CONESTOGA ENTERPRISES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 2, 1998
TO THE SHAREHOLDERS OF THE COMPANY:
The annual meeting of the Shareholders of CONESTOGA ENTERPRISES, INC. (the
"Company") will be held at the Office of the Company, 202 East First Street,
Birdsboro, Pennsylvania, 19508, on Saturday, May 2, 1998, at 10:00 A.M., for
the following purposes:
1. To elect 3 Class II Directors for a term of 3 years.
2. To ratify the appointment of Beard and Company, Inc., as independent
accountants of the Company for 1998.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
A copy of the Annual Report for 1997 is enclosed for your information.
The Board of Directors has fixed the close of business on April 3, 1998, as
the record date for the determination of Shareholders entitled to notice of
and to vote at said meeting.
You are requested to vote, date and sign the enclosed proxy and return it
in the enclosed envelope at your earliest convenience. If you attend the
meeting and decide you want to vote in person, the proxy will not be used.
By order of the Board of Directors
Date: April 9, 1998 Kenneth A. Benner, Secretary
PROXY STATEMENT
1998 ANNUAL MEETING OF SHAREHOLDERS
SOLICITATION OF PROXY, REVOCABILITY AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Conestoga Enterprises, Inc., a Pennsylvania corporation (the
"Company"), for use at the 1998 annual meeting of shareholders to be held on
May 2, 1998 (the "Annual Meeting"). Only shareholders of record on April 3,
1998 will be entitled to vote at that meeting. On April 3, 1998, the Company
had 4,620,194 shares of Common Stock outstanding.
The Company's principal executive offices are located at 202 East First
Street, Birdsboro, Pennsylvania 19508. The approximate date on which the Proxy
Statement and the accompanying proxy are first being sent to shareholders is
April 9, 1998.
Proxies which are validly executed by shareholders and received by the
Company prior to the meeting will be voted in accordance with the instructions
contained thereon. A shareholder may substitute the name of another person on
the accompanying proxy in place of those persons presently named as proxies.
In order to vote, a substitute must present adequate identification
to the Secretary before the voting occurs.
Voting
In all matters other than the election of directors, each share of Common
Stock outstanding on the record date is entitled to one vote. The holders of
a majority of the outstanding shares must be present in person or represented
by proxy at the Annual Meeting in order to constitute a quorum for the
transaction of business.
In all elecions for directors, each Shareholder shall have cumulative
voting rights, which is the right to cast as many votes in the aggregate as
shall equal the number of shares held by him or her multiplied by the number
of directors to be elected, and each Shareholder may cast the whole number of
votes for 1 candidate or distribute such votes among 2 or more candidates.
The affirmative vote of the holders of a plurality of votes cast at the
Annual Meeting will be required to elect directors, and the affirmative vote
of the holders of the majority of the votes cast will be required to act on
all other matters to come before the Annual Meeting. Votes cast by proxy or
in person at the Annual Meeting will be tabulated by the inspectors of election
appointed for the meeting, who will also determine whether or not a quorum is
present. Shares represented by each duly signed proxy will be voted as
directed by the shareholder thereon, and, if no direction is given on a duly
signed proxy, the shares subject to that proxy will be voted in favor of the
proposals described in this Proxy Statement. The shares will be voted in the
judgment of the persons named in the proxy upon such other business as may
properly come before the meeting. Shares represented by proxies
submitted by brokers who indicate that they do not have authority to vote on a
particular matter will be counted as shares that are present for purposes of
determining the presence of a quorum, but as unvoted (i.e., not cast) for
purposes of determining the approval of the particular matter in question.
Revocability of Proxy
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it at any time before its exercise. It may be revoked
by filing with the Secretary of the Company an instrument of revocation or by
the presentation at the meeting of a duly executed proxy bearing a later date.
It also may be revoked by attendance at the meeting and election to vote in
person. Attendance at the Annual Meeting, in and of itself, will not
constitute revocation of a proxy.
