As filed with the Securities and Exchange Commission
on August 1, 1995
Registration No. 33-6380
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POSTEFFECTIVE AMENDMENT NO. 5 TO FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CONESTOGA ENTERPRISES, INC.
Pennsylvania 23-256-5087
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
202 East First Street, Birdsboro, Pennsylvania 19508
(Address of Principal Executive Offices) (Zip Code)
THE CONESTOGA TELEPHONE AND TELEGRAPH COMPANY EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
John S. Hibschman, Esquire
Miller and Murray, Esquires
P.O. Box 942
542 Court Street
Reading, Pennsylvania 19603-0942
(Name and Address of Agent for Service)
(610) 376-6651
(Telephone Number, Including Area Code, of Agent for Service)
PROSPECTUS
CONESTOGA TELEPHONE AND TELEGRAPH COMPANY
EMPLOYEE STOCK PURCHASE PLAN
The Conestoga Telephone and Telegraph Company (hereinafter called
"CT&T") has adopted The Conestoga Telephone and Telegraph Company Employee
Stock Purchase Plan, which was approved by its shareholders on May 3, 1986.
Under the Plan, eligible employees may elect to purchase common stock of
Conestoga Enterprises, Inc. (hereinafter called "CE"), the holder of all of
the common stock of CT&T, with par value of Five Dollars ($5.00) per share,
and the purchase price thereof will be paid through authorized payroll
deductions from the employees. Initially, one hundred thousand (100,000)
shares of common stock of CT&T were offered pursuant to the Plan, but a two-
for-one stock split of CT&T's shares, effective August 1, 1988, increased the
total shares offered to two hundred thousand (200,000) shares. The first
offering under the Plan was made on July 1, 1986, and closed on July 31, 1988.
Thirty-one thousand eighty (31,080) shares, taking into account the
aforementioned stock split, were purchased by employees of CT&T pursuant to
the first offering. The second offering under the Plan was made on
September 1, 1988, and closed on September 30, 1990. Seventeen thousand two
hundred ten (17,210) shares of CE were purchased by employees of CT&T pursuant
to the second offering. The third offering under the Plan was made on
October 1, 1990, and closed on October 31, 1992. No shares of CE were
purchased by employees of CT&T pursuant to the third offering, because the
price of the shares on the Closing Date was below the lowest offering price
under the offering. The fourth offering under the Plan was made on
December 1, 1992, and closed on December 31, 1994. Five thousand four hundred
seventy-three shares (5,473) of CE were purchased by employees of CT&T
pursuant to the fourth offering. One hundred forty-six thousand two hundred
thirty-seven shares (146,237) of common stock of CE are being offered pursuant
to this fifth offering under the Plan. The price of CE's common stock, as
determined under the Plan, as amended, on the Offering Date, August 1, 1995,
is Twenty-six and 16/100 Dollars ($26.16)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 1, 1995.
This Prospectus omits certain additional information contained in
the Registration Statement (Form S-8), as amended by Amendments Numbered 1, 2
3, 4 and 5 filed with the Securities and Exchange Commission ("SEC"),
Washington, D.C., under the Securities Act of 1933, as amended, to which
reference is hereby made.
CE is subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act") and in accordance therewith files
reports and other information with the SEC. Reports, proxy statements and
other information filed by CE can be inspected and copied at the public
reference facilities of the SEC, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following Regional Office:
Philadelphia Regional Office, 600 Arch Street, Philadelphia, Pennsylvania
19106. Copies can be obtained by mail at prescribed rates. Requests should
be directed to the SEC's Public Reference Section, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549.
Any person receiving a copy of this Prospectus may obtain without
charge, upon written or oral request, a copy of any of the documents
incorporated by reference herein, except for the exhibits to such documents.
Requests should be addressed to Conestoga Enterprises, Inc. or The Conestoga
Telephone and Telegraph Company, 202 East First Street, Birdsboro,
Pennsylvania 19508 (610-582-8711)
DESCRIPTION OF THE PLAN
The Conestoga Telephone and Telegraph Company Employee Stock
Purchase Plan (the "Plan") was approved at the annual meeting of shareholders
of The Conestoga Telephone and Telegraph Company, Inc., a Pennsylvania
corporation, ("CT&T") on May 3, 1986. The Plan was amended effective
January 1, 1990, to provide for the sale of voting common shares of Conestoga
Enterprises, Inc. ("CE"), instead of shares of CT&T, under the Plan. The
amendment was necessitated by the fact that CE, as the result of the
consummation of a Plan of Merger on December 31, 1989, is now the owner of all
of the voting common shares of CT&T and shares of CE are the publicly traded
shares. The Plan was further amended on July 26, 1995, to base the
determination of the offering price on sales reported on the NASDAQ "small
caps" market. The Plan, as amended, is set forth as an exhibit to this
Prospectus, and the following summary is qualified by reference to the full
text. The principal offices of CE and CT&T are at 202 East First Street,
Birdsboro, Pennsylvania, 19508 (Tel. 610-582-8711). Subject to the
eligibility requirements set forth below, all employees of CT&T are entitled
to participate in the Plan.
Purpose
The purpose of the Plan is to provide employees of CT&T with an
opportunity to acquire a proprietary interest in CT&T and CE through the
purchase of stock of CE under one or more offerings under the Plan (each such
offering being hereinafter called an "Offering").
