<PAGE> 1
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,
May 19, 2000 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 2000 Equity Incentive
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., March 31, 2000 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 7, 2000.
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ROSEVILLE COMMUNICATIONS COMPANY
P.O. BOX 969
211 LINCOLN STREET
ROSEVILLE, CALIFORNIA 95678
APRIL 7, 2000
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 May 19, 2000, 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 7, 2000.
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
March 31, 2000, will be entitled to vote at the Annual Meeting. As of the close
of business on February 29, 2000, there were 15,839,173 shares of the Company's
Common Stock outstanding. On February 29, 2000, 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:
Amount and Nature Percent
Name and Address of Beneficial Owner of Beneficial Ownership of Class
- ------------------------------------ ----------------------- --------
Roseville Telephone Company Retirement
Supplement Plan............................. 1,716,010(1) 10.8%
P.O. Box 969
Roseville, California 95678
- ----------
(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 2000
Equity Incentive 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.
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ELECTION OF DIRECTORS
The following persons are nominees for Director to serve until the next
Annual Meeting of Shareholders and until their successors shall have been
elected and shall qualify. The nominees constitute the present Board of
Directors, all of whom were elected at the last Annual Meeting of Shareholders
of the Company. During 1999, the Board of Directors held eleven meetings. 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. In 1999, the Board of Directors established a
Nominating Committee, the principal functions of which are to develop and review
criteria for the qualification of potential Directors and to identify and
recommend to the Board of Directors new candidates for election to the Board.
The Nominating Committee members are Chris L. Branscum, who serves as Chairman,
Robert L. Doyle, Thomas E. Doyle and Brian H. Strom. During 1999, the
Compensation Committee held eight meetings, the Audit Committee three meetings
and the Nominating Committee one meeting. Each Director 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 29, 2000, an aggregate 744,722
shares, or 4.7% of the Company's Common Stock. In respect to the nominees and
all the Directors and Officers as a group, the following information is
furnished as of February 29, 2000.
Shares of
Principal Occupation and Company Percent
Business Experience Director Beneficially of
Name Age for Past Five Years Since Owned(1) Class
- ---- --- ------------------- ----- -------- -----
Robert L. Doyle(2)... 81 Chairman of the Board 1954 313,079 2.0%
of Directors of the
Company; President
and Chief Executive
Officer of the
Company from 1954
to 1993.
Brian H. Strom(3).... 57 President and Chief
Executive Officer of 1993 25,979 *
the Company
(since 1993); Vice
President and Chief
Financial Officer of
the Company from 1989
to 1993.
Thomas E. Doyle(2)... 71 Vice President (since 1951 298,035 1.9%
1972) and Secretary-
Treasurer (since 1965)
of the Company.
Ralph E. Hoeper...... 75 President, Foresthill 1987 53,326 *
Telephone Company,
Foresthill,
California.
John R. Roberts III.. 48 Executive Director 1993 16,669 *
(since March 1999),
The Natomas Basin
Conservancy;
Executive Director,
California Rice
Industry Association
from 1990 to 1998;
Director, Meta
Information Services,
Inc., Sacramento,
California.
Chris L. Branscum.... 51 Co-founder and Managing 1999 1,700 *
Director of Hallador
Venture Partners, LLC,
Sacramento, California
Neil J. Doerhoff(4).. 48 Financial Consultant; 1999 1,700 *
Corporate Secretary
(from 1987 to
January 2000),
Raley's, Sacramento,
California
All Directors and
Officers as a
group (11 persons). 744,722 4.7%
- ----------
* Less than 1.0%.
(1) Each beneficial owner has shared voting and investment power unless
otherwise noted.
<PAGE> 4
(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) Neil J. Doerhoff has sole voting power for the 1,700 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 $750 for each Board meeting they attended in
1999. 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 also receive a fee of $2,500 annually.
Compensation Committee Interlocks and Insider Participation
The Company's wholly-owned subsidiary Roseville PCS, Inc., is the manager of
and has an approximate 97% interest in West Coast PCS LLC, dba RCS Wireless
("RCS Wireless"), the other approximate 3% of which is owned by Foresthill
Telephone Company. Ralph E. Hoeper, a Director of the Company and member of the
Compensation Committee, 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, Chris L.
Branscum, Neil J. Doerhoff, and Ralph E. Hoeper. The Compensation Committee has
the responsibility of reviewing and recommending a compensation program for the
Company's officers including the consideration of benefit issues generally. The
measures of performance used by the Compensation Committee in 1999 included:
(i) operational goals, financial performance and the achievement of
shareholder 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 and benefits awarded to officers of
other telephone and telecommunications companies; and
(iv) officer compensation at general industry companies.
The Compensation Committee retains an independent consultant, Hewitt
Associates LLC, to help evaluate the compensation policies of the Company, to
gather and provide information about industry compensation practice and
competitive compensation levels, and to recommend alternatives for the
Compensation Committee's consideration which are consistent with the Company's
compensation policies. Hewitt Associates is an internationally recognized firm
of consultants and actuaries specializing in the design and administration of
employee compensation and benefit programs.
In order to assure that the Company is able to retain and attract executives
for both the successful operation of its regulated business and the ongoing
development of its unregulated businesses, the Compensation Committee, in
connection with 1999 compensation practices, initially reviewed compensation and
benefits information of both telecommunications and general industry companies.
The telecommunications companies were selected based upon industry and revenue
size, and each had revenues between $100 and $500 million. The general industry
data was obtained by reviewing information from published sources and examining
the compensation practices of companies with revenues between $100 and $200
million, by using statistical techniques to compare other companies with the
Company and by reviewing the practices of companies with between 500 and 1,000
employees. The Compensation Committee determined that the telecommunications
company data was more useful in providing information with
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respect to the establishment of compensation arrangements for the Company's
officers which would enable the Committee to satisfy its objectives.
In 1999, the annual cash compensation to officers consisted of base salary
and a performance bonus. The performance bonus was dependent upon the
satisfaction of recurring objectives, the officers' contribution to the growth
of existing businesses, and the officers' contribution to strategic growth
initiatives. The overall average of the base salaries paid to all officers as a
group in 1999 was comparable to the average salary paid to all officers in the
telecommunications company comparative group. In 1999, the Company also entered
into incentive compensation agreements with its executive officers, contingent
solely upon shareholder return, providing for the payment of deferred bonuses in
2002, but subject to forfeiture generally if the officer is not then employed by
the Company. The recipients were permitted to accept restricted shares of the
Company's common stock in accordance with the Company's 1999 Restricted Stock
Bonus Plan (the "1999 Plan"). The 1999 Plan was the first stock-based
compensation program considered for the Company's officers.
The 1999 compensation paid to Brian H. Strom, President and Chief Executive
Officer, was comprised principally of his salary and bonus. Mr. Strom's salary
and bonus were established taking into consideration the individual and Company
compensation criteria and policies described above. A 1999 survey prepared by
Hewitt Associates indicates that Mr. Strom's cash compensation was competitive
with the comparative telecommunications companies. 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 1999 which he has elected to receive in
the form of restricted stock under the 1999 Plan. The restricted shares
thereunder are subject to forfeiture generally if Mr. Strom is not employed by
the Company in January 2002.
