HICKORY TECH CORPORATION
221 East Hickory Street
P.O. Box 3248
Mankato, MN 56002
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD
MONDAY, APRIL 10, 1995
The Annual Meeting of the Shareholders of Hickory Tech Corporation, a Minnesota
corporation, (the "Company"), will be held at the Mankato Civic Center located
at the intersection of Riverfront Drive and Hickory Street, Mankato, Minnesota,
on Monday, April 10, 1995, at 2:30 p.m., Mankato time, for the following
purposes:
1. To elect three directors to serve for ensuing three-year terms;
2. To confirm the Board of Directors selection of Olsen, Thielen & Co., Ltd. as
the Company's auditors for 1995;
3. To transact such other business as may properly come before the meeting or
at any adjournment thereof.
The Board of Directors has fixed the close of business on Friday, March 3,
1995, as the record date for the determination of shareholders entitled to
notice of and to vote at the Annual Meeting and any adjournment thereof.
BY ORDER OF
THE BOARD OF DIRECTORS
HICKORY TECH CORPORATION
/s/ David A. Christensen
David A. Christensen, Secretary
Mankato, Minnesota
March 17, 1995
IMPORTANT
IF YOU DO NOT PLAN TO ATTEND THIS MEETING, PLEASE VOTE, SIGN AND RETURN THE
ENCLOSED PROXY PROMPTLY, USING FOR THAT PURPOSE THE ACCOMPANYING ENVELOPE, FOR
WHICH NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. YOU ARE URGED TO
SIGN AND RETURN YOUR PROXY WITHOUT DELAY TO ENSURE ITS ARRIVAL IN TIME FOR THE
MEETING.
ADDITIONAL COPIES OF THIS NOTICE, THE RELATED PROXY STATEMENT AND ADDITIONAL
PROXY FORMS MAY BE OBTAINED FROM THE SECRETARY, HICKORY TECH CORPORATION, 221
EAST HICKORY STREET, P.O. BOX 3248, MANKATO, MINNESOTA 56002-3248. TELEPHONE
NUMBER (507) 387-3355 OR (800) 326-5789.
HICKORY TECH CORPORATION
221 East Hickory Street
P.O. Box 3248
Mankato, MN 56002
March 17, 1995
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY, APRIL 10, 1995
SOLICITATION
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Hickory Tech Corporation, a Minnesota corporation
(the "Company"), for use at the Annual Meeting of Shareholders of the Company to
be held at the Mankato Civic Center located at the intersection of Riverfront
Drive and Hickory Street, Mankato, Minnesota, on Monday, April 10, 1995, at 2:30
p.m. (Mankato time) or at any adjournment thereof. All properly executed proxies
will be voted at the meeting. This proxy statement and the enclosed proxy card
are being mailed to shareholders on or about March 17, 1995.
REVOCABILITY OF PROXY
A shareholder's proxy may be revoked by a shareholder at any time before it is
exercised by filing a later dated proxy or a written notice of revocation with
the Company's secretary, or by voting in person at the meeting.
FINANCIAL STATEMENTS
The Annual Report for the Company for the calendar year 1994, including
financial statements, is separately enclosed in the envelope with this proxy
statement.
VOTING
Each shareholder of record at the close of business on March 3, 1995, is
entitled to one vote for each share of common stock held. As of that date,
5,124,291 shares were outstanding.
For each share held, shareholders may cast one vote for each proposal identified
on the proxy card. For each share held, shareholders may cast one vote for each
of three directorships to be filled at this meeting. If you do not wish your
shares to be voted for a particular nominee, please so indicate in the space
provided on the proxy card.
Abstentions and broker non-votes will be counted as present or represented at
the meeting for purposes of determining whether a quorum exists. However,
abstentions and broker non-votes with respect to any matter brought to a vote
will be treated as shares not voted for purposes of determining whether the
requisite vote has been obtained and, therefore, will have no effect on the
outcome on any such matter. A majority of the shares present or represented at
the meeting is required for approval of the proposals.
THREE DIRECTORS WILL BE ELECTED AT THE ANNUAL MEETING FOR THREE-YEAR TERMS.
