<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 29, 1994
REGISTRATION NO.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
LINCOLN TELECOMMUNICATIONS COMPANY
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
NEBRASKA 47-0632436
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
</TABLE>
1440 "M" STREET
LINCOLN, NEBRASKA 68508
(402) 474-2211
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
Michael J. Tavlin, Vice-President--Treasurer and Secretary
Lincoln Telecommunications Company
1440 M Street
Lincoln, Nebraska 68508
(402) 474-2211
(Name, address, including zip code and telephone number, including area code, of
agent for service)
COPY TO:
Woods & Aitken
Attention: Paul M. Schudel
Suite 1500
206 South 13th Street
Lincoln, Nebraska 68508
-------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. /X/
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock,
$.25 par value............... 150,000 $16.00(1) $2,400,000(1) $828(1)
Common Stock
Purchase Rights.............. (2) (3) (3) (3)
<FN>
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) based upon the average high and low sale prices for the Common
Stock on the Nasdaq National Market on April 26, 1994.
(2) The Common Stock Purchase Rights accompany the Common Stock.
(3) The value attributable to the Common Stock Purchase Rights is reflected in
the price of the Common Stock.
</TABLE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
PROSPECTUS
150,000 SHARES
LINCOLN TELECOMMUNICATIONS COMPANY
EMPLOYEE AND STOCKHOLDER DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
COMMON STOCK
(PAR VALUE $0.25 PER SHARE)
-----------------
The Company's Common Stock is traded on the Nasdaq National Market.
-------------------
The Employee and Stockholder Dividend Reinvestment and Stock Purchase Plan
(the "Plan") of Lincoln Telecommunications Company (the "Company") provides a
simple and convenient method for employees of the Company or its subsidiaries,
and holders of record of shares of the Company's Common Stock (the "Shares") to
purchase additional Shares. A participant pays no fees, service charges or
brokerage commissions for the purchase of Shares under the Plan. These costs are
paid by the Company. Upon withdrawal from the Plan, the participant may request
the sale of all Shares credited to the participant's account. The participant
will receive the proceeds of the sale, less any brokerage commission and
applicable service fees.
A participant in the Plan may:
--have all cash dividends on Shares registered in the participant's name
used for the purchase of additional Shares, or
--make optional cash payments of not less than $100 per payment nor more
than $3,000 per calendar quarter to be used for the purchase of additional
Shares and continue to receive cash dividends on Shares registered in the
participant's name at the date of initial participation, or
--have both cash dividends and such optional cash payments used to purchase
additional Shares.
Effective on or about June 15, 1993, Mellon Securities Trust Company
("Mellon") became the transfer agent for the Shares, and the administrator of
the Plan. As agent for each participant in the Plan, Mellon will apply all cash
dividends (the "Cash Dividends") received on Shares designated to participate in
the Plan, as well as optional cash payments, to the purchase of Shares. The
price at which Mellon shall be deemed to have acquired Shares shall be the
average price of all Shares purchased by Mellon during the prescribed trading
period. In the case of employee participants, the purchase price per Share shall
be 95 percent of such average price, and in the case of stockholder participants
the purchase price shall be 100 percent of such average price. See "Dividends"
and "Price Range of Shares" herein for details as to recent prices of the
Shares.
The last reported sale price of the Common Stock on April 26, 1994 was
$16.25 per share.
This Prospectus relates to Shares registered for purchase under the Plan,
which Shares will be purchased by Mellon in the open market. It is suggested
that this Prospectus be retained for future reference.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is April 29, 1994
<PAGE>
TO THE EMPLOYEES AND HOLDERS OF SHARES OF LINCOLN TELECOMMUNICATIONS COMPANY:
TO COMPLY WITH THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION
RELATING TO LINCOLN TELECOMMUNICATIONS COMPANY'S EMPLOYEE AND STOCKHOLDER
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN, IN WHICH YOU ARE OR MAY HEREAFTER
BE PARTICIPATING, THIS PROSPECTUS IS BEING FURNISHED TO YOU TO BRING YOU
UP-TO-DATE WITH RESPECT TO INFORMATION CONTAINED IN THE PROSPECTUS DATED APRIL
30, 1993. EMPLOYEES AND HOLDERS OF SHARES PRESENTLY PARTICIPATING IN THE PLAN
NEED TAKE NO FURTHER ACTION TO CONTINUE SUCH PARTICIPATION.
-------------------
AVAILABLE INFORMATION
Lincoln Telecommunications Company is subject to the informational
requirements of the Securities and Exchange Act of 1934, as amended, (the
"Exchange Act"), and, in accordance therewith, files reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as the
following Regional Offices: Seven World Trade Center, 13th Floor, New York, N.Y.
10048; Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Ill. 60661-2511; and Suite 4800, 1801 California Street, Denver, Colo.
80202-2648. Copies of such material can be obtained by mail from the Commission
at prescribed rates. Requests should be directed to the Commission's Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus constitutes a part of a registration statement (the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus omits
certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
Shares offered hereby. Any statements contained herein concerning the provisions
of any document are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference.
-------------------
DOCUMENTS INCORPORATED BY REFERENCE
The Annual Report on Form 10-K for the year ended December 31, 1993, which
has been filed by the Company with the Commission pursuant to the Exchange Act,
and all other reports filed pursuant to Sections 13(a) or 15(d) of the Exchange
Act since December 31, 1993 are incorporated by reference in this Prospectus and
shall be deemed to be a part hereof, including the Proxy Statement, dated March
25, 1994; relating to the April 27, 1994 annual meeting of stockholders.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, subsequent to the date of this Prospectus and prior
to the termination of the offering of the shares of Common Stock offered hereby,
shall be deemed to be incorporated by reference in this Prospectus and to be a
part hereof from the date of filing such documents.
2
<PAGE>
MELLON WILL PROVIDE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST BY ANY
PERSON TO WHOM THIS PROSPECTUS IS DELIVERED A COPY OF ANY OR ALL OF THE
DOCUMENTS DESCRIBED ABOVE WHICH HAVE BEEN INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. SUCH REQUEST SHOULD BE
DIRECTED TO:
Mellon Securities Trust Company
Reinvestment Services
P.O. Box 750
Pittsburgh, PA 15230
Telephone: 800-526-0801
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING CONTAINED HEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO ANY PERSON IN
ANY JURISDICTION WHERE SUCH AN OFFER WOULD BE UNLAWFUL OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
THE COMPANY
The Company is a diversified telecommunications company which provides
telecommunications services to telephone and cellular customers in southeastern
and eastern Nebraska. Since the mid-1980's, the Company's business strategy has
been to add value to its core telephone operations by positioning itself as a
"one-stop" telecommunications service provider and to diversify into faster
growing segments of the telecommunications businesses, such as wireless
communications. The Company provides basic exchange service; long distance
service; enhanced network services, including Caller ID, Voice Mail, and
Centrex; and a full range of data communications services. The Company also
provides cellular service, directory service and communications systems and
equipment to complement the Company's core telephone services.
The Company's primary geographic market consists of 22 contiguous counties
in southeastern Nebraska where the Company is the local exchange carrier and
provides cellular and other communications services. According to the U.S.
Bureau of the Census, the population of this region exceeds 450,000. Lincoln,
the capital of Nebraska and the location of the central campus of the University
of Nebraska, is the principal urban area within this market. The population in
the Lincoln MSA (which includes all of Lancaster County in Nebraska) grew by
10.8% between 1980 and 1990 to approximately 214,000. The Company's secondary
geographic market consists of the Omaha MSA (Douglas and Sarpy Counties in
Nebraska and Pottawatamie County in Iowa, which includes Council Bluffs) where
the Company provides business communications equipment and is the manager and
27.6% owner of the wireline cellular licensee.
In 1986, Nebraska enacted legislation which substantially deregulated the
pricing of telecommunications services. Telecommunications companies in Nebraska
are permitted to make certain rate adjustments for services without regulatory
approval, including the ability to increase basic local exchange rates by up to
10% during any consecutive 12-month period. An increase in local exchange rates
not exceeding 10% may be subject to regulatory review if a requisite number of
subscribers protest the increase. See "Company-- Regulatory Environment."
3
<PAGE>
WIRELINE OPERATIONS
The Company's local exchange operations provide voice and data
communications services for residential and business customers in southeastern
Nebraska and access services, fiber facilities, and billing and collection
services to other communications companies, including long distance and cellular
companies. Measured by access line data as of December 31, 1992 provided by the
United States Telephone Association, the Company was the 19th largest local
telephone company in the United States.
The following table sets forth certain information about the Company's local
exchange operations:
ACCESS LINES IN SERVICE(1)
<TABLE>
<CAPTION>
EMPLOYEES
PER
PERCENT 10,000
DECEMBER 31, RESIDENTIAL BUSINESS TOTAL INCREASE ACCESS LINES (2)
- - --------------- ----------- ----------- --------- ------------- -------------------
<S> <C> <C> <C> <C> <C>
1989 163,571 52,538 216,109 2.7% 69
1990 165,832 55,874 221,706 2.6% 66
1991 168,164 57,913 226,077 2.0% 65
1992 170,954 61,194 232,148 2.7% 62
1993 173,477 64,665 238,142 2.6% 60
<FN>
- - ------------------------
(1) Does not include cellular subscribers.
(2) Employees used in the computation are all employees of LT&T.
</TABLE>
Rates for basic local exchange service for residential customers range from
a low of $10.00 a month for smaller communities to a high of $12.50 a month in
Lincoln. Business rates range from a low of $33.00 for a single line in a small
community to $55.00 for a PBX line in Lincoln. In 1991, the Company, pursuant to
an order of the Nebraska Public Service Commission ("NPSC"), concluded a rate
restructuring program in which basic rates were increased to the current levels
to offset rate reductions for intraLATA long distance calling. The combined
result of this rate restructuring program was intended to be revenue neutral and
was monitored by the NPSC for 12 months following the order. Following such
monitoring period, the NPSC issued an order on February 16, 1993, intended to
accomplish revenue neutrality on an ongoing basis, as well as to refund excess
revenues LT&T earned during and following the monitoring period. Consistent with
this order, LT&T's customers received one-time credits which totalled
approximately $253,000, rates for touch call service were reduced by
approximately $464,000 annually and the Company's intraLATA long distance rates
were reduced by $1,125,000 annually. These adjustments allowed the Company to
more competitively position its rates for intraLATA long distance calling.
One of the Company's key strategies has been to deploy new technology in its
local exchange network to increase operating efficiencies and to provide a
platform for the delivery of new services to its customers. The Company has made
approximately $300 million in capital expenditures during the last ten years.
