As filed with the Securities and Exchange Commission on February 15, 1994
Registration No. 33-52117
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LINCOLN TELECOMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)
Nebraska 47-0632436
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
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)
_______________________
Copies to:
Benjamin F. Garmer, III Charles W. Mulaney, Jr.
Foley & Lardner Skadden, Arps, Slate, Meagher
777 East Wisconsin Avenue & Flom
Milwaukee, Wisconsin 53202 333 West Wacker Drive
(414) 271-2400 Chicago, Illinois 60606
(312) 407-0700
_______________________
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this 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. /_/
_______________________
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, please check the following
box. /_/
_______________________
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED FEBRUARY 15, 1994
PROSPECTUS
2,130,000 Shares
LINCOLN TELECOMMUNICATIONS COMPANY
Common Stock
_________________
All of the shares of Common Stock of Lincoln Telecommunications
Company (the "Company") offered hereby are being sold by Sahara
Enterprises, Inc. (the "Selling Stockholder"). See "Selling Stockholder."
The Company will not receive any of the proceeds from the sale of the
shares of Common Stock offered hereby. Concurrently with the sale of the
shares of Common Stock offered hereby, a Company employee benefit trust
(the "Employee Trust") will purchase 250,000 shares of Common Stock from
the Selling Stockholder. See "Sale of Shares to Employee Trust."
The Common Stock is traded on the Nasdaq National Market under the
symbol "LTEC." On February 14, 1994, the last reported sale price of the
Common Stock on the Nasdaq National Market was $18.25 per share. See
"Price Range of Common Stock and Dividends."
____________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public Discount (1) Selling
Stockholder(2)
Per Share . . $ $ $
Total(3) . . . $ $ $
(1) The Company and the Selling Stockholder have agreed to indemnify the
several Underwriters against certain liabilities under the Securities
Act of 1933, as amended. See "Underwriting."
(2) Before deducting offering expenses payable by the Selling Stockholder
estimated at $245,000. In addition, the Company will pay offering
expenses estimated at $30,000.
(3) The Selling Stockholder has granted the Underwriters a 30-day option
to purchase up to 319,500 additional shares of Common Stock solely to
cover over-allotments, if any. If such option is exercised in full,
the total Price to Public, Underwriting Discount and Proceeds to
Selling Stockholder will be $ , $ , and $ ,
respectively. See "Underwriting."
________________
The shares of Common Stock are offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, and
subject to approval of certain legal matters by counsel for the
Underwriters and certain other conditions. The Underwriters reserve the
right to withdraw, cancel or modify such offer and to reject orders in
whole or in part. It is expected that delivery of the shares of Common
Stock will be made in New York, New York on or about , 1994.
________________
Merrill Lynch & Co. Dain Bosworth
Incorporated
________________
The date of this Prospectus is , 1994.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company under
the Exchange Act can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at
Seven World Trade Center, 13th Floor, New York New York 10048, and
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material also may be obtained from the Public
Reference Section of the Commission, Washington, D.C. 20549, at prescribed
rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement which
may be inspected and copied in the manner and at the sources described
above. 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1992 (the "1992 10-K").
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1993, June 30, 1993 and September 30, 1993.
3. The Company's Current Report on Form 8-K dated January 21, 1994.
4. The Company's Current Report on Form 8-K dated February 1, 1994.
5. The Company's Current Report on Form 8-K dated February 14, 1994.
6. The Company's Registration Statement on Form 8-A under the
Exchange Act with respect to the Common Stock Purchase Rights, including
any amendment or reports filed for the purpose of updating the description
of the Rights contained herein.
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 of such
documents. Any statement contained in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the
documents that have been or may be incorporated herein by reference (other
than exhibits thereto, unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates).
Requests should be directed to Lincoln Telecommunications Company, 1440 M
Street, Lincoln, Nebraska 68508, Attention: Michael J. Tavlin, Vice
President-Treasurer (telephone: (402) 474-2211).
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements appearing elsewhere, or
incorporated by reference, in this Prospectus. All information contained
in this Prospectus assumes, unless otherwise indicated, that the
Underwriters' over-allotment option is not exercised. The number of
shares and per share amounts set forth in this Prospectus are adjusted to
reflect the Company's 100% stock dividend paid on January 6, 1994. Unless
the context otherwise requires, the term "Company" as used in this
Prospectus refers to Lincoln Telecommunications Company and all of its
subsidiaries.
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 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 "Business - Regulatory Environment."