The telecommunications comparative group consisted of 26 companies all of
which are engaged in the telecommunications industry in general. None of the 26
companies whose compensation policies were considered are among the 12 companies
now constituting the Dow Jones Telephone Systems Index.
Compensation Committee,
John R. Roberts III, Chairman
Chris L. Branscum
Neil J. Doerhoff
Ralph E. Hoeper
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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, 1999, 1998 and 1997:
Summary Compensation Table
Long-Term
Compen-
Annual Compensation sation
----------------------- ----------
Other All
Annual Restricted Other
Compen- Stock Compen-
sation Awards sation
Name and Salary Bonus (2) (3) (4)
Principal Position(1) Year $ $ $ $ $
---------------------- ---- ------ ----- ----- -------- ------
Robert L. Doyle 1999 329,992 -- 8,090 -- 95,353
Chairman of the Board 1998 329,992 -- 9,685 -- 92,986
of Directors 1997 342,684 -- 9,685 -- 90,016
Brian H. Strom 1999 374,726 80,000 1,680 139,800 9,800
President and chief 1998 356,990 25,000 1,935 150,000 9,800
Executive Officer 1997 368,417 50,000 1,875 -- 9,550
Michael D. Campbell 1999 302,794 47,000 975 93,200 9,800
Executive Vice President and 1998 285,770 12,500 1,240 112,500 9,800
Chief Financial Officer 1997 288,855 35,000 750 -- 9,550
Jay B. Kinder 1999 175,228 26,000 1,345 46,600 8,231
Vice president, Customer 1998 163,727 10,000 1,085 30,000 8,601
Services-- Roseville 1997 165,643 -- 1,235 -- 9,550
Telephone Company
Rulon D. Blackburn 1999 170,386 25,000 1,340 46,600 7,746
Vice President, Network 1998 160,852 10,000 1,695 30,000 7,627
Operations-- Roseville 1997 160,059 -- 1,865 -- 9,012
Telephone Company
- ----------
(1) 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 under the
1999 Restricted Stock Bonus Plan. The number of restricted shares granted
for 1999 are as follows: Brian H. Strom, 4,527 shares; Michael D. Campbell,
2,838 shares; Jay B. Kinder, 1,072 shares; and Rulon D. Blackburn, 1,072
shares. The stock awards vest in 2002. The total number of restricted shares
held by the named officers and their aggregate market value at December 31,
1999 are as follows: Brian H. Strom, 9,614 shares valued at $315,724;
Michael D. Campbell, 6,856 shares valued at $225,151; Jay B. Kinder, 2,491
shares valued at $81,804; and Rulon D. Blackburn, 2,491 shares valued at
$81,804. 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 1999, 1998
and 1997, payments to Mr. Doyle pursuant to the Company's Supplemental
Executive Retirement Plan (SERP) in the amount of $85,553, $83,166 and
$80,466, 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, 2000, 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 compensation, 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
<PAGE> 6
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 1999 plan contributions to estimated total
covered compensation was 3.9%. Estimated total covered compensation has been
determined by increasing the total base annual rate of compensation of plan
participants at January 1, 1999 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, 1999, were credited with 46, 11, 5, 36 and 37 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 2000.
Estimated Annual Pension for
Highest Consecutive Representative Years of Service
Five-Year Average -------------------------------
Compensation 15 20 25 30 35 40
- -------------- -------- -------- -------- -------- -------- --------
$150,000 ..... $ 39,375 $ 52,500 $ 65,625 $ 78,750 $ 91,875 $105,000
175,000 ..... 45,938 61,250 76,563 91,875 107,188 122,500
200,000 ..... 52,500 70,000 87,500 105,000 122,500 140,000
225,000 ..... 59,063 78,750 98,438 118,125 137,813 157,500
250,000 ..... 65,625 87,500 109,375 131,250 153,125 175,000
300,000 ..... 78,750 105,000 131,250 157,500 183,750 210,000
350,000 ..... 91,875 122,500 153,125 183,750 214,375 245,000
400,000 ..... 105,000 140,000 175,000 210,000 245,000 280,000
450,000 ..... 118,125 157,500 196,875 236,250 275,625 315,000
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, 1999:
Shares of
Company Percent
Beneficially of
Name Owned(1) Class
---- -------- -------
Robert L. Doyle .............................. 313,079 2.0%
Brian H. Strom(2) ............................ 25,979 *
Michael D. Campbell .......................... 16,550 *
Jay B. Kinder(3) ............................. 3,827 *
Rulon D. Blackburn(4) ........................ 9,147 *
- ----------
* Less than 1.0%.
<PAGE> 8
(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 3,827 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, 1999,
all Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were satisfied.
Performance Graph
The following graph shows a five-year comparison of cumulative total
shareholder return of the Company's Common Stock (assuming dividend
reinvestment) with the Dow Jones Telephone Systems Index (a published index
which includes 12 telecommunications companies) and the Russell 2000(R) 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, 1994 respectively in each of Roseville Communications
Company, the Dow Jones Telephone Systems Index and the Russell 2000(R) Index.
The stock performance shown on the graphs below is not necessarily indicative of
future price performance.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
Among Roseville Communications Company,
DJ Telephone Systems and Russell 2000
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- ----
RCC 100 110 116 127 151 177
DJ Telephone 100 146 151 220 326 385
Russell 2000 100 127 155 204 191 187
PROPOSAL TO APPROVE AND ADOPT
THE ROSEVILLE COMMUNICATIONS COMPANY 2000 EQUITY INCENTIVE PLAN
At the Annual Meeting, shareholders will be asked to consider a proposal to
approve and adopt the Roseville Communications Company 2000 Equity Incentive
Plan (the "Plan"), which was adopted by the Board of Directors on January 31,
2000, subject to approval by the Company's shareholders.
Summary of the Plan
The principal terms and provisions of the Plan are summarized below. The
summary 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.
<PAGE> 9
Purpose of the Plan
The purpose of the Plan is to promote the long-term success of the Company
and creation of shareholder value by (a) encouraging employees, outside
directors and consultants to focus on critical long-range objectives, (b)
encouraging the attraction and retention of employees, outside directors and
consultants with exceptional qualifications and (c) linking employees, outside
directors and consultants directly to shareholder interests through increased
share ownership.
Types of Awards
The Plan permits the granting of any or all of the following types of awards
to participants: (1) restricted shares, (2) stock units, (3) performance shares,
(4) stock options, including Incentive Stock Options ("ISOs") and options other
than ISOs ("non-qualified options") and stock appreciation rights ("SARs")
(collectively, the "Awards").
Number of Shares
Subject to adjustment as described below, the number of shares of Company
Common Stock available under the Plan for grant of Awards is 800,000.
Eligibility
All employees of the Company and its subsidiaries and affiliates, together
with outside directors and consultants are eligible to be participants.
Administration
The Plan is administered by the Compensation Committee of the Board of
Directors of the Company ("Compensation Committee"). The Compensation Committee
has the authority to select the participants to receive Awards under the Plan
and to determine the type, number, vesting requirements and other features and
conditions of Awards. The Compensation Committee is further authorized to
interpret the Plan, and to adopt such rules and guidelines as it deems
appropriate to implement the Plan.