Some of the most significant capital expenditure programs include:
ALL DIGITAL SWITCHING. All of the Company's switches have been converted to
digital technology and interoffice transmission is 100% digital. Immediate
benefits from this all-digital network include faster call
4
<PAGE>
completion, better transmission quality for both voice and data, reduced
administration and maintenance costs, and the ability to offer a wide variety of
enhanced services, such as custom calling and digital data services.
FIBER OPTICS. The Company has installed over 1,250 miles of fiber optic
cable, which provides for improved transmission quality, occupies less conduit
space, requires less maintenance and provides higher bandwidth for services like
video, data and voice. The Company has installed fiber optic cable in ring
configurations in its 22-county local exchange market. This configuration
provides route diversity and reduces the susceptibility of the network to
outages. One of the Company's fiber rings covers 88 square blocks in the
downtown Lincoln business area and provides large businesses and government
customers with access to a wide range of new data and video communications
services. The Company believes this fiber network will make the Company less
vulnerable to entry by competitive access providers.
SIGNALING SYSTEM 7 ("SS7"). The Company has installed SS7, an out-of-band
signaling system, to over 60% of its access lines. SS7 is a common network
"language" used by digital switches to separate telephone calls into two parts,
the voice message and the signaling message. Because the signaling messages are
sent over a separate path or "band," use of SS7 results in shortened call set up
times, more efficient use of the network and the ability to offer new advanced
services, including Caller ID, Continuous Redial, and Enhanced 800 services.
The Company's focus has been to achieve greater market penetration for the
new products that its advanced technology makes possible. As of December 31,
1993, residential penetration of traditional custom calling features, such as
call waiting and call forwarding, was over 22%, and residential penetration of
advanced custom calling features, such as Caller ID and Continuous Redial, in
the areas where such features are available was over 10%. These penetration
rates compare with national average penetration rates of approximately 34% for
custom calling features and approximately 4% for advanced custom calling
features.
The Company has launched a variety of new services to meet business and
government customers' needs for voice and data communications. The Company's
Centrex service, once only a service for large customers, has been repositioned
with new features and benefits to make it more attractive to small and
medium-sized business users. The number of Centrex lines has grown from 15,876
to 23,039 from January 1, 1990 to December 31, 1993. In 1992, the Company also
began offering frame relay service, an advanced standardized switching
technology that enables users to transmit data through a public network at high
speeds. Frame relay supports many business applications, including local area
network interconnection, remote terminal to host computer connection, image
transfer and file transfer.
WIRELESS SERVICES
The Company's wireless services include cellular operations and wide area
paging services. The Company's cellular businesses consist of the Lincoln and
Omaha MSAs and a Rural Service Area ("RSA") in Iowa contiguous to the Omaha MSA.
In addition, the Company holds a minority interest in Nebraska Cellular
Telephone Corporation which provides cellular service in the ten RSAs
established by the Federal Communications Commission ("FCC") in Nebraska. The
following table sets forth certain information about the Company's cellular
operations.
5
<PAGE>
CELLULAR OPERATIONS
<TABLE>
<CAPTION>
DECEMBER 31, 1993
POPS ---------------------------
ACQUISITION PERCENT WITHIN NET NET
SYSTEM (1) DATE (2) OWNERSHIP AREA (5) POPS SUBSCRIBERS SUBSCRIBERS
- - ----------------- ----------------- ----------- ------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Lincoln MSA April 23, 1987 100.0 220,126 220,126 12,845 12,845
Omaha MSA December 31, 1991 27.6(3) 614,731(6) 169,666 21,635 5,971
Nebraska RSAs November 25, 1989 13.1 825,169 108,097 (7) (7)
Iowa RSA 1 June 30, 1989 11.0(4) 61,965 6,816 (7) (7)
<FN>
- - ------------------------
(1) Systems are as follows:
Lincoln MSA--Lancaster County, Nebraska
Omaha MSA--Douglas and Sarpy Counties in Nebraska and Pottawatamie
County in Iowa
Nebraska RSAs--89 of the 93 Nebraska counties not in the Omaha and
Lincoln MSAs
Iowa RSA 1--Southwestern six counties of Iowa
(2) The date the Company's operating license was granted in the case of the
Lincoln MSA, and the date of the Company's initial acquisition of an
interest in the licensee in the case of the other systems.
(3) In addition, the Company has as an option to purchase an additional 27.6%
interest in the licensee of the Omaha MSA at fair market value.
(4) Includes the Company's allocable portion of the 14.1% interest in the
licensee held by the Omaha MSA system.
(5) Based upon Donnelley Marketing Information Services population data for
1992. Pops shown for Lincoln and Omaha MSAs are virtually all covered by
the networks of these systems. According to estimates available to the
Company, approximately 60% of the pops shown for Nebraska RSAs and
approximately 90% of the pops shown for Iowa RSA 1 are covered by the
networks of these systems.
(6) Does not include the Omaha MSA licensee's 14.1% interest in Iowa RSA 1
(which system has been separately included in the table) or the Omaha MSA
licensee's 8.3% interest in Iowa RSA 8 (representing 54,125 pops and 4,492
net pops).
(7) The data regarding the subscribers and net subscribers is not disclosed
herein because it is not considered material to the Company's consolidated
operations.
</TABLE>
Since assuming management of the Omaha MSA operations, over $6.9 million has
been invested by the licensee to improve cellular coverage in the Omaha MSA and
to open new retail and service centers. Synergies between the Lincoln and Omaha
markets have allowed for expanded advertising and promotional programs at lower
costs. In both markets, the Company has increased system minutes of use by
selling features, such as voice mail, call waiting, and call forwarding.
OTHER SERVICES AND PRODUCTS
The Company is a "reseller" of long distance services, primarily in its
exchange service area, and provides this service by aggregating its customers'
traffic to take advantage of volume discounts offered by national networks.
During 1992, the Company had 105.8 million minutes of long distance traffic, an
increase of 2 million minutes from 1991. For 1993, the Company had 110.0 million
minutes of long distance usage, up 4.0% over 1992. According to publicly
available information, at December 31, 1993, the Company's rates for
6
<PAGE>
long distance service were generally less than AT&T, MCI and Sprint. The Company
has a variety of calling programs for both residential and business customers.
Rates of all carriers change frequently and the foregoing rate comparisons may
change in the future.
The Company also sells and services a wide range of PBX, key system and
other communications equipment to large and small businesses, including products
manufactured by ROLM and Northern Telecom. These systems typically include a
variety of special features such as automatic call distribution, voice mail, and
LAN functionality.
The Company publishes six regional telephone directories and has been a
leader in the development of new revenue-producing directory features.
Advertisers can enhance their Yellow Page ads with "talking ads," four-color ads
and coupons.
The Company also provides billing and collection services and operator
services, both with respect to its own customers and, under contract, with
respect to the customers of AT&T and certain other carriers.
REGULATORY ENVIRONMENT
In 1986, Nebraska enacted legislation which substantially deregulated the
pricing of telecommunications services. The Company has flexibility to change
prices for its non-local exchange communications services without prior or
subsequent regulatory review. While certain local exchange rate increases are
subject to regulatory review as described below, the procedures applicable to
such increases have significantly reduced the delays in obtaining rate approval
which had been customary with traditional rate applications. The Company has the
ability to price and offer new services to its customers with minimal regulatory
oversight.
Since 1986, telecommunications companies in Nebraska have been permitted to
increase local exchange rates up to 10% in any consecutive 12-month period
without review by the NPSC. However, the Company must provide at least 60 days
notice to affected customers and conduct public informational meetings. If at
least 3% of all affected subscribers sign a formal complaint opposing the
increase within 120 days from such notice, the NPSC must hold and complete a
hearing with regard to the complaint within 90 days to determine whether the
proposed rates are fair, just and reasonable. Within 60 days after the close of
such hearing, the NPSC must enter an order adjusting the rates at issue.
Rates for all other services are not subject to regulation by the NPSC.
Rates for other services may be revised by a telecommunications company by
filing a rate list with the NPSC which is effective after ten days' notice to
the NPSC. Quality of service regulation over interexchange and local exchange is
retained by the NPSC. Nebraska has completely deregulated the provision of
mobile radio services and radio paging services.
Regardless of whether a particular rate increase is subject to regulatory
review, the Company's ability to raise rates will be determined by various
factors, including economic and competitive circumstances in effect at the time.
From time to time, including in January 1994, proposals have been made by
the Nebraska legislature and the NPSC to re-regulate rates for
telecommunications services, including local and interexchange long distance
rates, offered in Nebraska. In addition, a bill was introduced in the Nebraska
legislature in January 1994, which if passed in its current form, would
eliminate the Company's exclusive ability to provide basic
7
<PAGE>
local exchange service in its certificated service area (the southeastern 22
counties of Nebraska) and potentially subject the Company to competition from
other providers of basic local exchange service, interexchange service and
extended area service. Consideration of these two proposals was indefinitely
postponed by the Transportation Committee of the Nebraska legislature, the
committee to which they were assigned, and will not advance to the full Nebraska
legislature during the current term without a supermajority vote of legislators.
The Company cannot provide any assurance that similar proposals will not be
introduced in the future or that the current regulatory environment in Nebraska
will continue without change or make any predictions as to what impact any
change may have on the Company's operations.
The FCC regulates interstate telephone services provided by the Company.
This regulation primarily consists of the regulation of interstate access
charges that are billed to interexchange carriers for the origination and
termination of interstate long distance services by end-user customers over the
Company's local exchange network. The Company elected to be subject to price cap
regulation by the FCC effective July 2, 1993, pursuant to which limits are
imposed on the Company's interstate service rates. Prior to July 2, 1993, the
Company operated under rate-of-return regulation, which offered less pricing and
earnings flexibility than under price cap regulation. From time to time, the FCC
modifies existing regulations and adopts new regulations concerning interstate
telephone services, and there can be no assurance as to what impact such
regulations may have.
Bills pending in Congress, with the support of the Clinton Administration,
may substantially change the federal and state regulatory environment for the
telecommunications service providers, including the Company, which could
possibly increase competition for local exchange and long distance services.
The licensing, ownership, construction, operation and sale of controlling
interests in cellular telephone systems are subject to regulation by the FCC.
The FCC licenses for the Company's Lincoln MSA and Omaha MSA cellular operations
expire between October 1994 and October 1996, while FCC licenses for the
Company's Iowa RSA and Nebraska RSA cellular operations expire between July 1999
and August 2000. All renewal applications for these licenses must be received by
the FCC not later than 30 and not more than 60 days in advance of their
respective expiration dates and must be approved by the FCC. It is possible that
there may be competition for these FCC licenses upon expiration, and any such
competitors may apply for such licenses within the same time frame as the
Company. However, incumbent cellular providers generally retain their FCC
licenses upon a demonstration of substantial compliance with FCC regulations and
substantial service to the public. The FCC will only consider competitors'
applications if it determines the Company has not made such a demonstration.