The Company is a Nebraska corporation with its principal
executive offices at 1440 M Street, Lincoln, Nebraska, telephone number
(402) 474-2211.
The Offering
Common Stock Offered by the 2,130,000 shares
Selling Stockholder . . . . . . .
Common Stock Outstanding . . . . 32,595,350 shares (1)
Nasdaq National Market Symbol . . LTEC
Use of Proceeds . . . . . . . . . The Company will not
receive any of the
proceeds from the sale
of the shares of Common
Stock offered hereby.
________________
(1) As of December 31, 1993. Does not include options to purchase
110,650 shares of Common Stock under the Company's 1989 Stock and
Incentive Plan which were outstanding and unexercised as of such
date.
<PAGE>
<TABLE>
Summary Financial Information
<CAPTION>
1989 1990 1991 1992 1993
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Earnings Statement Data:
Total operating revenues . . $161,954 $164,665 $168,093 $175,368 $184,350
Operating income . . . . . . 41,384 41,064 49,561 51,428 56,825
Earnings before cumulative
effect of change in
accounting principle . . . . 25,046 24,696 27,820 29,609 33,191
Cumulative effect of change
in accounting principle . . - - - - (23,166)(1)
Net earnings . . . . . . . . 25,046 24,696 27,820 29,609 10,025
Per share of Common Stock:
Earnings before cumulative
effect of change in
accounting principle . . . .74 .73 .83 .90 1.01
Net earnings . . . . . . . .74 .73 .83 .90 .30
Dividends declared . . . . . .37 .37 .40 .43 .49
<CAPTION>
Balance Sheet Data: December 31,
1993
<S> <C>
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $395,279
Capitalization:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,000
5% redeemable preferred stock . . . . . . . . . . . . . . . . . . . . . . . . 4,499
Common stock investment . . . . . . . . . . . . . . . . . . . . . . . . . . . 184,032
--------
Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . $232,531(2)
========
________________
<FN>
(1) Effective January 1, 1993, the Company adopted FASB No. 106 and recorded the
costs (net of income taxes) of post-retirement benefits other than pensions.
(2) Does not reflect the adjustment for the sale of 250,000 shares of Common
Stock by the Selling Stockholder to the Employee Trust. See
"Capitalization."
</TABLE>
<PAGE>
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.
Sales Prices Cash
High Low Dividends
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 16.00 -
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 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 of the net proceeds from the sale of
shares of Common Stock offered hereby.
CAPITALIZATION
The following table sets forth the short-term debt and capitalization
of the Company as of December 31, 1993 and as adjusted to give effect to
the sale of 250,000 shares of Common Stock by the Selling Stockholder to
the Employee Trust. See "Sale of Shares to Employee Trust."
December 31, 1993
Historical As Adjusted
(in thousands)
Short-term debt . . . . . . . . . . . . $ 41,500 $ 41,500
======= ========
Long-term debt (1) . . . . . . . . . . $ 44,000 $ 44,000
Stockholders' equity:
5% redeemable preferred stock(2) . 4,499 4,499
Common stock investment . . . . . . 184,032 184,032
Unearned Employee Trust Common
Stock . . . . . . . . . . . . . . - (4,471)(3)
--------- -------
Total stockholders' equity . 188,531 184,060
------- -------
Total capitalization . . . $232,531 $228,060
======= =======
____________________
(1) See Note 6 to Company's consolidated financial statements
incorporated by reference herein for additional information
concerning the Company's long-term debt.
(2) LT&T is the issuer of the 5% redeemable preferred stock, which
preferred stock is publicly-held.
(3) Assumes the sale of Common Stock by the Selling Stockholder to the
Employee Trust at a price of
$17.885 per Share (assuming a public offering price of $18.25). See
"Sale of Shares to Employee Trust."
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents selected financial data for the Company,
which has been derived from, and is qualified by reference to, the
Company's consolidated financial statements and should be read in
connection with the consolidated financial statements, related notes and
other information incorporated by reference herein.
