<PAGE>
FORM 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT UNDER SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: September 30, 1995
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[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number: 0-15056
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CommNet Cellular Inc. Employee Stock Ownership Plan and Trust
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(Full title of the plan)
CommNet Cellular Inc.
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(Issuer of the securities held pursuant to the plan)
8350 East Crescent Parkway
Suite 400
Englewood, Colorado
80111
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(Address of principal executive office)
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FORM 11K (CONT.)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
CommNet Cellular Inc. Employee Stock Ownership Plan and Trust
March 11, 1996 By: /s/ Daniel P. Dwyer
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Date Signature
Daniel P. Dwyer
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Print Name
Executive VP - CommNet Cellular Inc. - The Plan Sponsor
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Title
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Financial Statements
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Years ended September 30, 1995 and 1994
with Report of Independent Auditors
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CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Financial Statements
Years ended September 30, 1995 and 1994
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors................................... 1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits............. 2
Statements of Changes in Net Assets Available for Plan Benefits.. 3
Notes to Financial Statements.................................... 4
Supplementary Information
Schedule of Assets Held for Investment Purposes.................. 9
Schedule of Reportable Transactions.............................. 10
</TABLE>
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[LETTERHEAD OF ERNST & YOUNG LLP]
Report of Independent Auditors
CommNet Cellular Inc. as Plan Administrator of the
CommNet Cellular Inc. Employee Stock Ownership Plan and Trust
We have audited the accompanying statement of net assets available for plan
benefits of the CommNet Cellular Inc. Employee Stock Ownership Plan and Trust as
of September 30, 1995, and the related statement of changes in net assets
available for plan benefits for the year then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of the CommNet Cellular Inc. Employee Stock Ownership Plan
and Trust for the year ended September 30, 1994, were audited by other auditors
whose report dated January 27, 1995, expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the CommNet
Cellular Inc. Employee Stock Ownership Plan and Trust at September 30, 1995, and
the changes in its net assets available for plan benefits for the year then
ended, in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of September 30, 1995, and reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the financial statements. The supplemental schedules
have been subjected to the auditing procedures applied in our audit of the 1995
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1995 financial statements taken as a whole.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Denver, Colorado
February 16, 1996
1
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
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CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
SEPTEMBER 30,
1995 1994
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<S> <C> <C>
Cash $ 2 $ 2
Contribution receivable from CommNet Cellular Inc.
(Note 3) 551,609 477,990
Investment in CommNet Cellular Inc. common stock,
at fair value 2,040,150 1,437,700
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Net assets available for plan benefits $2,591,761 $1,915,692
======================
</TABLE>
See accompanying notes.
2
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CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1995 1994
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Additions:
<S> <C> <C>
Contributions from CommNet Cellular Inc. (Note 3) $ 552,398 $ 478,615
Interest income - 8
Net unrealized and realized appreciation in the fair
value of CommNet Cellular Inc. common stock 486,492 397,593
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1,038,890 876,216
Deductions:
Distributions to terminated participants 362,821 341,322
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Net increase 676,069 534,894
Net assets available for plan benefits at beginning
of year 1,915,692 1,380,798
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Net assets available for plan benefits at end of year $2,591,761 $1,915,692
========================
</TABLE>
See accompanying notes.
3
<PAGE>
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Notes to Financial Statements
September 30, 1995
1. DESCRIPTION OF THE PLAN
The following description of the CommNet Cellular Inc. Employee Stock Ownership
Plan and Trust (the "Plan") provides only general information. Participants
should refer to the Plan for a more complete description.
GENERAL
The Plan is a defined contribution plan adopted effective October 1, 1988, to
enable eligible participants to acquire shares in CommNet Cellular Inc. (the
"Employer"). Anyone employed by the Employer on September 30, 1989, became a
participant on October 1, 1988. Any employee who was not employed on September
30, 1989, is eligible to participate in the Plan as of the earlier of the
October 1 or April 1 following the date on which the individual completes one
year of service. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). All assets of the Plan are
held by Colorado National Bank (the "Trustee") in accordance with the Plan.
CONTRIBUTIONS
The Employer makes annual discretionary contributions to the Plan, as determined
by its Board of Directors. Employer contributions may be made in cash or in
shares of its common stock. Participants may not contribute to the Plan.
Substantially all assets of the Plan are invested in common stock of the
Employer.
VESTING
Each participant becomes vested in Employer contributions and earnings/(losses)
on such contributions at the rate of 20 percent per year for each year of
service by the participant. Full vesting occurs upon completion of five years
of service, at normal retirement (age 65), death, or disability as defined in
the Plan.
BENEFITS AND DISTRIBUTIONS
Upon retirement, death, or disability, unless the participant elects otherwise,
and if the participant's vested benefits are greater than $3,500, distribution
of benefits will begin not later than one year after the end of the plan year.
In the event of termination of employment
4
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CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
for any reason other than retirement, disability, or death, unless the
participant elects otherwise, and if the participant's vested benefits are
greater than $3,500, distribution of vested benefits will begin not later than
one year after the end of the fifth plan year following the plan year during
which termination occurred. If the participant's vested benefits are $3,500 or
less, vested benefits will be distributed in one lump-sum amount after the event
causing the distribution or after the Plan year end, depending on the date of
the event. Vested benefits are distributed in cash and/or Employer common stock
and, unless the participant elects otherwise, distribution of vested benefits
will be in equal annual installments over a period not longer than five years.