The terms of directors James H. Holdrege, Lyle G. Jacobson and Starr J. Kirklin
expire this year and they are nominees. The term of Thomas R. Borchert expired
in 1994. The Board of Directors is in the process of searching for a candidate
for that directorship and does not have a nominee at this time. Proxies may not
be voted for more than three nominees.
MEMBERS OF THE BOARD AND NOMINEES
ROBERT D. ALTON, JR. has served as a director since 1993. His present term
expires in 1996. Mr. Alton became President and Chief Executive Officer of the
Company in 1993. Mr. Alton, age 46, is the former President of Telephone
Operations of Contel Corporation and was employed in various executive and
financial capacities at Contel Corporation for twenty-one years. In 1994 Mr.
Alton was a director of Valley Opportunities Incorporated, a registered
investment company.* Mr. Alton's term as a director of Valley Opportunities
Incorporated ended in February, 1995.
LYLE T. BOSACKER has served as a director since 1988. His present term expires
in 1997. Mr. Bosacker, age 52, is a management consultant and President of CEO
Advisors, Inc. Mr. Bosacker served as the Director of Corporate Information
Services for International Multifoods from 1991 to 1993 and as its Director of
Corporate Information Systems Planning from 1987 to 1991.
ROBERT K. ELSE has served as a director since 1990. His present term expires in
1996. Mr. Else, age 59, has been the President of EI Microcircuits, Inc. in
Mankato, Minnesota, since 1984. EI Microcircuits manufactures and assembles
electronic circuit boards.
JAMES H. HOLDREGE has served as a director since 1992. His present term expires
this year and he is a nominee. Mr. Holdrege, age 56, has been the General
Manager of KATO Engineering Division Reliance Electric Co. since 1984. KATO
Engineering is a manufacturer of synchronous generators, power conditioning
equipment and associated controls.
LYLE G. JACOBSON has served as a director since 1989. His present term expires
this year and he is a nominee. Mr. Jacobson, age 53, has been the President and
Chief Executive Officer of Katolight Corporation in Mankato, Minnesota, since
1985. Katolight Corporation is a manufacturer of emergency electrical generator
sets.
R. WYNN KEARNEY, JR., M.D. has served as a director since 1993. His present term
expires in 1996. Dr. Kearney, age 51, has been in private practice with the
Orthopaedic & Fracture Clinic, P.A., in Mankato, Minnesota, since 1972 and is
also a staff physician with the Department of Orthopaedic Surgery at
Immanuel-St. Joseph's Hospital in Mankato, Minnesota. Dr. Kearney is also a
director of Exactech, Inc. of Gainesville, Florida.
STARR J. KIRKLIN has served as a director since 1989. His present term expires
this year and he is a nominee. Mr. Kirklin, age 58, has been with First Bank
System, Inc. since 1964 and has served as President of First Bank Mankato since
1978. Mr. Kirklin is a director of Valley Opportunities Incorporated, a
registered investment company.*
BRETT M. TAYLOR, JR. has served as a director since 1970. His present term
expires in 1997. Mr. Taylor, age 65, is the retired Chairman of Brett's
Department Stores, Co. and previously served as its President from 1971 to 1987.
*Mr. Alton and Mr. Kirklin are "interested persons" within the meaning of
Section 2(a) (19) of the Investment Company Act of 1940. First Bank Mankato owns
2.6% of the voting stock of Valley Opportunities Incorporated. Mr. Alton and Mr.
Kirklin serve as directors of Computoservice, Inc. and Mankato Citizens
Telephone Company. The Company and these subsidiaries of the Company, own 11.4%
of the voting stock of Valley Opportunities Incorporated.
<TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
Directors, nominees and executive officers of the Company own the following
securities of the Company:
<CAPTION>
NAME OF AMOUNT & NATURE OF (a) PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
<S> <C> <C> <C>
Robert D. Alton, Jr. 4,889 *
Lyle T. Bosacker 114,702 (b) 2.2%
Robert K. Else 2,183 *
James H. Holdrege 433 *
Lyle G. Jacobson 7,021 (c) *
R. Wynn Kearney, Jr., M.D. 20,611 (d) *
Starr J. Kirklin 583 *
Brett M. Taylor, Jr. 29,182 (e) *
Thomas R. Borchert 2,025 *
David A. Christensen 1,522 *
Robert A. Holzinger 2,732 *
All directors and executive
officers as a group (11 persons) 185,883 3.6%
<FN>
*Less than 1%
(a) Includes shares which may be acquired within 60 days after March 17, 1995,
through the exercise of stock options. The persons who have such options and the
number of shares which may be so acquired are as follows: Mr. Alton, 3,165; Mr.