Solicitation
The Company will bear the entire cost of the solicitation of proxies,
including the costs of preparing, assembling, printing and mailing this Proxy
Statement, the accompanying proxy and any additional material which may be
furnished to shareholders. Copies of solicitation material will be furnished
to brokerage houses, fiduciaries and custodians to forward to beneficial
owners of stock held in the names of such nominees. In addition to use of the
mail, proxies may be solicited by directors, officers and regular employees of
the Company, without additional compensation, in person or by telephone.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Board consists of 9 directors, serving in three classes of 3
directors each, the respective terms of which expire alternately over a three-
year period. One of the three classes is elected each year to succeed the
directors whose terms are expiring. One of the purposes of the meeting is to
elect 3 Class II Directors to the Board. The nominees for Class II directors
are Kenneth A. Benner, F. M. Brown and Donald R. Breitenstein.
Unless otherwise specified by the stockholders, the shares represented by
the proxies will be voted, either cumulatively or non-cumulatively, in the
discretion of the proxy holders, for the nominees for Class II directors. If
any nominee should become unable to serve, an event not anticipated, the
proxies will be voted for another person designated by the present Board. The
3 nominees with the highest number of votes will be elected to the Board.
Vacancies in the Board may be filled by the Board, and any director chosen to
fill a vacancy would hold office until the next election of the class for
which such director had been chosen.
Information with respect to each nominee and each director whose term will
continue after the Annual Meeting is set forth in the following sections.
Such information includes summaries of their background, business experience
and principal occupations with the Company, its subsidiaries, and otherwise.
The Company's two telephone utility subsidiaries are Conestoga Telephone and
Telegraph Company and Buffalo Valley Telephone Company, referred to herein as
"CT&T" and "BVT", respectively.
Information Concerning Nominees For Election as Directors
Class II (Term Expires in 2001)
Kenneth A. Benner; Age 50; Secretary/Treasurer
Mr. Benner has been a member of the Board and its Secretary/Treasurer
since June, 1989. He was elected to the board of directors of CT&T in 1972,
and has served as its Secretary/Treasurer since 1982. He has been employed by
CT&T since 1974. In June, 1996, Mr. Benner was appointed Vice President and
General Manager of BVT.
F. M. Brown; Age 73; Chairman of the Board; President of F. M. Brown's Sons,
Inc., Feed and Flour Manufacturers, Sinking Spring, PA
Mr. Brown has been a member of the Board since June, 1989 and its Chairman
since May, 1996. He served as the Company's President from June, 1989, until
May, 1996, when he relinquished his position as President and was elected
Chairman of the Board. Mr. Brown has been a member of the board of directors
of CT&T since 1972, and served as its President from 1979 until May, 1996. He
is President of F.M. Brown's Sons, Inc., feed and flour manufacturers, Sinking
Spring, Pennsylvania.
Donald R. Breitenstein; Age 57; Controller
Mr. Breitenstein has been a member of the Board and the Company's
Controller since June, 1989. He has been employed by CT&T since 1962. He was
appointed CT&T's Controller in 1986, and to its board of directors in 1987.
Information Concerning Directors Who Are Not Standing for Election at the 1998
Annual Meeting
Class III (Term Expires in 2000)
Richard G. Weidner; Age 71; Retired
Mr. Weidner has been a member of the Board since June, 1989. He was
appointed to the board of directors of CT&T in June 1988. He retired as
President of Beard and Company, Inc., Certified Public Accountants, in 1986.
Jean M. Ruhl; Age 56; Retired
Ms. Ruhl has been a member of the Board since November, 1996. She served
as a member of the board of directors of BVT from 1990 until its acquisition
by the Company in 1996. She is retired, having served as Chief Financial
Officer and Manager of Solar Master Film Corporation from 1974 until 1990.
John M. Sausen; Age 64; Self-Employed Accountant, Oley, PA
Mr. Sausen has been a member of the Board since June, 1989. He was
elected to the board of directors of CT&T in 1974. He is a self-employed
accountant with an office in Oley, PA.
Class I (Term Expires in 1999)
John R. Bentz; Age 62; President
Mr. Bentz has been a member of the Board since 1989, and has been
President of the Company since May, 1996. He has been employed by CT&T
continuously since 1958. In March 1980, he was appointed Manager-Operations,
and in January 1982, was elected Executive Vice President-Operations. In
October, 1986, he was appointed to the board of directors of CT&T and named
Executive Vice President.
