<PAGE> 1
===========================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ALIANT COMMUNICATIONS INC.
(Name of Registrant as Specified In Its Charter)
ALIANT COMMUNICATIONS INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
===========================================================================
<PAGE> 2
Aliant Communications Inc.
1440 M Street
P.O. Box 81309
Lincoln, NE 68501-1309
[ALIANT COMMUNICATIONS LOGO]
March 21, 1997
To Our Stockholders:
The Board of Directors joins me in extending to you a cordial invitation to
attend the 1997 Annual Meeting of Stockholders. The meeting will be held
at The Cornhusker Hotel in Lincoln, Nebraska, at 10:30 a.m. on Wednesday,
April 23, 1997.
In addition to voting on the matters described in this Proxy Statement, we
will review the Corporation's 1996 business results and discuss our plans
for 1997 and beyond. There will be an opportunity to discuss matters of
interest to you as a stockholder.
We hope many Aliant Communications Inc. stockholders will find it
convenient to be present at the meeting, and we look forward to greeting
those personally able to attend. It is important that your shares be
represented and voted whether or not you plan to be present. THEREFORE,
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, PLEASE COMPLETE, SIGN, AND
PROMPTLY RETURN THE ENCLOSED PROXY IN THE POSTAGE-PAID ENVELOPE PROVIDED.
No postage is necessary if the envelope is mailed in the United States.
The prompt return of your proxy will save the expense involved in further
communications. Any stockholder attending the meeting may vote in person
even if a proxy has been returned.
We hope that you will be able to attend the meeting, and we look forward to
seeing you.
Sincerely,
/s/ Thomas C. Woods, III
Thomas C. Woods, III
Chairman of the Board
<PAGE> 3
ALIANT COMMUNICATIONS INC.
1440 M STREET
LINCOLN, NEBRASKA 68508
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 23, 1997
To the Holders of Common Stock of
Aliant Communications Inc.:
Notice is hereby given that the Annual Meeting of Stockholders of
Aliant Communications Inc., a Nebraska corporation (hereinafter the
"Corporation"), will be held at The Cornhusker Hotel, 333 South 13th
Street, Lincoln, Nebraska, 68508, on Wednesday, April 23, 1997, at 10:30
a.m. Central Time for the following purposes:
(1) To elect three (3) directors to hold office for a term
of three years or until their successors are elected
and qualified.
(2) To transact any other business which may be properly
brought before the meeting or any adjournment or
postponement thereof.
The close of business on March 10, 1997, has been fixed as the date of
record for the determination of common stockholders entitled to receive
notice of and to vote at the Annual Meeting and any adjournment or
postponement thereof. Accordingly, only common stockholders of record at
the close of business on that date will be entitled to notice of and to
vote at said meeting. A list of the stockholders entitled to vote at the
Annual Meeting will be open for examination by any stockholder for any
purpose germane to the meeting during ordinary business hours for a period
of ten days prior to the meeting at the offices of the Corporation, which
address is set forth above, and will also be available for examination at
the Annual meeting until its adjournment.
It is important that your shares of stock be represented at this
Annual Meeting. If you do not expect to be present in person, you are
requested by Management to fill in, sign, date and return the proxy in the
accompanying envelope. No postage need be affixed if mailed within the
United States.
By order of the Board of Directors,
Aliant Communications Inc.
/s/ Michael J. Tavlin
Michael J. Tavlin
Secretary
Lincoln, Nebraska
March 21, 1997
YOUR VOTE IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE
MEETING, PLEASE DATE THE ENCLOSED PROXY, WHICH IS SOLICITED BY
THE BOARD OF DIRECTORS, SIGN EXACTLY AS YOUR NAME APPEARS THEREON
AND RETURN IMMEDIATELY.
<PAGE> 4
ALIANT COMMUNICATIONS INC.
1440 M STREET
LINCOLN, NEBRASKA 68508
PROXY STATEMENT
SOLICITATION OF PROXIES
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 1997
This proxy statement is furnished in connection with the solicitation
of proxies on behalf of the Management of the Corporation for use at the
Annual Meeting of Stockholders to be held on April 23, 1997 for the
purposes set forth in the foregoing Notice. This statement and the form of
proxy are being first sent to security holders on or about March 21, 1997.
The accompanying form of proxy, in ballot form, has been prepared at
the direction of the Board of Directors and is sent to you at its request.
The proxies named therein have been designated by Management.
Stockholders who execute proxies retain the right to revoke them at
any time before they are voted by attending the Annual Meeting and voting
in person or by notifying the Secretary of the Corporation at 1440 M
Street, Lincoln, Nebraska, 68508, in writing of such revocation prior to
the Meeting. A proxy, when properly executed, duly returned and not so
revoked, will be voted and, if it contains any specification, will be voted
in accordance therewith; provided the proxy is not mutilated or otherwise
received in such form or at such time as to render it unvotable. If no
choice is specified, the proxy will be voted in accordance with the
recommendations of Management, as stated on the proxy form and in this
proxy statement.
The solicitation will be conducted by mail, except that in a limited
number of instances proxies may be solicited by officers, directors and
regular employees of the Corporation personally, by telephone or by
facsimile. The Corporation does not presently anticipate payment of any
compensation or fees of any nature to anyone for the solicitation of these
proxies, except that the Corporation may pay persons holding shares in
their name, or of their nominees, for the expense of sending proxies and
proxy material to principals. The entire cost of solicitation will be
borne by the Corporation.
Outstanding Shares and Voting Rights
The voting securities of the Corporation consist of 36,445,255 shares
of Common Stock (CUSIP 016090 10 2), issued and outstanding as of March 10,
1997, each of which is entitled to one vote. Only holders of Common Stock
of record at the close of business on March 10, 1997 are entitled to notice
of and to vote with respect to this solicitation.
