<PAGE> 1
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:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Roseville Telephone Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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> 2
ROSEVILLE TELEPHONE COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Roseville Telephone Company
(hereinafter called the Company) will be held at the Company's Industrial Avenue
Facility, 8150 Industrial Avenue, Building A, Roseville, California, on Friday,
June 21, 1996 at 8:00 o'clock P.M., for the following purposes:
1. To elect a Board of five (5) Directors;
2. To consider and act upon a proposal to amend the Company's Amended
and Restated Articles of Incorporation to increase to 100,000,000 the
authorized shares of Common Stock; and
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record on the books of the Company as of 5:00 o'clock
P.M., May 10, 1996 will be entitled to vote at the meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
(SIG)
THOMAS E. DOYLE
Secretary
SHAREHOLDERS WHO CANNOT ATTEND IN PERSON ARE REQUESTED TO FILL IN, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
Roseville, California, April 26, 1996.
<PAGE> 3
ROSEVILLE TELEPHONE COMPANY
P.O. BOX 969
211 LINCOLN STREET
ROSEVILLE, CALIFORNIA 95678
APRIL 26, 1996
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Roseville Telephone Company (hereinafter called the
Company) to be used at the Annual Meeting of Shareholders on June 21, 1996, or
any adjournment thereof, for the purposes set forth in the foregoing notice. Any
shareholder may revoke his or her proxy at any time prior to its use by written
communication to the Secretary of the Company or by attendance at the Annual
Meeting and voting in person.
The approximate date of mailing to shareholders of Notice of Annual Meeting
and this Proxy Statement is May 10, 1996.
VOTING SECURITIES
The Company has only one class of voting security, its Common Stock,
entitled to one vote per share and, as explained below, to cumulative voting in
the election of Directors. Only shareholders of record at 5:00 o'clock P.M. on
May 10, 1996, will be entitled to vote at the Annual Meeting. As of the close of
business on February 29, 1996, there were 14,915,424 shares of the Company's
Common Stock outstanding. On February 29, 1996, no person was known by the
Company to be the beneficial owner of more than five percent of its issued and
outstanding Common Stock, except as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
------------------------------------------------- ----------------------- ----------
<S> <C> <C>
Roseville Telephone Company Retirement
Supplement Plan................................ 1,351,663(1) 9.1%
P.O. Box 969
Roseville, California 95678
</TABLE>
- ----------
(1) Shared voting and investment power.
Shares cannot be voted at the meeting unless the owner is present or
represented by proxy. Because abstentions with respect to any matter are treated
as shares present or represented and entitled to vote for the purposes of
determining whether that matter has been approved by the shareholders,
abstentions have the same effect as negative votes. Broker non-votes and shares
as to which proxy authority has been withheld with respect to any matter are not
deemed to be present or represented for purposes of determining whether
shareholder approval of that matter has been obtained.
In voting for Directors, each shareholder is entitled to vote his shares
for as many persons as there may be Directors to be elected, to accumulate his
votes and give one nominee votes equal to the number of Directors multiplied by
the number of shares of stock owned by him or to distribute his votes upon the
same principle among as many nominees as he thinks fit. The five candidates for
election as Directors at the Annual Meeting of Shareholders who receive the
highest number of affirmative votes will be elected.
Approval of the proposal to amend the Company's Amended and Restated
Articles of Incorporation requires the affirmative vote of a majority of the
outstanding shares of the Company. The approval of any other matters submitted
for shareholder approval at the Annual Meeting will require the affirmative vote
of a majority of the shares of the Company present or represented and entitled
to vote at the meeting.
<PAGE> 4
ELECTION OF DIRECTORS
The following persons are nominees for Director to serve until the next
Annual Meeting of Shareholders and until their successors shall have been
elected and shall qualify. The nominees constitute the present Board of
Directors, all of whom were elected at the last Annual Meeting of Shareholders
of the Company. During 1995, the Board of Directors held twelve regular
meetings, of which no Director attended less than 75 percent. The Company's
Board of Directors has no standing audit or nominating Committee. In 1994 the
Board of Directors established a Compensation Committee, composed of independent
Directors, whose functions include the review of and recommendations with
respect to officer compensation, the review of officer performance and
consideration of benefit issues generally. The Compensation Committee members
are John R. Roberts III, who serves as Chairman, and Ralph E. Hoeper.