James H. Murray; Age 69; Vice President; Partner, Miller and Murray, LLP,
Attorneys-at-Law, Reading, PA
Mr. Murray has been a member of the Board and a Vice President of the
Company since June, 1989. He has been a member of the board of directors of
CT&T since 1957. In June, 1988, he was elected Vice President of CT&T. He is
a partner of the law firm of Miller and Murray, LLP, Reading, Pennsylvania,
legal counsel to the Company.
Robert M. Myers; Age 50; Director of Personnel, Reading Hospital and Medical
Center, Reading, PA
Mr. Myers was elected to the Board in 1996. He is the Director of
Personnel of the Reading Hospital and Medical Center where he has been
employed since 1982.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company during the last fiscal year had 12
regularly scheduled meetings and 3 special meetings. Each incumbent director
attended 75% or more of the total number of meetings of the Board and the
Committees of which he was a member.
The Board of Directors has a standing audit committee of which Mr. Sausen,
Mr. Weidner and Ms. Ruhl are members. This committee reviews with the
independent auditors the plan and results of the auditing engagement. The
audit committee of the Company held 4 meetings during the last fiscal year.
The Board of Directors has an executive committee of which Mr. Sausen, Mr.
Murray and Mr. Brown are members. This committee reviews and makes
recommendations to the Board of Directors on matters of major policy. The
executive committee of the Company held 4 meetings during the last fiscal year.
The Board of Directors has a compensation committee of which Mr. Sausen,
Mr. Murray and Mr. Brown are members. This committee reviews at least
annually the salaries of the executive management and makes appropriate
recommendations to the Board of Directors. The compensation committee of the
Company held one meeting during the last fiscal year.
The Board of Directors does not have a nominating committee.
Director Compensation
During 1997, the Company paid each non-employee member of the Board an
annual director's salary of $6,000. In addition, the Company paid them a fee
of $750 for each meeting of the Board he or she attended and a fee of $400 for
each committee meeting he or she attended. The directors were not paid
additional compensation for attending board or committee meetings of the
Company's subsidiaries.
Messrs. Benner, Bentz and Breitenstein are employees of the Company or one
of its subsidiaries and, as such, do not receive additional compensation for
serving on the Board and the boards of its subsidiaries or for attending
directors' and committee meetings.
In 1997, the Company paid $7,338 to Mr. Brown for his services as Chairman
of The Board. In 1997, CT&T paid $2,400 to Mr. Weidner for his services as a
consultant.
In 1997, the Company and its subsidiaries paid the law firm of Miller and
Murray, LLP, of which Mr. Murray was a partner, the sum of $163,528 in legal
fees.
EXECUTIVE OFFICERS
The names, ages, and positions of the executive officers of the Company
are set forth below. All officers of the Company serve for terms of one year
and until re-elected or until a successor is duly elected at the Annual
Meeting of directors, which follows the annual shareholders' meeting. No
officers have any arrangements or understandings with any other person
pursuant to which such officer was or is to be selected as an officer.
John R. Bentz; Age 62; President
Mr. Bentz has been employed by CT&T continuously since 1958. In March
1980, he was appointed Manager-Operations, and in January 1982, was elected
Executive Vice President-Operations. In October, 1986, he was appointed to
the board of directors of CT&T and named Executive Vice President. He was
elected Executive Vice President and a member of the Company's Board at its
organizational meeting in June, 1989. He was elected President of the Company
in May, 1996.
Albert H. Kramer; Age 43; Executive Vice President
Mr. Kramer was appointed Executive Vice President in August, 1997, and has
been employed by the Company since September, 1995, originally serving as Vice
President, Finance and Administration. Prior to that he was employed by
Denver and Ephrata Telephone Company for 11 years, serving as Chief Financial
Officer during the last 5 years of his employment.