Merger and Amendment of Plan to Provide for Sale of CE Stock Under the Plan
On December 31, 1989 a Plan of Merger was consummated whereby CE
became the sole owner of all of the outstanding shares of voting common stock
of CT&T, and the voting common shareholders of CT&T prior to the effective
date of the merger became the voting common shareholders of CE. CE's shares
of Five Dollar ($5.00) par value voting common stock were exchanged for CT&T's
shares of Five Dollar ($5.00) par value voting common stock on a one for one
basis. Effective as of January 1, 1990, the Plan was amended by the Board of
Directors of CT&T and adopted by the Board of Directors of CE to provide for
the issuance and sale of Five Dollar ($5.00) par value voting common stock of
CE under the Plan in place of the Five Dollar ($5.00) par value voting common
stock of CT&T originally issued under the Plan.
Eligibility
Participation in the Plan is entirely voluntary. All employees of
CT&T on August 1, 1995 who have then completed ninety (90) days' employment
and who are customarily employed by CT&T for more than twenty (20) hours per
week and for more than five (5) months in a calendar year are eligible to
purchase shares under the current Offering. CE and CT&T anticipate subsequent
Offerings under the Plan and all employees of CT&T on the date or dates of
such subsequent Offerings who have then completed ninety (90) days' employment
and who are customarily employed by CT&T for more than twenty (20) hours per
week and for more than five (5) months in a calendar year are eligible to
purchase shares under that Offering.
Method of Enrollment
An eligible employee may participate by completing an Election to
Purchase and a Payroll Deduction Authorization on forms provided by CT&T
therefor and filing them with the Payroll Office of CT&T. An eligible
employee who wishes to participate in the current Offering has to file his
Election to Purchase form and his Payroll Deduction Authorization form prior
to August 31, 1995.
Securities Subject to the Plan
Shares of Five Dollar ($5.00) par value voting common stock of CE
(the "Shares") are offered to employees under the Plan. The Shares are traded
in the NASDAQ "small caps" market.
A maximum of One Hundred Thousand (100,000) shares of Five Dollar
($5.00) par value voting common stock of CT&T were initially available for
issuance and purchase under the Plan, but a two for one stock split of CT&T's
shares effective August 1, 1988, (the "Stock Split") increased the total
shares offered to Two Hundred Thousand (200,000) shares. Such shares were
purchasable by employees pursuant to one or more Offerings under the Plan.
The first Offering commenced on July 1, 1986 and ended on July 31, 1988.
Under the first Offering employees of CT&T purchased Thirty-one Thousand
Eighty (31,080) shares, adjusted for the Stock Split. The second Offering
commenced on September 1, 1988 and ended on September 30, 1990. Under the
second Offering, employees of CT&T purchased Seventeen Thousand Two Hundred
Ten (17,210) shares of CE. The third offering commenced on October 1, 1990,
and ended on October 31, 1992. Under the third Offering employees of CT&T did
not purchase any shares of CE, because the market price of the shares declined
during the offering period to below the lowest offering price under the third
Offering. The fourth offering under the Plan was made on December 1, 1992,
and closed on December 31, 1994. Under the fourth Offering, employees of CT&T
purchased Five Thousand Four Hundred Seventy-three shares (5,473) of CE.
One Hundred Forty-six Thousand Two Hundred Thirty-seven (146,237)
Shares are purchasable by employees under this Offering, taking into account
the shares of CT&T and CE sold in the first four (4) Offerings under the Plan.
The Shares purchased under the current Offering will be transferred to the
account of the employees on or about August 31, 1997. Although CE and CT&T
anticipate making additional Offerings under the Plan, they are not obligated
to make any Offerings under the Plan subsequent to the current Offering or at
any particular time or times.
In the event of a stock dividend on, or subdivision, combination or
reclassification of, the Shares, appropriate adjustments will be made with
respect to the number of Shares subject to, and the exercise prices of,
outstanding options under the Plan.
Operation of the Plan
Under the Plan, CE and CT&T grant eligible employees of CT&T
options to purchase Shares through a payroll deduction program. In each
Offering under the Plan an eligible employee may elect to purchase one (1)
Share for each Fifty Dollars ($50.00) of his annual base pay as determined
from the payroll records of CT&T on the offering date for that Offering (the
"Offering Date"), provided that no employee may elect to purchase more than
nine hundred (900) Shares under each Offering. An employee may elect to
purchase less than the total number of Shares which such employee is eligible
to purchase in each Offering. "Base pay" is defined under the Plan as regular
straight time earnings excluding payments for overtime, shift premium,
incentive compensation, bonus, and other special payments except to the extent
that the inclusion of any such item is specifically approved by the Plan's
administrative committee.
The electing employee's option for the purchase of the number of
Shares he elects to purchase in his Election to Purchase form for any Offering
shall be exercised automatically for him on the Closing Date for that
Offering, provided that he has not prior thereto exercised his right to
withdraw all or part of his accumulated payroll deductions for that Offering
under the Plan. The balance, with interest, of any payroll deductions
credited to the employee's account during the Offering which were not used for
the purchase of Shares will be returned to the employee after the Closing
Date. The "Closing Date" for any Offering is the date specified in the
Offering as the date on which that Offering ends and the options to purchase
thereunder will be exercisable.
