D&E COMMUNICATIONS INC, PRE 14A, 1997-02-28

D&E COMMUNICATIONS INC
PRE 14A, 1997-02-28
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(A) of the Securities Exchange Act of 1934

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/X/ Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by
Rule 14a-b(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to (ss.)240.14a-11(c) or (ss.)240.14a-12

D & E COMMUNICATIONS, INC.

-------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):

/X/ No Fee Required

/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of each class of securities to which transaction
applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

Notes:

<PAGE>

D & E COMMUNICATIONS, INC.
124 EAST MAIN STREET
P.O. BOX 458
EPHRATA, PA 17522-0458
717-733-4101

ANNE B. SWEIGART
Chairman, President and Chief
Executive Officer

March 28, 1997

To Our Shareholders:

You are cordially invited to attend the 1997 Annual Meeting of Shareholders
to be held at the Brossman Business Complex, 124 East Main Street, Ephrata,
Pennsylvania 17522, on Tuesday, April 29, 1997, at 10:30 a.m.
local time.

We will be serving a continental breakfast at 9:30 a.m. prior to the
meeting. As always, I would be most pleased to have you in attendance for this
social period.

This year, in addition to being asked to elect three (3) nominees to the
Board of Directors of D & E Communications, Inc. (the "Company") and to ratify
the Board of Director's selection of Coopers & Lybrand L.L.P. as independent
auditors for 1997, you will also be asked to approve a proposal to amend and
restate in their entirety the Company's Articles of Incorporation in order to
increase the size of the Board of Directors from nine (9) members to twelve (12)
members and to make certain other nonsubstantive clarifications (the
"Amendment"), and if the Amendment is approved, to elect one (1) additional
nominee to the Board of Directors.

The expansion of the Board of Directors will provide the Company with
access to additional qualified individuals whose experience will add expertise
to the Company as it pursues its goals for the future, including positioning the
Company to enter a new age in telecommunications. FOR THIS REASON, THE BOARD OF
DIRECTORS CONSIDERS THIS PROPOSED AMENDMENT TO BE IN THE BEST INTERESTS OF THE
COMPANY AND ITS SHAREHOLDERS AND STRONGLY RECOMMENDS THAT YOU VOTE FOR THE
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION.

Detailed information as to the business to be transacted at the meeting is
contained in the accompanying Notice of Annual Meeting and Proxy Statement.

At your earliest convenience, please mark, sign and date the enclosed Proxy
Card and the Meeting Attendance Card and return them to us in the envelope
provided. In addition, if you are also a participant in the Company's Dividend
Reinvestment Plan, please mark and return to us at the same time the
Participant's Direction Card also enclosed herewith. Duly executed but unmarked
Proxy Cards and Participant's Direction Card will be voted FOR the election of
the three (3) nominees for director, FOR the Amendment, FOR the election of the
one (1) additional nominee for director (if the Amendment is approved) and FOR
the ratification of Coopers & Lybrand as independent auditors for 1997. If you
attend the meeting, you may, of course, choose to revoke your proxy and
personally cast your vote.

Sincerely yours,

(Mrs.) Anne B. Sweigart
Chairman of the Board, President
Enclosures and Chief Executive Officer

<PAGE>

D & E COMMUNICATIONS, INC.
124 EAST MAIN STREET
P.O. BOX 458
EPHRATA, PA 17522-0458
717-733-4101

ANNE B. SWEIGART
Chairman, President and Chief
Executive Officer

March 28, 1997

To Our Employee Stock Ownership Plan Participants:

We will be serving a continental breakfast at 9:30 a.m. prior to the
meeting. As always, I would be most pleased to have you in attendance for this
social period.

Detailed information as to the business to be transacted at the meeting is
contained in the accompanying Notice of Annual Meeting and Proxy Statement.

At your earliest convenience, please mark, sign and date: (1) the enclosed
Participant's Direction Card and return it to the plan trustee, CoreStates Bank,
and (2) the enclosed Meeting Attendance Card and return it to the Company in the
envelopes provided.

Sincerely yours,

(Mrs.) Anne B. Sweigart
Chairman of the Board, President
Enclosures and Chief Executive Officer

<PAGE>

D & E COMMUNICATIONS, INC.
124 EAST MAIN STREET
P.O. BOX 458
EPHRATA, PA 17522-0458
717-733-4101

ANNE B. SWEIGART
Chairman, President and Chief
Executive Officer

March 28, 1997

To Our Shareholders:

We will be serving a continental breakfast at 9:30 a.m. prior to the
meeting. As always, I would be most pleased to have you in attendance for this
social period.

At your earliest convenience, please mark and sign the enclosed Meeting
Attendance Card and return it to us in the envelope provided.

Sincerely,

(Mrs.) Anne B. Sweigart
Chairman of the Board, President
and Chief Executive Officer

Enclosures

<PAGE>

D & E COMMUNICATIONS, INC.
Ephrata, Pennsylvania

NOTICE OF 1997 ANNUAL MEETING
TO SHAREHOLDERS AND PARTICIPANTS
IN THE DIVIDEND REINVESTMENT PLAN

The Annual Meeting of the Shareholders of D & E Communications, Inc. ("the
Company") will be held in accordance with the By-Laws of the Company on Tuesday,
April 29, 1997, at 10:30 am. local time, at the Brossman Business Complex, 124
East Main Street, Ephrata, Pennsylvania 17522, for the purposes stated below,
which are more fully described in the accompanying Proxy Statement:

1. To elect three (3) Class B Directors for a term to expire in the year
2000 (and until their successors are duly elected and qualified);

2. To amend and restate the Articles of Incorporation of the Company in
their entirety in order to increase the size of the Board of Directors from nine
(9) members to twelve (12) members and to make certain other nonsubstantive
clarifications (the "Amendment");

3. If the Amendment is approved, to elect one (1) additional Class B
Director for a term to expire in the year 2000 (and until his successor is duly
elected and qualified);

4. To ratify the Board of Directors' selection of Coopers & Lybrand L.L.P.
as independent auditors in 1997; and

5. To act upon such other business as may properly come before the meeting.

Only holders of common stock of record on the books of the Company at the
close of business on March 14, 1997, will be entitled to vote at the Annual
Meeting or any adjournment thereof. The Company, as trustee of the D & E
Communications, Inc. Dividend Reinvestment Plan (the "DRIP") (the "Trustee"), is
the record owner of the shares which have been allocated to your DRIP account.
Pursuant to the DRIP, you are entitled to direct the Trustee on how to vote the
shares allocated to your account by returning the enclosed Participant's
Direction Card. A copy of the Proxy Statement, the 1996 Annual Report of the
Company, the Independent Accountants' Report, a Proxy Card and a Participant's
Direction Card are being mailed to you simultaneously prior to the Annual
Meeting. The Board of Directors' nominees for directors are set forth in the
accompanying Proxy Statement, as well as further information on the foregoing
matters.

THE ENCLOSED PROXY AND PARTICIPANT'S DIRECTION, WHICH IS BEING SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS, CAN BE RETURNED IN THE ENCLOSED ENVELOPE,
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

By Order of the Board of Directors

March 28, 1997 W. Garth Sprecher
Secretary

Enclosures

<PAGE>

D & E COMMUNICATIONS, INC.
Ephrata, Pennsylvania

NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO PARTICIPANTS OF THE D & E COMMUNICATIONS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN

The Annual Meeting of the Shareholders of D & E Communications, Inc. ("the
Company") will be held in accordance with the By-Laws of the Company, on
Tuesday, April 29, 1997, at 10:30 a.m. local time, at the Brossman Business
Complex, 124 East Main Street, Ephrata, Pennsylvania 17522, for the purposes
stated below, which are more fully described in the accompanying Proxy
Statement:

1. To elect three (3) Class B Directors for a term to expire in the year
2000 (and until their successors are duly elected and qualified);

3. If the Amendment is approved, to elect one (1) additional Class B
Director for a term to expire in the year 2000 (and until his successor is duly
elected and qualified);

4. To ratify the Board of Directors' selection of Coopers & Lybrand L.L.P.
as independent auditors in 1997; and

5. To act upon such other business as may properly come before the meeting.

Only holders of common stock of record on the books of the Company at the
close of business on March 14, 1997, will be entitled to vote at the Annual
Meeting or any adjournment thereof. CoreStates Bank, the trustee (the "Trustee")
of the D & E Communications, Inc. Employee Stock Ownership Plan (the "ESOP"), is
the record owner of the shares which have been allocated to your ESOP account.
Pursuant to the ESOP, you are entitled to direct the Trustee on how to vote the
shares allocated to your account by returning the enclosed Participant's
Direction Card. A copy of the Proxy Statement, the 1996 Annual Report of the
Company, the Independent Accountants' Report and a Participant's Direction Card
are being mailed to you simultaneously prior to the Annual Meeting. The Board of
Directors' nominees for directors are set forth in the accompanying Proxy
Statement, as well as further information on the foregoing matters.

THE ENCLOSED PARTICIPANT'S DIRECTION, WHICH IS BEING SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS, SHOULD BE RETURNED TO THE TRUSTEE IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

March 28, 1997 By Order of the Board of Directors

W. Garth Sprecher
Secretary

Enclosures

<PAGE>

PROXY STATEMENT

[This is a preliminary proxy statement as required pursuant to Rule
14a-b(a). A definitive proxy statement shall be released to security holders on
March 28, 1997.]

Proxies in the accompanying form are being solicited by the Board of
Directors (the "Board") of D & E Communications, Inc. ("the Company"), for use
at the annual meeting of the Shareholders (as defined below) to be held at 10:30
a.m. on Tuesday, April 29, 1997 at the Brossman Business Complex, 124 East Main
Street, Ephrata, Pennsylvania 17522 (the "Annual Meeting"). This proxy statement
and the form of proxy are being mailed to the Shareholders (as defined below)
commencing on or about March 28, 1997.

Only holders of shares of the common stock, par value $0.16 per share, of
the Company (the "Common Stock") of record on the books of the Company at the
close of business on March 14, 1997 (the "Record Date") will be entitled to vote
at the meeting. On the Record Date, there were [5,764,000] shares of the Common
Stock outstanding. Holders of record of the Common Stock at the close of
business on the Record Date (the "Shareholders"), or their proxies, are entitled
to cumulative voting rights in the election of directors at the Annual Meeting.
Under cumulative voting, a Shareholder, or the Shareholder's proxy, may vote the
number of shares of the Common Stock owned by the Shareholder for as many
persons as there are directors to be elected, or may cumulate such votes and
give to one, or distribute among two or more nominees, as many votes as shall
equal the number of directors to be elected multiplied by the number of the
Shareholder's shares of the Common Stock. Those persons receiving the highest
number of votes are declared to be elected directors of the Company. For all
other purposes, the Shareholders, or their proxies, are entitled to one vote per
each share of the Common Stock at the Annual Meeting.