The following table sets forth information as of March 10, 1997,
regarding the only persons or entities known by the Corporation based on
Schedule 13G filing with the Securities and Exchange Commission, to own
more than 5% of the Corporation's Common Stock. Except as otherwise
indicated below, the entity owns such Common Stock directly with sole
investment and sole voting power.
1
<PAGE> 5
Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership Of Class
---------------- -------------------- --------
Sahara Enterprises, Inc.* 3,176,776 8.7%
Suite 2000
Three First National Plaza
Chicago, Illinois 60602
* Reference should be made to the table and footnotes thereto under
"Security Ownership of Management" on pages 5 and 6, especially the
information concerning beneficial ownership of shares by Messrs. Woods
and Wheatley.
Information is as of February 28, 1997 (except that the percentage has
been calculated based on the number of shares outstanding as of the
record date of this meeting) and is from the Schedule 13G filed with
the Securities and Exchange Commission on January 31, 1997.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Mr. James E. Geist has chosen to retire from the Board and will not
stand for re-election. Pursuant to a policy adopted by the Board of
Directors providing that service on the Board of Directors should cease at
the end of a term in which a member attains age 70, Mr. Donald H. Pegler,
Jr. is retiring from the Board and will not stand for re-election. The
members of the Board of Directors and Management of the Corporation
appreciate Mr. Geist's 24 years of service and Mr. Pegler's 18 years of
service on the Board of Directors.
Three (3) Directors are to be elected at the Annual Meeting for a term
of three years to expire at the Corporation's Annual Meeting in the year
2000 or until their respective successors are elected and qualified.
The persons named in the accompanying form of proxy will vote the
shares represented by all executed proxies which are received for the
election of Management's nominees hereinafter named, unless the authority
to do so is withheld on the proxy. All nominees are presently serving as
Directors of the Corporation, being elected to office by its stockholders.
The holders of a majority of the Common Stock issued and outstanding,
present in person, or represented by proxy, shall constitute a quorum at
the Annual Meeting for the transaction of business. Shares represented by
proxies on which the authority to vote for a director nominee or nominees
is withheld and broker non-votes are counted only for purposes of
determining the presence of a quorum for the transaction of business. If a
quorum is present, the affirmative vote of a plurality of the votes cast by
the shares of Common Stock entitled to vote in the election at the Annual
Meeting shall be necessary for the election of a director nominee. Shares
of Common Stock represented by proxies or ballots on which authority to
vote is withheld and non-votes are not treated as votes for a nominee.
2
<PAGE> 6
At the Annual Meeting, votes will be counted by an employee of
ChaseMellon Shareholder Services, L. L. C., the Corporation's independent
transfer agent and registrar. Such individual will process the votes cast
by the stockholders, will make a report of inspection and count of the
votes cast by the stockholders and will certify the affirmative votes and
votes withheld for the election of each director nominee.
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 the stockholder for as
many persons as there are directors to be elected, or to cumulate such
shares and give one candidate as many votes as the number of directors to
be elected multiplied by the number of the stockholder's shares, or to
distribute said votes among as many directors to be elected as the
stockholder sees fit. Unless directed differently on any executed proxy,
the persons named in the proxy will vote the shares represented by any
proxy equally among those nominees for whom the stockholder has not
withheld authority to vote.
Management has no reason to believe that any nominee will refuse to
act or be unable to accept election; however, in such event and if any
other unforeseen contingency should arise, it is the intention of the
persons named in such accompanying form of proxy to vote for other nominees
selected by the Board in accordance with their best judgment.
The following table sets forth certain information about each
director, including each person's business experience for the past five
years, and presents certain information for all present executive officers
and directors as a group. Information presented is stated as of
February 28, 1997.
NOMINEES FOR TERM TO EXPIRE IN 2000
WILLIAM W. COOK, JR.; Director since 1981; Age 60; Beatrice, Nebraska. Mr.
Cook is Chairman and Chief Executive Officer of Beatrice National Bank &
Trust Co., of Beatrice, Nebraska, and has held such position since 1993.
He was President and Chief Executive Officer of such Company from 1971 to
1997.
CHARLES N. WHEATLEY; Director since 1993; Age 46; Chicago, Illinois. Mr.
Wheatley is President and Chief Executive Officer of Sahara Enterprises,
Inc. (a diversified holding company) and has held such position since July,
1992. He was Vice President and Secretary of Sahara Enterprises, Inc. from
1985 to July 1992. Mr. Wheatley is a Director of Sahara Enterprises, Inc.
THOMAS C. WOODS, III; Director since 1979; Age 51; Lincoln, Nebraska. Mr.
Woods is Chairman of the Board of the Corporation and its principal
subsidiary, Aliant Communications Co. He was the Corporation's Vice
Chairman of the Board-Corporate Relations and Communications from March
1990 to April 1993. Mr. Woods is a director of Sahara Enterprises, Inc.
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<PAGE> 7
PRESENT TERM EXPIRES IN 1998
CHARLES R. HERMES; Director since 1992; Age 54; Hastings, Nebraska. Mr.
Hermes is President of Dutton-Lainson Company (wholesale electrical and
plumbing supplies, and a manufacturer of hardware and marine specialties)
of Hastings, Nebraska, and has held such position since 1974.
FRANK H. HILSABECK; Director since 1990; Age 52; Lincoln, Nebraska. Mr.
Hilsabeck is President and Chief Executive Officer of the Corporation, is
President of its principal subsidiary, Aliant Communications Co., and is
Chairman of the Board of its other subsidiaries, Aliant Cellular Inc.,
Aliant Systems Inc., Aliant Midwest Inc., and Prairie Communications, Inc.