Although the Company has no reason to believe that the FCC renewal applications
will not be granted by the FCC, no assurance can be given.
For a five-year period ending after the date of the grant of a cellular
license by the FCC (the "fill-in period"), the licensee has the exclusive right
to apply to serve areas within the RSA or the MSA. At the end of the fill-in
period, any person may apply to serve the unserved areas in the MSA or RSA. The
fill-in period for both the Lincoln and Omaha MSAs has expired and no person has
filed to serve any unserved areas in those locations. The fill-in periods for
the Nebraska RSAs and the Iowa RSA expire between November 1994 and May 1995.
8
<PAGE>
RECENT OPERATING RESULTS
Before taking into account a one-time accounting charge relating to retiree
health care benefits, the Company posted record earnings of $33.2 million or
$1.01 per share in 1993. This compared to $29.6 million or $0.90 per share in
1992. After taking into account the one-time accounting charge, the Company's
1993 year-end earnings were $10 million or $0.30 per share.
The Company's total operating revenues for 1993 were $184,350,000, an
increase of $8,982,000 or 5.1% over 1992. Telephone operating revenues, led by
growth in cellular network revenues, increased by $7,154,000 or 4.6% over 1992.
Revenues and sales from diversified operations increased by $1,303,000 or 4.9%
over 1992.
Total operating expenses were $127,525,000 in 1993, an increase of
$3,585,000 or 2.9%, which resulted in a growth in operating income of $5,397,000
or 10.5%. Income taxes increased $3,517,000 or 21.9% over 1992.
RECENT DEVELOPMENTS
On March 16, 1994, the Company issued a press release announcing that due to
changes in technology, customer growth and usage demand for cellular services in
their respective markets, the Company's Lincoln and Omaha cellular operations
have entered into an agreement with AT&T to purchase digital cellular telephone
systems to replace the existing analog systems serving these markets. These
digital systems are expected to increase capacity and performance in these
markets. The new Omaha and Lincoln systems are expected to be operational in
April, 1994 and mid-1995, respectively.
The implementation of these system upgrades will cause the early retirement
of existing analog equipment prior to the expiration of its anticipated useful
life. As a result, the Company will, in the first quarter of 1994, write down
the value of these assets. This write down is expected to result in a one-time
non-cash reduction of first quarter 1994 earnings of approximately $3.2 million,
or $0.10 per share.
MANAGEMENT
The following table sets forth certain information about the executive
officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ------------------------------- --- --------------------------------------------------------------
<S> <C> <C>
Frank H. Hilsabeck 49 President and Chief Executive Officer
Thomas C. Woods, III 48 Chairman of the Board
James W. Strand 47 President-Diversified Operations
Jack H. Geist 61 Vice President-Diversified Operations
Robert L. Tyler 58 Senior Vice President -- Chief Financial Officer
Michael J. Tavlin 47 Vice President-Treasurer and Secretary
</TABLE>
Frank H. Hilsabeck has been Chief Executive Officer since May 1993. Prior to
that, he was President and Chief Operating Officer from March 1992 to May 1993
and before that was President-Telephone Operations from 1990 to March 1992 and
Vice President-Telephone Operations from 1986-1990.
9
<PAGE>
Thomas C. Woods, III has been Chairman of the Board since May 1993. Prior to
that, he was Vice Chairman of the Board-Corporate Relations and Communications
from 1990 to May 1993 and before that was Vice President-Corporate Relations
from 1985-1990.
James W. Strand has been President-Diversified Operations since 1990 and
before that was Vice President-Diversified Operations from 1987-1990.
Jack H. Geist has been Vice President-Diversified Operations since 1991.
Prior to that, he was President of the Anixter-Lincoln Partnership Joint Venture
from 1989-1991 and was President of a now-dissolved subsidiary of the Company
from 1986-1989.
Robert L. Tyler has been Senior Vice President -- Chief Financial Officer
since 1991. Prior to that, he was Vice President-Controller from 1989-1991 and
before that was Accounting Director of LT&T from 1979-1989.
Michael J. Tavlin has been Vice President-Treasurer since 1986 and Secretary
since 1987.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The following table sets forth the reported high and low sales prices of the
Common Stock on the Nasdaq National Market for the periods indicated and the
cash dividends declared per share during such periods. The prices and dividend
amounts have been adjusted to reflect the Company's 100% stock dividend paid on
January 6, 1994.
<TABLE>
<CAPTION>
SALES PRICES
-------------------- CASH
HIGH LOW DIVIDENDS
--------- --------- -------------
<S> <C> <C> <C>
1992
First Quarter........................................................ $ 14.25 $ 11.63 $ .10
Second Quarter....................................................... 13.13 10.63 .11
Third Quarter........................................................ 12.13 10.63 .11
Fourth Quarter....................................................... 13.50 11.25 .11
1993
First Quarter........................................................ 13.50 12.00 .12
Second Quarter....................................................... 14.50 12.50 .12
Third Quarter........................................................ 18.75 13.63 .12
Fourth Quarter....................................................... 20.50 17.50 .13
1994
First Quarter........................................................ 20.00 15.50 .13
Second Quarter (through April 26).................................... 16.50 14.75 --
</TABLE>
See the cover page of this Prospectus for a recent sale price of the Common
Stock on the Nasdaq National Market.
The declaration of future cash dividends by the Company's Board of Directors
is dependent upon business conditions, the earnings and financial position of
the Company and such other matters as the Board of Directors deems relevant. The
payment of dividends by the Company is dependent upon the Company's receipt of
dividends from its subsidiaries, principally The Lincoln Telephone and Telegraph
Company ("LT&T"). The agreements relating to the long-term debt of LT&T restrict
the payment of dividends. Under
10
<PAGE>
the most restrictive provision of these agreements, approximately $22 million of
retained earnings of LT&T was available for the payment of dividends as of
December 31, 1993. LT&T has outstanding 5% redeemable preferred stock which has
a preferential right to payment of its annual aggregate dividend of $224,955.
USE OF PROCEEDS
The Company will not receive any net proceeds from the sale of shares of
Common Stock offered hereby.
DESCRIPTION OF PLAN
The following describes the Employee and Stockholder Dividend Reinvestment
and Stock Purchase Plan of the Company.
PURPOSE
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide holders of record of Shares with a
convenient and economical way of investing cash dividends and optional cash
payments to purchase additional Shares at a price equal to market value (and in
the case of employees, by investing cash dividends and optional cash payments at
a price equal to 95% of market value), without payment of any brokerage
commission or service charge.
SEE QUESTION 14 WITH RESPECT TO PURCHASE PRICE OF SHARES.
2. WHEN DID THE PLAN BECOME EFFECTIVE?
The Plan became effective April 8, 1981. The predecessor Plan provided by
LT&T became effective August 8, 1977.
ADVANTAGES
3. WHAT ARE THE ADVANTAGES OF THE PLAN?
Participants in the Plan may (a) have cash dividends on their Shares used
for the purchase of additional Shares, or (b) invest by making optional cash
payments of not less than $100.00 per payment nor more than $3,000 per calendar
quarter and continue to receive their cash dividends on any Shares registered in
their names at the date of their initial participation, or (c) invest both their
cash dividends and such optional cash payments to purchase additional Shares.
Participants are not required to pay any commission or service charge in
connection with purchases under the Plan. Upon withdrawal from the Plan, the
participant may request the sale of all Shares credited to the participant's
account. The participant will receive the proceeds of the sale, less any
brokerage commission and applicable service fees. Full investment of funds is
possible under the Plan because fractions of Shares, as well as full Shares,
will be credited to participants' accounts. In addition, dividends in respect of
such fractions, as well as full Shares, will be credited to participant's
accounts. Participants are relieved of the responsibility for the safekeeping of
certificates for Shares purchased under the Plan. Periodic statements of account
provide each participant with a record for each transaction.
11
<PAGE>
ADMINISTRATION
4. WHO ADMINISTERS THE PLAN?
Effective on June 15, 1993, Mellon assumed administration of the Plan from
the Company. Mellon administers the Plan for the participants and records
purchases of Shares for participants. Additionally, Mellon sends periodic
statements of account to participants and performs other duties related to the
Plan. Shares purchased under the Plan will be registered in Mellon's nominee
name "PENBRAD & Company", as agent for the Plan participants.
PARTICIPATION
5. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
All holders of record of Shares and certain regular full-time and part-time
employees of the Company and its subsidiaries, even if they are not
stockholders, are eligible to participate in the Plan. However, any stockholder
or employee who directly or indirectly owns or becomes the owner of 5% or more
of the total combined voting power or value of all classes of stock of the
Company is not eligible to participate. In those cases where Shares are
registered in names other than the beneficial owner (with the exception of
trusts, estates, custodianships, guardianships and the like) the beneficial
owner will be required to become a holder of record before participating.
SEE QUESTIONS 36-41 WITH RESPECT TO PARTICIPATION IN THE PLAN BY EMPLOYEES.
6. DOES OWNERSHIP OF COMPANY SECURITIES OTHER THAN SHARES QUALIFY AN
INVESTOR TO JOIN THE PLAN?
No. Under the Plan as presently constituted, only ownership of Shares
qualifies an investor to participate in the Plan, however, Shares must be held
other than in street name to participate.
7. HOW DOES SUCH A STOCKHOLDER PARTICIPATE?
A holder of Shares may join the Plan at any time by completing a Dividend
Reinvestment and Stock Purchase Plan Authorization Form and returning it to
Mellon. Authorization Forms will be furnished at any time upon request to
Mellon.
8. WHEN MAY A STOCKHOLDER JOIN THE PLAN?
A holder of record of Shares may join the Plan at any time.
If the Authorization Form returned by a stockholder is received by Mellon on
or before the record date preceding a quarterly dividend payment date, that
dividend will be used to purchase Shares for the stockholder as of the dividend
payment date. If the Authorization Form is received by Mellon after the record
date established for a particular dividend, then the reinvestment of dividends
will not begin until the dividend payment date following the next record date.
PLEASE NOTE THAT ACTUAL RECEIPT OF THE AUTHORIZATION FORM BY MELLON RATHER THAN
THE POSTMARK OR MAILING DATE SHALL BE CONTROLLING.
The record date is generally the 25th day of the month preceding each
quarterly dividend payment date. The quarterly dividend payment dates are
generally January 10, April 10, July 10, and October 10.
For example, in the case of the July 10, 1994 dividend, the record date will
be June 25, 1994. Thus, if the Authorization Form is received by Mellon not
later than June 25, 1994, the July 10, 1994 dividend will be
12
<PAGE>
reinvested. If the Authorization Form is received after June 25, the dividend
payable on July 10, 1994 will be paid to the stockholder in cash, and the
reinvestment of the stockholder's dividends will begin with the next quarterly
dividend payment date.
