<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 7,708
<SECURITIES> 2,945
<RECEIVABLES> 10,289
<ALLOWANCES> 199
<INVENTORY> 3,293
<CURRENT-ASSETS> 23,299
<PP&E> 81,951
<DEPRECIATION> 47,080
<TOTAL-ASSETS> 71,121
<CURRENT-LIABILITIES> 7,038
<BONDS> 0
0
0
<COMMON> 502
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 71,121
<SALES> 10,776
<TOTAL-REVENUES> 31,483
<CGS> 6,445
<TOTAL-COSTS> 24,319
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 137
<INCOME-PRETAX> 7,567
<INCOME-TAX> 2,980
<INCOME-CONTINUING> 4,587
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,587
<EPS-PRIMARY> .90
<EPS-DILUTED> .90
</TABLE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
- or -
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-13721
HICKORY TECH CORPORATION
P.O. Box 3248
221 East Hickory Street
Mankato, Minnesota 56002-3248
(800) 326-5789
Incorporated in Minnesota I.R.S. Employer Identification
41-1524393
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X]
The number of shares outstanding of each of the Registrant's classes of common
stock, as of the latest practicable date: 5,020,830 shares of no par common
stock as of June 30, 1996.
HICKORY TECH CORPORATION
JUNE 30, 1996
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1.Financial Statements.
CONSOLIDATED INCOME STATEMENT
(UNAUDITED)
<CAPTION>
In Thousands For Quarter Ended For 6 Months Ended
6-30-96 6-30-95 6-30-96 6-30-95
--------- --------- --------- ---------
OPERATING REVENUES
<S> <C> <C> <C> <C>
Telephone $7,986 $7,627 $15,911 $15,171
Computer 2,122 2,424 4,796 4,248
Equipment Sales 4,111 3,213 7,486 6,810
Telecommunications Product Development 1,723 2,309 3,290 3,991
------- ------- ------- -------
TOTAL OPERATING REVENUES 15,942 15,573 31,483 30,220
COSTS AND EXPENSES
Cost of Sales 3,586 3,297 6,445 6,357
Operating Expenses 6,801 6,480 13,942 12,619
Depreciation 1,363 1,349 2,748 2,699
Amortization of Intangibles 882 533 1,184 1,016
------- ------- ------- -------
TOTAL COSTS AND EXPENSES 12,632 11,659 24,319 22,691
------- ------- ------- -------
OPERATING INCOME 3,310 3,914 7,164 7,529
OTHER INCOME 241 268 540 404
INTEREST EXPENSE (42) (16) (137) (46)
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 3,509 4,166 7,567 7,887
INCOME TAXES 1,338 1,661 2,980 3,161
------- ------- ------- -------
CONSOLIDATED NET INCOME $2,171 $2,505 $4,587 $4,726
======= ======= ======= =======
EARNINGS PER SHARE $0.43 $0.49 $0.90 $0.92
DIVIDENDS PER SHARE $0.275 $0.25 $0.55 $0.50
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
HICKORY TECH CORPORATION
JUNE 30, 1996
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<CAPTION>
In Thousands 6-30-96 12-31-95
------- --------
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and Cash Equivalents $6,431 $4,517
Temporary Cash Investments 1,277 7,176
Receivables, Net of Allowance 10,090 9,381
Taxes Receivable 1,049 0
Inventories 3,293 2,846
Deferred Tax Benefit and Other 1,159 985
------- -------
TOTAL CURRENT ASSETS 23,299 24,905
INVESTMENTS 2,948 2,714
PROPERTY, PLANT & EQUIPMENT:
Telecommunications Plant 71,191 69,162
Other Property and Equipment 10,760 11,433
------- -------
TOTAL 81,951 80,595
Less Accumulated Depreciation 47,080 44,507
------- -------
NET PROPERTY, PLANT AND EQUIPMENT 34,871 36,088
OTHER ASSETS:
Intangible Assets 9,330 9,457
Note Receivable 260 340
Miscellaneous 413 433
------- -------
TOTAL OTHER ASSETS 10,003 10,230
------- -------
TOTAL ASSETS $71,121 $73,937
======= =======
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $5,427 $5,568
Accrued Taxes 0 459
Advanced Billings & Deposits 1,402 1,679
Current Maturities of Long-Term Debt 209 206
------- -------
TOTAL CURRENT LIABILITIES 7,038 7,912
LONG-TERM DEBT, NET OF CURRENT MATURITIES 983 1,087
DEFERRED CREDITS:
Investment Tax Credits 193 233
Income Taxes 3,703 3,735
Compensation, Benefits and Other 2,829 3,063
------- -------
TOTAL DEFERRED CREDITS 6,725 7,031
SHAREHOLDERS' EQUITY:
Common Stock 502 2,294
Additional Paid-In Capital 1,604 0
Reinvested Earnings 54,269 55,613
------- -------
TOTAL SHAREHOLDERS' EQUITY 56,375 57,907
------- -------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $71,121 $73,937
======= =======
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
HICKORY TECH CORPORATION
JUNE 30, 1996
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<CAPTION>
For Six Months Ended
In Thousands 6-30-96 6-30-95
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $4,587 $4,726
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
Depreciation and Amortization 4,058 3,715
Estimated Loss Resulting from
Disposition of Assets 0 387
Equity in Subsidiary Income (241) (264)
Changes in Assets and Liabilities:
(Increase) Decrease in:
Receivables (709) (36)
Taxes Receivable (1,049) (191)
Inventories (447) (193)
Increase (Decrease) in:
Accounts Payable (141) 60
Accrued Taxes (459) (404)
Advanced Billings & Deposits (277) 1,560
Deferred Investments Tax Credits (40) (50)
Deferred Income Taxes (32) (37)
Other (388) 792
------- -------
Net Cash Provided by Operating Activities 4,862 10,065
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to Property, Plant & Equipment (1,656) (2,287)
Additions to Intangible Assets (1,057) (601)
(Increase) Decrease in Note Receivable 80 (73)
Decrease in Investments 7 176
(Increase) Decrease in Temporary Cash Investments 5,899 (1,226)
------- -------
Net Cash Provided by (Used in) Investing Activ. 3,273 (4,011)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of Debt (101) (874)
Proceeds from Issuance of Common Stock 303 12
Acquisition of Common Stock (3,612) 0
Dividends Paid (2,811) (2,562)
------- -------
Net Cash Used in Financing Activities (6,221) (3,424)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,914 2,630
CASH AND CASH EQUIVALENTS At Beginning of Year 4,517 5,065
------- -------
CASH AND CASH EQUIVALENTS At End of Period $6,431 $7,695
======= =======
<FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
HICKORY TECH CORPORATION
JUNE 30, 1996
PART 1. FINANCIAL INFORMATION
ITEM 1 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
The preceding unaudited Consolidated Statement of Income, Balance
Sheet and Statement of Cash Flows include all adjustments which are,
in the opinion of management, necessary to a fair statement of the
results for the interim periods reported on.
NOTE 1. BASIS OF CONSOLIDATION
The Registrant is a diversified communications company headquartered
in Mankato, Minnesota. The consolidated financial statements of the
Registrant include Hickory Tech Corporation, the parent company, and
its seven wholly owned operating subsidiaries. The companies and
operations of the Registrant are grouped into four primary lines of
business.
MANKATO CITIZENS TELEPHONE COMPANY, MID-COMMUNICATIONS, INC. and AMANA
COLONIES TELEPHONE COMPANY are local exchange telephone companies.
Mankato Citizens Telephone Company also owns and operates a direct
broadcast satellite license under the trade name DirectVision. CABLE
NETWORK, INC. owns and operates fiber optic cable facilities for the
transportation of long distance communications. It also operates cable
television systems and owns partnership interests in three cellular
properties in south central Minnesota. These four wholly-owned
subsidiaries comprise the Registrant's Telephone Segment.