Judges of election are appointed by the Board to conduct the tabulation of
votes with respect to the election of Directors and the other matters to come
before the Annual Meeting and to report the results thereof.

On June 11, 1996, the Denver and Ephrata Telephone and Telegraph Company
(the "Telco") effected a restructuring into a holding company structure whereby
the Company, which had been a wholly-owned subsidiary of Telco, became the
parent company and 100% owner of the shares of the common stock of the Telco,
and all of the holders of common stock of the Telco became the holders of all of
the Common Stock of the Company. Accordingly, references in this proxy statement
to the Company in an historical context are intended to be the Company after
June 11, 1996 and to the Telco before June 11, 1996.

PROPOSAL 1: ELECTION OF THREE (3) DIRECTORS

The Board currently consists of nine (9) members divided into three (3)
classes which are classified with respect to the year in which their term shall
expire. Each class of directors holds office for a term of three (3) years (and
until their successors are duly elected and qualified), and the three (3)
classes of the Board are staggered. Accordingly, one of the three (3) classes,
comprising one-third of the directors, is elected each year to succeed the
directors whose terms are expiring. Currently, the directors in Class B are
serving terms expiring this year. The directors in Classes A and C are serving
terms expiring at the annual meeting of the shareholders in 1999 and 1998,
respectively.

The Board has nominated for re-election to Class B two (2) directors whose
terms expire this year, namely Robert M. Lauman and Ronald E. Frisbie, and one
(1) additional person who has not previously served on the Board, namely Thomas
H. Bamford, to replace Charles E. Thomas who has decided not to submit his name
for re-election. If elected, their terms are to expire in the year 2000 (and
until their successors are duly elected and qualified). There are no
arrangements or understandings between any director or nominee and any other
person pursuant to which the director or nominee was or is to be elected as a
director.

The Company has been advised by the persons named in the accompanying proxy
that they intend to vote pursuant to the proxy for the election of Messrs.
Lauman and Frisbie (who are presently directors of the Company with regular
terms expiring this year), and Mr. Bamford as a new director in Class B, and to
exercise cumulative voting, if necessary, to secure their election. Each
individual nominated for election as director has agreed to serve if elected.
However, the Company is informed that in the event of the refusal or inability
of any of the foregoing nominees for director to serve, the persons named in the
accompanying proxy intend to vote at the Annual Meeting pursuant to the proxy
for the election of such person(s), if any, as may be nominated by the Board,
subject to the right of the persons named in the proxy to exercise cumulative
voting rights as described above.

Directors

Information about each nominee to serve in Class B and the other directors
serving in Classes A and C follows.

Nominees For Class B Directors For Terms To Expire In 2000

Robert M. Lauman, age 71, has been the Executive Vice President and Chief
Operating Officer of the Company since 1990. He joined the Company in 1983 and
was previously employed by Bell of Pennsylvania from 1946 to 1983, at which time
he retired as a Director and as Chief Operating and Planning Officer. Mr. Lauman
is a registered Professional Engineer, a member of the Pennsylvania Society of
Professional Engineers and the Institute of Electrical and Electronics Engineer,
Inc. He has been a director since 1983 and is a member of the Executive
Committee and the Compensation Committee.

Ronald E. Frisbie, age 74, retired from the Company in 1992. He was
employed by the Western Electric Company from 1947 to 1949 and the Commonwealth
Telephone Company from 1949 to 1953 at which time he became employed by the
Company as Wire Chief. Mr. Frisbie was a Vice President from 1971 until 1992,
Secretary, Treasurer and Assistant to the President from 1985 until 1992 and has
been a Director since 1983.

Thomas H. Bamford, age 56, is Director of Community Relations for the
Lancaster Health Alliance. He joined the Alliance in 1995 upon his retirement
after nearly 27 years with CoreStates Bank. At his retirement, he was Senior
Vice President, Director of Corporate Communications and Lancaster Area
Executive Officer for CoreStates Bank. Mr. Bamford is an accredited member of
the Public Relations Society of America. He is currently a director of the
United Way of Lancaster County, the Louise Von Hess Foundation for Medical
Education, the Lancaster Housing Opportunities Partnership, the Lancaster YMCA
Foundation and the Rotary Club of Lancaster. He is a member of the Marketing and
Communications Council of the Lancaster Chamber of Commerce and Industry and the
Lancaster County Health Partnership. Mr. Bamford is a past president of the
United Way, YMCA, and Lancaster Celebration 250, Inc.

Class A Directors Whose Terms Expire In 1999

John Amos, age 64, became a member of the Board on January 25, 1990. He has
been in the commercial fruit and produce growing business for more than 39 years
in Grand Traverse County, Michigan. Mr. Amos is a member of the Audit Committee.

W. Garth Sprecher, age 45, is Vice President and Secretary of the Company
and Chief Executive Officer of D & E Marketing Corp. He joined the Company in
1984, as a Communications Consultant for Red Rose Communications, Inc. (f.k.a.
Red Rose Systems, Inc.). He was named Commercial Manager of the Company in 1988.
In 1990, he assumed the position of Assistant Secretary and Director of External
Affairs, and in 1996, he assumed his present position. Mr. Sprecher became a
Director of the Company on March 27, 1993. He is a member of the Board of
Directors of the Lancaster Chamber of Commerce and Industry and is a director of
the Ephrata Chamber of Commerce. He is also a member of the Board of Directors
of the Mid-Atlantic Chapter of the American Society of Corporate Secretaries.
Mr. Sprecher is a member of the Executive Committee.

G. William Ruhl, age 57, is the Senior Vice President of the Company and
Chief Executive Officer of the Denver and Ephrata Telephone and Telegraph
Company. He joined the Company in 1991 and was previously employed by Bell of
Pennsylvania from 1961 to 1991, at which time he retired as Director of Network
Architecture and Deployment Planning. Mr. Ruhl is a registered Professional
Engineer and a member of the Institute of Electrical and Electronics Engineers,
Inc. He is also on the Board of Directors of the Central Pennsylvania Symphony.
He became a director of the Company on March 27, 1993. He is a member of the
Executive Committee.

Class C Directors Whose Terms Expire In 1998

Anne B. Sweigart, age 82, is the Chief Executive Officer, President and
Chairman of the Board of the Company. She became a director in 1952 and has been
Chairman of the Board since July 1985. Mrs. Sweigart served as Executive Vice
President from March 1981 to July 1985. Her employment began in 1936,
twenty-five years after her father founded the Company. From that time until
today she has always been involved in the management affairs of the Company. She
serves on numerous Boards and is currently a Trustee of Rider University, an
Associate Trustee of Elizabethtown College, an Honorary Trustee of Lebanon
Valley College and a Trustee of Linden Hall School for Girls. Mrs. Sweigart is a
member of the Audit Committee and serves as Chairman of the Executive Committee.

Paul W. Brubaker, age 53, is a Director and Executive Vice President of the
Ephrata National Bank, where he has been employed since 1961. He is a member of
the American Institute of Banking and of the Finance Committee of the Ephrata
Economic Development Board, and he has served as Vice Chairman of the National
Board of the Church of the Brethren in Elgin, Illinois. He has been a director
of the Company since 1990. Mr. Brubaker is Chairman of the Audit Committee and a
member of the Compensation Committee.

Steven B. Silverman, age 64, became a member of the Board on September 8,
1994. He is a senior partner in the law firm of Rothenberg & Silverman, Elkins
Park, Pennsylvania. In addition to his private practice, he serves as an adjunct
professor of labor law at Dickinson School of Law in Carlisle, Pennsylvania. Mr.
Silverman is a member of the Audit Committee and Compensation Committee.

General Information Regarding The Board Of Directors

Director Attendance at Board Meetings

The board held a total of twelve (12) regularly scheduled meetings during
the year ended December 31, 1996. Each incumbent director attended in excess of
75% of the nineteen (19) aggregate meetings of the Board and the Board's
following three (3) standing committees: the Audit Committee, the Compensation
Committee, and the Executive Committee.

Compensation of Directors

The directors were each paid $950.00 per meeting which they attended
($500.00 per meeting in which they did not participate) and $100.00 per any
committee meeting of the Board not held in conjunction with a Board meeting.
Actual travel and lodging expenses were also reimbursed.

Board Committees

Audit Committee

The current Audit Committee, consisting of Anne B. Sweigart, Steven B.
Silverman, Paul W. Brubaker (Chairman) and John Amos, is responsible for
recommending to the Board the firm of independent public accountants responsible
to audit the Company's financial statements. This Committee also reviews with
the independent public accountants the results of their audit work. The Audit
Committee held two (2) meetings during 1996.

Compensation Committee

The current Compensation Committee, consisting of Robert M. Lauman, Charles
E. Thomas (Chairman), Paul W. Brubaker and Steven B. Silverman, reviews and
makes recommendations to the Board regarding the compensation practices of the
Company. The Compensation Committee held three (3) meetings during 1996.

Executive Committee

The current Executive Committee, consisting of Anne B. Sweigart (Chairman),
Robert M. Lauman, G. William Ruhl and W. Garth Sprecher, is designed to perform
and uphold the duties and responsibilities of the Board as dictated by the
By-Laws of the Company and within the limitations set by the Board. The
Executive Committee held two (2) meetings during 1996.

Security Ownership Of Management

As of [March 6], 1997 (the "Most Practicable Date"), there were [5,764,000]
shares of the Company's Common Shares outstanding. The table below sets forth
the ownership of the Common Stock held, as of the Most Practicable Date, by each
of (i) the directors (and nominees), (ii) the executive officers and (iii) all
directors and officers as a group.

Nature and Amount of Percent
Name of Beneficial Owner Beneficial Ownership of Class
------------------------ -------------------- --------
<S> <C> <C>
John Amos.............................................. [42,100] (4, 7) *
Thomas H. Bamford (nominee)............................ 500
Paul W. Brubaker....................................... [3,375] (1) *
Ronald E. Frisbie...................................... [49,730] (1, 3, 4) *
Donald R. Kaufmann..................................... [518] (2, 6) *
Robert M. Lauman....................................... [46,524] (1, 2, 5, 6) *
Thomas E. Morell....................................... [1,304] (2, 5) *
G. William Ruhl........................................ [2,933] (1, 2, 5, 6) *
Steven B. Silverman.................................... [602] (6) *
Emily B. Sprecher...................................... [302,643] (1) [5.25]%
W. Garth Sprecher...................................... [94,421] (1, 2, 4, 5, 6) [1.64]%
Anne B. Sweigart....................................... [370,867] (1, 2, 4, 5, 6) [6.43]%
D. Mark Thomas (nominee)............................... 1,300 (8)
All Directors and Officers as a group.................. 880,817 (1, 2, 3, 4, 5, 6, 7) 15.28%
</TABLE>

- -----------------
* Less than 1 percent.