Joseph P. Laffey; Age 45; Vice President, Regulatory Affairs
Mr. Laffey has been employed by the Company as Vice President, Regulatory
and External Affairs, since May 1996. Prior to that he was employed by
Commonwealth Telephone Company for 17 years, serving as Vice President of
Revenue Requirements during the last year of his employment; and Director of
Revenue Requirements for four years prior thereto.
Donald R. Breitenstein; Age 57; Controller
Mr. Breitenstein has been employed by CT&T since 1962. He worked as
Accountant until September, 1979, when he was appointed Accounting Supervisor.
He was appointed CT&T's Accounting Manager in 1981, and Controller in 1986.
He was appointed to the board of directors of CT&T in 1987. He was elected
the Company's Controller and a member of its Board at its organizational
meeting in June, 1989.
Thomas C. Keim; Age 52; Vice President Telecom Group
Mr. Keim was appointed Vice President Telecommunications Group in August,
1997. He had previously served as Vice President, Operations, since October,
1994, and prior to that as Network Services Manager since February 1984. Mr.
Keim has been employed by CT&T since 1964.
Kenneth A. Benner; Age 50; Secretary/Treasurer
Mr. Benner has been employed by CT&T since 1974. He was elected to the
board of directors of CT&T in 1972, and has served as its Secretary/
Treasurer since 1982. He was elected Secretary/Treasurer and a member of
the Company's Board at its organizational meeting in June, 1989. In June,
1996, he was appointed Vice President and General Manager of BVT.
SECURITY OWNERSHIP OF MANAGEMENT
The following table reflects, as of March 1, 1998, the total Common Stock
ownership of the Company by each director and reporting officer, and by all
directors and executive officers as a group. The Company's voting Common
Stock is its only class of voting equity securities. Each named individual
and all members of the group exercise sole voting and investment power.
Amount
Name and Nature of
of Beneficial Percent
Beneficial Ownership of
Owner (See 1 and 2 Below) Class
Kenneth A. Benner 25,037 .53
John R. Bentz 20,052 .43
Donald R. Breitenstein 6,217 .13
F. M. Brown 99,758 2.12
James H. Murray 37,074 .79
Robert M. Myers 2,995 .06
Jean M. Ruhl 50,000 1.06
John M. Sausen 88,989 1.91
Richard G. Weidner 2,791 .06
Thomas C. Keim 33,579 .71
Albert H. Kramer 528 .01
Joseph P. Laffey 118 .00
All Directors and Officers 368,138 7.83
as a Group (12 persons)
1. Under the proxy rules of the Securities and Exchange Commission, a
person who directly or indirectly has or shares voting power and/or investment
power with respect to a security is considered a beneficial owner of the
security. Shares as to which voting power and/or investment power may be
acquired within 60 days are also considered as beneficially owned under these
proxy rules.
2. Included in the shares set forth in the table above are (a) shares
beneficially owned by the director, or officer, his wife, minor children and
relatives living in his house and includable in such table under rules of the
Securities and Exchange Commission, and (b) shares which are deemed to be
beneficially owned because the director or officer has voting power or power
of disposition with respect to the shares. Share amounts are reported as of
March 1, 1998 and percentages of share ownership are calculated based upon
4,700,405 shares of Common Stock of the Company outstanding as of that date.
The information in the table is based upon data furnished to the Company by,
or on behalf of, the persons referred to in the table.
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Executive Compensation Program
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors composed of Mr. Brown, Mr.
Murray and Mr. Sausen.
The executive compensation administered by the Committee is primarily that
of John R. Bentz, President and Chief Executive Officer; Thomas C. Keim, Vice
President Telecom Group; Albert H. Kramer, Executive Vice President; Joseph J.
Laffey, Vice President of Regulatory and External Affairs; and Donald R.
Breitenstein, Controller.
The Company's executive compensation program consists of a base salary and
a potential annual cash incentive award, which is designed to achieve the
following objectives:
(1) to attract and retain key executives with outstanding abilities and
to motivate them to perform to the full extent of those abilities;
(2) to support the Company's business mission of providing superior
telecommunications services to its customers, continually increasing
shareholder value and treating its employees fairly in the process; and
(3) linking executive compensation to increased corporate financial
performance and profitability.
