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Registration No. 333-__________
As filed with the Securities and Exchange Commission on December 30, 1998
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------------
FORM S-8
REGISTRATION STATEMENT
OF
DENVER AND EPHRATA TELEPHONE AND TELEGRAPH COMPANY
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------
D & E COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-2837108
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(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
124 East Main Street, P.O. Box 458 17522-0458
Ephrata, Pennsylvania ----------
---------------------------------------- (Zip Code)
(Address of principal executive offices)
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DENVER AND EPHRATA TELEPHONE
AND TELEGRAPH COMPANY
SUPERVISORY INCENTIVE PLAN AND
NON-SUPERVISORY INCENTIVE PLAN
(Full title of the plan)
------------------------------------
Anne B. Sweigart, Chairman, Barton D. Whitman
President and Chief Executive Officer General Counsel and Secretary
D & E Communications, Inc. D & E Communications, Inc.
Brossman Business Complex Brossman Business Complex
124 East Main Street 124 East Main Street
Ephrata, Pennsylvania 17522 Ephrata, Pennsylvania 17522
(717) 733-4101 (717) 733-4101
------------------------------------
Copies of communications to::
Vincent C. Deluzio, Esquire
James O. Perry, Esquire
Buchanan Ingersoll Professional Corporation
301 Grant Street, One Oxford Centre, 21st Floor
Pittsburgh, PA 15219-1410
(412) 562-8800
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================|======================|==========================|=============================|=======================
| | Proposed Maximum | |
Title of Securities To Be | Amount To Be | Offering Price Per | Proposed Maximum Aggregate | Amount of
Registered | Registered(1) | Share(2) | Offering Price(2) | Registration Fee(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> | <C> | <C> | <C> | <C>
Common Stock (par value | 50,000 Shares | $13.75 | $687,500 | $191.13
$0.16 per share) | | | |
============================|======================|==========================|=============================|=======================
</TABLE>
(1) The provisions of Rule 416 of the Securities Act of 1933, as amended
shall apply to the number of shares registered on this Registration
Statement and shall automatically increase or decrease as a result of
stock splits, stock dividends or similar transactions.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(h) of the Securities Act of 1933, as amended. In
accordance with Rule 457(h) of the Securities Act of 1933, as amended,
such price is the average of the high and low sale prices for the
Common Stock as quoted on the Nasdaq National Market on December 23,
1998.
(3) Calculated pursuant to Section 6(B) of the Securities Act of 1933, as
amended.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement relates to the Denver and Ephrata Telephone
and Telegraph Company Supervisory and Non-Supervisory Incentive Plans (the
"Plans"). Denver and Ephrata Telephone and Telegraph Company ("Telco") and D&E
Communications, Inc. ("D&E") are sometimes referred to herein, collectively, as
the "Company" or the "Registrant", and both Telco and D&E are incorporated in
the Commonwealth of Pennsylvania.
Item 3. Incorporation of Documents by Reference
The Registrant hereby incorporates herein by reference into this
Registration Statement the documents listed in (a) through (c) below. The
Registrant also incorporates all documents subsequently filed by it with the
Securities and Exchange Commission (the "Commission") pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"):
(a) The latest annual report of the Company filed on Form 10-K for the
fiscal year ended December 31, 1997;
(b) All other reports, if any, filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the annual
report referred to in (a) above; and
(c) The description of the capital stock of the Company, par value
$0.16 per share, as set forth in the Company's Form 8-K/A filed with the
Commission on June 4, 1997.