(1) Includes shares owned in their individual capacities, but held by the D
& E Communications, Inc. Voting Trust (f/k/a Denver and Ephrata
Telephone and Telegraph Company Voting Trust) (the "Voting Trust") as
of the Most Practicable Date as follows: [3,375] for Mr. Brubaker,
[49,430] for Mr. Frisbie, [300] for Mr. Kaufmann, [44,615] for Mr.
Lauman, [672] for Mr. Ruhl, [266,643] for Mrs. Sprecher, [93,283] for
Mr. Sprecher, [332,457] for Mrs. Sweigart, [36,000] for Mrs. Sweigart
and Mrs. Sprecher as joint trustees (which are included in both Mrs.
Sweigart's and Mrs. Sprecher's shares shown above), and [790,775] for
all directors and officers as a group. Mrs. Sweigart and Messrs. Amos,
Frisbie and Sprecher are Voting Trustees of the Voting Trust.

(2) Includes shares held in the Company's Employee Stock Ownership Plan as
of the Most Practicable Date as follows: [214] for Mr. Kaufmann, [426]
for Mr. Lauman, [977] for Mr. Morell, [1,099] for Mr. Ruhl, [858] for
Mr. Sprecher, [459] for Mrs. Sweigart and [4,033] for all directors and
officers as a group. All fractional shares are rounded to the nearest
whole share.

(3) Does not include [920] shares owned by Mr. Frisbie's wife, with
respect to which Mr. Frisbie disclaims beneficial ownership.

(4) Does not include shares not owned in their own capacities, but held by
the Voting Trust, for which Mrs. Sweigart and Messrs. Amos, Frisbie and
Sprecher serve as Trustees, as to which shares each of the Trustees
disclaims beneficial ownership.

(5) Includes shares held in the Company's Employee Stock Purchase Plan as
of the Most Practicable Date as follows: [763] for Mr. Lauman, [327]
for Mr. Morell, [827] for Mr. Ruhl, [259] for Mr. Sprecher, [1,641] for
Mrs. Sweigart and [3,817] for all directors and officers as a group.

(6) Includes shares held in the Company's Dividend Reinvestment Plan
as of the Most Practicable Date as follows: [4] for Mr. Kaufmann,
[719] for Mr. Lauman, [35] for Mr. Ruhl, [2] for Mr. Silverman, [20]
for Mr. Sprecher, [11] for Mrs. Sweigart and [791] for all directors
and officers as a group.

(7) Includes shares held in the John Amos Living Trust, of which Mr. Amos
is trustee. Does not include [43,806] owned by the Mary P. Amos Living
Trust, of which Mr. Amos' wife is trustee, and to which Mr. Amos
disclaims beneficial ownership.

(8) Includes 300 shares held as custodian for Emily Thomas and 600 shares
held as custodian for David Thomas for which Mr. Thomas does not
disclaim beneficial ownership.

Section 16(a) Beneficial Ownership Reporting Compliance

The following persons who are subject to Section 16 reporting compliance did not
timely file their Form 5 reports disclosing their beneficial ownership in the
Company as of December 31, 1996: Donald R. Kaufmann, Robert M. Lauman, Thomas E.
Morell, G. William Ruhl, Steven B. Silverman, Emily B. Sprecher, W. Garth
Sprecher and Anne B. Sweigart In addition, Mr. Kaufmann became an executive
officer of the Company during 1996 and a Form 3 was not filed on his behalf.

Identification Of Executive Officers

The following table sets forth the names, ages, and positions of the
executive officers of the Company. All officers of the Company serve for terms
of one year, and until re-elected or until a successor is duly elected at the
annual organizational meeting of directors, which follows the annual
shareholders' meeting. No officers have any arrangements or understandings with
any other person pursuant to which such officer was or is to be selected as an
officer.

Position
Name Age Position Held Since
- ---- --- -------- ----------
Anne B. Sweigart 82 Chairman, President, and 1985
Chief Executive Officer

Robert M. Lauman 71 Executive Vice President and 1990
Chief Operating Officer

G. William Ruhl 57 Senior Vice President 1991

Thomas E. Morell 36 Vice President, Chief Financial 1995
Officer and Treasurer (1)

Emily B. Sprecher 90 Assistant Treasurer 1980

W. Garth Sprecher 45 Vice President and Secretary (1) 1993

Donald R. Kaufmann 54 Vice President 1996

(1) Both Messrs. Morell and Sprecher were elected as a Vice President in 1996.

Emily B. Sprecher, age 90, is Assistant Treasurer of the Company. Mrs.
Sprecher had an early career as a public school teacher. Since 1958,
she has been employed by the Company in various capacities, including
Assistant Secretary and Assistant Treasurer from 1980 to 1990 and
Assistant Treasurer since 1990. She is the daughter of the founder of
the Company, William F. Brossman, a sister of Anne B. Sweigart, and the
mother of W. Garth Sprecher.

Thomas E. Morell, age 36, is Vice President, Chief Financial Officer
and Treasurer of the Company and Chairman of D & E Marketing Corp. Mr.
Morell is a Certified Public Accountant and is a member of the
Pennsylvania Institute of Certified Public Accountants. From 1982 to
1984, he was employed by Coopers & Lybrand, L.L.P. as an auditor. Mr.
Morell was Assistant Controller of the Company from 1984 to 1990;
Controller from 1990 to 1995 and Chief Financial Officer and Treasurer
since August 22, 1995.

Donald R. Kaufmann, age 54, is Vice President of the Company and Chief
Executive Officer of the Company's subsidiary, Red Rose Communications,
Inc. From 1965 to 1995, Mr. Kaufmann was employed by Bell Atlantic.
When Mr. Kaufmann left Bell Atlantic, he was Director of Network
Investment Management.

Executive Compensation

Summary Compensation Table

The following table sets forth the compensation received for services to
the Company and its subsidiaries during each of the last three (3) fiscal years
by the Company's CEO and, in addition, the individual who during 1996 was the
most highly compensated executive officer of the Company and who received in
excess of $100,000 in salary and bonus.

Annual Compensation
-----------------------------------------------------
Other Annual All Other
Salary Bonus Compensation Compensation
Name and Principal Position Year ($) ($)(A) ($)(B) ($)(C)
- --------------------------- ---- -------- ------ ------ ------

<S> <C> <C> <C> <C> <C>
Anne B. Sweigart 1996 $148,124 $21,945 -0- $149,319
Chairman, President & CEO 1995 141,131 21,105 -0- 142,122
1994 134,515 13,400 -0- 134,709

Robert M. Lauman 1996 $137,730 $20,550 $-0- $41,908
Executive Vice President 1995 131,738 19,695 21,263 20,681
& Chief Operating Officer 1994 125,485 12,500 -0- 19,751
</TABLE>

- ----------------

(A) Bonuses are established pursuant to the Company's Management Incentive
Plan under performance targets for the year established by the
Compensation Committee.

(B) Except in the case of Mr. Lauman, the aggregate amounts paid to the
named executive officers did not exceed the lesser of (i) $50,000 or
(ii) 10% of the total annual salary and bonus reported for each
individual. In 1995, amounts paid to Mr. Lauman include an initiation
and membership fee of $13,820, which was greater that 25% of his total
"other annual compensation" in such year.

(C) The amounts shown in this column are for the following persons for
the following items in the years 1996, 1995, and 1994, respectively:
(i) Anne B. Sweigart: $19,684, $19,919 and $20,152 for Split Dollar
Life Insurance; $2,926, $2,672 and $2,690 for the 401(k) Company Match;
$126,709, $119,531 and $111,867, Pension Benefits (over age 70 1/2);
and (ii) Robert M. Lauman: $15,606, $15,790 and $15,981 for the Split
Dollar Life Insurance; $0, $2,256 and $1,260 for Term Life Insurance;
$2,714, $2,635 and $2,510 for the 401(k) Company Match; $23,588 in 1996
for Pension Benefits (over age 70 1/2).

<PAGE>

Compensation Committee Report On Executive Compensation

The Company's executive compensation program is administered by the
Compensation Committee (the "Committee") comprised of Directors Charles E.
Thomas (Chairman), Robert M. Lauman, Paul W. Brubaker and Steven B. Silverman.

In establishing the base salaries of the executive officers of the Company,
including the Chief Executive Officer, Mrs. Sweigart, and Chief Operating
Officer, Mr. Lauman, the Committee considers a number of factors, including
salary ranges for comparable positions at other companies, the historical
financial performance of the Company, the level of responsibility of the
employee, the quality and affordability of the service provided to the Company's
customers and the level of inflation for the period. For 1996, a compensation
consultant retained by the Committee developed recommended salary ranges for
executive officers of the Company based on a comparison of salaries paid at
comparable telephone and other companies for positions with equivalent levels of
responsibility. (There is, however, no intentional relation between the
companies used for compensation purposes and the companies in the Standard and
Poor's Telephone Index (S&P Tel) used in the Stock Performance Graph below.)
Using the consultant's recommendations, and based on the Committee's subjective
evaluation of the factors listed above, including the Company's performance, the
base salary of the Chief Executive Officer was increased by 16.2% for 1996 from
1995, and the base salary of the Chief Operating Officer was increased 6.9% for
1996 from 1995.

Beginning in 1993, the Committee also provided an annual incentive
opportunity to the Company's executive officers pursuant to the Company's
Management Incentive Plan. Under the Plan, the Committee establishes performance
targets for the year, including targets for net income, operating cash flow and
expense control. In 1996, the performance goals established by the Committee at
the beginning of the year were achieved, and bonuses of $21,945 and $20,550 were
paid to Mrs. Sweigart and Mr. Lauman, respectively.

Respectfully Submitted,

The Compensation Committee
Charles E. Thomas
Paul W. Brubaker
Robert M. Lauman
Steven B. Silverman

Insider Participation in Compensation Decisions

During the year ended December 31, 1996, Messrs. Thomas (Chairman),
Brubaker, Silverman and Lauman served on the Compensation Committee of the
Board. Mr. Lauman is an executive officer of the Company.