Shares represented by the proxy will be voted and the proxies will vote for
the election of all the nominees to the Board of Directors, except to the extent
that authority to vote for particular nominees has been withheld. If any person
is unable or unwilling to serve as a nominee for the office of Director at the
date of the Annual Meeting, or any adjournment thereof, the proxies will vote
for such substitute nominee as shall be designated by the proxies. Management
has no reason to believe that any of the nominees will be unable to serve if
elected a Director. The present Directors and Officers (consisting of seven
individuals) beneficially owned, as of February 29, 1996, an aggregate 693,558
shares, or 4.6% of the Company's Common Stock. In respect to the nominees and
all the Directors and Officers as a group, the following information is
furnished as of February 29, 1996.
<TABLE>
<CAPTION>
SHARES OF
PRINCIPAL OCCUPATION AND COMPANY PERCENT
BUSINESS EXPERIENCE DIRECTOR BENEFICIALLY OF
NAME AGE FOR PAST FIVE YEARS SINCE OWNED(1) CLASS
- -------------------------- --- --------------------------------- -------- ------------ -------
<S> <C> <C> <C> <C> <C>
Robert L. Doyle(2)(3)..... 77 Chairman of the Board of 1954 311,505 2.1%
Directors of the Company;
President and Chief Executive
Officer of the Company from
1954 to 1993.
Brian H. Strom(4)......... 53 President and Chief Executive Of- 1993 7,163 *
ficer of the Company (since De-
cember 1993); Vice President
and Chief Financial Officer of
the Company from 1989 to 1993.
Thomas E. Doyle(2)........ 67 Vice President (since 1972) and 1951 289,532 1.9%
Secretary-Treasurer (since 1965)
of the Company; Chairman of the
Board, Placer Savings Bank, Au-
burn, California.
Ralph E. Hoeper(5)........ 71 President, Foresthill Telephone 1987 37,438 *
Company, Foresthill,
California.
John R. Roberts III(5).... 44 Executive Director (since 1990), 1993 10,456 *
California Rice Industry
Association; Executive Director
(from 1989 to 1990), Sacramento
Metropolitan Chamber of
Commerce; Director, Meta
Information Services, Inc.,
Sacramento, California.
All Directors and Officers
as a group (7
persons)................ 693,558 4.6%
</TABLE>
- ----------
* Less than 1.0%.
(1) Each beneficial owner has shared voting and investment power unless
otherwise noted.
(2) Robert L. Doyle and Thomas E. Doyle are brothers.
(3) Included in Robert L. Doyle's share ownership figure are 142,562 shares in
respect of which he has sole voting and investment power.
(4) Included in Brian H. Strom's share ownership figure are 6,248 shares in
respect of which he has sole voting and investment power.
(5) Ralph E. Hoeper and John R. Roberts III serve on the Compensation Committee.
2
<PAGE> 5
Compensation of Directors
All Directors other than Robert L. Doyle and Brian H. Strom (who have not
received compensation as Directors since April 1994) were compensated by a fee
of $1,000 per month and $500 for each Board meeting they attended in 1995.
EXECUTIVE COMPENSATION
The following table sets forth the executive compensation paid during the
years ended December 31, 1995, 1994 and 1993, to all officers of the Company who
earned more than $100,000 in combined salary and bonus in 1995:
Summary Compensation Table
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------
OTHER ANNUAL ALL OTHER
NAME AND SALARY(2) BONUS COMPENSATION(3) COMPENSATION(4)
PRINCIPAL POSITION(1) YEAR $ $ $ $
- ----------------------------------- ---- --------- ----- ------------ ------------
<S> <C> <C> <C> <C> <C>
Robert L. Doyle.................... 1995 369,961 -- 9,685 60,462
Chairman of the Board 1994 361,496 -- 9,685 21,097
of Directors 1993 359,775 -- 9,685 10,000
Brian H. Strom..................... 1995 322,229 -- 1,235 8,335
President and 1994 271,207 -- 1,235 8,493
Chief Executive Officer 1993 201,385 -- 1,080 10,000
A. A. Johnson...................... 1995 262,050 -- 9,685 16,042
Executive Vice President and 1994 238,428 -- 9,685 8,493
Chief Operating Officer 1993 201,865 -- 8,480 10,000
Michael D. Campbell................ 1995 233,915 -- 745 8,335
Vice President and 1994 163,255 -- 560 --
Chief Financial Officer
</TABLE>
- ----------
(1) On December 22, 1993, Brian H. Strom, former Vice President and Chief
Financial Officer of the Company was elected President and Chief Executive
Officer and A. A. Johnson, former Vice President, Operations of the Company
was elected Executive Vice President and Chief Operating Officer. Robert L.
