SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CFW COMMUNICATIONS COMPANY
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
[CFW LOGO]
JAMES S. QUARFORTH
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
401 Spring Lane
Suite 300
P.O. Box 1990
Waynesboro, VA 22980
Telephone 540 946-3500
FAX 540 946-3595
March 12, 1998
Dear Shareholder:
You are cordially invited to attend our 1998 Annual Meeting of
Shareholders at 10:00 a.m. on Tuesday, April 21, 1998. The meeting will be
held at the Holiday Inn at the intersection of Route 275 and I-81, North
of Staunton, Virginia. Please join us for refreshments at 9:30 a.m.
You will find complete information about the meeting in the enclosed
Notice and Proxy Statement. Your 1997 Annual Report is sent to you
herewith.
We sincerely hope you will be able to be present at the meeting, but
whether or not you plan to attend, we request that you sign your Proxy
Card and mail it in the enclosed envelope. The prompt return of your Proxy
will be appreciated.
Sincerely,
/s/ J.S. Quarforth
J. S. Quarforth
President and
Chief Executive Officer
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<PAGE>
[CFW LOGO]-
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Notice is Hereby Given that the Annual Meeting of Shareholders of CFW
Communications Company (the "Meeting") will be held at the Holiday Inn at the
intersection of Route 275 and I-81, North of Staunton, Virginia, on Tuesday,
April 21, 1998, at 10:00 a.m. for the following purposes:
(1) To elect two Class I directors for three-year terms expiring in 2001
and one Class II director for a one year term expiring in 1999.
(2) To transact such other business as may properly come before the meeting
or any adjournment.
Only shareholders of Common Stock of record at the close of business on
February 23, 1998 will be entitled to vote at the Meeting.
By Order of the Board of Directors
C. S. Smith
Corporate Secretary
Waynesboro, Virginia
March 12, 1998
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE SO THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING. SHAREHOLDERS
ATTENDING THE MEETING MAY PERSONALLY VOTE ON ALL MATTERS WHICH ARE CONSIDERED,
IN WHICH EVENT THE SIGNED PROXIES ARE REVOKED.
- 2 -
<PAGE>
[CFW LOGO]-
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 1998
This Proxy Statement is furnished to the Shareholders of CFW
Communications Company (the "Company") in connection with the solicitation of
proxies by the Board of Directors of the Company to be voted at the Annual
Meeting of Shareholders to be held at 10:00 a.m. on Tuesday, April 21, 1998, at
the Holiday Inn at the intersection of Route 275 and I-81, North of Staunton,
Virginia, and at any adjournment. The mailing address of the Company's
Corporate Office is 401 Spring Lane, Suite 300, P. O. Box 1990, Waynesboro,
Virginia 22980. The Company's subsidiaries are CFW Telephone Inc., CFW Network
Inc., CFW Wireless Inc., CFW Communications Services Inc., CFW Cable Inc., CFW
Cable of Virginia Inc., CFW Information Services Inc., CFW Licenses Inc. and
CFW PCS Inc.
Solicitations of proxies will be made by use of the United States mail and
may be made by direct or telephone contact by the Company. All solicitation
expenses will be borne by the Company. Brokerage houses and nominees will be
requested to forward the proxy materials to the beneficial holders of the
shares held of record by these persons and the Company will reimburse them for
their reasonable charges in this connection. Shares represented by duly
executed proxies in the accompanying form received by the Company prior to the
Meeting will be voted at the Meeting.
The Company does not know of any matters other than those referred to in
the accompanying Notice which are to come before the Meeting. If any other
matters are properly presented for action, the persons named in the
accompanying form of proxy will vote the proxy in accordance with their best
judgment.