Pension Plan Table

The Company's pension plan is a noncontributory defined benefit plan
computed on an actuarial basis covering all eligible employees. The plan
provides benefits based on years of service and the employee's compensation as
the average of the highest three years of the previous ten years prior to
retirement. Accrued benefits are vested after five years of service. Normal
retirement age is 65, but an employee who has attained the age of 55 and has at
least 25 years of service (The Rule of Eighty) may retire without any actuarial
reduction of his benefit. Benefit amounts are not subject to any deduction for
Social Security or other amounts.

The following table illustrates the maximum annual benefit payable upon
retirement pursuant to the Company's pension plan for employees with specified
average final compensation and years of service, assuming normal retirement age
and payment as a single life annuity.

<TABLE>
<CAPTION>
Years of Service

------------------------------------------------------------------------------------------------
Average Final
Compensation 15 20 25 30 35
------------
<S> <C> <C> <C> <C> <C>
$100,000 $24,000 $32,000 $40,000 $48,000 $56,000
110,000 26,400 35,200 44,000 52,800 61,600
120,000 28,800 38,400 48,000 57,600 67,200
130,000 31,200 41,600 52,000 62,400 72,800
140,000 33,600 44,800 56,000 67,200 78,400
150,000 36,000 48,000 60,000 72,000 84,000
160,000 38,400 51,200 64,000 76,800 89,600
170,000 40,800 54,400 68,000 81,600 95,200
</TABLE>
- --------------------
Compensation included in the pension plan base consists of the salaries
shown in the Salary and Bonus columns of the Summary Compensation Table. As of
December 31, 1996, Mrs. Sweigart and Mr. Lauman had 60 and 13 years of service,
respectively, for purposes of the pension plan.

Stock Performance Graph

The following is a graphical comparison of five-year cumulative total
return on shares of the Company's Common Shares.

[GRAPHIC]
In the printed version, a line graph appears which depicts the following
plot points:
<TABLE>
<CAPTION>

1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
S & P 500 $100.00 $107.62 $118.46 $120.03 $165.13 $203.05
S & P Tel $100.00 $109.73 $126.73 $121.49 $183.02 $184.85
D & E $100.00 $129.80 $205.99 $260.63 $289.64 $286.64
</TABLE>

Assumes $100 invested in each of the Standard and Poor's (S & P) 500 Index,
the S & P Telephone Index (S & P Tel) and the Company's Common Stock, on
December 31, 1991 and that all dividends were reinvested.

The Common Stock is currently quoted on the National Association of
Securities Dealers Automated Quotations National Market System (the
"NASDAQ-NMS"). Prior to being quoted on the NASDAQ-NMS, the Common Stock was
traded on the over-the-counter market. For the years represented on the graph,
the points plotted on the graph above use an average of the high and low bid
prices of the Common Stock on the last trading day before the beginning of each
fiscal year reported above, as reported on the interdealer quotation system and
summarized in the "Pink Sheets" published by the National Quotation Bureau. Such
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.

Security Ownership Of Certain Beneficial Owners

The following shares are shown as of the Record Date.

Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- ------------------- -------------------- --------
The Voting Trust D & E [3,158,106] (1) [54.79]%

Communications, Inc.
("Voting Trust")
P.O. Box 458
Ephrata, PA 17522

The Ephrata National
Bank, Trustee of [1,100,100] (2) [19.09]%
the William and Jemima Brossman
Charitable Foundation (the
"Charitable Foundation")
P.O. Box 457
Ephrata, PA 17522

Anne B. Sweigart [370,867] (3) [6.43]%
207 East Main Street
Ephrata, PA 17522

Emily B. Sprecher [302,643] (4) [5.25]%
150 East Main Street
Ephrata, PA 17522

(1) Certain shareholders are parties to that certain Voting Trust Agreement,
dated as of November 19, 1992, pursuant to which the Voting Trustees named
therein have the right to exercise sole voting power on all matters submitted to
the Company's shareholders for a vote, but not investment power, with respect to
the shares held by such shareholders. By its terms, the Voting Trust expires
November 18, 2002. The Trustees of the Voting Trust are Anne B. Sweigart, Ronald
E. Frisbie, W. Garth Sprecher, Kay W. Shober and John Amos, each of whom, except
for Mr. Shober, is a director of the Company. Each of the Voting Trustees
disclaims beneficial ownership of the shares held by the Voting Trust, except
such shares held in each Trustee's capacity as a participant of the Voting
Trust.

(2) The Charitable Foundation is a member of the Voting Trust. Therefore, the
number of shares shown above as held by the Charitable Foundation is also
included in the number of shares shown above held by the Voting Trust. Ephrata
National Bank, as trustee of the Charitable Foundation, exercises sole
investment power, but not the voting power, with respect to such shares held by
the Charitable Foundation.

(3) Mrs. Sweigart is a member of the Voting Trust and has the sole investment
power, but not the voting power, with respect to such shares, except in her
capacity as Voting Trustee. Therefore, the number of shares shown above as held
by Mrs. Sweigart is also included in the number of shares shown above as held by
the Voting Trust.

(4) Mrs. Sprecher is a member of the Voting Trust and has the sole investment
power, but not the voting power, with respect to such shares. Therefore, the
number of shares shown above as held by Mrs. Sprecher is also included in the
number of shares shown above as held by the Voting Trust.

Certain Relationships And Related Transactions

Mr. Steven B. Silverman, a director of the Company, is a senior partner in
the law firm of Rothenberg & Silverman, which is currently retained as counsel
to the Company.

Mr. D. Mark Thomas, a nominee for election as a Class B director of the
Company (as discussed below), is a partner in the law firm of Thomas, Thomas,
Armstrong & Niesen, which is currently retained as counsel to the Company.

Mrs. Anne B. Sweigart, Chairman of the Board, President and Chief Executive
Officer, and Mrs. Emily B. Sprecher, Assistant Treasurer, are sisters. W. Garth
Sprecher, Vice President and Secretary of the Company is
Mrs. Sprecher's son.

The Board Recommends the Election of Its Three (3) Nominees as Class B
Directors.

PROPOSAL 2: AMENDING AND RESTATING
THE ARTICLES OF INCORPORATION OF THE COMPANY IN THEIR ENTIRETY

The Board recommends that the Articles of Incorporation of the Company (the
"Articles") be amended and restated in their entirety in the form attached
hereto as Exhibit A (the "Amendment") such that the bracketed language in
Exhibit A is deleted from the Articles and the double underscored language in
Exhibit A is added to the Articles. The Amendment would increase the size of the
Board from nine (9) members to twelve (12) members and would make certain other
nonsubstantive clarifications in the existing Articles. The expansion of the
Board will provide the Company with access to additional qualified individuals
whose experience will add expertise to the Company as it pursues its goals for
the future, including positioning the Company to enter a new age in
telecommunications, and making the nonsubstantive clarifications will remedy
[two (2)] mistaken cross-references in the Articles as recently adopted during
the formation of the holding company structure. This proposal is being submitted
to the Shareholders for approval, which requires the affirmative vote of a
majority of the votes cast by all shareholders entitled to vote thereon.

The Board Recommends the Shareholders Vote in Favor of the Amendment.

PROPOSAL 3: ELECTION OF ONE (1) ADDITIONAL DIRECTOR

Subject to the approval of Proposal 2, the Board is recommending D. Mark
Thomas for election as a Class B director. If elected, his term is to expire in
the year 2000 (and until his successor is duly elected and qualified). There is
no arrangement or understanding between Mr. Thomas and any other person pursuant
to which he was or is to be elected as a director. The Company has been advised
by the persons named in the accompanying proxy that they intend to vote pursuant
to the proxy for the election of Mr. Thomas and to exercise cumulative voting,
if necessary, to secure his election. Mr. Thomas has agreed to serve if elected.
However, the Company is informed that in the event of the refusal or inability
of Mr. Thomas to serve, the persons named in the accompanying proxy intend to
vote at the Annual Meeting pursuant to the proxy for the election of such
person, if any, as may be nominated by the Board, subject to the right of the
persons named in the proxy to exercise cumulative voting rights as described
above.

Please refer to Proposal 1 for general information concerning the election
of directors. Set forth below is information about Mr. Thomas whom the Board has
nominated for election to Class B, subject to approval by the Shareholders of
Proposal 2.

D. Mark Thomas, age 49, has been a managing partner in the law firm of
Thomas, Thomas, Armstrong & Niesen, Harrisburg, PA, since the formation of the
firm in 1991, concentrating primarily in public utility and telecommunications
law. Previous thereto, he was a partner in the law firm of Thomas & Thomas from
1977 to 1990. He is also a director of ConQuest Telecommunications Service Corp.

The Board Recommends the Election of Its One (1) Additional Nominee as a
Class B Director.

PROPOSAL 4:
RATIFICATION OF INDEPENDENT AUDITORS

The Board, upon recommendation of its Audit Committee, appointed Coopers &
Lybrand, L.L.P., as auditors of the Company's Financial Statements for 1997. The
recommendation is being submitted to the Shareholders for approval, which
requires the affirmative vote of a majority of the votes cast by all
shareholders entitled to vote thereon. A representative of Coopers & Lybrand,
L.L.P. is expected to be present at the Annual Meeting and will be available to
respond to appropriate questions.

The Board Recommends the Shareholders vote in Favor of Ratifying Coopers &
Lybrand, L.L.P. as Independent Auditors for 1997.

1998 SHAREHOLDER PROPOSALS

Proposals of shareholders intended for inclusion in the Company's proxy
statement relating to the 1998 Annual Meeting must be received at the Company's
principal executive offices, 124 East Main Street, Ephrata, PA 17522 (please
address to the attention of W. Garth Sprecher, Vice President and Secretary), no
later than Friday, November 28, 1997. Any such proposal must comply with Rule
14a-8 of Regulation 14A of the proxy rules of the Securities and Exchange
Commission.

OTHER MATTERS

The Board is not aware that any matter other than those listed in the
Notice of 1997 Annual Meeting of Shareholders is to be presented for action at
the Annual Meeting. If any of the Board's nominees are unavailable for election
as a director or if any matter should properly come before the Annual Meeting,
it is intended that votes will be cast pursuant to the proxy in respect thereof
in accordance with the best judgment of the person or persons acting as proxies.

Any Shareholder who executes and returns the proxy may revoke the same at
any time before it is exercised by filing with the Secretary of the Company
written notice of such revocation or a duly executed proxy bearing a later date
or by attending the Annual Meeting and voting in person. Attendance at the
Annual Meeting will not in and of itself constitute revocation of a proxy.