Borchert, 1,639; Mr. Christensen, 1,281; and Mr. Holzinger, 1,694.
(b) Includes 113,702 shares held by Mrs. Bosacker.
(c) Includes 6,588 shares held by Mrs. Jacobson.
(d) Includes 2,206 shares held in a Profit Sharing Trust.
(e) Includes 17,182 shares held in a partnership and 11,816 shares in a trust
for which Mr. Taylor is co-trustee.
</TABLE>
OTHER EXECUTIVE OFFICERS
THOMAS R. BORCHERT, age 58, has served as Vice-President since 1986. Mr.
Borchert has served as President of Mankato Citizens Telephone Company since
1984.
DAVID A. CHRISTENSEN, age 42, has served as Secretary since 1993, Vice President
and Chief Financial Officer since 1989, Treasurer since 1986 and as Controller
since 1979.
ROBERT A. HOLZINGER, age 61, has served as Vice-President since 1993. Mr.
Holzinger has served as President of Computoservice, Inc. since 1985. Mr.
Holzinger retired in March, 1995.
There are no present family relationships between the executive officers, nor
between the executive officers and the directors.
REMUNERATION OF EXECUTIVE OFFICERS
The remuneration paid or accrued to the Chief Executive Officer and executive
officers of the Company whose aggregate remuneration exceeded $100,000 in 1994
is as follows:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term CompensationAwards
Restricted Securities All
Name and Stock Underlying Other
Principal
Annual Compensation Awards Options/ Compensation
Position Year Salary ($) Bonus($)(3) ($)(4) SARs(#) ($)(5)
<S> <C> <C> <C> <C> <C> <C> <C>
ROBERT D. ALTON, JR. 1994 $194,775 (1) $ 87,990 $38,006 3,092 $ 8,295
Director, Chairman, 1993 $183,750 (1) N/A $35,855 3,201 $32,230(6)
President and Chief
Executive Officer
THOMAS R. BORCHERT 1994 $142,200 $ 62,237 $19,423 1,580 $ 7,880
Vice President 1993 $138,759 (2) $ 71,159 $18,672 1,667 $ 6,389
1992 $129,000 (2) $ 57,890 N/A N/A $ 5,905
DAVID A. CHRISTENSEN 1994 $112,000 $ 39,959 $15,298 1,244 $ 1,492
Vice President, 1993 $107,939 (2) $ 43,161 $14,561 1,299 $ 1,387
Chief Financial 1992 $102,500 (2) $ 31,451 N/A N/A $ 1,387
Officer, Secretary
and Treasurer
ROBERT A. HOLZINGER 1994 $145,600 $ 67,633 $19,888 1,618 $ 7,875
Vice President 1993 $142,000 $108,148 $19,396 1,732 $ 7,870
<FN>
(1) Includes deferred compensation of $8,750 in 1993 and $9,275 in 1994 pursuant
to a Supplemental Retirement Agreement with the Company. Each year Mr. Alton
accrues benefits equal to five percent (5%) of his base salary. This
accumulation of benefits will occur for a maximum of ten (10) years of service
commencing January 1, 1993. Benefits are paid upon termination of employment and
commencing on the earlier of Mr. Alton's 62nd birthday or his date of death.
(2) Includes deferred compensation of $15,000 for Mr. Borchert and $10,000 for
Mr. Christensen pursuant to Supplemental Retirement Agreements with Mankato
Citizens Telephone Company. The Supplemental Retirement Agreements provide for
payments commencing upon termination of employment of $15,000 and $10,000,
respectively, for each year of service commencing January 1, 1984, up to a
maximum of ten (10) years.
(3) The Company and its subsidiaries have an Executive Incentive Plan whereby
key executives may receive additional compensation based on annual performance
and set goals of the Company, its subsidiaries and the individual executive. In
addition to cash compensation, each executive receives a performance award equal
to one-half of the cash compensation. The performance award is credited to the
executive's performance account. The performance account is annually credited
with growth additions or subtractions equal to the percentage increase or
decrease in the book value of the Company's stock. The performance account is
vested over four (4) years and is paid to the executive upon termination of
employment.