Where a shareholder directs in the proxy a choice with respect to any
matter that is to be voted on, that direction will be followed. If no direction
is made, proxies will be voted for the election of one Class II Director and
re-election of two Class I Directors. Any person who has returned a proxy has
the power to revoke it at any time before it is exercised by submitting a
subsequently dated proxy, or by voting in person at the Meeting. The close of
business on February 23, 1998, has been fixed as the record date (the "Record
Date") for the Meeting and any adjournment. As of that date, there were
12,989,521 Common Shares outstanding, each of which is entitled to one vote. As
of the Record Date, and on the date hereof, no person was known to the Company
to own of record or beneficially more than 5% of the outstanding shares of
Common Stock of the Company.
This Proxy Statement and enclosed proxy card are being mailed to
shareholders beginning on or about March 12, 1998. An Annual Report to
Shareholders including financial statements for the years ending December 31,
1997, 1996 and 1995 is enclosed.
ELECTION OF DIRECTORS
There are currently eight members of the Board of Directors, divided into
three classes, two of which have three members and one of which has two members.
One class is elected each year for a three-year term. The Board of Directors has
realigned Mr. C. Phillip Barger from a Class I Director to a Class II Director
to make the expiration of his term in 1999 coincident with his planned tenure as
Director. Due to this realignment, the Board has realigned Mr. Carl A. Rosberg
from a Class II Director to a Class I Director to make the three Board classes
as nearly equal in size as possible - two in Class I and three in each of
Classes II and III. The names and employment histories of the three nominees,
five current Directors and Executive Officers are indicated in the following
table. The number and percentage of shares of Common Stock beneficially owned by
each as of the Record Date is also indicated.
- 3 -
<PAGE>
One Class II Director and the Class I Directors are eligible for election
at the 1998 Annual Meeting of Shareholders. The nominees listed below are
current Directors who have consented to stand for re-election as Class II and
Class I Directors of the Company to serve one and three year terms expiring at
the 1999 and 2001 Annual Meeting of Shareholders of the Company, respectively.
It is not anticipated that any nominee for election will become unable to serve
as a Director of the Company, but if any or all are unable to accept
nomination, it is intended that shares represented by proxies in the
accompanying form will be voted for the election of substitute nominees
selected by the Board of Directors. A quorum being present, the persons
receiving a plurality of the votes cast will be elected as Directors. Votes
that are withheld and shares held in street name that are not voted in the
election of Directors will not be included in determining the number of votes
cast. Unless otherwise specified in the accompanying form of proxy, it is
intended that votes will be cast for the election of all of the nominees as
Directors.
<TABLE>
<CAPTION>
Common Stock
- -----------------------------------------------------------------------------
Shared
Sole Voting
Voting and and
Investment Investment Other
Name Power Power(a) (b)
- ----------------------------------------- ------------ ------------ ---------
<S> <C> <C> <C>
CLASS I DIRECTORS - Nominees for Election
C. Wilson McNeely, III 18,461 1,825 1,322
Age 55
Director since 1995
Carl A. Rosberg 0 10,248 51,900
Age 45
Director since 1992
CLASS II DIRECTOR - Nominee for Election
C. Phillip Barger 123,707 29,992 0
Age 69
Director since 1963
CLASS II DIRECTORS - Terms Expire 1999
John B. Mitchell, Sr 1,467 3,262 661
Age 57
Director since 1989
</TABLE>
<TABLE>
<CAPTION>
Principal
Occupation and
Business
Percentage Experience for
Name Total of Class Past 5 years
- ----------------------------------------- --------- ------------ --------------------------------
<S> <C> <C> <C>
CLASS I DIRECTORS - Nominees for Election
C. Wilson McNeely, III 21,608 .16% Chairman of the
Age 55 Board - Eagle Corporation
Director since 1995 (Manufacturer of concrete