Amendment
The Board of Directors may, at any time and for any reason, amend or
terminate the Plan, subject to the approval of the Company's shareholders to the
extent required by applicable laws, regulations or rules.
Awards
Stock Options. The exercise price per share of Company Common Stock
purchasable under any stock option shall be determined by the Compensation
Committee provided, however, the exercise price under an ISO shall not be less
than 100% of the fair market value of a share of Company Common Stock on the
date of the grant, and the exercise price under a non-qualified option shall not
be less than 85% of the fair market value of Company Common Stock on the date of
the grant. The Compensation Committee will determine the term of each stock
option (subject to a maximum of 10 years). Options may be exercised in cash, by
the surrender of Common Stock, by delivery of a full-recourse promissory note,
or any other form approved by the Compensation Committee consistent with
applicable laws, regulations and rules.
Option Grants to Outside Directors. The Plan provides, beginning with the
2000 Annual Meeting of Shareholders, for the grant of a non-qualified option
covering 1,250 shares of Company Common Stock to each outside director who will
continue serving as a member of the Board of Directors. The exercise price per
share under all such non-qualified options shall be equal to 100% of the fair
market value of the Company's Common Stock on the date of the grant. The grants
terminate on the earliest of (a) the 10th anniversary of the grant, (b) the date
three months after the termination of the outside director's service for any
reason other than death or total and permanent disability, or (c) the date six
months after the termination of the outside directors' service because of death
or total and permanent disability. The options may be exercised in cash or by
the surrender of Company Common Stock.
Stock Appreciation Rights. An SAR may be granted free-standing or in tandem
with the grant of new options or outstanding non-qualified options. Upon
exercise of the SAR, the holder thereof is entitled to receive the excess of the
fair market value of the shares for which the right is exercised over the
original exercise price of the SAR. The original exercise price and other
<PAGE> 10
provisions of the SAR shall be determined by the Compensation Committee. Upon
exercise of the SAR, the holder shall receive cash, shares of the Company's
Common Stock, or a combination of cash and shares as the Compensation Committee
shall determine.
Restricted Shares. Restricted shares may not be disposed of by the recipient
until certain conditions established in an agreement approved by the
Compensation Committee are satisfied. Consideration for the restricted shares
shall be determined by the Compensation Committee and may include, without
limitation, cash, cash equivalents, a full-recourse promissory note, and past or
future services. The holders of restricted stock shall have the same voting,
dividend and other rights as the Company's other shareholders.
Stock Units. Stock Units granted under the Plan shall be evidenced by an
agreement between the recipient and the Company, and do not require any
consideration in connection with the Award. Each Award may or may not be subject
to vesting requirements, and may provide for accelerated vesting in the event of
the participant's death, disability or retirement or other events. The holders
of stock units have no voting rights, and have no rights other than those of a
general creditor of the Company.
Performance Shares. The Compensation Committee may select a performance
period during which one or more performance criteria designated by the
Compensation Committee are measured for the purpose of determining the extent to
which a performance share Award has been earned. The performance criteria which
the Compensation Committee may consider consist of one or more of the following:
(i) operating income, (ii) cash flow, including EBITDA (earnings before
interest, taxes, depreciation and amortization), (iii) return on equity, (iv)
per share rate of return on the Company's Common Stock (including dividends),
(v) general indices relative to levels of general customer service satisfaction,
(vi) market share, (vii) customer retention rates, (viii) market penetration
rates, (ix) revenues, (x) reductions in expense levels, and (xi) the attainment
by shares of Company Common Stock or a specified market value for a specified
period of time. Performance Awards may be paid in cash, Company Common Stock, or
some combination thereof.
Directors' Fees in Securities. The Plan provides that the Board of Directors
may implement a provision pursuant to which an outside director may elect to
receive his or her annual retainer payments
and/or meeting fees from the Company
in the form of cash, non-qualified options, restricted shares or stock units, or
a combination thereof, as determined by the Board of Directors. The Board of
Directors has not considered implementation of such a provision, any discussion
of which would be deferred and only considered subsequent to approval of the
Plan.
Adjustments
In the event of any change affecting the shares of the Company's Common
Stock by reason of any stock dividend or split, a combination or consolidation
of the outstanding shares of the Company's common stock (by reclassification or
otherwise) into a lesser number of shares, a recapitalization, a spin-off or a
similar occurrence, then the Compensation Committee shall make such substitution
or adjustments in the aggregate number or class of shares which may be
distributed under the Plan and in the number, class and option price or other
price of shares subject to the outstanding Awards granted under the Plan, as it
deems appropriate in order to maintain the purpose of the original grant.
Termination of the Plan
The Plan will continue until terminated by the Board of Directors of the
Company, except that no ISOs may be granted on or after the 10th anniversary of
the date on which the Board of Directors adopted the Plan.
Federal Income Tax Consequences
The following are the federal tax consequences generally arising under the
present law with respect to Awards granted under the Plan.
The grant of an option or SAR will create no tax consequences for a grantee
or the Company. In general, the grantee will have no taxable income upon
exercising an ISO if the applicable ISO holding period is satisfied (except that
the alternative minimum tax may apply), and the Company will receive no income
tax deduction when an ISO is exercised. Upon exercising a non-qualified option
or an SAR, the optionee must recognize ordinary income equal to the difference
between the exercise price and the fair market value of shares of the Company's
Common Stock on the date of the exercise. The Company will be entitled to an
income tax deduction for the same amount, subject to possible limits imposed by
Section 162(m) of the Internal Revenue Code. Generally, there will be no tax
consequences to the Company in connection with the disposition of shares
acquired by exercise of an option, except that the Company may be entitled to a
tax deduction in the case of a disposition of shares acquired by exercise of an
ISO before the applicable ISO holding periods have been satisfied.
<PAGE> 11
With respect to other awards granted under the Plan that are settled either
in cash or in stock or other property that is either transferable or not subject
to substantial risk of forfeiture, the participant generally must recognize
ordinary income equal to the cash or fair market value of shares or other
property received, and the Company will be entitled to a deduction for the same
amount. With respect to Awards that are settled in stock or other property that
is restricted as to transferability and subject to substantial risk of
forfeiture, the participant must generally recognize ordinary income equal to
the fair market value of the shares or other property received at the first time
the shares or other property become transferable or not subject to substantial
risk of forfeiture, whichever occurs earlier, and the Company will be entitled
to a deduction for the same amount, subject to possible limitation under Section
162(m) of the Internal Revenue Code.
Plan Benefits
No Awards have been granted under the Plan or are contemplated as of the
date of this Proxy Statement. Grants under the Plan would be at the discretion
of the Compensation Committee.
Recommendation and 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.
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.
<PAGE> 12
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 2001 ANNUAL
MEETING MUST BE RECEIVED BY THE COMPANY NOT LATER THAN DECEMBER 11, 2000 TO BE
CONSIDERED FOR INCLUSION IN THE COMPANY'S PROXY STATEMENT.
ROSEVILLE, CALIFORNIA, APRIL 7, 2000.