SEE QUESTIONS 15-18 WITH RESPECT TO PARTICIPATION IN THE PLAN THROUGH
OPTIONAL CASH PAYMENTS.
9. WHAT DOES THE AUTHORIZATION FORM PROVIDE?
The Authorization Form directs the Company to apply all of the participant's
cash dividends on the Shares registered in his own name as well as on Shares
credited to his account under the Plan and any optional cash payments to the
purchase of additional Shares as of each quarterly dividend payment date. If the
"Dividend Reinvestment of Plan Shares and Optional Cash Payments Only" box on
the Authorization Form is checked, Mellon will continue to remit cash dividends
to the participant on any Shares registered in his name in the usual manner, but
will apply any optional cash payments received and dividends on Shares credited
to the participant's Plan account to the purchase of additional Shares under the
Plan.
10. MAY A STOCKHOLDER HAVE DIVIDENDS REINVESTED UNDER THE PLAN WITH RESPECT
TO LESS THAN ALL OF THE SHARES REGISTERED IN THAT STOCKHOLDER'S NAME?
No. However, some stockholders may have Shares registered in more than one
name (for example, some Shares registered in the name "John Smith" and others
registered in the name "J. Smith"). In such a situation, the stockholder will
receive an Authorization Form for each registration. If this occurs, the
stockholder has the choice of signing and returning any of the Authorization
Forms, but he must return all Authorization Forms in order to have all dividends
on all Shares reinvested.
11. MAY A PARTICIPANT CHANGE HIS METHOD OF PARTICIPATION AFTER ENTRY INTO
THE PLAN?
Yes. If a participant elects to participate only in the optional cash
payment feature but later decides to participate in the dividend reinvestment
feature as well, an additional Authorization Form must be executed and returned
to Mellon as provided under Questions 7 and 8. If a participant elects to
participate through the reinvestment of dividends but later decides to
participate in the optional cash payment feature only, an additional
Authorization Form must be executed and returned to Mellon, but such
Authorization Form must be received not later than a record date in order to
stop the reinvestment of dividends payable with respect to that date. IT SHOULD
BE REMEMBERED THAT EVEN IF THE PARTICIPANT PARTICIPATES ONLY IN THE OPTIONAL
CASH PAYMENT FEATURE, MELLON WILL REINVEST DIVIDENDS ON SHARES CREDITED TO THE
PARTICIPANT'S ACCOUNT.
COSTS
12. ARE THERE ANY EXPENSES TO PARTICIPANTS IN CONNECTION WITH PURCHASES
UNDER THE PLAN?
A participant pays no fees, service charges or brokerage commissions for the
purchase of shares under the Plan. These costs are paid by the Company. In
addition, all costs of administration of the Plan will be paid by the Company.
Upon withdrawal from the Plan, the participant may request the sale of all
Shares credited to the participant's account. The participant will receive the
proceeds of the sale, less any brokerage commission and applicable service fees.
13
<PAGE>
PURCHASES
13. HOW MANY SHARES WILL BE PURCHASED FOR A PARTICIPANT?
The number of Shares to be purchased depends on the amount of the
participant's dividends, optional cash payments, or both, being invested, and
the price of the Shares. Each participant's account will be credited with that
number of Shares, including fractions computed to four decimal places, equal to
the total amount to be invested divided by the purchase price per Share.
14. WHAT WILL BE THE PRICE OF SHARES PURCHASED UNDER THE PLAN?
The price at which Mellon shall be deemed to have acquired Shares shall be
the average price of Shares purchased on the open market for a period commencing
four business days prior to and including the dividend payment date. Should the
dividend payment date fall on a non-business day (i.e., weekend or holiday),
such trading would commence on the fifth business day preceding the dividend
payment date. If Mellon is unable to acquire sufficient Shares during the
prescribed trading period to satisfy the distribution, trading will continue
until all Shares needed have been acquired. The purchase price per Share for
employee participants shall be 95% of such price, and the price for stockholders
shall be 100% of such price. The Sale of Shares on each dividend payment date is
contingent upon compliance with all legal and regulatory requirements at such
date.
OPTIONAL CASH PAYMENTS
15. WHO IS ELIGIBLE TO MAKE OPTIONAL CASH PAYMENTS?
All participants who have submitted an appropriately signed Authorization
Form are eligible to make optional cash payments (see Question 9).
16. HOW ARE OPTIONAL CASH PAYMENTS MADE?
An initial optional cash payment may be made by a participant when joining
the Plan by enclosing a check with the Authorization Form. CHECKS SHOULD BE MADE
PAYABLE TO MELLON SECURITIES TRUST COMPANY--LINCOLN. Thereafter, optional cash
payments may be invested by the use of the cash payment form enclosed with the
quarterly statements sent to participants by Mellon.
17. WHAT ARE THE LIMITATIONS ON MAKING OPTIONAL CASH PAYMENTS?
Optional cash payments cannot be less than $100 per payment nor more than
$3,000 per calendar quarter. The limitation of $3,000 per calendar quarter may
not be cumulated from quarter to quarter. The same amount of money need not be
sent each quarter, and there is no obligation to make and optional cash payment
each quarter.
18. WHEN WILL OPTIONAL CASH PAYMENTS RECEIVED BY MELLON BE INVESTED?
In order to be invested on a given dividend payment date (See Question 8),
optional cash payments must be mailed so as to be actually received by Mellon at
least 72 hours, but not more than 30 days, prior to the payment date for such
dividend payment. Optional cash payments received after this date will be
returned to the sender by Mellon. SINCE NO INTEREST WILL BE PAID ON OPTIONAL
CASH PAYMENTS, YOU ARE URGED TO MAKE YOUR OPTIONAL CASH PAYMENTS SHORTLY BEFORE
A RECORD DATE. HOWEVER, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE THAT YOUR
OPTIONAL CASH PAYMENTS WILL BE RECEIVED AT LEAST 72 HOURS
14
<PAGE>
PRIOR TO THE RECORD DATE. OPTIONAL CASH PAYMENTS WILL BE REFUNDED IF A WRITTEN
REQUEST FOR REFUND IS RECEIVED BY MELLON NO LATER THAN 72 HOURS PRIOR TO THE
DIVIDEND PAYMENT DATE ON WHICH THE CASH PAYMENT WOULD OTHERWISE HAVE BEEN
INVESTED.
REPORTS TO PARTICIPANTS
19. HOW WILL PARTICIPANTS BE ADVISED OF THEIR PURCHASE OF SHARES?
As soon as practicable after each purchase, a participant will receive a
statement of account. These statements are a participant's continuing record of
the cost of his purchase. IT IS IMPORTANT THAT YOU RETAIN ALL STATEMENTS OF YOUR
ACCOUNT WHICH MELLON SENDS YOU EACH TIME IT INVESTS YOUR FUNDS. YOU WILL NEED
THESE STATEMENTS TO CALCULATE THE COST BASIS OF YOUR SHARES FOR TAX PURPOSES.
Each participant will receive copies of the same communications sent to
every other stockholder including the Company's quarterly and annual reports,
notice of annual and special meetings and proxy statements, and income tax
information for reporting dividends paid.
DIVIDENDS
20. WILL PARTICIPANTS BE CREDITED WITH DIVIDENDS ON SHARES HELD IN THEIR
ACCOUNT UNDER THE PLAN?
Yes. All dividends in respect of full and fractional Shares held in a
participant's account will be reinvested in additional Shares.
CERTIFICATES FOR SHARES
21. WILL STOCK CERTIFICATES BE ISSUED FOR SHARES PURCHASED?
Normally, certificates for Shares purchased under the Plan will not be
issued to participants. The number of Shares credited to an account under the
Plan will be shown on the participant's statement of account.
Certificates for any number of full Shares credited to an account under the
Plan will be issued upon written request to Mellon by a participant. Any
remaining full and fractional Shares will continue to be credited to the
participant's account. CERTIFICATES FOR FRACTIONAL SHARES WILL NOT BE ISSUED
UNDER ANY CIRCUMSTANCE.
Shares credited to the account of a participant under the Plan may not be
pledged as collateral for indebtedness. A participant who wishes to pledge such
Shares must request that certificates for such Shares be issued in his name.
22. IN WHOSE NAME WILL CERTIFICATES BE REGISTERED WHEN ISSUED?
Accounts in the Plan will be maintained in the participant's name as shown
on Mellon's stockholder records at the time the participant enters the Plan.
Certificates for full Shares will be similarly registered when issued.
15
<PAGE>
WITHDRAWAL
23. HOW DOES A PARTICIPANT WITHDRAW FROM THE PLAN?
In order to withdraw from the Plan, a participant must notify Mellon in
writing and request to withdraw. When a participant withdraws from the Plan, or
upon termination or suspension of the Plan by the Company, certificates for
whole Shares credited to the participant's account under the Plan will be issued
and any fraction of a Share shall be liquidated, with the proceeds less any
applicable brokerage commissions, paid to the participant (see Question 25).
Upon a participant's withdrawal from the Plan, the participant may, if so
desired, also request that all of the Shares, both whole and fractional,
credited to the participant's account, be sold. The participant will receive the
proceeds of the sale, less any brokerage commission and applicable service fees.
24. WHEN MAY A PARTICIPANT WITHDRAW FROM THE PLAN?
A participant may stop a reinvestment of dividends on a dividend payment
date if a request to withdraw is received not later than the business day next
preceding the record date for a dividend payment. Any optional cash payment
received for which investment has been stopped by withdrawal from the Plan will
be refunded by Mellon. All subsequent dividends will be sent to the participant
unless the participant re-enters the Plan.
25. WHAT HAPPENS TO A FRACTION OF A SHARE WHEN A PARTICIPANT WITHDRAWS FROM
THE PLAN OR THE PLAN IS TERMINATED OR SUSPENDED?
When a participant withdraws from the Plan or upon termination or suspension
of the Plan by the Company, a cash payment representing the liquidation value of
any fraction of a Share, less any applicable brokerage commissions, will be
mailed directly to the participant. The cash adjustment to each such participant
will be based on the closing or "last" price of the Company's Common Stock on
the Nasdaq National Market on the date the withdrawal request is received by
Mellon, or the date that the Plan is terminated or suspended by the Company.
26. CAN A PARTICIPANT RE-ENTER THE PLAN AFTER WITHDRAWAL?
Yes. A participant may re-enter the Plan by completing a new Authorization
Form. However, Mellon reserves the right to reject any Authorization Form from a
previous participant on grounds of excessive withdrawal and re-entry.
OTHER INFORMATION
27. WHAT HAPPENS WHEN A PARTICIPANT SELLS OR TRANSFERS ALL OF THE SHARES
REGISTERED IN HIS NAME?
