SHENANDOAH TELECOMMUNICATIONS COMPANY
124 South Main Street
Edinburg, Virginia
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 18, 1995
March 24, 1995
TO THE STOCKHOLDERS OF
SHENANDOAH TELECOMMUNICATIONS COMPANY:
The annual meeting of stockholders of Shenandoah
Telecommunications Company will be held in the Social Hall of the
Edinburg Fire Department, Stoney Creek Boulevard, Edinburg,
Virginia, on Tuesday, April 18, 1995, at 11:00 a.m. for the
following purposes:
1. To elect nine directors to serve for the ensuing year;
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
Only stockholders of record at the close of business March 22,
1995, will be entitled to vote at the meeting.
Lunch will be provided.
By Order of the Board of Directors
Harold Morrison, Jr.
Secretary
IMPORTANT
YOU ARE URGED TO COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY CARD
IN THE SELF-ADDRESSED STAMPED (FOR U. S. MAILING) ENVELOPE PROVIDED
AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON. IF YOU DO ATTEND THE MEETING IN PERSON, YOU MAY
THEN WITHDRAW YOUR PROXY AND VOTE YOUR OWN SHARES.
SEE PROXY STATEMENT ON THE FOLLOWING PAGES
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PROXY STATEMENT
P. O. Box 459
Edinburg, VA 22824
March 24, 1995
TO THE STOCKHOLDERS OF
SHENANDOAH TELECOMMUNICATIONS COMPANY:
Your proxy in the enclosed form is solicited by the management
of the Company for use at the Annual Meeting of Stockholders to be
held in the Social Hall of the Edinburg Fire Department, Stoney
Creek Boulevard, Edinburg, Virginia, on Tuesday, April 18, 1995, at
11:00 a.m., and any adjournment thereof.
The mailing address of the Company's executive offices is P. O.
Box 459, Edinburg, Virginia 22824.
The Company has 8,000,000 authorized shares of common stock, of
which 3,760,760 shares were outstanding on March 22, 1995. This
proxy statement and the Company's annual report, including
financial statements for 1994, are being mailed on or about March
24, 1995, to approximately 2,987 stockholders of record on March
22, 1995. Only stockholders of record on that date are entitled to
vote. Each outstanding share will entitle the holder to one vote
at the Annual Meeting. No director, officer, or other party owns
as much as five percent of the outstanding shares of the common
stock of the Company. The Company intends to solicit proxies by
the use of the mail, in person, and by telephone. The cost of
soliciting proxies will be paid by the Company.
Executed proxies may be revoked at any time prior to exercise.
Proxies will be voted as indicated by the stockholders.
THE ELECTION OF DIRECTORS
At the meeting, nine directors (constituting the entire Board of
Directors of the Company) are to be elected for the ensuing year.
The proxy holders will vote the proxies received by them (unless
contrary instructions are noted on the proxies) for the election as
directors of the following nominees, all of whom are now members of
and constitute the Company's Board of Directors. If any such
nominees should be unavailable, the proxy holders will vote for
substitute nominees in their discretion. Stockholders may withhold
the authority to vote for the election of directors or one or more
of the nominees. Directors will be elected by a plurality of the
votes cast. Abstentions and shares held in street name that are
not voted in the election of directors will not be included in
determining the number of votes cast.
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<TABLE>
Nominees for Election of Directors
<CAPTION>
Elected Principal Occupation and Other
Name of Director Director Age Directorships for Past Five Years
(1) (2) (3)
<S> <C> <C> <C>
Noel M. Borden 1972 58 Pres., H. L. Borden Lumber Co. (a
Vice Chairman retail building materials firm);
Chairman of Board,
1st National Corp.
Dick D. Bowman 1980 66 Pres., Bowman Bros., Inc. (a farm
Treasurer of the Co. equip. dealer); Dir., Shen. Valley
Elec. Coop.; Dir., Rockingham Mutual
Ins. Co.; Dir., Old Dominion
Electric Coop.