ORDER OF THE BOARD OF DIRECTORS
/s/ Robert L. Doyle
-----------------------------
ROBERT L. DOYLE
<PAGE> 13
CHAIRMAN OF THE BOARD
[MAP OF DIRECTIONS TO ANNUAL MEETING]
<PAGE> 14
Appendix A
ROSEVILLE COMMUNICATIONS COMPANY
2000 EQUITY INCENTIVE PLAN
Article 1. Introduction.
The Plan was adopted by the Board effective January 31, 2000. The purpose of
the Plan is to promote the long-term success of the Company and creation of
shareholder value by (a) encouraging Employees, Outside Directors and
Consultants to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Employees, Outside Directors and Consultants with
exceptional qualifications and (c) linking Employees, Outside Directors and
Consultants directly to shareholder interests through increased share ownership.
The Plan seeks to achieve this purpose by providing for Awards in the form of
Restricted Shares, Stock Units, Performance Shares, Options (which may
constitute incentive stock options or nonstatutory stock options) or stock
appreciation rights.
The Plan shall be governed by, and construed in accordance with, the laws of
the State of California (except their choice-of-law provisions).
Article 2. Definitions.
2.1 "Affiliate" means any entity other than a Subsidiary, if the Company
and/or one or more Subsidiaries own not less than 50% of such entity.
2.2 "Award" means any award of an Option, an SAR, a Restricted Share, a
Stock Unit or a Performance Share under the Plan.
2.3 "Board" means the Company's Board of Directors, as constituted from time
to time.
2.4 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. A
transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transaction.
2.5 "Code" means the Internal Revenue Code of 1986, as amended.
2.6 "Committee" means the Compensation Committee of the Board, as described
in Article 3.
2.7 "Company" means Roseville Communications Company, a California
corporation.
2.8 "Consultant" means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered employment
for all purposes of the Plan, except as provided in Section 5.1.
2.9 "Employee" means a common law employee of the Company, a Parent, a
Subsidiary or an Affiliate.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.11 "Exercise Price," in the case of an Option, means the amount for which
one Share may be purchased upon exercise of such Option, as specified in the
applicable Stock Option Agreement. "Exercise Price," in the case of an SAR,
means an amount, as specified in the applicable SAR Agreement, which is
subtracted from the Fair Market Value of one Share in determining the amount
payable upon exercise of such SAR.
<PAGE> 15
2.12 "Fair Market Value" means the market price of Shares, determined by the
Committee in good faith on such basis as it deems appropriate. Fair Market Value
may mean (i) if the Company's common stock is listed on a securities exchange or
is traded over the NASDAQ National Market System, the closing sales price of one
Share on such exchange or other such system on an applicable date or, in the
absence of reported sales on such date, the closing sales price on the
immediately preceding date on which sales were reported, or (ii) if the
Company's common stock is not listed on a securities exchange or traded over the
NASDAQ National Market System, the mean between the bid and offered prices of
the Share as quoted by the National Association of Securities Dealer through
NASDAQ, provided, that if the Committee determines that the fair market value is
not properly reflected by such NASDAQ quotations, the Fair Market Value will
mean the fair market value as determined by such other method as the Committee
determines in good faith to be reasonable. Such determination shall be
conclusive and binding on all persons.
2.13 "ISO" means an incentive stock option described in Section 422(b) of
the Code.
2.14 "NSO" means a stock option not described in Sections 422 or 423 of the
Code.
2.15 "Option" means an ISO or NSO granted under the Plan and entitling the
holder to purchase Shares.
2.16 "Optionee" means an individual or estate who holds an Option or SAR.
2.17 "Outside Director" means a member of the Board who is not an Employee.
Service as an Outside Director shall be considered employment for all purposes
of the Plan, except as provided in Section 5.1.
2.18 "Parent" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such date.
2.19 "Participant" means an individual or estate who holds an Award.
2.20 "Performance Share" means an Award to a Participant under Article 12.
2.21 "Performance Share Agreement" means the agreement between the Company
and a Participant which contains the terms, conditions and restrictions
pertaining to such Performance Share.
2.22 "Plan" means this Roseville Communications Company 2000 Equity
Incentive Plan, as amended from time to time.
2.23 "Restricted Share" means a Share awarded under the Plan.
2.24 "Restricted Stock Agreement" means the agreement between the Company
and the recipient of a Restricted Share which contains the terms, conditions and
restrictions pertaining to such Restricted Share.
2.25 "SAR" means a stock appreciation right granted under the Plan.
2.26 "SAR Agreement" means the agreement between the Company and an Optionee
which contains the terms, conditions and restrictions pertaining to his or her
SAR.
2.27 "Share" means one share of the common stock of the Company.
2.28 "Stock Option Agreement" means the agreement between the Company and an
Optionee that contains the terms, conditions and restrictions pertaining to his
or her Option.
2.29 "Stock Unit" means a bookkeeping entry representing the equivalent of
one Share, as awarded under the Plan.
2.30 "Stock Unit Agreement" means the agreement between the Company and the
recipient of a Stock Unit which contains the terms, conditions and restrictions
pertaining to such Stock Unit.
<PAGE> 16
2.31 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.
Article 3. Administration.
3.1 Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist exclusively of two or more directors of
the Company, who shall be appointed by the Board. In addition, the composition
of the Committee shall satisfy:
(a) Such requirements as the Securities and Exchange Commission may
establish for administrators acting under plans intended to quality for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and
(b) Such requirements as the Internal Revenue Service may establish for
Outside Directors acting under plans intended to qualify for exemption under
section 162(m)(4)(C) of the Code.
3.2 Committee Responsibilities. The Committee shall (a) select the
Employees, Outside Directors and Consultants who are to receive Awards under the
Plan, (b) determine the type, number, vesting requirements and other features
and conditions of such Awards, (c) interpret the Plan and (d) make all other
decisions relating to the operation of the Plan. The Committee may adopt such
rules or guidelines as it deems appropriate to implement the Plan. The
Committee's determinations under the Plan shall be final and binding on all
persons.
3.3 Committee for Non-Officer Grants. The Board may also appoint a secondary
committee of the Board, which shall be composed of two or more directors of the
Company who need not satisfy the requirements of Section 3.1. Such secondary
committee may administer the Plan with respect to Employees and Consultants who
are not considered officers or directors of the Company under Section 16 of the
Exchange Act, may grant Awards under the Plan to such Employees and Consultants
and may determine all features and conditions of such Awards. Within the
limitations of this Section 3.3, any reference in the Plan to the Committee
shall include such secondary committee.
Article 4. Shares Available for Grants.
4.1 Basic Limitation. Shares issued pursuant to the Plan shall be authorized
but unissued shares. The aggregate number of Options, SARs, Stock Units,
Restricted Shares and Performance Shares awarded under the Plan shall not exceed
Eight Hundred Thousand (800,000) Shares. The limitation of this Section 4.1
shall be subject to adjustment pursuant to Article 13.