(4) Restricted Stock Awards under the Company's 1993 and 1994 Stock Award
Programs will only be issued, if the Company and its subsidiaries achieve
established goals of compound annual growth in pre-tax net income for the three
(3) year periods ending December 31, 1995 and December 31, 1996, respectively.
These amounts have been calculated for illustrative purposes only. Certain
assumptions have been made in estimating the amount of compensation associated
with the Restricted Stock Awards. These assumptions include: a 3% compound
annual growth rate in salaries for the individuals in the Programs, that all
financial targets are met, and that the Committee approves a 100% payout of the
awards to each participant. The Awards will be paid in stock of the Company, not
in cash. See the LTIP table and associated footnotes on page 7.
(5) Employer contributions to 401(k) Plans.
(6) Includes $19,893 reimbursement for moving expenses, $7,681 contribution to
401(k) Plan and $4,655 in miscellaneous perquisites.Option grants in last fiscal
year
</TABLE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
% of Total
Options Potential Realizable Value at Assumed
Options Granted to Exercise Annual Rates of Stock Price Appreciation
Granted Employees in Price Expiration for Option Term ($)
Name (#)(1) Fiscal Year ($/Share) Date 5%($)(2) 10% ($) (2)
<S> <C> <C> <C> <C> <C> <C>
Alton 3,092 41.0 $33.75 May 13, 2004 $65,643 $166,319
Borchert 1,580 21.0 $33.75 May 13, 2004 $33,543 $ 84,988
Christensen 1,244 16.5 $33.75 May 13, 2004 $26,410 $ 66,915
Holzinger 1,618 21.5 $33.75 May 13, 2004 $34,350 $ 87,032
<FN>
(1) The options were granted at the fair market value of the shares on May 13,
1994. The options may be exercised for one-third (1/3) of the shares on or after
May 13, 1995, one-third (1/3) of the shares on or after May 13, 1996, and
one-third (1/3) of the shares on or after May 13, 1997. All options expire on
May 13, 2004 or in the event the optionee is no longer employed by the Company.
All options vest upon the occurrence of an Event (as described in the 1993 Stock
Award Plan). Shares acquired by the optionees are subject to rights of
repurchase by the Company in the event the optionee terminates employment with
the Company or wishes to transfer the shares.
(2) The exercise price was compounded at 5% and 10% over the ten (10) year term
of the options. The resulting stock price was reduced by the exercise price to
determine the potential realizable gain at the assumed rates of appreciation.
</TABLE>
<TABLE>
FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Options at FY-End at FY-End
(#) ($)
Name Exercisable Unexercisable Exercisable Unexercisable(1)
<S> <C> <C> <C> <C>
Alton 1,067 5,226 $1,067 $2,134
Borchert 556 2,691 $ 556 $1,111
Christensen 433 2,110 $ 433 $ 866
Holzinger 577 2,773 $ 577 $1,155
<FN>
(1) Value of unexercised options equals fair market value of shares underlying
in-the-money options at December 31, 1994 ($31.75), less the exercise price,
times the number of in-the-money options outstanding.
</TABLE>
LONG-TERM INCENTIVE PLANS AWARDS IN LAST FISCAL YEAR
In 1993, the shareholders approved the Company's 1993 Stock Award Plan. Stock
Award Programs (the "Programs") were implemented in 1993 and 1994 pursuant to
the terms of the Stock Award Plan. Each Program established a pool of restricted
shares that may be issued to the executives of the Company contingent upon
achievement of performance objectives over a three year period. The objectives
are based on compound annual increases in the earnings of the Company and its
subsidiaries.
<TABLE>
<CAPTION>
Performance
Number of or Other
Shares, Units Period Until Estimated Future Payouts
or Other Maturation or under Non-Stock Price-Based Plans(1)
Name Rights(#)(1) Payout Threshold(2) Target(3) Maximum (4)
<S> <C> <C> <C> <C> <C>
Alton 1,054 1 year 1,054 1,054 1,581
1,055 2 years 1,055 1,055 1,582
Borchert 549 1 year 549 549 823
539 2 years 539 539 808
Christensen 428 1 year 428 428 642
424 2 years 424 424 636
Holzinger 570 1 year 570 570 855
539 2 years 552 552 828
<FN>
(1) Under the terms of the Programs, restricted shares will only be issued if
the Company and its subsidiaries achieve established goals of compound annual
growth in pre-tax net income for the three (3) year periods ending December 31,
1995 and 1996, respectively. It is not possible to predict future salaries,
stock prices or the financial results of the Company and its subsidiaries,
therefore certain assumptions have made to estimate the outcome of the Programs.