COMPUTOSERVICE, INC. provides data processing for the Telephone
Segment as well as other unrelated telephone companies. It also
provides services to interexchange carriers such as AT&T, MCI and US
West Communications, Inc. through its subsidiary, National Independent
Billing, Inc. The operations of Computoservice, Inc. and National
Independent Billing, Inc. constitute the Registrant's Computer
Segment.
COLLINS COMMUNICATIONS SYSTEMS CO. sells, installs and services
telecommunications equipment in the retail market in the metropolitan
Minneapolis/St. Paul area. The Registrant's Equipment Sales Segment
is made up of this wholly-owned subsidiary, as well as the retail
sales and service operations of the Registrant's local exchange
telephone companies in southern Minnesota and east-central Iowa.
DIGITAL TECHNIQUES, INC. designs, assembles and distributes unique
business telephone system components. The operations comprise the
Registrant's Telecommunications Product Development Segment. The
Registrant owns 100% of Digital Techniques, Inc., which increased from
96% at March 31, 1996, as a result of the acquisition of the remaining
minority interest through the distribution of 6,757 shares of the
Registrant's common stock in a merger.
The accounting policies of the Registrant are in conformity with
generally accepted accounting principles and, where applicable,
conform to the accounting principles as prescribed by federal and
state telephone utility regulatory authorities.
All intercompany transactions have been eliminated from the
consolidated financial statements.
NOTE 2. EARNINGS AND CASH DIVIDENDS PER COMMON SHARE
Earnings per common share are based on the weighted average number of
shares of common stock equivalents outstanding during all periods. For
the quarter ended June 30, 1996, the earnings per common share
calculation was based on 5,081,645 shares. For the six months ended
June 30, 1996, the calculation was based on 5,101,992 shares. For the
quarter ended June 30, 1995, the earnings per common share calculation
was based on 5,124,656 shares. For the six months ended June 30, 1995,
the calculation was based on 5,124,475 shares. The number of shares
outstanding on June 30, 1996 was 5,020,830.
Cash dividends are based on the number of common shares outstanding
at the respective record dates. The number of shares outstanding as
of the record date for the first and second quarter of 1996 and 1995
were as follows:
Shares Outstanding on Record Date 1996 1995
--------------------------------- --------- ---------
1st Quarter (Feb. 15) 5,121,873 5,124,291
2nd Quarter (May 15) 5,098,119 5,124,656
NOTE 3. INVENTORIES
Inventories are stated at the lower of average cost or market and
consist of the following:
(in Thousands) 6-30-96 12-31-95
------- --------
Finished Goods $ 416 $ 344
Work in Process 102 142
Materials and Supplies 2,775 2,360
------- -------
Total $ 3,293 $ 2,846
======= =======
NOTE 4. COMMON STOCK
The Registrant's common stock has no par value. There are
25,000,000 shares authorized. There were 5,020,830 shares
outstanding on June 30, 1996, and 5,134,021 shares outstanding
on December 31, 1995.
Pursuant to the Retainer Stock Plan for Directors, 455 shares of
common stock were issued in lieu of cash retainers to five
members of the Registrant's Board of Directors on March 31,
1996 and 356 shares were issued to four Directors on June 30,
1996. Pursuant to a long-term incentive award plan for
officers, 3,152 shares of common stock were issued to officers
of the Registrant during the first quarter of 1996. Shares
issued to directors and officers were issued at 100% of fair
market value on the date of issue.
During the six months ended June 30,1996, the Registrant retired
123,911 shares of its common stock at a cost of $3,612,000.
In April, 1996, the Registrant announced a program to
repurchase up to 500,000 shares of its outstanding stock.
This program was reported on Form 8-K dated April 8, 1996.
Other common stock activity includes 6,757 shares issued in April
1996 to minority shareholders of Digital Techniques, Inc., the
Registrant's subsidiary, to complete a merger.
Effective April 1, 1996, the Registrant established a stated
value of $0.10 per share for its common stock. Prior this change,
the Registrant's common stock had no stated value. On April 1,
1996, the accounting value of the Registrant's common stock of
$1,941,000 was
reclassified to $512,000 as common stock and $1,429,000 as
Additional Paid-In Capital. This change was implemented due to the
Registrant's activities in repurchasing its common stock.
NOTE 5. CORPORATE DEVELOPMENT
The Registrant has entered into an agreement to purchase the assets
of eleven rural telephone exchanges in the State of Iowa from US
West Communications, Inc. ("US West") for $35,271,000. The eleven
exchanges contain approximately 12,200 access lines. The
acquisition will be structured as a purchase of telephone assets
from US West and must be approved by the Public Utilities Boards of
Iowa, South Dakota, Minnesota and the Federal Communications
Commission. The Iowa and South Dakota approvals have been
obtained and the others are in process. It is anticipated that
all the approvals for the purchase of the exchanges should be
completed in the first quarter of 1997.
The Registrant is anticipating utilizing new long-term debt
instruments to fund the majority of its $35,271,000 acquisition
price for the US West property. Negotiations are presently
taking place to secure such funding. No difficulty is
anticipated in obtaining this financing.
NOTE 6. OTHER
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is
suggested these condensed financial statements be read in
conjunction with the financial statements and notes thereto
included in the Registrant's December 31, 1995 Form 10-K.
HICKORY TECH CORPORATION
JUNE 30, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
Consolidated Net Income for the quarter ended June 30, 1996, was
13.3% lower than the same period in 1995, as illustrated by the
following table:
NET INCOME (thousands) 1996 1995 1994 1993
---- ---- ---- ----
1st Quarter $2,416 $2,221 $2,121 $2,233
2nd Quarter 2,171 2,505 2,255 1,976
Operating Revenues were 2.4% higher for the quarter ended June 30,
1996, than for the quarter ended June 30, 1995, as illustrated
by the following table:
OPERATING REVENUES (thousands) 1996 1995 1994 1993
---- ---- ---- ----
1st Quarter $15,541 $14,647 $14,095 $13,309
2nd Quarter 15,942 15,573 14,589 12,762
A. Material changes in results of operations:
1. TELEPHONE - Operating Revenues for the second quarter of 1996
were $359,000 or 4.7% higher than the same period in 1995. For
the six months ended June 30, 1996, Operating Revenues were
$740,000 or 4.9% higher than the same period in 1995. Access
line growth was the primary contributor to the revenue growth,
providing access revenue, as well as additional minutes of
use revenue.
2. COMPUTER - Operating Revenues for the second quarter of 1996
were $302,000 or 12.5% lower than the same period in 1995. For
the six months ended June 30, 1996, Operating Revenues were
$548,000 or 12.9% higher than the six months ended June 30,
1995. The decline in revenue for the second quarter of 1996
was due to the non-renewal of a data-processing contract
with a large long-distance company, reduced contract
programming services and a decline in software sales. In
1995, second quarter revenues for the Computer Segment had
software sales from the initiation of a business
relationship with a large interexchange carrier.
While the business relationship and operating revenues
from this customer continue, there have been no additional
large software sales in 1996.
3. EQUIPMENT SALES - Operating Revenues for this segment were
$898,000 or 27.9% higher for the second quarter of 1996 when
compared to the second quarter of 1995. For the six months
ended June 30, 1996, Operating Revenues were $676,000 or
9.9% higher than the same period in 1995. The Registrant
sold the assets of its California division in 1995.
Revenues from the California division for the second
quarter of 1995 were $162,000 and for the first six months
of 1995 were $615,000. Without consideration of the 1995
Revenue from the California division, Operating Revenues
for this segment would have increased 34.7% for the quarter
ended June 30, 1996, and 20.8% for the six months ended
June 30, 1996, when compared to the same period in 1995.
Revenue for the second quarter of 1996 for the St. Paul
division was enhanced by a $1 million contract with
Anoka-Hennepin school district. This contract was signed
late in 1995. The St. Paul division has also recently
entered into a $2.1 million contract to provide enhanced
digital equipment for a large financial advising company.