Doyle continues to serve as Chairman of the Board of Directors, a position
he held in addition to his service to December 1993 as President and Chief
Executive Officer. Michael D. Campbell was elected Vice President and Chief
Financial Officer effective March 14, 1994.
(2) Reflects for Robert L. Doyle and Brian H. Strom, in addition to salary,
director's fees in the amount of $3,000 for the year ended December 31,
1994, and for Robert L. Doyle in the amount of $12,000 for the year ended
December 31, 1993 and, in respect of Michael D. Campbell, salary from the
commencement of his employment on March 14, 1994.
(3) Other annual compensation consists of gross-up payments to officers and
other employees for tax liability incurred in connection with imputed
premiums in respect of life insurance coverage in excess of $50,000.
(4) Reflects employer contributions to the Company's Retirement Supplement Plan
and, for Robert L. Doyle in 1995 and 1994, payments to Mr. Doyle pursuant to
the SERP in the amount of $52,313 and $11,864, respectively and, for A. A.
Johnson in 1995, a payment to Mr. Johnson pursuant to the SERP in the amount
of $7,707. See "Retirement Supplement Plan" and "Pension Plan and SERP" for
further information.
Retirement Supplement Plan
The Company has a Retirement Supplement Plan in which all employees of the
Company are eligible to participate after one year of service. Under the
Retirement Supplement Plan, eligible employees of the Company are allowed to
contribute to the plan not more than 6% of their annual compensation as an
"employee savings contribution." Eligible employees may also contribute to the
plan not more than 10% of their annual compensation as an "employee retirement
contribution." Generally, in accordance with Section
3
<PAGE> 6
401(k) of the Internal Revenue Code, an employee who makes an employee
retirement contribution reduces by the amount of such contribution the amount of
his or her taxable income that is otherwise currently reportable for Federal tax
purposes. The Company will make employer contributions to the plan equal to 50%
of the employee's aggregate savings and retirement contributions. Subject to
plan limitations on total contributions and Company matching contributions, an
employee may elect to make either a savings contribution or a retirement
contribution, or both. Employees may voluntarily withdraw their employee savings
contributions upon appropriate notice to the Company, but must reach the age of
59 1/2, or alternatively, demonstrate a financial hardship to withdraw their
employee retirement contributions. Employees are always fully vested in employer
retirement contributions, and become vested in employer savings contributions at
the rate of 20% per year of participation until fully vested or fully vested
upon death, disability or the reaching of age 65. Distribution from the plan
occurs generally upon termination of employment.
Pension Plan and SERP
The Company has a qualified defined benefit pension plan in which all
employees are eligible to participate substantially concurrently with the
commencement of employment ("Pension Plan"), as well as a supplemental
non-qualified and unfunded supplemental executive retirement plan ("SERP"). The
SERP provides benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan benefits, based on
remuneration that is covered under the plans and years of service with the
Company. Benefits under the plans are a function of a participant's years of
service with the Company and the employee's average annual compensation during
the period of the five consecutive years in the last ten years of credited
service in which annual compensation was the largest. The monthly retirement
benefit payable under the plans will be adjusted on the basis of actuarial
equivalents for a joint and survivor benefit and for optional forms of benefit,
such as the early retirement benefit. Benefits become fully vested at age 65 or
on the completion of 5 years of service, whichever first occurs, and are not
subject to any deduction for Social Security or other offset amounts.
