SHENANDOAH TELECOMMUNICATIONS COMPANY
124 South Main Street
Edinburg, Virginia
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 21, 1998
March 27, 1998
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 21, 1998, at 11:00 a.m. for the
following purposes:
1. To vote upon a proposed amendment to the Company's Articles
of Incorporation to classify the Board of Directors into
three classes;
2. If the amendment is approved, to elect three directors to
serve until the 1999 Annual Stockholders' Meeting, three
directors to serve until the 2000 Annual Stockholders'
Meeting, and three directors to serve until the 2001 Annual
Stockholders' Meeting;
3. If the amendment is not approved, to elect nine directors to
serve for the ensuing year; and
4. 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
24, 1998, will be entitled to vote at the meeting. Approval of
the Amendment to the Articles of Incorporation requires the
affirmative vote of the holders of more than two-thirds (2/3) of
the Company's outstanding shares of common stock.
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 27, 1998
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 21, 1998, 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 3,755,760 shares were outstanding on March 24, 1998.
This proxy statement and the Company's annual report, including
financial statements for 1997, are being mailed on or about March
27, 1998, to approximately 3,575 stockholders of record on March
24, 1998. 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
beneficially 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.
Executed but unmarked proxies will be voted "FOR" Proposals 1 and
2. Abstentions and broker non-votes will be treated as shares
that are present, in person or by proxy, and entitled to vote for
purposes of determining the presence of a quorum at the Annual
Meeting. Broker non-votes will not be counted as a vote cast on
any matter presented at the Annual Meeting.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION OF THE COMPANY TO
PROVIDE FOR A CLASSIFIED BOARD OF DIRECTORS
Directors of the Company presently are elected annually by
the stockholders to serve until the next annual meeting and until
their successors are elected and qualified. Rather than elect
the entire Board on an annual basis, a significant number of
public companies have classified their Boards to stagger the
terms of their directors. In this regard, the Board of Directors
has unanimously approved and recommends that the stockholders
adopt an amendment (the "Classified Board Amendment") to the
Company's Articles of Incorporation to add a new paragraph which
would classify the Board of Directors into three classes of
directors.
<PAGE>
The Board of Directors is recommending the adoption of the
Classified Board Amendment in order to further continuity and
stability in the leadership and policies of the Company and to
discourage certain types of tactics which could involve changes
of control that are not in the best interests of the
stockholders. The Classified Board Amendment is permitted under
the Virginia Stock Corporation Act. The Classified Board
Amendment is not in response to any specific efforts of which the
Company is aware to accumulate shares of Common Stock or to
obtain control of the Company.
The Classified Board Amendment provides for a board of
directors of the Company divided into three classes of directors
serving staggered three-year terms. If adopted, the Classified
Board Amendment would divide the Board into three equal classes,
designated Class I, Class II, and Class III. At the Annual
Meeting, at which nine directors are to be elected, the first
class, consisting of three directors, would be elected for a term
expiring at the 1999 Annual Meeting; the second class, consisting
of three directors, would be elected for a term expiring at the
2000 Annual Meeting; and the third class, consisting of the
remaining three directors, would be elected for a term expiring
at the 2001 Annual Meeting (and in each case until their
respective successors are duly elected and qualified). Commencing
with the reelection of directors to Class I in 1999, each class
of directors elected at an annual stockholders' meeting would be
elected to three-year terms. If the number of directors
constituting the Board is increased or decreased, the resulting
number would be apportioned by the Board of Directors among the
three classes so as to make all classes as nearly equal in number
as possible. The Company presently has no agreement or plans to
increase or decrease the size of the Board.
The Classified Board Amendment also provides that a director
may be removed from office at a meeting called expressly for
that purpose by the vote of stockholders holding not less than
75% of the shares entitled to vote at the election of directors.
The Company's Bylaws provide that special meetings of
stockholders may only be called by the President of the Company
or a majority of the Board of Directors.
Information concerning the current nominees for election as
directors at the Annual Meeting and the terms for which they will
serve if the Classified Board Amendment is adopted is contained
under the caption "The Election of Directors" below. If the
Classified Board Amendment is not adopted, all directors will be
elected to serve until the 1999 Annual Meeting and until their
successors are elected and qualified.
The Classified Board Amendment would facilitate director
continuity and experience, since a majority of the Company's
directors at any given time will have prior experience as Company
directors. While the Company has not experienced any problems
with such continuity in the past, it wishes to ensure that this
experience will continue. If adopted, the provisions of the
amendment would be applicable to every election of directors.
<PAGE>
The Board of Directors believes that the Classified Board
Amendment will encourage persons who may seek to acquire control
of the Company to initiate such an acquisition through
negotiations with the Board of Directors. The Board believes that
it will therefore be in a better position to protect the
interests of all the stockholders. In addition, the stockholders
of the Company will have a more meaningful opportunity to
evaluate any such action.