4. TELECOMMUNICATIONS PRODUCT DEVELOPMENT - Operating Revenues
for the quarter ended June 30, 1996 were $586,000 or 25.4%
lower than the second quarter of 1995. Operating Revenues
for the six months ended June 30, 1996 were $701,000 or
17.6% lower than the same period in 1995. Standard Product
Sales for the six months ended June 30, 1996 were down
$993,000 when compared to the first six months of 1995.
Standard Product Sales were affected by a large customer of
this segment's E911 product. The customer has put E911
purchases on hold while it is evaluating alternative
solutions. Standard Product Sales in 1996 were also
affected by the delayed deployment of the new Qstar product.
Qstar is undergoing extensive tests by RBOC's, GTE and British
Telecom, Inc. When the tests are completed, the higher
level of Standard Product Sales originally anticipated to
occur early in 1996 are expected to begin. Management
cannot predict when the distributors' product testing will
be completed. OEM sales for the six months ended June 30,
1996 were $325,000 higher than the second quarter of 1995.
OEM sales are generally at a lower margin than standard
product sales.
5. COST OF SALES - Consolidated Cost of Sales was $289,000 or
8.8% higher for the quarter ended June 30, 1996, than the
same period in 1995. For the six months ended June 30, 1996,
Cost of Sales was $88,000 or 1.4% higher than for the same
period in 1995. Through the first six months of 1996,
Operating Revenues for the two segments (Equipment Sales
and Telecommunications Product Development) which generated
most of the Cost of Sales were essentially the same as
Operating Revenues during the six months ended June 30, 1995.
In terms of percentage of Operating Revenues from these two
segments, Cost of Sales was 60% for the six months ended
June 30, 1996, compared to 59% for the same period in 1995.
Operating margins have been satisfactory to management. It
is the volume of sales activity in 1996 which is below
expectations.
6. OPERATING EXPENSES - Operating Expenses for the quarter ended
June 30, 1996, were $321,000 or 5.0% higher than the same
period in 1995. For the six months ended June 30, 1996,
Operating Expenses were $1,323,000 or 10.5% higher than in
1995. The Telecommunications Product Development Segment
incurred increases in Engineering, Sales and Marketing
expenses totaling $267,000 for the second quarter and
$543,000 for the six months ended June 30, 1996. These
increases were related to the development of new products.
The Registrant recorded an estimated loss of $387,000 in
the second quarter of 1995 on the anticipated closing and
disposition of assets of the California division of Collins
Communications Systems Co. Without the effect of the estimated
loss, the increase in Operating Expenses over 1995 would have
been 14.0% for the six months ended June 30, 1996.
7. AMORTIZATION OF INTANGIBLES - Amortization for the quarter
ended June 30, 1996, was $349,000 higher than for the quarter
ended June 30, 1995. For the six months ended June 30, 1996,
Amortization was $168,000 higher than for the same period in
1995. The Registrant accelerated the amortization of
capitalized software costs in its Computer Segment, which
resulted in a nonrecurring expense of $573,000 in the second
quarter of 1996. Without the effect of this one-time expense,
amortization for the quarter ended June 30, 1996 was $224,000
lower than the second quarter of 1995. This reduction
resulted from the sale of assets and full amortization of some
intangible assets associated with acquisitions made in 1990
and 1992.
B. Material changes in financial condition:
1. CASH FLOWS - Cash and Cash Equivalents increased $1,914,000
for the six months ended June 30, 1996, compared with an
increase of $2,630,000 for the same period in 1995. The
primary sources of cash in 1996 were from internal
operations and $5.9 million from use of temporary cash
investments for the Registrant's stock repurchase program.
The 1995 primary source of cash was from internal operations.
The primary use of cash in the first six months of 1996 was
the Registrant's stock repurchase program which required
$3.6 million. Additions to Property, Plant and Equipment
required $1.7 million in 1996 and $2.3 million in 1995.
Dividends paid for the first six months were higher (9.7%)
in 1996 than 1995, reflecting a $0.05 per share increase for
the first two quarters.
2. WORKING CAPITAL - Current Assets exceeded Current Liabilities
by $16.3 million dollars as of June 30, 1996, compared to a
working capital surplus of $17.0 million as of December 31,
1995. The primary source of working capital was internal
operations. The ratio of current assets to current
liabilities was 3.3:1 as of June 30, 1996.
3. USES OF CAPITAL - The largest use of internal capital
during the quarter ended June 30, 1996 was the Registrant's
repurchase of 108,611 shares of its common stock. The stock
repurchase program used $3.1 million of capital during the
quarter. Additions to Property, Plant and Equipment have
historically been the Registrant's largest investing
activity, using $17.9 million for the three years ended
December 31, 1995. During the first six months of 1996,
$1.7 million of working capital was used to purchase fixed
assets.
4. LONG-TERM DEBT- The Registrant's Long-Term Debt as of June 30,
1996, was $983,000. In addition, Current Maturities of
Long-Term Debt were $209,000. The general purpose of this debt
was the financing of telephone property, plant and equipment
of Mid-Communications, Inc. in the 1970's. This debt has
final maturities at various times in 2003 through 2007 with
interim sinking fund payments. Currently debt service is
being funded out of operations. No material liquidity problems
are anticipated from the long-term funding of the debts
maturing in 2003 through 2007.
The Registrant is anticipating utilizing new long-term debt
instruments of various maturities to fund the majority of the
$35 million acquisition of the Iowa - US West telephone
property in 1997. Negotiations are presently taking place to
obtain such funding. No difficulty is anticipated in
obtaining such funding. In September, 1995, the Registrant
secured a $7,000,000 line of credit arrangement. This line of
credit will be used for general corporate purposes and as
bridge financing for future acquisition activity. The line of
credit provides for borrowing at the prime interest rate.
Through June 30, 1996, no advances have been made against this
line of credit.
5. CAPITAL FROM OPERATIONS - Management believes the Registrant
will be able to generate sufficient working capital internally
from operations to meet its immediate operating needs, and
sustain its historical dividend levels. The Registrant has
completed five acquisitions in the previous five years which
were all funded out of existing cash balances. Growth plans
and acquisitions will require additional debt financing in the
future. Discussions have been conducted with several sources
of long-term debt financing, but no commitments have been
made. Should the Registrant have a need to secure senior debt
financing as a result of pursuing corporate acquisitions, no
difficulty is anticipated.
The Registrant's stock repurchase program has been funded with
internal cash to date. As further stock repurchases are made,
financing from the Registrant's Line of Credit will be
available.
HICKORY TECH CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Default Upon Senior Securities,
None.
Item 4. Submission of Matters to a Vote of Security Holders.
a. The annual shareholders' meeting was held on April 8, 1996.
b. Three directors were elected to serve three year terms. The
names of the directors elected at the annual meeting and the
applicable votes were as follows:
With- Broker
Director For Against held Nonvotes
-------------------- -------- ------- ------ --------
Robert D. Alton, Jr. 3,724,614 43,927 20,428 None
Robert K. Else 3,747,133 21,408 20,428 None
R. Wynn Kearney, Jr. 3,733,196 35,345 20,428 None
The other directors of the Registrant are as follows:
Lyle T. Bosacker James H. Holdrege
Lyle G. Jacobson Starr J. Kirklin
Brett M. Taylor, Jr.
c. An Amendment to the 1993 Stock Award Plan to allow employees
of the Company and its subsidiaries to receive awards under
the Plan was approved. The votes regarding the approval of
this Amendment were as follows:
For Against Abstain Broker Nonvotes
--------- ------- ------- ---------------
3,113,872 588,545 65,140 None
d. Olsen Thielen & Co., Ltd. was also confirmed as the auditors
for the Registrant for 1996 at the annual meeting. The votes
regarding the selection of the auditors were as follows:
For Against Abstain Broker Nonvotes
--------- ------- ------- ---------------
3,726,194 13,884 28,462 None
Item 5. Other Information.
