Registration Statement No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Exact name of Registrant as specified in its Charter)
Virginia 54-1162807
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
500 Shentel Way, Edinburg, Virginia 22824
(Address of principal executive office, including zip code)
2005 SHENANDOAH TELECOMMUNICATIONS
COMPANY STOCK INCENTIVE PLAN
(Full title of the Plan)
Jonathan R Spencer
General Counsel and Secretary
500 Shentel Way, Edinburg, Virginia 22824
(540) 984-4141
(Name, address and telephone number including, area code, of agent for service)
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
Proposed Maximum
Amount to be Offering Price Per Aggregate Offering
Title of Securities Registered (1) Share (2) Price (2) Registration Fee
- --------------------------------------------------------------------------------------------------------------------
Common Stock, no par value 480,000 $44.36 $21,292,800 $2,506.16
per share
- --------------------------------------------------------------------------------------------------------------------
(1) Pursuant to Rule 416(b) under the Securities Act of 1933, as amended, this
Registration Statement also covers an indeterminate number of additional
shares as may be offered or issued as a result of the anti-dilution
provisions of the 2005 Shenandoah Telecommunications Company Stock
Incentive Plan.
(2) Estimated pursuant to Rule 457(c) and (h) under the Securities Act of
1933, as amended, solely for the purpose of calculating the registration
fee, based on the average of the high and low prices per share of the
common stock of Shenandoah Telecommunications Company, no par value, on
August 5, 2005, as reported on the NASDAQ National Market.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information required by Part I to be contained in the Section 10(a) Prospectus
is omitted from this registration statement in accordance with Rule 428 under
the Securities Act of 1933, as amended, and the "Note" to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which have been filed by the Company with the
Commission, are incorporated by reference in this Registration Statement, as of
their respective dates:
(a) Annual Report of the Company on Form 10-K for the year ended
December 31, 2004;
(b) Quarterly Reports of the Registrant on Form 10-Q for the quarters
ended March 31, 2005 and June 30, 2005
(c) The description of our common stock contained in the Registration
Statement on Form S-3D (File No. 333-74297), including any
amendments or reports filed for the purpose of updating such
description.
All documents and reports subsequently filed by us pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the respective filing dates
of such documents or reports.
Any statement contained in a document or report incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document or report which also is,
or is deemed to be, incorporated by reference herein modifies or supersedes such
prior statement. Any such statement so modified or superseded shall not be
deemed to constitute a part of this Registration Statement, except as so
modified or superseded.
To the extent that any proxy statement is incorporated herein by
reference, such incorporation shall not include any information contained in
such proxy statement which is not, pursuant to the Commission's rules, deemed to
be "filed" with the Commission or subject to the liabilities of Section 18 of
the Exchange Act.
Item 4. Description of Securities.
The Company's common stock is registered under Section 12 of the Exchange
Act.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters with respect to the validity of the shares of Common
stock offered pursuant to this Registration Statement are being passed upon for
the Registrant by Jonathan R. Spencer, general counsel to the Registrant.
Item 6. Indemnification of Directors and Officers.
The Virginia Stock Corporation Act permits, and the registrant's Articles
of Incorporation require, indemnification of the registrant's directors and
officers in a variety of circumstances, which may include indemnification for
liabilities under the Securities Act of 1933, as amended (the "Securities Act").
Under Sections 13.1-697 and 13.1-702 of the Virginia Stock Corporation Act, a
Virginia corporation generally is authorized to indemnify its directors and
officers in civil or criminal actions if they acted in good faith and believed
their conduct to be in the best interests of the corporation and, in the case of
criminal actions, had no reasonable cause to believe that the conduct was
unlawful. The Company's Articles of Incorporation require indemnification of
directors and officers with respect to certain liabilities, expenses and other
amounts imposed upon them by reason of having been a director or officer, except
in the case of willful misconduct or a knowing violation of criminal law.