All documents subsequently filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment to this Registration Statement, which
indicate that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law
of 1988, as amended (the "PBCL") provides in general that a corporation may
indemnify any person, including its directors, officers and employees, who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative or
investigative (including actions by or in the right of the corporation) by
reason of the fact that he or she is or was a representative of or serving at
the request of the corporation,
II-1
<PAGE>
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in connection with
the action or proceeding if he or she is determined by the board of directors,
or in certain circumstances by independent legal counsel to the shareholders, to
have acted in good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the corporation and, with respect to
any criminal proceeding, had no reason to believe his conduct was unlawful. In
the case of actions by or in the right of the corporation, indemnification is
not permitted in respect of any claim, issue or matter as to which the person
has been adjudged to be liable to the corporation except to the extent a court
determines that the person is fairly and reasonably entitled to indemnification.
In any case, to the extent that the person has been successful on the merits or
otherwise in defense of any claim, issue or matter, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith. Subchapter D of Chapter 17 of
the PBCL also provides that the indemnification permitted or required thereby is
not exclusive of any other rights to which a person seeking indemnification may
be entitled.
As permitted by the PBCL, D&E's Articles of Incorporation (the
"Articles") provide that D&E shall indemnify and hold harmless to the full
extent not prohibited by law, as the same exists or may hereafter be amended,
interpreted or implemented (but, in the case of any amendment, only to the
extent that such amendment permits D&E to provide broader indemnification rights
than D&E is permitted 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 D&E or is or was serving at the request of D&E
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 D&E or in any other capacity on
behalf of D&E while such person is or was serving as a director or officer of
D&E, 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. Such
indemnification includes the right to be paid by D&E the expenses incurred in
defending any such proceeding (or part thereof) or in enforcing his or her
indemnification rights under the Articles in advance of the final disposition
thereof promptly after receipt by D&E of a request therefor stating in
reasonable detail the expenses incurred, subject to certain conditions to the
extent required by law. Persons who are not directors or officers of D&E may be
similarly indemnified in respect of service to D&E, or to another such entity at
the request of D&E, to the extent the Board of Directors designates. Under the
PBCL, indemnification pursuant to this provision of the Articles is not
permitted in any case in which the act or failure to act giving rise to the
claim for indemnification is determined by a court to have constituted willful
misconduct or recklessness. There may be other circumstances where
indemnification may not be permitted as a matter of public policy.
The Articles also provide that 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
II-2
<PAGE>
liability of directors, no director of D&E shall be personally liable for
monetary damages as such for any action taken, or any failure to take any
action, as a director. Under Section 1713 of the PBCL, the personal liability of
a director may not be eliminated or limited if: (1) the director has breached or
failed to perform the duties of his office under Subchapter B of Chapter 17 of
the PBCL (relating to the fiduciary duties of directors); and (2) the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
Furthermore, this limitation on the personal liability of directors of D&E does
not apply to: (1) the responsibility or liability of a director pursuant to any
criminal statute; or (2) the liability of a director for the payment of taxes
pursuant to local, state or federal law.
The Articles also provide that D&E may purchase and maintain insurance
on behalf of any person who is or was a director or officer or representative of
D&E, or is or was serving at the request of D&E as a representative of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against such person or incurred by such person in any such
capacity, or arising out of his or her status as such, whether or not D&E has
the power to indemnify such person against such liability under the laws of this
or any other state. D&E 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 arising under the Articles or otherwise.
D&E and its subsidiaries also carry insurance for their officers and
directors against certain liabilities which they might incur as directors or
officers of D&E or of any other organization which they serve at D&E's request,
including certain liabilities under the Securities Act of 1933, as amended (the
"Securities Act").
Insofar as indemnification by D&E for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of D&E pursuant to the foregoing provisions, D&E has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
The following is a complete list of exhibits filed as part of this
Registration Statement, which are incorporated herein by reference:
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing
- ------ ----------- ----------------
<S> <C> <C>
4.1 Articles of Incorporation of D & E Incorporated herein by reference from the
Communications, Inc. Corporation's Registration Statement on Form
S-4, Exhibit 3.1.
4.2 Denver and Ephrata Telephone and Telegraph Filed herewith.
Company Supervisory Incentive Plan.