The Option price per Share for each Offering will be ninety-five
percent (95%) of the average of the closing sales prices of the Shares as
quoted on NASDAQ for the days on which sales are reported during the ten (10)
business days prior to the Closing Date, but will not be less than ninety-five
percent (95%), nor more than one hundred eight and five tenths percent
(108.5%) of the average of the closing sales prices of the Shares as quoted on
NASDAQ for the days on which sales are reported during the ten (10) business
days prior to the Offering Date.
For the current Offering each eligible employee may elect to
purchase one (1) Share for each Fifty Dollars ($50.00) of his annual base pay
on August 1, 1995, with the limitations provided above. The Closing Date for
this Offering is August 31, 1997, the date on which the employee's option for
the purchase of Shares will be exercised automatically for him. The option
price per Share for the current Offering will be ninety-five percent (95%) of
the average of the closing sales prices of the Shares as quoted on NASDAQ for
the days on which sales are reported during the ten (10) business days prior
to the Closing Date, August 31, 1997, but will not be less than Twenty-four
and 85/100 Dollars ($24.85) nor more than Twenty-eight and 38/100 Dollars
($28.38). The minimum price of Twenty-four and 85/100 Dollars ($24.85) is
determined as ninety-five percent (95%) of Twenty-six and 16/100 Dollars
($26.16), the average of the closing sales prices of the Shares as quoted on
NASDAQ for the days on which sales are reported during the ten (10) business
days prior to the Offering Date, August 1, 1995; and the maximum price of
Twenty-eight and 38/100 Dollars ($28.38) is one hundred eight and five tenths
percent (108.5%) of such average.
Three officer-director employees of CT&T and CE are eligible to
participate in the Plan; and the maximum number of Shares which each of them
may purchase under each Offering is nine hundred (900). Since CE and CT&T
anticipate additional Offerings under the Plan, the total number of Shares
which may be purchased by the foregoing under the Plan, as distinguished from
a single Offering, is considerably more than nine hundred (900). The Plan
does not establish a minimum number of Shares that any employee may purchase
thereunder.
No restrictions on the resale of the Shares purchased under the
Plan will be imposed upon employees who purchase Shares pursuant thereto.
Employees have the period from August 1, 1995 through August 31,
1995 to elect to participate in the current Offering. Except for the options
being offered pursuant to the current Offering, no other options to purchase
Shares of CE and CT&T are outstanding.
Payment for Shares
Payment for Shares with respect to which an employee has exercised
an option under an Offering is to be made in equal installments (with no right
of prepayment) by deductions from pay over one hundred four (104) calendar
weeks (the "Purchase Period") beginning with the pay period starting five (5)
weeks after the Offering Date and ending with the pay period ending on the
Closing Date. Such deductions shall be in an amount sufficient to accumulate
over the Purchase Period, with allowance for interest, the maximum price
payable for the Shares subject to option in that Offering. Except in the case
of an employee's withdrawal from the Plan or election to purchase less than
the number of Shares subject to his option or none at all, the amount in an
employee's account at the end of the purchase period will be applied to the
purchase of the elected Shares and any excess will be returned to the
employee.
For the current Offering, such payroll deductions will begin with
the pay period ending September 10, 1995, and pay received on September 14,
1995, and will end with the pay period ending on August 31, 1997, and pay
received on September 4, 1997.
Each employee participating in the Plan shall authorize deductions
from his pay on each pay day during the Purchase Period sufficient to pay the
installments provided for above. All such payroll deductions will be credited
to his account under the Plan.
Reports will be made to each participating employee every six (6)
months by Bank of Pennsylvania, Division of Dauphin Deposit Bank and Trust
Company, Reading, Pennsylvania, as investment agent for the Plan, setting
forth as of the end of the period covered by the report on standard forms of
the investment agent the amount of payroll deductions accrued to his account,
the interest earned thereon, and the total balance in his account at the time
of the report.
Contributions under the Plan
CE and CT&T will not make any contributions under the Plan, except
that CT&T will pay all administrative costs incurred by the Plan, and, if Bank
of Pennsylvania, Division of Dauphin Deposit Bank and Trust Company , Fifty
North Fifth Street, Reading, Pennsylvania 19601 ("Bank of Pennsylvania"), as
investment agent for the Plan, earns interest on the funds contributed to the
Plan at a rate equal to less than six percent (6%) per annum, simple interest,
CT&T will contribute the difference between such interest earned and interest
thereon equal to six percent (6%) per annum, simple interest.
The amount each participating employee is required to contribute
under the Plan is that amount which, with accumulated interest, is sufficient
to pay the maximum purchase price provided in the Plan for the Shares such
employee elected to purchase under the Plan in the particular Offering.
Withdrawal from the Plan
An employee may withdraw payroll deductions credited to his account
under any Offering under the Plan and thereby terminate his participation in
that Offering at any time by giving thirty (30) days prior written notice to
CT&T. All of the employee's payroll deductions, with interest, credited to
his account under the Offering will be paid to him promptly after his
withdrawal, and no further payroll deductions will be made from his pay for
that Offering.