Ken L. Burch 1995 50 Farmer
Warren B. French, Jr. 1973 71 Chairman of the Board, Shenandoah
(4) Telecommunications Co.; Dir., 1st
National Corp.; Dir., Orion Network
Systems, Inc.; Dir., AvData Systems,
Inc.
Grover M. Holler, Jr. 1952 74 Pres., Blue Ridge Homes, Inc. (a real
estate developer); Pres., Valley
View, Inc.
I. Clinton Miller 1983 55 Attorney-at-Law; Dir., F&M Bank
Harold Morrison, Jr. 1979 65 Chairman of the Board, Woodstock
Secretary of the Co. Garage, Inc. (auto sales & repair
firm); Dir., 1st Va. Bank-SV
Zane Neff 1976 66 Retired Manager, Hugh Saum Co., Inc.
Asst. Secretary (a hardware and furniture store);
of the Co. Director, Crestar Bank
James E. Zerkel II 1985 50 Vice Pres., James E. Zerkel, Inc.
(a plumbing, heating, gas, & hardware
firm)
<FN>
(1) The directors who are not full-time employees of the Company were
compensated in 1994 for their services on the Board and one or more of
the Boards of the Company's subsidiaries at the rate of $325 per month
plus $325 for each Board meeting attended. Additional compensation was
paid to the Chairman of the Board, Vice Chairman, Secretary, Assistant
Secretary, and Treasurer, for their services in these capacities,
in the amounts of $3,840, $1,180, $2,480, $1,180, and $2,480,
respectively.
(2) Years shown are when first elected to the Board of the Company or the
Company's predecessor, Shenandoah Telephone Company. Each nominee has
served continuously since
the year he joined the Board.
(3) Each director also serves as a director of one or more of the Company's
subsidiaries.
(4) Warren French's son, Christopher French, is the President of the
Company and all of its subsidiaries.
<PAGE>
Standing Audit, Nominating, and Compensation Committees
of the Board of Directors
1. Audit Committee - The Finance Committee of the Board of
Directors, consisting of the following directors: Dick D.
Bowman (Chairman), Grover M. Holler, Jr., and Noel M.
Borden, performs a function similar to that of an Audit
Committee. This committee is responsible for the employment
of outside auditors and for receiving and reviewing the
auditor's report. During 1994 there was one meeting of the
Audit Committee. Additional business of the committee was
conducted in connection with the regular Board meetings.
2. Nominating Committee - The Board of Directors does not have
a standing Nominating Committee.
3. Compensation Committee - The Personnel Committee of the
Board of Directors, consisting of the following directors:
Noel M. Borden (Chairman), Harold Morrison, Jr., and I.
Clinton Miller, performs a function similar to that of a
Compensation Committee. This committee is responsible for
the wages, salaries, and benefit programs for all employees.
During 1994 there were three meetings of this committee.
Attendance of Board Members at Board and Committee Meetings
During 1994, the Board of Directors held 13 meetings. All of the
directors attended at least 75 percent of the aggregate of: (1)
the total number of meetings of the Board of Directors; and (2) the
total number of meetings held by all committees of the Board on
which they served.
Certain Transactions
Under the terms of a Supplemental Employment Agreement approved
and executed by Shenandoah Telephone Company in February 1984,
Warren B. French, Jr. was paid $12,649 in 1994, as an additional
retirement benefit. He was also paid $12,000 for consulting
services provided to the Company.
In 1994, the Company received services from Mr. Morrison's
company in the amount of $51,034.61 and from Mr. Zerkel's company
in the amount of $6,962. Management believes that each of the
companies provides these services to the Company on terms
comparable to those available to the Company from other similar
companies. No other director is an officer, director, employee, or
owner of a significant supplier or customer of the Company.
<PAGE>
STOCK OWNERSHIP
The following table presents information relating to the
beneficial ownership of the Company's outstanding shares of common
stock by all directors, the president, and all directors and
officers as a group.
