UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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HECTOR COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
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Minnesota 41-1666660
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
211 South Main Street
Hector, Minnesota 55342
(320) 848-6611
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
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Curtis A. Sampson
Chief Executive Officer
211 South Main Street
Hector, Minnesota 55342
(320) 848-6611
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
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Copies to:
Richard A. Primuth
Lindquist & Vennum P.L.L.P.
4200 IDS Center, 80 South Eighth Street
Minneapolis, Minnesota 55402
(612) 371-3211
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Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: |_|
If any of the securities being registered on the Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering: |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
<PAGE>
Calculation of Registration Fee
<TABLE>
<CAPTION>
========================================================================================================
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Offering Registration
Securities to be Registered Registered Per Unit Price(1) Fee
========================================================================================================
Common Stock, $.01 par
<S> <C> <C> <C> <C>
value per share 87,046 $13.75 (1) $119,688.50 (1) $ 315.98
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</TABLE>
(1) Estimated solely for the purpose of determining the registration fee based
on the last reported sales price of the Company's Common Stock on the American
Stock Exchange on June 21, 2000 pursuant to Rule 457(c).
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information in this Prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities, and it is not a solicitation to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED June 26, 2000
HECTOR COMMUNICATIONS CORPORATION
PROSPECTUS
87,046 Shares of Common Stock, $.01 par value
Warrants were granted to underwriters for services provided in our 1995 public
offering of $12,650,000 principal amount of Convertible Subordinated Debentures.
This prospectus only relates to the registration of the common stock underlying
these warrants.
The shareholders named in this prospectus (the "Selling Shareholders") each held
warrants to acquire our common stock. The Selling Shareholders exercised their
respective warrants in their entirety and have paid in full the exercise price
for the shares covered by their respective warrants.
These shares of common stock of Hector Communications Corporation may be sold
from time to time by the Selling Shareholders.
We will not receive any proceeds from the sale of the Shares by the Selling
Shareholders. See "Use of Proceeds."
We will bear all expenses of the offering hereunder, excluding the underwriting
discounts and commissions incurred in connection with the sale of the Shares by
the Selling Shareholders.
Our Common Stock is traded on the American Stock Exchange under the symbol
"HCT."
The last reported sale price of our Common Stock on June 21, 2000 was $13.75 per
share, as reported by the American Stock Exchange.
This Offering involves investment risk. See "Risk Factors" beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is June 26, 2000
<PAGE>
TABLE OF CONTENTS
Page
Prospectus Summary ........................................................ 3
Risk Factors .............................................................. 4
Use of Proceeds ........................................................... 7
Selling Shareholders ...................................................... 7
Plan of Distribution ...................................................... 8
Description of Securities ................................................. 8
Interests of Named Experts and Counsel .................................... 9
Incorporation of Certain Documents by Reference ........................... 9
Commission Position of Indemnification for Securities Act Liabilities ..... 10
Where You Get More Information ............................................ 10
Hector's executive offices are located at: 211 South Main Street
Hector, Minnesota 55342
Hector's telephone number is: (320) 848-6611
------------------------------------
You should rely only on the information contained or incorporated by
reference in this prospectus and in any accompanying prospectus supplement. No
one has been authorized to provide you with different information.
The common stock is not being offered in any jurisdiction where the
offer is not permitted.
You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of the document.
WARNING REGARDING OUR USE OF FORWARD LOOKING STATEMENTS
This prospectus contains "forward-looking statements" which relate to
possible future events, our future performance and future operations. In some
cases, you can identify forward-looking statements by the use of such words as
"may," "will," "expect," "anticipate," "continue," "should," "believe," "plan,"
"could," "estimate," or "predict" or the negative of these terms or similar
expressions. These forward-looking statements are only our predictions. Our
actual results could differ materially from these forward-looking statements for
many reasons, including risks described above and appearing elsewhere in this
prospectus, as well as risks and uncertainties unknown to us at this time. We
cannot guarantee future results, levels of activity, performance or
achievements. We are under no duty and do not undertake to update any of the
forward-looking statements after the date of this prospectus to make the
statements conform to actual results or changes in our expectations.