An employee's withdrawal from any Offering will not have any effect
upon his eligibility to participate in additional Offerings under the Plan,
but he will not be permitted to participate further in that Offering.
Upon termination of a participating employee's employment for any
reason, including retirement and death, prior to the Closing Date of an
Offering (August 31, 1997, for the current Offering), the payroll deductions,
with interest, credited to his account under that Offering will be returned to
him, or, in the case of death, to the person or persons entitled thereto
pursuant to the Plan, within forty (40) days after such termination, or death,
as applicable.
An employee may also by written notice to CT&T at any time during
the period of twelve (12) weeks immediately prior to the Closing Date of an
Offering, elect, effective on such Closing date, to (a) withdraw all the
accumulated payroll deductions, with interest, in his account at that time
under that Offering, or (b) exercise his option for a specified number of full
Shares less than the number of Shares specified in his Election to Purchase
form for that Offering and withdraw the difference, if any, between the total
accumulated payroll deductions, with interest, in his account under that
Offering and the total purchase price of the Shares he elects to purchase.
For the current Offering, such notice period is June 8 through August 31,
1997.
Neither payroll deductions credited to an employee's account nor
any rights with respect to the exercise of an option to receive Shares under
the Plan may be assigned, transferred, pledged, or otherwise disposed of in
any way by the employee. Any such attempted assignment, transfer, pledge, or
other disposition shall be without effect, except that CT&T may treat such act
as an election by the employee to withdraw funds from the Plan and terminate
his participation in the particular Offering.
Designation of Beneficiary
A participating employee may file a written designation of
beneficiary who is to receive any Shares and cash to the employee's credit
under the Plan in the event of his death prior to delivery to him of such
Shares and cash. 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 CT&T of proof of the identity and existence at his death of a
beneficiary validly designated by him under the Plan, CT&T shall deliver such
Shares and/or cash to such beneficiary. In the event of the death of a
participating employee and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such employee's death, CT&T shall
deliver such Shares and 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 CT&T), CT&T, in its discretion, may deliver such Shares and
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 CT&T, then to
such other persons as CT&T may determine. No designated beneficiary shall
prior to the death of the employee by whom he has been designated acquire any
interest in the Shares or cash credited to the employee under the Plan.
Defaults under the Plan
There are only two (2) occurrences under the Plan which could be
considered defaults, to wit, (1) an attempted assignment of an employee's
interest in the Plan and (2) failure to make payments provided thereunder. In
either event the employee's contributions to the Plan for that particular
Offering are returned to him with interest and his participation in that
Offering terminated.
Leave of Absence, Layoff and Absence on Disability Benefits
An employee who is granted a leave of absence, or is laid off, may
at that time by written notice to the Company, elect either of two options as
follows: (1) suspend payments during his absence but not beyond the earlier
of the close of business on the last business day of the first calendar month
after the month in which such leave of absence or layoff commenced or the
Closing Date of the then current Offering (August 31, 1997, for the current
Offering). (Any period of suspension under option 1 shall be reduced by the
period of any other suspension in effect thereunder at the time such option is
elected); or (2) make his installment payments in cash but not beyond the
close of business on the last business day of the first calendar month after
the month in which such leave of absence or layoff commenced or, in case of
leave of absence, beyond the expiration of his leave, if earlier.
An employee who is receiving disability benefits may elect to
suspend his payments under the Plan during his absence on disability benefits
but not for more than six (6) months or beyond the Closing Date of the then
current Offering (August 31, 1997, for the current Offering). If such
employee does not so elect, installment payments under the Plan will be
deducted from benefits.
If an employee has elected to suspend payments as provided above
and at the end of the suspension period is again in active service, or is
receiving disability benefits, then, unless he cancels the Election to
Purchase, installment payments are to be resumed and he must either make up
the deficiency in the account by immediate lump sum payment or elect to have
future installment payments uniformly increased so that, assuming a purchase
price per Share equivalent to the maximum price per Share provided under the
Plan, payment would be completed by the Closing Date of the then current
Offering (August 31, 1997, for the current Offering). If the employee has
elected to make increased installment payments, he may, nevertheless, at any
time make up the remaining deficiency by a lump sum payment.
If an employee has elected to suspend payments or to make
installment payments in cash, as provided above, and the period during which
payments may be suspended or installment payments may be made in cash has
expired and he is not then eligible to resume or continue installment
payments, the Election to Purchase shall be deemed to have been canceled at
such time of expiration; the employee shall be deemed to have withdrawn
pursuant to the provisions of the Plan providing for withdrawal from a
particular Offering under the Plan; and the amount of his payroll deductions
under that Offering, with interest, shall be distributed to him.
Administration
The Plan shall be administered by a committee consisting of not
less than three (3) members who shall be appointed by the Board of Directors
of CT&T. Each member of the committee shall be either a director, an officer
or an employee of CT&T. The committee shall be vested with full authority to
make, administer, and interpret such rules and regulations as it deems
necessary to administer the Plan. 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 participating employees and any and all persons complaining
under or through any participating employee. The members of the committee
shall serve at the pleasure of the Board of Directors of CT&T and at any time
may be removed from Office.
Bank of Pennsylvania will act as investment agent for the Plan.
