or 2000. Mr. Clayton's remaining 100,000 restricted shares
vest February 10, 2003 provided that the Company's stock price shall have
reached $29.00 per share within 12 months of the grant, $31.00 per share within
18 months of the grant, or $32.00 per share within 24 months of the grant. This
stock price appreciation target was reached; payout of the vested amounts will
be deferred until Mr. Clayton reaches age 55 on October 11, 2004.
Pension Plans
The following table shows the estimated annual benefits payable upon retirement
at age 65 to individuals in specified remuneration and years of service
classifications. Furthermore, the amounts set forth are neither subject to any
deduction for Social Security benefits or any other offsets nor adjusted to
reflect maximum allowable benefits under the Internal Revenue Code.
Certain of the Company's officers are participants in the Company's Pension
Plan for Non-Bargaining Employees (the "Management Pension Plan") as
supplemented by a Supplemental Management Pension Plan ("SMPP"). Of those listed
in the Summary Compensation Table, Mr. Carr and Ms. Reeves-Collins participate
in these Plans. The annual aggregate pension benefit for an officer under these
Plans is based upon several factors and is largely determined by the number of
years of employment multiplied by a percentage of the officer's three
consecutive years of highest average annual compensation preceding retirement.
Both the Company's Management Pension Plan and the SMPP were amended and
frozen effective December 31, 1996. Benefit calculations under both pension
plans were increased by 20% for all plan participants who had five or more years
of service under the Plans by December 31, 1996. Additionally, early retirement
requirements were reduced by three years of service and three years of age as
final enhancements to both plans.
15
<PAGE>
Pension Plan Table
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Years of Service
Remuneration (15) (20) (25) (30) (35)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$250,000 $ 67,648 $ 90,197 $112,746 $135,295 $157,844
300,000 81,508 108,677 135,846 163,015 190,184
350,000 95,368 127,157 158,946 190,735 222,524
400,000 109,228 145,637 182,046 218,455 254,864
450,000 123,088 164,117 205,146 246,175 287,204
500,000 136,948 182,597 228,246 273,895 319,544
550,000 150,808 201,077 251,346 301,615 351,884
600,000 164,668 219,557 274,446 329,335 384,224
650,000 178,528 238,037 297,546 357,055 416,564
===========================================================================
</TABLE>
Messrs. Clayton, Barrett, Carr, and Huff and Ms. Reeves-Collins each have
executive contracts which may pay a benefit in the event of a "change in
control" of the Company. These contracts are explained in detail on page 17 of
this proxy statement. With the exception of Messrs. Clayton, Barrett and Huff,
each of them also participates in the Company's Management Pension Plan and
SMPP. Under SMPP, the service factor would include, subject to certain
limitations, the amount of service for which payment is made to each of them
under his or her respective executive contract.
The SMPP also provides that in the event of a Change in Control of the
Company, the Board may not terminate a participant's benefit and the Employees'
Benefit Committee may not change prior decisions regarding a participant's
service factor.
Effective January 1, 1994, the Company established a Supplemental Executive
Retirement Plan ("SERP") which covers Mr. Carr plus one other current executive.
The Plan has an accrual and vesting schedule based on years of service and age.
A maximum benefit of 60% of final compensation will be paid to an executive
retiring at age 50 or older with 30 or more years of service. Payments made
under the Company's Management Pension Plan and the SMPP are included in
determining the ultimate benefit payable under the SERP. However, in order to
qualify for the SERP benefit, a covered executive must be at least 50 years of
age. Executive officers who are not at least 50 years old when they retire would
only receive the retirement benefits set forth in the above Pension Plan Table
and would receive no SERP benefit. Effective December 31, 1999, the SERP will be
frozen with no enhancements.
For the purpose of the Management Pension Plan, annual compensation includes
all taxable W-2 compensation plus deferred compensation. For the purpose of SMPP
and the SERP, annual compensation is the same as that given in the Salary and
Bonus columns of the Summary Compensation Table for the named executive
officers. The number of years of employment of such individuals for the purposes
of these Plans currently are as follows: Mr. Carr--29 and Ms. Reeves-Collins--
15.
Ms. Reeves-Collins has not yet attained the age and years of service criteria
to be retirement eligible. If her employment ended as of the current date, Ms.
Reeves-Collins would receive a deferred pension based upon the amount reflected
in the Pension Plan Table. Since Mr. Carr has attained the age of 50 years and
has 29 years of service credit, he is entitled to a full pension based on the
amount reflected in the Pension Plan Table. Assuming compensation at his January
31, 1999 level, if Mr. Carr were to retire, he would additionally receive an
annual SERP benefit of $44,900.58.