No. of Shares
Name and Address Owned as of 2-1-95 Percent of Class
(1) (2)
Noel M. Borden 17,456 *
Strasburg, VA 22657
Dick D. Bowman 40,144 1.07
Edinburg, VA 22824
Ken L. Burch 46,762 1.24
Quicksburg, VA 22847
Christopher E. French 114,948 3.06
Woodstock, VA 22664
Warren B. French, Jr. 56,942 1.51
Edinburg, VA 22824
Grover M. Holler, Jr. 70,736 1.88
Edinburg, VA 22824
I. Clinton Miller 1,440 *
Woodstock, VA 22664
Harold Morrison, Jr. 20,148 *
Woodstock, VA 22664
Zane Neff 7,516 *
Edinburg, VA 22824
James E. Zerkel II 4,198 *
Mt. Jackson, VA 22842
Total shares beneficially
owned by 13 directors and
officers as a group 382,326 10.17
(1) Includes shares held by relatives and in certain trust
relationships, which may be deemed to be beneficially owned
by the nominees under the rules and regulations of the
Securities and Exchange Commission; however, the inclusion
of such shares does not constitute an admission of
beneficial ownership.
(2) Asterisk indicates less than 1%.
PAGE
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SUMMARY COMPENSATION TABLE
The following Summary Table is furnished as to the salary and
incentive payment paid by the Company and its subsidiaries on an
accrual basis during the fiscal years 1992, 1993, and 1994 to, or
on behalf of, the chief executive officer and each of the next four
most highly compensated executive officers who earn $100,000 or
more per year.
Name and Principal Incentive
Position Year Salary Payment
Christopher E. French 1994 $107,816 $ 14,875
President 1993 100,904 14,159
1992 93,923 22,185
RETIREMENT PLAN
The Company maintains a noncontributory defined benefit
Retirement Plan for its employees. The following table illustrates
normal retirement benefits based upon Final Average Compensation
and years of credited service. The normal retirement benefit is
equal to the sum of:
(1) 1.14% times Final Average Compensation plus 0.65% times
Final Average Compensation in excess of Covered Compensation
(average annual compensation with respect to which Social
Security benefits would be provided at Social Security
retirement age) times years of service (not greater than
30); and
(2) 0.29% times Final Average Compensation times years of
service in excess of 30 years (such excess service not to
exceed 15 years).
Estimated Annual Pension
Years of Credited Service
Final Average
Compensation 15 20 25 30 35
$ 20,000 3,420 4,560 5,700 6,840 7,130
35,000 6,870 9,160 11,451 13,741 14,248
50,000 10,898 14,530 18,163 21,796 22,521
75,000 17,610 23,480 29,351 35,221 36,308
100,000 24,323 32,430 40,538 48,646 50,096
120,000 29,693 39,590 49,488 59,386 61,126
Covered Compensation for those retiring in 1995 is $25,920.
Final Average Compensation equals an employee's average annual
compensation for the five consecutive years of credited service for
which compensation was the highest. The amounts shown as estimated
annual pensions were calculated on a straight-life basis assuming
the employee retires in 1995. The Company did not make a
contribution to the Retirement Plan in 1994, as the plan was
adequately funded. Christopher French has 13 years of credited
service under the plan as of January 1, 1995.
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The members of the Personnel Committee of the Board of Directors
of the Company perform the function of a Compensation Committee.
The Committee's approach to compensation of the Company's executive
officers, including the chief executive officer, is to award a
total compensation package consisting of salary, incentive, and
fringe benefit components. The compensation package is designed to
provide a level of compensation to enable the Company to attract
and retain the executive talent necessary for the long-term success
of the organization.
The incentive plan component of the total compensation package
provides an incentive to the officers to meet or exceed certain
performance objectives. The plan also places a portion of the
officers' compensation at risk in the event the Company does not
achieve its objectives. The objectives include a component
measuring the improvement in the level of service provided to the
Company's customers and a component measuring the increase in the
Company's net income. In 1994, the Company reached over 100
percent of its combined goals.
Submitted by the Company's Personnel Committee:
Noel M. Borden, Chairman
Harold Morrison, Jr.