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C> <C>
4.3 Denver and Ephrata Telephone and Telegraph Filed herewith.
Company Non-Supervisory Incentive Plan.
5.1 Opinion of Buchanan Ingersoll Professional Filed herewith.
Corporation.
23.1 Consent of Buchanan Ingersoll Professional See Exhibit 5.1 hereof.
Corporation.
23.2 Consent of PricewaterhouseCoopers, L.L.P. Filed herewith.
24.1 Powers of Attorney for D&E Communications, Filed herewith.
Inc.
</TABLE>
- -----------------------------
Item 9. Undertakings
(a) The undersigned company hereby undertakes:
(1) To file during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement to include any material
information with respect to the plan of distribution
not previously disclosed in this Registration
Statement or any material change to such information
in this Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described in Item 6 of this
Registration Statement, or otherwise, the Registrant has
II-4
<PAGE>
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Ephrata, Commonwealth of Pennsylvania, on the 29th
day of December, 1998.
D & E COMMUNICATIONS, INC.
By: \s\ Anne B. Sweigart
----------------------
Anne B. Sweigart
President, Chief Executive
Officer and Chairman of the
Board
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Anne B. Sweigart and W. Garth Sprecher, and each
of them, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and revocation, for such person and in such person's name,
place and stead, in any and all amendments (including post-effective amendments
to this Registration Statement) and to file the same with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as such
person might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on December 29, 1998.
Date: December 29, 1998 By: \s\Anne B. Sweigart
---------------------- --------------------------------
Anne B. Sweigart
President, Chairman of the
Board, and Chief Executive
Officer
Date: December 29, 1998 By: \s\Robert M. Lauman
---------------------- --------------------------------
Robert M. Lauman
Executive Vice President and
Chief Operating Officer
Member of the Board of
Directors
Date: December 29, 1998 By: \s\Thomas E. Morell
---------------------- --------------------------------
Thomas E. Morell
Vice President, Chief Financial
Officer and Treasurer
(Chief Accounting Officer)
II-6
<PAGE>
Date: December 29, 1998 By: \s\W. Garth Sprecher
---------------------- --------------------------------
W. Garth Sprecher
Vice President and Secretary
Member of the Board of
Directors
Date: December 29, 1998 By: \s\John Amos
---------------------- --------------------------------
John Amos
Member of the Board of
Directors
Date: December 29, 1998 By: \s\Thomas H. Bamford
---------------------- --------------------------------
Thomas H. Bamford
Member of the Board of Directors
Date: December 29, 1998 By: \s\Paul W. Brubaker
---------------------- --------------------------------
Paul W. Brubaker
Member of the Board of Directors
Date: December 29, 1998 By: \s\Ronald E. Frisbie
---------------------- ---------------------------------
Ronald E. Frisbie
Member of the Board of Directors
Date: December 29, 1998 By: \s\G. William Ruhl
---------------------- ---------------------------------
G. William Ruhl
Senior Vice President,
Member of the Board of Directors
Date: December 29,1 998 By: \s\Steven B. Silverman
---------------------- ---------------------------------
Steven B. Silverman
Member of the Board of Directors
Date: December 29, 1998 By: \s\D. Mark Thomas
---------------------- ---------------------------------
D. Mark Thomas
Member of the Board of Directors
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Method of Filing
- ------ ----------- ----------------
<S> <C> <C>
4.1 Articles of Incorporation of D & E Incorporated herein by reference from the
Communications, Inc. Corporation's Registration Statement on Form
S-4, Exhibit 3.1.
4.2 Denver and Ephrata Telephone and Telegraph Filed herewith.
Company Supervisory Incentive Plan
4.3 Denver and Ephrata Telephone and Telegraph Filed herewith.
Company Non-Supervisory Incentive Plan
5.1 Opinion of Buchanan Ingersoll Professional Filed herewith.
Corporation.