Base Compensation
Base salaries of executive officers are determined by evaluating the
responsibilities of their positions and by comparing salaries paid in the
competitive marketplace to executives with similar experience and
responsibilities. The Company employs an outside compensation consulting firm
to review annually these comparisons and update the salary ranges for all
salary grades. The Compensation Committee considers both financial and non-
financial performance measures in making salary adjustments.
In March 1997, the Board of Directors approved a 4.0% merit increase in
Mr. Bentz's base salary to $154,500.00. The Committee reviewed Mr. Bentz's
performance during 1996 and made a favorable assessment based upon the
significant improvement in the Company's financial results and the successful
integration of BVT into the Company.
Incentive Compensation
The Compensation Committee believes that executives should have a greater
portion of their compensation at risk than other employees. In 1996, the
Company instituted an annual executive incentive plan. This plan allows the
participants to earn an annual bonus of 10-30% of base salary if certain
corporate financial goals are met. The goals are set annually by the Board of
Directors. In 1997, the goals focused on increasing overall corporate
operating income and cash flow. If these goals are not met, there is
no payment for that year. Based upon the Company's financial performance in
1997, plan participants (including Mr. Bentz) received incentive bonuses equal
to 12.5% of base pay.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS:
John M. Sausen
James H. Murray
F. M. Brown
Compensation Committee Interlocks and Insider Participation
Messrs. Brown, Murray and Sausen are the members of the Company's
Executive Committee.
During 1997, Mr. Brown served as Chairman of the Board. Mr. Brown has
participated in all discussions and decisions concerning executive
compensation.
Mr. Murray is a Vice President of the Company. Mr. Murray is a partner of
the law firm of Miller and Murray, LLP, 542 Court Street, Reading,
Pennsylvania, which firm performs legal services for the Company and its
subsidiaries. Mr. Murray is not a full time employee of the Company and is
not compensated as such. Mr. Murray participates in all discussions and
decisions concerning executive compensation.
Summary of Cash and Certain Other Compensation
The following table sets forth information concerning annual and long term
compensation for services in all capacities to the Company during the years
ended December 31, 1997, 1996 and 1995 of those persons who were, at December
31, 1997, the chief executive officer and the four other most highly
compensated executive officers of the Company whose compensation in 1997
exceeded $100,000 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h)
Other Securities
Annual Restricted Under-
Name and Compen-Stock lying LTIP
Principal sationsAwards Option/ Payouts
Position Year Salary($) Bonus($)(1)($) ($)(2) SARs(#)(2) ($)
John R. Bentz, 1997 $156,319 $18,563 None 0 0 0
President 1996 147,832 $25,371 None 423 900 0
1995 143,298 None None 423 900 0
Albert H. 1997 $132,302 $15,300 None 0 0 0
Kramer, 1996 $121,948 $21,000 None 0 0 0
Executive 1995 36,978 None None 0 0 0
Vice President
Joseph J. 1997 $117,072 $13,750 None 0 0 0
Laffey, Vice 1996 77,604 19,250 None 0 0 0
President,
Regulatory and
External Affairs
Donald R. 1997 $108,794 $12,938 None 0 0 0
Breitenstein, 1996 103,000 $17,672 None 94 200 0
Controller 1995 101,034 None None 94 200 0
Thomas C. 1997 $105,230 $12,500 None 0 0 0
Keim, Vice 1996 98,176 $15,844 None 212 450 0
President 1995 90,587 None None 212 450 0
Telecom
Group
SUMMARY COMPENSATION TABLE
(a) (i)
Name and All Other
Principal Compen-
Position sation($)(3)(4)
John R. Bentz, 1997 $22,757
President 1996 21,435
1995 20,771
Albert H. 1997 $ 6,898
Kramer, 1996 5,488
Executive 1995 311
Vice President
Joseph J. 1997 $ 4,307
Laffey, Vice 1996 2,817
President,
Regulatory and
External Affairs
Donald R. 1997 $16,570
Breitenstein, 1996 14,935
Controller 1995 14,642
Thomas C. 1997 $ 5,632
Keim, Vice 1996 4,159
President 1995 4,074
Telecom
Group
1. The bonus is a 12.5% incentive bonus paid to each of the Named
Executive Officers under the Company's annual executive incentive plan
instituted in 1996.