In addition, the Company carries insurance on behalf of directors,
officers, employees or agents that may cover liabilities under the Securities
Act. Section 13.1-692.1 of the Virginia Stock Corporation Act presently permits
the elimination of liability for damages of directors and officers in any
proceeding brought by or in the right of the Company or brought by or on behalf
of stockholders of the Company, except for liability resulting from such
person's having engaged in willful misconduct or a knowing violation of the
criminal law or any federal or state securities law, including, without
limitation, any unlawful insider trading or manipulation of the market for any
security.
The Company's Articles of Incorporation eliminate liability for damages of
its directors or officers, as permitted in Section 13.1-692.1, except for
liability resulting from any such person having engaged in willful misconduct or
a knowing violation of the criminal law or any federal or state securities law.
Sections 13.1-692.1 and 13.1-696 to -704 of the Virginia Stock Corporation Act
are hereby incorporated by reference herein.
The indemnification provisions contained in the Company's Articles of
Incorporation, and Bylaws are not exclusive of any other rights to which a
person may be entitled by law, agreement, vote of stockholders or disinterested
directors or otherwise.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number Description
- ------- --------------------------------------------------------------------
5.1 Opinion of Jonathan R. Spencer Esq. regarding the legality of the
securities being registered
10.1 2005 Shenandoah Telecommunications Stock Incentive Plan
23.1 Consent of KPMG LLP
23.2 Consent of Jonathan Spencer. (included as part of Exhibit 5.1)
24.1 Powers of Attorney
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement
(or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in this registration statement;
provided, however, that subparagraphs (i) and (ii) above do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by
the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement related to
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Edinburg, Commonwealth of Virginia, on this 9th day
of August 2005.
SHENANDOAH TELECOMMUNICATIONS COMPANY
(Registrant)
By: /s/ Christopher E. French
__________________________________
Christopher E. French
President and Director
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
on this 9th day of August 2005.
/s/ CHRISTOPHER E. FRENCH President & Chief Executive Officer,
- ------------------------------- Director (Principal Executive Officer)
Christopher E. French
/s/ EARLE A. MACKENZIE Executive Vice President & Treasurer
- ------------------------------- (Principal Financial Officer and
Earle A. MacKenzie Principal Accounting Officer)
/s/ DOUGLAS C. ARTHUR Director
- -------------------------------
Douglas C. Arthur
/s/ NOEL M. BORDEN Director
- -------------------------------
Noel M. Borden
/s/ KEN L BURCH Director
- -------------------------------
Ken L. Burch
/S/ TRACY FITZSIMMONS Director
- -------------------------------
Tracy Fitzsimmons
/s/ GROVER M. HOLLER Director
- -------------------------------
Grover M. Holler, Jr.
/S/ DALE S. LAM Director
- -------------------------------
Dale S. Lam
/S/ WILLIAM A. TRUBAN, JR. Director
- -------------------------------
William A. Truban, Jr.
/s/ JAMES E. ZERKEL II Director
- -------------------------------
James E. Zerkel II
EXHIBIT INDEX
Exhibit
Number Description
- --------- --------------------------------------------------------------------
5.1 Opinion of Jonathan R. Spencer Esq.. regarding the legality of the
securities being registered
10.1 2005 Shenandoah Telecommunications Stock Incentive Plan (Amended and
Restated as of May 17, 2004)
23.1 Consent of KPMG LLP
23.2 Consent of Jonathan R. Spencer (included as part of Exhibit 5.1)
24.1 Powers of Attorney
Shenandoah Telecommunications Company Exhibit 5.1
500 Shentel Way
Edinburg, VA 22824 August 9, 2005
Re: Registration Statement on Form S-8 - 2005 Shenandoah
Telecommunications Company Stock Incentive Plan
Ladies and Gentlemen:
I am the General Counsel of Shenandoah Telecommunications Company (the
"Company") and have acted as such in connection with the proposed filing with
the Securities and Exchange Commission expected to be made on or about the date
set forth above under the Securities Act of 1933, as amended, of a Registration
Statement on Form S-8 (the "Registration Statement") for the purpose of
registering 480,0000 shares (the "Shares") of the Company's Common Stock, no par
value (with associated stock purchase rights), which may be issued under the
Company's 2005 Stock Incentive Plan (the "Plan").