<TABLE>
<CAPTION>
Year ended
December 31,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Earnings Statement Data:
Revenues and Sales:
Telephone operations . . . . . $142,872 $146,162 $149,312 $156,760 $163,914
------- ------- ------- ------- -------
Diversified operations . . . . 25,806 25,799 26,902 26,751 28,054
Intercompany revenues . . . . . (6,724) (7,296) (8,121) (8,143) (7,618)
------ ------ ------ ------ ------
Total revenues and sales . 161,954 164,665 168,093 175,368 184,350
------ ------ ------ ------ ------
Operating Expenses:
Depreciation . . . . . . . . 27,656 28,692 28,628 29,626 28,596
Cost of goods and services . 18,342 18,149 18,806 18,103 17,709
Intercompany expenses . . . . (6,724) (7,296) (8,121) (8,143) (7,618)
Other . . . . . . . . . . . . 81,296 84,056 79,219 84,354 88,838
------- ------- ------- ------- -------
Total operating expenses . 120,570 123,601 118,532 123,940 127,525
------- ------- ------- ------- -------
Operating income . . . . . . . 41,384 41,064 49,561 51,428 56.825
Net non-operating expense 3,943(1) 4,497 4,904 5,718 4,016
Income taxes . . . . . . . . . 12,395 11,871 16,837 16,101 19,618
------ ------- ------ ------ ------
Earnings before cumulative
effect of change in
accounting principle . . . . 25,046 24,696 27,820 29,609 33,191
Cumulative effect
of change in accounting
principle . . . . . . . . . . - - - - (23,166)(2)
------ ------- ------- ------- ------
Net earnings . . . . . . . . . 25,046 24,696 27,820 29,609 10,025
Preferred dividends . . . . . . 543 506 469 338 225
------ ------ ------ ------- ------
Earnings available for
Common Stock . . . . . . . . $ 24,503 $ 24,190 $ 27,351 $ 29,271 $ 9,800
======= ======== ======== ======= =======
Per Share of Common Stock:
Net earnings before
cumulative effect of
change in accounting
principle . . . . . . . . . $ .74 $ .73 $ .83 $ .90 $ 1.01
Net earnings . . . . . . . . .74 .73 .83 .90 .30
Dividends declared . . . . . $ .37 $ .37 $ .40 $ .43 $ .49
Weighted average
shares outstanding . . . . . 32,980 32,976 32,879 32,672 32,548
__________
<FN>
(1) Includes $400,000 of income (net of income taxes) in 1988 and $59,000
of loss (net of income taxes) in 1989 relating to discontinued
operations.
(2) Effective January 1, 1993, the Company adopted FASB No. 106 and
recorded the costs (net of income taxes) of accumulated post-
retirement benefits other than pensions.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31,
1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Assets:
Net property and
equipment . . . . . . . $244,763 $250,275 $253,368 $249,565 $246,104
Current assets . . . . . 51,886 90,476 63,452 68,659 81,751
Other assets . . . . . . 8,259 7,344 44,156 50,892 67,424
------- ------- ------- ------- -------
Total assets . . . . . $304,908 $348,095 $360,976 $369,116 $395,279
======= ======= ======= ======= =======
Capitalization and
Liabilities:
Capitalization:
Long-term debt . . . . $ 55,075 $ 85,794 $ 80,325 $ 73,550 $ 44,000
Preferred stock . . . . 8,179 7,699 7,219 4,499 4,499
Common stock investment
153,420 164,815 177,911 189,435 184,032
------- ------- ------- ------- -------
Total capitalization . 216,674 258,308 265,455 267,484 232,531
Current liabilities . . . 38,850 41,568 50,353 53,760 74,385
Deferred credits . . . . 49,384 48,219 45,168 47,872 88,363
------- ------- ------- ------- -------
Total capitalization
and liabilities . . . . $304,908 $348,095 $360,976 $369,116 $395,279
======= ======= ======= ======== =======
</TABLE>
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.
<PAGE>
BUSINESS
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 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 "Business - Regulatory Environment."
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:
<TABLE>
<CAPTION>
Access Lines in Service(1)
Employees Per
December Percent 10,000
31 Residential Business Total Increase Access Lines (2)
<C> <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 concluded a rate restructuring program in which basic
rates were increased to the current levels to offset rate reductions in
intraLATA long distance calling. 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 over $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 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%.
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 an 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 ten RSAs in
Nebraska. The following table sets forth certain information about the
Company's cellular operations.
<TABLE>
<CAPTION>
Cellular Operations
Pops December 31, 1993
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 100.0 220,126 220,116 12,845 12,845
Omaha MSA December 31, 1991 27.6(3) 614,731(6) 169,604 21,635 5,971
Nebraska RSAs November 25, 1989 13.1 825,169(7) 115,176 (8) (8)
Iowa RSA 1 June 30, 1989 11.0(4) 61,965(7) 6,816 (8) (8)
___________________
<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 90 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.