16
<PAGE>
Employment Contracts
The Company has entered into employment agreements with certain of its executive
officers. Effective August 16, 1995, the Company entered with Mr. Carr into an
employment agreement with a three-year term and a provision for annual renewals.
Effective March 26, 1996, the Company also entered with Mr. Barrett into a
three-year employment agreement with a provision for annual renewals.
Additionally, the Company entered with Ms. Reeves-Collins into a similar
agreement on October 13, 1997. Each of these agreements provides for specific
compensation, duties and terms and conditions of employment. Each agreement also
provides that, in the event of a Change in Control (as defined in the agreement)
which is followed within three (3) years by termination of employment under
certain circumstances, the employee will be entitled to all accrued
compensation, a pro rata bonus, a cash severance payment (as determined under
the agreement), the cash value of certain retirement amounts (if applicable and
as determined under the agreement) and continuation for three years of certain
health and life insurance benefits. Additionally, in the event any of these
amounts are determined to trigger an Excise Tax (as defined in the agreement),
the employee may also be entitled to a Gross-Up Payment (also as defined in the
agreement). The amount of the severance payable to a named officer may vary
based upon the individual's agreement with the Company.
Effective January 1, 1998, the Company entered into an employment agreement
with Mr. Clayton. Mr. Clayton's agreement has a three-year term with annual
renewals and specifies the duties of his employment. It also provides for an
annual base compensation of $725,000, a short-term incentive as established
under the Company's Executive Compensation Program, a grant of 200,000 stock
options, and the grant of a total of 300,000 restricted shares with vesting tied
to specific performance criteria linked to an increase in the Company's stock
price and the passage of time. Of this grant, 200,000 restricted shares will
vest over three years, assuming achievement of certain specific stock price
appreciation targets. The performance criteria for the remaining 100,000
restricted shares is a specific stock price appreciation target to be achieved
over 12, 18 or 24 months. Assuming achievement of these stock price appreciation
targets, the 100,000 restricted shares will vest five years following the grant
date. Mr. Clayton's employment agreement also contains termination and Change in
Control provisions substantially similar to the agreements of the other named
executive officers.
Effective May 22, 1998, the Company entered into an employment agreement with
Mr. Huff. Mr. Huff's agreement has a three-year term with annual renewals and
specifies the duties of his employment. It also provides for an annual base
compensation of $375,000, a short-term incentive as established under the
Company's Executive Compensation Program, a grant of 200,000 stock options, and
the grant of a total of 100,000 restricted shares with vesting tied to specific
performance criteria linked to an increase in the Company's stock price and the
passage of time. All these restricted shares would vest over three years,
assuming achievement of certain specific stock price appreciation targets. Mr.
Huff's employment agreement also contains termination and Change in Control
provisions substantially similar to the agreements of the other named executive
officers. This agreement addresses Mr. Huff's responsibilities as Executive Vice
President and Chief Financial Officer and provides that the Board of Directors
may consider his appointment to the position of President and Chief Operating
Officer.
BUSINESS TRANSACTIONS AND RELATIONSHIPS
Alan Hasselwander and the Company entered into a consulting arrangement under
which he serves as Chair of the North American Numbering Council ("NANC"). The
NANC advises the Federal Communications Commission ("FCC") on telecommunications
industry numbering issues, including implementation of the FCC's number
portability rules. Mr. Hasselwander's consulting agreement provides that he will
perform services on a per diem basis and is reimbursed for necessary expenses.
During 1998, Mr. Hasselwander received $150,000, plus reimbursement for
expenses, under this consulting arrangement. The Company anticipates that Mr.
Hasselwander will continue to render services during 1999 pursuant to this
consulting arrangement but is, at this time, unable to anticipate the amount
which it will pay for any future services.
17
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The Committee on Management serves as the compensation committee. The members of
the Committee on Management at the end of the last completed fiscal year were
Mr. Cesan, Mr. McDonald and Dr. Thomas (Chair). None of these persons were,
during 1998 or previously, an officer or employee of the Company or any of its
subsidiaries.
The full Board of Directors accepted the recommendation of the Committee on
Management concerning Mr. Clayton's compensation. Mr. Hasselwander is a former
officer of the Company and, during 1998, he participated in those deliberations
of the Company's Board of Directors in which the Board accepted the Committee on
Management's recommendations concerning executive officer compensation. Mr.
Hasselwander is not a member of the Committee on Management. No executive
officer of the Company has, during 1998 or previously, served as a director or
member of the compensation committee of any other entity that has an executive
officer who serves or has served either as a member of the Committee on
Management or as a member of the Board of Directors of Frontier Corporation.