These assumptions include: a 3% compound annual growth rate in salaries for the
individuals in the Programs, all financial objectives being achieved, the
Committee approves a payout for each participant and the market value of the
Company's stock is $34.00 per share in February, 1996 and $36.00 per share in
February, 1997.
(2) No restricted shares will be issued unless the Company and its subsidiaries
achieve the performance objectives. The number of shares in the "Threshold"
column assumes the performance objectives have been achieved by the Company and
its subsidiaries.
(3) The number of shares in the "Target" column are the same as the shares in
the "Threshold" column because restricted shares will only be issued if the
performance objectives are achieved.
(4) The Programs allow the Committee the authority to reward outstanding
individual performance by issuing restricted shares to an individual in an
amount not to exceed 150% of the number of shares the individual would have
received under the targeted level. The shares in the "Maximum" column assumes
the Committee will issue 150% of the target number of shares to all
participants.
</TABLE>
COMPENSATION OF DIRECTORS
Directors received $350 for each Board and committee meeting they attended. In
1994, the Directors were paid an annual retainer of $8,000. These fees are
waived if the individual is a paid employee of the Company.
401(K) PLANS
Hickory Tech Corporation and several of its subsidiaries (the "Companies") have
established Retirement Savings Plans ("401(k) Plans"). Robert D. Alton, Jr. and
Robert A. Holzinger are trustees for the Computoservice, Inc. 401(k) Plan trust
funds. Mr. Alton and Thomas R. Borchert are trustees for the other 401(k) Plan
trust funds.
Participation in the 401(k) Plans is open to employees of the Companies that
have 401(k) Plans, and have completed ninety (90) days of continuous employment,
and have been hired to work at least 1,000 hours annually. Participation in the
401(k) Plans is optional. Employees may participate beginning with any biweekly
payroll after completion of eligibility requirements. As of December 31, 1994,
there were 317 employees eligible to participate in the 401(k) Plans. All but 34
eligible employees participated in the 401(k) Plans in 1994.
A participant may elect to defer on a pre-tax basis up to 15 percent of annual
base compensation limited to $9,240 in 1994. The subsidiaries will make an
employer-matching contribution of 75% of the first three percent (3%) of the
participant's pre-tax contribution and 100% of the second three percent (3%) of
the participant's pre-tax contribution. Effective June 1, 1994, the Hickory Tech
Corporation Plan changed its employer-matching contribution to 96% of the first
six percent (6%) of the participant's pre-tax contribution.
The 401(k) Plans are qualified plans under Section 401(a) and 401(k) of the
Internal Revenue Code.
In 1994, the Companies contributed $454,952 to the accounts of all eligible
employees.
CHANGE OF CONTROL
The Company and its subsidiaries have change of control contracts with Robert D.
Alton, Jr., Thomas R. Borchert, David A. Christensen and Robert A. Holzinger.
These contracts provide that in the event there is a change in control of the
Company, the officers shall continue to be employed for at least three (3)
years, unless they are released for cause, are disabled or die. If the officers
are released within three (3) years after change in control, for a reason other
than cause, death or disability, they shall be paid their then current salary
for the remainder of the three (3) year period. In the event of a change in
control of the Company and the simultaneous release of the officers, the
estimated maximum amount of compensation that would be paid to Messrs. Alton,
Borchert, Christensen and Holzinger under their current contracts would be
$991,000, $712,000, $526,000 and $732,000, respectively.
SEVERANCE PAY
The Company has an agreement with Robert D. Alton, Jr. that if he is discharged
by the Company, he will receive severance pay equal to twelve (12) times his
then current monthly base salary. No payments will be made to Mr. Alton if he is
discharged for fraud, misappropriation of funds, embezzlement, or the commission
of a work related felony.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During the fiscal year 1994, the Board of Directors held twelve (12) meetings.