If a participant disposes of all Shares registered in the participant's name
(those for which the participant holds certificates), Mellon will, so long as
the participant has at least one full Share credited to his Plan account,
continue to reinvest the dividends on such Shares until the participant notifies
Mellon in writing of a desire to withdraw. If less than one full Share is
credited to such participant's Plan account, Mellon reserves the right to close
such account, sell the fractional Share, and send to the participant the
liquidation value of the fractional Share, less any applicable brokerage
commissions. The account will then be closed.
28. HOW SHOULD ALL COMMUNICATIONS TO MELLON BE SIGNED?
Stockholders mailing Authorization Forms, notices of withdrawal or other
communications to Mellon should sign in the exact manner in which their stock
certificates were registered at the time of entering the
16
<PAGE>
Plan. Joint owners should both sign. Employees participating in the Plan should
sign all communications in the manner in which their Authorization Form was
completed. Fiduciaries, corporate officers, holders of powers of attorney and
others signing in representative capacities should state their capacities.
29. WHAT HAPPENS IF THE COMPANY ISSUES A STOCK DIVIDEND OR DECLARES A STOCK
SPLIT?
Any stock dividends or split shares distributed by the Company on Shares
credited to the account of a participant under the Plan will be added to the
participant's account. Stock dividends or split shares distributed on any Shares
registered in the name of the participant will be mailed directly to the
stockholder in the same manner as to stockholders who are not participating in
the Plan.
30. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF STOCKHOLDERS?
For each meeting of stockholders, the participant will receive a proxy which
will enable the participant to vote Shares registered in his name as well as
Shares credited to his Plan account as of the record date for any such meeting.
31. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE
PLAN?
Participants in the Plan, in general, have the same federal income tax
obligations with respect to their dividends as do stockholders who are not
participants in the Plan. When dividends are reinvested in Shares of Common
Stock, a participant will be treated for federal income tax purposes as having
received a taxable dividend equal to the cash dividend reinvested, to the extent
the Company has earnings and profits. A participant's share of brokerage fees
paid by the Company, if any, will be an additional dividend to that participant.
Shares of Common Stock purchased with reinvested dividends will have a tax
basis equal to the amount paid therefor, increased by any brokerage fees treated
as a dividend to the participant with respect to those Shares. Shares will have
a holding period beginning on the day following the "transaction date". The
transaction date is the date all purchases are completed with respect to a
particular dividend payment date.
Shares purchased with optional cash payments have a tax basis equal to the
amount of such payments, increased by the amount of brokerage fees, if any,
treated as a dividend to the participant with respect to those Shares. The
holding period for such Shares begins on the day following the transaction date.
Participants should not be treated as receiving an additional taxable
dividend based upon their pro rata share of the costs of administering the Plan
which are paid by the Company. However, there can be no assurance that the
Internal Revenue Service ("IRS") will agree with this position. The Company has
no present plans to seek formal advice from the IRS on this issue.
Participants do not recognize any taxable income when they receive
certificates for whole Shares credited to their accounts, either upon their
requests for such certificates or upon withdrawal from or termination of the
Plan. However, participants recognize gain or loss when whole Shares acquired
under the Plan are sold or exchanged either through the Plan at the request of
participants or by participants themselves after receipt of certificates for
Shares from the Plan. Participants also recognize gain or loss when they receive
cash payments for fractional Shares credited to their accounts, upon withdrawal
from or termination of the Plan. The amount of gain or loss is the difference
between the amount which the participant receives for his or her Shares or
fractional Shares and the tax basis thereof. Such gain or loss will
17
<PAGE>
generally be a capital gain or loss, long-term or short-term depending upon the
participant's holding period. Presently, net long-term capital gains of certain
taxpayers are taxed at lower rates than other items of their taxable income.
The above discussion sets forth the general federal income tax consequences
of participating in the Plan; however, the discussion is not intended to be an
exhaustive treatment of such tax consequences. Future legislative changes or
changes in administrative or judicial interpretation, some or all of which may
be retroactive, could significantly alter the tax treatment discussed herein.
ACCORDINGLY AND BECAUSE TAX CONSEQUENCES MAY DIFFER AMONG PARTICIPANTS IN THE
PLAN, EACH PARTICIPANT SHOULD DISCUSS SPECIFIC TAX QUESTIONS REGARDING
PARTICIPATION IN THE PLAN WITH HIS OR HER OWN TAX ADVISOR.
32. WHAT ARE THE EFFECTS OF THE BACKUP WITHHOLDING PROVISIONS OF THE
INTERNAL REVENUE CODE OF 1986?
If a participant has failed to furnish a valid taxpayer identification
number to the Company, unless the participant is exempt from the withholding
requirements described in section 3406 of the Internal Revenue Code, then the
Company must withhold 31% from the amount of common share dividends and the
proceeds of the sale of fractional shares (as described in Question 25). In
addition, the Internal Revenue Code provides that if a new participant fails to
certify that such participant is not subject to withholding on interest and
dividend payments as a result of failure to report all interest or dividend
income on prior tax returns, then 31% must be withheld from the amount of Share
dividends. The withheld amounts will be deducted from the amount of dividends
and the remaining amount will be reinvested. The regular statements sent to such
participants will indicate the amount of tax withheld. Likewise, participants
selling Shares or withdrawing from the Plan who are subject to backup or other
withholding will receive only the net proceeds from such sale or withdrawal as
required by the Internal Revenue Code and applicable federal regulations. The
Company cannot refund withheld amounts.
33. WHAT PROVISION IS MADE FOR FOREIGN STOCKHOLDERS SUBJECT TO INCOME TAX
WITHHOLDING?
In the case of foreign stockholders who elect to have their dividends
reinvested and whose dividends are subject to United States income tax
withholding, Mellon will invest in Shares an amount equal to the dividends of
such foreign participants after the deduction of any taxes which are required to
be withheld.
34. MAY THE PLAN BE CHANGED OR DISCONTINUED?
While the Company hopes to continue the Plan indefinitely, the Board of
Directors of the Company may, insofar as permitted by law, from time to time,
suspend or terminate the Plan or revise or amend it in any respect whatsoever
except that, without the approval of stockholders, no such revision or amendment
shall decrease the number of Shares subject to the Plan or permit participation
in this Plan by persons other than employees of the Company and its subsidiaries
and stockholders of the Company. However, in the event that at any time the
purchase price for Shares offered for purchase under the Plan shall be
determined by the Company to be less than 80% of the consolidated book value per
Share as of the previous December 31 audited financial statements, the Board of
Directors shall suspend or terminate the Plan.
35. WHAT IS THE RESPONSIBILITY OF MELLON UNDER THE PLAN?
Mellon, in administering the Plan, will not be liable for any act done in
good faith or for any good faith omission to act, including, without limitation,
any claim of liability arising out of failure to terminate a participant's
account upon such participant's death prior to receipt of notice in writing of
such death and withdrawal from the Plan.
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<PAGE>
THE PARTICIPANT SHOULD RECOGNIZE THAT NEITHER MELLON, NOR THE COMPANY CAN
ASSURE A PROFIT OR PROTECT AGAINST A LOSS ON THE SHARES PURCHASED UNDER THE
PLAN.
EMPLOYEE PARTICIPATION
36. WHICH EMPLOYEES ARE ELIGIBLE TO PARTICIPATE?
All regular full-time and part-time employees of the Company and its
subsidiaries with not less than six months' service with the Company or one of
its subsidiaries are eligible to participate in the Plan. Employees need not be
stockholders of record in order to participate. Any employee whose employment is
twenty (20) hours or less per week or not more than five months in any calendar
year shall be regarded as not a regular part-time employee and is not eligible
to participate.
In addition, any employee who directly or indirectly owns or becomes the
owner of 5% or more of the total combined voting power or value of all classes
of stock of the Company is not eligible to participate.
37. IN WHOSE NAMES WILL EMPLOYEES' CERTIFICATES BE REGISTERED WHEN ISSUED?
In the case of an employee who is not a stockholder at the time of entry
into the Plan, such employee's account under the Plan will be maintained in the
employee's name. The employee may designate a co-owner. Certificates for whole
shares, when issued, will be registered in the name in which the account under
the Plan is maintained.
38. WHAT ARE THE RIGHTS OF EMPLOYEES UNDER THE PLAN?
In general, employees shall have the same rights, and shall be governed by
the same terms, under the Plan as stockholder-participants (see especially
Questions 5 through 14). However, employees who are not stockholders at the time
of entry into the Plan may participate in the Plan if they check ONLY the
"Optional Cash Payments Only" box on the Authorization Form. Any employee who
becomes a stockholder of record after joining the Plan may execute another
Authorization Form in order to provide for the reinvestment of dividends on
Shares registered in the employee's name. IT SHOULD BE REMEMBERED THAT EVEN IF
THE PARTICIPANT PARTICIPATES ONLY IN THE OPTIONAL CASH PAYMENT FEATURE, MELLON
WILL REINVEST DIVIDENDS ON SHARES CREDITED TO THE PARTICIPANT'S ACCOUNT.
39. HOW MAY EMPLOYEES MAKE OPTIONAL CASH PAYMENTS?
Employee-participants may make optional cash payments by executing a payroll
deduction authorization prior to the first day of any month or by sending cash
directly to Mellon in the same manner as other participants. The payroll
deduction authorization authorizes the Company to make payroll deductions in
increments of $5.00, but not less than $10.00 per pay period, nor more than
$1,000.00 per month, determined by the employee to be used for the purchase of
Shares pursuant to the Plan. Employees may increase or decrease, within the
above limits, the amount of such deductions by executing an additional payroll
deduction authorization available on request from the Treasurer's Office.
In addition to, or in lieu of, payroll deductions, optional cash payments
may be made by employees in the same manner as by other participants. Optional
cash payments cannot be less than $100 per payment nor more than $3,000 per
calendar quarter. The same amount of money need not be sent each quarter, and
there is no obligation to make an optional cash payment each quarter, however,
the total of payroll deductions and
19
<PAGE>
additional optional cash payments may not exceed $3,000 in any calendar quarter.
Such optional cash payments may be made by an employee by enclosing a check
(made payable to Mellon Securities Trust Company--Lincoln) with the
Authorization Form when joining or at any other time by forwarding such a check
with a cash payment form which will be enclosed with the periodic statements of
account sent to participants.
40. HOW DOES AN EMPLOYEE WITHDRAW FROM THE PLAN?
In order to withdraw from the Plan, an employee-participant must notify
Mellon in writing of a desire to withdraw, and employees making optional cash
payments through payroll deductions must also notify the Treasurer's Office in
writing. Any optional cash payment received for which investment has been
stopped by withdrawal from the Plan will be refunded by Mellon.