He was the Corporation's President and Chief Operating Officer from March
1991 to May 1993, and was President-Telephone Operations from March 1990 to
March 1991.
PAUL C. SCHORR, III; Director since 1973; Age 60; Lincoln, Nebraska. Mr.
Schorr is President and Chief Executive Officer of ComCor Holding
Incorporated (an electrical contractor specializing in construction
consulting services) of Lincoln, Nebraska, and has held such position since
1989. Mr. Schorr is Chairman and Chief Executive Officer of Austins Steaks
& Saloon, Inc.
JAMES W. STRAND; Director since 1990; Age 50; Lincoln, Nebraska. Mr.
Strand is President-Diversified Operations of the Corporation, Executive
Vice President-Marketing and Customer Services of its principal subsidiary,
Aliant Communications Co. and is President of its subsidiaries, Prairie
Communications, Inc., Aliant Midwest Inc., and is Vice Chairman of the
Board of Aliant Cellular Inc.
PRESENT TERM EXPIRES IN 1999
DUANE W. ACKLIE; Director since 1983; Age 65; Lincoln, Nebraska. Mr.
Acklie is Chairman of Crete Carrier Corporation (a motor carrier) of
Lincoln, Nebraska, and has held such position since 1991. He was President
and Chief Executive Officer of Crete Carrier Corporation from 1971 to 1991.
Mr. Acklie is Chairman of the First National Bank of Lincoln, Nebraska.
TERRY L. FAIRFIELD; Director since 1993; Age 48; Lincoln, Nebraska. Mr.
Fairfield is President and Chief Executive Officer of the University of
Nebraska Foundation, Lincoln, Nebraska. He has held such position since
1987.
JOHN HAESSLER; Director since 1993; Age 60; Lincoln, Nebraska. Mr.
Haessler is President and Chief Executive Officer of Woodmen Accident and
Life Company of Lincoln, Nebraska, and has held such position since 1986.
(See Note 1 below.)
WILLIAM C. SMITH; Director since 1983; Age 63; Lincoln, Nebraska. Mr.
Smith retired in 1989 from the position of Chairman and Chief Executive
Officer of FirsTier Financial, Inc. of Omaha, Nebraska, a position which he
had held since 1988. Mr. Smith is currently self-employed in business and
financial consulting.
4
<PAGE> 8
LYN WALLIN ZIEGENBEIN; Director since 1992; Age 44; Omaha, Nebraska. Mrs.
Ziegenbein is Executive Director of the Peter Kiewit Foundation of Omaha,
Nebraska, and has held such position since 1983. (See Note 2 below.)
Note 1. Woodmen Accident and Life Company is the insurer from which
the Corporation and its principal subsidiary, Aliant Communications Co.,
purchase key man life insurance and employee group life insurance. The
total net premiums paid for such insurance coverages in 1996 were
$1,506,199.00. The Corporation believes that the rates paid for such
insurance are comparable to market rates.
Note 2. The Woods & Aitken law firm, in which Mr. John H. Ziegenbein,
the husband of Mrs. Ziegenbein, is of counsel, provided legal services to
the Corporation and its subsidiaries, Aliant Communications Co., Aliant
Systems Inc., Aliant Cellular Inc., Aliant Midwest Inc., and Prairie
Communications, Inc., during 1996 for which it received fees in the amount
of $205,599.00.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
During 1996, six meetings of the Board of Directors were held. The
Corporation has no standing nominating committee, but does have the
following three standing committees:
Executive Committee
The Executive Committee, in accordance with By-Law 17 of the Corporation's
By-Laws, and subject to the limitations of the Nebraska Business
Corporation Act, possesses and may exercise all powers of the Board of
Directors. The Committee did not meet during 1996. Committee members
during 1996 were: Frank H. Hilsabeck, Chairman; William W. Cook, Jr.; Paul
C. Schorr, III; and William C. Smith.
Audit Committee
The Audit Committee recommends the independent auditors for the Corporation
to the full Board of Directors, reviews the scope of the audit and approves
the fees for the auditors. In addition, the Committee reviews the work of
the Corporation's Internal Audit Section. The Committee met three times
during 1996. Committee members during 1996 were: Charles R. Hermes,
Chairman; Terry L. Fairfield; John Haessler; and Charles N. Wheatley.
Executive Compensation Committee
The Executive Compensation Committee reviews and makes recommendations to
the full Board of Directors for compensation levels of the Corporation's
officers and administers the 1989 Stock and Incentive Plan in which
executive officers and other key employees participate. The Committee met
four times during 1996. Committee members during 1996 were: Duane W.
Acklie, Chairman; Paul C. Schorr, III; Charles N. Wheatley; and Lyn Wallin
Ziegenbein.
5
<PAGE> 9
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is a tabulation indicating as of February 28, 1997,
the shares of the Corporation's Common Stock beneficially owned by each
director and nominee, each of the named executive officers, and directors
and executive officers of the Corporation as a group.