4.2 Forfeited Shares. If Restricted Shares, Performance Shares or Shares
issued upon the exercise of Options are forfeited, then such Shares shall again
become available for Awards under the Plan. If Stock Units, Options or SARs are
forfeited or terminate for any other reason before being exercised, then the
corresponding Shares shall again become available for Awards under the Plan. If
Stock Units are settled, then only the number of Shares (if any) actually issued
in settlement of such Stock Units shall reduce the number available under
Section 4.1 and the balance shall again become available for Awards under the
Plan. If SARs are exercised, then only the number of Shares (if any) actually
issued in settlement of such SARs shall reduce the number available under
Section 4.1 and the balance shall again become available for Awards under the
Plan. The foregoing notwithstanding, the aggregate number of Shares that may be
issued under the Plan upon the exercise of ISOs shall not be increased when
Restricted Shares, Performance Shares or other Shares are forfeited.
4.3 Dividend Equivalents. Any dividend equivalents paid or credited under
the Plan shall not be applied against the number of Restricted Shares,
Performance Shares, Stock Units, Options or SARs available for Awards, whether
or not such dividend equivalents are converted into Stock Units.
Article 5. Eligibility.
5.1 Incentive Stock Options. Only Employees who are common-law employees of
the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs.
In addition, an Employee who owns more than 10% of the total combined voting
power of all classes of outstanding stock of the Company or any of its Parents
or Subsidiaries shall not be eligible for the grant of an ISO unless the
requirements set forth in section 422(c)(6) of the Code are satisfied.
<PAGE> 17
5.2 Other Grants. Only Employees, Outside Directors and Consultants
shall be eligible for the grant of Restricted Shares, Performance Shares,
Stock Units, NSOs or SARs.
Article 6. Options.
6.1 Stock Option Agreement. Each grant of an Option under the Plan shall be
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms of the Plan and may be subject
to any other terms that are not inconsistent with the Plan. The Stock Option
Agreement shall specify whether the Option is an ISO or an NSO. The provisions
of the various Stock Option Agreements entered into under the Plan need not be
identical. Options may be granted in consideration of a reduction in the
Optionee's other compensation. A Stock Option Agreement may provide that a new
Option will be granted automatically to the Optionee when he or she exercises a
prior Option and pays the Exercise Price in the form described in Section 7.2.
6.2 Number of Shares. Each Stock Option Agreement shall specify the number
of Shares subject to the Option and shall provide for the adjustment of such
number in accordance with Article 13. Options granted to any Optionee in a
single fiscal year of the Company shall not cover more than 200,000 Shares,
except that Options granted to a new Employee in the fiscal year of the Company
in which his or her service as an Employee first commences shall not cover more
than 25,000 Shares. The limitations set forth in the preceding sentence shall be
subject to adjustment in accordance with Article 13.
6.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price; provided that the Exercise Price under an ISO shall in no event be less
than 100% of the Fair Market Value of a Share on the date of grant and the
Exercise Price under an NSO shall in no event be less than 85% of the Fair
Market Value of a Share on the date of grant. In the case of an NSO, a Stock
Option Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the NSO is outstanding.
6.4 Exercisability and Term. Each Stock Option Agreement shall specify the
date or event when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an ISO shall in no event exceed 10 years from
the date of grant. A Stock Option Agreement may provide for accelerated
exercisability in the event of the Optionee's death, disability or retirement or
other events and may provide for expiration prior to the end of its term in the
event of the termination of the Optionee's service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not
be exercisable unless the related SARs are forfeited.
6.5 Effect of Change in Control. The Committee may determine, at the time of
granting an Option or thereafter, that such Option shall become exercisable as
to all or part of the Shares subject to such Option in the event that a Change
in Control occurs with respect to the Company, subject to the limitations that,
in the case of an ISO, the acceleration of exercisability shall not occur
without the Optionee's written consent.
6.6 Modification or Assumption of Options. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding options or may
accept the cancellation of outstanding options (whether granted by the Company
or by another issuer) in return for the grant of new options for the same or a
different number of shares and at the same or a different exercise price. The
foregoing notwithstanding, no modification of an Option shall, without the
consent of the Optionee, alter or impair his or her rights or obligations under
such Option.
6.7 Buyout Provisions. The Committee may at any time (a) offer to buy out
for a payment in cash or cash equivalents an Option previously granted or (b)
authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.
Article 7. Payment for Option Shares.
7.1 General Rule. The entire Exercise Price of Shares issued upon exercise
of Options shall be payable in cash or cash equivalents at the time when such
Shares are purchased, except as follows:
(a) In the case of an ISO granted under the Plan, payment shall be made
only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made
in any form(s) described in this Article 7.
(b) In the case of an NSO, the Committee may at any time accept payment
in any form(s) described in this Article 7.
7.2 Surrender of Stock. To the extent that this Section 7.2 is applicable,
all or any part of the Exercise Price may be paid by surrendering, or attesting
to the ownership of, Shares that are already owned by the Optionee. Such Shares
shall be valued at their Fair Market Value on the date when the new Shares are
purchased under the Plan. The Optionee shall not surrender, or attest to the
ownership of, Shares in payment of the Exercise Price if such action would cause
the Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.
7.3 Exercise/Sale. To the extent that this Section 7.3 is applicable, all or
any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to a
securities broker approved by the Company to sell all or part of the Shares
being purchased under the Plan and to deliver all or part of the sales proceeds
to the Company.
7.4 Exercise/Pledge. To the extent that this Section 7.4 is applicable, all
or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) an irrevocable direction to
pledge all or part of the Shares being purchased under the Plan to a securities
broker or lender approved by the Company, as security for a loan, and to deliver
all or part of the loan proceeds to the Company.
7.5 Promissory Note. To the extent that this Section 7.5 is applicable, all
or any part of the Exercise Price and any withholding taxes may be paid by
delivering (on a form prescribed by the Company) a full-recourse promissory
note.
7.6 Other Forms of Payment. To the extent that this Section 7.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may
be paid in any other form that is consistent with applicable laws, regulations
and rules.
Article 8. Automatic Option Grants to Outside Directors.
8.1 Annual Grants. Upon the conclusion of each regular annual meeting of the
Company's stockholders held in the year 2000 or thereafter, each Outside
Director who will continue serving as a member of the Board thereafter shall
receive an NSO covering 1,250 Shares (subject to adjustment under Article 13).
NSOs granted under this Section 8.1 shall become exercisable in full on the
first anniversary of the date of grant.
8.2 Accelerated Exercisability. All NSOs granted to an Outside Director
under this Article 8 shall also become exercisable in full in the event of:
(a) The termination of such Outside Director's service because of death,
total and permanent disability or retirement at or after age 70 1/2 ; or
(b) A Change in Control with respect to the Company.
8.3 Exercise Price. The Exercise Price under all NSOs granted to an Outside
Director under this Article 8 shall be equal to 100% of the Fair Market Value of
a Share on the date of grant, payable in one of the forms described in Sections
7.1, 7.2, 7.3 and 7.4.
8.4 Term. All NSOs granted to an Outside Director under this Article 8 shall
terminate on the earliest of (a) the 10th anniversary of the date of grant, (b)
the date three (3) months after the termination of such Outside Director's
service for any reason other than death or total and permanent disability or (c)
the date six (6) months after the termination of such Outside Director's service
because of death or total and permanent disability.