All amounts withheld as payroll deductions under the Plan will be deposited by
CT&T with Bank of Pennsylvania. No payroll deductions received or held by
CT&T under the plan may be used by CT&T and CE for any corporate purposes,
until Shares are purchased therewith on the Closing Date of the particular
Offering (August 31, 1997, for the current Offering). Bank of Pennsylvania
shall keep records with respect to the amounts standing to the account of each
employee participating in the Plan and make reports to such employees as
stated above.
Investment of Funds
Prior to the exercise of the options to purchase Shares on the
Closing Date of the particular Offering (August 31, 1997, for the current
Offering), Bank of Pennsylvania, as investment agent, shall invest the amounts
accumulated pursuant to the Plan in a money market fund secured by United
States government securities.
The Shares to be sold to the employees under the Plan on the
Closing Date of any Offering (August 31, 1997, for the current Offering) may,
at the election of CE, be either Treasury Shares or Shares originally issued
for such purpose. The Shares to be purchased under the Plan will not be
purchased in the open market. Therefore, all of the amounts applied to the
purchase of Shares under the Plan will be paid to CE. The Offering Date price
of the Shares, as determined under the Plan, as amended is Twenty-six and
16/100 Dollars ($26.16). Based on such price, the maximum consideration which
could be received by CE from the sale of all of the One hundred forty-six
thousand two hundred thirty-seven (146,237) Shares remaining to be offered
under the Plan could be Four Million One Hundred-Fifty Thousand Two Hundred
Six Dollars ($4,150,206) (computed by multiplying the market price of Twenty-
six and 16/100 Dollars ($26.16) by One Hundred Forty-six Thousand Two Hundred
Thirty-seven (146,237) Shares by one hundred eight point five percent
(108.5%). Such amount could only be realized by CE through a series of
Offerings under the Plan over several years and is based on the assumption
that the market price of the Shares will be the same on the Offering Date of
each Offering under the Plan. CT&T deems it unlikely that the market price of
the Shares will remain the same and makes such assumption only to calculate
the possible proceeds under the Plan.
CT&T received Two Hundred Sixty-one Thousand Three Hundred Eighty-
two and 80/100 Dollars ($261,382.80) as proceeds from the sale of Thirty-one
Thousand Eighty (31,080) shares of CT&T, adjusted for the Stock Split, in the
first Offering under the Plan; CE received Three Hundred Ninety-two Thousand
Two Hundred Fifteen and 90/100 Dollars ($392,215.90) as proceeds from the sale
of Seventeen Thousand Two Hundred Ten (17,210) Shares in the second Offering
under the Plan; and One Hundred Forty Thousand Three Hundred Eighty-two and
45/100 Dollars ($140,382.45) as proceeds from the sale of Five Thousand Four
Hundred Seventy-three (5,473) Shares in the fourth Offering under the Plan.
No brokerage fees will be incurred with respect to transactions
under the Plan.
Charges and Deductions and Liens Therefor
No charges and deductions, other than payroll deductions to pay for
Shares to be purchased under the Plan, shall be made against employees
participating in the Plan or against funds, securities or other property held
under the Plan. No charges or deductions shall be made upon the termination
of an employee's interest in the Plan or the withdrawal of the balance
credited to his account under the Plan.
The Plan provides that no person has or may create a lien on any
funds, securities or other property held under the Plan.
Taxes
CT&T believes the following to be a general outline of the federal
income tax consequences of the Plan to a participating employee under present
federal income tax laws:
(a) The amount contributed by each employee into the Plan through
deductions from his compensation is taxed as ordinary income at the time the
payroll deduction is made.
(b) If an employee holding an option under the Plan exercises the
option and does not, within two (2) years after the date of the granting of
the option, nor within one (1) year after the transfer of the Shares to him,
dispose of the Shares purchased, he will not realize taxable income from the
grant or exercise of the option, and any gain realized on disposition of the
Shares will be taxable as ordinary income to the extent of (1) the excess of
the fair market value of the Shares on the Offering Date over the option price
or (2) the excess of the fair market value of the Shares on the date of
disposition of the Shares over the option price, whichever is less, with the
balance taxable as a long term capital gain.
(c) If the Shares purchased upon exercise of an option are disposed
of prior to the expiration of the foregoing required holding period or the
employee dies within such period (a disqualifying disposition), the employee,
or his estate, may realize ordinary income to the extent of the difference
between the option price and the fair market value of the Shares on the date
the option was exercised. Any additional gain will be taxed as capital gain.
(d) Interest credited to an employee's account under the Plan will
be taxed in the year of accrual.
The Plan is intended to be an "Employees Stock Purchase Plan" in
conformation with the requirements of Section 423 of the Internal Revenue
Code. It is not qualified under Section 401(a) of the Internal Revenue Code.
If the Shares purchased upon exercise of an option are disposed of
after the expiration of the foregoing required holding period, CT&T will not
be entitled to a deduction from federal income taxes, but, if such Shares are
disposed of prior to the expiration of the required holding period, CT&T will
be entitled to a deduction in the year of disposition in the amount of the
ordinary income realized by the employee.