The Company will pay the expense in connection with printing, assembling
and mailing the Notice of 1997 Annual Meeting of Shareholders, this Proxy
Statement and the accompanying form of proxy. In addition to the use of mails,
proxies may be solicited by directors, officers and other employees of the
Company personally or by telephone. The Company may request persons holding
stock in their names or names of nominees to send proxy material to, and obtain
proxies from, their principals and the Company will reimburse such persons for
their expense in so doing.

Items included in this Proxy Statement are as of December 31, 1996, unless
otherwise stated.

UPON WRITTEN REQUEST BY ANY SHAREHOLDER TO W. GARTH SPRECHER, VICE
PRESIDENT AND SECRETARY, D & E COMMUNICATIONS, INC., 124 EAST MAIN STREET,
EPHRATA, PA 17522, A COPY OF THE COMPANY'S 1996 ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1996 WILL BE PROVIDED WITHOUT CHARGE.

March 28, 1997

EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
D & E COMMUNICATIONS, INC.

1. Name. The name of the corporation is D & E Communications, Inc. (herein
called the "Corporation").

2. 2. [2.1] Registered Office. The location and post office address of the
Corporation's registered office in the Commonwealth of Pennsylvania is 124 East
Main Street, Brossman Business Complex,

Ephrata, Lancaster County, Pennsylvania 17522.

[2.2 Sole Incorporator. The name and address of the sole incorporator
is Kimberly Ross Lieb, 301 Grant Street, 20th Floor, Pittsburgh, PA 15219.]

3. Purpose and Powers. The Corporation is incorporated under the Business
Corporation Law of 1988, as amended, and shall have unlimited power to engage in
and to do any lawful act concerning any or all lawful business for which
corporations may be incorporated under said Business Corporation Law.

4. Term of Existence. The term for which the Corporation shall exist is
perpetual.

5. Capital Stock.

5.1 Authorized Shares. The aggregate number of shares which the
Corporation shall have authority to issue is:

5.1.1 20,000,000 shares of Preferred Stock, without par value;
and

5.1.2 30,000,000 shares of Common Stock, par value of $0.16 per
share.

5.2 Preferred Stock. The Preferred Stock may be divided into one or
more classes or series as determined by the Board of Directors as
hereinafter provided. Each class or series of Preferred Stock may have full,
limited, multiple or fractional, or no voting rights, and such designations,
preferences, limitations, qualifications, privileges, options, restrictions and
special rights as determined by the Board of Directors as hereinafter provided.
The division of the Preferred Stock into classes or series, the determination of
the designation and the number of shares of any such class or series and the
determination of the voting rights, preferences, limitations, qualifications,
privileges, options, restrictions and special rights of the shares of any such
class or series may be accomplished by an amendment to this Section 5.2, which
amendment may be made solely by action of the Board of Directors, which shall
have the full authority permitted by law to make such division and
determinations. Unless otherwise provided in a resolution or resolutions
establishing any particular class or series of Preferred Stock, the aggregate
number of authorized shares of Preferred Stock may be increased by an amendment
to the Articles approved solely by the holders of the Common Stock and of any
Preferred Stock which is entitled pursuant to its voting rights designated by
the Board to vote thereon, if at all, voting together as a class.

5.3 Common Stock. Except for and subject to those rights expressly
granted to holders of the Preferred Stock or any series thereof by one or
more amendments to these Articles adopted by the Board of Directors and except
as may be provided by the laws of the Commonwealth of Pennsylvania, holders of
the Common Stock shall have exclusively all other rights of shareholders. The
holders of shares of the Common Stock shall have one vote per share. All shares
of Common Stock issued or to be issued shall be alike in every particular.

6. Shareholder Meetings.

6.1 Business to be Transacted. At any annual meeting or special
meeting of shareholders, only such business as is properly brought
before the meeting in accordance with this Article 6 may be transacted, and
there will be no opportunity to cure any deficiencies in any notice given
pursuant to this [Section] Article 6.

6.2 Proposed Business. To be properly brought before any shareholder
meeting, any proposed business must be either:

6.2.1 Specified in the notice of the meeting of the shareholders
(or any supplement thereto) given by or at the direction of the Board of
Directors;

6.2.2 Otherwise properly brought before the meeting of the
shareholders by or at the direction of the Board of Directors; or

6.2.3 If brought before an annual meeting of the shareholders by a
shareholder, then:

A. The shareholder must have been a shareholder of record on the
record date for the determination of shareholders entitled to vote at the
annual meeting of the shareholders;

B. Written notice of such proposed business must have been
received by the Secretary of the Corporation not later than 120 days in
advance of the annual meeting of the shareholders at which the business is
proposed to be transacted; provided, however, that in the event that less than
120 days notice or prior public disclosure of the date of the annual meeting of
the shareholders is given, notice from the shareholder to be timely must be
received not later than the tenth day following the date on which such notice of
the date of the annual meeting of the shareholders was mailed or such public
disclosure was made, whichever first occurs;

C. Such written notice must set forth the following:

(a) The name and address of the shareholder proposing such
business;

(b) A brief description of such business;

(d) A description of all arrangements or understandings between
such shareholder and any other person or persons in connection with such
business or any special interest such shareholder may have in connection with
such business;

(e) All other information as would be required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities
and Exchange Commission had proxies been submitted with respect to such business
by the Board of Directors; and

(f) A representation that the shareholder is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at such meeting to bring such business before such
meeting.

7. Board of Directors.

7.1 Powers. The property, business and affairs of the Corporation
shall be managed and controlled by or under the direction of a Board of
Directors. The Board of Directors may exercise all the powers of the Corporation
and do all things for and in the name of the Corporation except such as are by
statute, these Articles or the By-Laws conferred upon or reserved to the
shareholders.

7.2 Number. The Board of Directors shall consist of not less than
five (5) nor more than [nine (9)] twelve (12) directors, the exact such
number of persons to be fixed from time to time by a majority vote of the Board
of Directors, plus such number of additional directors as the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or assets, voting separately as a class or series, shall have the
right from time to time to elect.

7.3 Classes, Election and Terms. The directors elected by the holders
of Voting Stock shall be classified in respect of the time for which they
shall severally hold office by dividing them into three classes, as nearly equal
in number as possible. If such classes of directors are not equal, the Board of
Directors by a majority vote shall determine which class shall contain an
unequal number of directors. The initial Board of Directors shall serve as
directors of the Corporation for the respective terms for which the class of
which they are members has been elected by the shareholders at the first called
meeting of the shareholders, and at each annual meeting of the shareholders
thereafter, the shareholders shall elect directors of the class whose term then
expires, to hold office until the third succeeding annual meeting. Except as
otherwise expressly provided in these Articles, each director shall hold office
for the term for which he or she is elected and until his or her successor shall
have been elected and qualified, or until such director's earlier death,
resignation or removal in the manner provided in Section 7.4 hereof.

7.4 Removal of Directors.

7.4.1 Any director, any class of directors or the entire Board of
Directors may be removed from office by shareholder vote at any time only
for cause and only if, in addition to any vote required by any other provision
of law, these Articles or the By-Laws of the Corporation, such removal is
approved by the affirmative vote of:

A. The holders of at least 80% of the voting power of all the then
outstanding shares of Voting Stock, voting together as a single class; and

B. The holders of at least a majority of the voting power of the
outstanding shares of Voting Stock of the Corporation which are not beneficially
owned by an Interested Shareholder, voting together as a single class.

7.4.2 If shareholders are entitled to vote cumulatively in the
election of directors, no individual director shall be removed, unless the
entire Board of Directors or a class of the Board of Directors is removed, in
case the votes of a sufficient number of shares are cast against the resolution
for his removal, which, if cumulatively voted at a meeting of the shareholders
for the election of directors, would be sufficient to elect one or more
directors to the Board of Directors or to the class.

7.4.3 In case the Board of Directors or a class of the Board of
Directors or any one or more directors are so removed, new directors may be
elected at the same meeting.

7.5 Vacancies. Vacancies in the members of the Board of Directors elected
by the holders of Voting Stock, including vacancies resulting from an increase
in the number of directors, shall be filled only by a majority vote of the
Disinterested Directors then in office, though less than a quorum, or by a sole
remaining director, except as otherwise required by law. All such directors
elected to fill vacancies shall hold office for a term expiring at the annual
meeting of shareholders at which the term of the class to which they have been
elected expires and until the election and qualification of his successor. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.

7.6 Nominations of Director Candidates.

7.6.1 Nominations for the election of directors may be made only by
the Board of Directors or a committee appointed by the Board of Directors
or by any holder of record of stock entitled to vote in the election of the
directors to be elected at a meeting of the shareholders; provided, however,
that a nomination may be made by a shareholder if written notice of such
nomination has been received by the Secretary of the Corporation not later than
120 days in advance of the meeting of the shareholders at which the election is
to be held; provided further, however, that in the event that less than 120 days
notice or prior public disclosure of the date of the meeting of the shareholders
is given, notice from the shareholder, in order to be timely, must be received
not later than the tenth day following the date on which such notice of the date
of the meeting of the shareholders was mailed or such public disclosure was
made, whichever first occurs.

7.6.2 Each such notice shall set forth the following:

A. The name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated;

B. A representation that the shareholder is a holder of record of
stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice;

C. A description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder;

D. Such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated by the Board of Directors; and

E. The consent of each nominee to serve as a director of the
Corporation if so elected.

7.6.3 If the Corporation receives notice from a shareholder pursuant
to Section 7.6.2 hereof and such notice, in the judgment of the Board of
Directors, fails to comply, in any respect, with the requirements set forth in
Section 7.6.2 hereof, then the Corporation shall notify the shareholder of the
deficiencies with such notice within ten days of the Corporation's receipt of
such notice. Commencing on the day of receipt of the deficiency notification
from the Corporation, the shareholder shall have ten days to cure all
deficiencies and provide the Corporation with notice which conforms to the
requirements of Section 7.6.2 hereof. A shareholder shall be entitled to
re-submit a notice as provided in Section 7.6.2 hereof only once for each annual
meeting of the shareholders. Only candidates who have been nominated in
accordance with Section 7.6.2 hereof shall be eligible for election by the
shareholders as directors of the Corporation.

7.7 Exception for Preferred Stock. Whenever the holders of any class or
series of stock having a preference over the Common Stock of the Corporation as
to dividends or assets shall have the right, voting separately as a class or
series, to elect one or more directors of the Corporation or to take any other
action, none of the provisions of Sections 7.2, 7.3, 7.4, 7.5 and 7.6 hereof
shall apply with respect to the director or directors elected or the action
taken by the holders of such class or series.