(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) According to estimates available to the Company, approximately 90% of
these pops are covered by the networks of these systems.
(8) 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 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 Nebraska Public Service Commission
("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 inter-
exchange 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 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. The Company cannot
provide any assurance that the current regulatory environment in Nebraska
will continue without change in the future or make any predictions as to
what impact any change may have on the Company's operations.
The Federal Communication Commission (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.
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 approved by the FCC. It is
possible that there may be competition for these FCC licenses upon
expiration. However, incumbent cellular providers generally retain their
FCC licenses upon a demonstration of substantial compliance with FCC
regulations and substantial service to the public. 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.
<PAGE>
MANAGEMENT
The following table sets forth certain information about the
executive officers of the Company.
Name Age Position
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 and Chief
Financial Officer
Michael J. Tavlin . 47 Vice President-Treasurer and
Secretary
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.
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 and 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.
<PAGE>
SELLING STOCKHOLDER
All of the shares of Common Stock offered hereby are being sold by
the Selling Stockholder. At the date of this Prospectus, the Selling
Stockholder beneficially owned 5,412,976 shares of Common Stock
representing approximately 16.6% of the outstanding Common Stock as of
December 31, 1993. Immediately after the sale of the shares of Common
Stock offered hereby and the sale of shares to the Employee Trust (but
without giving effect to exercise of the Underwriters' over-allotment
option), the Selling Stockholder will beneficially own 3,032,976 shares of
Common Stock, representing approximately 9.3% of the outstanding shares of
Common Stock.
Charles N. Wheatley, the President, Chief Executive Officer and a
director of the Selling Stockholder, and George Kelm, the Chairman and a
director of the Selling Stockholder, are directors of the Company. Thomas
C. Woods, III, the Chairman of the Board of the Company, is a director of
the Selling Stockholder. The Selling Stockholder is a holding company
with a portfolio of investments which is controlled by descendants of the
Company's founder, including Thomas C. Woods, III.
SALE OF SHARES TO EMPLOYEE TRUST
Concurrently with the sale of the shares offered hereby, the Selling
Stockholder will sell 250,000 shares of Common Stock to the Employee Trust
at a price equal to the public offering price less a discount of 2% of
such price. Either the ESOP account in the Company's Savings and Stock
Ownership Plan (the "ESOP") or a newly-organized, irrevocable grantor
trust (the "Grantor Trust") will purchase these shares.
If the ESOP is the purchaser, it is anticipated that the ESOP will
either obtain the funds to purchase the shares through a loan, guaranteed
by the Company, from an outside financing source or through a direct loan
from the Company. The ESOP is a tax-qualified Company employee benefit
plan in which approximately 587 employees were participating as of
December 31, 1993. As principal and interest are paid on the loan (which
is anticipated to occur through contributions to the ESOP by the Company
and cash dividends paid on the shares of Common Stock held by the ESOP),
the shares purchased will be allocated to accounts of employees.
Allocated shares are voted as directed by the employee to whose account
the shares are allocated. Shares which have not been allocated will be
voted by the Trustee of the ESOP in the same manner as the majority of the
allocated shares are voted unless the Trustee deems such vote to be
imprudent. The ESOP Trustee is selected by the Company and currently is
National Bank of Commerce Trust and Savings Association, Lincoln,
Nebraska.
If the Grantor Trust is the purchaser, it is anticipated that the
Grantor Trust will also obtain the funds to purchase the shares through a
loan, guaranteed by the Company, from an outside financing source or
through a direct loan from the Company. The assets of the Grantor Trust
(which could include cash if the shares of Common Stock to be purchased
from the Selling Shareholder are later sold) will be applied to fund one
or more Company employee benefit programs at such times and in such
amounts as the Company determines. Common Stock held by the Grantor Trust
will be either voted as directed by employees eligible to participate in
these benefit programs or voted by the trustee of the Grantor Trust,
unless such trustee is considered to be controlled by the Company for
purposes of the Nebraska Business Corporation Act, in which case such
Common Stock will not be voted.
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.
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.
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.
UNDERWRITING
The Underwriters (the "Underwriters") named below, acting through
their representatives, Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Dain Bosworth Incorporated (the "Representatives"), have severally
agreed, subject to the terms and conditions of a Purchase Agreement with
the Company and the Selling Stockholder (the "Purchase Agreement"), to
purchase from the Selling Stockholder the number of shares of Common Stock
set forth below opposite their respective names. The Underwriters are
committed to purchase all of the shares of Common Stock if any are
purchased. Under certain circumstances, the commitments of non-defaulting
Underwriters may be increased as set forth in the Purchase Agreement.