CT&T believes that the Plan is not subject to any provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
Delivery
As promptly as practicable after the Closing Date of an Offering
(August 31, 1997, for the current Offering), CE and CT&T will deliver to each
participating employee either (1) the Shares purchased upon the exercise of
his option under that Offering together with a cash payment equal to the
balance with interest of any payroll deductions credited to his account during
such Offering which were not used for the purchase of Shares, or (2) a cash
payment equal to the total of the payroll deductions credited to his account
during such Offering together with interest earned on the payroll deductions.
Interest on Payroll Deductions
Whether an employee applies his accumulated payroll deductions
under an Offering to the purchase of Shares or elects to withdraw from the
Offering and receive payment of the amount of his accumulated payroll
deductions, the amount of his payroll deductions shall constitute indebtedness
of CT&T to him until applied to the purchase of Shares or until payment, as he
may elect, and such indebtedness shall bear such interest as shall be paid by
Bank of Pennsylvania, Division of Dauphin Deposit Bank and Trust Company,
Reading, Pennsylvania, as investment agent for the Plan, from its United
States Treasury Obligation Fund. The rate of interest shall not be less than
six percent (6%) per annum, simple interest, during the period of any
Offering; and, if the interest earned by Bank of Pennsylvania, as investment
agent for the Plan, is less than six percent (6%) per annum, simple interest,
CT&T will contribute the difference to the Plan for that Offering.
Stock
The maximum number of Shares available for sale in this Offering
under the Plan is One Hundred Forty-six Thousand Two Hundred Thirty-seven
(146,237) Shares, taking into account Shares sold under prior offerings under
the Plan. The number of such Shares available under this Offering and under
the Plan is subject to additional adjustments upon changes in capitalization
of CE as provided above. If the total number of Shares elected to be
purchased under any Offering, when added to the CT&T and CE shares purchased
in prior Offerings under the Plan, exceeds said Two Hundred Thousand (200,000)
Shares, CE shall for that Offering make a pro rata allocation of the Shares
available in as nearly a uniform manner as it shall deem to be practicable.
No employee shall have an interest in Shares covered by his option
until such option has been exercised. He shall have no rights as a
shareholder with respect to Shares under Election to Purchase until he becomes
a shareholder as herein provided. He will become a shareholder with respect
to Shares for which payment has been completed as of the close of business on
the Closing Date of the Offering (August 31, 1997, for the current Offering).
Shares to be delivered to the employee under any Offering under the
Plan will be registered in his name, or, if he so directs, by written notice
to CT&T prior to the Closing Date of that Offering (August 31, 1997, for the
current Offering), in the names of the employee and such other person or
persons as he may designate and in such title as he may designate, to the
extent permitted by applicable law.
Amendment or Termination
The Board of Directors of CT&T may at any time terminate or amend
the Plan. No such termination can affect options previously granted; nor may
an amendment make any change in any option theretofore granted which would
adversely affect the rights of any employee; nor may any amendment be made
without prior approval of the shareholders of CE, if such amendment would
require the sale of more Shares than are authorized under the Plan.
THE COMPANY
CE was incorporated under the laws of the Commonwealth of
Pennsylvania on January 27, 1989 and became the holding company of CT&T and
its subsidiary on December 31, 1989, the effective date of the merger
transaction as described in the section hereof entitled "Merger and Amendment
of Plan to Provide for Sale of CE Stock Under the Plan". CE has adopted the
registration statement, as amended, previously filed for the Plan and the
stock of CT&T to be sold thereunder as its own registration statement for all
purposes of the Securities Act of 1933 and the Securities Exchange Act of
1934, as applicable.
CT&T, now the subsidiary of CE, is an independent telephone company
enfranchised by the Commonwealth of Pennsylvania to furnish local and toll
telephone service to the general public in parts of the counties of Berks,
Chester, Montgomery and Lancaster, Pennsylvania. CT&T was incorporated under
the laws of the Commonwealth of Pennsylvania on August 20, 1902. CE's other
wholly owned subsidiary, Northern Communications, Inc., is a company not
subject to regulation by the Pennsylvania Public Utility Commission which
provides non-regulated telecommunication services.
The principal offices of CE and CT&T are located at 202 East First
Street, Birdsboro, Pennsylvania, 19508.
DIVIDENDS
CE has paid regular cash dividends on its common stock since
1990. Its subsidiary, CT&T, prior to January 1, 1990, had paid regular cash
dividends on its common stock since 1910. The following table sets forth
information with respect to cash dividends, adjusted for the February 1995,
five percent (5%) stock dividend paid by CE for the quarters indicated:
CE Dividends
Year - 1993
First Quarter $ .26
Second Quarter $ .26
Third Quarter $ .27
Fourth Quarter $ .31
Year - 1994
First Quarter $ .27
Second Quarter $ .27
Third Quarter $ .285
Fourth Quarter $ .285
Year - 1995
First Quarter $ .30
Second Quarter $ .30
It is the present intent of the Board of Directors of CE to
continue its practice of declaring cash dividends on a quarterly basis.
However, no assurance can be given as to the amount of future dividends, which
will necessarily be dependent on future earnings, financial requirements of CE
and its subsidiaries and other factors.
LEGAL OPINION
Legal matters in connection with the issue of the common stock
offered hereby and the Plan have been passed upon for CE and CT&T by Messrs.
