SHENANDOAH TELECOMMUNICATIONS COMPANY
124 South Main Street
Edinburg, Virginia
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 22, 1997
March 28, 1997
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 22, 1997, at 11:00 a.m. for the
following purposes:
1. To elect nine directors to serve for the ensuing year; and
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 26,
1997, 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 <PAGE>
PROXY STATEMENT
P. O. Box 459
Edinburg, VA 22824
March 28, 1997
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 22,
1997, 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 26, 1997.
This proxy statement and the Company's annual report, including
financial statements for 1996, are being mailed on or about March
28, 1997, to approximately 3,409 stockholders of record on March
26, 1997. 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.
On February 17, 1997, Douglas C. Arthur was elected by the
Board to fill the vacancy created by the death of Philip M.
Grabill, Jr.
-1-
PAGE
<PAGE>
<TABLE> Nominees for Election of Directors
<CAPITION> Elected Principal Occupation and Other
Name of Director Director Age Directorships for Past Five Years
(1) (2) (3)
<S> <C> <C> <C>
Douglas C. Arthur 1997 54 Attorney-at-Law; Dir., 1st National Corp.
Noel M. Borden 1972 60 Pres., H. L. Borden Lumber Co. (a
Vice President retail building materials firm); Chairman
of the Board, 1st National Corp.
Dick D. Bowman 1980 68 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 52 Farmer
Christopher E. French 1996 39 Pres., Shen. Telecommunications Co.
President & its Subsidiaries; Dir., 1st National
Corp.
Grover M. Holler, Jr. 1952 76 Pres., Valley View, Inc. (a real estate
developer)
Harold Morrison, Jr. 1979 67 Chairman of the Board, Woodstock
Secretary of the Co. Garage, Inc. (auto sales & repair
firm); Dir., 1st Virginia Bank-BR
Zane Neff 1976 68 Retired Manager, Hugh Saum Co.,
Asst. Secretary Inc. (a hardware and furniture
of the Co. store); Dir., Crestar Bank
James E. Zerkel II 1985 52 Vice Pres., James E. Zerkel, Inc. (a
heating, gas, & hardware firm); Dir.,
Shen. Valley Elec. Coop.
PAGE
<PAGE>
(1) The directors who are not full-time employees of the Company were compensated in 1996
for their services on the Board and one or more of the Boards of the Company's
subsidiaries at the rate of $355 per month plus $355 for each Board meeting attended.
Additional compensation was paid to the Vice President, Secretary, Assistant Secretary,
and Treasurer, for their services in these capacities, in the amounts of $1,300, $2,720,
$1,300, and $2,720, 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.
/TABLE
<PAGE>
Standing Audit, Nominating, and Compensation Committees
of the Board of Directors
1. Audit Committee - The Finance Committee of the Board of
Directors, consisted of the following directors: Dick D.
Bowman (Chairman), Grover M. Holler, Jr., and Noel M.
Borden. It performed 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 1996 there were two meetings of
the Finance 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, consisted of the following directors:
Noel M. Borden (Chairman), Harold Morrison, Jr., and Philip
M. Grabill, Jr. James E. Zerkel II has been named to this
committee to replace Mr. Grabill. This committee performed
a function similar to that of a Compensation Committee. It
is responsible for the wages, salaries, and benefit programs
for all employees. During 1996 there were three meetings of
this committee.
Attendance of Board Members at Board and Committee Meetings
During 1996, 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
In 1996, the Company received services from Mr. Morrison's
company in the amount of $24,239 and from Mr. Zerkel's company in
the amount of $20,145. 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
<PAGE>
<TABLE> 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.
<CAPTION>
No. of Shares
Name and Address Owned as of 2-1-97 Percent of Class
<S> <C> (1) <C> (2)
Douglas C. Arthur 1,440 *
Strasburg, VA 22657
Noel M. Borden 17,896 *
Strasburg, VA 22657
Dick D. Bowman 42,944 1.14
Edinburg, VA 22824
Ken L. Burch 45,172 1.20
Quicksburg, VA 22847
Christopher E. French 129,228 3.44
Woodstock, VA 22664
Grover M. Holler, Jr. 70,736 1.88
Edinburg, VA 22824
Harold Morrison, Jr. 20,378 *
Woodstock, VA 22664
Zane Neff 7,616 *
Edinburg, VA 22824
James E. Zerkel II 4,348 *
Mt. Jackson, VA 22842
Total shares beneficially
owned by 13 directors and
officers as a group 341,714 9.09
PAGE
<PAGE>
(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%.
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 1994, 1995, and
1996 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.
<CAPTION>
Name and Principal Incentive
Position Year Salary Payment
<C> <C> <C> <C>
Christopher E. French 1996 $130,612 $ 11,013
President 1995 114,684 20,150
1994 107,816 14,875
/TABLE
<PAGE>
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 6,540 8,720 10,901 13,081 13,588
50,000 10,568 14,090 17,613 21,136 21,861
75,000 17,280 23,040 28,801 34,561 35,648
100,000 23,993 31,990 39,988 47,986 49,436
125,000 30,705 40,940 51,176 61,411 63,223
150,000 37,418 49,890 62,363 74,836 77,011
Covered Compensation for those retiring in 1997 is $29,304.
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 1997. The Company did not make a
contribution to the Retirement Plan in 1996, as the Plan was
adequately funded. Christopher French had 15 years of credited
service under the plan as of January 1, 1997.
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
PAGE
<PAGE>
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' total 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 Company's financial performance. In 1996, the
Company reached over 57 percent of its combined goals.
Submitted by the Company's Personnel Committee:
Noel Borden, Chairman
Harold Morrison, Jr.
James Zerkel II
PAGE
<PAGE>
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.
Comparison of Five-Year Cumulative Total Return* among Shenandoah
Telecommunications Company, NASDAQ Market Index, and S&P
Telephone Index
1991 1992 1993 1994 1995 1996
Shenandoah
Telecommunications 100.00 105.49 110.47 105.52 113.78 118.35
NASDAQ Market
Index 100.00 116.40 133.60 130.60 184.70 227.20
S&P Telephone
Index 100.00 109.73 126.73 121,49 183.02 184.85
Assumes $100 invested December 31, 1991 in Shenandoah
Telecommunications Company stock, NASDAQ Market Index, and S&P
Telephone Index
*Total return assumes reinvestment of dividends
PAGE
<PAGE>
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 1997 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 28, 1997.
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
<PAGE>
(Front)
PROXY
SHENANDOAH TELECOMMUNICATIONS COMPANY
124 South Main Street
Edinburg, VA 22823 This Proxy is Solicited on
Behalf of the Board of
Directors
The undersigned hereby appoints Christopher E. French, 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 26, 1997, at the Annual Meeting of
Stockholders to be held on April 22, 1997, and at any and all
adjournments thereof.
1. ELECTION OF DIRECTORS
( ) FOR Douglas C. Arthur, Noel M. Borden, Dick D. Bowman, Ken
L. Burch, Christopher E. French, Grover M. Holler, Jr.,
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
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" ELECTION
OF DIRECTORS.
PAGE
<PAGE>
(Back)
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 PROPOSAL 1.
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_________, 1997 ___________________________________
Signature
( ) I plan to attend the
meeting
( ) No. of persons
attending ___________________________________
( ) I cannot attend Additional Signature
the meeting (if held jointly)
<PAGE>