INDEMNIFICATION OF CERTAIN PERSONS
The Company and its subsidiaries indemnify their Directors and officers against
certain liabilities they may incur. As authorized by New York State Law, the
Company and its subsidiaries have purchased insurance from the Chubb Group,
Reliance National, and Gulf Insurance Company insuring the Company and its
subsidiaries against amounts they may pay as a result of indemnifying their
officers, Directors and certain fiduciaries under the Employees Retirement
Income Security Act of 1974 (ERISA). These insurance policies also insure all
officers and Directors of the Company and its affiliates for additional
liabilities against which the Company and its affiliates may not provide
indemnification. The Directors and Officers Liability insurance has combined
limits with the Fiduciary Liability insurance. The insurance was renewed on May
21, 1998 for a period of three years. During 1998, the Company prepaid $924,000
for the entire three-year term of this insurance.
- --------------------------------------------------------------
PROPOSAL 2--RATIFICATION OF PUBLIC ACCOUNTANT
Your Board of Directors recommends a vote "FOR" this proposal.
- --------------------------------------------------------------
The Company's public accountant is Pricewaterhouse-Coopers LLP. At the Annual
Meeting, the shareholders will consider and vote upon a proposal to ratify the
public accountant for the Company's fiscal year ending December 31, 1999. The
Audit Committee of the Board of Directors has recommended that shareholders
ratify the re-election of PricewaterhouseCoopers LLP as public accountant for
that year. No member of the Audit Committee is an officer or employee of the
Company. The Board of Directors unanimously recommends that you vote FOR this
proposal. Proxies solicited by the Board of Directors will be voted FOR the
foregoing proposal unless otherwise indicated. Approval of this proposal will
require the affirmative vote of a majority of the votes cast at the Annual
Meeting by the holders of the common stock outstanding.
Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting to make a statement, if they wish, and to respond to appropriate
questions from shareholders.
2000 ANNUAL MEETING--FUTURE PROPOSALS OF SHAREHOLDERS
In order to be eligible for inclusion in the proxy materials for the Company's
2000 Annual Meeting of Common Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's principal executive
offices by November 12, 1999. Any such proposal should be addressed to 180 South
Clinton Avenue, Rochester, New York 14646, Attention: Josephine S. Trubek,
Corporate Secretary.
In addition, the Company's By-Laws establish an advance notice procedure with
regard to certain matters, including shareholder proposals not included in the
Company's proxy statement, to be brought before an annual meeting of
shareholders. In general, in order to bring a matter before the meeting, notice
must be received by the Corporate Secretary of the Company not less than 60 days
nor more than 90 days prior to the anniversary of the immediately preceding
annual meeting.
18
<PAGE>
The notice must contain information as specified in the By-Laws concerning the
matters to be brought before such meeting and concerning the shareholder
proposing such matters. If the date of the annual meeting is more than 30 days
earlier or more than 60 days later than the anniversary date, notice must be
received not earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day prior to such
annual meeting or the 10th day following the day on which the public
announcement of the date of such meeting is first made. However, if a
shareholder complies with the requirements to have a proposal included in the
proxy materials, he or she is deemed to have complied with this advance notice
procedure. If a shareholder who has notified the Company of his or her intention
to present a proposal at an annual meeting does not appear or send a qualified
representative to present that proposal at the meeting, the Company need not
present the proposal for a vote at the meeting. In order to provide an admission
card, we do ask that if a proposal is to be presented by a qualified
representative, the shareholder advise us of the identity of the person who will
be presenting the proposal.
OTHER MATTERS
As of the date of this proxy statement, the Board of Directors does not intend
to present any matter for action at the Annual Meeting other than those set
forth in the Notice of Annual Meeting. If any other matters properly come before
the meeting, the holders of the proxies will act in accordance with their best
judgment. In the event a nominee is unable to serve, the proxies will vote upon
a substituted nominee.
An admission ticket will be required to enter the Annual Meeting. Please use
the form attached to your proxy card to request your ticket. Ticket requests
after April 9, 1999 should be made by calling the Shareholder Line: 1-800-836-
0342. If you hold your shares through your broker or otherwise are not a record
holder, you may be asked to show evidence of your share position in order to
enter the Annual Meeting. At this meeting we will celebrate the Company's 100th
year of providing telephone service. We hope you will join us in this
celebration.
March 12, 1999
19
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
Notes
- --------------------------------------------------------------------------------
<PAGE>
[LOGO OF FRONTIER COMMUNICATIONS]
Frontier Corporation
Frontier Center
180 South Clinton Avenue
Rochester, New York 14646-0700
[Map showing meeting location]
<PAGE>
LOGO Frontier Communications/SM/
180 SOUTH CLINTON AVENUE
ROCHESTER, NY 14646
Vote by Telephone
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps:
1. Read the accompanying Proxy Statement
and Proxy Card
2. Call the toll-free number
1-877-PRX-VOTE (1-877-779-8683)
3. Enter your 14 digit Control Number located
on your Proxy Card above your name
4. Follow the recorded instructions
Your vote is important!