7.8 Authority to Amend By-Laws.

7.8.1 The Board of Directors, by vote including a majority of the
Disinterested Directors then in office, may adopt, amend, alter, modify, add to
or repeal the By-Laws with respect to those matters which are not, by statute,
reserved exclusively to the shareholders. No By-Law may be adopted, amended,
altered, modified, added to or repealed by the shareholders unless, in addition
to any other affirmative vote required by law, these Articles or otherwise, such
action is approved by the affirmative votes of:

A. The holders of at least 80% of the voting power of all then
outstanding shares of Voting Stock, voting together as a single class; and

B. The holders of at least a majority of the voting power of the
then outstanding shares of Voting Stock which are not beneficially owned by
any Interested Shareholder, voting together as a single class.

7.8.2 The additional affirmative votes required by Section 7.8.1
shall not apply to any shareholder adoption, amendment or repeal of any
By-Law provision if:

A. Such action is recommended and submitted to the shareholders
for their consideration by the affirmative vote of a majority of the
Disinterested Directors; and

B. At the time of such recommendation the Disinterested Directors
constitute at least a majority of the full Board of Directors, excluding any
directors elected by the holders of any class or series of stock having a
preference over the Common Stock as to dividends or assets.

8. Votes Required for Certain Business Combinations.

8.1 Business Combinations.

8.1.1 Special Votes for Certain Business Combinations. In
addition to any affirmative vote required by law, these Articles or otherwise,
and except as otherwise expressly provided in Section 8.2 hereof, approval
of the following actions shall require the votes as required in Section 8.1.2
hereof:

A. Any merger, consolidation or share exchange of the
Corporation or any Subsidiary with any Interested Shareholder or with any
other person (whether or not itself an Interested Shareholder) which is, or
after such merger, consolidation or share exchange would be, an Affiliate or
Associate of an Interested Shareholder or which does not include in its articles
of incorporation the substance of the terms of this Article 8, in each case
without regard to which person is the surviving person;

B. Any sale, lease, exchange, mortgage, pledge, transfer or
other disposition or security arrangement, investment, loan, advance,
guarantee, agreement to purchase, agreement to pay, extension of credit, joint
venture participation or other arrangement (in one transaction or a series of
transactions) to, with or for the benefit of any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder involving any assets,
securities or commitments of the Corporation or any Subsidiary having an
aggregate Fair Market Value, or involving aggregate commitments equal to, 5% or
more of Total Assets;

C. The issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any securities
of the Corporation or any Subsidiary to any Interested Shareholder or any
Affiliate or Associate of any Interested Shareholder in exchange for cash,
securities or other consideration (or a combination thereof) having an aggregate
Fair Market Value equal to 5% or more of Total Assets;

D. The adoption of any plan or proposal for the liquidation,
dissolution or division of the Corporation proposed by or on behalf of any
Interested Shareholder or any Affiliate or Associate of any Interested
Shareholder;

E. Any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Shareholder) which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity securities
or securities convertible into equity securities of the Corporation or any
Subsidiary which is directly or indirectly beneficially owned by any Interested
Shareholder or any Affiliate or Associate of any Interested Shareholder; or

F. Any other transaction or series of transactions similar in
purpose or effect to, or any agreement, contract or other arrangement
providing for, any one or more of the transactions specified in this Section
8.1.1.

8.1.2 Required Votes. Approval of the actions specified in Section
8.1.1 hereof shall require the affirmative votes of, and such affirmative
votes shall be required notwithstanding the fact that no vote may be required,
or that a lesser percentage may be specified, by law or in any agreement with
any national securities exchange or otherwise, the following:

A. The holders of at least 80% of the voting power of all then
outstanding shares of Voting Stock, voting together as a single class; and

B. The holders of at least a majority of the voting power of
the then outstanding shares of Voting Stock which are not beneficially
owned by such Interested Shareholder, voting together as a single class

8.2 Exceptions to Special Vote Requirements. The provisions of Section 8.1
shall not be applicable to any Business Combination, and such Business
Combination shall require only such affirmative vote (if any) as is required by
law, any other provision of these Articles, any agreement with any national
securities exchange or otherwise, if all of the following conditions are met:

8.2.1 Approval by Disinterested Directors. The Business Combination
shall have been approved by a majority of the Disinterested Directors; or

8.2.2 Price and Procedural Requirements. All of the following six
conditions shall have been met:

A. The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to the highest of the
following:

(a) If applicable, the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of Common Stock at any time beneficially
owned by the Interested Shareholder which were acquired (i) within the two-year
period immediately prior to the first public announcement of the proposed
Business Combination or (ii) in the transaction in which it became an Interested
Shareholder;

(b) The Fair Market Value per share of Common Stock,
whichever is higher, (i) on the Announcement Date or (ii) on the date on
which the Interested Shareholder became an Interested Shareholder; or

(c) If applicable, the price per share equal to the Fair
Market Value per share of Common Stock determined pursuant to Section
8.2.2(A)(b) immediately preceding, multiplied by the ratio of (i) the highest
per share price (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any shares of Common Stock at
any time beneficially owned by the Interested Shareholder which were acquired
within the two-year period immediately prior to the Announcement Date or (ii)
the Fair Market Value per share of Common Stock on the first day in such
two-year period on which the Interested Shareholder beneficially owned any
shares of Common Stock;

B. The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of shares of
any other class or series of Voting Stock shall be at least equal to the highest
of the following (it being intended that the requirements of this Section
8.2.2(B) shall be required to be met with respect to every class or series of
outstanding Voting Stock, whether or not the Interested Shareholder beneficially
owns any shares of a particular class or series of Voting Stock):

(a) If applicable, the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers' fees)
paid in order to acquire any shares of such class or series of Voting Stock at
any time beneficially owned by the Interested Shareholder which were acquired
(i) within the two-year period immediately prior to the Announcement Date or
(ii) in the transaction in which it became an Interested Shareholder;

(b) If applicable, the highest preferential amount per share
to which the holders of shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation;

(c) The Fair Market Value per share of such class or series
of Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher; and

(d) If applicable, the price per share equal to the Fair
Market Value per share of such class or series of Voting Stock determined
pursuant to Section 8.2.2(B)(c) hereof immediately preceding, multiplied by the
ratio of (i) the highest per share price (including any brokerage commissions,
transfer taxes and soliciting dealers' fees) paid in order to acquire any shares
of such class or series of Voting Stock at any time beneficially owned by the
Interested Shareholder which were acquired within the two-year period
immediately prior to the Announcement Date to (ii) the Fair Market Value per
share of such class of Voting Stock on the first day in such two-year period on
which the Interested Shareholder beneficially owned any shares of such class or
series of Voting Stock.

C. The consideration to be received by holders of each class
or series of outstanding Voting Stock (including Common Stock) shall be in
cash or in the same form as was previously paid in order to acquire shares of
Voting Stock which are beneficially owned by the Interested Shareholder. If the
Interested Shareholder beneficially owns shares of Voting Stock which were
acquired with varying forms of consideration, the form of consideration to be
received by holders of each class or series of Voting Stock shall be either cash
or the form used to acquire the largest number of shares of Voting Stock
(regardless of class or series) beneficially owned by the Interested
Shareholder. All per share prices referred to in Sections 8.2.2(A) and (B)
hereof shall be appropriately adjusted to reflect any intervening stock
dividend, stock split, combination of shares or similar event.

D. After the Determination Date and prior to the consummation
of such Business Combination:

(a) Except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends (whether or not cumulative)
on any outstanding capital stock of the Corporation having preference over the
Common Stock as to dividends or upon liquidation;

(b) There shall have been (i) no reduction in the annual
rate of dividends paid on the Common Stock (except as necessary to reflect
any subdivision of the Common Stock), except as approved by a majority of the
Disinterested Directors, and (ii) in the event of any reclassification
(including any reverse stock split), recapitalization, reorganization or any
similar transaction which has the effect of reducing the number of outstanding
shares of the Common Stock, an increase in such annual rate of dividends (as
necessary to prevent any such reduction), unless the failure so to increase such
annual rate is approved by a majority of the Disinterested Directors; and

(c) Such Interested Shareholder shall not have become the
beneficial owner of any additional shares of Voting Stock except as part of
the transaction in which it became an Interested Shareholder.

E. After the Determination Date, such Interested Shareholder
shall not have received the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances, guarantees, pledges
or other financial assistance or any tax credits or other tax advantages
provided by the Corporation, whether in anticipation of or in connection with
such Business Combination or otherwise.

F. If the proposed Business Combination otherwise requires a
shareholder vote, such Business Combination shall be submitted to the
holders of capital stock of the Corporation entitled to vote thereon, and their
proxies for approval of such transaction shall be solicited in accordance with
the requirements of the Act, and the rules and regulations promulgated
thereunder, and in any event (whether or not a shareholder vote is required), a
proxy or information statement describing the proposed Business Combination and
complying with such requirements shall be mailed to all holders of Voting Stock
and the holders of any other class or series of stock entitled to vote thereon
at least 30 days prior to the earlier of the date of the shareholder meeting to
vote on such Business Combination or the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to the Act or the rules and regulations promulgated
thereunder). The first page of such proxy or information statement shall
prominently display any statement regarding the advisability (or inadvisability)
of the proposed Business Combination which a majority of the Disinterested
Directors then in office may choose to make. Such proxy or information statement
shall also contain, if a majority of the Disinterested Directors then in office
so requests, an opinion of a reputable investment banking firm (which firm shall
be selected by a majority of the Disinterested Directors then in office,
furnished with all information it reasonably requests, and paid a reasonable fee
for its services by the Corporation upon the Corporation's receipt of such
opinion) as to the fairness (or lack of fairness) from a financial point of view
of the terms of the proposed Business Combination to the holders of Voting Stock
other than the Interested Shareholder and its Affiliates or Associates.

8.3 No Effect on Fiduciary Obligations of Interested
Shareholder. Nothing contained in this Article 8 shall be construed to relieve
any Interested Shareholder from any fiduciary obligation imposed by law or
equity.

8.4 Board Not Limited by Compliance. The fact that any
Business Combination complies with the conditions set forth in Section 8.2.2
hereof shall not be construed to impose any fiduciary duty, obligation or
responsibility on the Board of Directors, or any member thereof, to approve such
Business Combination or recommend its adoption or approval to the shareholders
of the Corporation, nor shall such compliance limit, prohibit or otherwise
restrict in any manner the business judgment of the Board of Directors, or any
member thereof, with respect to evaluations of or actions and responses taken
with respect to such Business Combination.