41. WHAT HAPPENS WHEN AN EMPLOYEE-PARTICIPANT LEAVES THE COMPANY?
If an employee-participant retires, dies or leaves the employment of the
Company or one of its subsidiaries, so long as the employee has at least one
full share credited to the employee's Plan account, Mellon will continue to
reinvest the dividends on the Shares credited to the employee's account under
the Plan until otherwise notified. Such individual shall, at that time, be
regarded as a stockholder and not as an employee for purposes of the purchase
discount and optional cash payments. If less than one full share is credited to
such employee's Plan account. Mellon reserves the right to close such account,
sell the fractional Share, and send to the participant the liquidation value of
the fractional Share, less any applicable brokerage commissions. The account
will then be closed.
42. ARE THERE ANY SPECIAL INCOME TAX CONSEQUENCES FOR EMPLOYEE PARTICIPANTS
IN THE PLAN?
Yes. The 5% discount from market value, at which employees purchase shares,
will be ordinary income to the employee-participant for the year in which the
purchase of Shares occurs.
CORRESPONDENCE
43. WHERE SHOULD NOTICES, OPTIONAL CASH PAYMENTS AND CORRESPONDENCE
REGARDING THE PLAN BE DIRECTED?
Notices, optional cash payments and correspondence regarding the Plan shall
be addressed to Mellon as follows:
Mellon Securities Trust Company
Reinvestment Services
P.O. Box 750
Pittsburgh, PA 15230
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, $.25 par value, and 20,000,000 shares of Preferred Stock, $.50
par value. As of December 31, 1993, there were 32,595,350 shares of Common Stock
outstanding. There are no shares of Preferred Stock outstanding, although LT&T
has publicly-held 5% redeemable preferred stock outstanding.
20
<PAGE>
COMMON STOCK
After all cumulative dividends have been paid or declared and set apart for
payment on any shares of Preferred Stock that are outstanding, the Common Stock
is entitled to such dividends as may be declared from time to time by the Board
of Directors in accordance with applicable law. For certain restrictions on the
ability of the Company to declare dividends, see "Price Range of Common Stock
and Dividends."
Except as provided under Nebraska law and except as may be determined by the
Board of Directors of the Company with respect to any series of Preferred Stock,
only the holders of Common Stock shall be entitled to vote for the election of
directors of the Company and on all other matters. Subject to the limitations
imposed by Nebraska law as described below, upon any such vote the holders of
Common Stock shall be entitled to one vote for each share of Common Stock held
by them. Under Nebraska law, holders of Common Stock are entitled to cumulative
voting rights in the election of directors. Cumulative voting allows a
stockholder to vote the number of shares owned by such stockholder for as many
persons as there are directors to be elected, or to cumulate such votes and give
one person as many votes as the number of directors to be elected multiplied by
the number of such stockholder's shares, or to distribute such votes among as
many directors to be elected as such stockholder sees fit.
All shares of Common Stock are entitled to participate equally in
distributions in liquidation, subject to the prior rights of any Preferred Stock
which may be outstanding. Except as the Board of Directors may in its discretion
otherwise determine, holders of Common Stock have no preemptive rights to
subscribe for or purchase shares of the Company. There are no conversion rights,
or sinking fund or redemption provisions applicable to the Common Stock. The
shares of Common Stock offered hereby are fully paid and nonassessable.
Mellon Securities Trust Company, New York, New York, is the transfer agent
and registrar for the Common Stock.
PREFERRED STOCK
The Board of Directors is authorized to issue from time to time, without
stockholder authorization, in one or more designated series, shares of Preferred
Stock with such preferences, voting rights, conversion rights, limitations and
relative rights as are provided in the particular series which could adversely
affect the voting rights of holders of Common Stock. No dividends or other
distributions are payable on the Common Stock unless dividends are paid in full
on the outstanding shares of Preferred Stock. In the event of a liquidation or
dissolution of the Company, the outstanding shares of Preferred Stock would have
priority over the Common Stock to receive the amounts specified in each
particular series out of the remaining assets of the Company.
CERTAIN STATUTORY AND OTHER PROVISIONS
STATUTORY PROVISIONS. The Nebraska Statutes provide that the voting power
of shares of a Nebraska corporation such as the Company held by any person or
persons acting as a group of 20% or more is eliminated with respect to all
matters other than the election of directors, unless otherwise approved by a
vote of the disinterested stockholders at a special or annual meeting pursuant
to certain provisions of the Nebraska Statutes. To the extent so approved, such
shares shall have the same voting rights as other shares of the same class or
series. This restriction does not apply to shares acquired directly from the
Company or in certain specified transactions.
21
<PAGE>
The Nebraska Statutes provide that a Nebraska corporation such as the
Company may not engage in a business combination with a beneficial owner of 10%
or more of the voting shares of the corporation (or an affiliate of such a
beneficial owner) unless, before such shares were acquired, the board of
directors of the corporation approved the business combination or the
stockholder's acquisition of those shares which causes such stockholder's
beneficial ownership to equal or exceed 10% of the voting shares.
ARTICLES OF INCORPORATION. The Articles of Incorporation provide that the
Board of Directors of the Company is divided into three classes, with staggered
terms of three years each. Each year the term of one class expires. The members
constituting the entire Board of Directors may be removed from office only by
the affirmative vote of at least 70% of all outstanding shares of Common Stock.
The Articles of Incorporation provide that the approval of a merger,
consolidation, exchange of all outstanding shares, or sale, lease or other
disposition of all or substantially all of the Company's assets requires the
affirmative vote of at least 70% of all outstanding shares of Common Stock.
The Articles of Incorporation provide that the amendment or repeal of any of
the provisions described in the preceding paragraph requires the affirmative
vote of at least 70% of all outstanding shares of Common Stock.
The statutory provisions and the provisions of the Company's Articles of
Incorporation described above and the Common Stock Purchase Rights described
below could have the effect of delaying, deterring or preventing a change in
control of the Company or a merger, reorganization, tender offer or sale of all
or substantially all of the Company's assets.
COMMON STOCK PURCHASE RIGHTS
Under the Rights Agreement, dated as of June 21, 1989, as amended (the
"Rights Agreement"), each outstanding share of Common Stock (including the
shares being sold by the Selling Stockholder in this offering) has attached
thereto one Common Stock Purchase Right (a "Right") and each share subsequently
issued by the Company prior to the expiration of the Rights Agreement will also
have attached thereto one Right. Under certain circumstances described below,
the Rights will entitle the holder thereof to purchase additional shares of
Common Stock. In this Prospectus, unless the context otherwise requires, all
references to the Common Stock include the accompanying Rights.
Currently, the Rights are not exercisable and trade with the Common Stock.
In the event the Rights become exercisable, each Right (unless held by a person
or group, other than the Selling Stockholder, which beneficially owns more than
10% of the outstanding Common Stock) will initially entitle the holder to
purchase for $21.875 an amount of the Common Stock having a market value of
$43.75. The Rights will only become exercisable if a person or group, other than
the Selling Stockholder, has acquired, or announced an intention to acquire, 10%
or more of the outstanding shares of Common Stock. In the event of the
acquisition of the Company by another corporation subsequent to a party
acquiring 10% or more of the Common Stock, each holder of a Right will be
entitled to receive the acquiring corporation's common shares having a market
value of two times the exercise price per Right. The Rights may be redeemed at a
price of $.0025 per Right prior to the existence of a 10% acquiring party, and
thereafter may be exchanged for one share of Common Stock per Right prior to the
existence of a 50% acquiring party. The Rights will expire on June 30, 1999. The
Rights do not have voting or dividend rights and, until they become exercisable,
have no dilutive effect on the earnings of the Company.
22
<PAGE>
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company by Messrs. Woods & Aitken, Suite 1500, 206 South 13th Street, Lincoln,
Nebraska 68508.
Members of the law firm of Woods & Aitken participating in matters relating
to the offering beneficially own 33,460 shares of Common Stock of the Company.
In addition, Mr. J. Taylor Greer, a partner in the firm, is a director of the
Company and of its subsidiary, LT&T. John H. Ziegenbein, who is of counsel to
Woods & Aitken, is the spouse of Lyn Wallin Ziegenbein, a director of the
Company.
EXPERTS
The financial statements and schedules of Lincoln Telecommunications Company
and Subsidiaries as of December 31, 1993 and 1992 and for each of the years in
the three-year period ended December 31, 1993 incorporated in the Prospectus by
reference have been so incorporated in reliance upon the reports of KPMG Peat
Marwick, independent certified public accountants, and upon the authority of
said firm as experts in accounting and auditing.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Pursuant to the provisions of Section 21-2004(15) of the Nebraska Business
Corporation Act, the Company has the power to indemnify certain persons,
including its officers and directors under stated circumstances and subject to
certain limitations, for liabilities incurred in connection with services
performed in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Company. By resolution of the Company's
Board of Directors pursuant to Article 55 of the By-Laws of the Company, by
contractual agreement and pursuant to certain provisions of an insurance policy,
the Company has provided for indemnification of officers and directors of the
Company, and certain other persons, against liabilities and expenses incurred by
any of them in certain stated proceedings and under certain stated conditions.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
23
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Available Information.......................... 2
Documents Incorporated by Reference............ 2
The Company.................................... 3
Recent Operating Results....................... 9
Recent Developments............................ 9
Management..................................... 9
Price Range of Common Stock and Dividends...... 10
Use of Proceeds................................ 11
Description of Plan............................ 11
Description of Capital Stock................... 20
Legal Matters.................................. 22
Experts........................................ 23
Indemnification of Officers and Directors...... 23
</TABLE>
LINCOLN
TELECOMMUNICATIONS
COMPANY
EMPLOYEE AND
STOCKHOLDER
DIVIDEND
REINVESTMENT
AND STOCK
PURCHASE PLAN
150,000 SHARES
COMMON SHARES
($0.25 PAR VALUE)
PROSPECTUS
DATED APRIL 29, 1994
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses in connection with the
offering described in this Registration Statement:
<TABLE>
<S> <C>
Printing Registration Statement, Prospectus and other documents............. $ 4,000
Blue Sky filing and legal fees.............................................. 1,000
Legal fees and expenses..................................................... 1,500
Accountants' fees and expenses.............................................. 1,500
Miscellaneous expenses...................................................... 250
---------
Total............................................................... $ 8,250
---------
---------
</TABLE>
All of the above amounts are estimated and will be paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to the provisions of Section 21-2004(15) of the Nebraska Business
Corporation Act, the Company has the power to indemnify certain persons,
including its officers and directors under stated circumstances and subject to
certain limitations, for liabilities incurred in connection with services
performed in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Company. By resolution of Company's Board
of Directors pursuant to Article 55 of the By-laws of the Company by contractual
agreement and pursuant to and certain provisions of an insurance policy, the
Company has provided for indemnification of officers and directors of the
Company, and certain other persons, against liabilities and expenses incurred by
any of them in certain stated proceedings and under certain stated conditions.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in said Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer, or controlling person of the Company in the
successful defense of any such action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company 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 Act and will be governed by any final adjudication of
such issue.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
- - ----------- ------------------------------------------------------------------------------------------
<C> <S>
(4.1) Articles of Incorporation (incorporated by reference to Exhibit 3 to the Registrant's Form
S-3 Registration Statement No. 33-21557).