In rendering my opinion, I have examined and shall be entitled to rely
upon originals or copies, certified or otherwise identified to my satisfaction,
of such documents, instruments and certificates as I have deemed necessary for
purposes of this opinion, including without limitation (i) the Registration
Statement, (ii) the Amended and Restated Articles of Incorporation and Bylaws of
the Company, as amended, (iii) the Plan, (iv) a review of the Virginia State
Corporation Commission's website to the effect that the Company is in good
standing under the laws of that state, (v) one or more officer's certificates as
to certain factual matters, (vi) the minutes of the Board of Directors of the
Company relating to the amendment and restatement of the Plan, (vii) the draft
minutes of the May 3, 2005 meeting of the shareholders of the Company relating
to the amendment and restatement of the Plan; (viii) the Notice of Annual
Meeting and Proxy Statement delivered to shareholders of the Company in
connection with the May 3 meeting, (ix) a specimen stock certificate and (ix)
such other documents of the Company as I have deemed necessary or appropriate
for the purpose of the opinion expressed herein.
In connection with the foregoing, I have assumed the authenticity of all
records, documents and instruments submitted to me as originals, the genuineness
of all signatures, the legal capacity of natural persons and the conformity to
the originals of all records, documents and instruments submitted to me as
copies and the due authorization, execution and delivery of the applicable
records, documents and instruments by the parties thereto.
I am a corporate counsel member of the Bar of the State of Virginia and a
full member of the Bar of the District of Columbia, and the opinion set forth
below is restricted to matters governed by the laws of the State of Virginia and
the federal securities laws. .
Based upon the foregoing and the qualifications and limitations set forth
below, I am of the opinion that the shares have been validly authorized and when
(i) the Registration Statement and any amendments thereto filed with the
Securities and Exchange Commission have become effective, (ii) the provisions of
such state securities laws as may be applicable have been complied with, (iii)
payment of the purchase price is made by participating employees in the manner
provided by the Plan, and (iv) the Shares are otherwise issued and sold in
accordance with the Plan and any applicable award agreement, the Shares will be
validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. I also consent to use of my name under Item 5,
"Interests of Named Experts and Counsel," in the Registration Statement. In
giving such consent, I do not admit that I am in the category of persons whose
consent is required under Section 7 of the Act. However, this opinion is not to
be used, circulated, quoted or otherwise referred to for any other purpose
without my prior written consent.
Very truly yours,
By: /s/ Jonathan R. Spencer
__________________________________
Jonathan R. Spencer
Exhibit 10.1
2005 SHENANDOAH TELECOMMUNICATIONS COMPANY
STOCK INCENTIVE PLAN
ARTICLE I.
DEFINITIONS
1.01. Administrator means the Committee and any delegate of the Committee that
is appointed in accordance with Article III.
1.02. Affiliate means any "subsidiary" or "parent" corporation (within the
meaning of Section 424 of the Code) of the Company.
1.03. Agreement means a written agreement (including any amendment or supplement
thereto) between the Company and a Participant specifying the terms and
conditions of a Stock Award, an award of Performance Shares, an Option or a SAR
granted to such Participant.
1.04. Board means the Board of Directors of the Company.
1.05. Code means the Internal Revenue Code of 1986, and any amendments thereto.
1.06. Committee means the Personnel Committee of the Board, or such other
committee of the Board appointed by the Board to administer the Plan.
1.07. Common Stock means the common stock of the Company.
1.08. Company means Shenandoah Telecommunications Company.
1.09. Corresponding SAR means a SAR that is granted in relation to a particular
Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates.
1.10. Fair Market Value means, on any given date, the closing price of a share
of Stock of Common Stock reported on the Stock Exchange on the most recent
trading date immediately preceding such date of determination on which a closing
price was so reported. Notwithstanding the foregoing, in the event that the
shares of Common Stock are listed or admitted to trading on more than one Stock
Exchange, Fair Market Value means the closing price of a share of Common Stock
reported on the Stock Exchange that trades the largest volume of shares of
Common Stock on the applicable trading date. If the Common Stock is not at the
time listed or admitted to trading on a Stock Exchange, Fair Market Value means
the mean between the lowest reported bid price and highest reported asked price
of a share of Common Stock on the applicable trading date in the
over-the-counter market, as such prices are reported in a publication of general
circulation selected by the Board and regularly reporting the market price of
the Common Stock in such market. If the Common Stock is not listed or admitted
to trading on any Stock Exchange or traded in the over-the-counter market, Fair
market Value shall be determined by the Administrator using any reasonable
method in good faith.