products and distributor of
fuel oils), Charlottesville, VA
Carl A. Rosberg 62,148 .47% Senior Vice President since
Age 45 May 1, 1990 - CFW
Director since 1992 Communications Company
and Subsidiaries,
Waynesboro, VA and
Director of American
Telecasting, Inc.,
Colorado Springs, CO
CLASS II DIRECTOR - Nominee for Election
C. Phillip Barger 153,699 1.16% Chairman - E. W. Barger
Age 69 and Company T/A Barger
Director since 1963 Insurance Network,
Waynesboro, VA
CLASS II DIRECTORS - Terms Expire 1999
John B. Mitchell, Sr 5,390 .04% President and Chairman of
Age 57 the Board - Hammond-
Director since 1989 Mitchell, Inc. (Construction
Contractor), Covington, VA
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Common Stock
- --------------------------------------------------------------------------------------------------------------
Shared Principal
Sole Voting Occupation and
Voting and and Business
Investment Investment Other Percentage Experience for
Name Power Power(a) (b) Total of Class Past 5 years
- ---------------------- ------------ ------------ --------- --------- ------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C>
James S. Quarforth 392 14,103 100,433 114,928 .87% President and Chief
Age 43 Executive Officer since
Director since 1987 May 1, 1990 - CFW
Communications Company
and Subsidiaries,
Waynesboro, VA; Director of
Virginia Financial
Corporation, Staunton, VA;
and Director of American
Telecasting, Inc., Colorado
Springs, CO
CLASS III DIRECTORS - Terms Expire 2000
John N. Neff 100 800 1,178 2,078 .02% President and Chief
Age 46 Executive Officer - Nielsen
Director since 1995 Builders, Inc.,
Harrisonburg, VA
William W. Gibbs, V 76,934 115,668 294 192,896 1.46% President - Comprehensive
Age 57 Computer Consultants,
Director since 1977 Staunton, VA
Robert S. Yeago, Jr. 18,501 87,168 0 105,669 .80% Chairman of the Board
Age 73 (President and Chief
Director since 1973 Executive Officer until
May 1, 1990) - CFW
Communications Company
and Subsidiaries,
Waynesboro, VA
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Common Stock
- ----------------------------------------------------------------------------------------------------
Shared
Sole Voting
Voting and and
Investment Investment Other Percentage
Name Power Power(a) (b) Total of Class
- -------------------------------- ------------ ------------ --------- --------- -----------
<S> <C> <C> <C> <C> <C>
NON-DIRECTOR EXECUTIVE OFFICERS
J. William Brownlee 12,388 0 11,950 24,338 .18%
Age 57
Warren C. Catlett 292 0 6,500 6,792 .05%
Age 38
David E. Lowe 0 500 0 500 .00%
Age 56
David R. Maccarelli 0 1,560 22,166 23,726 .18%
Age 45
Michael B. Moneymaker 1,508 3,944 7,200 12,652 .10%
Age 40
Christina S. Smith 166 3,416 7,950 11,532 .09%
Age 37
Walter M. Zirkle 3,686 0 6,500 10,186 .08%
Age 40
All officers and directors as a
group (15 persons)
257,602 272,486 218,054 748,142 5.66%
- -------------------------------- ------- ------- ------- ------- ----
</TABLE>
(a) Includes shares held by spouses, children, trusts and companies in which
the director or officer owns a controlling interest.
(b) Shares subject to options exercisable within sixty days.
Based on a review of the forms and written representations received by the
Company pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Company believes that during 1997 its directors and executive officers complied
with all applicable Section 16 filing requirements except, Mr. McNeely, whose
Form 4 filings with respect to the purchase of 2,000, 1,000, 2,000 and 200
shares were thirteen, nine, nine and four months late, respectively.
COMMITTEES OF THE BOARD
C. Phillip Barger, James S. Quarforth, Robert S. Yeago, Jr. and John B.
Mitchell, Sr. comprise the Executive Committee of the Board. One committee
meeting was held during 1997.
The Company has a standing Audit Committee and a Compensation and Stock
Option Committee. The Audit Committee, consisting of C. Phillip Barger, William
Wayt Gibbs, V. and John N. Neff, had two meetings in 1997 for the purpose of
approving the 1996 audit and recommending an accounting firm to the Board to
serve as independent public auditors to make an audit of the financial
statements of the Company for the year 1997 and to perform certain non-audit
services.
