<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Roseville Communications Company
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee was calculated and state how it was determined):
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
---------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
ROSEVILLE COMMUNICATIONS COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Roseville Communications Company
(hereinafter called the Company) will be held at the Company's Industrial Avenue
Facility, 8150 Industrial Avenue, Building A, Roseville, California, on Friday,
June 18, 1999 at 8:00 o'clock P.M., for the following purposes:
1. To elect a Board of seven (7) Directors;
2. To consider and act upon a proposal to approve and adopt the
Roseville Communications Company 1999 Restricted Stock Bonus Plan; and
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record on the books of the Company as of 5:00 o'clock
P.M., April 23, 1999 will be entitled to vote at the meeting or any adjournment
thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Thomas E. Doyle
----------------------------------
THOMAS E. DOYLE
Secretary
SHAREHOLDERS WHO CANNOT ATTEND IN PERSON ARE REQUESTED TO FILL IN, DATE,
SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
Roseville, California, April 30, 1999.
<PAGE> 3
ROSEVILLE COMMUNICATIONS COMPANY
P.O. BOX 969
211 LINCOLN STREET
ROSEVILLE, CALIFORNIA 95678
APRIL 30, 1999
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Roseville Communications Company (hereinafter called
the Company) to be used at the Annual Meeting of Shareholders on June 18, 1999,
or any adjournment thereof, for the purposes set forth in the foregoing notice.
Any shareholder may revoke his or her proxy at any time prior to its use by
written communication to the Secretary of the Company or by attendance at the
Annual Meeting and voting in person.
The approximate date of mailing to shareholders of Notice of Annual Meeting
and this Proxy Statement is April 30, 1999.
VOTING SECURITIES
The Company has only one class of voting security, its Common Stock,
entitled to one vote per share and, as explained below, to cumulative voting in
the election of Directors. Only shareholders of record at 5:00 o'clock P.M. on
April 23, 1999, will be entitled to vote at the Annual Meeting. As of the close
of business on February 28, 1999, there were 15,815,230 shares of the Company's
Common Stock outstanding. On February 28, 1999, no person was known by the
Company to be the beneficial owner of more than five percent of its issued and
outstanding Common Stock, except as follows:
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP CLASS
------------------------------------ ----------------------- ----------
<S> <C> <C>
Roseville Telephone Company Retirement
Supplement Plan................................ 1,718,387(1) 10.9%
P.O. Box 969
Roseville, California 95678
</TABLE>
- ----------
(1) Shared voting and investment power.
Shares cannot be voted at the meeting unless the owner is present or
represented by proxy. Because abstentions with respect to any matter are treated
as shares present or represented and entitled to vote for the purposes of
determining whether that matter has been approved by the shareholders,
abstentions have the same effect as negative votes. Broker non-votes and shares
as to which proxy authority has been withheld with respect to any matter are not
deemed to be present or represented for purposes of determining whether
shareholder approval of that matter has been obtained.
In voting for Directors, each shareholder is entitled to vote his shares
for as many persons as there may be Directors to be elected, to accumulate his
votes and give one nominee votes equal to the number of Directors multiplied by
the number of shares of stock owned by him or to distribute his votes upon the
same principle among as many nominees as he thinks fit. The seven candidates for
election as Directors at the Annual Meeting of Shareholders who receive the
highest number of affirmative votes will be elected.
The proposal to approve and adopt the Roseville Communications Company 1999
Restricted Stock Bonus Plan and any other matters submitted for shareholder
approval at the Annual Meeting will require the affirmative vote of a majority
of the shares of the Company present or represented and entitled to vote at the
meeting.
<PAGE> 4
ELECTION OF DIRECTORS
The following persons are nominees for Director to serve until the next
Annual Meeting of Shareholders and until their successors shall have been
elected and shall qualify. The nominees constitute the present Board of
Directors, five of whom were elected at the last Annual Meeting of Shareholders
of the Company. Chris L. Branscum and Neil J. Doerhoff were elected to the Board
of Directors on January 27, 1999. During 1998, the Board of Directors held
sixteen meetings. The Company's Board of Directors has no standing nominating
Committee. In 1994 the Board of Directors established a Compensation Committee,
comprised of independent Directors, whose functions include the review of and
recommendations with respect to officer compensation, the review of officer
performance and consideration of benefit issues generally. The Compensation
Committee members are John R. Roberts III, who serves as Chairman, Chris L.
Branscum, Neil J. Doerhoff and Ralph E. Hoeper. In 1998 the Board of Directors
established an Audit Committee to review the auditing, accounting, financial
reporting and internal control functions of the Company and make recommendations
to the Board of Directors regarding the selection of independent accountants.
The Audit Committee members are Neil J. Doerhoff, who serves as Chairman, Chris
L. Branscum and John R. Roberts III. During 1998, the Compensation Committee
held seven meetings and the Audit Committee two meetings. Each Director serving
in 1998 attended at least 75 percent of the Board Meetings and meetings of the
committees of which he is a member.
Shares represented by the proxy will be voted and the proxies will vote for
the election of all the nominees to the Board of Directors, except to the extent
that authority to vote for particular nominees has been withheld. If any person
is unable or unwilling to serve as a nominee for the office of Director at the
date of the Annual Meeting, or any adjournment thereof, the proxies will vote
for such substitute nominee as shall be designated by the proxies. Management
has no reason to believe that any of the nominees will be unable to serve if
elected a Director. The present Directors and Officers (consisting of eleven
individuals) beneficially owned, as of February 28, 1999, an aggregate 730,292
shares, or 4.6% of the Company's Common Stock. In respect to the nominees and
all the Directors and Officers as a group, the following information is
furnished as of February 28, 1999.
<TABLE>
<CAPTION>
SHARES OF
PRINCIPAL OCCUPATION AND COMPANY PERCENT
BUSINESS EXPERIENCE DIRECTOR BENEFICIALLY OF
NAME AGE FOR PAST FIVE YEARS SINCE OWNED(1) CLASS
---- --- ------------------------ -------- ------------ -------
<S> <C> <C> <C> <C> <C>
Robert L. Doyle(2)....... 80 Chairman of the Board of Directors of the 1954 324,896 2.1%
Company; President and Chief Executive
Officer of the Company from 1954 to 1993.
Brian H. Strom(3)........ 56 President and Chief Executive Officer of the 1993 16,365 *
Company (since 1993); Vice President and
Chief Financial Officer of the Company from
1989 to 1993.