(4.2) By-Laws of the Registrant (incorporated by reference to Exhibit 4.2 of Registrant's Form
S-3 Registration Statement No. 33-52117).
(4.3) Rights Agreement, dated as of June 21, 1989, between the Registrant and Harris Trust and
Savings Bank (incorporated by reference to Exhibit 4.1 to Registrant's Current Report on
Form 8-K dated June 21, 1989).
(4.4) Amendment to Rights Agreement, dated as of September 7, 1989 between the Registrant and
Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.2 to Registrant's
Current Report on Form 8-K dated September 7, 1989).
(4.5) Amendment No. 2 to Rights Agreement dated June 15, 1993 between the Registrant and Harris
Trust and Savings Bank and Mellon Securities Trust Company (incorporated by reference to
Exhibit 4.5 of Registrant's Form S-3 Registration Statement No. 33-52117).
(4.6) Lincoln Telecommunications Company Employee and Stockholders Dividend Reinvestment and
Stock Purchase Plan.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
- - ----------- ------------------------------------------------------------------------------------------
<C> <S>
(5.1) Opinion of Woods & Aitken.
(23.1) Consent of Woods & Aitken included in Exhibit (5.1).
(23.2) Consent of KPMG Peat Marwick.
</TABLE>
ITEM 17. UNDERTAKINGS
The 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or, in the
aggregate, represent a fundamental change in the information set forth in
the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
For purposes of determining any liability under the 1933 Act, each filing of
the Company's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the 1934 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.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF LINCOLN, STATE OF NEBRASKA, ON THE 27TH DAY OF APRIL,
1994.
LINCOLN TELECOMMUNICATIONS COMPANY
BY _______/s/_Frank H. Hilsabeck______
(FRANK H. HILSABECK)
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN DULY SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- - ------------------------------------------ ------------------------------------------ ------------------------
<C> <C> <S>
President and
Chief Executive Officer
/s/ Frank H. Hilsabeck (Principal Executive Officer)
---------------------------------
FRANK H. HILSABECK
Senior Vice President--Chief Financial
Officer
(Principal Financial and Accounting
/s/ Robert L. Tyler Officer)
---------------------------------
ROBERT L. TYLER
Vice President--Treasurer
/s/ Michael J. Tavlin and Secretary
---------------------------------
MICHAEL J. TAVLIN
/s/ Duane W. Acklie Director
---------------------------------
DUANE W. ACKLIE
/s/ William W. Cook, Jr. Director
---------------------------------
WILLIAM W. COOK, JR.
/s/ Terry L. Fairfield Director
---------------------------------
TERRY L. FAIRFIELD
/s/ James E. Geist Director
---------------------------------
JAMES E. GEIST
/s/ J. Taylor Greer Director April 27, 1994
---------------------------------
J. TAYLOR GREER
/s/ John Haessler Director
---------------------------------
JOHN HAESSLER
/s/ Charles R. Hermes Director
---------------------------------
CHARLES R. HERMES
/s/ Donald H. Pegler, Jr. Director
---------------------------------
DONALD H. PEGLER, JR.
/s/ Paul C. Schorr, III Director
---------------------------------
PAUL C. SCHORR, III
/s/ William C. Smith Director
---------------------------------
WILLIAM C. SMITH
/s/ James W. Strand Director
---------------------------------
JAMES W. STRAND
/s/ Charles N. Wheatley Director
---------------------------------
CHARLES N. WHEATLEY
/s/ Thomas C. Woods, III Director
---------------------------------
THOMAS C. WOODS, III
/s/ Lyn Wallin Ziegenbein Director
---------------------------------
LYN WALLIN ZIEGENBEIN
</TABLE>
II-3
<PAGE>
EXHIBIT 4.6
LINCOLN TELECOMMUNICATIONS COMPANY
EMPLOYEE AND STOCKHOLDER DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
(AMENDED AS OF APRIL 27, 1994)
The following shall be the terms of the Employee and Stockholder Dividend
Reinvestment and Stock Purchase Plan of Lincoln Telecommunications Company, as
amended by actions of the Boards of Directors of The Lincoln Telephone and
Telegraph Company and Lincoln Telecommunications Company (the "Company") on
March 18, 1981 to substitute shares of Common Stock of Lincoln
Telecommunications Company (the "Shares") for common stock of the Lincoln
Telephone and Telegraph Company ("LT&T") as available for dividend reinvestment
and purchase by participants in the Plan (as so amended, herein called the
"Plan"), as provided by Agreement and Plan of Merger approved by the
stockholders of the Company on December 16, 1980 and the stockholders of LT&T on
February 5, 1981, and as amended subsequent thereto.
1. Purpose and Purchase Price.
(a) The purpose of the Plan is to provide holders of record of Shares
and eligible employees of the Company and its subsidiaries with a convenient and
economical way of investing cash dividends and optional cash payments to
purchase additional shares without payment of any brokerage commission or
service charge.
(b) In the case of stockholder participants, the purchase price for
the additional Shares shall be 100% of the Share Price as hereinbelow defined.
In the case of employee participants, the purchase price for the additional
Shares shall be 95% of such Share Price.
2. Eligibility
(a) All holders of record of Shares and all regular full-time and
part-time employees of the Company and its subsidiaries with not less than six
months service (whether or not initially holders of record of Shares) are
eligible to participate in the Plan.
(b) Any such employee whose employment is twenty (20) hours or less
per week, or not more than five (5) months in any calendar year, shall be
regarded as not a regular part-time employee and is not eligible to participate.
<PAGE>
(c) Any stockholder or such employee who directly or indirectly owns
or becomes the owner of 5% or more of the total combined voting power or value
of all classes of stock of the Company is not eligible to participate. Any
owner of Preferred Stock, bonds or securities of the Company, or its
subsidiaries, other than the Shares, is not eligible to participate.
3. Stock Available for Purchase
The stock subject to purchase under the Plan shall be Shares purchased
on the open market. Shares may be authorized for issuance under the Plan by the
Board of Directors of the Company or otherwise made available for purchase under
the Plan, subject to required approvals of any governmental authorities
required.
4. Participants.
(a) A participant in the Plan may (1) have all cash dividends
declared on Shares registered in the participant's name used for the purchase of
additional Shares; (2) make optional cash payments of not less than $100.00 per
payment, not more than $3,000.00 per calendar quarter, to be used for the
purchase of additional Shares and continue to receive cash dividends on any
Shares registered in the participant's name at the date of his initial
participation; or (3) have both his cash dividends and such optional cash
payments used to purchase additional Shares. The method of participation may be
changed by a participant at any time by written notice to the Administrator.
(b) A holder of record of Shares and an eligible employee may join
the Plan at any time by completing and signing an Authorization Form (which in
the case of employees so desiring, may include authorization for payroll
deduction), and forwarding it to the Administrator. Stockholders and employees
who previously executed and delivered an Authorization Form to the Company or
LT&T need not re-execute such a form for the Administrator.
(c) The timely receipt by the Administrator of a signed Authorization
Form will entitle stockholder participants to the right to purchase additional
Shares at a purchase price equal to 100% of the average price of Shares
purchased on the open market for a period commencing four business days prior to
and including the dividend payment date (the "Share Price"). Should the
dividend payment date fall on a non-business day (i.e., weekend or holiday),
such trading would commence on the fifth business day preceding the dividend
payment date. If the Administrator is unable to acquire sufficient Shares
during the prescribed trading period to satisfy the distribution, trading will
continue until all Shares needed have been acquired. The timely receipt by the
Administrator of a signed Authorization Form will entitle employee participants
to the right to purchase
-2-
<PAGE>
additional Shares at a purchase price equal to 95% of the Share Price on each
quarterly dividend payment date. Such quarterly dividend payment dates will
normally be January 10, April 10, July 10 and October 10.
(d) The number of Shares to be purchased will depend on the amount of
the participant's dividends being reinvested, optional cash payments, payroll
deductions, or combination thereof, and the Share Price. Each participant's
account will be credited with that number of Shares, including fractions
computed to four decimal places, equal to the total amount to be invested
divided by the Share Price.
(e) If the Authorization Form is received by the Administrator at
least seventy-two (72) hours before the record date preceding a dividend payment
date (the record date is the 25th day of the month preceding each dividend
payment date), that dividend, any optional cash payments and any payroll
deductions received at least seventy-two (72) hours before said record date will
be used to purchase additional Shares as of the dividend payment date. If the
Authorization Form is received by the Administrator after the record date
established for a particular dividend, then the reinvestment of dividends, the
investment of any optional cash payments and any payroll deductions will not
begin until the dividend payment date following the next record date.
(f) Employee participants may make optional cash payments by
executing a payroll deduction authorization prior to the first day of any month,
or by sending cash directly to the Administrator. The payroll deduction
authorization authorizes the Company to make payroll deductions in increments of
$5.00, but not less than $10.00 per pay period nor more than $1,000.00 per
month, determined by the employee to be used for the purchase of Shares pursuant
to the Plan. Employees may, at any time upon thirty (30) days written notice to
the Company, increase or decrease within the above limits the amount of such
deductions or terminate such deductions. However, the total of payroll
deductions and additional optional cash payments by employee participants may
not exceed $3,000.00 in any calendar quarter.
(g) If Shares are registered in names other than the beneficial owner
(with the exception of trusts, estates, custodianships, guardianships and the
like), the beneficial owner will be required to become a holder of record before
participating. A stockholder who has Shares registered in more than one name
has the option of participating with the Shares registered in one or more of the
names, but he may not have less than all of the dividends reinvested for the
Shares registered in any one name.
-3-
<PAGE>
(h) If an employee participant retires, dies, or leaves the
employment of the Company, or its subsidiaries, the Company will, so long as the
employee has at least one full share credited to his Plan account, continue to
reinvest the dividends on the Shares credited to the employee's account under
the Plan until otherwise notified. Such individual shall thereafter be regarded
as a stockholder and not as an employee for purposes of the purchase discount
provided in paragraph 1 above. If less than one full Share is credited to such
employee's Plan account, the Administrator reserves the right to close the
account, sell the fractional share, and send to the participant the liquidation
value of the fractional shares, less any applicable brokerage commissions, and
the account will be closed.