None.
Item 6. Exhibits and Reports of Form 8-K.
(a) Exhibits
Exhibit 10(k) contains the 1993 Hickory Tech Corporation Stock
Award Plan (amended and restated).
Exhibit 10(m) contains the Hickory Tech Corporation Stock Plan
for Directors (amended and restated).
Exhibit 10(j) contains the Hickory Tech Corporation Employee
Stock Purchase Plan (amended and restated).
(b) Reports on Form 8-K
On April 8, 1996, the Registrant filed a Form 8-K. Item 5
(Other Events) was reported on the Form 8-K.
On April 8, 1996, the Board of Directors of the Registrant
adopted a share repurchase program authorizing the Registrant to
repurchase up to 500,000 shares, which represents 9.8% of its
outstanding common stock. The purchases may be executed through
open market purchases, block purchases and privately negotiated
transactions. The program to repurchase the shares may be
discontinued and recommenced at any time at the discretion of
the Board of Directors. The Registrant has a strong cash
position and the Board of Directors believes the shares are
undervalued compared to the performance of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
Dated: August 12, 1996 HICKORY TECH CORPORATION
/s/ Robert D. Alton, Jr.
Robert D. Alton, Jr.,
Chief Executive Officer
/s/ David A. Christensen
David A. Christensen,
Chief Financial Officer
EXHIBIT 10 (k)
HICKORY TECH CORPORATION
1993 STOCK AWARD PLAN
(Amended and Restated Effective September 1, 1996)
1. Purpose. The purpose of the Hickory Tech Corporation 1993 Stock Award
Plan (the"Plan") is to motivate key employees of Hickory Tech Corporation (the
"Company") and its subsidiaries to produce a superior return to the shareholders
of the Company by offering such employees an opportunity to acquire a
proprietary interest in the Company and thereby develop a stronger incentive to
put forth maximum effort for the continued success and growth of the Company and
its subsidiaries. The Plan is also intended to facilitate recruiting and
retaining key personnel of outstanding ability by providing such an acquisition
opportunity.
2. Definitions.
2.1 The terms defined in this section are used (and capitalized) elsewhere
in the Plan.
a. "Agreement" means a written contract entered into between the Company
and a Participant containing the terms and conditions of an Award in
such form and not inconsistent with this Plan as the Committee (as
defined in Section 3.1) shall approve from time to time, together with
all amendments thereto, which amendments may be unilaterally made by
the Company (with the approval of the Committee) unless such
amendments are deemed by the Committee to be materially adverse to the
Participant and are not required as a matter of law.
b. "Award" means a grant made under this Plan in the form of Restricted
Stock or options.
c. An "Event" shall be deemed to have occurred if:
(i) a majority of the directors of the Company shall be persons
other than those:
(a) for whom election proxies shall have been solicited by the
Board of Directors of the Company (the "Board"); or
(b) who are then serving as directors appointed by the Board to
fill vacancies on the Board caused by death or resignation
(but not by removal) or to fill newly-created
directorships.
(ii) 30% or more of the outstanding voting stock of the Company is
acquired or beneficially owned (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended, or any
successor rule thereto) by any person (other than the Company or
a subsidiary of the Company) or group of persons acting in
concert (other than the acquisition and beneficial ownership by
a parent corporation or its wholly-owned subsidiaries, of 100%
of the outstanding voting stock of the Company as a result of a
merger which complies with paragraph subsection (iii) (A) (2)
below in all respects),
(iii) the shareholders of the Company approve a definitive agreement
or plan to:
(A) Merge or consolidate the Company with or into another
corporation (other than (1) a merger or consolidation with
a subsidiary of the Company of (2) a merger in which the
Company is the surviving corporation and either (A) no
outstanding voting stock of the Company (other than
fractional shares) held by shareholders immediately prior
to the merger is converted into cash, securities or other
property, or (B) all holders of outstanding voting stock of
the Company (other than fractional shares) immediately
prior to the merger have substantially the same
proportionate ownership of the voting stock of the Company
or its parent corporation immediately after the merger),
(B) Exchange, pursuant to the statutory exchange of shares of
voting stock of the Company held by stockholders
immediately prior to the exchange, shares of one or more
classes or series of voting stock of the Company for cash,
securities or other property,
(C) Sell or otherwise dispose of all or substantially all of
the assets of the Company (in one transaction or a series
of transactions); or
(D) Liquidate or dissolve the Company.
Notwithstanding the above, an Event shall not be deemed to occur with
respect to a recipient of an Award if the acquisition of the 30% or
greater interest referred to in subsection (ii) above is by the
recipient or a group, acting in concert, that includes the recipient
or if a majority of the voting stock (or the voting equity interest)
of the surviving corporation or its parent corporation or any
corporation (or other entity) acquiring all or substantially all of
the assets of the Company (in the case of a merger, consolidation or
disposition of assets) or the Company or its parent corporation (in
the case of a statutory share exchange) is, immediately following the
merger, consolidation, statutory share exchange or disposition of
assets, beneficially owned by such recipient or by a group acting in
concert, that includes the recipient.
d. "Fair Market Value" as of any date shall mean an average of the
closing price per Share of Common Stock, no par value (a "Share"), of
the Company on each of the five business days immediately preceding
the date on which a price determination is to be made. The closing
prices shall be the closing prices as published in The Wall Street
Journal. In the absence of trading in the Shares on any of the five
immediately preceding business days, the calculation will be based on
the closing price for the five business days preceding the date on
which a price determination is to be made on which there were actual
trades of the Shares.
e. "Participant" means an employee to whom an Award is made.
f. "Restricted Stock" means Shares granted under Section 7 so long as
such Shares remain subject to restrictions.
g. "Successor" means the legal representative of the estate of a deceased
Participant or the person or persons who may, by request or
inheritance, or pursuant to the terms of an Award or of forms
submitted by the Participant to the Committee pursuant to Section 18,
acquire the right to exercise an option or to receive Shares issuable
in satisfaction of an Award in the event of a Participant s death.
2.2 Gender and Number. Except when otherwise indicated by context,
reference to the masculine gender shall include, when used, the feminine gender,
and any term used in the singular shall also include the plural.
3. Administration.
3.1 Authority of Committee. The Plan shall be administered by a committee
of two or more persons (the "Committee") appointed by the Board. No person
shall serve as a member of the Committee unless such person shall be a "Non-
Employee Director" as that term is defined in Rule 16b-3(b)(3)(i), promulgated
under the Exchange Act, or any successor statute or regulation comprehending the
same subject matter. A majority of the members of the Committee shall
constitute a quorum for any meeting of the Committee and the acts of a majority
of the members present at any meeting at which a quorum is present or the acts
unanimously approved in writing by all members of the Committee shall be the
acts of the Committee. Subject to the provisions of the Plan, the Committee may
from time to time adopt such rules for the administration of this Plan as it
deems appropriate.
3.2 Indemnification. To the full extent permitted by law, (i) no member
of the Committee shall be liable for any action or determination taken or made
in good faith with respect to the Plan or any Award made under the Plan, and
(ii) the members of the Committee shall be entitled to indemnification by the
Company with regard to such actions and determinations.
4. Shares Available Under the Plan. The number of Shares available for
distribution under the Plan shall not exceed 250,000 (subject to adjustment
pursuant to Section 13). Any Shares subject to the terms and conditions of an
Award under the Plan which are not used because the terms and conditions of the
Award are not met may again be used for an Award under the Plan.
5. Eligibility. Participation in the Plan shall be available to all
employees of the Company and its subsidiaries.