FORFEITURES
Upon termination of employment, the nonvested portion of a participant's account
is forfeited and is subject to allocation to the remaining participants'
accounts as an additional Employer contribution for the plan year in which the
forfeiture occurs. The forfeiture is considered to have occurred on the earlier
of the date on which there is a distribution of the entire vested portion of a
participant's account, or on the last day of the plan year in which the
participant has incurred five consecutive one-year breaks in service.
PARTICIPANT ACCOUNTS
Separate accounts are maintained for each participant by the Trustee. Each
participant's account is adjusted annually for Employer contributions and
allocated forfeitures based on the ratio each participant's eligible
compensation bears to the total of all participants' eligible compensation for
that plan year. Gains or losses on the Plan's investments, and other income or
expenses of the Plan, are allocated to participants' accounts based on the ratio
that each eligible participant's account bears to the total of all such
accounts.
EXPENSES
All expenses incurred in the administration and management of the Plan have been
or will be paid by the Employer and, accordingly, are not reflected in the
Plan's financial statements.
5
<PAGE>
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PLAN TERMINATION AND AMENDMENTS
Upon full or partial termination or upon complete discontinuance of
contributions to the Plan by the Employer, which shall be deemed a termination,
the account balances of all participants shall become 100 percent vested. Upon
such termination of the Plan, the Plan assets can be completely distributed in
cash or in kind, or can remain in the Plan to be distributed as benefits as if
the Plan had not been terminated.
The Employer may amend the Plan at any time, provided that such action does not
reduce a participant's account balance or benefits under the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
The Plan's investment in CommNet Cellular Inc. common stock is carried at fair
value based on its quoted market price at the respective balance sheet dates.
CONTRIBUTIONS
Contributions are recorded by the Plan after the Board of Directors of the
Employer approves the contribution for that plan year.
INCOME TAX STATUS
The Internal Revenue Service has issued a determination letter dated May 10,
1990, that the Plan qualifies, in form, under Sections 401(a) and 4975(e)(7) of
the Internal Revenue Code (the "Code"), and the underlying trust is, therefore,
exempt from federal income taxes under Section 501(a) of the Code. The Plan is
required to operate in accordance with the Code to maintain its tax
qualification. The Plan Administrator is not aware of any course of action or
series of events that have occurred which might adversely affect the Plan's
qualified status.
6
<PAGE>
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Notes to Financial Statements (continued)
3. EMPLOYER CONTRIBUTION RECEIVABLE
The Employer's Board of Directors determined to contribute (in shares of its
common stock, valued at its closing price at the Plan's year end) an amount
equal to five percent of each participant's eligible compensation during the
plan years 1995 and 1994. Accordingly, at September 30, 1995 and 1994, the Plan
recorded a receivable from CommNet Cellular Inc. amounting to $551,609 and
$477,990, respectively.
4. BASIS OF PRESENTATION
The financial statements have been prepared in accordance with the financial
reporting requirements of ERISA.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1995 1994
------------------------
<S> <C> <C>
Net assets available for benefits per the financial
statements $2,591,761 $1,915,692
Amounts allocated to withdrawn participants (347,573) (261,932)
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Net assets available for benefits per the Form 5500 $2,244,188 $1,653,760
========================
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
1995
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<S> <C>
Benefits paid to participants per the financial
statements $ 362,821
Add: Amounts allocated to withdrawn participants at
September 30, 1994 347,573
Less: Amounts allocated to withdrawn participants at
September 30, 1993 (261,932)
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Benefits paid to participants per the Form 5500 $ 448,462
==========
</TABLE>
7
<PAGE>
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Notes to Financial Statements (continued)
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED)
Amounts allocated to withdrawn participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment, but have not
been paid, prior to September 30.
6. SUBSEQUENT EVENT
CommNet Cellular Inc.'s Board of Directors has approved a proposal to change the
Plan's Trustee from Colorado National Bank to Bank One, Colorado, N.A. If
consummated, the Plan's Trustee will be changed effective October 1, 1996.
8
<PAGE>
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Schedule of Assets Held for Investment Purposes
Item 27(A)
September 30, 1995
EIN: 84-0924904
Plan Number: 002
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
DESCRIPTION
OF HISTORICAL CURRENT
IDENTITY OF ISSUE INVESTMENT COST VALUE
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<S> <C> <C> <C>
* CommNet Cellular Inc. common stock 70,350 shares $1,078,423 $2,040,150
</TABLE>
* CommNet Cellular Inc. is a party-in-interest to the Plan.
9
<PAGE>
CommNet Cellular Inc.
Employee Stock Ownership Plan and Trust
Schedule of Reportable Transactions
Item 27(D)
Year ended September 30, 1995
EIN: 84-0924904
Plan Number: 002
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON
IDENTITY OF PARTY DESCRIPTION OF PURCHASE ORIGINAL TRANSACTION
INVOLVED ASSETS SHARES PRICE COST DATE
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<S> <C> <C> <C> <C> <C>
Category (i) - Individual transaction in excess of five percent of Plan assets
Employer (CommNet CommNet Cellular
Cellular Inc.) Inc. common stock 20,953 $477,990 $ - $ -
Category (iii) - Series of Securities Transactions
Terminated participants CommNet Cellular
Inc. common stock 13,624 - 201,720 362,821
</TABLE>
There were no category (ii) or (iv) reportable transactions during the 1995 Plan
year.
10
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-40500) pertaining to CommNet Cellular Inc. Employee Stock Ownership
Plan and Trust of our report dated February 16, 1996, with respect to the
financial statements and schedules of CommNet Cellular Inc. Employee Stock
Ownership Plan and Trust included in this Annual Report (Form 11-K) for the year
ended September 30, 1995.
/s/ ERNST & YOUNG LLP
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ERNST & YOUNG LLP
Denver, Colorado
March 5, 1996