(i) Cash dividends declared on all additional Shares purchased under
the Plan will be automatically reinvested to purchase additional Shares.
Fractions of Shares, as well as full Shares, will be credited to participants'
accounts. In addition, cash dividends in respect of such fractions, as well as
full Shares, will be credited to participants' accounts.
(j) The sale of Shares on each dividend payment date is contingent
upon compliance by the Company will all legal and regulatory requirements at
such date.
(k) No interest will be paid on funds received by the Administrator
prior to investment.
5. Administration.
(a) Effective June 15, 1993, Mellon Securities Trust Company
("Administrator") will assume administration of the Plan, will maintain records
of participation and send periodic statements of each account under the Plan.
Shares issued under the Plan will be registered by the Administrator in the
nominee name, Penbrad & Company, as agent for each participant in the Plan. The
Shares will be held by such agent for participants.
(b) Administrator, in administering the Plan, will not be liable for
any act done in good faith or for any good faith omission to act, including
without limitation, any claim of liability arising out of failure to terminate a
participant's account upon such participant's death prior to receipt of notice
in writing of such death and withdrawal from the Plan.
6. Costs.
Participants will not pay any brokerage commission or service charge
in connection with purchases under the Plan. All costs of administration of the
Plan will be paid by the Company.
-4-
<PAGE>
7. Reports to Participants.
As soon as practicable after each purchase of Shares, a participant
will receive a statement of account. These statements are a participant's
continuing record of the cost of the Shares purchased and should be retained for
tax purposes. In addition, each participant will receive copies of the
communications sent to all stockholders, including the Company's quarterly and
annual reports, notice of annual and special meetings, proxy statements, and
income tax information for reporting dividends paid.
8. Certificates for Shares.
(a) Normally, certificates for Shares purchased under the Plan will
not be issued to participants. The number of Shares credited to an account
under the Plan will be shown on a participant's quarterly statement of account.
(b) Certificates for any number of full Shares credited to an account
under the Plan will be issued upon written request of a participant who wishes
to remain in the Plan. This request should be mailed to the Administrator. Any
remaining full and fractional Shares will continue to be credited to the
participant's account. Certificates for fractional Shares will not be issued
under any circumstances.
(c) Accounts in the Plan will be maintained in the participant's name
as shown on the Company's stockholder records or employee records of the Company
or its subsidiaries at the time the participant enters the Plan. Certificates
for full Shares will be similarly registered when issued.
9. Rights Not Transferable.
Rights under this Plan are not transferable by a participant other
than by will or the laws of descent and distribution and are exercisable during
a participant's lifetime only by the participant. Shares credited to the
account of a participant may not be pledged as collateral for indebtedness.
10. Withdrawal.
(a) A participant may withdraw from the Plan at any time by notifying
the Administrator in writing of the desire to withdraw. In the event of death
of a participant, such notification shall be made by the participant's legal
representative. When a participant withdraws from the Plan or upon termination
or suspension of the Plan by the Company, either (i) certificates for whole
Shares credited to his account under the Plan will be issued and any fractional
Share shall be sold,and the Administrator shall send the liquidation value of
the fractional shares, less any applicable brokerage commissions, to the
participant; or
-5-
<PAGE>
(ii) the participant may request that all of his Shares, both whole and
fractional, credited to his account, be sold, in which event the participant
will receive the proceeds of the sale, less any brokerage commission and
applicable service fees.
(b) A participant may stop his reinvestment of dividends on a
dividend payment date if his request to withdraw is received not later than the
record date preceding such dividend payment date. Any dividend or optional cash
payment received for which reinvestment has been stopped by withdrawal from the
Plan will be refunded by the Administrator. All subsequent dividends will be
sent to the participant unless the participant reenters the Plan.
(c) A participant may reenter the Plan by completing and signing a
new Authorization Form. However, the Administrator reserves the right to reject
any Authorization Form from a previous participant on grounds of excessive
withdrawal and reentry.
(d) If a participant disposes of all Shares registered in his name
(i.e., those for which the participant holds certificates), the Administrator
will, so long as the participant has at least one full Share credited to his
Plan account, continue to reinvest the dividends on the Shares credited to the
participant's account under the Plan until the participant notifies the
Administrator in writing of a desire to withdraw.
11. Changes in Stock and Voting Rights.
(a) Any stock dividends or split shares distributed by the Company on
Shares credited to the account of a participant under the Plan will be added to
the participant's account. Stock dividends or split shares distributed on any
shares registered in the name of the participant will be mailed directly to the
stockholder in the same manner as to stockholders who are not participating in
the Plan.
(b) For each meeting of stockholders, the participant will receive a
proxy which will enable the participant to vote Shares registered in his name as
well as Shares credited to his Plan account.
12. Tax Consequences.
(a) It is intended that the continuing offer to employees of the
Company and its subsidiaries of the opportunity to purchase Shares from dividend
payment date to dividend payment date pursuant to the Plan shall constitute
options issued pursuant to an "employee stock purchase plan" within the meaning
of
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<PAGE>
Section 423 of the Internal Revenue Code of 1954, as amended. The income tax
consequences of participation in the Plan by such employees will be governed
accordingly.
(b) In the case of foreign stockholders who elect to have their
dividends reinvested and whose dividends are subject to United States income tax
withholding, the Company will invest in shares of Common Stock an amount equal
to the dividends of such foreign participants before the deduction of taxes.
Such foreign participants will be billed quarterly for an amount equal to the
tax required to be withheld.
13. Amendment or Termination of the Plan.
(a) The Board of Directors of the Company may, insofar as permitted
by law, from time to time, suspend or terminate the Plan or revise or amend it
in any respect whatsoever except that, without the approval of the stockholders,
no such revision or amendment shall decrease the number of shares subject to the
Plan or permit participation in this Plan by persons other than common
stockholders of the Company and employees of the Company and its subsidiaries.
Further, the Plan may not, without the approval of the stockholders, be amended
in any manner that will cause it to fail to meet the requirements of an
"employee stock purchase plan" as defined in Section 423 of the Internal Revenue
Code of 1986, as amended.
(b) In the event that at any time the market value for Shares offered
for purchase under the Plan shall be determined by the Company to be less than
80% of the consolidated book value per Share as of the previous December 31
audited financial statements, the Board of Directors may elect to suspend or
terminate the Plan.
14. Addresses for Notices and Correspondence.
Notices required by the Plan shall be addressed to the Administrator
as follows:
Mellon Securities Trust Company
Reinvestment Services
P.O. Box 750
Pittsburgh, PA 15230
Correspondence may be addressed to the Administrator at the above
address. All participants in the Plan and other interested parties will be
notified or any change in such address specified above.
15. Effective Date of Plan
The Plan became effective March 31, 1981, with a first investment date
of April 10, 1981.
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<PAGE>
[Letterhead of Woods & Aitkin]
Exhibit 5.1
April 29, 1994
Lincoln Telecommunications Company
1440 M Street
Lincoln, NE 68508
Gentlemen:
We have acted as counsel for Lincoln Telecommunications Company, a
Nebraska corporation (the "Company"), with respect to the preparation of a
Registration Statement on Form S-3 (the "Registration Statement"), including
the prospectus constituting a part thereof (the "Prospectus"), to be filed by
the Company with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the proposed sale
by the Company of up to 150,000 shares of Common Stock, $.25 par value, of the
Company (the "Common Stock"), and the associated rights to purchase shares of
Common Stock accompanying each share of Common Stock (the "Rights"), in the
manner set forth in the Registration Statement and Prospectus, and pursuant to
the Employee and Stockholder Dividend Reinvestment and Stock Purchase Plan (the
"Plan"). The terms of the Rights are set forth in that certain Rights Agreement
dated as of June 21, 1989, by and between the Company and Mellon Securities
Trust Company, as rights agent, as amended by amendments No. 1 and No. 2, dated
September 7, 1989 and June 15, 1993, respectively (the "Rights Agreement").
In connection with our representation, we have examined: (a) the
Registration Statement, including the Prospectus; (b) the Articles of
Incorporation and By-Laws of the Company, as amended to the date hereof; (c)
the Rights Agreement; and (d) such other proceedings, documents and records as
we have deemed necessary to enable us to render this opinion.
In all such examinations, we have assumed the genuineness of all
signatures, the authenticity of all documents, certificates and instruments
submitted to us as originals and the conformity with the originals of all
documents submitted to us as copies. As to any facts material to the opinions
set forth herein which we did not independently verify, we have relied upon
statements and representations of officers and other representatives of the
Company and on certificates of public officials.
<PAGE>
Lincoln Telecommunications Company
April 29, 1994
Page -2-
Based upon and subject to the foregoing, and subject to the limitations
and qualifications hereinafter set forth, we are of the opinion that:
1. The Company is a corporation in good standing under the Nebraska
Business Corporation Act (the "Act").
2. The 150,000 shares of Common Stock of the Company which are being
registered pursuant to the Registration Statement, when delivered and paid for
in the manner and for the consideration stated in the Prospectus and the Plan,
will be validly issued, fully paid and nonassessable under the Act.
3. The Rights are validly issued under the Act.
This opinion is limited to the matters expressly set forth herein and no
opinion may be inferred or implied beyond the matters so expressly stated. No
opinions are expressed with respect to the effect of any subsequent change in
the laws or facts referred to herein, and we assume no obligation to advise you
of any such change. This opinion expresses only our legal opinion and does not
constitute and should not be relied upon as a guarantee.
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the references to our firm therein. In giving our consent, we
do not thereby admit that we are "experts" within the meaning of Section 11 of
the Securities Act or within the category of persons whose consent is required
by Section 7 of the Securities Act.
Very truly yours,
/s/ Woods & Aitken
WOODS & AITKEN
PMS/pjd
<PAGE>
Exhibit 23.2
ACCOUNTANTS' CONSENT
The Board of Directors of
Lincoln Telecommunications Company:
We consent to the incorporation by reference in the registration statement
on Form S-3 relating to the Employee and Stockholder Dividend Reinvestment and
Stock Purchase Plan of Lincoln Telecommunications Company of our report, dated
February 4, 1994, relating to the consolidated balance sheets of Lincoln
Telecommunications Company and subsidiaries as of December 31, 1993 and 1992,
and related consolidated statements of income, common stock investment and
preferred stock and cash flows and related schedules for each of the years in
the three-year period ended December 31, 1993, which reports appear in the
December 31, 1993 annual report on Form 10-K of Lincoln Telecommunications
Company.
We also consent to the use of our reports incorporated herein by reference
and to the reference to our firm under the heading "Experts" in the Prospectus.
/s/ KPMG Peat Marwick
Lincoln, Nebraska
April 29, 1994