6. General Terms of Awards.
a. Amount of Award. Each Agreement shall set forth the number of Shares
of Restricted Stock or the number of Shares to which the option
subject to such Agreement applies, as the case may be.
b. Term. Each Agreement shall set forth the term of the option or
Restricted Stock Award, as the case may be. Subject to the
requirements of the Plan, an Agreement may permit an acceleration of
the expiration of the applicable term upon such terms and conditions
as shall be set forth in the Agreement.
c. Transferability. During the lifetime of a Participant to whom an
Award is granted, only such Participant (or such Participant s legal
representative) may exercise an option. No Award of Restricted Stock
(prior to the expiration of the restrictions) or option may be sold,
assigned, transferred, exchanged or otherwise encumbered, and any
attempt to do so shall be of no effect. Notwithstanding the
immediately preceding sentence, an Agreement may provide that the
Award subject to the Agreement shall be transferable to a Successor
in the event of a Participant s death.
d. Termination of Employment. No option may be exercised by a
Participant and all Restricted Stock held by a Participant shall be
forfeited if the Participant s employment with the Company or its
subsidiaries shall be voluntarily terminated or involuntarily
terminated with or without cause prior to the expiration of the term
of the option or the Restricted Stock, as the case may be except as,
and to the extent, provided in the Agreement applicable to that Award.
An option may be exercised by the Successor of a Participant following
the death of such Participant to the extent, and during the period of
time, if any, provided in the applicable Agreement.
7. Restricted Stock Awards. An Award of Restricted Stock under the Plan
shall consist of Shares subject to restrictions on transfer and conditions of
forfeiture, which restrictions and conditions shall be included in the
applicable Agreement. Except as otherwise provided in the applicable Agreement,
each certificate representing shares issued in respect to an Award of Restricted
Stock shall either be deposited with the Company or its designee, together with
an assignment separate from such certificate, in blank, signed by the
participant, or bear such legends with respect to the restricted nature of the
Restricted Stock evidenced thereby as shall be provided in the applicable
Agreement. The agreement shall describe terms and conditions by which the
restrictions upon awarded Restricted Stock shall lapse. Upon the lapse of the
restrictions, Shares free of restrictive legends, if any, relating to such
restrictions shall be issued to the Participant or his Successor. A Participant
with a Restricted Stock Award shall have all the other rights of a shareholder
including, but not limited to the right to receive dividends and the right to
vote the Shares of Restricted Stock.
8. Stock Options.
8.1 Terms of All Options. An option shall be granted pursuant to an
Agreement as either an Incentive Stock Option (as that term is defined in
Section 422 of the Internal Revenue Code or any amendment thereto ("the Code")
or a Non-Qualified Stock Option (an option granted under the Plan that is not
intended to be an Incentive Stock Option). The purchase price of each Share
subject to an option shall be determined by the Committee and set forth in the
Agreement, but shall not be less than 100% of the Fair Market Value of a Share
as of the date the option is granted. The purchase price of the Shares with
respect to which an Option is exercised shall be payable in full at the time of
exercise. The purchase price may be payable in cash, in Shares having a Fair
Market Value equal to the purchase price of the Shares being purchased pursuant
to the option as of the date the option is exercised, or a combination thereof,
as determined by the Committee and provided in the Agreement. Each option shall
be exercisable in whole or in part on the terms provided in the Agreement. In
no event shall any option be exercisable at any time after its expiration date.
When an option is no longer exercisable, it shall be deemed to have lapsed or
terminated.
8.2 Incentive Stock Options. In addition to the other terms and conditions
applicable to all options.
(i) The aggregate Fair Market Value (determined as of the date the option
is granted) of the Shares with respect to which Incentive Stock
Options held by an individual first become exercisable in any calendar
year (under this Plan and all other incentive stock option plans of
the Company) shall not exceed $100,000 (or such other limit as may be
required by the Code) if such limitation is necessary to qualify the
option as an Incentive Stock Option;
(ii) An Incentive Stock Option shall not be exercisable more than ten years
after the date of grant (or such other limit as may be required by the
Code) if such limitation is necessary to qualify the option as an
Incentive Stock Option;
(iii) At the time the Incentive Stock Option is granted, if the eligible
employee owns stock of the Company possessing more than ten percent
of the total combined voting power of all classes of stock therein,
(A) the purchase price of each Share covered by the option shall
not be less than 110% of the Fair Market Value of a Share on the
date of grant, and (B) the term of the option shall not be greater
than five years from the date of grant;
(iv) The Participant must remain continuously employed by the Company
and/or its subsidiaries from the date of grant until the effective
date of exercise unless such exercise occurs within the period, if
any, allowed following termination of employment by the Code and by
the Agreement; and
(v) The Agreement covering an Incentive Stock Option shall contain such
other terms and provisions which the Committee determines necessary
to qualify such option as an Incentive Stock Option.
If any option is not granted, exercised or held in accordance with the
provisions set forth above in this Section 8.2, it will be considered to be a
Non-Qualified Stock Option to the extent that it is in conflict with these
provisions.
9. Duration of The Plan. The Plan shall remain in effect until all
Shares of Common Stock subject to it shall have been distributed or until all
Awards have expired or lapsed, or the Plan is terminated pursuant to Section 13.
The date and time of approval by the Committee of the granting of an Award shall
be considered the date and time at which such Award is made or granted.
10. Right to Terminate Employment. Nothing in the Plan shall confer upon
any Participant the right to continue in the employment of the Company or any
subsidiary or affect any right which the Company or any subsidiary may have to
terminate the employment of the Participant with or without cause.
11. Tax Withholding. The Company shall have the right to require a
Participant or other person receiving Shares under the Plan to pay the Company
a cash amount sufficient to cover any required withholding taxes. In lieu of
all or any part of such a cash payment from a person receiving Shares under the
Plan, the Committee may permit the individual to elect to cover all or any part
of the required withholdings, and to cover any additional withholdings up to the
amount needed to cover the individual s full FICA, federal, state, and local
income tax with respect to income arising from payment of the Award, through a
reduction of the number of Shares delivered to him or a subsequent return to the
Company of Shares held by the Participant in each case valued in the same manner
as used in computing the withholding taxes under the applicable laws.
12. Amendment, Modification and Termination of Plan. The Board may at any
time terminate, suspend or modify the Plan. Amendments are subject to approval
of the shareholders of the Company only if such approval is necessary to
maintain the Plan in compliance with the requirements of Exchange Act Rule 16b-3
Internal Revenue Code Section 422, its successor provisions or any other
applicable law or regulation. No termination, suspension or modification of the
Plan will materially and adversely affect any right acquired by any Participant
(or his legal representative) or any Successor under an Award granted before the
date of termination, suspension or modification, unless otherwise agreed to by
the Participant in the Agreement or otherwise or required as a matter of law;
but it will be conclusively presumed that any adjustment for changes in
capitalization provided for in Section 13 will not adversely affect any right.
13. Adjustment for Changes in Capitalization. Subject to Section 14,
appropriate adjustments in the aggregate number and type of Shares available for
Awards under the Plan and in the number and type of Shares subject to Awards
then outstanding and in the option price as to any outstanding options may be
made by the Committee in its sole discretion to give effect to adjustments made
in the number of type of Shares of the Company through a dissolution or
liquidation of the Company, a sale of substantially all of the assets of the
Company, a merger or consolidation of the Company with or into any other
corporation, regardless of whether the Company is the surviving corporation, or
a statutory share exchange involving capital stock of the Company (each of the
foregoing a "Fundamental Change"), recapitalization, reclassification, stock
dividend, stock split, stock combination or other relevant change, provided that
fractional Shares shall be rounded to the nearest whole share.