23.1 Consent of Buchanan Ingersoll Professional See Exhibit 5.1 hereof.
Corporation.
23.2 Consent of PricewaterhouseCoopers, L.L.P. Filed herewith.
24.1 Powers of Attorney for D & E Communications, Filed herewith.
Inc.
</TABLE>
Exhibit 4.2
EXHIBIT 4.2
DENVER AND EPHRATA TELEPHONE AND TELEGRAPH COMPANY
SUPERVISORY INCENTIVE PLAN
Section 1. Purpose
The Board of Directors of D&E Communications, Inc. ("D&E" or the
"Company") has established this annual incentive compensation plan for the
supervisory employees of its telephone company subsidiary (the "SIP" or "Plan").
The purpose of this Plan is to provide incentives for the Plan participants to
meet or exceed the financial goals of the Company. The Plan is intended to
achieve this result by providing the opportunity for participants to receive the
payment of annual incentive compensation in the form of cash and D&E common
stock, which complements an employee's competitive base salary, for the
attainment of the Company's financial objectives.
Section 2. Plan Year
A "Plan Year" for purposes of this Plan shall be a calendar year or
such other fiscal year as the Company elects to report its financial
performance, but only if the Board of Directors shall have adopted performance
goals for Plan purposes for such year.
Section 3. Eligibility
Permanent employees of Denver and Ephrata Telephone and Telegraph
Company ("Telco"), a wholly-owned subsidiary of D&E, who are neither officers
nor directors of the Company, whose duties include the direct supervision of one
or more employees filling permanent employee positions and who are not eligible
to participate in the Executive or Officer Incentive Plan or any other
significant incentive or bonus plans are eligible to participate in this Plan.
Employees hired by November 30th of the current Plan Year and who
remain on active status through the date of such award distribution will be
eligible to participate in the Plan provided that such eligible employees make
their Election (as defined in Section 6 below) on their respective Date of Hire.
Calculation of the incentive compensation will be based on a proration of 1/12
for each full month of continuous service following the date of hire. For
example, if an employee's Date of Hire is February 10, then his or her eligible
months are March through December or 10/12th of the award eligibility.
If a Plan participant's employment with Telco is terminated or the Plan
participant resigns his or her employment with Telco during the Plan Year or
thereafter up to and including the date of payment for the Plan Year incentive
compensation, then, subject to a determination by the Plan Administrator (as
defined below) to the contrary, that employee shall not be eligible to receive
an incentive compensation payment.
However, if the active service of a participant in the Plan is
terminated during the Plan Year by death, retirement, or disability on an
approved leave of absence of more than 8 weeks, but the participant
<PAGE>
otherwise has been determined to be eligible for an award under the Plan by the
Plan Administrator, then, notwithstanding the language of the preceding
paragraph, the appropriate incentive award as determined by the Board of
Directors, or a duly appointed committee thereof (the "Plan Administrator") will
be paid to the individual or his or her estate, as the case may be.
If a participant's active service with Telco is interrupted after the
conclusion of the Plan Year, but prior to payment of the participant's incentive
compensation, by death, retirement, or disability on an approved leave of
absence of more than 8 weeks, then the participant will be otherwise eligible to
receive consideration for full incentive compensation for the Plan Year.
Distribution of the award will be computed on a full monthly basis.
(Example: Date of Hire - January 10, Approved Leave Date - October 15 through
December 31, eligible months = February through September or 8/12th of the award
eligibility).
Section 4. Activating the Plan
The operation of the Plan is predicated on D&E's attaining or exceeding
annual performance goals. The goals will consist of internally measured
financial achievements. D&E's goals for each Plan Year will be approved by D&E's
Board of Directors prior to the commencement of each Plan Year.
For purposes of determining the Company's performance only, any and all
incentive compensation payments made pursuant to this Plan, will be considered
Company expenses in the Plan Year in which the incentive payment is earned.