Amount and
Nature of
Name of Beneficial Principal Beneficial Percent of
Owner Position Ownership (Note 1) Class
- - ------------------ -------- ------------------ -----
Thomas C. Woods, III Chairman of the 47,244 Direct 8.9%
Board and Director 3,187,058 Indirect* Note 3
Frank H. Hilsabeck President & Chief 32,403 Direct Note 2
Executive Officer 379 Indirect*
and Director
James W. Strand President-Diversified 16,576 Direct Note 2
Operations and 8,067 Indirect*
Director
Robert L. Tyler Senior Vice 21,403 Direct Note 2
President-Chief 4,073 Indirect*
Financial Officer
Bryan C. Rickertsen Vice President- 16,891 Direct Note 2
Technology 1,580 Indirect*
Kevin J. Wiley Vice President- None Direct Note 2
Diversified Operations 484 Indirect*
Michael J. Tavlin Vice President- 16,577 Direct Note 2
Treasurer and Secretary 2,390 Indirect*
Duane W. Acklie Director 128,172 Direct Note 2
61,950 Indirect*
William W. Cook, Jr. Director 7,233 Direct Note 2
1,102 Indirect*
Terry L. Fairfield Director None Direct Notes
29,456 Indirect* 2 & 4
James E. Geist Director 23,932 Direct Note 2
31,769 Indirect*
John Haessler Director 7,000 Direct Notes
252,432 Indirect* 2 & 4
Charles R. Hermes Director 2,000 Direct Note 2
34,692 Indirect*
Donald H. Pegler, Jr. Director 10,800 Direct Note 2
40,000 Indirect
6
<PAGE> 10
Amount and
Nature of
Name of Beneficial Principal Beneficial Percent of
Owner Position Ownership (Note 1) Class
- - ------------------ -------- ------------------ -----
Paul C. Schorr, III Director 1,867 Direct Note 2
28,370 Indirect*
William C. Smith Director 2,400 Direct Note 2
None Indirect
Charles N. Wheatley Director None Direct 8.8%
3,218,520 Indirect* Note 3
Lyn Wallin Ziegenbein Director 4,000 Direct Note 2
10 Indirect*
All Directors and
Executive Officers
as a Group (18 persons) TOTAL 4,064,054 ** 11.2%
* Includes shares held by individual's spouse, held by the individual in
custodianship for minor children, or held by a corporation with which the
individual is affiliated, and to the extent listed as owned by the director
or named executive officer should not be construed as an admission of
beneficial ownership.
** Total shares and percent of class ownership do not reflect the
cumulative effect of beneficial ownership by Messrs. Woods and Wheatley of
shares held of record by Sahara Enterprises, Inc. (See Note 3 below.)
Note 1. Approximate number of shares of Common Stock owned, directly
or indirectly, as of February 28, 1997. This information has been
furnished by each Director or Officer. Also includes all Short-Term
Incentive awards of Restricted Stock of the Corporation under the 1989
Stock and Incentive Plan (the "Plan") and any Long-Term Incentive awards of
Stock Options under the Plan which are exercisable within 60 days of the
date hereof, in the following amounts: Frank H. Hilsabeck, 17,500;
James W. Strand, 11,900; Robert L. Tyler, 12,300; Bryan C. Rickertsen,
6,400; and Kevin J. Wiley, 0.
Note 2. Owns less than one percent of the Corporation's outstanding
Common Stock.
Note 3. The shares of the Corporation's Common Stock shown as
indirectly owned by Messrs. Woods and Wheatley are held as follows:
3,176,776 shares included in each individual's indirect ownership total
were held of record by Sahara Enterprises, Inc., as of February 28, 1997.
Messrs. Woods and Wheatley each serve as Directors and Mr. Wheatley serves
as President and Chief Executive Officer of Sahara Enterprises, Inc. The
balance of Mr. Woods' indirect ownership is held by his spouse or held in
trust. The balance of Mr. Wheatley's indirect ownership consists of shares
held as trustee of various Woods family trusts.
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<PAGE> 11
Note 4. The shares of the Corporation's Common Stock shown as
indirectly owned by Mr. Fairfield include 29,456 shares held by the
University of Nebraska Foundation of which Mr. Fairfield is President and
Chief Executive Officer. The shares of the Corporation's Common Stock
shown as indirectly owned by Mr. Haessler include 252,432 shares held by
Woodmen Accident and Life Company, a mutual insurance company, of which Mr.
Haessler is President and Chief Executive Officer.
EXECUTIVE COMPENSATION
The Summary Compensation Table appearing below shows the compensation
for the past three years for each of the Corporation's five most highly
compensated executive officers, including the Corporation's Chief Executive
Officer (the "named executive officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
Annual Compensation Awards
------------------- ----------------------
Number of
Securities
Underlying
Name and Restricted Stock All Other
Principal Position Year Salary Bonus Stock Options Compensation
($) ($)(1) ($)(2) (#)(3) ($)(4)
<S> <C> <C> <C> <C> <C> <C>
Frank H. Hilsabeck 1996 300,000 45,001 44,999 17,900 4,500
President & Chief 1995 270,000 61,392 61,368 16,350 4,500
Executive Officer 1994 225,000 52,210 52,190 0 4,500
and Director
James W. Strand 1996 200,000 19,812 19,788 8,950 4,500
President-Diversified 1995 184,800 27,611 27,589 8,400 4,500
Operations and Director 1994 154,000 22,872 22,848 0 4,500
Robert L. Tyler 1996 150,000 13,208 13,192 5,800 4,500
Senior Vice President- 1995 138,000 18,193 18,167 5,450 4,140
Chief Financial Officer 1994 124,000 16,804 16,796 0 3,720
Bryan C. Rickertsen 1996 125,000 10,200 10,200 4,100 3,750
Vice President- 1995 100,250 11,109 11,091 1,900 3,008
Technology 1994 85,700 8,402 8,398 0 2,571
Kevin J. Wiley (5) 1996 120,000 55,000 0 3,300 3,600
Vice President- 1995 57,577 45,000 0 0 2,725
Diversified Operations 1994 - - - - -
</TABLE>
8
<PAGE> 12
(1) The 1989 Stock and Incentive Plan (the "Plan") is administered by the
Executive Compensation Committee of the Board of Directors (the
"Committee") constituted of members of the Board not eligible to
participate in the Plan, and permits the award of Short-Term
Incentives, Stock Options, Stock Appreciation Rights and Restricted
Stock. The bonus amounts shown reflect the cash bonus amounts paid
pursuant to the Short-Term Incentive feature of the Plan attributable
to the fiscal years of the Corporation shown. The stockholders of the
Corporation approved the Plan on April 26, 1989.