14. Fundamental Change. In the event of a proposed Fundamental Change,
the Committee may, but shall not be obligated to:
a. If the Fundamental Change is a merger or consolidation or
statutory share exchange, make appropriate provision for the
protection of the outstanding options granted under the Plan by
the substitution, in lieu of such options, of options to
purchase appropriate voting common stock (the "Survivor s
Stock") of the corporation surviving any merger or consolidation
or, if appropriate, the parent corporation of the Company or
such surviving corporation, or, alternatively, by the delivery
of a number of shares of the Survivor s Stock which has a Fair
Market Value as of the effective date of the Fundamental Change
equal to the product of (i) the amount by which the Event
Proceeds per Share (as defined in 14(b) below) exceeds the
option price per share times (ii) the number of Shares covered
by the option, or
b. At least ten days prior to the actual effective date of a
Fundamental Change, declare, and provide written notice to each
optionee of the declaration, that each outstanding option,
whether or not then exercisable, shall be canceled at the time
of, or immediately prior to the occurrence of the Fundamental
Change (unless it shall have been exercised prior to the
occurrence of the Fundamental Change) in exchange for payment to
each option holder, within ten days after the Fundamental
Change, of cash equal to the amount (if any), for each Share
covered by the canceled option, by which the Event Proceeds per
Share (as hereinafter defined) exceeds the exercise price per
Share covered by such option. At the time of the declaration
provided for in the immediately preceding sentence, each option
shall immediately become exercisable in full and each person
holding an option shall have the right, during the period
preceding the time of cancellation of the option, to exercise
his option as to all or any part of the Shares covered thereby.
In the event of a declaration pursuant to this Section 14b, each
outstanding option granted pursuant to the Plan, that shall not
have been exercised prior to the Fundamental Change, shall be
canceled at the time of, or immediately prior to, the
Fundamental Change as provided in the declaration, and the Plan
shall terminate at the time of such cancellation, subject to the
payment of obligations of the Company provided in this Section
14b. For purposes of this Section 14b, "Event Proceeds" per
Share shall mean the cash plus the Fair Market Value, as
determined in good faith by the Committee, of the non-cash
consideration to be received per Share by the shareholders of
the Company upon the occurrence of the Fundamental Change.
15. Acceleration. Upon the Occurrence of an Event, (i) an option held by
a Participant under this Plan that shall not have expired shall become
immediately exercisable in full, and (ii) all restrictions applicable to
outstanding Restricted Stock Awards shall be deemed to have immediately lapsed.
16. Repurchase Rights of the Company.
16.1 Termination of Employment. If, for any reason, an employee who has
received Shares pursuant to an Award granted hereunder ("Awarded Shares") ceases
to be employed by the Company or a subsidiary, such employee (or his legal
representative or beneficiaries if the employee is deceased or mentally
incapacitated) shall offer such Awarded Shares (including any Shares purchased
subsequent to termination pursuant to the applicable Agreement) for sale to the
Company on the date that such employee ceases to be employed by the Company
and/or a subsidiary or on the date immediately after exercise of an Award
permitted by the applicable Agreement subsequent to termination.
16.2 Right of First Refusal. In the event that any employee who has
received Awarded Shares desires to sell, transfer, exchange or otherwise dispose
of (whether by gift or otherwise), or pledge or otherwise encumber, all or any
part of such Awarded Shares, he shall first offer such Shares for sale to the
Company.
16.3 Involuntary Transfer. In the event of any involuntary transfer of all
or any part of the Awarded Shares by reason of sale pursuant to a levy of
execution, foreclosure of pledge, garnishment, attachment, transfer pursuant to
a divorce decree or other legal process, the transferee or transferees of such
acquired Shares or other successor in title to such Shares shall offer such
Shares for sale to the Company.
16.4 Terms of Company Purchase. All offers under this Section 16 shall be
made to the Company at its registered office. With respect to a proposed
transfer under Subsection 16.2 above, the notice shall contain the name and
address of each person to whom the employee (or his legal representative of
beneficiaries) intends to dispose of or encumber all or any part of the Awarded
Shares and the price and other terms and conditions of the proposed transfer or
encumbrance. In addition, prior to the purchase of Awarded Shares under
Subsection 16.2 above, the Company may require evidence of a bona fide offer to
purchase or take a security interest in such Shares. After receipt of any such
written offer under this Section 16, the Company shall have the option for a
period of sixty (60) days thereafter to purchase, at the price and on the terms
specified below, all but not less than all of the Shares offered to it by
accepting such offer in writing; provided however, that notwithstanding anything
to the contrary stated below, if the employee (or his legal representative or
beneficiaries) is offering such Shares under Subsection 16.2 above, the Company
may instead elect to purchase such Shares at the price and on the terms and
conditions of the intended sale, exchange or encumbrance as stated in the
employee s (or his legal representative s or beneficiaries ) offer, for which
purpose the price of any Shares which the employee (or his legal representative
or beneficiaries) intends to encumber shall be the Fair Market Value of the
property to be received upon the security of such Shares (as determined in good
faith by the Committee); and provided further, that notwithstanding anything to
the contrary provided below, the Company may elect to purchase Shares being
offered by a transferee or successor in title to such Shares under Subsection
16.3 above on the terms and conditions under which such Shares were acquired by
the transferee or successor in title to the Shares.
The exercise of any option by the Company pursuant to this Section 16 shall
be by the Company mailing written notice of such exercise to the employee whose
Shares are subject to such option or his legal representative or beneficiaries,
as the case may be, within the applicable 60-day period. Notice to the employee
shall be addressed to employee s last known address appearing in the personnel
records of the Company, and notice to the employee s legal representative or
beneficiaries shall be addressed to the last known address of such legal
representative or beneficiaries or, if none is known, to the employee s last
known address.
Subject to the alternative purchase prices provided for above, the purchase
price of Awarded Shares purchased pursuant to this Section 16 shall be the Fair
Market Value of such Shares.
The Company, at its option, may elect to pay the entire purchase price for
any shares subject to purchase pursuant to this Section 16 in cash or to make
payment in installments by delivery of a promissory note of the Company,
subordinated to all indebtedness of the Company for money borrowed, payable in
three equal annual installments, commencing on the date of tender as provided
below, and bearing interest at the rate of ten percent per annum, with optional
prepayment, in whole or in part, by the Company without penalty, at any time.
Within fifteen days after the Company gives notice of exercise of its
option as provided above in this Section 16, the Company shall tender to the
employee, legal representative or beneficiary or other offeror, as the case may
be, the purchase price for such Shares in cash or as otherwise provided above.
Simultaneously with the payment of said purchase price, the employee, legal
representative, beneficiary or other offeror shall deliver the certificate or
certificates representing such Shares to the Company, duly endorsed in blank for
transfer of record upon the books of the Company (accompanied in the case of
purchase from a legal representative or beneficiary by a duly certified copy of
authority), and all assignments and other documents of transfer and release
reasonably required by the Company to effect the transfer of the Shares to the
Company free and clear of any liens, encumbrances or other defects of title.
In the event that the Company does not exercise any option granted to the
Company pursuant to Subsection 16.2 above, the selling employee may dispose of
the Shares not purchased pursuant to the exercise of such option without regard
to the provisions of this Section 16, but only (a) during a period of 30 days
following the Company s 60-day option period, (b) to the persons or entities
listed in the offer to the Company, and (c) at a price and upon terms not less
advantageous to the selling employee than the price and terms stated in the
offer to the Company. If the disposition is not consummated within such 30-day
period, such Shares shall again be subject to all the requirements of this
Section 16.
16.5 Written Consent to Agreement. No sale, transfer, assignment, exchange
or other disposition of Awarded Shares shall be made by any employee or his
legal representative or beneficiaries to any person (including any individual,
partnership, corporation or other entity) unless and until such person shall
agree in writing to take such Shares subject to, and shall subscribe to the
terms and conditions of, this Section 16. Any person who agrees in writing to
take Shares subject to, and subscribes to the terms and conditions of, this
Section 16 shall be and become entitled to the benefits of, and shall be bound
by, this Section 16.