The Classified Board Amendment would significantly extend
the time required to make any change in composition of a majority
of the Board and may discourage certain unsolicited takeover bids
for the Company which the Board may deem to be unfair or
coercive. Presently, a change in control of the Board can be made
by a majority of the Company's stockholders at a single annual
meeting. Under the proposed amendment, it will take at least two
annual meetings to effect a change in the majority control of the
Board of Directors, except in the event of vacancies resulting
from removal. Because of the additional time required to change
control of the Board, the Classified Board Amendment will tend to
perpetuate present management and will tend to discourage certain
tender offers. The Classified Board Amendment will also make it
more difficult for the stockholders to change the composition of
the Board even if the stockholders believe such a change would be
desirable.
Upon adoption of the Classified Board Amendment by the
stockholders, the Board of Directors will amend the Bylaws of the
Company to conform to the Articles of Incorporation as amended by
the Classified Board Amendment. The Board of Directors does not
currently contemplate recommending the adoption of any further
amendments to the Articles of Incorporation or Bylaws or any
other action designed to affect the ability of third parties to
take over or change control of the Company.
Recommendation
The Board of Directors recommends that you vote FOR approval
of the amendment to the Company's Articles of Incorporation
providing for a classified Board of Directors. Approval of the
amendment requires the affirmative vote of the holders of more
than two-thirds of the Company's outstanding shares of Common
Stock. Abstentions and broker non-votes are treated as votes
against the proposal.
Text of the Amendment
A new Article VI of the Company's Articles of Incorporation
is proposed to be adopted to replace the existing Article VI of
the Company's Articles of Incorporation. The new Article VI would
read in its entirety as follows:
"ARTICLE VI
The authorized number of directors of this Corporation shall
be not less than seven (7) and not more than nine (9). The number
of directors within this range shall be stated in the
Corporation's Bylaws, as may be amended from time to time. When
the number of directors is changed the Board of Directors shall
determine the class or classes to which the increased or
decreased number of directors shall be apportioned, provided that
the directors in each class shall be as nearly equal in number as
<PAGE>
possible. No decrease in the number of directors shall have the
effect of shortening the term of any incumbent director.
Effective as of the annual meeting of stockholders in 1998,
the Board of Directors shall be divided into three classes,
designated as Class I, Class II, and Class III, as nearly equal
in number as possible; and the term of office of directors of one
class shall expire at each annual meeting of stockholders, and in
all cases until their successors shall be elected and shall
qualify, or until their earlier resignation, removal from office,
death or incapacity. The initial term of office of Class I shall
expire at the annual meeting of stockholders in 1999; that of
Class II shall expire at the annual meeting in 2000; and that of
Class III shall expire at the annual meeting in 2001, and in all
cases as to each director until his successor shall be elected
and shall qualify, or until his earlier resignation, removal from
office, death or incapacity.
Subject to the foregoing, at each meeting of stockholders
the successors to the class of directors whose term shall then
expire shall be elected to hold office for a term expiring at the
third succeeding annual meeting and until their successors shall
be elected and qualified.
The directors remaining in office acting by a majority vote,
or a sole remaining director, although less than a quorum, are
hereby expressly delegated the power to fill any vacancies in the
Board of Directors, however occurring, whether by an increase in
the number of directors, death, resignation, retirement,
disqualification, removal from office or otherwise; and any
director so chosen shall hold office until the next shareholders
meeting at which directors are elected and until his successor
shall have been elected and qualified, or until his earlier
resignation, removal from office, death, or incapacity.
Any director may be removed from office at a meeting called
expressly for that purpose by the vote of stockholders holding
not less than 75% of the shares entitled to vote at the election
of directors."
Existing Defensive Provisions
Certain other provisions also exist under the Company's
Bylaws and Rights Plan (as defined below) and the Virginia Stock
Corporation Act which could be characterized as having an
anti-takeover effect, including the following:
Stockholders' Rights Plan. On February 9, 1998, the Board of
Directors adopted a Stockholders' Rights Plan for the Company
(the "Rights Plan"). Pursuant to the Rights Plan, the Board
declared a dividend of Rights to each of the corporation's
existing stockholders. Under certain circumstances, if a person
acquires 15% or more of the Company's common stock or causes the
Company to merge into or with another company, these Rights can
be exercised to purchase the common stock of the Company or the
acquirer at a price that represents a substantial discount to
market value. Because Rights held by the acquirer would become
void under the Rights Plan, the exercise of Rights by the<PAGE>
Company's other stockholders would have the effect of diluting
the economic and voting power of the acquirer and dramatically
increasing the cost of acquiring the Company. The threat that the
Rights will become exercisable, coupled with the ability of the
Board of Directors to eliminate the Rights by redemption,
increases the leverage of the Company's Board of Directors and
enhances its ability to negotiate with the acquirer on behalf of
the Company and its shareholders.