(2) Pursuant to the terms of the Plan, a participant may elect to receive
up to forty percent (40%) of the amount of any Short-Term Incentive
award in Restricted Stock of the Corporation. Each of the listed
individuals has elected to receive the maximum amount. The number of
such shares awarded was based upon the closing price of the
Corporation's Common Stock as of December 30, 1994, December 29, 1995
and December 31, 1996, respectively. In order to promote ownership of
the Corporation's Common Stock, the Committee in each year has
increased the number of shares awarded by a multiple of 1.5. The
dollar value of the Restricted Stock awards are attributable to the
Corporation's fiscal year as indicated. The number of shares of
Restricted Stock awarded and values thereof for each named executive
officer and the aggregate value as of December 31, 1996, are as
follows:
Number of Restricted Shares
------------------------------------------------------------
Name 1994 Award 1995 Award 1996 Award Aggregate Value
---------- ---------- ---------- ---------------
Mr. Hilsabeck 3,070 2,905 2,647 $ 146,574
Mr. Strand 1,344 1,306 1,164 64,838
Mr. Tyler 988 860 776 44,608
Mr. Rickertsen 494 525 600 27,523
Mr. Wiley - 0 0 0
----- ----- ----- -------
Totals 5,896 5,596 5,187 $ 283,543
The restrictions against sale, transfer, pledge or assignment of the
Restricted Stock will lapse, and the awards have vested or will vest
as follows: 1994 Awards - January 31, 1997; 1995 Awards - January 31,
1998; and 1996 awards January 29, 1999. Restrictions will lapse
sooner if the participant dies, becomes disabled, retires or there is
a change in control of the Corporation during the period of
restriction.
Dividends are paid during the period of restriction on the shares of
Restricted Stock to the executive officer holding such shares and
their voting rights may be exercised by the executive officer.
(3) The options shown for 1995 were awarded on March 15, 1995, and the
options awarded for 1996 were awarded on July 1, 1996. The awards were
not attributed to any past performance.
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<PAGE> 13
(4) The Corporation maintains a 401(k) Savings and Stock Ownership Plan
for the benefit of its non-union-eligible employees, including the
named executive officers. Pursuant thereto the Corporation (a) has
contributed 1.75% of the employee's base salary in the form of the
Corporation's Common Stock for the employee's benefit (to the
following maximum base salary amounts: 1994 - $150,000.00; 1995 -
$150,000.00; and 1996 - $150,000.00); and (b) has contributed on a
matching basis, at the rate of 0.25% for each 1.00% of the employee's
salary contributed to the 401(k) account, up to a maximum of 1.25% of
such salary contribution. Such match is also made in shares of the
Corporation's Common Stock.
(5) Mr. Wiley became an employee of the Corporation effective July 13,
1995.
OPTION EXERCISES IN FISCAL 1996
AND FISCAL 1996 YEAR-END OPTION VALUES
The Corporation has in effect the 1989 Stock and Incentive Plan which
was approved by its stockholders and pursuant to which options to purchase
shares of Common Stock of the Corporation have been granted to officers and
other key employees of the Corporation and its subsidiaries in the past.
The following table sets forth information concerning the exercise of stock
options by each of the named executive officers during the 1996 fiscal
year, the number of unexercised options existing at the end of the year
1996 for each of the named executive officers and the 1996 year-end value
of unexercised options.
<TABLE>
<CAPTION>
Number of
Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money Options
12/31/96 (#) at 12/31/96 ($)
---------------------- --------------------
Shares
Acquired on Value
Exercise Realized Exercis- Unexer- Exercis- Unexer-
Name (#) ($) able cisable able cisable
<S> <C> <C> <C> <C> <C> <C>
Frank H. Hilsabeck 0 0 17,500 34,250 84,125 12,650
James W. Strand 0 0 11,900 17,350 55,575 6,438
Robert L. Tyler 0 0 12,300 11,250 59,150 4,175
Bryan C. Rickertsen 0 0 6,400 6,000 31,200 1,975
Kevin J. Wiley 0 0 0 3,300 0 825
</TABLE>
10
<PAGE> 14
PENSION PLAN TABLE
The following table illustrates the annual pension plan benefit
provided by the Corporation's Plan for Employees' Pensions, as supplemented
by the Executive Benefit Plan for eligible executive employees, upon
retirement at age 65, assuming no optional forms of benefit have been
elected. The Plan for Employees' Pensions is not integrated with Social
Security and is maintained for all employees.