17. Other Benefit and Compensation Programs. Payments and other benefits
received by a Participant under an Award made pursuant to the Plan shall not be
deemed a part of a Participant s regular, recurring compensation for purposes
of the termination, indemnity or severance pay law of any country and shall not
be included in, nor have any effect on, the determination of benefits under any
other employee benefit plan, contract or similar arrangement provided by the
Company or a subsidiary unless expressly so provided by such other plan,
contract or arrangement, or unless the Committee expressly determines that an
Award or portion of an Award should be included to accurately reflect
competitive compensation practices or to recognize that an Award has been made
in lieu of a portion of competitive cash compensation.
18. Beneficiary Upon Participant s Death. To the extent that the transfer
of a Participant s Award at his death is permitted under an Agreement, (i) a
Participant s Award shall be transferable at his death to the beneficiary, if
any, designated on forms prescribed by and filed with the Committee and (ii)
upon the death of the Participant, such beneficiary shall succeed to the rights
of the Participant to the extent permitted by law. If no such designation of
a beneficiary has been made, the Participant s legal representative shall
succeed to the Awards which shall be transferable by will or pursuant to laws
of descent and distribution to the extent permitted under an Agreement.
19. Governing Law. To the extent that Federal laws do not otherwise
control, the Plan and all determinations made and actions taken pursuant to the
Plan shall be governed by the laws of Minnesota and construed accordingly.
EXHIBIT 10 (m)
HICKORY TECH CORPORATION
RETAINER STOCK PLAN FOR DIRECTORS
Restated and Amended effective September 1, 1996
1. Purpose and Effective Date
The purpose of this plan is to aid the Corporation in attracting and
retaining Directors by encouraging and enabling the acquisition of a financial
interest in the Corporation by Directors through the issuance of Shares. It is
the intention of this Plan to allow for payment of the Directors Retainer in
Shares of the Company.
2. Definitions
As used in this Plan:
(a) The term "Quarterly Payment Date" means the four dates during the
year when Directors are paid a Quarterly Retainer.
(b) The term "Board" means the Board of Directors of the Corporation.
(c) The term "Corporation" means Hickory Tech Corporation, a
Minnesota corporation.
(d) "Fair Market Value" as of any date shall mean an average of the
closing price per Share of Common Stock no par value (a "Share"), of the Company
on each of the five business days immediately preceding the date on which a
price determination is to be made. The closing prices shall be the closing
prices as published in The Wall Street Journal. In the absence of trading in
the Shares on any of the five immediately preceding business days, the
calculation will be based on the closing price for the five business days
preceding the date on which a price determination is to be made on which there
were actual trades of the Shares.
(e) The term "Director" means any person who is elected or appointed
to the Board.
(f) The term "this Plan" means this Retainer Stock Plan for Directors
as it may be amended from time to time.
(g) The term "Quarterly Retainer" means the compensation payable to
a Director for any quarter for his or her services as a member of the Board
other than amounts payable for attendance at meetings of the Board or its
committees.
(h) the term "Share" means a share of common stock, no par value, of
the Corporation.
3. Eligibility
Participation in this Plan is limited to Directors.
4. Issuance of Shares
(a) Election. Prior to a Quarterly Payment Date, each Director may
elect to receive his or her Quarterly Retainer in Shares rather than cash. Each
Director election to receive the Quarterly Retainer in Shares must submit such
a written request to the Secretary of the Corporation at least 30 days prior to
a Quarterly Payment Date. This request must indicate the Director's desire to
receive Stock Certificates Quarterly or Annually. The Secretary of the
Corporation will supply each Director with the form to be used to elect to
receive Shares. Once an election to receive Shares has been submitted to the
Secretary of the Corporation by a Director said election shall be effective by
written request to the Secretary at least 30 days prior to the Quarterly Payment
Date for which it is to be effective. Directors not electing to receive Shares
will receive their Quarterly Retainer in cash.
(b) In the event a Director elects to receive Shares, the Corporation
will issue to such Director a number of Shares equal to the amount of the
Quarterly Retainer divided by the Fair Market Value Per Share as of the date of
the applicable Quarterly Payment Date. Any fractional Share shall be rounded
to a whole Share. No cash shall be paid to a Director that elects to receive
Shares in lieu of cash for a Quarterly Retainer.
(c) As soon as practicable after each applicable Payment Date
(Quarterly or Annually, depending on the Director's election), the Corporation
shall cause to be issued and delivered to each electing Director a stock
certificate, registered in the name of such Director evidencing the Shares
issued pursuant to this Plan. If the Director selects annual distribution of
stock certificates, an account will be established with the Stock Transfer Agent
to record the Shares credited to the account, and applicable quarterly dividends
will be paid to the Director for these shares.
(d) Directors shall not be deemed for any purpose to be, or have any
rights as, shareholders of the Corporation with respect to any Shares awarded
under this Plan except if, as and when Shares are issued except as provided in
(c). No adjustment shall be made for dividends or distributions or other rights
for which the record date is prior to the date of such share transaction.
5. Administration
The Board, or any duly appointed committee thereof, is authorized to
administer this Plan. Determinations of the Board, or any such committee,
within its area of authority under the provisions of this Plan, shall be final.
6. Amendment and Discontinuance
(a) Changes in Law. The Board may, without further action by the
shareholders and without further consideration to the Corporation or any
Director, amend this Plan or condition or modify awards of Shares under this
Plan (i) in response to changes in securities or other laws, or rules,
regulations or regulatory interpretations thereof, applicable to this Plan or
(ii) to comply with stock exchange or inter-dealer quotation system rules or
requirements.
(b) Other Amendments. The Board may from time to time amend this
Plan, or any provision thereof, without further action of the Corporation s
shareholders, except that:
(i) No amendment may affect a Director s rights under any award
of Shares under this Plan made prior to such amendment without such
Director s consent.
(ii) This Section (b) may not be amended.
(c) Discontinuance. The Board may suspend or discontinue this Plan
in whole or in part, but any such suspension or discontinuance shall not affect
issuance of Shares granted under this Plan prior thereto.
7. Compliance with Applicable Legal Requirements
No Shares issuable pursuant to this Plan shall be issued and delivered
unless the issuance of such Shares complies with all applicable legal
requirements including, without limitation, compliance with the provisions of
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, any state law and the requirements of the exchanges or inter-dealer
quotation system on which Shares may, at the time, be listed or quoted.
8. Transferability
Benefits under this Plan may not be transferred or assigned by the
Directors, other than by will or the laws of descent and distribution.
EXHIBIT 10 (j)
HICKORY TECH CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
Amended and Restated Effective September 1, 1996
1. Purpose. The purpose of the Employee Stock Purchase Plan (the
"Plan"), is to provide eligible employees of Hickory Tech Corporation (the
"Company"), and its subsidiaries, who wish to become shareholders of the
Company, an opportunity to purchase common stock of the Company (the
"Shares"). The Board of Directors of the Company believes that employee
participation in the ownership of the Company will be to the mutual benefit
of both the employees and the Company. The Plan is intended to qualify as an
"employee stock purchase plan" within the meaning of Section 423 of the
Internal Revenue Code (the "Code").
2. Overview of the Plan. Employees may only purchase Shares offered
under the Plan by participating in the Company's payroll deduction plan.
Employees electing to participate in the Plan shall sign up for participation
in the Company s payroll deduction plan effective upon an Election Date (as
defined in Section 9(a) hereof). On the Offering Date (as defined in Section
5 hereof), the payroll deductions in the employee's payroll deduction account
will be used to purchase Shares in the Company, subject to the limitations
contained in Sections 4 and 7 below.
3. Eligible Employees. Subject to the provisions of Section 4 below,
any individual who is an employee of the Company or of any of its
subsidiaries (as defined in Section 424(f) of the Code) a minimum of 14 days
prior to an Election Date is eligible to participate in the offering of
Shares to be made by the Company on the Offering Date immediately following
the Election Date.