While the Company may terminate the plans at any time, such termination
will not deprive any participant or beneficiary of any vested accrued benefits
under the plan to the extent such benefits are then funded.
Since the Pension Plan is a defined benefit plan, funding is determined
with respect to participants as a group and costs cannot be readily allocated to
any individual participant. The ratio of 1995 plan contributions to estimated
total covered compensation was 15.0%. Estimated total covered compensation has
been determined by increasing the total base annual rate of compensation of plan
participants at January 1, 1995 by 6.0%. Robert L. Doyle, Brian H. Strom, A. A.
Johnson and Michael D. Campbell are entitled to benefits under the Pension Plan
and the SERP and, at December 31, 1995, were credited with 42, 7, 18 and 1 years
of service, respectively, under the plans. The compensation covered by the
Pension Plan and the SERP for each participant is substantially similar to the
sum of the salary and other annual compensation reported above for each
executive officer. The table below illustrates approximate annual benefits
payable under the plans for the ranges of pay and periods of service indicated,
assuming retirement at age 65 in 1996.
<TABLE>
<CAPTION>
HIGHEST
CONSECUTIVE ESTIMATED ANNUAL PENSION FOR
FIVE-YEAR REPRESENTATIVE YEARS OF SERVICE
AVERAGE -------------------------------------------------------------------------
COMPENSATION 15 20 25 30 35 40
- --------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$100,000... $ 26,250 $ 35,000 $ 43,750 $ 52,500 $ 61,250 $ 70,000
125,000... 32,813 43,750 54,688 65,625 76,563 87,500
150,000... 39,375 52,500 65,625 78,750 91,875 105,000
175,000... 45,938 61,250 76,563 91,875 107,188 122,500
200,000... 52,500 70,000 87,500 105,000 122,500 140,000
225,000... 59,063 78,750 98,438 118,125 137,813 157,500
250,000... 65,625 87,500 109,375 131,250 153,125 175,000
300,000... 78,750 105,000 131,250 157,500 183,750 210,000
400,000... 105,000 140,000 175,000 210,000 245,000 280,000
</TABLE>
4
<PAGE> 7
Compensation Committee Interlocks and Insider Participation
In early 1994, the Board of Directors established a Compensation Committee
of independent Directors comprised of John R. Roberts III, who currently serves
as Chairman, and Ralph E. Hoeper.
Report of the Compensation Committee Concerning Compensation
The Compensation Committee in 1994 assumed the responsibility of reviewing
and recommending a compensation program for the Company's officers. Previously
such responsibility was held by the entire Board of Directors. Consistent with
past practices followed by the Company, and deemed by the Compensation Committee
to be a proper articulation of the factors to be utilized in connection with
officer compensation, the Compensation Committee considered:
(i) operational goals and financial performance and the achievement of
stockholder value, together with each officer's individual effectiveness in
reaching those goals and achieving desirable financial performance and
stockholder value;
(ii) the years of service, skill levels and duties of the Company's
officers giving effect to the limited number of officers and the resulting
determination of increased responsibilities for the Company's officers in
relation to other companies;
(iii) the compensation earned by officers of other telephone and
telecommunications companies; and
(iv) officer compensation at general industry companies of similar
size to the Company within the Sacramento, California metropolitan area and
in other areas of the United States with comparable cost-of-living and
compensation levels.
The Compensation Committee also realizes the significance of the
distinctions between the compensation policy at the Company and at other
companies, both within and outside the telecommunications industry. Most
importantly, substantially all of the officers' compensation is derived from
base salary. Compensation incentives utilized at other companies, such as
stock-based or other long-term incentive plans have never been adopted by the
Company. As a result, substantially all of the officers' compensation at the
Company is determined by base salary with reference to the performance of the
Company and the officer in the prior fiscal year and competitive conditions.