Thomas E. Doyle(2)....... 70 Vice President (since 1972) and Secretary- 1951 300,459 1.9%
Treasurer (since 1965) of the Company;
Chairman of the Board, Placer Savings Bank,
Auburn, California.
Ralph E. Hoeper(4)....... 74 President, Foresthill Telephone Company, 1987 52,273 *
Foresthill, California.
John R. Roberts 47 Executive Director (since March 1999), The 1993 15,194 *
III(4)(5).............. Natomas Basin Conservancy; Executive
Director, California Rice Industry
Association from 1990 to 1998; Director,
Meta Information Services, Inc., Sacra-
mento, California.
Chris L. 50 Co-founder and Managing Director of Hal- 1999 500 *
Branscum(4)(5)......... lador Venture Partners, LLC, Sacramento,
California.
Neil J. 47 Corporate Secretary (since 1987), Raley's, 1999 700 *
Doerhoff(4)(5)(6)...... Sacramento, California.
All Directors and
Officers as a group (11
persons)............... 730,292 4.6%
</TABLE>
2
<PAGE> 5
- ----------
* Less than 1.0%.
(1) Each beneficial owner has shared voting and investment power unless
otherwise noted.
(2) Robert L. Doyle and Thomas E. Doyle are brothers.
(3) Included in Brian H. Strom's share ownership figure are 7,688 shares in
respect of which he has sole voting and investment power.
(4) Chris L. Branscum, Neil J. Doerhoff, Ralph E. Hoeper and John R. Roberts III
serve on the Compensation Committee.
(5) Chris L. Branscum, Neil J. Doerhoff and John R. Roberts III serve on the
Audit Committee.
(6) Neil J. Doerhoff has sole voting power for the 700 shares.
Compensation of Directors
All Directors other than Robert L. Doyle and Brian H. Strom were
compensated by a fee of $1,000 per month and $500 for each Board and Committee
meeting they attended in 1998. Beginning in February 1999, Directors other than
Messrs. Doyle and Strom will be compensated by a fee of $1,000 per month and
$750 for each Board meeting they attend. Directors also receive $500 for each
Committee meeting they attend ($750 if the meeting is on a day different than a
Directors' meeting). Committee Chairmen will also receive a fee of $2,500
annually.
Transaction with Director
The Company's wholly-owned subsidiary Roseville PCS, Inc., is the manager
of and has an approximate 93% interest in West Coast PCS LLC, dba RCS Wireless
("RCS Wireless"), the other approximate 7% of which is owned by Foresthill
Telephone Company. Ralph E. Hoeper, a Director of the Company, is the President
and owner of Foresthill Telephone Company. RCS Wireless has acquired four
Personal Communications Services (PCS) licenses to offer PCS services to areas
located in central California including Sacramento, Stockton, Modesto and Yuba
City. The Operating Agreement of RCS Wireless, which was authorized by the
disinterested members of the Company's Board of Directors, requires
contributions to RCS Wireless commensurate with each participant's ownership
interest.
EXECUTIVE COMPENSATION
Report of the Compensation Committee Concerning Compensation
The Board of Directors has a Compensation Committee of independent
Directors comprised of John R. Roberts III, who currently serves as Chairman,
and Ralph E. Hoeper. Chris L. Branscum and Neil J. Doerhoff, who were elected to
the Board of Directors on January 27, 1999, were also elected to the
Compensation Committee on the same date. As a result of their recent election to
the Compensation Committee, Messrs. Branscum and Doerhoff did not participate in
the preparation of this report.
The Compensation Committee has the responsibility of reviewing and
recommending a compensation program for the Company's officers. The measures of
performance used by the Compensation Committee in 1998 included:
(i) operational goals, financial performance and the achievement of
stockholder value, together with each officer's individual effectiveness in
reaching those goals and achieving desirable financial performance and
shareholder value;
(ii) the skill levels and duties of the Company's officers, including
the limited number of officers and the resulting determination of increased
responsibilities for the Company's officers in relation to other companies;
(iii) the compensation earned by officers of other telephone and
telecommunications companies; and
3
<PAGE> 6
(iv) officer compensation at general industry companies of similar
size to the Company within the Sacramento, California metropolitan area and
in other areas of the United States with comparable cost-of-living and
compensation levels.
The Compensation Committee also realizes the significance of the
distinctions between the compensation policy at the Company and at other
companies, both within and outside the telecommunications industry. Most
importantly, substantially all of the officers' compensation historically has
been derived from base salary. Only beginning in 1996 did the Company award
bonuses to executive officers in recognition of their services and contributions
to the Company during those fiscal years. In 1998, the Company entered into
incentive compensation agreements with its executive officers contingent upon
shareholder return providing for the payment of deferred bonuses in 2001, but
subject to forfeiture generally if the executive officer were not then employed
by the Company. The incentive bonuses were earned in full, and the recipients
were permitted to accept restricted shares of Company common stock in accordance
with and assuming approval of the Roseville Communications Company 1999
Restricted Stock Bonus Plan, which is being submitted to the Company's
shareholders for approval. The Plan is the first stock-based compensation
program considered for the Company's officers.
The Compensation Committee received the assistance of independent
consulting firms specializing in compensation matters which prepared reports in
1996, 1997 and 1998 with respect to the Company's compensation policies and
related matters. The engagement of the independent consultants was implemented
in furtherance of the Compensation Committee's goal to provide compensation
opportunities that attract, motivate and retain the most qualified officers who
can contribute to the long-term performance and growth of the Company.
Compensation for the Company's executive officers was largely determined with
reference to the information provided in these reports.
The 1998 compensation paid to Brian H. Strom, President and Chief Executive
Officer, was comprised almost entirely of his salary and bonus. Mr. Strom's
salary and bonus was established taking into consideration the individual and
Company compensation criteria and policies described above. The 1996, 1997 and
1998 independent consulting surveys indicate that Mr. Strom's cash compensation
was significantly below the mid-point of survey results taking into
consideration the size of the Company compared to the companies in the surveys.
In addition, the Compensation Committee also recognized the continued successful
financial performance of the Company measured by revenue and net income results,
the Company's continued technological advancements, and the contributions of the
Chief Executive Officer in helping the Company achieve such performance and
advancements. In addition, Mr. Strom earned an incentive bonus in 1998 which, as
described above, he has elected to receive in the form of restricted stock
assuming approval of the Roseville Communications Company 1999 Restricted Stock
Bonus Plan. The restricted shares thereunder are subject to forfeiture generally
if Mr. Strom is not employed by the Company in January 2001.