I. Clinton Miller
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
The Securities and Exchange Commission requires that the Company
include in its Proxy Statement a line graph presentation comparing
cumulative, five-year stockholder returns on an indexed basis with
a performance indicator of the overall stock market and either a
nationally recognized industry standard or an index of peer
companies selected by the Company. The broad market index used in
the graph is the NASDAQ Market Index. The S&P Telephone Index
consists of the seven regional Bell Operating Companies and GTE.
The Company's stock is not listed on any national exchange nor
NASDAQ; therefore, for purposes of the following graph, the value
of the Company's stock, including the price at which dividends are
assumed to have been reinvested, has been determined based upon the
average of the prices of transactions in the Company's stock that
were reported to the Company in each fiscal year.
PAGE
<PAGE>
Comparison of Five-Year Cumulative Total Return* among Shenandoah
Telecommunications Company, NASDAQ Market Index, and S&P Telephone
Index
1989 1990 1991 1992 1993 1994
Shenandoah
Telecommunications 100.00 107.30 190.03 200.46 209.92 200.52
NASDAQ Market
Index 100.00 84.92 136.28 158.58 180.93 176.91
S&P Telephone
Index 100.00 95.46 102.66 112.65 130.10 124.72
Assumes $100 invested December 31, 1989 in Shenandoah
Telecommunications Company stock, NASDAQ Market Index, and S&P
Telephone Index
*Total return assumes reinvestment of dividends
EMPLOYMENT OF AUDITORS
The Board of Directors, on the recommendation of the Audit
Committee, has appointed the firm of McGladrey and Pullen as
auditors to make an examination of the accounts of the Company for
the 1995 fiscal year. It is not expected that representatives of
the firm will be present at the annual meeting.
PROPOSALS OF SECURITY HOLDERS
Proposals of security holders to be included in management's
proxy statement and form of proxy relating to next year's annual
meeting must be received at the Company's principal executive
offices not later than November 24, 1995.
OTHER MATTERS
Management does not intend to bring before the meeting any
matters other than those specifically described above and knows of
no matters other than the foregoing to come before the meeting. If
any other matters properly come before the meeting, it is the
intention of the persons named in the accompanying form of proxy to
vote such proxy in accordance with their judgment on such matters,
including any matters dealing with the conduct of the meeting.
FORM 10-K
The Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission is available to stockholders,
without charge, upon request to Mr. Laurence F. Paxton, Vice
President-Finance, Shenandoah Telecommunications Company, P. O. Box
459, Edinburg, VA 22824.
PAGE
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PROXY
SHENANDOAH TELECOMMUNICATIONS COMPANY
124 South Main Street This Proxy is Solicited
Edinburg, VA 22824 on behalf of the Board
of Directors
The undersigned hereby appoints Warren B. French, Jr., Noel M.
Borden, and Grover M. Holler, Jr., and each of them, as Proxies
with full power of substitution, to vote all common stock of
Shenandoah Telecommunications Company held of record by the
undersigned as of March 22, 1995, at the Annual Meeting of
Stockholders to be held on April 18, 1995, and at any and all
adjournments thereof.
1. ELECTION OF DIRECTORS
( ) FOR Noel M. Borden, Dick D. Bowman, Ken L. Burch, Warren B.
French, Jr., Grover M. Holler, Jr., I. Clinton Miller,
Harold Morrison, Jr., Zane Neff, James E. Zerkel II
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME LISTED ABOVE
( ) VOTE WITHHELD for all nominees listed above
Your Board of Directors recommends a vote FOR Election of
Directors.
PAGE
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2. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Please mark, sign exactly as name appears below, date, and return
this proxy card promptly, using the enclosed envelope, whether or
not you plan to attend the meeting.
When signing as attorney, executor,
administrator, trustee, guardian, or
agent, please give full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Dated_____________, 1995 ________________________
Signature
I plan to attend the meeting___ ________________________
Number of persons attending ___ Additional Signature
I cannot attend the meeting ___ (if held jointly)
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