In addition, the Compensation Committee received the assistance of an
independent consulting firm specializing in compensation matters which prepared
a report in early 1994 with respect to the Company's compensation policies and
related matters. The engagement of the independent consulting firm was
implemented in furtherance of the Compensation Committee's goal to provide
compensation opportunities that attract, motivate and retains the most qualified
officers who can contribute to the long-term performance and growth of the
Company. The consulting firm reviewed the appropriateness of the design of the
Company's various plans in meeting the stated goal. In addition, the consulting
firm provided the Compensation Committee with an analysis of compensation paid
to executives in comparable positions in other companies that are representative
of the labor markets in which the Company competes for executive talent. For the
Company's executive officers 1994 compensation was below median figures for
telecommunications and general industry companies with comparable revenues
studied and discussed in the 1994 report delivered to the Compensation
Committee. 1995 compensation for the Company's executive officers was determined
with reference to the information provided in the 1994 report and adjustments
effected to implement the compensation considerations identified above.
The 1995 compensation awarded to Brian H. Strom, President and Chief
Executive Officer, was comprised almost entirely of his salary. Mr. Strom's
salary was established taking into consideration the individual and Company
compensation criteria and policies described above. In addition, the
Compensation Committee also considered that the 1994 compensation for the
Company's executive officers, including the Chief Executive Officer, was below
median figures for the comparable companies in the 1994 report. As a
5
<PAGE> 8
result, the Compensation Committee has made a conscious effort to advance the
salary of the Chief Executive Officer to the median of such comparable
companies. In addition, the Compensation Committee also recognized the continued
successful financial performance of the Company measured by revenue and net
income results, the Company's continued technological advancements, and the
contributions of the Chief Executive Officer in helping the Company achieve such
performance and advancements.
In connection with the 1994 report utilized to assist in the determination
of officer compensation, three of the twelve companies whose compensation
policies were considered are among the seventeen companies constituting the Dow
Jones Telephone Systems Index. All of the companies whose policies were
considered for compensation comparisons are engaged in the telecommunications
industry in general, and the local exchange carrier business in particular. In
addition to the nature of their business, such comparison companies were
comparable to the Company in one or more of the following categories: revenues,
access lines, assets and geographic location. Substantially all of the companies
in the Dow Jones Telephone Systems Index are larger than the Company and it was
determined that comparison of compensation of the Company's officers with the
officers of the other companies would not be meaningful.
Compensation Committee,
John R. Roberts III, Chairman
Ralph E. Hoeper
EXECUTIVE OFFICERS
The following table provides information regarding certain executive
officers of the Company as of February 29, 1996:
<TABLE>
<CAPTION>
SHARES OF
PRINCIPAL OCCUPATION AND COMPANY PERCENT
BUSINESS EXPERIENCE FOR BENEFICIALLY OF
NAME AGE PAST FIVE YEARS OWNED(1) CLASS
- ----------------------- --- ------------------------------------------ ------------ -------
<S> <C> <C> <C> <C>
Robert L. Doyle(2)..... 77 Chairman of the Board of Directors; 311,505 2.1%
President and Chief Executive Officer
(1954 to 1993)
Brian H. Strom(3)...... 53 President and Chief Executive Officer 7,163 *
(since December 1993); Vice President and
Chief Financial Officer (1989 to 1993)
A. A. Johnson.......... 74 Executive Vice President and Chief 33,176 *
Operating Officer (since December 1993);
Vice President, Operations (1989 to
1993)
Michael D. Campbell.... 47 Vice President and Chief Financial Officer 4,288 *
(since March 1994); Partner, Ernst &
Young LLP (1983 to 1994)
</TABLE>
- ----------
* Less than 1.0%.
(1) Each beneficial owner has shared voting and investment power unless
otherwise noted.
(2) Included in Robert L. Doyle's share ownership figure are 142,562 shares in
respect of which he has sole voting and investment power.
(3) Included in Brian H. Strom's share ownership figure are 6,248 shares in
respect of which he has sole voting and investment power.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Common Stock of the Company to file with the Securities and
Exchange Commission (the "Commission") initial reports of ownership and reports
of
6
<PAGE> 9
changes in ownership of Common Stock of the Company. Officers, directors and
greater than ten-percent shareholders are required by the Commission's
regulations to furnish the Company with copies of all forms they file pursuant
to Section 16(a).