The Company has an Audit Committee consisting of Messrs. Else and Holdrege. The
Audit Committee reviews internal controls of the Company and its financial
reporting, and meets with certified public accountants on these matters; one
meeting was held in 1994. The Company also has a Compensation Committee which
consisted of Messrs. Bosacker, Else and Holdrege until April 11, 1994 and
Messrs. Bosacker, Jacobson and Taylor after April 11, 1994. The Compensation
Committee makes recommendations to the Board regarding compensation for top
management of the Company; four (4) meetings were held in 1994. The Company also
has a Corporate Development Committee consisting of Messrs. Else, Kearney and
Kirklin. The Corporate Development Committee investigates potential expansion
and new markets for the Company; seven (7) meetings were held in 1994. Incumbent
director nominees, Messrs. Holdrege, Jacobson and Kirklin attended 71%, 100% and
95% of their meetings held in 1994, respectively. Attendance at meetings of the
Board of Directors and all committees as a whole averaged 94% in 1994.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation program for executives is the responsibility of the
Compensation Committee of the Board of Directors. In 1994, this Committee was
composed of three outside directors, Messrs. Bosacker, Jacobson and Taylor.
The Board of Directors has established the following ongoing principles and
objectives for the Company's executive compensation program:
1. Provide compensation opportunities that will attract, motivate and retain
highly qualified managers and executives.
2. Link executives' total compensation to the Company's financial performance
and individual job performance.
3. Provide a balance between incentives focused on achievement of annual
objectives and longer term incentives linked to increases in earnings and
shareholder's value.
There are three elements to the compensation plan: annual base salary, cash
bonuses (the "Executive Incentive Plan") and longer term incentives (the "Stock
Award Plan").
Annual base salaries are somewhat influenced by the pay practices of comparable
companies so that the Company remains reasonably competitive with what others
are doing.
The Executive Incentive Plan has both an annual and a long-term component. The
Executive Incentive Plan rewards an executive with a cash bonus for attainment
of annually established financial objectives based on a combination of revenue,
pre-tax earnings and/or return on equity. The individual executive's performance
is also factored into awards made under the Executive Incentive Plan. In
addition to the payment of a cash bonus, an account is established for each
executive equal to 50% of the cash bonus. The account is adjusted annually based
on growth additions or subtractions equal to the percentage increase or decrease
in the book value of the Company. There is a four year vesting schedule
associated with this element of the Executive Incentive Plan. This long-term
feature is designed to emphasize the long-term success of the Company and not to
focus merely on the results for the current year.
The Stock Award Plan allows the Company to issue restricted shares, incentive
stock options and non-qualified stock options to officers of the Company. The
1994 Stock Award Program that was adopted pursuant to the Stock Award Plan
issued incentive stock options to four officers of the Company. The incentive
stock options vest over a three year period and must be exercised within ten
years of their issuance. The stock options reward the executives in the event
they increase the fair market value of the shares of the Company. The 1994 Stock
Award Program also established a pool of restricted shares that may be issued to
the executives of the Company contingent upon the achievement of performance
objectives over a three year period. The objectives are based on increases in
the earnings of the Company and its subsidiaries.
The Committee applied the above-described principles and objectives in
determining the compensation for the Chief Executive of the Company, Mr. Alton.
In setting 1994 salary the Committee reviewed Mr. Alton's total compensation
program to make sure that it was closely related to the performance of the
Company in 1993. In establishing salary for 1994 the Committee specifically
considered the satisfactory results of the Company in 1993 as compared to
targeted goals in the areas of annual revenue, pre-tax profitability, return on
equity and rate of growth. The Committee also reviewed the compensation of the
CEO to determine that the compensation was competitive for similar positions in
comparable companies and was equitable for the Company and its shareholders.
COMPENSATION COMMITTEE
Lyle T. Bosacker
Lyle G. Jacobson
Brett M. Taylor, Jr.
FIVE YEAR SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The line graph presentation compares cumulative, five-year shareholder returns
on an indexed basis. The graph shows the value at each year of $100 invested in
the Company's stock or the index at December 31, 1989 and assumes the
re-investment of all dividends. The Board of Directors has approved a peer group
of four (4) independent telecommunications companies which have been used for
purposes of this performance comparison. These companies were selected because
they have a similar proportion of core business in regulated telephone
operations, a similar pattern of internal diversification and moderate external
acquisition activity. The companies selected to be in the peer group are
identified below. The following graph compares the cumulative five year
performance of the Company's common stock to the S&P 500 Composite Index and to
an index of peer companies.