- 6 -
<PAGE>
The Compensation and Stock Option Committee, consisting of C. Phillip
Barger, John B. Mitchell, Sr., C. Wilson McNeely, III and Robert S. Yeago, Jr.,
held one meeting during the year for the purpose of determining wage and salary
increases and granting stock options to certain key employees of the Company.
The full Board of Directors has the responsibilities of a Nominating
Committee whose functions include consideration of the size, composition and
continuity of the Board. In carrying out its responsibilities, the Board will
consider candidates suggested by shareholders. Any shareholder recommendation
for a nominee for director at the 1999 Annual Meeting of Shareholders of the
Company, together with a description of the proposed nominee's qualifications,
relevant biographical information and the proposed nominee's signed consent to
serve if elected, should be submitted in writing to the Corporate Secretary of
the Company not later than February 27, 1999.
The Board of Directors held eight regular meetings during 1997. All
directors attended at least 75% of the meetings of the Board and committees of
which he is a member.
SUMMARY COMPENSATION TABLES
The following tables set forth information as to compensation paid to the
chief executive officer and the next four most highly compensated executive
officers of the Company (the "Named Executives") for 1997, with comparisons to
1996 and 1995 information, as well as option grants and exercises for 1997:
EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
- ------------------------------------------------- --------------
Awards
--------------
<S> <C> <C> <C> <C> <C>
Name and Options/
Principal Position Year Salar y Bonu s SARs All Other1/
- -------------------------- ---- ----- ---- --- ------------
James S. Quarforth 1997 $221,250 $98,698 20,000 $7,668
President & Chief 1996 198,750 69,418 21,000 6,018
Executive Officer 1995 165,000 46,077 6,000 5,754
Carl A. Rosberg 1997 157,500 54,237 11,000 7,176
Senior Vice President 1996 142,500 22,313 12,000 5,681
1995 118,308 22,223 4,000 5,371
David R. Maccarelli 1997 127,500 43,804 11,000 6,881
Senior Vice President 1996 113,751 35,250 12,000 5,014
1995 95,004 19,162 3,000 4,334
Walter M. Zirkle2/ 1997 119,000 31,679 10,000 5,392
Vice President and 1996 96,250 23,771 10,000 361
COO - Wireless 1995 0 0 0 0
Michael B. Moneymaker3/ 1997 111,000 31,583 8,000 3,185
Vice President - Finance 1996 102,500 26,141 6,750 2,329
1995 19,782 0 5,000 0
</TABLE>
1/ In 1997 the Company made contributions to the savings plan of $5,700
for James S. Quarforth, $5,700 for Carl A. Rosberg, $5,700 for David R.
Maccarelli, $4,310 for Walter M. Zirkle, and $2,152 for Michael B. Moneymaker.
In addition, the Company made group life insurance premium payments of $1,968
for James S.
- 7 -
<PAGE>
Quarforth, $1,476 for Carl A. Rosberg, $1,181 for David R. Maccarelli, $1,082
for Walter M. Zirkle, and $1,033 for Michael B. Moneymaker.
In 1996 the Company made contributions to the savings plan of $4,394 for
James S. Quarforth, $4,500 for Carl A. Rosberg, $4,070 for David R. Maccarelli,
and $1,706 for Michael B. Moneymaker. In addition, the Company made group life
insurance premium payments of $1,624 for James S. Quarforth, $1,181 for Carl A.
Rosberg, $944 for David R. Maccarelli, $361 for Walter M. Zirkle, and $623 for
Michael B. Moneymaker.
2/ Mr. Zirkle joined the Company on February 16, 1996 and became an
executive officer of the Company effective April 22, 1997.
3/ Mr. Moneymaker joined the Company on October 10, 1995.