Thus, each Plan Year's goal must be met after factoring the incentive
compensation payments earned in that year as an expense to the goal for that
Plan Year.
Section 5. Calculation of Awards
The Board of Directors shall establish the goals for D&E's financial
performance prior to the beginning of the Plan Year as set forth in Section 4,
above. In the event these pre-established financial goals are attained, eligible
Plan participants may receive an incentive compensation award based upon a
percentage of the eligible participant's base pay.
The base pay is determined by the participant's base annual salary at
the end of the Plan Year and includes commission earnings received in the Plan
Year. All car allowances or other payments received by a Plan participant are
excluded from base pay.
If a Plan participant changes status within the Plan Year (i.e.,
supervisory to non-supervisory or non-supervisory to supervisory), then the
distribution of the incentive compensation award, if any, will be prorated
between the two incentive plans.
Section 6. Distribution of Awards
A Plan participant may elect to receive up to 50% of his or her
incentive compensation in shares of D&E common stock (the "Stock Percentage").
To do so the Plan participant must advise the Plan Administrator or a designee
of the Plan Administrator of such election, in writing within 30 days of the
beginning the Plan Year (the "Election"). The number of shares awarded under the
Plan will be the Stock Percentage elected by the Plan participant multiplied by
his or her incentive compensation award
<PAGE>
divided by the average of the high/low bid/ask price for D&E common stock for
the five (5) business days immediately preceding the distribution of any stock
under the Plan. Distribution of such incentive compensation payments, if any,
will be made within 90 days of the end of the Plan Year. In the event of a Plan
participant's death, any award approved for the deceased Plan participant will
become payable to the Plan participant's estate.
Section 7. Plan Administration
The Board of Directors or the Plan Administrator shall, with respect to
the Plan, have full power and authority to construe, interpret and manage,
control and administer this Plan, and to pass and decide upon cases in
conformity with the objectives of the Plan under such rules as the Board of
Directors may establish. Promptly after the end of the Plan Year, the Plan
Administrator shall determine those eligible participants and the amount of
incentive compensation proposed to be awarded to them. The Plan Administrator
shall then report such determinations to the Board of Directors for
consideration and approval.
Any decision made or action taken by the Plan Administrator arising out
of, or in connection with the administration, interpretation and effect of the
Plan shall be at its absolute discretion and shall be conclusive and binding
upon all parties.
No member of the Board of Directors shall be liable for any act or
action hereunder, whether of omission or commission, by a Plan participant or
employee or by any agent to whom duties in connection with the administration of
the plan have been delegated in accordance with the provision of the Plan.
Section 8. Amendment, Modification, Suspension or Termination
The Company reserves the right, by and through its Board of Directors
to amend, modify, suspend, reinstate or terminate all or any part of the Plan at
the end of any Plan Year in any way that does not diminish the right of a Plan
participant to receive payment for achievement of any prior year's goals. The
Plan Administrator shall give prompt written notice to each participant of any
amendment, suspension, termination, or material modification of the Plan. The
Board of Directors also reserves the right to withhold or alter incentive
compensation payments based on individuals or Company performance or
circumstances deemed to be highly unusual at any time prior to payment.
<PAGE>
Section 9. Effective Date of the Plan
The effective date of the Plan shall be January 1, 1999.
Section 10. Employer Relation with Participants
Neither the establishment of the Plan nor its maintenance shall be
construed as conferring any legal rights upon any Plan participant or any person
for a continuation of employment, and they shall not interfere with the right of
Telco to discharge any Plan participant or otherwise deal with him or her
without regard to the existence of the Plan.
Section 11. Governing Law
Except to the extent pre-empted under federal law, the provisions of
the Plan shall be construed, administered and enforced in accordance with the
domestic internal law of the Commonwealth of Pennsylvania.