(Following are the tables included in the proxy which describe the points of the
graph.)
<TABLE>
Annual Returns (Based on Dividends Reinvested Monthly)
<CAPTION>
Return Return Return Return Return
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Hickory Tech 36.04% 9.85% 7.75% 7.51% -1.18%
S&P 500 Index -3.11 30.47 7.62 10.08 1.32
Peer Group Index Average -19.75 -0.98 10.85 16.81 -3.74
<FN>
Indexed Returns (12/31/89 = 100)
</TABLE>
<TABLE>
Value at December 31
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Hickory Tech $136.04 $149.44 $161.02 $173.11 $171.07
S&P 500 Index 96.89 126.42 136.05 149.76 151.74
Peer Group Index Average 80.25 79.46 88.08 102.89 99.05
</TABLE>
Companies in selected Peer Group are:
Cincinnati Bell, Inc.
Lincoln Telecommunications Company
Frontier Corp. f/k/a Rochester Telephone Company
Southern New England Telecommunications Corporation
SELECTION OF AUDITORS
Subject to the approval of the shareholders, the Board of Directors has
re-employed Olsen, Thielen & Co., Ltd., 223 Little Canada Road, St. Paul,
Minnesota 55117, as the Company's auditors for 1995. The auditors report
directly to the Board of Directors. No representative of Olsen, Thielen & Co.,
Ltd is expected to be present at the Annual Meeting on April 10, 1995.
METHOD AND EXPENSES OF SOLICITATION
The entire cost of this solicitation will be paid by the Company. In addition to
solicitation by mail, officers or regular employees of the Company may solicit
proxies by personal interview, mail, telephone and telegraph and may request
brokers and other custodians, nominees and fiduciaries to forward soliciting
material to their beneficial owners at the expense of the Company.
PROPOSALS OF SHAREHOLDERS
Proposals submitted by shareholders must be received by the Company not later
than December 15, 1995, for inclusion in the proxy materials for the next Annual
Meeting proposed to be held in April, 1996.
AVAILABILITY OF FORM 10-K
Shareholders of record on March 3, 1995, may obtain a copy of the Company's Form
10-K for the 1994 fiscal year, free of charge, by a written request to the
Company's executive offices directed to:
David A. Christensen, Secretary
Hickory Tech Corporation
221 East Hickory Street
P.O. Box 3248
Mankato, Minnesota 56002
OTHER MATTERS
The Management does not know of other matters to come before the meeting.
However, if any other matters properly come before the meeting, it is the
intention of the persons designated as proxies to vote in accordance with their
best judgment on such matter.
IN THE INTEREST OF ECONOMY, YOU ARE REQUESTED TO VOTE, SIGN AND RETURN THE
ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. ALL SHAREHOLDERS SHOULD SIGN THE
PROXY. (NO POSTAGE IS REQUIRED ON THE ENCLOSED ENVELOPE.)
BY THE ORDER OF
THE BOARD OF DIRECTORS
HICKORY TECH CORPORATION
/s/ Robert D. Alton, Jr.
Robert D. Alton, Jr.
Chairman
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000766561
<NAME> HICKORY TECH CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 6952
<SECURITIES> 2648
<RECEIVABLES> 7350
<ALLOWANCES> 92
<INVENTORY> 2948
<CURRENT-ASSETS> 18187
<PP&E> 73867
<DEPRECIATION> 38236
<TOTAL-ASSETS> 67780
<CURRENT-LIABILITIES> 6956
<BONDS> 0
<COMMON> 2002
0
0
<OTHER-SE> 50840
<TOTAL-LIABILITY-AND-EQUITY> 67780
<SALES> 58208
<TOTAL-REVENUES> 58208
<CGS> 14406
<TOTAL-COSTS> 43702
<OTHER-EXPENSES> 102
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 102
<INCOME-PRETAX> 14705
<INCOME-TAX> 5558
<INCOME-CONTINUING> 9147
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9147
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.78
</TABLE>