Certain portions of the independent consultant reports consist of an
analysis of the compensation policies of comparable companies. The most recent
comparison group consisted of twelve companies, all of which are engaged in the
telecommunications industry in general, and the local exchange carrier business
in particular. In addition to the nature of their business, the comparison
companies were similar to the Company in one or more of the following
categories: revenues, access lines, assets and geographical location. None of
the twelve companies whose compensation policies were considered are among the
twelve companies now constituting the Dow Jones Telephone Systems Index. All of
the companies in the Index are substantially larger than the Company, and in
certain instances have not traditionally been engaged in the local exchange
carrier business and, as a result, it was determined that comparison of
compensation of the Company's officers with the officers of the companies in the
Index would not be meaningful.
Compensation Committee,
John R. Roberts III, Chairman
Ralph E. Hoeper
4
<PAGE> 7
Executive Compensation
The following table sets forth the executive compensation paid to the
Company's Chief Executive Officer and the four remaining most highly paid
executive officers for the years ended December 31, 1998, 1997 and 1996:
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- ----------------
OTHER ANNUAL RESTRICTED STOCK ALL OTHER
NAME AND SALARY BONUS COMPENSATION(2) AWARDS(3) COMPENSATION(4)
PRINCIPAL POSITION(1) YEAR $ $ $ $ $
--------------------- ---- ------- ------ --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Doyle................... 1998 329,992 -- 9,685 -- 91,966
Chairman of the Board 1997 342,684 -- 9,685 -- 90,016
of Directors 1996 350,768 -- 6,425 -- 82,225
Brian H. Strom.................... 1998 356,990 25,000 1,935 150,000 9,800
President and 1997 368,417 50,000 1,875 -- 9,550
Chief Executive Officer 1996 342,234 50,000 1,235 -- 8,475
Michael D. Campbell............... 1998 285,770 12,500 1,240 112,500 9,800
Executive Vice President and 1997 288,855 35,000 750 -- 9,550
Chief Financial Officer 1996 261,461 35,000 745 -- 8,475
Jay B. Kinder..................... 1998 163,727 10,000 1,085 30,000 8,601
Vice President, Customer 1997 165,643 -- 1,235 -- 9,550
Services -- Roseville Telephone 1996 145,213 995 -- 8,577
Company --
Rulon D. Blackburn................ 1998 160,852 10,000 610 30,000 7,627
Vice President, Network 1997 160,059 -- 1,865 -- 9,012
Services -- Roseville Telephone 1996 126,730 1,310 -- 7,906
Company --
</TABLE>
- ----------
(1) The Company is the successor to Roseville Telephone Company effective
October 1, 1996. Unless otherwise described, each of the named individuals
serve in their identified capacity for both the Company and its wholly-owned
subsidiary Roseville Telephone Company.
(2) Other annual compensation consists of gross-up payments to officers and
other employees for tax liability incurred in connection with imputed
premiums in respect of life insurance coverage in excess of $50,000.
(3) The amounts disclosed in this column reflect the dollar values of restricted
shares granted as a result of the attainment of certain performance measures
under individual agreements with the respective executive officer and are
subject to the approval by the Company's shareholders of the Roseville
Communications Company 1999 Restricted Stock Bonus Plan. The stock awards
vest in 2001. If The 1999 Restricted Stock Bonus Plan is not approved, the
entire amount will be payable in cash in 2001 subject to the satisfaction of
certain conditions precedent. The total number of restricted shares and
their aggregate market value at December 31, 1998: Brian H. Strom, 5,357
shares valued at $150,000; Michael D. Campbell, 4,018 shares valued at
$112,500; Jay B. Kinder, 1,072 shares valued at $30,000; and Rulon D.
Blackburn, 1,072 shares valued at $30,000. Dividends will be paid on the
restricted shares in the same amount and at the same time as dividends paid
to all other owners of Common Stock.
(4) Reflects employer contributions to the Company's Retirement Supplement Plan
(the Company's qualified 401(k) plan) and, for Robert L. Doyle in 1998, 1997
and 1996, payments to Mr. Doyle pursuant to the Company's Supplemental
Executive Retirement Plan (SERP) in the amount of $83,166, $80,466 and
$73,950, respectively.
Change of Control Agreements
The Company has entered into change in control agreements with each of the
individuals named in the Summary Compensation Table (excluding Robert L. Doyle).
The agreements are in effect until December 31, 1999, and automatically extend
for one-year terms unless the Company provides a notice of termination by
November 30 of this year or each extended term. A "change in control of the
Company" generally means (i) the acquisition by a third party of 20% or more of
the Company's common stock, (ii) a merger or consolidation of the Company in
which the Company does not survive as an independent public company, or (iii) a
partial or complete liquidation of the business for which the executive's
services are performed. For payments to be owed to an executive officer, there
must be a change in control of the Company and a "constructive termination" of
the executive's employment (meaning generally a decrease in compensa-
5
<PAGE> 8
tion, a reduction in job responsibility or a geographical relocation). If there
is a change in control of the Company, and a subsequent constructive
termination, the executive is entitled to a severance benefit equal to two times
the sum of his annual compensation and benefits received in the period prior to
the separation, and the continuation of insurance and medical benefits for the
executive and his family for two years.
Pension Plan and SERP
The Company has a qualified defined benefit pension plan in which all
employees are eligible to participate substantially concurrently with the
commencement of employment ("Pension Plan"), as well as a supplemental
non-qualified and unfunded supplemental executive retirement plan ("SERP"). The
SERP provides benefits that would otherwise be denied participants by reason of
certain Internal Revenue Code limitations on qualified plan benefits, based on
remuneration that is covered under the plans and years of service with the
Company. Benefits under the plans are a function of a participant's years of
service with the Company and the employee's average annual compensation during
the period of the five consecutive years in the last ten years of credited
service in which annual compensation was the largest. The monthly retirement
benefit payable under the plans will be adjusted on the basis of actuarial
equivalents for a joint and survivor benefit and for optional forms of benefit,
such as the early retirement benefit. Benefits become fully vested at age 65 or
on the completion of 5 years of service, whichever first occurs, and are not
subject to any deduction for Social Security or other offset amounts.