OPTION/SAR GRANTS TABLE
Option/SAR Grants in Last Fiscal Year
-------------------------------------
<TABLE>
<CAPTION>
Potential Realizable
Value At Assumed
Annual Rates of
Stock Price
Appreciation
Individual Grants For Option Term
- ------------------------------------------------------------------------------------ -------------------------
% of Total
Options/ Options/SARs Exercise
SARs Granted to or Base
Granted(1) Employees in Price Expiration
Name (Shares) Fiscal Year Per Share Date 5%(2) 10%(2)
- ----------------------- ------------ -------------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
James S. Quarforth 20,000 18.8% $ 20.875 02/24/2007 $262,500 $662,500
Carl A. Rosberg 11,000 10.4% 20.875 02/24/2007 144,375 364,375
David R. Maccarelli 11,000 10.4% 20.875 02/24/2007 144,375 364,375
Walter M. Zirkle 10,000 9.4% 20.875 02/24/2007 131,250 331,250
Michael B. Moneymaker 8,000 7.5% 20.875 02/24/2007 105,000 265,000
</TABLE>
(1) No SARs were granted in tandem with stock options.
(2) In order to realize the potential value set forth, the price per share of
the Company's common stock would be approximately $34.00 and $54.00,
respectively, at the end of the ten year option term.
- 8 -
<PAGE>
OPTION/SAR EXERCISES AND YEAR END VALUE TABLE
Aggregated Option/SAR Exercises in Last Fiscal Year, and FY-End Option/SAR
- --------------------------------------------------------------------------
Values
------
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options/SARs at Options/SARs
FY-End (Shares) FY-End
Shares Acquired Value Exercisable/ Exercisable/
Name On Exercise Realized Unexercisable Unexercisable
- ----------------------- ----------------- ---------- ----------------------- ----------------------
<S> <C> <C> <C> <C>
James S. Quarforth 3,775 $45,536 91,233 / 41,948 $995,030 / $121,467
Carl A. Rosberg 2,500 3,015 46,750 / 23,350 416,787 / 69,300
David R. Maccarelli 1,560 9,140 17,016 / 22,850 49,659 / 67,800
Walter M. Zirkle 0 0 2,000 / 18,000 9,250 / 52,000
Michael B. Moneymaker 0 0 3,850 / 15,900 16,893 / 48,636
</TABLE>
Closing price on December 31, 1997 was $22.375 and was used in calculating the
value of unexercised options.
PENSION PLAN/DEFINED BENEFIT PLAN DISCLOSURE
The following table reflects the estimated aggregate retirement benefits
to which certain executive officers of the Company, including each of the named
executive officers in the Summary Compensation Table, are expected to be
entitled under the provisions of the Company's non-contributory, funded
employee retirement plan and the executive supplemental retirement plan (the
"Plans"). The table illustrates the amount of aggregate annual retirement
benefits payable under the Plans for an executive retiring in 1997 at age 65
computed on a straight life annuity. The amount of benefit assumes that the
executive has completed a minimum of 15 years of service. The supplemental
benefit amount will not be paid for service of less than 15 years. Additional
aggregate benefits are not earned for service in addition to 35 years. Amounts
listed will be reduced by social security benefits and offset by employer
401(k) contributions.
<TABLE>
<CAPTION>
Annual Retirement Benefits Payable for
Respective Years of Service
---------------------------------------------------------------
Average Annual
Compensation 15 years 20 years 25 years 30 years 35 years
- --------------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 75,000 $ 86,250 $ 97,500 $108,750 $120,000
175,000 87,500 100,625 113,750 126,875 140,000
200,000 100,000 115,000 130,000 145,000 160,000
225,000 112,500 129,375 146,250 163,125 180,000
250,000 125,000 143,750 162,500 181,250 200,000
275,000 137,500 158,125 178,750 199,375 220,000
300,000 150,000 172,500 195,000 217,500 240,000
325,000 162,500 186,875 211,250 235,625 260,000
350,000 175,000 201,250 227,500 253,750 280,000
</TABLE>
The number of credited years of service for James S. Quarforth, Carl A.