9. Definitions; Interpretations; Amendments.

9.1 Definitions. For the purposes of these Articles:

9.1.1 The "Act" shall mean the Securities Exchange Act of
1934, as amended.

9.1.2 An "Affiliate" of a specified person shall mean any
person which, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common
control with the person specified.

9.1.3 "Announcement Date" shall have the meaning set forth
in Section 8.2.2(A)(a)(i) hereof.

9.1.4 An "Associate" of a specified person shall mean:

A. Any director, officer or partner of, or any
beneficial owner, directly or indirectly, of 5% or more of
any class of equity securities of, such person or any of its
Affiliates;

B. Any corporation or organization (other than the
Corporation or a Subsidiary) of which such person is a
director, officer or partner or is, directly or indirectly,
the beneficial owner of 10% or more of any class of equity
securities;

C. Any trust or other estate (other than an employee
benefit plan of the Corporation or a Subsidiary) in which
such person has a substantial beneficial interest or as to
which such person serves as trustee or in a similar
fiduciary capacity;

D. Any relative or spouse of such person, or any
relative of such spouse, who has the same home as such
person or who is a director or officer of the Corporation or
any of its parents or Subsidiaries; and

E. Any investment company registered under the
Investment Company Act of 1940 for which such person or any
Affiliate or Associate of such person serves as investment
advisor.

9.1.5 A person shall be a "beneficial owner" of any shares of
Voting Stock:

A. Which such person or any of its Affiliates or
Associates owns, directly or indirectly;

B. Which such person or any of its Affiliates or
Associates has:

(a) The right to acquire (whether or not such right is
exercisable immediately) pursuant to any agreement,
arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options,
revocation of a trust, or otherwise; or

(b) The right to vote, or to direct the voting of,
pursuant to any agreement, arrangement or understanding; or

C. Which are owned, directly or indirectly, by any
other person with which such person or any of its Affiliates
or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting
or disposing of any shares of Voting Stock.

9.1.6 "Business Combination" shall mean any transaction which
is referred to in Section 8.1.1 hereof. In the event of any Business Combination
in which the Corporation survives, the phrase "consideration other than cash to
be received" as used in Section 8.2.2 hereof shall include the shares of Common
Stock and/or the shares of any other class or series of outstanding Voting Stock
retained by the holders of such shares.

9.1.7 "Determination Date" shall have the meaning set forth in
Section 8.2.2(A)(b)(ii) hereof.

9.1.8 With respect to the term "Disinterested Director":

A. The term shall mean a director of the Corporation
who is not an Interested Shareholder or an Affiliate,
Associate or representative of an Interested Shareholder and
either:

(a) Was a director of the Corporation immediately prior
to the time the Interested Shareholder became an Interested
Shareholder; or

(b) Is a successor to a Disinterested Director and is
recommended or elected to succeed a Disinterested Director
by a majority of the then Disinterested Directors.

B. Whenever the holders of any class or series of stock
having a preference over the Common Stock as to dividends or
assets shall have the right, voting separately as a class or
series, to elect one or more directors of the Corporation,
the term "Disinterested Director" shall not include any
director elected by the holders of such class or series.

C. As used with respect to any particular transaction
in Article 8 hereof or with respect to a determination or
interpretation as to such transaction under Sections 9.1.9
or 9.2 hereof, the term "Disinterested Director" shall
include all directors who are Disinterested Directors with
respect to the Interested Shareholder involved in such
transaction.

D. In all other cases, unless the context otherwise
clearly requires, the term "Disinterested Director" shall
mean only those directors who are Disinterested Directors
with respect to all persons who are then Interested
Shareholders.

9.1.9 "Fair Market Value" shall mean:

A. In the case of stock, the highest closing sale price
during the 30-day period immediately preceding the date in
question of a share of such stock on a national securities
exchange registered under the Act on which such stock is
listed, or if such stock is not listed, the highest closing
sale price, or if none, the highest closing bid quotation,
with respect to a share of such stock during the 30-day
period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotation
System, or any such similar system then in use, or if there
are no such quotations available, the highest closing bid
quotation as reported in the "pink sheets" of the National
Association of Securities Dealers, or if not so reported,
the fair market value on the date in question of a share of
such stock as determined in good faith by a majority vote of
the Disinterested Directors; and

B. In the case of property other than stock or cash,
the fair market value of such property on the date in
question as determined in good faith by a majority vote of
the Disinterested Directors or by a qualified appraiser
retained by them for such purpose.

9.1.10 With respect to the term "Interested Shareholder":

A. The term at any particular time shall mean any
person (other than the Corporation or a Subsidiary, an
employee benefit plan of the Corporation or a Subsidiary,
the Voting Trust of the Denver and Ephrata Telephone and
Telegraph Company (the "Voting Trust"), the William and
Jemima Brossman Charitable Foundation (the "Charitable
Foundation"), a successor trust to the Voting Trust, a
successor foundation to the Charitable Foundation, Anne B.
Sweigart, Emily B. Sprecher, W. Garth Sprecher, any heir of
W. Garth Sprecher, a trustee or fiduciary of the Voting
Trust, the Charitable Foundation or any such plan when
acting in such capacity and any other person deemed by a
majority of the Disinterested Directors not to be an
Interested Shareholder) which:

(a) Is at such time the beneficial owner, directly or
indirectly, of more than 10% of the voting power of the
outstanding Voting Stock;

(b) Is at such time an Affiliate of the Corporation and
at any time within the two-year period immediately prior to
such time was the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the then outstanding
Voting Stock;

(c) Is at such time an assignee of or has otherwise
succeeded to the beneficial ownership of any shares of
Voting Stock which were at any time within the two-year
period immediately prior to such time beneficially owned by
any Interested Shareholder, if such assignment or succession
shall have occurred in the course of a transaction or series
of transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended; or

(d) With respect to any particular transaction, any of
the foregoing involved in such transaction, any Affiliate or
Associate of such Interested Shareholder and any other
member of a group acting in concert with such Interested
Shareholder.

B. For the purposes of determining whether a person is
an Interested Shareholder pursuant to this Section 9.1.10,
the number of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned by an
Interested Shareholder through application of Section 9.1.5
hereof but shall not include any other shares of Voting
Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise.

9.1.11 A "person" shall mean any individual, firm,
corporation, partnership, joint venture, trust or other entity and shall include
any group comprised of any person and any other person with whom such person or
any Affiliate or Associate of such person has any agreement, arrangement or
understanding, directly or indirectly, for the purpose of acquiring, holding,
voting or disposing of Voting Stock. As used herein, the pronouns "which",
"that" and "it" in relation to persons that are individuals shall be construed
to mean "who" or "whom", "he" or "she" and "him" or "her", as appropriate.

9.1.12 "Subsidiary" shall mean any corporation of which a
majority of any class of equity security is owned, directly or indirectly, by
the Corporation, as well as any Affiliate of the corporation which is controlled
by the Corporation.

9.1.13 "Total Assets" shall mean the consolidated total assets
of the Corporation and its consolidated subsidiaries as of the close of the most
recent fiscal quarter ended on or prior to the Announcement Date of the Business
Combination in question, as shown on the consolidated balance sheet published by
the Corporation for such quarter.

9.1.14 "Voting Stock" shall mean capital stock of the
Corporation entitled to vote generally in an annual election of directors of the
Corporation.

9.2 Powers of the Disinterested Directors. The Disinterested Directors,
by a majority vote, are authorized to interpret all the terms and provisions of
these Articles and to determine, on the basis of information known to them after
reasonable inquiry, any fact necessary to determine compliance with any term or
provision of these Articles, including, without limitation, the following, and
any such interpretation or determination made in good faith shall be binding and
conclusive for all purposes of these Articles:

A. Whether a person is an Interested Shareholder;

B. The number of shares of Voting Stock beneficially
owned by any person;

C. Whether a person is an Affiliate or Associate of
another person;

D. Whether any articles of incorporation provision
required by Section 8.1.1(A) hereof complies with such
section and is valid and enforceable;

E. Whether the requirements of Section 8.2.2 hereof
have been met with respect to any Business Combination; and

F. Whether the assets which are the subject of any
Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Business Combination
has, an aggregate Fair Market Value equal to 5% or more of
Total Assets.

9.3 Amendment, Repeal, Etc.

9.3.1 The Corporation reserves the right to amend, alter,
change or repeal any provision contained in these Articles in the manner now or
hereafter prescribed by law, and all rights conferred upon shareholders herein
are granted subject to this reservation.

9.3.2 In addition to any affirmative vote required by law,
these Articles or otherwise, any amendment, alteration, change or repeal of any
provision of Article 7, Article 8, Article 9, Article 10 or Article 11 hereof,
or the adoption of any provision inconsistent therewith, shall require the
affirmative votes of:

A. The holders of at least 90% of the voting power of
all then outstanding shares of Voting Stock, voting together
as a single class; and

B. The holders of at least a majority of the voting
power of the then outstanding shares of Voting Stock which
are not beneficially owned by any Interested Shareholder,
voting together as a single class.

9.3.3 The additional affirmative votes required by Section
9.3.[1]2 hereof shall not apply to any amendment, alteration, change or repeal
of any provision of Article 7, Article 8, Article 9, Article 10 or Article 11
[or Section 10.2] of these Articles if:

A. It is recommended and submitted to the shareholders
for their consideration by the affirmative vote of a
majority of the Disinterested Directors; and

B. At the time of such recommendation the Disinterested
Directors constitute at least a majority of the full Board
of Directors, excluding any directors elected by the holders
of any class or series of stock having a preference over the
Common Stock as to dividends or assets.

10. Statutory Antitakeover Provisions.

Subchapters E and G of Chapter 25 of the Pennsylvania Business
Corporation Law of 1988, as amended, shall not be applicable to the Corporation.

11. Indemnification and Personal Liability.

11.1 Indemnification. The Corporation shall indemnify and hold
harmless to the full extent not prohibited by law, as the same exists or may
hereinafter be amended, interpreted or implemented (but, in the case of any
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than are permitted the Corporation to
provide prior to such amendment), each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in (as a witness or
otherwise) any threatened, pending or completed claim, action, suit, or
proceeding, whether civil, criminal, administrative, investigative or other and
whether or not by or in the right of the Corporation or otherwise (hereinafter,
a "proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the heir, executor, or administrator, is or was a director or officer of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary, trustee or other representative of
another corporation or of a partnership, joint venture, trust or other
enterprise (including without limitation service with respect to employee
benefit plans), or where the basis of such proceeding is any alleged action or
failure to take any action by any such of the foregoing persons while acting in
an official capacity as a director or officer of the Corporation or in any other
capacity on behalf of the Corporation while such person is or was serving as a
director or officer of the Corporation, against all expenses, liability and
loss, including but not limited to attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement whether
with or without court approval, actually incurred or paid by such person in
connection therewith. Other persons who are not directors or officers of the
Corporation, or their heirs, executors, or administrators, may be similarly
indemnified in respect of service to the Corporation or to another such [entity]
entity at the request of the Corporation to the extent the Board of Directors at
any time designates such person as entitled to the benefits of this [Section]
Article 11.