Miller and Murray, Post Office Box 942, 542 Court Street, Reading,
Pennsylvania 19603. James H. Murray, a partner of Miller and Murray, is a
director of CE and CT&T and holds of record and beneficially Thirty-seven
Thousand Seven Hundred Four (37,704) shares of common stock of CE.
EXPERTS
The consolidated financial statements of CE and its subsidiaries
included in CE's Annual Report on Form 10-K for the year ended December 31,
1994, and in this Prospectus by reference thereto, have been examined by Beard
& Company, Inc., independent certified public accountants, as set forth in
their report included in such Annual Report on Form 10-K, and have been
included herein by reference in reliance upon the opinion of such firm given
upon its authority as experts in accounting and auditing.
INFORMATION INCORPORATED BY REFERENCE
CE's definitive proxy statement for the annual meeting on May 6,
1995, the annual report of CE on Form 10-K for the year ending December 31,
1994 and the quarterly reports of CE and CT&T on Form 10-Q for the quarters
ending March 31, 1995 and June 30, 1995 are incorporated herein by reference.
All documents filed by CE pursuant to Sections 13, 14 or 15(b) of the
Securities Exchange Act of 1934 after the date hereof and prior to the
termination of the Offering of the securities offered hereby shall be deemed
to be incorporated by reference herein and to be a part hereof from the date
of filing of such documents.
The description of CE's common stock included or incorporated by
reference in its registration statement filed pursuant to the Securities Act
of 1933 on August 25, 1989, Registration No. 33-30715, for its common stock of
the same class issued pursuant hereto, is incorporated herein by reference.
ADDITIONAL INFORMATION
Reports, proxy statements and other information filed by CE and
CT&T with the Securities and Exchange Commission can be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Office of the Commission: Philadelphia Regional Office,
600 Arch Street, Philadelphia, Pennsylvania 19106, at prescribed rates.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
CE and CT&T will indemnify, hold harmless, and pay the cost of
defense of their directors, officers, and employees in any suit, action, or
claim made against them as a result of any action taken, or any failure to
take action, in their capacities as such, to the fullest extent permitted by
law, except for liabilities arising under the Federal Securities Act of 1933.
Officers and Directors Insurance is also provided.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors and officers of CE and
CT&T pursuant to the foregoing provisions, CE and CT&T have been informed that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is therefore
unenforceable.
TABLE OF CONTENTS
Page
DESCRIPTION OF THE PLAN..............................................3
Purpose............................................................3
Merger and Amendment of Plan to Provide for Sale of
CE Stock Under the Plan..........................................3
Eligibility........................................................3
Method of Enrollment...............................................4
Securities Subject to the Plan.....................................4
Operation of the Plan..............................................4
Payment for Shares.................................................5
Contributions Under the Plan.......................................6
Withdrawal from the Plan...........................................6
Designation of Beneficiary.........................................7
Defaults under the Plan............................................7
Leave of Absence, Layoff and Absence on Disability Benefits........8
Administration.....................................................8
Investment of Funds................................................9
Charges and Deductions and Liens Therefor..........................9
Taxes.............................................................10
Delivery..........................................................10
Interest on Payroll Deduction.....................................11
Stock.............................................................11
Amendment or Termination..........................................11
THE COMPANY.........................................................11
DIVIDENDS...........................................................12
LEGAL OPINION.......................................................12
EXPERTS.............................................................13
INFORMATION INCORPORATED BY REFERENCE...............................13
ADDITIONAL INFORMATION..............................................13
INDEMNIFICATION OF OFFICERS AND DIRECTORS...........................13
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus, and if given or
made, such information or representation must not be relied upon as having
been authorized. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of these securities in any State to any
person to whom it is unlawful to make such offer or solicitation in such
State. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create an implication that there has been no
change in the affairs of CE and CT&T since the date hereof.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers
CE and CT&T will indemnify, hold harmless, and pay the cost of
defense of its directors, officers, and employees in any suit, action, or
claim made against them as a result of any action taken, or any failure to
take action, in their capacities as such, to the fullest extent permitted by
law, except for liabilities arising under the Federal Securities Act of 1933.
Officers and Directors Insurance is also provided.
Item 8. Exhibits
(4) (c) Amendment No. 2 - Stock Purchase Plan
The Conestoga Telephone and Telegraph Company
(5) Opinion of Miller and Murray as to legality of the securities
being registered
(24) Consents of expert and counsel
(a) Consent of Miller and Murray, Esquires
(b) Consent of Beard & Company, Inc
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing of Form S-8 and has duly caused this Amended
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Borough of Birdsboro, County of Berks and
Commonwealth of Pennsylvania, on the 26th day of July, 1995.
CONESTOGA ENTERPRISES, INC.
By:/s/ F. M. Brown
F. M. Brown, President
Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated. Moreover, the undersigned
hereby also certify that to the best of their knowledge and belief the Issuer
meets all of the requirements for filing of Form S-8.