Rosberg, David R. Maccarelli, Walter M. Zirkle and Michael B. Moneymaker is 18
years, 9 years, 5 years, 1 year and 2 years, respectively.
DIRECTOR COMPENSATION
Non-management directors receive a monthly retainer fee of $800 and $400
for each meeting attended. The Chairman of the Board receives an additional
monthly retainer fee of $600. Upon election by December 15th of the preceding
year, non-management directors may elect to receive all, or a portion of their
annual retainer fee in Company stock option grants.
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<PAGE>
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
As members of the Compensation Committee and Stock Option Committee it is
our duty to monitor the performance and compensation of executive officers and
other key employees and to make appropriate recommendations and reports to the
Board concerning matters of executive compensation.
The Company maintains a compensation program designed to motivate, retain
and attract management, with incentives linked to financial performance and
enhanced shareholder value. The fundamental philosophy is to relate the amount
of compensation for an executive directly to his or her contribution to the
Company's success in achieving superior performance objectives. The Company's
executive compensation program consists of three components: 1) base salary; 2)
potential for annual incentive compensation based on Company performance; and,
3) the opportunity to earn long-term stock-based incentives which are intended
to encourage achievement of superior long-term results and to align executive
officer interests with those of the shareholders. The base salary element is
developed based on the performance of the individual executives with reference
to industry, peer group and national surveys, with the objective of having the
Company's chief executive officer receive a level of base salary similar to the
average base salary of chief executives at similarly sized technological
service companies. Base salary levels of the Company's other executive officers
are established by reference to the chief executive officer's salary, depending
on the type and level of responsibility of the other executives. The annual
incentive compensation element is based on the Company's attainment of certain
levels of profitability, service and on the individual's overall performance,
all as set forth in the Company's annual management incentive plan. The
criteria contained in the Company's annual management incentive compensation
plan (MIP) is developed in conjunction with the Company's annual business plan.
The long-term stock-based element is developed by reference to competitive
practices and trends of other companies which use stock options as a component
of executive compensation. Long-term stock-based incentives are given great
weight in the Company's overall compensation mix in order to incentivize
executive officers to increase shareholder value. Accordingly, the Committee
has taken into account the amount and value of options held by each of the
executive officers when considering new grants to assure that deserving
executives have a significant equity participation in the Company.
The Chief Executive Officer's total compensation increased by $53,430 in
1997 compared to 1996. A number of factors and criteria were utilized by the
Compensation Committee in evaluating the increase in total compensation. An
independent compensation consulting firm's industry market survey of similarly
sized technological service companies as well as individual performance were
utilized to determine the base salary increase of $22,500. The achievement of
strong financial performance compared to the Company's annual business plan
resulted in an incentive increase of $29,280 over 1996. During 1997, the
Company's consolidated net operating revenues increased $9.1 million or 18%,
operating cash flows (operating income before depreciation and amortization)
increased $4.8 million or 20% and net income (including gain on sale and loss
on write-down of investments) increased $2.7 million or 28%. The Compensation
Committee also considers the Chief Executive Officer's continued leadership in
advancing the Company's long-term strategic business goals. Specifically,
during 1997, the Company, launched Personal Communications Services throughout
central and western Virginia in the fourth quarter and in conjunction with this
service opened the Company's first integrated retail stores throughout this
same geographic region; introduced high speed internet access over wireless
cable spectrum; doubled the calling volume from directory assistance within the
Company's existing calling centers with the expansion of the contract with AT&T
for customers seeking numbers in New Jersey, Delaware and Pennsylvania and a
new contract for GTE wireless customers in Virginia and Pennsylvania and;
introduced long distance service during the fourth quarter.
Compensation Committee and Stock Option Committee
R. S. Yeago, Jr. John B. Mitchell, Sr.
C. Phillip Barger C. Wilson McNeely, III
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Robert S. Yeago, Jr., a Director and member of the Compensation Committee
and Stock Option Committee of the Company, formerly served as President and
Chief Executive Officer.