Number of
Underwriter Shares
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . .
Dain Bosworth Incorporated . . . . . . . . . . .
-----------
Total . . . . . . . . . . . . . . . . . 2,130,000
===========
The Representatives have advised the Company and the Selling Stockholder
that they propose initially to offer the shares of Common Stock to the
public at the public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers
may reallow, a discount not in excess of $ per share on sales to
certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
The Selling Stockholder has granted the Underwriters an option,
exercisable within 30 days after the date of this Prospectus, to purchase
up to 319,500 additional shares of Common Stock to cover over-allotments,
if any, at the initial public offering price, less the underwriting
discount. If the Underwriters exercise this option, each of the
Underwriters will have a firm commitment, subject to certain conditions,
to purchase approximately the same percentage of such additional shares
which the number of shares set forth next to such Underwriter's name in
the preceding table bears to the 2,130,000 shares of Common Stock
initially offered hereby.
Without the Representatives' prior written consent, the Selling
Stockholder has agreed not to sell or otherwise dispose of any shares of
Common Stock for a period of 180 days after the date of this Prospectus.
Without the Representatives' prior written consent, the Company has agreed
not to sell or otherwise dispose of any shares of Common Stock for a
period of 180 days after the date of this Prospectus, other than the
shares of Common Stock to be issued upon the exercise of the Rights or
pursuant to the Company's current employee benefit plans.
The Company and the Selling Stockholder have severally agreed to
indemnify the Underwriters against certain liabilities which may be
incurred in connection with the offering of the Common Stock, including
liabilities under the Securities Act or to contribute to payments that the
Underwriters may be required to make in respect thereof.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed on for
the Company by Foley & Lardner, Milwaukee, Wisconsin. Certain legal
matters will be passed on for the Underwriters by Skadden, Arps, Slate,
Meagher & Flom, Chicago, Illinois. Foley & Lardner and Skadden, Arps,
Slate, Meagher & Flom will rely on Woods & Aitken, Lincoln, Nebraska, with
respect to matters of Nebraska corporate law. J. Taylor Greer, a member
of Woods & Aitken, is a director of the Company. Gilbert G. Lundstrom, a
member of Woods & Aitken until January 1, 1994 when he left Woods & Aitken
to become president of a financial institution, is a director of the
Selling Stockholder. John H. Ziegenbein, who is of counsel to Woods &
Aitken, is the spouse of a director of the Company. Attorneys of Woods &
Aitken participating in matters relating to the offering beneficially own
33,452 shares of Common Stock (excluding shares beneficially owned by the
Selling Stockholder and that may be deemed to be owned by Mr. Lundstrom
because he is a director of the Selling Stockholder).
EXPERTS
The consolidated financial statements and schedules included in the
Company's 1992 Form 10-K and in its Form 8-K filed February 14, 1994,
incorporated by reference in this Prospectus and in the Registration
Statement, have been included herein in reliance on the reports dated
February 5, 1993 and February 4, 1994 of KPMG Peat Marwick, independent
auditors, appearing in the 1992 Form 10-K and the Form 8-K filed February
14, 1994, respectively, given on the authority of said firm as experts in
auditing and accounting.
<PAGE>
No dealer, salesperson or other
individual has been authorized to
give any information or make any 2,130,000 Shares
representations not contained or
incorporated by reference in this
Prospectus in connection with the
offering covered by this Prospectus. LINCOLN
If given or made, such information or TELECOMMUNICATIONS
representations must not be relied COMPANY
upon as having been authorized by the
Company, the Selling Stockholder or
the Underwriters. This Prospectus
does not constitute an offer to sell,
or solicitation of an offer to buy, Common Stock
the Common Stock in any jurisdiction
where, or to any person to whom, it
is unlawful to make such offer or
solicitation. Neither the delivery
of this Prospectus nor any sale made
hereunder shall, under any
circumstances, create any implication
that there has not been any change in
the facts set forth in this
Prospectus or in the affairs of the
Company since the date hereof
TABLE OF CONTENTS
Page PROSPECTUS
Available Information . . . . 2
Incorporation of Certain
Documents by Reference . . 2 Merrill Lynch & Co.