While the Company may terminate the plans at any time, such termination
will not deprive any participant or beneficiary of any vested accrued benefits
under the plan to the extent such benefits are then funded.
Since the Pension Plan is a defined benefit plan, funding is determined
with respect to participants as a group and costs cannot be readily allocated to
any individual participant. The ratio of 1998 plan contributions to estimated
total covered compensation was 5.9%. Estimated total covered compensation has
been determined by increasing the total base annual rate of compensation of plan
participants at January 1, 1998 by 5.5%. Robert L. Doyle, Brian H. Strom, and
Michael D. Campbell are entitled to benefits under the Pension Plan and the SERP
and Jay B. Kinder and Rulon D. Blackburn under the Pension Plan, and at December
31, 1998, were credited with 45, 10, 4, 35 and 36 years of service,
respectively, under the plans. The compensation covered by the Pension Plan and
the SERP for each participant is substantially similar to the sum of the salary
and other annual compensation reported above for each executive officer. The
table below illustrates approximate annual benefits payable under the plans for
the ranges of pay and periods of service indicated, assuming retirement at age
65 in 1999.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION FOR
HIGHEST CONSECUTIVE REPRESENTATIVE YEARS OF SERVICE
FIVE-YEAR AVERAGE ------------------------------------------------------------------------
COMPENSATION 15 20 25 30
------------------- -- -- -- --
<S> <C> <C> <C> <C>
$150,000........ $ 39,375 $ 52,500 $ 65,625 $ 78,750
175,000........ 45,938 61,250 76,563 91,875
200,000........ 52,500 70,000 87,500 105,000
225,000........ 59,063 78,750 98,438 118,125
250,000........ 65,625 87,500 109,375 131,250
300,000........ 78,750 105,000 131,250 157,500
350,000........ 91,875 122,500 153,125 183,750
400,000........ 105,000 140,000 175,000 210,000
450,000........ 118,125 157,500 196,875 236,250
<CAPTION>
ESTIMATED ANNUAL PENSION FOR
HIGHEST CONSECUTIVE REPRESENTATIVE YEARS OF SERVICE
FIVE-YEAR AVERAGE ----------------------------------
COMPENSATION 35 40
------------------- -- --
<S> <C> <C>
$150,000........ $ 91,875 $ 105,000
175,000........ 107,188 122,500
200,000........ 122,500 140,000
225,000........ 137,813 157,500
250,000........ 153,125 175,000
300,000........ 183,750 210,000
350,000........ 214,375 245,000
400,000........ 245,000 280,000
450,000........ 275,625 315,000
</TABLE>
6
<PAGE> 9
SECURITY OWNERSHIP OF NAMED EXECUTIVE OFFICERS
The following table provides information regarding beneficial ownership of
the Company's Common Stock by Brian H. Strom, Chief Executive Officer of the
Company, and each of the four other most highly paid executive officers of the
Company at December 31, 1998:
<TABLE>
<CAPTION>
SHARES OF
COMPANY PERCENT
BENEFICIALLY OF
NAME OWNED(1) CLASS
---- ------------ -------
<S> <C> <C>
Robert L. Doyle....................................... 324,896 2.1%
Brian H. Strom(2)..................................... 16,365 *
Michael D. Campbell................................... 9,694 *
Jay B. Kinder(3)...................................... 1,336 *
Rulon D. Blackburn(4)................................. 6,658 *
</TABLE>
- ----------
* Less than 1.0%.
(1) Each beneficial owner has shared voting and investment power unless
otherwise noted.
(2) Included in Brian H. Strom's share ownership figure are 7,688 shares in
respect of which he has sole voting and investment power.
(3) Included in Jay B. Kinder's share ownership figure are 1,336 shares in
respect of which he has sole voting and investment power.
(4) Included in Rulon D. Blackburn's share ownership figure are 87 shares in
respect of which he has sole voting and investment power.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
("Exchange Act") requires the Company's directors and executive officers, and
persons who own more than ten percent of the Common Stock of the Company to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock of the Company.
Officers, directors and greater than ten-percent shareholders are required by
the SEC's regulations to furnish the Company with copies of all forms they file
pursuant to Section 16(a).
To the Company's knowledge, during the fiscal year ended December 31, 1998,
all Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were satisfied.
7
<PAGE> 10
Performance Graph
The following two graphs show a five-year and ten-year comparison of
cumulative total shareholder return of the Company's Common Stock (assuming
dividend reinvestment) with the Dow Jones Telephone Systems Index (a published
index which includes 12 telecommunications companies), the Russell 2000(R) Index
and Standard & Poor's ("S&P") 500 Stock Index. The comparison of total return on
investment (change in year end stock price plus reinvested dividends) for each
of the periods assumes that $100 was invested on December 31, 1993 and December
31, 1988, respectively in each of Roseville Communications Company, the Dow
Jones Telephone Systems Index, the Russell 2000(R) Index and S&P 500 Stock
Index. The stock performance shown on the graphs below is not necessarily
indicative of future price performance.