4. Limitations on Grants.
(a) No more than 300,000 Shares may be sold pursuant to the Plan.
Appropriate adjustments in the above figure, and in the minimum number
of Shares which an employee may purchase shall be made to give effect to
any mergers, consolidations, acquisitions, stock splits, stock
dividends, or other relevant changes in the capitalization occurring
after the effective date of the Plan, provided that fractional Shares
shall be adjusted downward to the nearest full Share. Any agreement of
merger or consolidation will include provisions for protection of the
then existing rights of participating employees under the Plan.
(b) No employee shall be allowed to participate in the Plan if
such participation in the Plan will result in the employee owning stock
consisting of five percent or more of the total combined voting power or
value of all classes of stock of the Company, computed in accordance
with Section 423(b)(3) of the Code.
(c) In accordance with the provisions of Section 423(b) of the
Code, no employee shall be granted rights under this Plan or any
employee stock purchase plan which will allow the employee to accrue
rights to purchase more than $25,000.00 in Shares in any year.
5. Offering Date. On the last business day of the calendar month which
occurs before twelve months after each Election Date (hereinafter called an
"Offering Date"), the Board of Directors will make an offer (hereinafter
called an "Offering") to all employees then eligible to participate in the
purchase of Shares. In order to purchase Shares on an Offering Date, an
eligible employee must complete and file with the Human Resources Department,
all documents, if any, required by the Company.
6. Price. The price per Share for each Offering shall be 85 percent
of the lesser of (a) the fair market value of the Shares on the applicable
Election Date or (b) the fair market value of the Shares on the applicable
Offering Date, in each case as determined by the Committee (as defined in
Section 17 hereof).
7. Limits of Participation. As to each Offering, the minimum number
of Shares which an employee will be permitted to purchase is ten Shares. If
at any time during the term of this Plan the available Shares (as prescribed
in Section 4 above) are oversubscribed either because there is not a
sufficient number of Shares available on an Offering Date or because of any
applicable rules, laws, and regulations of any government agency then in
effect imposing limitations on the number of Shares which may be issued, the
rights of the eligible employees to purchase said Shares shall be pro rated
to eliminate such oversubscription.
8. Method of Payment. With respect to Shares to be purchased on an
Offering Date, full payment for all such Shares shall be made only from funds
accumulated by the employee by participation in the Company's payroll
deduction plan (as defined in Section 9 below).
9. Payroll Deduction Plan.
(a) Election Date. From time to time, but not more frequently
than once during any 12-month period, the Board of Directors may fix a
date which is the first business day of a month (hereinafter called an
"Election Date") on which the Company will allow eligible employees to
participate in the Company's payroll deduction plan.
(b) Election Participation.
i) Current Employees. Any individual who is an employee a
minimum of 14 days prior to the Election Date may elect to
participate in the Company s Payroll Deduction Plan by completing
an authorization for a payroll deduction on a form provided by the
Company and filing it with Human Resources Department of the
Company, a minimum of 14 days prior to the Election Date. Payroll
deductions for the employee shall commence on the first payroll
date following the Election Date and shall end on the payroll date
immediately preceding the Offering Date, unless sooner terminated
by the employee as provided in Subsection 9(d) below.
ii) New Employees. Employees hired less than 14 days prior
to the Election Date will not be eligible to participate in the
Plan until the next Election Date established by the Board of
Directors.
(c) Account. At the time an employee files an authorization for a
payroll deduction, the employee shall elect to have a deduction made
from the employee's pay on each payday in an amount selected by the
employee. The amount selected by the employee may be in any fixed
amount; provided, however, under no circumstances may the deductions in
the aggregate exceed ten percent of the employee's basic wage for the 12
month period in which the election is effective. For purposes of this
Plan, basic wage shall mean the employee's regular salary and shall not
include sales commissions, payment for overtime work, bonuses and other
forms of compensation. An employee may not make any separate cash
payment into such account.
(d) Withdrawal.
i) An employee may withdraw payroll deductions credited to
the employee's account at any time by giving written notice to the
Company. All of the payroll deductions credited to such account
will be paid promptly after receipt of notice of withdrawal and no
further payroll deductions will be made except in accordance with
the authorization for a new payroll deduction filed in accordance
with Subsection 9(b) above.
ii) An employee's withdrawal will not have any effect upon
eligibility to participate on a succeeding Election Date.
iii) Upon termination of the employee's employment for any
reason, the payroll deductions credited to the account will be
returned to the employee, or in the case of the death of the
employee to the person or persons entitled thereto under Section 11
hereof.
(e) Interest. The Company shall establish an account for each
participating employee. The funds in the payroll deduction account
shall constitute indebtedness of the Company until the funds are applied
to the purchase of Shares or until the funds are paid to the employee.
No interest will be accrued or paid on the funds in the payroll
deduction accounts.
10. Issuance of Shares. On each Offering Date, the accumulated payroll
deductions in the employee's account on that date will be automatically
applied to purchase the maximum number of Shares which may be purchased, and
a certificate will be issued to the employee for those Shares. Excess
payroll deductions, if any, will be returned to the employee. Ten Shares
shall be the minimum number for which a certificate will be issued at any one
time and no fractional Shares will be issued at any time.
11. Designation of Beneficiary. An employee must file a written
designation of a beneficiary who is to receive the funds in the employee's
account in the event of such employee's death. Such designation of
beneficiary may be changed by the employee at any time by written notice.
Upon the death of an employee and upon receipt by the Company of proof of a
validly designated beneficiary, the Company shall deliver the funds in the
employee's account to such beneficiary. In the absence of a validly
designated beneficiary who is living at the time of such employee's death,
the Company, at its option, shall deliver the cash to the executor or
administrator of the estate of the employee, or if no such executor or
administrator has been appointed (to the knowledge of the Company) the
Company, in its discretion, may deliver the cash to the spouse or to any one
or more dependents or relatives of the employee, or if no spouse, dependent,
or relative is known to the Company then to such other person as the Company
may designate. No designated beneficiary shall, prior to the death of the
employee, acquire any interest in the cash credited to the employee under the
payroll deduction plan.
12. Employees' Rights as Shareholders. No participating employee shall
have any rights as a shareholder in the Shares until full payment has been
made for the Shares and the share certificate is actually issued.
13. Rights Not Transferable. Rights under this Plan are not assignable
or transferable by a participating employee.
14. Termination of Employment. In the event that the employment of a
participating employee is terminated for any reason, said employee's rights
to participate in the Plan shall terminate immediately and payroll deductions
in the account of the employee will be paid to the employee pursuant to the
provisions of Section 9(d) hereof. For purposes of this Plan, the
participating employee's employment will be deemed to be terminated on the
date the employee leaves the Company or any subsidiary.
15. Amendments or Discontinuance of Plan. The Board of Directors of
the Company shall have the right to amend, modify or terminate this Plan at
any time without notice provided that without the consent of the shareholders
of the Company possessing a majority of the voting power, no such amendment
to the Plan shall:
(a) Increase the total number of Shares which may be offered under
the Plan; or
(b) Change the classification of employees eligible to participate
in the Plan.
16. Approvals. The Company's obligation to offer, sell and deliver its
Shares under this Plan is subject to the receipt of any required governmental
consents or approvals.
17. Administration. The Plan shall be administered by a Committee
consisting of not less than three members who shall be appointed by the
President of the Company. Each member of the Committee shall be an officer
of the Company or its subsidiaries. The Committee shall be vested with full
authority to determine the fair market value of the Shares and to make,
administer, and interpret such rules and regulations as it deems necessary to
administer the Plan, and any determination, decision or action of the
Committee in connection with the construction, interpretation,
administration, or application of the Plan shall be final, conclusive, and
binding upon all participants and any and all persons claiming under or
through any participant.
18. Duration. The provisions of this Plan shall terminate no later
than January 29, 2002.