Signature Title Date
/s/ Alvin W. Sponagle Chairman of the Board 7/26/95
Alvin W. Sponagle and Director
/s/ F. M. Brown President and Director 7/26/95
F. M. Brown
/s/ John R. Bentz Executive Vice-President 7/26/95
John R. Bentz (Principal Executive Officer)
and Director
/s/ James H. Murray Vice-President and 7/26/95
James H. Murray Director
/s/ Kenneth A. Benner Secretary-Treasurer 7/26/95
Kenneth A. Benner and Director
/s/ Donald R. Breitenstein Controller (Principal 7/26/95
Donald R. Breitenstein Financial and Accounting
Officer) and Director
/s/ Emma F. Mullen Director 7/26/95
Emma F. Mullen
/s/ John M. Sausen Director 7/26/95
John M. Sausen
/s/ Richard G. Weidner Director 7/26/95
Richard G. Weidner
Pursuant to the requirements of the Securities Act of 1933, the Plan
has duly caused this Amended Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the Borough of Birdsboro,
County of Berks and Commonwealth of Pennsylvania, on the 26th day of July,
1995.
THE CONESTOGA TELEPHONE
AND TELEGRAPH COMPANY
EMPLOYEE STOCK PURCHASE PLAN
BY:/s/ John R. Bentz
John R. Bentz
Chairman of Administration Committee
Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following persons
in the capacities and on the date indicated.
Signature Title Date
/s/ John R. Bentz Chairman of the 7/26/95
John R. Bentz Administration Committee
/s/ Robert R. Mattson Member of the 7/26/95
Robert R. Mattson Administration Committee
/s/ James H. Murray Member of the 7/26/95
James H. Murray Administration Committee
AMENDMENT NO. 2 - STOCK PURCHASE PLAN
THE CONESTOGA TELEPHONE AND TELEGRAPH COMPANY
The Stock Purchase Plan of the Conestoga Telephone and Telegraph
Company adopted by the Board of Directors of Conestoga Telephone and Telegraph
Company on March 25, 1986 and approved by the Shareholders on May 3, 1986, as
amended by Amendment No. 1 effective January 1, 1990, is hereby amended as
follows:
1. Paragraph 6, Option Price of the Plan is hereby
deleted in its entirety and the following is substituted therefore:
"6. Option Price. The Option Price per share will be ninety-
five percent (95%) of the price of the shares on the Closing Date of the
Offering, but will not be less than ninety-five percent (95%) nor more than
one hundred eight point five percent (108.5%) of the price of the shares on
the Offering Date. The price of the shares on the Closing Date and the
Offering Date, respectively, will be the average of the closing sales prices
as quoted on NASDAQ for the days on which sales are reported during the ten
(10) business days prior to the Closing Date or the Offering Date, as
applicable."
2. Except as expressly amended herein, all of the terms and
provisions of the Plan, as amended by Amendment No. 1 thereto, shall remain in
full force and effect and hereby are reaffirmed and ratified by the
undersigned.
IN WITNESS WHEREOF, the undersigned has duly adopted this Amendment
Number 2 by action of its Board of Directors on July 26, 1995.
CONESTOGA TELEPHONE AND TELEGRAPH
COMPANY
By: John R. Bentz
Attest: Donald R. Breitenstein
Conestoga Enterprises, Inc. hereby ratifies and affirms Amendment
No. 2 to the Stock Purchase Plan of the Conestoga Telephone and Telegraph
Company.
IN WITNESS WHEREOF, the undersigned has duly acted by action of its
Board of Directors on July 26, 1995.
CONESTOGA ENTERPRISES, INC.
By: John R. Bentz
Attest: Donald R. Breitenstein
August 1, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Re:Amendment No. 5 to the Form S-8 Registration Statement for
Registration of The Conestoga Telephone and Telegraph Company
Employee Stock Purchase Plan and 200,000 Shares (adjusted for a
two for one stock split effective August 1, 1988) of Conestoga
Enterprises, Inc. to be sold pursuant thereto
Gentlemen:
It is the opinion of this firm, counsel for the above registrant,
that the above stock can be legally registered and when said
stock is sold will be legally issued, fully paid and non-
assessable under the laws of the Commonwealth of Pennsylvania and
the United States of America.
Very truly yours,
MILLER AND MURRAY
Exhibit 5
August 1, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Re:Amendment No. 5 to the Form S-8 Registration Statement for Registration of
The Conestoga Telephone and Telegraph Company Employee Stock Purchase Plan and
200,000 Shares (adjusted for a two for one stock split effective August 1,
1988) of Conestoga Enterprises, Inc. to be sold pursuant thereto
Gentlemen:
On behalf of Miller and Murray, we consent to the reference to us in the
registrant's Prospectus and Amendment No. 5 of the Registration Statement on
Form S-8 as to the giving of legal opinions in matters pertaining to the
Prospectus and Registration Statement, as amended, and, also, we consent to
the use of our name with respect to the opinion letter, being Exhibit No. 5 of
the Registration Statement, as amended.
Very truly yours,
MILLER AND MURRAY
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Conestoga Enterprises, Inc.
Birdsboro, PA 19508
In connection with the foregoing Amendment Number 5 of the
Registration Statement of Form S-8 and the related Prospectus, we hereby
consent to the incorporation by reference herein of our report dated January
20, 1995, which appears in the annual report on Form 10-K of Conestoga
Enterprises, Inc.
We also consent to the reference to our firm under the caption
"Experts" in the Prospectus included in this Registration Statement.
BEARD & COMPANY, INC.
Reading, Pennsylvania
August 1, 1995