2. Messrs. Bentz, Breitenstein, and Keim subscribed for 900, 200, and
450 shares respectively under the fifth offering of the Employees' Stock
Purchase Plan, which offering commenced on August 1, 1995, and closed on
August 31, 1997.
3. "All Other Compensation" includes amounts accrued during each of the
years stated in the Table for the accounts of Messrs. Bentz and Breitenstein
under the employment contracts, described under the heading "Employment
Contracts", between each of them and CT&T.
4. "All Other Compensation" includes amounts contributed for the
accounts of the Named Executive Officers under CT&T's 401(k) Plan, and, for
periods prior to June 1, 1995, under the CT&T Savings and Investment Plan.
Messrs. Bentz, Kramer, Laffey, Breitenstein, and Keim participated in the
401(k) Plan in 1997, and CT&T contributed against their contributions $7,125;
$6,898; $4,307; $5,691 and $5,632, respectively.
The following table reports exercises of stock options and stock
appreciation rights (SARs) by the Named Executive Officers during 1997 and
the value of their unexercised stock options and SARs as of December 31, 1997.
No stock options were outstanding on December 31, 1997. The Company has not
issued any SARs to the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN 1997
AND YEAR-END OPTION VALUES
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Number of Options Options
Shares at 12/31/97 at 12/31/97
Acquired on Value Realized Exercisable/ Exercisable/
Name Exercise ($)(1) Unexercisable Unexercisable
John R. Bentz, 900 1,242 0 0 0 0
President
Thomas C. Keim, 450 621 0 0 0 0
Vice President
Telecommunications
Group
1. Stock options were granted to employees of the Company in August
1995 under the fifth offering of the Employees' Stock Purchase Plan (the
"Plan"), the Closing Date of which was August 31, 1997. Under that offering
Messrs. Bentz and Keim purchased 900 and 450 shares, respectively. The option
price per share under the Plan was 95% of the average of the closing sales
prices of the shares as quoted on NASDAQ for the days on which sales were
reported during the ten (10) business days prior to the Closing Date, August
31, 1997, but not less than 95%, nor more than 108.5%, of the average of the
closing sales prices of the shares as quoted on NASDAQ for the days on which
sales were reported during the ten (10) business days prior to the Offering
Date, August 1, 1995. The average price of the shares, determined as
described above, on the Offering Date was $26.16 per share, so the lowest
price under the offering was $24.85 per share, that is, 95%
of the price on the Offering Date. The average price of the shares,
determined as described above, on the Closing Date was $27.64, and
consequently the offering price was $26.26, 95% of such average price.
Pension Plan
The following table shows the estimated annual pension benefits payable to
a covered participant at normal retirement age (65) under the Company's
qualified defined benefit pension plan for employees with years of service
ranging from 15 through 40 years and earning compensation ranging from
$100,000 to $190,000:
PENSION PLAN TABLE
Years of Service
Compensation 15 20 25 30 35 40
100,000 15,000 20,000 25,500 31,000 37,500 44,000
110,000 16,500 22,000 28,050 34,100 41,250 48,400
120,000 18,000 24,000 30,600 37,200 45,000 52,800
130,000 19,500 26,000 33,150 40,300 48,750 57,200
140,000 21,000 28,000 35,700 43,400 52,500 61,600
150,000 22,500 30,000 38,250 46,500 56,250 66,000
160,000 24,000 32,000 40,800 49,600 60,000 70,400
170,000 25,500 34,000 43,350 52,700 63,750 74,800
180,000 27,000 36,000 45,900 55,800 67,500 79,200
190,000 28,500 38,000 48,450 58,900 71,250 83,600
The normal retirement benefit at age 65 is 1.0% of the employees' "average
pay" multiplied by years of service to normal retirement date for the first
twenty (20) years of service; 1.1% for service in excess of twenty (20) years
but less than thirty (30) years; 1.3% for service in excess of thirty (30)
years but less than forty (40) years; and 1.0% for service in excess of forty
(40) years. "Average pay" is defined as the average of the highest 5
consecutive years of salary during an employee's last 10 years as a plan
participant. For 1997, Mr.Bentz' covered compensation was $156,319; Mr.