1.11. Initial Value means, with respect to a SAR, the Fair Market Value of one
share of Common Stock on the date of grant.
1.12. Option means a stock option that entitles the holder to purchase from the
Company a stated number of shares of Common Stock at the price set forth in an
Agreement.
1.13. Participant means an employee of the Company or an Affiliate, a member of
the Board, or an individual who provides services to the Company or an Affiliate
and who satisfies the requirements of
Article IV and is selected by the Administrator to receive a Stock Award, an
award of Performance Shares, an Option, a SAR, or a combination thereof.
1.14. Performance Criteria means performance goals established by the
Administrator including but not limited to one or more of the following: net
income, return on equity, earnings per share, total earnings, earnings growth,
sales, revenue, revenue growth, return on capital, return on assets, bad debt,
expenses, service measures (e.g., dropped calls, trouble reports or churn) or
Fair Market Value in each case relating to the Company or, as applicable, an
Affiliate or operating unit.
1.15. Performance Shares means an award that, in accordance with and subject to
the terms of an Agreement, will entitle the Participant (or his estate or
beneficiary in the event of the Participant's death), to receive cash or Common
Stock or a combination thereof.
1.16. Plan means the 2005 Shenandoah Telecommunications Company Stock Incentive
Plan.
1.17. SAR means a stock appreciation right that entitles the holder to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the amount determined by the Administrator and specified in an Agreement.
In the absence of such a determination, the holder shall be entitled to receive,
with respect to each share of Common Stock encompassed by the exercise of such
SAR, the excess of the Fair Market Value on the date of exercise over the
Initial Value. References to "SARs" include both Corresponding SARs and SARs
granted independently of Options, unless the context requires otherwise.
1.18. Stock Award means Common Stock awarded to a Participant under Article IX.
1.19. Stock Exchange means the NASDAQ Stock market, Inc, the OTC Bulletin Board
and any established national or regional stock exchange on which the Common
Stock is listed or admitted to trading.
1.20. Ten Percent Shareholder means any individual owning more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of an Affiliate. An individual shall be considered to own any voting stock
owned (directly or indirectly) by or for his brothers, sisters, spouse,
ancestors or lineal descendants and shall be considered to own proportionately
any voting stock owned (directly or indirectly) by or for a corporation,
partnership, estate or trust of which such individual is a shareholder, partner
or beneficiary.
ARTICLE II.
PURPOSES
The Plan is intended to assist the Company and its Affiliates in recruiting and
retaining individuals with ability and initiative by enabling such persons to
participate in its future success and to associate their interests with those of
the Company and its shareholders. The Plan is intended to permit the grant of
Stock Awards, the grant of Performance Shares, the grant of SARs, and the grant
of both Options qualifying under Section 422 of the Code ("incentive stock
options") and Options not so qualifying. No Option that is intended to be an
incentive stock option shall be invalid for failure to qualify as an incentive
stock option. The proceeds received by the Company from the sale of Common Stock
pursuant to this Plan shall be used for general corporate purposes.
ARTICLE III.