Regulations promulgated by the SEC generally require a comparison of the
Company's cumulative total shareholder return with both a published industry or
line-of-business index and a broad equity market index. For the latter, in past
years, the Company has used the S&P Index. However, many of the companies
comprising the S&P Index are substantially larger than the Company, and the
Company believes using the Russell 2000(R) Index for the broad equity market
index is more appropriate. As of its latest reconstitution, the average market
capitalization of the 2,000 companies in the Russell 2000(R) Index was
approximately $592 million, and the median market capitalization was
approximately $500 million. At December 31, 1998, the Company's market
capitalization was approximately $475 million. Accordingly, the Company has
determined it will no longer use the S&P 500 Stock Index for purposes of
comparing cumulative total shareholder return in its proxy statement performance
graph, but includes it in this year's presentation as required by SEC
regulations.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ROSEVILLE COMMUNICATIONS COMPANY,
DJ TELEPHONE SYSTEMS, RUSSELL 2000 AND S&P 500
<TABLE>
<CAPTION>
ROSEVILLE S&P 500 STOCK INDEX
COMMUNICATIONS ------------------- DJ TELEPHONE SYSTEMS RUSSELL 2000 (R)
COMPANY INDEX INDEX
-------------- -------------------- ----------------
<S> <C> <C> <C> <C>
1993 100 100 100 100
1994 108 101 94 91
1995 118 139 137 126
1996 125 171 142 147
1997 141 229 204 180
1998 172 294 307 179
</TABLE>
8
<PAGE> 11
COMPARISON OF 10-YEAR CUMULATIVE TOTAL RETURN
AMONG ROSEVILLE COMMUNICATIONS COMPANY,
DJ TELEPHONE SYSTEMS, RUSSELL 2000 AND S&P 500
<TABLE>
<CAPTION>
ROSEVILLE SRP 500 INDEX RUSSELL 2000 INDEX
COMMUNICATIONS DJ TELEPHONE SYSTEMS ------------- ------------------
COMPANY INDEX
-------------- --------------------
<S> <C> <C> <C> <C>
1988 100 100 100 100
1989 164 160 132 116
1990 238 143 128 94
1991 283 159 167 137
1992 319 176 180 162
1993 359 211 198 193
1994 386 198 200 189
1995 425 289 276 243
1996 448 299 339 283
1997 506 429 452 346
1998 618 647 581 344
</TABLE>
PROPOSAL TO APPROVE AND ADOPT
THE ROSEVILLE COMMUNICATIONS COMPANY 1999 RESTRICTED STOCK BONUS PLAN
At the Annual Meeting, shareholders will be asked to consider a proposal to
approve and adopt the Roseville Communications Company 1999 Restricted Stock
Bonus Plan (the "Plan"), which provides for the issuance of shares of the
Company's Common Stock to eligible officers and key employees of the Company.
GENERAL
On March 4, 1999, the Board of Directors adopted the Plan, which allows
certain eligible employees of the Company, who receive an incentive bonus, to
acquire shares of the Company's Common Stock.
The following summary of the Plan is not intended to be complete and is
qualified in its entirety by reference to the Plan, which is set forth as
Appendix A to the Proxy Statement.
PURPOSE OF THE PLAN
The purpose of the Plan is to further the growth, success and interests of
the Company, and the shareholders of the Company by enabling certain eligible
officers and key employees of the Company who receive an incentive bonus to
acquire shares of Common Stock under the terms and conditions of and in
accordance with the Plan, thereby increasing their direct involvement in the
success of the Company.
ADMINISTRATION OF THE PLAN
The Plan is administered by the Compensation Committee of the Board of
Directors (the "Committee"). The Committee will be composed of no fewer than
three members of the Board of Directors of the Company who will be designated by
the Board of Directors. Each member of the Committee must be a
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"disinterested person" within the meaning of Rule 16b-3 promulgated under the
Exchange Act and any successor to such rule as may be in effect from time to
time.
The Committee is authorized to construe and interpret the Plan and to issue
such rules and interpretations as, in its judgment, are necessary in order to
administer the Plan effectively.
EMPLOYEES ELIGIBLE FOR THE PLAN
Any officer and key employee of the Company will be eligible to participate
in the Plan if he or she has been awarded an incentive bonus for the Company's
fiscal year or any portion of the Company's fiscal year.
The term "incentive bonus" means a bonus paid to an employee under the
Company's Incentive Compensation Program.
SHARES SUBJECT TO THE PLAN
The shares to be awarded and issued to officers and key employees under the
Plan will be shares of Common Stock of the Company. Either authorized and
unissued shares, or shares re-acquired by the Company as a result of the
transfer restrictions set forth below, may be made available for re-offering
under the Plan.
The aggregate number of shares of Common Stock which may be issued under
this Plan will be 200,000. However, in the event that subsequent to the date of
adoption of the Plan by the Board of Directors, the outstanding shares of Common
Stock should be changed by reason of stock splits or dividends, then the number
of shares of Common Stock issued under the Plan may be appropriately adjusted by
the Committee to reflect such change.
AWARD OF SHARES
Subject to the approval of the Plan by the stockholders, the following
shares of Common Stock will be awarded to each of the individuals named in the
cash compensation table and to all executive officers as a group.
ROSEVILLE COMMUNICATIONS COMPANY 1999 RESTRICTED STOCK BONUS PLAN
<TABLE>
<CAPTION>
NUMBER OF
NAME AND POSITION DOLLAR VALUE SHARES
----------------- ------------ ---------
<S> <C> <C>
Brian H. Strom.............................................. $150,000 5,357
President and Chief Executive Officer
Michael D. Campbell......................................... $112,500 4,018
Executive Vice President and Chief Financial Officer
Jay B. Kinder............................................... $ 30,000 1,072
Vice President, Customer Services --
Roseville Telephone Company
Rulon D. Blackburn.......................................... $ 30,000 1,072
Vice President, Network Services --
Roseville Telephone Company
Executive Officers as a Group............................... $352,500 12,591
Non-Executive Officer Employees as a Group.................. -- --
</TABLE>
AWARD PROVISIONS
Stock Bonus Awards. The number of shares of Common stock awarded to a
participant shall be determined by dividing the "incentive bonus" by the
Adjusted Purchase Price of one share of Common Stock.
The Adjusted Purchase Price of one share of Common Stock will be determined
by calculating the average closing price of one share of Common Stock for the
ten (10) trading days ending on the last day of the
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month immediately preceding the month during which payment of the incentive
bonus is actually made. No fractional shares will be awarded under the Plan. In
the event that a participant is entitled to a fractional share, such participant
shall be entitled to round up such determination to the next larger whole share.
Limitation on Transfer. The shares of Common Stock awarded under the Plan
to a participant may not be sold, transferred or otherwise disposed of, or
pledged, so long as the Company has the right to a return of such shares as
provided in the Plan. The Company has such right until the earlier of (i) the
second anniversary of the Plan Year for which such shares of Common Stock were
awarded; (ii) the occurrence of a change in control that occurs with respect to
the Company; (iii) the termination of the Plan; or (iv) the expiration of the
Company's right to a return of such shares of Common Stock. If a participant's
employment with the Company shall terminate, for any reason other than death or
total disability prior to the earliest of (i) through (iii) listed above, the
participant shall immediately forfeit any right to receive shares of Common
Stock for which the restrictions imposed under the Plan have not lapsed. If a
participant's employment with the Company shall terminate by reason of death or
total disability prior to the earliest of (i) through (iii) listed above, or
there is a change in control as defined in the Plan, then the restrictions on
the shares of Common Stock awarded under the Plan shall lapse and be of no
further force and effect.