Call 1-877-PRX-VOTE anytime!
Vote by Internet
It's fast, convenient, and your vote is immediately
confirmed and posted.
Follow these four easy steps:
1. Read the accompanying Proxy Statement
and Proxy Card
2. Go to the Website:
http://www.eproxyvote.com/fro
3. Enter your 14-digit Control Number located on
your Proxy Card above your name
4. Follow the instructions provided
Your vote is important!
Go to http://www.eproxyvote.com/fro anytime!
Your telephone or internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card. Please
note all votes cast via the telephone or the internet must be cast prior to 3:00
p.m. EDT, April 28, 1999. If you wish to change your address or notify the
company that you plan to attend the meeting, please mark the boxes below and
return your proxy by mail or call the Shareowner Line at 1-800-836-0342 to
request an admission ticket.
Do not return your Proxy Card if you are voting by Telephone or Internet
THANK YOU FOR VOTING
FRC91A DETACH HERE
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[2920-FRONTIER CORPORATION] [FILE NAME:FRC91A.ELX] [VERSION-4] [3/04/99]
[X] Please mark
votes as in
this example.
The Board of Directors recommends a vote "FOR" Proposals 1 and 2:
1. Nominees for Director: (01) Patricia C. Barron, (02) Raul E. Cesan,
(03) Joseph P. Clayton, (04) Brenda E. Edgerton, (05) Jairo A. Estrada,
(06) Michael E. Faherty, (07) Alan C. Hasselwander, (08) Eric Hippeau,
(09) Robert Holland, Jr., (10) Douglas H. McCorkindale, (11) James F. McDonald
(12) and Dr. Leo J. Thomas
FOR WITHHELD
ALL [_] FROM ALL [_]
NOMINEES NOMINEES
[_]______________________________________
For all nominees except as noted above
2. Ratification of PricewaterhouseCoopers LLP as Public Accountant.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. To vote in favor of any substituted director if a nominee is unable to serve
and act in their discretion upon such matters which may properly come before the
meeting or which are incident to the conduct of the meeting, or which the Board
of Directors does not know, at the time of this solicitation, will be presented
at the Annual Meeting.
MARK HERE FOR MARK HERE IF YOU
ADDRESS CHANGE [_] PLAN TO ATTEND THE [_]
AND NOTE AT LEFT MEETING
(Please sign exactly as your name appears at left)
Signature:_____________ Date:__________ Signature:_____________ Date:__________
<PAGE>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Ticket Request
If your plan to attend the Annual Meeting of Shareholders at 10:00 a.m., Pacific
Time, on Thursday, April 29, 1999, at the Hotel Nikko San Francisco, 222 Mason
Street in San Francisco, California, use this form to request your admission
ticket. Complete the form by typing or printing your name and address. If your
request is received by April 9, 1999, an admission ticket will be mailed to you.
All other admission tickets will be provided beginning at 9:00 a.m., at the
registration desk for the meeting. (Doors to the meeting will not be open before
9:00 a.m.) The envelope provided for the return of your proxy card should also
be used to return this form. Alternatively, tickets may be requested by calling
the Shareholder Line 1-800-836-0342. If you hold your shares through a broker or
otherwise are not a record holder, we may require you to show evidence of your
share position before you will be allowed into the Annual Meeting.
NOTE: If your shares are not registered in your own name, please advise the
shareholder of record (i.e., your bank, broker, trustee, etc.) that you wish to
attend the meeting. The registered owner must provide you with evidence of your
stock ownership so that you may gain admittance to the meeting.
I plan to attend the meeting.
(please print or type)
Name
________________________________________________________________________________
Street
________________________________________________________________________________
City
________________________________________________________________________________
State Zip Code
________________________________________________________________________________
[2920-FRONTIER CORPORATION] [FILE NAME:FRC91B.ELX] [VERSION-3] [3/05/99]
FRC91B DETACH HERE
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PROXY
LOGO Frontier Communications/SM/
I authorize each of Joseph P. Clayton and/or Josephine S. Trubek, or
substitutes selected by them, to vote all shares of Frontier Corporation Common
Stock which I am entitled to vote at the Annual Meeting of Shareholders on April
29, 1999, or at any adjournment thereof, as specified below.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION TO THE
CONTRARY IS INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES
AND THE RATIFICATION OF THE PUBLIC ACCOUNTANT.
SEE REVERSE CONTINUED, and to be signed and dated, on REVERSE SIDE SEE REVERSE
SIDE SIDE