Estimated Annual Pension at Normal Retirement
Age for Representative Years of Credited Service
<TABLE>
<CAPTION>
Highest 15 Years 20 Years 25 Years 30 Years 35 Years 40 Years
Consecutive Service Service Service Service Service Service
Five-Year (34.875 (52.00 (59.375 (67.00 (74.875 (82.00
Average Percent Percent Percent Percent Percent Percent
Compensation Factor) Factor) Factor) Factor) Factor) Factor)
<S> <C> <C> <C> <C> <C> <C>
$ 90,000 $ 31,388 $ 46,800 $ 53,438 $ 60,300 $ 67,388 $ 73,800
120,000 41,850 62,400 71,250 80,400 89,850 98,400
150,000 52,313 78,000 89,063 100,500 112,313 123,000
180,000 62,775 93,600 106,875 120,600 134,775 147,600
210,000 73,238 109,200 124,688 140,700 157,238 172,200
240,000 83,700 124,800 142,500 160,800 179,700 196,800
270,000 94,163 140,400 160,313 180,900 202,163 221,400
300,000 104,625 156,000 178,125 201,000 224,625 246,000
330,000 115,088 171,600 195,938 221,100 247,088 270,600
360,000 125,550 187,200 213,750 241,200 269,550 295,200
<CAPTION>
Highest 45 Years 50 Years
Consecutive Service Service
Five-Year (89.125 (96.25
Average Percent Percent
Compensation Factor) Factor)
<S> <C> <C>
$ 90,000 $ 80,213 $ 86,625
120,000 106,950 115,500
150,000 133,688 144,375
180,000 160,425 173,250
210,000 187,163 202,125
240,000 213,900 231,000
270,000 240,638 259,875
300,000 267,375 288,750
330,000 294,113 317,625
360,000 320,850 346,500
</TABLE>
11
<PAGE> 15
Compensation covered by the Pension Plan is a participant's salary, as
shown in the Summary Compensation Table on page 7 herein (whether or not
such compensation has been deferred at participant's election). Benefits
are based on a participant's average compensation for five consecutive
years, or, in the case of a participant who has been employed for less than
five full years, the period of his employment covered by the Pension Plan.
Under the Pension Plan, only salary as shown in the Summary Compensation
Table up to the limits imposed by the Internal Revenue Code is taken into
account. The 1996 compensation limit applicable to the Pension Plan is
$150,000.00.
Included in the information reflected in the above table are the
supplemental retirement benefits which the Corporation provides pursuant to
an Executive Benefit Plan for the benefit of Messrs. Hilsabeck, Strand,
Tyler, Rickertsen, and certain other executive officers. The Executive
Benefit Plan also provides pre-retirement death benefits and long-term
disability benefits. Pension benefits which exceed the limitations imposed
by the Internal Revenue Code are payable under the Executive Benefit Plan.
All pension benefits payable under the Executive Benefit Plan will be paid
outside the Pension Plan as an operating expense.
The named executive officers have the following years of service with
the Corporation and Aliant Communications Co. as of December 31, 1996:
Frank H. Hilsabeck, 29 years; James W. Strand, 23 years; Robert L. Tyler,
37 years; Kevin J. Wiley, 1 year; and Bryan C. Rickertsen, 11 years.
COMPENSATION OF DIRECTORS
Full-time officers of the Corporation or its subsidiaries do not
receive additional compensation for serving as members of the Boards of
Directors of the Corporation or its subsidiaries. No additional
compensation is paid if a full-time officer serves on any committee of such
Boards of Directors.
Effective April 26, 1995, non-employees serving as members of the
Corporation's Board of Directors are paid: (a) an annual retainer of
$8,400.00, paid in monthly installments of $700.00; (b) an additional fee
of $700.00 for attendance at each meeting of the Board; (c) an additional
fee of $1,000.00 for attendance at any meeting of a Board Committee by the
Committee Chairman; (d) an additional fee of $700.00 for attendance at any
meeting of a Board Committee by other Committee members; and (e)
reimbursement of expenses incurred in connection with such meetings. Total
fees paid to Directors in 1996 were $165,400.00.
12
<PAGE> 16
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Corporation has agreements with Messrs. Hilsabeck, Strand, Tyler,
and Rickertsen which provide that the named executive officer is entitled
to benefits if, after a change in control (as defined), such executive
officer's employment is ended through (I) termination by the Corporation
other than by reason of death or disability or for cause (as defined), or
(ii) termination by the executive officer following the first anniversary
of the change in control or due to a breach of the agreement by the
Corporation or a significant adverse change in his responsibilities. As
used in such agreements, (a) "change in control" means (i) if any person is
or becomes a thirty percent beneficial owner of the Corporation or (ii) a
change in a majority of the members of the Board of Directors of the
Corporation over a two consecutive year period; and (b) "cause" means
termination of an executive's employment by the Corporation after a change
in control based upon willful and intentional conduct causing serious
injury to the Corporation, conviction for a felony or willful and
unreasonable neglect or refusal to perform the executive's duties. The
benefits provided are: (a) a cash termination payment of up to three times
the sum of executive officer's annual salary and his highest annual bonus
during the three years before the termination and (b) continuation of
equivalent hospital, medical, dental, accident, disability and life
insurance coverage as in effect at the termination. The agreements provide
that if any portion of the benefits under the agreements or under any other
agreement would constitute an "excess parachute payment" for purposes of
the Internal Revenue Code of 1986 (the "Code"), benefits are reduced so
that the executive officer is entitled to receive $1.00 less than the
maximum amount which he can receive without becoming subject to the 20%
excise tax imposed by the Code or which the Corporation may pay without
loss of deduction under the Code.
In accordance with agreements pursuant to the Corporation's Executive
Benefit Plan, in the event of a change in control of the Corporation,
entitlement to benefits payable to the named executive officers shall
become vested, provided that such employees shall comply with specified
non-competition and confidentiality requirements of such agreements. The
vested amount shall equal 25% of average final compensation irrespective of
the employee's net credited service on the date of employee's retirement.
If after the change of control the employee's employment is terminated for
reasons other than death or retirement, the vested 25% of average final
compensation shall be payable on the later of his attaining age 60 or his
date of termination.
EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Compensation Committee of the Board is responsible for
all aspects of the Corporation's compensation package offered to its
corporate officers, including the named executive officers. The following
report was approved by members of the Executive Compensation Committee.