The Company's Bylaws. The Company's existing Bylaws also
include certain provisions which could be characterized as having
an anti-takeover effect, including (i) a requirement that notice
of stockholder nominations for election of directors at an annual
meeting must be given to the Company at least 120 days prior to
the meeting and that certain information specified in the Bylaws
must be included with such notice; and (ii) providing that a
special meeting of stockholders may only be called by the
President or a majority of the Board of Directors.
Virginia's Affiliated Transactions Statute. Virginia's
Affiliated Transactions Statute provides that if a person
acquires 10% or more of the stock of a Virginia corporation
without the approval of its board of directors, such person may
not engage in certain transactions with the corporation
(including a merger and purchase or sale of greater than 5% of
the corporation's assets or voting stock) for a period of three
years, and then only with the specified super-majority
shareholder vote, disinterested director approval, or fair price
and procedural protections. Virginia's statute includes certain
exceptions to this prohibition. For example, if a majority of
disinterested directors approves the acquisition of stock or the
transaction prior to the time that the person became an
interested shareholder, or if the transaction is approved by a
majority of the disinterested directors and by the affirmative
vote of two-thirds of the outstanding voting stock which is not
owned by the interested shareholder, the prohibition does not
apply.
THE ELECTION OF DIRECTORS
Subject to the Amendment of the Company's Articles of
Incorporation as described above, at the meeting, nine directors
(constituting the entire Board of Directors of the Company) are
to be elected at the Annual Meeting, each to hold office for the
term specified below and until his successor is elected and
qualified.
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.
<TABLE>
<CAPTION> Nominees for Election of Directors
Year
<S> Elected Principal Occupation
and Other
Name of Director Director Age Directorships for
Past Five Years
(1) (2) (3)
<C> <C> <C>
Class I (Term expires 1999)
Douglas C. Arthur 1997 55 Attorney-at-Law;
Dir., 1st National Corp.
Harold Morrison, Jr. 1979 68 Chairman of the
Board, Woodstock Garage, Inc.
Secretary of the Co. (an auto sales &
repair firm); Dir., 1st Virginia
Bank-BR
Zane Neff 1976 69 Retired Manager, Hugh
Saum Co., Inc.(a hardware
Asst. Secretary of the Co. and furniture store);
Dir., Crestar Bank
Class II (Term expires 2000)
Noel M. Borden 1972 61 Pres., H. L. Borden
Lumber Co. (a retail building
Vice President materials firm);
Chairman of the Board, 1st
National Corp.
Ken L. Burch 1995 53 Farmer
Grover M. Holler, Jr. 1952 77 Pres., Valley View,
Inc. (a real estate
developer)
Class III (Term expires 2001)
Dick D. Bowman 1980 69 Pres., Bowman Bros.,
Inc. (a farm equipment
Treasurer of the Co. dealer); Dir., Shen.
Valley Elec. Coop.; Dir., The
Rockingham Group;
Dir., Old Dominion Electric
Coop.
Christopher E. French 1996 40 Pres., Shenandoah
Telecommunications Co.
President & its Subsidiaries;
Dir., 1st National Corp.
James E. Zerkel II 1985 53 Vice Pres., James E.
Zerkel, Inc. (a heating, gas,
& hardware firm),
Dir., Shen. Valley Elec. Coop.
(1) The directors who are not full-time employees of the Company were
compensated in 1997 for their
services on the Board and one or more of the Boards of the Company's
subsidiaries at the rate
of $370 per month plus $370 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 $1,360, $2,840, $1,360, and $2,840,
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>
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 1997 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. James E. Zerkel. 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 1997 there were three
meetings of this committee.
Attendance of Board Members at Board and Committee Meetings
During 1997, the Board of Directors held 14 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 1997, the Company received services from Mr.
Morrison's company in the amount of $45,993 and from Mr.
Zerkel's company in the amount of $13,803.36. 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 2-1-98 Percent of Class
(1) (2)
Douglas C. Arthur 1,440 *
Strasburg, VA 22657
Noel M. Borden 18,096 *
Strasburg, VA 22657
Dick D. Bowman 43,744 1.16
Edinburg, VA 22824
Ken L. Burch 45,172 1.20
Quicksburg, VA 22847
Christopher E. French 137,209 3.65
Woodstock, VA 22664
Grover M. Holler, Jr. 70,736 1.88
Edinburg, VA 22824
Harold Morrison, Jr. 20,528 *
Woodstock, VA 22664
Zane Neff 7,716 *
Edinburg, VA 22824
James E. Zerkel II 4,498 *
Mt. Jackson, VA 22842
Total shares beneficially
owned by 13 directors and
officers as a group 351,395 9.36
(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%.