Escrow Agreement. In order to enforce the restrictions imposed on the
shares of Common Stock awarded to a participant under the Plan, the Committee
may require a participant to enter into an Escrow Agreement which provides that
the Common Stock issued under the Plan will remain in the physical custody of
the escrow holder (which may be the Company) until any or all of the
restrictions imposed under the Plan have terminated. Notwithstanding the Escrow
Agreement, the participant will have all rights (including dividend and voting
rights) with respect to escrowed shares of Common Stock issued pursuant to the
Plan.
TERMINATION OF THE PLAN
The Plan will terminate on December 31, 2008 or such earlier date as may be
determined by the Board of Directors of the Company. However, the Committee's
right to award any shares of Common stock will terminate after the last award of
shares with respect to the fiscal year ending on December 31, 2006.
FEDERAL INCOME TAX CONSEQUENCES
Generally a participant in the Plan will be taxed on the value of the
shares of Common Stock issued pursuant to the Plan upon the expiration of the
Company's right to a return of such shares. The participant will recognize as
income the full fair market value of the shares at the ordinary income tax rates
in effect at that time. However, if a participant makes an election under
Section 83(b) of the Internal Revenue Code, he will be taxed on the full fair
market value of the shares at the time they are awarded, rather than at the time
his right to the shares becomes unrestricted. If such an election is made, the
participant will not recognize any tax for federal income tax purposes at the
time the shares become unrestricted. The Company will be entitled to a tax
deduction of the same amount the participant recognizes in income.
Regardless of whether a participant makes a Section 83(b) election, at the
time he sells the shares of Common Stock issued to him under the Plan, he will
recognize capital gain or capital loss based on the difference between the sales
price and the basis of the shares. The basis in the shares will be the value on
which the participant paid ordinary income tax, either when the shares become
unrestricted or when the Section 83(b) election was made, whichever is
applicable.
RECOMMENDATION; REQUIRED VOTE
The Board of Directors recommends a vote FOR the proposal. The persons
named in the accompanying Proxy or their substitutes will vote such Proxy for
this proposal unless it is marked to the contrary. The affirmative vote of
shares representing a majority of the outstanding shares of the Company present
or represented at the Annual Meeting is required to approve and adopt the Plan.
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INDEPENDENT AUDITORS
Ernst & Young LLP, the Company's auditors since 1960, has been selected by
the Company as its independent auditors for the current year. A representative
of Ernst & Young LLP is expected to be present at the meeting to be available to
respond to appropriate questions and will have the opportunity to make a
statement if such representative desires to do so.
COST OF SOLICITATION
The total cost of preparing, assembling and mailing the proxy statement,
the form of proxy, any additional material intended to be furnished to
shareholders concurrently with the proxy statement, and any additional material
relating to the same meeting or subject matter furnished to shareholders
subsequent to the furnishing of the proxy statement, will be borne by the
Company. The Company will, upon request, reimburse brokers and other nominees
for costs incurred by them in mailing the proxy statement, the form of proxy and
any additional material intended to be furnished to shareholders concurrently
with the proxy statement to beneficial owners. In addition, officers and regular
employees may solicit proxies by telephone or in person.
OTHER MATTERS AND SHAREHOLDER PROPOSALS
As of this date, there are no other matters the management intends to
present or has reason to believe others will present to the meeting. If other
matters now unknown to the management come before the meeting, those who shall
act as proxies will vote in accordance with their best judgment.
Proposals of shareholders intended to be presented at the 2000 Annual
Meeting must be received by the Company not later than January 6, 2000 to be
considered for inclusion in the Company's proxy statement.
Roseville, California, April 30, 1999.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert L. Doyle
-------------------------------
ROBERT L. DOYLE
Chairman of the Board
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APPENDIX A
ROSEVILLE COMMUNICATIONS COMPANY
1999 RESTRICTED STOCK BONUS PLAN
1. Name and Purpose.
1.1 The name of this plan is the Roseville Communications Company 1999
Restricted Stock Bonus Plan ("Plan"). The Plan is created, adopted and will be
maintained by Roseville Communications Company (the "Company") to further the
growth, success and interests of the Company and its Affiliates (as defined in
Section 3.1) and the shareholders of the Company by enabling employees of the
Company and its Affiliates who receive an Incentive Bonus, as defined in Section
3.3 below, to acquire shares of common stock of the Company ("Shares") under the
terms and conditions of and in accordance with this Plan, thereby increasing
their direct involvement in the success of the Company.
2. Administration of the Plan.
2.1 This Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company which shall consist of at
least three directors, each of whom shall be a "disinterested person" within the
meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), and any successor to such rule ("Rule 16b-3"). The
Committee may, from time to time, designate one or more persons or agents to
carry out any or all of its administrative duties hereunder; provided that none
of the duties required to be performed by the Committee under Rule 16b-3 or
Section 2.2 of the Plan may be delegated to any other person.
2.2 The Committee shall have the exclusive right in its sole discretion to
determine the number of Shares awarded to each participant, to determine the
price or prices at which Shares shall be awarded to each participant, to
determine the time or times when Shares may be awarded, the time or times within
which the Shares may be subject to or release from forfeiture, all other
conditions of an award, and to prescribe the form, which shall be consistent
with this Plan, of the instruments evidencing any award and issuance under this
Plan and the legend, if any, to be affixed to the certificates representing
Shares issued under this Plan. The Committee shall interpret the Plan, and to
the extent and in the manner contemplated herein, it shall exercise the
discretion granted to it. The Committee shall issue from time to time such rules
and interpretations as in its judgment are necessary in order to administer the
Plan effectively. Each determination or other action made or taken pursuant to
the Plan, including interpretation of the Plan and the specific terms and
conditions of any awards under the Plan shall be final and conclusive for all
purposes and upon all persons including without limitation the Company and its
Affiliates, the Committee, the Board of Directors and the affected participants
and their respective successors in interest.
3. Eligible Employees and Participation.
3.1 Any officer and key employee of the Company and its Affiliates shall be
eligible to participate in the Plan if he or she has been awarded an Incentive
Bonus, as defined in Section 3.3. The term "Affiliate" shall mean any
corporation or other business organization in which the Company owns, directly
or indirectly, 50% or more of the voting stock or capital at the time of the
granting of an award.
3.2 No member of the Board of Directors of the Company, unless he or she is
also an employee of the Company, and no member of the Committee, shall be
eligible to participate in the Plan.