In the event of relevant changes to the Internal Revenue Code, related
rulings and regulations or changes imposed by other regulatory agencies
affecting the continued appropriateness of the Plan and awards made thereunder,
the Board of Directors may, at its sole discretion, accelerate or change the
manner of payments of any unpaid incentive compensation award or amend the
provisions of the Plan.
The Plan was approved by the Board of Directors on September 24, 1998.
Exhibit 4.3
EXHIBIT 4.3
DENVER AND EPHRATA TELEPHONE AND
TELEGRAPH COMPANY
NON-SUPERVISORY INCENTIVE COMPENSATION PLAN
Section 1. Purpose
The Board of Directors of D&E Communications, Inc. ("D&E" or the
"Company") has established this annual incentive compensation plan for the
non-supervisory employees of its telephone company subsidiary (the "NSIP" or
"Plan"). The purpose of this Plan is to provide incentives for the Plan
participants to meet or exceed the financial goals of the Company. The Plan is
intended to achieve this result by providing the opportunity for participants to
receive the payment of annual incentive compensation in the form of cash and D&E
common stock, which complements an employee's competitive base salary or wages,
for the attainment of the Company's financial objectives.
Section 2. Plan Year
A "Plan Year" for purposes of this Plan shall be a calendar year or
such other fiscal year as D&E elects to report its financial performance, but
only if the Board of Directors shall have adopted performance goals for Plan
purposes for such year.
Section 3. Eligibility
Permanent employees of Denver and Ephrata Telephone and Telegraph
Company ("Telco"), a wholly-owned subsidiary of D&E, who are neither officers
nor directors of the Company, whose duties do not include direct supervision of
one or more employees filling permanent employee positions and who are not
eligible to participate in the Executive or Officer Incentive Plan or any other
significant incentive or bonus plans are eligible to participate in this Plan.
Employees hired by November 30th of the current Plan Year and who
remain on active status through the date of such award distribution will be
eligible to participate in the Plan provided that such eligible employees make
their Election (as defined in Section 6 below) on their respective Date of Hire.
Calculation of the incentive compensation will be based on a proration of 1/12
for each full month of continuous service following the date of hire. For
example, if an employee's Date of Hire is February 10, then his or her eligible
months are March through December or 10/12th of the award eligibility.
If a Plan participant's employment with Telco is terminated or the Plan
participant resigns his or her employment with Telco during the Plan Year or
thereafter up to and including the date of payment for the Plan Year incentive
compensation, then subject to a determination by the Plan Administrator (as
defined below) to the contrary, that employee shall not be eligible to receive
an incentive compensation payment.
<PAGE>
However, if the active service of a participant in the Plan is
terminated during the Plan Year by death, retirement, or disability on an
approved leave of absence of more than 8 weeks, but the participant otherwise
has met the expectations as outlined in the Company's appraisal process, then,
notwithstanding the language of the preceding paragraph, the appropriate
incentive award as determined by the Board of Directors or a duly appointed
committee thereof (the "Plan Administrator") will be paid to the individual or
his or her estate.
If a participant's active service with Telco is interrupted after the
conclusion of the Plan Year, but prior to payment of the participant's incentive
compensation, by death, retirement, or disability on an approved leave of
absence of more than 8 weeks, then the participant will be otherwise eligible to
receive consideration for full incentive compensation for the Plan Year.
Distribution of the award will be computed on a full monthly basis.
(Example: Date of Hire - January 10, Approved Leave Date - October 15 through
December 31, eligible months = February through September or 8/12th of the award
eligibility).
Section 4. Activating the Plan
The operation of the Plan is predicated on attaining or exceeding
annual performance goals. The goals will consist of internally measured
financial achievements. D&E's goals for each Plan Year will be approved by D&E's
Board of Directors prior to the commencement of each Plan Year.
For purposes of determining the Company's performance, any and all
incentive compensation payments made pursuant to this Plan, will be considered
Company expenses in the Plan Year in which the incentive payment is earned.