ADMINISTRATION
The Plan shall be administered by the Administrator; provided, however, that
each award made to a member of the Board who is not also an employee of the
Company or an Affiliate shall be subject to final approval by the Board. The
Administrator shall have authority to grant Stock Awards, Performance Shares,
Options and SARs upon such terms (not inconsistent with the provisions of this
Plan) as the
Administrator may consider appropriate. Such terms may include conditions (in
addition to those contained in this Plan) on the exercisability of all or any
part of an Option or SAR or on the transferability or forfeitability of a Stock
Award or a Performance Share. Notwithstanding any such conditions, the
Administrator may, in its discretion, accelerate the time at which any Option or
SAR may be exercised, the time at which a Stock Award may become transferable or
nonforfeitable, or the time at which an award of Performance Shares may be
settled. In addition, the Administrator shall have complete authority to
interpret all provisions of this Plan; to prescribe the form of Agreements; to
adopt, amend, and rescind rules and regulations pertaining to the administration
of the Plan; and to make all other determinations necessary or advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Administrator shall not be construed as limiting any power or authority
of the Administrator. Any decision made, or action taken, by the Administrator
in connection with the administration of this Plan shall be final and
conclusive. Neither the Administrator nor any member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any
Agreement, Option, SAR, Stock Award or Performance Share. All expenses of
administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers of the
Company, all or part of the Committee's authority and duties with respect to
grants and awards to individuals who are not subject to the reporting and other
provisions of Section 16 of the Securities Exchange Act of 1934, as in effect
from time to time. The Committee may revoke or amend the terms of a delegation
at any time but such action shall not invalidate any prior actions of the
Committee's delegate or delegates that were consistent with the terms of the
Plan.
ARTICLE IV.
ELIGIBILITY
4.01. General. Any employee of the Company or an Affiliate (including a
corporation that becomes an Affiliate after the adoption of this Plan), a member
of the Board or an individual who provides services to the Company or an
Affiliate (including a corporation that becomes an Affiliate after the adoption
of this Plan), is eligible to participate in this Plan. The Administrator will
select the individuals who will participate in this Plan.
4.02. Grants. The Administrator will designate individuals to whom Stock Awards
and Performance Shares are to be awarded and to whom Options and SARs are to be
granted and will specify the number of shares of Common Stock subject to each
award or grant. An Option may be granted with or without a related SAR. A SAR
may be granted with or without a related Option. All Stock Awards, Performance
Shares, Options and SARs granted under this Plan shall be evidenced by
Agreements which shall be subject to the applicable provisions of this Plan and
to such other provisions as the Administrator may adopt. No Participant may be
granted incentive stock options or related SARs (under all incentive stock
option plans of the Company and its Affiliates) that are first exercisable in
any calendar year for stock having an aggregate Fair Market Value (determined as
of the date an Option is granted) that exceeds $100,000. The preceding annual
limitation shall not apply with respect to Options that are not incentive stock
options.
ARTICLE V.
STOCK SUBJECT TO PLAN
5.01. Aggregate Limit. Upon the grant of Stock Awards and the settlement of
Performance Shares, the Company may issue shares of Common Stock from its
authorized but unissued Common Stock. Upon the exercise of any Option or SAR,
the Company may deliver to the Participant (or the Participant's broker if the
Participant so directs), shares of Common Stock from its authorized but unissued
Common Stock. The maximum aggregate number of shares of Common Stock that may be
issued pursuant to the exercise of Options and SARs, the settlement of
Performance Shares and the grant of Stock Awards under this Plan is 480,000
shares. The maximum aggregate number of shares of Common Stock that may be
issued under this Plan shall be subject to adjustment as provided in Article XI.
If an option is terminated, in whole or in part, for any reason other than its
exercise or the exercise of a Corresponding SAR, the number of shares of
Common Stock allocated to the terminated portion of the Option may be
reallocated to other Options, SARs, Performances Shares and Stock Awards to be
granted under this Plan. If a SAR is terminated, in whole or in part, for any
reason other than its exercise or the exercise of a related Option, the number
of shares of Common Stock allocated to the terminated portion of the SAR may be
reallocated to other Options, SARs, Performance Shares and Stock Awards to be
granted under this Plan. If a Stock Award is terminated, in whole or in part,
the number of shares of Common Stock allocated to the terminated portion of the
Stock Award may be reallocated to other Options, SARs, Performance Shares and
Stock Awards to be granted under this Plan. If a Performance Share award is
terminated, in whole or in part, the number of shares of Common Stock allocated
to the terminated portion of the Performance Share award may be reallocated to
other Options, SARs, Performance Shares and Stock Awards to be granted under
this Plan.