13
<PAGE> 17
Compensation Policies. The Corporation's principal executive
compensation objective is to compensate executive officers in a manner that
will attract and retain the services of an outstanding management team and
provide incentives to motivate superior performance by key employees. In
light of that objective, the Executive Compensation Committee of the Board
of Directors (the "Committee"), which also serves as the executive
compensation committee for Aliant Communications Co. (the principal
subsidiary of the Corporation), has approved a compensation program for the
Corporation's executive officers consistent with the policies described
below.
To attract and retain employees, the Corporation's compensation
program provides a base salary and an overall compensation package that are
intended to be competitive and are based upon the following factors.
First, the Committee reviews the financial performance of the Corporation
as compared to the peer group of telecommunications companies (as shown in
the Performance Graph on page 12 which graphically illustrates returns on
investments by stockholders over a five-year period, including reinvestment
of dividends). Second, the Committee reviews competitive, legislative,
regulatory and operational issues which the Corporation has faced during
the past fiscal year, or will face during the ensuing fiscal year. In its
discussions, the Committee evaluates the proactive and reactive actions of
the executive officers concerning these first two factors and subjectively
incorporates the evaluation into its compensation decisions. Third, and
most important to the Committee's considerations, the Committee considers
surveys of executive compensation obtained from available sources. Such
surveys take into account both the telecommunications industry and other
industries nationwide. The surveys include the five mid-sized
telecommunications companies in the Corporation's peer group, as well as a
number of other similarly sized companies in telecommunications or related
industries. The 1994, 1995 and 1996 surveys indicated that the
compensation of the Corporation's Chief Executive Officer was significantly
below the mid-point of the survey results after giving consideration to the
size of the Corporation compared to the size of the companies in the
survey. Certain other officers were also below the mid-point of the survey
results. The Committee's actions concerning 1996 salary level adjustments
for these officers included steps to more closely align the salary of the
Chief Executive Officer and other Corporation officers with the mid-point
of the survey results.
To provide incentives to motivate performance, the Corporation's
executive compensation program establishes a direct relationship between
compensation and the Corporation's performance and encourages executives to
acquire an ownership interest in the Corporation. Pursuant to the
provisions of the Plan, eligible executives, who have been chosen in
advance by the Committee, receive a portion of their compensation in the
form of incentive awards ("Short-Term Incentive awards"). The amounts of
such Short-Term Incentive awards are established in accordance with ranges
of earnings and return on equity realized by the Corporation as pre-
determined by the Committee. The minimum return on equity required to
award short-term incentives for 1996 was 15.0%. In 1996, the Corporation's
earnings and return on equity yielded an aggregate short-term incentive
pool of $231,750.00 or 14.4% of composite salaries for eligible executives.
The portion of such incentive pool received by an executive is based on
his or her position of responsibility and individual performance.
14
<PAGE> 18
Further, to align the interests of executives with stockholder
interests and to provide a means for the acquisition of an ownership
interest in the Corporation, executives are encouraged to elect to receive
up to 40% of the cash portion of the Short-Term Incentive awards in
Restricted Stock of the Corporation. If such an election is made, the
Committee may increase the stock portion of the award by a multiple not to
exceed two times such stock portion. For 1996, the Committee determined
1.5 to be an appropriate multiple to be applied to the stock portion of the
award to incent ownership in view of its objective to increase ownership of
the Corporation's Common Stock and the two-year period of transfer
restrictions applicable to Restricted Stock. Finally, the Committee may
grant stock options under the Plan to key executives in amounts that are
competitive based upon market considerations, which are exercisable after
three years.
Chief Executive Officer Compensation. The compensation for Mr. Frank
H. Hilsabeck, President and Chief Executive Officer, reported for 1996
reflects the application of the policies described above.
Mr. Hilsabeck also received a Short-Term Incentive award for 1996. On
December 13, 1995, the Committee adopted performance goals for the
Corporation for 1996 for purposes of the Corporation's Short-Term Incentive
awards. As a result of the Corporation's earnings and return on equity and
his performance in 1996, Mr. Hilsabeck received a Short-Term Incentive
award of $75,000 or approximately 32.4% of the aggregate award.
Consistent with the Corporation's desire to encourage acquisition of
an ownership interest in the Corporation, Mr. Hilsabeck elected to receive
Restricted Stock pursuant to the Plan to the maximum permitted of 40% of
the Short-Term Incentive award. The Committee had previously determined to
increase the value of the portion of the award used for the granting of
Restricted Stock by a multiple of 1.5, thereby enabling Mr. Hilsabeck to
receive Restricted Stock with a value of $45,001.00, as well as a cash
award of $44,999.00. As of December 31, 1996, Mr. Hilsabeck held unvested
Restricted Stock with an aggregate value of $146,574.00, including the 1996
award.
Mr. Hilsabeck also participated in other employee benefit plans
available to other executive officers during 1996, which the Committee
believes are competitive, including the Pension Plan, Executive Benefit
Plan, the 401(k) Savings and Stock Ownership Plan and life and health
insurance programs.
Internal Revenue Code Section 162(m). Section 162(m) of the Internal
Revenue Code (the "Code") eliminates, subject to certain exceptions, the
deductibility of executive compensation to the extent that any executive's
compensation for any year exceeds $1 million. Exceptions to amounts
included in executive compensation for purposes of Section 162(m) involve
various types of performance-based compensation. As noted above, it is the
Executive Compensation Committee's policy to base a substantial amount of
executive compensation on the Corporation's performance. Currently the
cash compensation levels for the Corporation's executive officers fall
significantly below $1 million. In the event that in the future the annual
remuneration of any executive of the Corporation approaches $1 million, the
Committee will consider the various alternatives to preserving the
15
<PAGE> 19
deductibility of compensation payments to the extent reasonably practicable
and consistent with its compensation objectives.