Thus, each Plan Year's goal must be met after factoring the incentive
compensation payments earned in that year as an expense to the goal for that
Plan Year.
Section 5. Calculation of Awards
The Board of Directors shall establish the goals for the Company's
financial performance prior to the beginning of the Plan Year. In the event
these pre-established financial goals are attained, a percentage eligible Plan
participants may receive an incentive compensation award based upon a percentage
of the eligible participant's base pay.
The base pay for non-exempt personnel is determined by the
participant's base rate of pay at the end of the Plan Year multiplied by the
standard number of hours worked per Plan Year and includes commission earnings
received in the Plan Year. The base pay for exempt personnel is determined by
the participant's annual salary at the end of the Plan Year. All car allowances
or other payments received by a Plan participant are excluded from base pay.
If a Plan participant changes status within the Plan Year (i.e.,
supervisory to non-supervisory or non-supervisory to supervisory), then the
distribution of the incentive compensation award, if any, will be prorated
between the two incentive plans.
NOTE: Part-time employees of Telco (as defined below) will be eligible
to receive an incentive award that is equal to 50% of the amount provided for
regular full-time employees. Reduced full-time
<PAGE>
employees (as defined below) will be eligible to receive an incentive award that
is 75% of the amount provided for regular full-time employees. Temporary
employees are ineligible for the incentive award.
For the purposes of this Plan, "Part-time employees" shall be those
employees of Telco who are regularly scheduled to work nineteen (19) hours or
less each week and who, in aggregate, will annually total less than 1,000 hours.
"Reduced full-time employees" shall be those employees of Telco who are
regularly scheduled to work more than 19 hours, but not more than 34 hours per
week, and who, in aggregate, will annually total between 1,000 and 1,800 hours
of work.
Section 6. Distribution of Awards
A Plan participant may elect to receive up to 50% of his or her
incentive compensation in shares of D&E common stock (the "Stock Percentage").
To do so the Plan participant must advise the Plan Administrator or a designee
of the Plan Administrator of such election, in writing within 30 days of the
beginning of the Plan Year (the "Election"). The number of shares awarded under
the Plan will be the Stock Percentage elected by the Plan participant multiplied
by his or her incentive compensation award divided by the average of the
high/low bid/ask price for D&E common stock for the five (5) business days
immediately preceding the distribution of any stock under the Plan. Distribution
of such incentive compensation payments, if any, will be made within 90 days of
the end of the Plan Year. In the event of a Plan participant's death, any award
approved for the deceased Plan participant will become payable to the Plan
participant's estate.
Section 7. Plan Administration
The Board of Directors or the Plan Administrator shall, with respect to
the Plan, have full power and authority to construe, interpret and manage,
control and administer this Plan, and to pass and decide upon cases in
conformity with the objectives of the Plan under such rules as the Board of
Directors may establish. Promptly after the end of the Plan Year, the Plan
Administrator shall determine those eligible participants and the amount of
incentive compensation proposed to be awarded to them. The Plan Administrator
shall then report such determinations to the Board of Directors for
consideration and approval.
Any decision made or action taken by the Plan Administrator, arising
out of, or in connection with the administration, interpretation and effect of
the Plan shall be at its absolute discretion and shall be conclusive and binding
upon all parties.
No member of the Board of Directors shall be liable for any act or
action hereunder, whether of omission or commission, by a Plan participant or
employee or by any agent to whom duties in connection with the administration of
the plan have been delegated in accordance with the provision of the Plan.
<PAGE>
Section 8. Amendment, Modification, Suspension or Termination
The Company reserves the right, by and through its Board of Directors
to amend, modify, suspend, reinstate or terminate all or any part of the Plan at
the end of any Plan Year in any way that does not diminish the right of a Plan
participant to receive payment for achievement of any prior years goals. The
Plan Administrator shall give prompt written notice to each participant of any
amendment, suspension, termination or material modification of the Plan. The
Board of Directors also reserves the right to withhold or alter incentive
compensation payments based on individuals or Company performance or
circumstances deemed to be highly unusual at any time prior to payment.