To the Company's knowledge, during the two fiscal years ended December 31,
1995, all Section 16(a) filing requirements applicable to its officers,
directors and greater than ten-percent beneficial owners were complied with,
except, that one initial report of ownership was filed late by Michael D.
Campbell.
Performance Graph
The following graph shows a five-year comparison of cumulative total
shareholder return of the Company's Common Stock (assuming dividend
reinvestment) with the Dow Jones Telephone Systems Index (a published index
which includes 17 telecommunications companies) and Standard & Poor's ("S&P")
500 Stock Index. The comparison of total return on investment (change in year
end stock price plus reinvested dividends) for each of the periods assumes that
$100 was invested on December 31, 1990 in each of Roseville Telephone Company,
the Dow Jones Telephone Systems Index and S&P 500 Stock Index. The stock
performance shown on the graph below is not necessarily indicative of future
price performance.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ROSEVILLE TELEPHONE COMPANY,
DJ TELEPHONE SYSTEMS AND S&P 500
<TABLE>
<CAPTION>
ROSEVILLE
MEASUREMENT PERIOD TELEPHONE DJ TELEPHONE S&P 500 STOCK
(FISCAL YEAR COVERED) COMPANY SYSTEMS INDEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 119 111 130
1992 134 124 140
1993 151 148 155
1994 162 139 157
1995 178 203 215
</TABLE>
AMENDMENT OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Company's Amended and Restated Articles of Incorporation presently
provide that the number of shares of Common Stock which the Company is
authorized to issue is 20,000,000. As of February 29, 1996, there were issued
and outstanding 14,915,424 shares of Common Stock.
7
<PAGE> 10
On March 26, 1996, the Company's Board of Directors unanimously approved a
proposed amendment to the Company's Amended and Restated Articles of
Incorporation to increase the number of authorized shares of Common Stock to
100,000,000 shares, subject to approval by the shareholders. The Board of
Directors deems it in the best interest of the Company and its shareholders to
increase the number of shares of its Common Stock in order to insure that a
sufficient number of shares are authorized for issuance for general corporate
purposes. The Board of Directors believes that having such additional shares
authorized and available for issuance or reservation will allow the Company to
have greater flexibility in considering potential future actions involving the
issuance of stock, including stock dividends or splits. The Board of Directors
has declared a stock dividend every year since 1982, but no determination has
been made for 1996. Additional shares authorized may be issued from time to time
by authority of the Company's Board of Directors, without further authorization
by a vote of the shareholders. There are no present understandings,
negotiations, contracts or agreements for the issuance of the additional shares
of Common Stock to be authorized. Shareholders do not have pre-emptive rights
with respect to shares of Common Stock of the Company.
On June 16, 1995 the Company's shareholders approved an Agreement and Plan
of Reorganization (the "Reorganization") to reorganize the corporate structure
of the Company and its one existing subsidiary to create a new holding company
to be the publicly-held parent of the Company. The reorganization continues to
be subject to the approval of the California Public Utilities Commission, and it
is currently anticipated that the Reorganization will be implemented by the end
of 1996. The Articles of Incorporation of the proposed holding company are
currently substantially identical to the Amended and Restated Articles of
Incorporation of the Company. Accordingly, if the amendment to the Company's
Amended and Restated Articles of Incorporation is approved by the Company's
shareholders, the Articles of Incorporation of the holding company will also be
amended to increase its authorized number of shares of Common Stock to
100,000,000.
The Board of Directors recommends a vote FOR the proposed amendment to the
Amended and Restated Articles of Incorporation. The affirmative vote of the
holders of a majority of the issued and outstanding shares of Common Stock of
the Company is necessary to further amend the Amended and Restated Articles of
Incorporation to increase the number of shares of Common Stock authorized.
INDEPENDENT AUDITORS
Ernst & Young LLP, the Company's auditors since 1960, has been selected by
the Company as its independent auditors for the current year. A representative
of Ernst & Young LLP is expected to be present at the meeting to be available to
respond to appropriate questions and will have the opportunity to make a
statement if such representative desires to do so.