Members of the Executive Compensation Committee for 1996 were:
Duane W. Acklie, Chairman Charles N. Wheatley
Paul C. Schorr, III Lyn Wallin Ziegenbein
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Executive Compensation Committee are
identified above. Mrs. Ziegenbein, a member of the Executive Compensation
Committee, is the spouse of John H. Ziegenbein, of counsel in the law firm
of Woods & Aitken. Woods & Aitken acted as outside counsel for the
Corporation for 1996 for which it received fees of $205,599.00.
PERFORMANCE GRAPH
The following graph sets forth a comparison of the cumulative total
stockholder return by quarter, commencing December 1991 and ending December
1996, on an investment of $100 in (a) shares of the Corporation's Common
Stock; (b) shares of Standard & Poor's telephone company composite; (c)
shares of Standard & Poor's 500 company composite; and (d) shares of the
Corporation's telephone company peer group identified below. The
cumulative total market appreciation includes the cumulative amount of
dividends for the five-year period, assuming dividend reinvestment.
[COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN* GRAPH]
Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96
Aliant Communications
Inc. $100 $115 $168 $160 $205 $171
S&P 500 $100 $108 $118 $120 $165 $203
S&P Telephone Index $100 $110 $127 $121 $183 $185
Custom Composite Index
(5 Stocks) $100 $121 $141 $145 $179 $193
* Based on reinvestment of $100 beginning December 31, 1991
The 5-Stock Custom Composite Index consists of Alltel Corp., Century
Telephone Enterprise, Cincinnati Bell Inc., Frontier Corp., and Southern
New England Telecommunications.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Corporation's executive officers, directors and holders of more than ten
percent of the Corporation's outstanding shares ("Insiders") file reports
(on prescribed forms) of their beneficial ownership of the Corporation's
stock and furnish copies of such forms to the Corporation. Based solely on
a review of the copies of such forms furnished to the Corporation, or
written representations that no Form 5 was required to be filed, the
Corporation believes that, during its fiscal year commencing January 1,
1996, and ending December 31, 1996, all Forms 3, 4 and 5 required by
Section 16(a) to be filed by Insiders were filed on a timely basis, except
that Mr. Acklie reported in a late Form 4 filing the purchase of 700 shares
16
<PAGE> 20
of Corporation stock and Mr. Wheatley reported in a late Form 4 filing the
disposition of 4,400 shares of Corporation stock.
RELATIONSHIP WITH INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of the Corporation, on the recommendation of
the Audit Committee, has reappointed KPMG Peat Marwick L.L.P. as the
Company's independent certified public accountants for the calendar year
ending December 31, 1997. This accounting firm has audited the financial
statements of Aliant Communications Co., formerly known as The Lincoln
Telephone and Telegraph Company (LT&T), continuously since calendar year
1946, and has audited the consolidated financial statements of the
Corporation and its other subsidiaries since their respective dates of
incorporation. Representatives of KPMG Peat Marwick L.L.P. will be present
at the Annual Meeting of Stockholders, have the opportunity to make any
statements they desire and respond to appropriate questions.
OTHER BUSINESS AT THE ANNUAL MEETING OF STOCKHOLDERS
Management is not aware of any business which properly may be
presented for action at the meeting other than the matters set forth in the
Notice of Annual Meeting. Should any other matter requiring a vote of the
stockholders properly arise, the enclosed proxy gives discretionary
authority to the persons named in the proxy to vote on such matters in
accordance with their best judgment.
DATE OF RECEIPT OF PROPOSALS
All stockholder proposals intended for inclusion in the Corporation's
1998 proxy materials and for presentation at the Corporation's 1998 Annual
Meeting set in the Corporation's By-Laws as the fourth Wednesday in April,
or April 22, 1998, must be received by the Corporation (Attn: Corporate
Secretary) not later than November 17, 1997. In addition, the
Corporation's By-Laws establish procedures for stockholder nominations for
election of directors and bringing business before the Annual Meeting of
the Corporation's stockholders. Among other requirements, to bring
business before the 1998 Annual Meeting or to nominate a person for
election as a director, a stockholder must give written notice to the
Secretary of the Corporation not less than 90 days prior to April 22, 1998,
or in the event an earlier date is set by the Board of Directors within ten
days after the first public disclosure of the earlier date. The notice
must contain certain information concerning the proposed business or the
nominee and the stockholder making the proposal. Any stockholder
interested in making a nomination or proposal should request a copy of the
applicable By-Law provisions from the Secretary of the Corporation.
By order of the Board of Directors,
Aliant Communications Inc.
/s/ Michael J. Tavlin
Michael J. Tavlin
Secretary
Lincoln, Nebraska
March 21, 1997
17
<PAGE> 21
ALIANT COMMUNICATIONS
PROXY
This proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Thomas C. Woods, III and Frank H. Hilsabeck
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as
designated on the other side, all the shares of stock of Aliant
Communications Inc. standing in the name of the undersigned with all
powers which the undersigned would possess if present at the Annual Meeting
of Stockholders of the Company to be held April l23, 1997 or any
adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
<PAGE> 22
Please mark your votes as indicated in this example [X]
This proxy, when properly executed, will be voted in the manner directed
herein by the signed shareholder. If no direction is made, this proxy will
be voted for Item 1.
ITEM 1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
NOMINEES:
William W. Cook, Jr., Charles N. Wheatley and Thomas C. Woods, III.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space to the right.):
- - -----------------------------------------------------
ITEM 2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
Signature: Signature:
----------------------- ---------------------------
Date:
----------------------
Note: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
<PAGE>