Unless the context requires otherwise, "we," "us," "our" and "Hector"
refer to Hector Communications Corporation, including our operating
subsidiaries.
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<PAGE>
PROSPECTUS SUMMARY
Because this is a summary, it does not contain all of the information
that may be important to you. You should read carefully the entire prospectus,
including financial statements and documents incorporated by reference, before
you decide whether to investment in Hector's common stock.
Our Company
Hector Communications is a growing provider of telecommunications
services to rural communities in the Upper Midwest. Through wholly owned and
majority owned rural local exchange carrier subsidiaries, or RLECs, we provide a
complete package of local communications services including: local telephone
service, access to long distance service, Internet access and other enhanced
services in 35 communities in the Upper Midwest. At March 31, 2000 our RLEC
subsidiaries provided telephone service to approximately 36,000 customers in 35
rural communities in Minnesota, Wisconsin, South Dakota and Iowa.
We also provide cable TV service in rural communities served by or near
our telephone exchanges. We served approximately 13,100 subscribers in 68 rural
communities at March 31, 2000. We believe that our cable TV operations
complement our RLEC operations, and that we can profitably provide cable TV
service in rural markets through synergies with our RLEC personnel, facilities
and technical resources.
On June 9, 2000 our 68%-owned subsidiary, Alliance Telecommunications
Corporation ("Alliance"), acquired Hager TeleCom, Inc. for a purchase price of
$9,124,700. Hager TeleCom provides telephone service to approximately 2000
residential and business customers in the Hager City, Wisconsin area. In
addition, Hager provides Internet service to approximately 2500 customers,
primarily in Redwing, Minnesota.
Our Strategic Investments
In addition to the telecommunications and cable television services we
offer, we have made a number of investments in telecommunications ventures which
provide us with exposure to new technologies, foster strategic business
partnerships and generate attractive investment returns. We are actively
involved in several strategic investments, including ONVOY Inc., an integrated
voice, data, and network services provider, and two wireless companies, Midwest
Wireless LLC and Wireless North LLC. We also hold significant passive
investments in several telecommunications companies.
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<PAGE>
Our Goals
Our business objective is to build shareholder value by capitalizing on
the significant market opportunities in rural telecommunications. Key elements
of our strategy include:
o Leverage our management team's extensive experience in rural
telecommunications;
o Continue to pursue strategic acquisitions as attractive opportunities become
available;
o Build customer loyalty by providing high quality telecommunications services
through locally managed exchanges;
o Capitalize on the increasing demand for enhanced services and Internet
connectivity; and
o Continue to make strategic investments in ventures leveraging emerging
technologies to provide advanced services to rural markets;
RISK FACTORS
The risks and uncertainties described below are not the only ones
facing us. Additional risks and uncertainties not presently known to us or that
we currently consider immaterial may also impair our operations. If any of the
following risks actually occur, our business, financial condition or results of
operations could be materially adversely affected. In this case the trading
price of our common stock could decline, and you may lose all or part of your
investment.
We plan to grow by acquiring other rural telephone exchanges, but we may not be
a successful bidder.
A major element of our business strategy is to expand our existing
operations through acquisitions of additional rural telephone exchanges. We
actively review and evaluate rural telephone exchanges throughout the Upper
Midwest as they become available for sale. Competition to acquire these entities
is intense. Also, many of our competitors have greater financial resources than
we do, and may be able to structure transactions on a more favorable basis than
we can. In addition, the intense interest in acquiring rural telephone exchanges
often drives up the price ultimately paid by the successful bidder. Therefore,
even though we may submit a bid, we cannot be sure that we will be successful in
purchasing any available rural exchanges.
We may be unable to obtain acquisition financing or the financing may be on
unfavorable terms.
To date we have obtained financing for our acquisitions of rural
telephone exchanges on terms we consider reasonable. However, even if we are a
successful bidder for an available rural telephone exchange, we may not be able
to obtain sufficient acquisition financing to purchase the entity. Even if we
can arrange additional financing, the terms may be unfavorable. For example, we
may be required to pay higher interest rates or be subject to onerous lending
covenants that could make an acquisition unprofitable, more cumbersome, or harm
our overall financial results.