<TABLE>
<CAPTION> 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 1995,
1996, and 1997 to, or
on behalf of, the chief executive officer and each of the next four most highly
compensated
executive officers who earn $100,000 or more per year.
Long-Term
<S> Annual Compensation Compensation
Name and Principal Incentive
Other
Position Year Salary ($) Payment ($) Options (#)
Compensation ($)(1)
<C> <C> <C> <C>
<C>
Christopher E. French 1997 $136,491 $ 12,405 471
$ 7,291
President 1996 130,612 11,013 --
6,778
1995 114,684 20,150 --
6,329
David E. Ferguson 1997 94,141 5,981 352
6,647
Vice President- 1996 91,270 6,134 --
5,807
Customer Service 1995 82,857 10,029 --
5,561
(1) Includes amounts contributed by the company under its 401(k) and Flexible
Benefits Plans, each
of which is available to all regular company employees.
<CAPTION> OPTION GRANTS TABLE
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants
Option Term
% of Total
Options Exercise
Options Granted to or Base
<S> Granted Employees in Price Expiration
Name (Shares) Fiscal Year per Share Date
5% (1) 10% (1)
<C> <C> <C> <C>
<C> <C>
Christopher E. French 471 3.4% $21.86 2/10/2002
$2,845 $6,288
David E. Ferguson 352 2.5% 21.86 2/10/2002
2,125 4,699
(1) In order to realize the potential value set forth, the price per share of the
Company's common
stock would be approximately $27.90 and $35.21, respectively, at the end of the
five-year option
term./TABLE
<PAGE>
<TABLE>
<CAPTION> OPTION EXERCISES AND YEAR END VALUE TABLE
Aggregated Option Exercises in Last Fiscal Year and
FY-End Option Value
Value of Unexercised
No. of Unexercised
in the Money
Options/
Options/
FY-End (Shares)
FY-End ($)
<S> Shares Acquired Value Exercisable/
Exercisable/
Name on Exercise Realized Unexercisable
Unexercisable
<C> <C> <C>
<C>
Christopher E. French 0 0 0 / 471
0 / 0
David E. Ferguson 0 0 0 / 352
0 / 0
Average reported price for transactions reported to the Company during 1997 was
$20.59.
</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 6,363 8,483 10,604 12,725 13,233
50,000 10,390 13,853 17,317 20,780 21,505
75,000 17,103 22,803 28,504 34,205 35,293
100,000 23,815 31,753 39,692 47,630 49,080
125,000 30,528 40,703 50,879 61,055 62,868
150,000 37,240 49,653 62,067 74,480 76,655
160,000 39,925 53,233 66,542 79,850 82,170
Covered Compensation for those retiring in 1998 is
$31,128. 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 1998.
The Company did not make a contribution to the Retirement
Plan in 1997, as the Plan was adequately funded. Christopher
French and David Ferguson had 16 years and 30 years,
respectively, of credited service under the plan as of
January 1, 1998.
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' 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 1997, the Company reached
over 61 percent of its combined goals.
Submitted by the Company's Personnel Committee:
Noel M. Borden, Chairman
Harold Morrison, Jr.
James E. Zerkel II
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
regional Bell Operating Companies, GTE, ALLTEL, and Frontier
Corporation.
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
1992 1993 1994 1995 1996 1997
Shenandoah
Telecommunications 100.00 104.72 100.03 107.86 112.19 107.88
NASDAQ Market
Index 100.00 114.80 112.21 158.70 195.19 239.53
S&P Telephone
Index 100.00 115.49 110.71 166.78 168.45 235.22
Assumes $100 invested December 31, 1992 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, LLP as auditors to make an examination of the
accounts of the Company for the 1998 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 27, 1998.
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.
(Front)
PROXY
Shenandoah Telecommunications Company
124 South Main Street
Edinburg, VA 22824 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 24, 1998, at the Annual
Meeting of Stockholders to be held on April 21, 1998, and at
any and all adjournments thereof.
1. Approval of Classifying the Board of Directors into Three
Classes
( ) FOR ( ) AGAINST ( ) ABSTAIN
The Board of Directors unanimously recommends a vote
"FOR" approval of classifying the Board of Directors.
2. Election of Directors
( ) FOR CLASS I Douglas C. Arthur, Harold Morrison, Jr.
and Zane Neff
CLASS II Noel M. Borden, Ken L. Burch, and
Grover M. Holler, Jr.
CLASS III Dick D. Bowman, Christopher E. French,
and 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>
(Back)
3. 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 , 1998
Signature
( ) I plan to attend the
meeting
( ) Number of persons
attending
( ) I cannot attend the Additional Signature
meeting (if held jointly)
Additional Signature (if held jointly)