11.2 Initiation of Proceedings. Notwithstanding the foregoing,
and except as provided in Section 11.5 hereof, the Corporation shall indemnify
any such person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.

11.3 Contract Right; Advancement of Expenses. Subject to the
limitation set forth above concerning proceedings initiated by the person
seeking indemnification, the right to indemnification conferred in this Article
11 shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding (or part
thereof) or in enforcing his or her rights under this Article 11 in advance of
the final disposition thereof promptly after receipt by the Corporation of a
request therefor stating in reasonable detail the expenses incurred; provided,
however, that to the extent required by law, the payment of such expenses
incurred by a director or officer of the Corporation in advance of the final
disposition of a proceeding shall be made only upon receipt of an undertaking,
by or on behalf of such person, to repay all amounts so advanced if and to the
extent it shall ultimately be determined by a court that he or she is not
entitled to be indemnified by the Corporation under this Article 11, or in the
case of a criminal action, the majority of the Board of Directors so determines
that he or she is not entitled to be indemnified by the Corporation or
otherwise.

11.4 Former Officials. The right to indemnification and
advancement of expenses provided herein shall continue as to a person who has
ceased to be a director or officer of the Corporation or to serve in any of the
other capacities described herein and shall inure to the benefit of the heirs,
executors and administrators of such person.

11.5 Authority to File Suit. If a claim for indemnification
under this Article 11 hereof is not paid in full by the Corporation within
thirty days after a written claim therefor has been received by the Corporation,
the claimant may, at any time thereafter, bring suit against the Corporation to
recover the unpaid amount of the claim, and if successful in whole or in part on
the merits or otherwise in establishing his or her right to indemnification or
to the advancement of expenses, the claimant shall be entitled to be paid also
the expense of prosecuting such claim.

11.6 Exclusivity. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of a final disposition
conferred in this Article 11 and the right to payment of expenses conferred in
Section 11.5 hereof shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses hereunder may be
entitled under any By-Law, agreement, vote of shareholders, vote of directors or
otherwise, both as to actions in his or her official capacity and as to actions
in any other capacity while holding that office, the Corporation having the
express authority to enter into such agreements or arrangements as the board of
directors deems appropriate for the indemnification of and advancement of
expenses to present or future directors and officers as well as employees,
representatives or agents of the Corporation in connection with their status
with or services to or on behalf of the Corporation or any other corporation,
partnership, joint venture, trust or other enterprise, including any employee
benefit plan, for which such person is serving at the request of the
Corporation.

11.7 Reserves. The Corporation may create a fund of any
nature, which may, but need not be, under the control of a trustee, or otherwise
secure or insure in any manner its indemnification obligations, including its
obligation to advance expenses, whether arising under or pursuant to this
Article 11 or otherwise.

11.8 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer or
representative of the Corporation, or is or was serving at the request of the
Corporation as a representative of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of his
or her status as such, whether or not the Corporation has the power to indemnify
such person against such liability under the laws of this or any other state.

11.9 Amendment. Neither the modification, amendment,
alteration or repeal of this Article 11 or any of its provisions nor the
adoption of any provision inconsistent with this Article 11 or any of its
provisions shall adversely affect the rights of any person to indemnification
and advancement of expenses existing at the time of such modification,
amendment, alteration or repeal or the adoption of such inconsistent provision.

11.10 Liability Limitation. To the fullest extent that the
laws of the Commonwealth of Pennsylvania, as now in effect or as hereafter
amended, permit elimination or limitation of the liability of directors, no
Director of the Company shall be personally liable for monetary damages as such
for any action taken, or any failure to take any action, as a Director. Any
amendment or repeal of this Section 11.10 which has the effect of increasing
Director liability shall operate prospectively only, and shall not affect any
action taken, or any failure to act, prior to its adoption.

[EXECUTED this 13th day of February, 1996.]

[ /s/ Kimberly Ross Lieb ]

[Kimberly Ross Lieb, Sole Incorporator]

<PAGE>

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PARTICIPANT'S DIRECTION

D & E Communications, Inc.

Employee Stock Ownership Plan

To: CoreStates Bank, as Trustee of the D & E Communications, Inc. Employee
Stock Ownership Plan

Pursuant to your notice accompanied by the proxy material in connection
with the 1997 Annual Meeting of Shareholders of D & E Communications, Inc.
to be held on April 29, 1997, I direct you to execute a proxy in the form
solicited by the Board of Directors of D & E Communications, Inc. with
respect to all shares of Common Stock, par value $0.16, to which I have the
right to give voting directions under the D & E Communications, Inc.
Employee Stock Ownership Plan as follows:

(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)

<TABLE>
<S> <C>
/X/ Please mark votes as 1. ELECTION OF THREE (3) DIRECTORS
in this example.
NOMINEES:

/ / FOR all nominees listed
(except as marked to the For the Class B Directors Whose Terms Expire in 2000:
contrary below) Robert M. Lauman, Ronald E. Frisbie and Thomas Bamford
</TABLE>

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the line below.)

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<PAGE>

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2. AMENDING AND RESTATING THE ARTICLES OF INCORPORATION OF D & E
COMMUNICATIONS, INC. IN THEIR ENTIRETY

/ / For / / Against / / Abstain

3. SUBJECT TO THE APPROVAL OF PROPOSAL 2, ELECTION OF ONE (1) ADDITIONAL
DIRECTOR NOMINEE: For the Class B Director Whose Term Expires in 2000:
D. Mark Thomas

/ / For / / Against / / Abstain

4. RATIFICATION OF INDEPENDENT AUDITORS

/ / For / / Against / / Abstain

THIS PARTICIPANT'S DIRECTION, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PARTICIPANT'S DIRECTION WILL BE VOTED FOR THE LISTED NOMINEES IN
THE ELECTION OF THE THREE (3) DIRECTORS, FOR THE APPROVAL OF AMENDING AND
RESTATING THE ARTICLES OF INCORPORATION OF THE COMPANY IN THEIR ENTIRETY,
FOR THE LISTED NOMINEE IN THE ELECTION OF ONE (1) ADDITIONAL DIRECTOR AND
FOR THE RATIFICATION OF INDEPENDENT AUDITORS AND IN THEIR DISCRETION, UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
POSTPONEMENT OR ADJOURNMENT THEREOF. CUMULATIVE VOTING RIGHTS WILL BE
EXERCISED TO SECURE THE ELECTION OF AS MANY AS POSSIBLE OF THE BOARD OF
DIRECTORS' NOMINEES.

DATE: , 1997

Participant sign above exactly as name is printed on label.

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<PAGE>

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PARTICIPANT'S DIRECTION

D & E Communications, Inc.

Dividend Reinvestment Plan

To: D & E Communications, Inc., as Trustee of the D & E Communications,
Inc. Dividend Reinvestment Plan

(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)

/X/ Please mark votes as 1. ELECTION OF THREE (3) DIRECTORS
in this example.
NOMINEES:

/ / FOR all nominees listed For the Class B Directors Whose
(except as marked to the Terms Expire in 2000: Robert M.
contrary below) Lauman, Ronald E. Frisbie and
Thomas Bamford

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the line below.)

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<PAGE>

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2. AMENDING AND RESTATING THE ARTICLES OF INCORPORATION OF D & E
COMMUNICATIONS, INC. IN THEIR ENTIRETY
/ / For / / Against / / Abstain

3. SUBJECT TO THE APPROVAL OF PROPOSAL 2,

NOMINEE: For the Class B Director Whose Term Expires in 2000:
D. Mark Thomas

/ / For / / Against / / Abstain

4. RATIFICATION OF AUDITORS.

/ / For / / Against / / Abstain

DATE: __________________________ , 1997 ________________________________
________________________________

Participant sign above exactly as name is printed on label.

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<PAGE>

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PROXY

D & E Communications, Inc.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.

Anne B. Sweigart, G. William Ruhl and W. Garth Sprecher, or any one or more
of them with power of substitution in each, are hereby authorized to
represent the undersigned at the 1997 Annual Meeting of Shareholders of
D & E Communications, Inc. to be held at the Brossman Business Complex, 124
East Main Street, Ephrata, Pennsylvania, on April 29, 1997 at 10:30 a.m.,
local time, and at any adjournment thereof, and thereat to vote the same
number of shares as the undersigned would be entitled to vote if then
personally present.

(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)

/X/ Please mark votes as 1. ELECTION OF THREE (3) DIRECTORS
in this example.
NOMINEES:

/ / FOR all nominees listed For the Class B Directors Whose
(except as marked to the Terms Expire in 2000:
contrary below) Robert M. Lauman, Ronald E.
Frisbie and Charles E. Thomas

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
the nominee's name on the line below.)

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<PAGE>

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2. AMENDING AND RESTATING THE ARTICLES OF INCORPORATION OF D & E
COMMUNICATIONS, INC. IN THEIR ENTIRETY

/ / For / / Against / / Abstain

3. SUBJECT TO THE APPROVAL OF PROPOSAL 2 ELECTION OF ONE (1) ADDITIONAL
DIRECTOR

NOMINEE: For the Class B Director Whose Term Expires in 2000: D. Mark
Thomas

/ / For / / Against / / Abstain

4. RATIFICATION OF INDEPENDENT AUDITORS

/ / For / / Against / / Abstain

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE LISTED NOMINEES IN THE ELECTION
OF THE THREE (3) DIRECTORS, FOR THE APPROVAL OF AMENDING AND RESTATING
THE ARTICLES OF INCORPORATION OF THE COMPANY IN THEIR ENTIRETY, FOR
THE LISTED NOMINEE IN THE ELECTION OF ONE (1) ADDITIONAL DIRECTOR, FOR
THE RATIFICATION OF INDEPENDENT AUDITORS, AND IN THEIR DISCRETION,
UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL
MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. IF NECESSARY,
CUMULATIVE VOTING RIGHTS WILL BE EXERCISED TO SECURE THE ELECTION OF
AS MANY AS POSSIBLE OF THE BOARD OF DIRECTORS' NOMINEES.

DATE:___________________ , 1997

Shareholder(s) sign above exactly as
name is printed on label. If signing as
representative, so indicate. For joint
accounts, all owners should sign.

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