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Because Hector is a holding company, it relies on distributions from its RLEC
subsidiaries to satisfy its obligations. If Hector does not receive adequate
distributions from its RLEC subsidiaries it may not be able to service its debt
and meet its other financial obligations.
We are a holding company with no significant assets or independent
operations other than the equity of Hector's wholly owned RLEC subsidiaries, our
68% ownership of Alliance and our cable television subsidiary. Alliance is also
a holding company with no substantial assets other than its RLEC subsidiaries.
Each of our RLEC subsidiaries is a separate and distinct legal entity; RLECs are
limited in the amount of dividends on common stock that they may pay by loan
covenants and regulatory requirements as to paying dividends. Their ability to
pay dividends or make other payments or advances to us also depends on their
operating results.
If we do not receive dividends or other distributions from our RLEC
subsidiaries that are sufficient for us to satisfy our obligations under our
loan agreements, a default could occur in payment of those obligations. However,
we expect sufficient dividends or other payments to be available to meet our
debt obligations. In the event of an insolvency, bankruptcy or similar
proceeding involving one of these RLEC subsidiaries, creditors of that
subsidiary would generally be entitled to priority over us with respect to the
assets of the subsidiary.
Regulatory authorities impose limits on our revenues and regulatory changes
could hurt our business.
Our RLEC subsidiaries are subject to significant regulation by the
Minnesota, Wisconsin, Iowa, North Dakota and South Dakota utility regulatory
agencies, as well as the FCC. Actions by these regulatory agencies may adversely
affect the amount we charge for local service. Additionally, there is a risk
that the state regulatory agencies that oversee our business could, at any time,
review our agreements with our RLEC subsidiaries regarding the amounts we charge
for centralized services and alter our rate of return if the regulatory body
concluded that our cost allocations were not proper.
Competition in our markets could result in a decline in revenues.
Competition to local exchange service in rural telephone exchange
markets is increasing. This increased competition stems from cable TV companies,
competitive local exchange carriers called CLECs, cellular providers and PCS
providers, also known as personal communications service providers. Cellular and
PCS providers currently compete in territories of certain of our rural telephone
exchange subsidiaries. Increased competition from these wireless providers is
expected, and CLECs and cable TV companies could begin to compete in our markets
at any time.
Franchises granted to our cable television systems are nonexclusive.
While today only one of our cable television systems competes with another cable
television provider, the possibility of competition in the future exists. Our
cable television systems do face significant competition from increasingly
popular direct broadcast satellite services such as Direct TV or Dish Network.
Our future operations could be harmed significantly by increased competition and
changes in the competitive climate of the cable television industry.
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The access charge revenues we receive may be reduced at any time.
A substantial portion of our revenues is from access charges paid by
interexchange carriers, or IXCs, for services provided by our RLEC subsidiaries
in originating and terminating intrastate and interstate long distance telephone
calls. The amount of access charge revenues we receive for these services is
regulated by the FCC and state regulatory agencies. Actions by these agencies
could reduce the amount of access revenues we receive. In addition, a portion of
our access revenues is received from state and federal universal service funds
based upon the high cost of providing telephone service to certain rural areas.
In the future, there may be proposals by state or federal regulatory agencies to
eliminate or reduce these subsidies. If the subsidies received from these funds
were materially reduced, this would adversely affect our financial results.
Hector relies on key employees and if they were to leave Hector's business could
suffer.
Hector relies on key management employees, including Hector's Chief
Executive Officer, Curtis A. Sampson, its Vice President-Finance, Paul N. Hanson
and its President, Steven H. Sjogren. If we were to lose any number of these key
employees, our current and future operations could be negatively affected.
Hector does not maintain key person life insurance on any member of its
management.
We believe that our future success will depend on our ability to retain
key members of management and to attract experienced management in the future in
a highly competitive industry where companies with greater resources compete for
personnel. In the telecommunications business it is particularly difficult to
recruit and retain employees because of the level of skill and expertise some
positions require. This is especially true in the rural areas where we
principally operate.
Hector has in place several measures that make a takeover difficult, and
potential bidders may be deterred from seeking to acquire it if its board of
directors does not favor the transaction.