Kramer's $132,302; Mr. Laffey's $117,072; Mr. Breitenstein's $108,794; and Mr.
Keim's $105,230. These were the amounts reported as "salary" in the Summary
Compensation Table. In 1998 Mr. Bentz will have 40, Mr. Kramer 3, Mr. Laffey
2, Mr. Breitenstein 35, and Mr. Keim 32, credited years of service under the
Plan. Benefits are computed as straight-life annuity amounts. The benefits
listed in the Pension Plan Table are not subject to any deduction for Social
Security or other offset amounts. Although the normal retirement age is 65,
an employee with ten years of service may retire
at age 55 with actuarially reduced benefits. An employee who has attained the
age of 55, but not 65, may retire without any actuarial reduction of his
benefits, if the sum of his age and years of service with CT&T is at least
eighty (80) when he retires. The years and months of service of an employee
are the total length of time that he is employed by CT&T.
Employment Contracts
CT&T has entered into employment contracts with John R. Bentz, President,
and Donald R. Breitenstein, Controller, whereby CT&T has agreed to pay to each
of them, or his estate, at such time as he (1) elects to retire from the
active and daily service of CT&T on or after a specified date, (2) becomes
disabled or (3) dies at any time during the period of employment covered by
the agreement, additional retirement, disability, or death compensation equal
to ten percent (10%) of his annual gross salary, before deductions, for each
year he is employed by CT&T after the date specified in his contract. Such
compensation is payable commencing one (1) month after his retirement on or
after his specified retirement date, his disability or death, as applicable,
in equal monthly installments of 1/120 of the amount of additional
compensation accumulated. The obligation of CT&T to make such payments is
conditioned and contingent upon the employee remaining an employee of CT&T
until his specified retirement date, unless prior to attaining such retirement
age he dies, becomes disabled, or terminates his employment with CT&T for
proper cause. CT&T is obligated to employ each of them until he attains the
age of 65 unless his employment is terminated prior thereto as a result of his
early retirement, death, disability or for proper cause.
Mr. Bentz' contract is dated January 28, 1987, and benefits are accrued
under it for each year he is employed by CT&T after January 1, 1983. He is
currently eligible for retirement under the contract. The amount of $15,632
accrued for Mr. Bentz under his contract for 1997 is included in the Summary
Compensation Table under the heading "all other compensation". The total
amount accrued for Mr. Bentz under his contract as of December 31, 1997 was
$158,064, which upon his retirement on or after December 31, 1997, disability
or death would provide him equal monthly payments of $1,317 for ten years.
Mr. Breitenstein's contract is dated March 22, 1989, and benefits accrue
under it for each year he is employed by CT&T after January 1, 1989. His
retirement date is on or after December 31, 2005. The amount of $10,879
accrued for Mr. Breitenstein under his contract for 1997 is included in the
Summary Compensation Table under the heading "all other compensation". The
total amount accrued for Mr. Breitenstein under his contract as of December
31, 1997, was $83,039, which upon his retirement on or after December 31,
2005, disability or death would provide him equal monthly payments of $692 for
ten years.
CT&T and Mr. Kramer have also entered into an employment contract dated
September 1, 1995. The contract provides for a three year term commencing on
September 1, 1995, and terminating on August 31, 1998, with provision for the
continuation of the relationship beyond the three year term. It prescribes
Mr. Kramer's compensation, duties and the extent of his services. It does not
provide for deferred compensation.
CT&T and Mr. Laffey have entered into an employment contract dated May 29,
1996. The contract provides for a three year term commencing on May 29, 1996,
and terminating on May 28, 1999, with provision for the continuation of the
relationship beyond the three year term. It prescribes Mr. Laffey's
compensation, duties and the extent of his services. It does not provide for
deferred compensation.
SHAREOWNER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareowner return on the Company's Common Stock against
the cumulative total return of the S & P 500 Stock Index and the S & P
Telephone Index for the period of five calendar years commencing on December
31, 1992 and ending on December 31, 1997.