Article 9. Stock Appreciation Rights.
9.1 SAR Agreement. Each grant of an SAR under the Plan shall be evidenced by
an SAR Agreement between the Optionee and the Company. Such SAR shall be subject
to all applicable terms of the Plan and may be subject to any other terms that
are not inconsistent with the Plan. The provisions of the various SAR Agreements
entered into under the Plan need not be identical. SARs may be granted in
consideration of a reduction in the Optionee's other compensation.
9.2 Number of Shares. Each SAR Agreement shall specify the number of Shares
to which the SAR pertains and shall provide for the adjustment of such number in
accordance with Article 13. SARs granted to any Optionee in a single calendar
year shall in no event pertain to more than 200,000 Shares, except that SARs
granted to a new Employee in the fiscal year of the Company in which his or her
service as an Employee first commences shall not pertain to more than 25,000
Shares. The limitations set forth in the preceding sentence shall be subject to
adjustment in accordance with Article 13.
<PAGE> 19
9.3 Exercise Price. Each SAR Agreement shall specify the Exercise Price. An
SAR Agreement may specify an Exercise Price that varies in accordance with a
predetermined formula while the SAR is outstanding.
9.4 Exercisability and Term. Each SAR Agreement shall specify the date when
all or any installment of the SAR is to become exercisable. The SAR Agreement
shall also specify the term of the SAR. An SAR Agreement may provide for
accelerated exercisability in the event of the Optionee's death, disability or
retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionee's service. SARs may be
awarded in combination with Options, and such an Award may provide that the SARs
will not be exercisable unless the related Options are forfeited. An SAR may be
included in an ISO only at the time of grant but may be included in an NSO at
the time of grant or thereafter. An SAR granted under the Plan may provide that
it will be exercisable only in the event of a Change in Control.
9.5 Effect of Change in Control. The Committee may determine, at the time of
granting an SAR or thereafter, that such SAR shall become fully exercisable as
to all Shares subject to such SAR in the event that a Change in Control occurs
with respect to the Company.
9.6 Exercise of SARs. Upon exercise of an SAR, the Optionee (or any person
having the right to exercise the SAR after his or her death) shall receive from
the Company (a) Shares, (b) cash or (c) a combination of Shares and cash, as the
Committee shall determine. The amount of cash and/or the Fair Market Value of
Shares received upon exercise of SARs shall, in the aggregate, be equal to the
amount by which the Fair Market Value (on the date of surrender) of the Shares
subject to the SARs exceeds the Exercise Price. If, on the date when an SAR
expires, the Exercise Price under such SAR is less than the Fair Market Value on
such date but any portion of such SAR has not been exercised or surrendered,
then such SAR shall automatically be deemed to be exercised as of such date with
respect to such portion.
9.7 Modification or Assumption of SARs. Within the limitations of the Plan,
the Committee may modify, extend or assume outstanding SARs or may accept the
cancellation of outstanding SARs (whether granted by the Company or by another
issuer) in return for the grant of new SARs for the same or a different number
of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of an SAR shall, without the consent of the
Optionee, alter or impair his or her rights or obligations under such SAR.
Article 10. Restricted Shares.
10.1 Restricted Stock Agreement. Each grant of Restricted Shares under the
Plan shall be evidenced by a Restricted Stock Agreement between the recipient
and the Company. Such Restricted Shares shall be subject to all applicable terms
of the Plan and may be subject to any other terms that are not inconsistent with
the Plan. The provisions of the various Restricted Stock Agreements entered into
under the Plan need not be identical.
10.2 Payment for Awards. Restricted Shares may be sold or awarded under the
Plan for such consideration as the Committee may determine, including (without
limitation) cash, cash equivalents, full-recourse promissory notes, past
services and future services.
10.3 Vesting Conditions. Each Award of Restricted Shares may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Restricted Stock Agreement. A
Restricted Stock Agreement may provide for accelerated vesting in the event of
the Participant's death, disability or retirement or other events. The Committee
may determine, at the time of granting Restricted Shares or thereafter, that all
or part of such Restricted Shares shall become vested in the event that a Change
in Control occurs with respect to the Company.
10.4 Voting and Dividend Rights. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other shareholders. A Restricted Stock Agreement, however, may require
that the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid.
<PAGE> 20
Article 11. Stock Units.
11.1 Stock Unit Agreement. Each grant of Stock Units under the Plan shall be
evidenced by a Stock Unit Agreement between the recipient and the Company. Such
Stock Units shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need
not be identical. Stock Units may be granted in consideration of a reduction in
the recipient's other compensation.
11.2 Payment for Awards. To the extent that an Award is granted in the form
of Stock Units, no cash consideration shall be required of the Award recipients.
11.3 Vesting Conditions. Each Award of Stock Units may or may not be subject
to vesting. Vesting shall occur, in full or in installments, upon satisfaction
of the conditions specified in the Stock Unit Agreement. A Stock Unit Agreement
may provide for accelerated vesting in the event of the Participant's death,
disability or retirement or other events. The Committee may determine, at the
time of granting Stock Units or thereafter, that all or part of such Stock Units
shall become vested in the event that a Change in Control occurs with respect to
the Company.
11.4 Voting and Dividend Rights. The holders of Stock Units shall have no
voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under
the Plan may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Share while the Stock Unit is outstanding.
Dividend equivalents may be converted into additional Stock Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of Shares, or
in a combination of both. Prior to distribution, any dividend equivalents which
are not paid shall be subject to the same conditions and restrictions as the
Stock Units to which they attach.
11.5 Form and Time of Settlement of Stock Units. Settlement of vested Stock
Units may be made in the form of (a) cash, (b) Shares or (c) any combination of
both, as determined by the Committee. The actual number of Stock Units eligible
for settlement may be larger or smaller than the number included in the original
Award, based on predetermined performance factors. Methods of converting Stock
Units into cash may include (without limitation) a method based on the average
Fair Market Value of Shares over a series of trading days. Vested Stock Units
may be settled in a lump sum or in installments. The distribution may occur or
commence when all vesting conditions applicable to the Stock Units have been
satisfied or have lapsed, or it may be deferred to any later date. The amount of
a deferred distribution may be increased by an interest factor or by dividend
equivalents. Until an Award of Stock Units is settled, the number of such Stock
Units shall be subject to adjustment pursuant to Article 13.
11.6 Death of Recipient. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Award recipient's death.
If no beneficiary was designated or if no designated beneficiary survives the
Award recipient, then any Stock Units Award that becomes payable after the
recipient's death shall be distributed to the recipient's estate.
11.7 Creditors' Rights. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.
Article 12. Performance Shares.
12.1 Performance Share Agreement. Each grant of Performance Shares under the
Plan shall be evidenced by a Performance Share Agreement between the Participant
and the Company. Such Performance Shares shall be subject to all applicable
terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Performance Share
Agreements entered into under the Plan need not be identical.