Hector has in place certain mechanisms that could cause a delay or
deter a takeover or change in control. These include:
o a shareholder rights plan,
o provisions in Hector's articles of incorporation,
o provisions of the Minnesota Business Corporation Act and
o Hector's ability to issue undesignated preferred stock.
Under Hector's shareholder rights plan, if a person or group acquires
or announces they intend to acquire 15% of Hector's common stock, all
shareholders except the take-over bidder are entitled to purchase Hector's stock
at a bargain price. This plan could discourage a hostile acquisition attempt and
encourage a prospective acquiror to negotiate any acquisition with the board.
Hector's articles of incorporation require that any "business
combination" be approved by at least 75% of the voting power generally entitled
to vote in the election of directors. A "business combination" includes a
takeover or merger. This supermajority provision could deter prospective
bidders. Furthermore, members of the board serve in staggered 3-year terms. This
has the effect of lengthening the time necessary to change the composition of
the board.
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Hector is subject to the Minnesota Control Share Acquisition Act which
limits or eliminates the voting rights of shares acquired in certain
circumstances. It is also subject to the Minnesota Business Combination Act
which limits any shareholder from acquiring more than ten percent of Hector's
common stock without approval of a committee of the outside board members. The
effect of these laws is to limit third parties from acquiring significant
amounts of Hector's common stock without board or shareholder approval.
Hector's board of directors has the authority to issue up to 2,427,900
shares of preferred stock. Without any shareholder vote or action, the board may
establish the powers, preferences, rights and restrictions, including voting
rights, of those shares. The holders of the preferred stock could be given
preferential rights with respect to voting, liquidation, dissolution or
dividends over existing shareholders. The issuance of these shares could deter
an unsolicited acquisition.
USE OF PROCEEDS
We will not receive any proceeds from sales of the Shares by the
Selling Shareholders.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of our Common Stock by the Selling Shareholders as of June
21, 2000.
Common Stock Number of
Beneficially Shares of Owned After
Owned Prior to Common Stock Offering(1)(2)
Selling Shareholders Offering Offered(1) Number Percent
--------------------- -------------- ------------- ------------ ---------
John Feltl 46,665 43,969 2,696 *
Timothy Friederichs 144 144 0 *
Richard Heise 34,969 34,969 0 *
John Ryden 3,507 3,507 0 *
Dennis Hanish 3,507 3,507 0 *
Wayne Mills 950 950 0 *
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TOTAL 87,046
=============
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* Less than 1%.
(1) Represents the maximum number of shares that may be sold by each
selling shareholder pursuant to this Prospectus; provided, however,
that pursuant to Rule 416 under the Securities Act of 1933, as amended,
the Registration Statement of which this Prospectus is a part shall
also cover any additional shares of common stock which become issuable
in connection with the shares registered for sale hereby by reason of
(i) any stock dividend, stock split, recapitalization or other
transaction effected without the receipt of consideration which results
in an increase in the Company's number of outstanding shares of common
stock. In the event Rule 416 is not available, the Company is obligated
to register such additional shares of common stock.
(2) Assumes the sale of all shares offered hereby to unaffiliated third
parties. The selling shareholders may sell all or part of their
respective shares.
7
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PLAN OF DISTRIBUTION
We have been advised that the Selling Shareholders may sell Shares from
time to time in one or more transactions (which may include block transactions)
on the American Stock Exchange at market prices prevailing at the time of the
sale or at prices otherwise negotiated.
The Shares may, without limitation, be sold by one or more of the
following:
(i) a block trade in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
(ii) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this
Prospectus; and
(iii) ordinary brokerage transactions and transactions in which the
broker solicits purchasers.
We have been advised that, as of the date hereof, the Selling
Shareholders have made no arrangement with any broker for the sale of the
Shares. Underwriters, brokers or dealers may participate in such transactions as
agents and may, in such capacity, receive brokerage commissions from the Selling
Shareholders or purchasers of such securities. Such underwriters, brokers or
dealers may also purchase Shares and resell such Shares for their own account in
the manner described above. The Selling Shareholders and such underwriters,
brokers or dealers may be considered "underwriters" as that term is defined by
the Securities Act of 1933, although the Selling Shareholders disclaim such
status. Any commissions, discounts or profits received by such underwriters,
brokers or dealers in connection with the foregoing transactions may be deemed
to be underwriting discounts and commissions under the Securities Act of 1933.