Prospectus Summary . . . . . 4
Price Range of Common Stock Dain Bosworth
and Dividends . . . . . . . 6 Incorporated
Use of Proceeds . . . . . . . 7
Capitalization . . . . . . . 7
Selected Consolidated
Financial Data . . . . . . 8 , 1994
Recent Operating Results . . 9
Business . . . . . . . . . . 10
Management . . . . . . . . . 15
Selling Stockholder . . . . . 16
Sale of Shares to
Employee Trust . . . . . . 16
Description of Capital
Stock . . . . . . . . . . . 16
Underwriting . . . . . . . . 18
Legal Matters . . . . . . . . 19
Experts . . . . . . . . . . . 20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The Selling Stockholder and the Company have agreed that the Selling
Stockholder will bear the first $200,000 of out-of-pocket expenses
incurred by the Company in connection with the distribution of the
securities registered hereby and the Company will bear the remainder of
such expenses. In addition, the Selling Stockholder will bear all
expenses incurred by it in connection with such distribution.
The following table sets forth the estimated expenses of the Company
and the Selling Stockholder in connection with the distribution of the
securities being registered hereby. Of such expenses, $245,000 will be
borne by the Selling Stockholder and the remainder will be borne by the
Company.
Securities and Exchange Commission
registration fee . . . . . . . . . . . . . . $ 15,415
Printing expenses . . . . . . . . . . . . . . 55,000
Accounting fees and expenses . . . . . . . . . 15,000
Legal fees and expenses . . . . . . . . . . . 175,000
Blue Sky fees and expenses . . . . . . . . . . 10,000
Miscellaneous expenses . . . . . . . . . . . . 5,269
--------
Total . . . . . . . . . . . . . . . . . . . $275,684
========
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 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.
The exhibits filed herewith are as specified on the Exhibit Index
included herein.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the 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.
(b) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains
a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offer
of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised 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. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<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 of 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, and State of Nebraska,
on this 14th day of February, 1994.
LINCOLN TELECOMMUNICATIONS COMPANY
By: 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 signed below on February 14, 1994 by the
following persons in the capacities and on the dates indicated.
Signature Title
President and Chief
FRANK H. HILSABECK Executive Officer and
Frank H. Hilsabeck Director (Principal
Executive Officer)
ROBERT L. TYLER Senior Vice President
Robert L. Tyler and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
DUANE W. ACKLIE* Director
WILLIAM W. COOK, JR.* Director
TERRY L. FAIRFIELD* Director
JAMES E. GEIST* Director
J. TAYLOR GREER* Director
JOHN HAESSLER* Director
CHARLES R. HERMES* Director
GEORGE KELM* Director
DONALD H. PEGLER, JR.* Director
PAUL C. SCHORR, III* Director
WILLIAM C. SMITH* Director
JAMES W. STRAND* Director
CHARLES N. WHEATLEY* Director
THOMAS C. WOODS, III* Director
LYN WALLIN ZIEGENBEIN* Director
*By: FRANK H. HILSABECK
Frank H. Hilsabeck
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Sequential
Exhibit Page
Number Document Description Number
(1) Form of Purchase Agreement *
(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. *
(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.
(5.1) Opinion of Foley & Lardner (to be filed by
amendment).
(24.1) Consent of Foley & Lardner (to be included in
Exhibit (5.1)).
(24.2) Consent of KPMG Peat Marwick
(25) Powers of Attorney *
________________________
* Previously filed with the Registration Statement or incorporated by
reference herein.
EXHIBIT 24.2
ACCOUNTANTS' CONSENT
The Board of Directors
Lincoln Telecommunications Company:
We consent to the incorporation by reference in the registration statement
on Form S-3 of Lincoln Telecommunications Company of (i) our report, dated
February 5, 1993, relating to the consolidated balance sheets of Lincoln
Telecommunications Company and subsidiaries as of December 31, 1992 and
1991, and related consolidated statements of earnings, common stock
investment and preferred stock and cash flows and relating to the
schedules to Form 10-K for each of the years in the three-year period
ended December 31, 1992, which reports appear in the December 31, 1992
annual report on Form 10-K of Lincoln Telecommunications Company; and (ii)
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
earnings, common stock investment and preferred stock and cash flows for
each of the years in the three-year period ended December 31, 1993, which
reports appear in the Current Report on Form 8-K of Lincoln
Telecommunications Company, filed with the Securities and Exchange
Commission on February 14, 1994.
We also consent to the reference to our Firm under the heading "Experts"
in the registration statement.
February 14, 1994 KPMG PEAT MARWICK
Lincoln, Nebraska