12.2 Grant of Performance Shares. Before the grant of Performance Shares,
the Committee shall:
(a) determine objective performance goals, which may consist of any one
or more of the following goals deemed appropriate by the Committee: earnings
(either in the aggregate or on a per-share basis), operating income, cash
flow, including EBITDA (earnings before interest, taxes, depreciation and
amortization), return on equity, per share rate of return on the Shares
(including dividends), general indices relative to levels of general
customer service satisfaction, as measured through various
randomly-generated customer service surveys, market share (in one or more
<PAGE> 21
markets), customer retention rates, market penetration rates, revenues,
reductions in expense levels, and the attainment by the Shares of a
specified market value for a specified period of time, in each case where
applicable to be determined either on a Company-wide basis or in respect of
any one or more business units, and the amount of compensation under the
goals applicable to such grant;
(b) designate a period for the measurement of the extent to which
performance goals are attained, which may begin prior to the date of grant
(the "Performance Period"); and
(c) assign a "Performance Percentage" to each level of attainment of
performance goals during the Performance Period, with the percentage
applicable to minimum attainment being zero percent and the percentage
applicable to maximum attainment to the determined by the Committee from
time to time, but not in excess of 250%.
12.3 Modification of Grant. If a Participant is promoted, demoted, or
transferred to a different business unit of the Company during a Performance
Period, then, to the extent the Committee determines any one or more of the
performance goals, Performance Period, or Performance Percentage are no longer
appropriate, the Committee may make any changes thereto as it deems appropriate
in order to make them appropriate.
12.4 Terms of the Grant. When granted, Performance Shares may, but need not,
be identified with Shares subject to a specific Option, specific Restricted
Shares, or specific SARs of the Participant granted under the Plan in a number
equal to or different from the number of the Performance Shares so granted. If
Performance Shares are so identified, then, unless otherwise provided in the
applicable Award, the Participant's associated Performance Shares shall
terminate upon (a) the expiration, termination, forfeiture, or cancellation of
the Option, Restricted Shares, or SARs with which the Performance Shares are
identified, (b) the exercise of such Option or SARs, or (c) the date Restricted
Shares become nonforfeitable.
12.5 Payment of Performance Shares. Unless otherwise provided in the
Performance Share Agreement, if the minimum performance goals applicable to such
Performance Shares have been achieved during the applicable Performance Period,
then the Company shall pay to the Participant that number of Shares equal to the
product of:
(a) the sum of (i) number of Performance Shares specified in the
applicable Award agreement and (ii) the number of Shares that would have
been issuable if such Performance Shares had been Shares outstanding
throughout the Performance Period and the stock dividends, cash dividends
(except as otherwise provided in the Performance Share Agreement) and other
property paid in respect of such shares had been reinvested in additional
Shares as of each dividend payment date,
multiplied by
(b) the Performance Percentage achieved during such Performance Period.
The Committee may, in its discretion, determine that cash be paid in lieu of
some or all of such Shares. The amount of cash payable in lieu of a Share shall
be determined by valuing such shares at its Fair Market Value on the business
day next preceding the date such cash is to be paid. Payments pursuant to this
Section shall be made as soon as administratively practical after the end of the
applicable Performance Period. Any Performance Shares with respect to which the
performance goals shall not have been achieved by the end of the applicable
Performance period shall expire.
Article 13. Protection Against Dilution.
13.1 Adjustments. In the event of a subdivision of the outstanding Shares, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the price
of Shares, a combination or consolidation of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of:
(a) The number of Options, SARs, Restricted Shares, Performance Shares
and Stock Units available for future Awards under Article 4;
(b) The limitations set forth in Sections 6.2 and 9.2;
<PAGE> 22
(c) The number of NSOs to be granted to Outside Directors under Article
8;
(d) The number of Shares covered by each outstanding Option and SAR;
(e) The Exercise Price under each outstanding Option and SAR; or
(f) The number of Stock Units included in any prior Award which has not
yet been settled.
Except as provided in this Article 13, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.
13.2 Dissolution or Liquidation. To the extent not previously exercised or
settled, Options, SARs and Stock Units shall terminate immediately prior to the
dissolution or liquidation of the Company.
13.3 Reorganizations. In the event that the Company is a party to a merger
or other reorganization, outstanding Awards shall be subject to the agreement of
merger or reorganization Such agreement shall provide for:
(a) The continuation of the outstanding Awards by the Company, if the
Company is a surviving corporation;
(b) The assumption of the outstanding Awards by the surviving
corporation or its parent or subsidiary;
(c) The substitution by the surviving corporation or its parent oR
subsidiary of its own awards for the outstanding Awards;
(d) Full exercisability or vesting and accelerated expiration of the\
outstanding Awards; or
(e) Settlement of the full value of the outstanding Awards in cash or
cash equivalents followed by cancellation of such Awards.
Article 14. Deferral of Awards.
The Committee (in its sole discretion) may permit or require a Participant
to:
(a) Have cash that otherwise would be paid to such Participant as a
result of the exercise of an SAR or the settlement of Stock Units credited
to a deferred compensation account established for such Participant by the
Committee as an entry on the Company's books;
(b) Have Shares that otherwise would be delivered to such Participant as
a result of the exercise of an Option or SAR converted into an equal number
of Stock Units; or
(c) Have Shares that otherwise would be delivered to such Participant as
a result of the exercise of an Option or SAR or the settlement of Stock
Units converted into amounts credited to a deferred compensation account
established for such Participant by the Committee as an entry on the
Company's books. Such amounts shall be determined by reference to the Fair
Market Value of such Shares as of the date when they otherwise would have
been delivered to such Participant.
A deferred compensation account established under this Article 14 may be
credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no
rights other than those of a general creditor of the Company. Such an account
shall represent an unfunded and unsecured obligation of the Company and shall be
subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is
permitted or required, the Committee (in its sole discretion) may establish
rules, procedures and forms pertaining to such Awards, including (without
limitation) the settlement of deferred compensation accounts established under
this Article 14.
<PAGE> 23
Article 15. Awards Under Other Plans.
The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Shares issued under this Plan. Such Shares shall be
treated for all purposes under the Plan like Shares issued in settlement of
Stock Units and shall, when issued, reduce the number of Shares available under
Article 4.
Article 16. Payment of Director's Fees in Securities.
16.1 Effective Date. No provision of this Article 16 shall be effective
unless and until the Board has determined to implement such provision.
16.2 Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside
Director may elect to receive his or her annual retainer payments and/or meeting
fees from the Company in the form of cash, NSOs, Restricted Shares or Stock
Units, or a combination thereof, as determined by the Board. Such NSOs,
Restricted Shares and Stock Units shall be issued under the Plan. An election
under this Article 16 shall be filed with the Company on the prescribed form.
16.3 Number and Terms of NSOs, Restricted Shares or Stock Units. The number
of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in
lieu of annual retainers and meeting fees that would otherwise be paid in cash
shall be calculated in a manner determined by the Board. The terms of such NSOs,
Restricted Shares or Stock Units shall also be determined by the Board.
Article 17. Limitation on Rights.
17.1 Retention Rights. Neither the Plan nor any Award granted under the Plan
shall be deemed to give any individual a right to remain an Employee, Outside
Director or Consultant. The Company and its Parents, Subsidiaries and Affiliates
reserve the right to terminate the service of any Employee, Outside Director or
Consultant at any time, with or without cause, subject to applicable laws, the
Company's articles of incorporation and bylaws and a written employment
agreement (if any).