RELATED TRANSACTIONS
Through a competitive bidding process, during 1997 the Company awarded a
$2.2 million construction contract to Nielsen Construction Company. Mr. John N.
Neff currently serves as President and Chief Executive Officer of Nielsen
Construction Company.
PERFORMANCE GRAPH
The following performance graph compares the performance of the Company's
Common Stock to the NASDAQ Composite Index and to the S&P Telecommunications
Index (which includes the five (previously seven, before mergers) Regional Bell
Operating Companies (RBOCS), GTE and ALLTEL) for the Company's last five fiscal
years. The graph assumes that the value of the investment in each scenario was
$100 at December 31, 1992 and that all dividends were reinvested in their
respective common stock issue in the month paid.
COMPARISON of FIVE-YEAR CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Fiscal Year Ended December 31
1992 1993 1994 1995 1996 1997
<S> <C>
CFW Communciations Company 100 143 119 105 134 138
NASDAQ Composite Index 100 115 112 159 195 240
S&P Telecom Index 100 121 115 168 176 243
</TABLE>
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<PAGE>
FINANCIAL STATEMENTS
The Company's 1997 Annual Report to Shareholders contains audited
financial statements for 1997, 1996 and 1995 and the report of McGladrey &
Pullen, LLP thereon. Management's Discussion and Analysis of financial
condition and results of operations is also contained in this 1997 Annual
Report.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of McGladrey & Pullen, LLP, P. O. Box 1276, Richmond, Virginia,
independent public accountants, audited the financial statements of the Company
for the fiscal year ending December 31, 1997. A representative of McGladrey &
Pullen, LLP is expected to be present at the Annual Meeting and will be
available to make a statement if he desires to do so and to answer appropriate
questions with respect to that firm's audit of the Company's financial
statements and records for the fiscal year ended December 31, 1997.
SHAREHOLDER PROPOSALS
In order for proposals of shareholders to be considered for inclusion in
the Proxy Statement and Proxy for the 1999 Annual Meeting of Shareholders, such
proposals must be received by the Corporate Secretary of the Company by
February 27, 1999.
FORM 10-K
Upon written request to the Corporate Office of the Company, P. O. Box
1990, Waynesboro, Virginia 22980, shareholders will be furnished without charge
a copy of the Company's Annual Report on Form 10-K required to be filed with
the Securities and Exchange Commission, including the financial statements and
the schedules thereto for the most recent fiscal year.
Waynesboro, Virginia
March 12, 1998
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<PAGE>
P R O X Y CFW COMMUNICATIONS COMPANY
Proxy Solicited by the Board of Directors
The undersigned hereby constitutes W.W. Gibbs, V and C.S. Smith, or either
of them, attorneys and proxies, with power of substitution in each, to act for
the undersigned with respect to all common stock of the undersigned at the
Annual Meeting of Shareholders to be held at the Holiday Inn at the
intersection of Route 275 and I-81, North of Staunton, Virginia, on Tuesday,
April 21, 1998, at 10:00 a.m., or any adjournment thereof.
The Board of Directors recommends a vote "FOR":
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS (two Class I, one Class II)
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as marked to the contrary below) vote for all nominees listed below
</TABLE>
(Instruction: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below.)
C. Wilson McNeely, III Carl A. Rosberg C. Phillip Barger
(Class I) (Class I) (Class II)
2. To vote on such other business, if any, that may properly come before the
meeting.
[ ] Please check box if you plan to attend the meeting.
(continued on other side)
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(continued from other side)
Dated:________________ , 1998 ________________________________________
________________________________________
(Please sign your name(s) exactly as
shown hereon.)
THIS PROXY WHEN PROPERLY
EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE
SHAREHOLDER(S). IF NO DIRECTION
IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES FOR
ELECTION OF THE CLASS I AND II
DIRECTORS AND APPROVAL OF THE
OTHER MATTERS TO BE CONSIDERED
AT THE MEETING.