3.3 The words "Incentive Bonus" shall mean an Award to an officer or key
employee either under the Incentive Compensation Program as adopted and operated
by the Committee and as such program may be amended from time to time, or in
accordance with the terms and conditions set forth in an agreement between the
Company and a participant. The Incentive Compensation Program and each such
agreement shall contain such individual corporate and performance goals,
restrictions, terms and conditions as the Committee may require.
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4. Stock Portion of Incentive Bonus.
4.1 The number of Shares that shall be awarded to a participant shall be
determined by dividing a Participant's Incentive Bonus by the Adjusted Purchase
Price of one Share.
4.2 The Adjusted Purchase Price for one Share shall be determined by
calculating the average closing price of one Share for the ten (10) trading day
period ending on the last day of the month preceding the date of the
determination of the amount of the Incentive Bonus.
4.3 No fractional Shares shall be awarded under the Plan. In the event that
the determination of the number of Shares that a participant is entitled to
under the Plan results in a fractional Share, such participant shall be entitled
to the number of whole Shares that results from rounding up such determination
to the next larger whole Share.
5. Shares Subject to the Plan.
5.1 The Shares which may be awarded and issued to employees under this Plan
shall be made available, at the discretion of the Board of Directors, either
from authorized and unissued Shares of the Company or from Shares reacquired by
the Company.
5.2 Shares issued to employees under this Plan shall be subject to the
terms, conditions and restrictions specified in Section 6 and to such other
terms, conditions and restrictions as the Committee in its discretion may
provide.
5.3 Subject to the provisions of the succeeding paragraphs of this Section
5, the aggregate number of Shares which may be issued under this Plan shall not
exceed 200,000 Shares.
5.4 If Shares issued under this Plan shall be reacquired by the Company
pursuant to the provisions of Section 6 hereof, such Shares shall again become
available for issue under this Plan.
5.5 In the event that the outstanding Shares shall be changed by reason of
share splits or combinations, recapitalization or reorganizations, or share
dividends, the number of Shares and the class or classes of securities which may
thereafter be issued under this Plan may be appropriately adjusted as determined
by the Committee so as to reflect such change.
6. Transfer Restrictions.
All Shares issued to participants under this Plan shall be subject to the
following restrictions:
6.1 The Shares shall not be sold, transferred or otherwise disposed of and
shall not be pledged or otherwise hypothecated (and any such sale, transfer or
other disposition, pledge or other hypothecation being hereinafter referred to
as "to dispose of" or a "disposition") as long as the Company has the right to a
return of the Shares as hereinafter provided in this Section 6.
6.2 The obligation not to dispose of Shares acquired under this Plan and
the right of the Company to a return of such Shares pursuant to this Section 6
(such obligation and right being hereinafter in this Section referred to
collectively as the "restrictions") shall lapse as to all Shares issued at any
one time on the earliest of (a) the second (2nd) anniversary immediately
following the end of the Plan year for which such Shares were awarded; (b) a
change in control that occurs with respect to the Company; (c) the termination
of the Plan; (d) the expiration of the Company's right to a return of such
Shares; or (e) the retirement of the participant assuming the participant's
attainment of age 55.
6.3 In the event that a participant's employment with the Company shall
terminate for any reason other than death, total disability, involuntary
termination, or retirement of the participant (assuming the participant's
attainment of age 55) prior to the earliest of (a) the second (2nd) anniversary
immediately following the end of the plan year for which such Shares were
awarded; (b) a change in control that occurs with respect to the Company; or (c)
the termination of the Plan, the participant shall immediately forfeit any right
hereunder to receive Shares for which the restrictions imposed hereunder have
not lapsed.
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6.4 In the event that a participant's employment with the Company shall
terminate by reason of death, total disability, involuntary termination, or
retirement of the participant (assuming the participant's attainment of age 55)
prior to the earliest of (a) the second (2nd) anniversary immediately following
the end of the plan year for which such Shares were awarded; (b) a change in
control that occurs with respect to the Company; or (c) the termination of the
Plan, then the restrictions imposed on such Shares by this Section 6 shall lapse
and be of no further force and effect.
6.5 A change in control shall be deemed to have occurred if (A) any
"person" (as such term is used in Section 13(d) and 14(d) of the Exchange Act),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing Twenty percent (20%) or more of the combined voting power
of the Company's then outstanding voting securities; (B) there is a merger or
consolidation of the Company in which the Company does not survive as an
independent public company; or (C) the business or businesses of the Company for
which a participant's services are principally performed are disposed of by the
Company pursuant to a partial or complete liquidation of the Company, a sale of
assets (including stock of a subsidiary) of the Company, or otherwise. If the
Committee shall decide, in its sole discretion, that a change in control has
occurred it shall issue written notice to participants of such fact and shall
issue all Shares which have become unrestricted to participants as soon as
possible after such notice.
6.6 The Committee may require any employee to whom Shares are issued to
execute and deliver to the Company a stock power in blank with respect to the
Shares issued and may require that the Company retain possession of the
certificates for Shares with respect to which the restrictions have not lapsed.
Notwithstanding retention of certificates by the Company, the employee in whose
name certificates are issued shall have all rights (including dividend and
voting rights) with respect to the Shares represented by such certificates,
subject to the terms, conditions and restrictions specified under this Plan, and
the Shares represented by such certificates shall be considered as issued and
outstanding for all purposes.
7. Other Restrictions.
7.1 The Committee may impose such other restrictions on any Shares awarded
pursuant to the Plan as it may deem advisable, including, without limitation,
restrictions under the Securities Act of 1933, as amended, under the
requirements of any stock exchange upon which such Shares are then listed and
under any state blue sky or securities laws applicable to such Shares.
8. Escrow or Legend.
8.1 In order to enforce the restrictions imposed upon Shares issued
hereunder, the Committee also may require any participant to enter into an
Escrow Agreement providing that the certificates representing Shares issued
pursuant to this Plan shall remain in the physical custody of any escrow holder
until any or all of the restrictions imposed pursuant to this Plan have
terminated. In addition, the Committee may cause a legend or legends to be
placed on any certificates representing Shares issued pursuant to this Plan,
which legend or legends shall make appropriate reference to the various
restrictions imposed hereunder.