17.2 Shareholders' Rights. A Participant shall have no dividend rights,
voting rights or other rights as a shareholder with respect to any Shares
covered by his or her Award prior to the time when a stock certificate for such
Shares is issued or, if applicable, the time when he or she becomes entitled to
receive such Shares by filing any required notice of exercise and paying any
required Exercise Price. No adjustment shall be made for cash dividends or other
rights for which the record date is prior to such time, except as expressly
provided in the Plan.
17.3 Regulatory Requirements. Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Shares under the Plan
shall be subject to all applicable laws, rules and regulations and such approval
by any regulatory body as may be required. The Company reserves the right to
restrict, in whole or in part, the delivery of Shares pursuant to any Award
prior to the satisfaction of all legal requirements relating to the issuance of
such Shares, to their registration, qualification or listing or to an exemption
from registration, qualification or listing.
Article 18. Withholding Taxes.
18.1 General. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.
18.2 Share Withholding. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be issued
to his or her or by surrendering all or a portion of any Shares that he or she
previously acquired. Such Shares shall be valued at their Fair Market Value on
the date when taxes otherwise would be withheld in cash.
Article 19. Future of the Plan.
19.1 Term of the Plan. The Plan, as set forth herein, shall become effective
on January 31, 2000. The Plan shall remain in effect until it is terminated
under Section 19.2, except that no ISOs shall be granted on or after the 10th
<PAGE> 24
anniversary of the later of (a) the date when the Board adopted the Plan or (b)
the date when the Board adopted the most recent increase in the number of Shares
available under Article 4 which was approved by the Company's shareholders.
19.2 Amendment or Termination. The Board may, at any time and for any
reason, amend or terminate the Plan. An amendment of the Plan shall be subject
to the approval of the Company's shareholders only to the extent required by
applicable laws, regulations or rules. No Awards shall be granted under the Plan
after the termination thereof. The termination of the Plan, or any amendment
thereof, shall not affect any Award previously granted under the Plan.
Article 20. Limitation on Parachute Payments.
20.1 Scope of Limitation. This Article 20 shall apply to an Award only if:
(a) The independent auditors most recently selected by the Board (the
"Auditors") determine that the after-tax value of such Award to the
Participant, taking into account the effect of all federal, state and local
income taxes, employment taxes and excise taxes applicable to the
Participant (including the excise tax under section 4999 of the Code), will
be greater after the application of this Article 20 than it was before the
application of this Article 20, or
(b) The Committee, at the time of making an Award under the Plan or at
any time thereafter, specifies in writing that such Award shall be subject
to this Article 20 (regardless of the after-tax value of such Award to the
Participant).
If this Article 20 applies to an Award, it shall supersede any contrary
provision of the Plan or of any Award granted under the Plan.
20.2 Basic Rule. In the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer by
the Company under the Plan to or for the benefit of a Participant (a "Payment")
would be nondeductible by the Company for federal income tax purposes because of
the provisions concerning "excess parachute payments" in Section 28OG of the
Code, then the aggregate present value of all Payments shall be reduced (but not
below zero) to the Reduced Amount. For purposes of this Article 20, the "Reduced
Amount" shall be the amount, expressed as a present value, which maximizes the
aggregate present value of the Payments without causing any Payment to be
nondeductible by the Company because of Section 28OG of the Code.
20.3 Reduction of Payments. If the Auditors determine that any Payment would
be nondeductible by the Company because of Section 28OG of the Code, then the
Company shall promptly give the Participant notice to that effect and a copy of
the detailed calculation thereof and of the Reduced Amount, and the Participant
may then elect, in his or her sole discretion, which and how much of the
Payments shall be eliminated or reduced (as long as after such election the
aggregate present value of the Payments equals the Reduced Amount) and shall
advise the Company in writing of his or her election within 10 days of receipt
of notice. If no such election is made by the Participant within such 10-day
period, then the Company may elect which and how much of the Payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the Payments equals the Reduced Amount) and shall notify the
Participant promptly of such election. For purposes of this Article 20, present
value shall be determined in accordance with Section 28OG(d)(4) of the Code. All
determinations made by the Auditors under this Article 20 shall be binding upon
the Company and the Participant and shall be made within 60 days of the date
when a Payment becomes payable or transferable. As promptly as practicable
following such determination and the elections hereunder, the Company shall pay
or transfer to or for the benefit of the Participant such amounts as are then
due to him or her under the Plan and shall promptly pay or transfer to or for
the benefit of the Participant in the future such amounts as become due to him
or her under the Plan.
20.4 Overpayments and Underpayments. As a result of uncertainty in the
application of Section 28OG of the Code at the time of an initial determination
by the Auditors hereunder, it is possible that Payments will have been made by
the Company that should not have been made (an "Overpayment") or that additional
Payments that will not have been made by the Company could have been made (an
"Underpayment"), consistent in each case with the calculation of the Reduced
Amount hereunder. In the event that the Auditors, based upon the assertion of a
deficiency by the Internal Revenue Service against the Company or the
Participant that the Auditors believe has a high probability of success,
determine that an Overpayment has been made, such Overpayment shall be treated
for all purposes as a loan to the Participant which he or she shall repay to the
Company, together with interest at the applicable federal rate provided in
Section 7872(f)(2) of the Code; provided, however, that no amount shall be
payable by the Participant to the Company if and to the extent that such payment
would not reduce the amount subject to taxation under Section 4999 of the Code.
In the event that the Auditors determine that an Underpayment has occurred, such
Underpayment shall promptly be paid or transferred by the Company to or for the
benefit of the Participant, together with interest at the applicable federal
rate provided in Section 7872(f)(2) of the Code.
<PAGE> 25
20.5 Related Corporations. For purposes of this Article 20, the term
"Company" shall include affiliated corporations to the extent determined by the
Auditors in accordance with Section 28OG(d)(5) of the Code.
Article 21. Execution.
To record the adoption of the Plan by the Board, the Company has caused its
duly authorized officer to execute this document in the name of the Company.
ROSEVILLE COMMUNICATIONS COMPANY
By: ___________________________________________
Title:__________________________________________
<PAGE> 26
ROSEVILLE
COMMUNICATIONS
COMPANY
PROXY
SOLICITED
ON BEHALF OF THE
BOARD OF
DIRECTORS FOR THE
ANNUAL MEETING
MAY 19, 2000
NDERSIGNED
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 THE 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 MAY 19, 2000, OR ANY ADJOURNEMENT 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 2000 Equity Incentive 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 7, 2000, 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> 27
DATED: ________DAY OF__________________________, 2000.
SIGNED: _____________________________________________
______________________________________________________
SIGNATURE OF STOCKHOLDER (S)
PLEASE DATE PROXY AND SIGN EXACTLY AS NAME OR NAMES
APPEAR AT THE 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 CORPORATE NAME BY
THE PRESIDENT OR OTHER AUTHORIZED OFFICER.
IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY
AN AUTHORIZED PERSON.
YOUR VOTE IS IMPORTANT, PLEASE FILL IN AND RETURN PROMPTLY