Comparison of Five Year Cumulative Total Return
220
200
180
160
140
120
100
80
Dec. Dec. Dec. Dec. Dec. Dec.
1992 1993 1994 1995 1996 1997
CEI S&P 500 S&P TEL
1992 1993 1994 1995 1996 1997
CEI 100 105 109 133 121 154
S&P 500 100 110 112 153 189 252
S&P TEL. 100 115 111 167 168 235
DEC 92 DEC 93 DEC 94 DEC 95 DEC 96 DEC 97
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF
BEARD & COMPANY, INC., AS AUDITORS
The Board of Directors has appointed the firm of Beard & Company, Inc.,
independent certified public accountants, to audit the accounts and certify
the financial statements of the Company for the year ending December 31, 1998,
subject to the approval of the Shareholders. Beard and Company, Inc., was the
independent certified public accountants for the Company for the year ended
December 31, 1997. The Shareholders are asked to approve the action of the
Board of Directors in making such appointment for 1998, and it is intended
that proxies not limited to the contrary will be voted for ratification of
such appointment. A representative of Beard and Company, Inc., is expected to
be present at the Shareholders' meeting with the opportunity to make a
statement if he desires to do so, and such representative is expected to be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
If any Shareholder desires to have a proposal included in the proxy
statement for the 1999 Annual Meeting of Stockholders, the proposal must be
received by the Company in writing on or before December 10, 1998, by
certified mail, return receipt requested. The proposal must comply in all
respects with applicable rules and regulations of the Securities and Exchange
Commission, the laws of the Commonwealth of Pennsylvania and the Company's By-
Laws relating to such inclusion. Stockholder proposals may be mailed to the
Corporate Secretary, Conestoga Enterprises, Inc., 202 East First Street,
Birdsboro, Pennsylvania 19508.
OTHER MATTERS
The foregoing are the only items of business which the Management intends
to present, or is informed that others will present, at the meeting for any
action as to which proxies received in response to this solicitation are to be
exercised or used for a quorum. However, if other matters properly come
before the meeting, it is the intention of the persons named in the proxy to
vote the same in accordance with their judgment.
By Order of the Board of Directors
Kenneth A. Benner, Secretary
Dated: April 9, 1998
1998
CONESTOGA ENTERPRISES, INC.
P R O X Y
THIS PROXY IS SOLICITED ON
NUMBER OF SHARES BEHALF OF THE MANAGEMENT OF
CONESTOGA ENTERPRISES, INC.
Please sign and return promptly in
the enclosed envelope which requires
no postage if mailed in the U.S.A.
The undersigned hereby appoint(s) John M. Sausen and Richard G. Weidner, or in
the absence of either of them, the one which may be present, or
, as Proxies, each
with the power to appoint his or her substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of common stock of
Conestoga Enterprises, Inc. held of record by the undersigned on April 3, 1998,
at the annual meeting of shareholders to be held on May 2, 1998, or any
adjournment thereof.
1.ELECTION OF DIRECTORS
WITHHOLD AUTHORITY TO VOTE
FOR all nominees listed below [ ] FOR all nominees listed below [ ]
(except as marked to the
contrary below)
Kenneth A. Benner, Donald R. Breitenstein, and F. M. Brown
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
2.PROPOSAL TO RATIFY THE APPOINTMENT OF BEARD & COMPANY, INC., as the
independent accountants ofthe Company for 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3.In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY and
the shares represented hereby will be voted as specified. IF NO
SPECIFICATION IS MADE, SUCH SHARES WILL BE VOTED FOR PROPOSALS 1 and 2. If
any of such nominees for director is unavailable to serve
as director, the proxy or proxies will vote for another person or persons
designated by the Board of Directors of the Company. This proxy may be
revoked at any time prior to its exercise.
DATED: Sign Here
Sign Here
When signing as attorney in fact, administrator,
executor, trustee, guardian or custodian, please
give full title as such. If the stock is registered
in more than one name, each joint owner should sign.
If the signer is a corporation, sign in the
full corporate name by a duly authorized officer.