DESCRIPTION OF SECURITIES
Warrants were granted to R.J. Steichen & Company for services provided
to us in our 1995 public offering of $12,650,000 Convertible Subordinated
Debentures. This prospectus only relates to the registration of the common stock
underlying these warrants.
A description of our common stock is set forth in our Registration
Statement on Form 10 (File No. 0-19587), including the supplemental description
on Form 8-A (File No. 001-13891) filed with the Commission on August 9, 1999,
and herein incorporated by reference.
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INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the issuance of the Common Stock offered hereby will be
passed upon for us by Lindquist & Vennum P.L.L.P., Minneapolis, Minnesota, of
which Richard A. Primuth, our Secretary, is a partner.
The financial statements incorporated in this prospectus by reference
from our 1999 Annual Report on Form 10-K have been audited by Olsen Thielen &
Co., Ltd, independent auditors, as of and for the years ended December 31, 1999
and 1998, as stated in its reports, which are incorporated herein by reference,
and have been so incorporated in reliance upon the reports of such firm given
upon its authority as experts in accounting and auditing.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We "incorporate by reference" into this prospectus the information we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is an important part of this prospectus. Information that we file subsequently
with the SEC will automatically update this prospectus. We incorporate by
reference the documents listed below, and any filings we make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 after
the initial filing of the registration statement that contains this prospectus
and before the time that we sell all the securities offered by this prospectus:
o Annual report on Form 10-K for the year ended December 31,
1999 (including information specifically incorporated by
reference into our Form 10-K from our 1999 annual report to
shareholders and our definitive notice and proxy statement for
our 2000 annual meeting of shareholders held on May 18, 2000);
o Quarterly report on Form 10-Q for the quarter ended
March 31, 2000;
o Proxy Statement dated April 10, 2000;
o Current report on Form 8-K filed June 23, 2000.
In addition we provide our shareholders with annual reports containing
audited financial statements.
We will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents which are incorporated by reference into
this Prospectus, other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference in such documents.) Requests for such
copies should be directed to Assistant Secretary, Hector Communications
Corporation, 211 South Main Street, Hector, Minnesota 55342, telephone number
(320) 848-6611.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation eliminate or limit certain liabilities of
our directors and our Bylaws provide for indemnification our directors, officers
and employees in certain instances. Insofar as exculpation of, or
indemnification for, liabilities arising under the Securities Act of 1933 may be
permitted to our directors, officers or control persons pursuant to the
foregoing provisions, we have been informed that in the opinion of the
Securities and Exchange Commission such exculpation or indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
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WHERE YOU GET MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, generally called the "Exchange Act". We file reports,
proxy statements and other information with the Commission in accordance with
that law. These reports, proxy statements and other information may be inspected
and copied at the public reference facilities maintained by the Commission at:
Room 1024
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
and at the SEC regional offices at:
7 Word Trade Center
Suite 1300
New York, New York 10048
and
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661.
Copies of such material may be obtained at prescribed rates by writing
to: Securities and Exchange Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington D.C. 20549. It may also be obtained via the SEC web
site at www.sec.gov.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC registration fee . . . . . . . . . . . . . . . . . $ 316
Accounting fees and expenses . . . . . . . . . . . . . 1,500
Legal fees and expenses . . . . . . . . . . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 100
Total . . . . . . . . . . . . . . . . . . . . . . $ 6,916
Except for the SEC fee, all of the foregoing expenses have been estimated.