9. Amendments.
9.1 This Plan may be amended at any time by the Board of Directors of the
Company, provided, that if this Plan shall have been approved by the
shareholders of the Company, no such amendment shall increase the maximum number
of Shares that may be issued pursuant to this Plan, except pursuant to Section 5
hereof, without the further approval of such shareholders; and provided further,
that no amendment to this Plan shall modify or impair the rights of participants
who have been awarded Shares, or who have been granted the right to an award of
Shares hereunder prior to any such amendment.
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10. Duration.
10.1 This Plan shall become effective upon its adoption by the Board of
Directors for the Plan Year ended December 31, 1998 and shall terminate on
December 31, 2008 or such earlier date as may be determined by the Board of
Directors; provided, however, that the Plan shall terminate and all awards of
Shares under the Plan shall be revoked if, within 12 months of the date of its
adoption by the Board of Directors, the Plan does not receive the approval of a
majority of the outstanding Shares present in person or by proxy and entitled to
vote at a meeting of shareholders of the Company. Notwithstanding the foregoing
sentence, the Committee's right to award any new Shares shall terminate
immediately after the last award of Shares with respect to the fiscal year
ending December 31, 2006.
11. Taxes.
11.1 If any officer or employee properly elects within 30 days of the date
on which an award is granted to include in gross income for federal income tax
purposes an amount equal to the fair market value (on the date of grant of the
award) of the Shares subject to the award, such person shall make arrangements
satisfactory to the Committee to pay to the Company in the year of such Award
any federal, state or local taxes required to be withheld with respect to such
Shares. If such person shall fail to make such tax payments as are required, the
Company and its Affiliates shall, to the extent permitted by law, have the right
to deduct from any payment of any kind otherwise due to the officer or employee
any federal, state or local income taxes of any kind required by law to be
withheld with respect to the Shares subject to such award.
11.2 Each officer or employee who does not make the election described in
Section 11.1 shall, no later than the date as of which the restrictions referred
to in Section 6 and such other restrictions as may have been imposed as a
condition of the award shall lapse, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld with respect to the Shares
subject to such award, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct from any payment of any kind
otherwise due to the officer or employee any federal, state or local taxes of
any kind required by law to be withheld with respect to the Shares subject to
such award. The Committee may, in its sole discretion and on terms it shall
determine, approve or disapprove the election of an officer or employee for the
Company to withhold Shares as the deemed cash settlement to satisfy the
Company's withholding tax obligations, in whole or in part, relating to the
award. The approval or disapproval of the Committee may be given at any time
after the election to which it relates.
12. Beneficiary Designation.
12.1 Unless a participant has designated a beneficiary in accordance with
the provisions of the following sentence, any Shares that become unrestricted
and payable on account of the death of a participant shall be paid to the person
or persons in the first of the following classes in which there are any
survivors of such employee:
(a) his or her spouse at the time of death;
(b) his or her issue per stirpes;
(c) his or her parents; and
(d) the executor or administrator of his or her estate.
Instead of having any Shares that become payable on account of a participant's
death paid as determined above, an employee may sign a document designating a
beneficiary or beneficiaries to receive such Shares and filing such designation
with the Company.
13. Right to Terminate Employment.
13.1 The Plan shall not impose any obligation on the Company or an
Affiliate to continue the employment of any participant employee selected to
participate in the Plan. The Plan does not impose any obligation on the part of
the participant to remain in the employ of the Company or an Affiliate.
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[MAP OF DIRECTIONS TO ANNUAL MEETING]
<PAGE> 20
ROSEVILLE
COMMUNICATIONS
COMPANY
PROXY
SOLICITED
ON BEHALF OF THE
BOARD OF
DIRECTORS FOR THE
ANNUAL MEETING
JUNE 18, 1999
THE UNDERSIGNED STOCKHOLDER HEREBY APPOINTS ROBERT L. DOYLE, BRIAN H. STROM,
THOMAS E. DOYLE, RALPH E. HOEPER, JOHN R. ROBERTS III, CHRIS L. BRANSCUM AND
NEIL J. DOERHOFF OR ANY ONE OR MORE OF THEM, WITH FULL POWER OF SUBSTITUTION,
TO ACT AS PROXY FOR AND TO VOTE THE STOCK OF THE UNDERSIGNED AT THE ANNUAL
MEETING OF SHAREHOLDERS OF ROSEVILLE COMMUNICATIONS COMPANY, TO BE HELD AT THE
COMPANY'S INDUSTRIAL AVENUE FACILITY, 8150 INDUSTRIAL AVENUE, BUILDING A,
ROSEVILLE, CALIFORNIA, ON JUNE 18, 1999, OR ANY ADJOURNMENT THEREOF ON THE
MATTERS BELOW:
(1) Election of Directors (THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"):
FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary to vote for all nominees listed
below) [ ] below) [ ]
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A
LINE THROUGH THAT NOMINEE'S NAME
CHRIS L. BRANSCUM, NEIL J. DOERHOFF, ROBERT L. DOYLE, THOMAS E.
DOYLE, RALPH E. HOEPER, JOHN R. ROBERTS III, BRIAN H. STROM
(2) To approve the proposal to approve and adopt the Roseville Communications
Company 1999 Restricted Stock Bonus Plan (The Board of Directors recommends
a vote "FOR"); and
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(3) In their discretion on any other business which may properly come before
the meeting or any adjournment thereof:
all as set forth in the Notice of said meeting and in the Proxy Statement, both
dated April 30, 1999, the receipt of which is hereby acknowledged.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS INDICATED. WHERE NO SPECIFICATION IS MADE SUCH SHARES WILL BE
VOTED FOR PROPOSALS (1) AND (2) HEREOF.
PLEASE DATE AND SIGN ON REVERSE SIDE (OVER)
<PAGE> 21
DATED:______ DAY OF _________________, 1999.
SIGNED:_____________________________________
____________________________________________
SIGNATURE OF STOCKHOLDER(S)
PLEASE DATE PROXY AND SIGN EXACTLY AS NAME OR
NAMES APPEAR AT RIGHT. IF STOCK IS REGISTERED
IN THE NAME OF TWO OR MORE PERSONS, EACH MUST
SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH. IF A CORPORATION,
PLEASE SIGN IN FULL CORPORATION NAME BY THE
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A
PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AN AUTHORIZED PERSON.
YOUR VOTE IS IMPORTANT, PLEASE FILL IN AND RETURN PROMPTLY