Section 9. Effective Date of the Plan
The effective date of the Plan shall be January 1, 1999.
Section 10. Employer Relation with Participants
Neither the establishment of the Plan nor its maintenance shall be
construed as conferring any legal rights upon any Plan participant or any person
for a continuation of employment, and they shall not interfere with the right of
Telco to discharge any Plan participant or otherwise deal with him or her
without regard to the existence of the Plan.
Section 11. Governing Law
Except to the extent pre-empted under federal law, the provisions of
the Plan shall be construed, administered and enforced in accordance with the
domestic internal law of the Commonwealth of Pennsylvania.
In the event of relevant changes to the Internal Revenue Code, related
rulings and regulations or changes imposed by other regulatory agencies
affecting the continued appropriateness of the Plan and awards made thereunder,
the Board of Directors may, at its sole discretion, accelerate or change the
manner of payments of any unpaid incentive compensation award or amend the
provisions of the Plan.
The Plan was approved by the Board of Directors on September 24, 1998.
Exhibit 5.1
December 29, 1998
D & E Communications, Inc.
Brossman Business Complex
124 East Main Street
Ephrata, PA 17522
Ladies and Gentlemen:
We have acted as counsel to D & E Communications, Inc., a
Pennsylvania corporation ("D&E") and its wholly-owned subsidiary, Denver and
Ephrata Telephone and Telegraph Company ("Telco") ("D&E" and "Telco" are
sometimes collectively, referred to as the "Company"), in connection with the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of 50,000 shares of common stock, par value $0.16 per share of D&E (the
"Common Stock") reserved for issuance pursuant to the Denver and Ephrata
Telephone and Telegraph Company Supervisory Incentive Plan and the Denver and
Ephrata Telephone and Telegraph Company Non-Supervisory Incentive Plan
(collectively, the "Plans"). In such capacity, we have examined the following:
1. The By-Laws, as amended, and the Articles of Incorporation, as
amended, of the Company;
2. The Registration Statement on Form S-4, as amended (the "S-4"), with
respect to the Restructuring (as therein defined), filed by D & E with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act;
3. The Registration Statement on Form S-8 with respect to the Plans
(the "Registration Statement"), filed by D & E with the Commission pursuant to
the Securities Act;
4. Proceedings of the Board of Directors of the Company relating to the
adoption of the Plans, and the authorization, execution and filing of the
Registration Statement; and
5. Such other documents, certificates, records, statutes and decisions
as we considered necessary to express the opinion contained herein.
Based upon the foregoing, we are of the opinion that when the
Registration Statement shall have been declared effective by the order of the
Securities and Exchange Commission and when the Common Stock has been duly
issued and delivered pursuant to the terms of the Plans, such shares of Common
Stock will be validly issued, fully paid and nonassessable.
<PAGE>
We hereby consent to be named in the Registration Statement, and in
the Prospectus which constitutes a part thereof, as counsel which has passed
upon the legality of the shares of D & E Common Stock to be issued pursuant to
the Plans. We further consent to the filing of a copy of this opinion as an
exhibit to the Registration Statement.
BUCHANAN INGERSOLL
PROFESSIONAL CORPORATION
By: /s/ Stephen W. Johnson
-----------------------------
Stephen W. Johnson
Exhibit 23.2
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of D&E Communications, Inc. on this Form S-8 of our report dated March
6, 1998, on our audit of the consolidated financial statements of D&E
Communications, Inc. and its subsidiaries as of December 31, 1997 and December
31, 1996, and for each of the three years in the period ended December 31, 1997,
which report is included in the Annual Report on Form 10-K of D&E
Communications, Inc. for the year ended December 31, 1997.
/s/ PricewaterhouseCoopers, LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 28, 1998