Item 15. Indemnification of Directors and Officers
Section 302A.521 of the Minnesota Business Corporation Act ("MBCA")
provides that, unless prohibited or limited by a corporation's articles of
incorporation or bylaws, a corporation must indemnify its current and former
officers, directors, employees and agents against reasonable expenses (including
attorneys' fees), judgments, penalties, fines and amounts paid in settlement and
which were incurred in connection with actions, suits, or proceedings in which
such persons are parties by reason of the fact that they are or were an officer,
director, employee or agent of the corporation, if they (i) have not been
indemnified by another organization, (ii) acted in good faith, (iii) received no
improper personal benefit, (iv) in the case of a criminal proceeding, had no
reasonable cause to believe the conduct was unlawful, and (v) reasonably
believed that the conduct that was in the best interests of the corporation.
Section 302A.521 also permits a corporation to purchase and maintain insurance
on behalf of its officers, directors, employees and agents against any liability
which may be asserted against, or incurred by, such persons in their capacities
as officers, directors, employees and agents against any liability which may be
asserted against, or incurred by, such persons in their capacities as officers,
directors, employees or agents of the corporation, whether or not the
corporation would have been required to indemnify the person against the
liability under the provisions of such section.
Article IX of our Bylaws provides that we may indemnify each person who
is or was a director or officer to the full extent permitted by the MBCA.
Article IX also provides that we may, but we are not required to, indemnify
employees and agents, other than directors and officers, to the full extent and
in the manner permitted by the MBCA.
Item 16. Exhibits
Exhibit No. Description
5.1 Opinion and Consent of Lindquist & Vennum P.L.L.P., counsel to
Hector Communications Corporation
23.1 Consent of Lindquist & Vennum P.L.L.P. (see Exhibit 5.1 above)
23.2 Consent of Olsen Thielen & Co., Ltd., independent auditors
24.1 Power of Attorney (contained on signature page)
II-1
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Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised 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. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hector, State of Minnesota, on June 21, 2000.
HECTOR COMMUNICATIONS CORPORATION
By /s/ Curtis A. Sampson
------------------------------------
Curtis A. Sampson, Chairman and
Chief Executive Officer
(Principal Executive Officer)
POWER OF ATTORNEY
The undersigned officers and directors of Hector Communications
Corporation hereby constitute and appoint Curtis A. Sampson and Paul N. Hanson,
or either of them, with power to act one without the other, our true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for us and in our stead, in any and all capacities to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents relating thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing necessary or
advisable to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
June 21, 2000 and in the capacities indicated.
Signature Title
/s/ Curtis A. Sampson Chairman of the Board of Directors,
------------------------------- Chief Executive Officer and Director
Curtis A. Sampson
/s/ Steven H. Sjogren President, Chief Operating Officer,
------------------------------- and Director
Steven H. Sjogren
/s/ Paul N. Hanson Vice President, Treasurer
------------------------------- and Director
Paul N. Hanson
/s/ Charles A. Braun Chief Financial Officer and
------------------------------ Principal Accounting Officer
Charles A. Braun
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<PAGE>
/s/ James O. Ericson Director
-------------------------------
James O. Ericson
/s/ Paul A. Hoff Director
-------------------------------
Paul A. Hoff
/s/ Wayne E. Sampson Director
-------------------------------
Wayne E. Sampson
/s/ Edward E. Strickland Director
-------------------------------
Edward E. Strickland
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<PAGE>
June 26, 2000
Hector Communications Corporation
211 South Main
Hector, Minnesota 55342
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 to be filed
by Hector Communications Corporation (the "Company") with the Securities and
Exchange Commission on June 26, 2000 relating to an offering of up to 87,046
shares of Common Stock, par value $.01 per share, to be offered by the Selling
Shareholders, please be advised that as counsel to the Company, upon examination
of such corporate documents and records as we have deemed necessary or advisable
for the purposes of this opinion, it is our opinion that:
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Minnesota.
2. The shares of Common Stock being offered by the Selling Share-
holders have been validly issued and are fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
/s/ Lindquist & Vennum P.L.L.P.
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<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Hector Communications Corporation on Form S-3 relating to the sale of 87,046
shares of common stock of our report dated February 16, 2000 on the 1999
financial statements, appearing in the Annual Report on Form 10-K of Hector
Communications Corporation for the year ended December 31, 1999 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
OLSEN THIELEN & CO., LTD.
/s/Olsen Thielen & Co., Ltd.
June 26, 2000
St. Paul, Minnesota
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