COST OF SOLICITATION
The total cost of preparing, assembling and mailing the proxy statement,
the form of proxy, any additional material intended to be furnished to
shareholders concurrently with the proxy statement, and any additional material
relating to the same meeting or subject matter furnished to shareholders
subsequent to the furnishing of the proxy statement, will be borne by the
Company. The Company will, upon request, reimburse brokers and other nominees
for costs incurred by them in mailing the proxy statement, the form of proxy and
any additional material intended to be furnished to shareholders concurrently
with the proxy statement to beneficial owners. In addition, officers and regular
employees may solicit proxies by telephone or in person.
OTHER MATTERS AND SHAREHOLDER PROPOSALS
As of this date, there are no other matters the management intends to
present or has reason to believe others will present to the meeting. If other
matters now unknown to the management come before the meeting, those who shall
act as proxies will vote in accordance with their best judgment.
8
<PAGE> 11
Proposals of shareholders intended to be presented at the 1997 Annual
Meeting must be received by the Company not later than January 7, 1997 to be
considered for inclusion in the Company's proxy statement.
Roseville, California, April 26, 1996.
BY ORDER OF THE BOARD OF DIRECTORS
(SIG)
ROBERT L. DOYLE
Chairman of the Board
9
<PAGE> 12
ROSEVILLE TELEPHONE
COMPANY
PROXY
SOLICITED
ON BEHALF OF THE
BOARD OF
DIRECTORS FOR THE
ANNUAL MEETING
JUNE 21, 1996
THE UNDERSIGNED STOCKHOLDER HEREBY APPOINTS ROBERT L. DOYLE, BRIAN H. STROM,
THOMAS E. DOYLE, RALPH E. HOEPER AND JOHN R. ROBERTS III OR ANY ONE OR MORE OF
THEM, WITH FULL POWER OF SUBSTITUTION, TO ACT AS PROXY FOR AND TO VOTE THE STOCK
OF THE UNDERSIGNED AT THE ANNUAL MEETING OF STOCKHOLDERS OF ROSEVILLE TELEPHONE
COMPANY, TO BE HELD AT THE COMPANY'S INDUSTRIAL AVENUE FACILITY, 8150 INDUSTRIAL
AVENUE, BUILDING A, ROSEVILLE, CALIFORNIA, ON JUNE 21, 1996, OR ANY ADJOURNMENT
THEREOF ON THE MATTERS BELOW:
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<S> <C>
(1) Election of Directors (The Board of Directors recommends a vote "FOR"):
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed
below) / / below / /
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INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THAT NOMINEE'S NAME
ROBERT L. DOYLE, THOMAS E. DOYLE, RALPH E. HOEPER, JOHN R. ROBERTS III, BRIAN H.
STROM
(2) Approval of the amendment to the Amended and Restated Articles of
Incorporation to increase the authorized Common Stock to 100,000,000 shares
(The Board of Directors recommends a vote "FOR"):
FOR / / AGAINST / / ABSTAIN / /
(3) In their discretion on any other business which may properly come before the
meeting or any adjournment thereof;
all as set forth in the Notice of said meeting and in the Proxy Statement, both
dated April 26, 1996, the receipt of which is hereby acknowledged.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS INDICATED.
WHERE NO SPECIFICATION IS MADE SUCH SHARES WILL BE VOTED FOR PROPOSALS (1) AND
(2) HEREOF.
PLEASE DATE AND SIGN ON REVERSE SIDE (OVER)
DATED:
- --------------- DAY OF
- ------------------, 1996. SIGNED:
- ------------------------------------------------------------------
- ------------------------------------------------------------------
SIGNATURE OF STOCKHOLDER(S)
PLEASE DATE PROXY AND SIGN EXACTLY AS
NAME OR NAMES APPEAR AT LEFT. IF STOCK IS
REGISTERED IN THE NAME OF TWO OR MORE
PERSONS, EACH MUST SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL
TITLE AS SUCH. IF A CORPORATION, PLEASE
SIGN IN FULL CORPORATE NAME BY THE
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF
A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AN AUTHORIZED PERSON.
YOUR VOTE IS IMPORTANT, PLEASE FILL IN AND RETURN PROMPTLY