5.02. Individual Limits. No Participant may be granted Options in any five
calendar year period for more than 75,000 shares of Common Stock. No Participant
may be granted SARs in any five calendar year period for more than 75,000 shares
of Common Stock. No Participant may be granted Stock Awards or Performance
Shares in any five calendar year for more than 75,000 shares of Common Stock.
These limits on the number of shares of Common Stock that may be issued to an
individual under this Plan shall be subject to adjustment as provided in Article
XI.
ARTICLE VI.
OPTION PRICE
The price per share for Common Stock purchased on the exercise of an Option
shall be determined by the Administrator on the date of grant; provided,
however, that the price per share for Common Stock purchased on the exercise of
any Option shall not be less than the Fair Market Value on the date the Option
is granted and provided further that the price per share shall not be less than
110% of such Fair Market Value in the case of an incentive stock option granted
to a Participant who is a Ten Percent Shareholder on the date such incentive
stock option is granted. The exercise price per share of an outstanding Option
may not be reduced except in accordance with Article XI.
ARTICLE VII.
EXERCISE OF OPTIONS AND SARS
7.01. Maximum Option or SAR Period. The maximum period in which an option or SAR
may be exercised shall be determined by the Administrator on the date of grant,
except that no Option that is an incentive stock option or its Corresponding SAR
shall be exercisable after the expiration of ten years from the date such Option
or Corresponding SAR was granted. In the case of an incentive stock option or
its Corresponding SAR that is granted to a Participant who is a Ten Percent
Shareholder on the date of grant, such Option and Corresponding SAR shall not be
exercisable after the expiration of five years from the date of grant. The terms
of any Option that is an incentive stock option or Corresponding SAR may provide
that it is exercisable for a period less than such maximum period.
7.02. Nontransferability. Any Option or SAR granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In
the event of any such transfer, the Option and any Corresponding SAR must be
transferred to the same person or persons. During the lifetime of the
Participant to whom the Option or SAR is granted, the Option or SAR may be
exercised only by the Participant. No right or interest of a Participant in any
Option or SAR shall be liable for, or subject to, any lien, obligation, or
liability of such Participant.
7.03. Employee Status. For purposes of determining the applicability of Section
422 of the Code (relating to incentive stock options), or in the event that the
terms of any Option or SAR provide that it may be exercised only during
employment or continued service or within a specified period of time after
termination of employment or service, the Administrator may decide to what
extent leaves of absence for governmental or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.
ARTICLE VIII.
METHOD OF EXERCISE
8.01. Exercise. Subject to the provisions of Articles VII and XII, an Option or
SAR may be exercised in whole at any time or in part from time to time at such
times and in compliance with such requirements as the Administrator shall
determine; provided, however, that a Corresponding SAR that is related to an
incentive stock option may be exercised only to the extent that the related
Option is exercisable. An Option or SAR granted under this Plan may be exercised
with respect to any number of whole shares less than the full number for which
the Option or SAR could be exercised. A partial exercise of an Option or SAR
shall not affect the right to exercise the Option or SAR from time to time in
accordance with this Plan and the applicable Agreement with respect to the
remaining shares subject to the Option or related to the SAR. The exercise of
either an Option or Corresponding SAR shall result in termination of the other
to the extent of the number of shares with respect to which the Option or
Corresponding SAR is exercised.
8.02. Payment and Withholding. Unless otherwise provided by the Agreement,
payment of the Option price shall be made in cash or a cash equivalent
acceptable to the Administrator. If the Agreement provides, payment of all or
part of the Option price may be made by surrendering shares of Common Stock to
the Company. If Common Stock is used to pay all or part of the Option price, the
cash, cash equivalent and any shares surrendered must have a Fair Market Value
(determined as of the day preceding the date of exercise) that is not less than
the Option price for the number of shares the Option is being exercised. The
Agreement may specify the manner in which the withholding obligation shall be
satisfied with respect to the particular type of Award.
8.03. Determination of Payment of Cash and/or Common Stock Upon Exercise of SAR.
At the Administrator's discretion, the amount payable as a result of the
exercise of a SAR may be settled in cash, Common Stock, or a combination of cash
and Common Stock. No fractional share shall be deliverable upon the exercise of
a SAR but a cash payment will be made in lieu thereof.
8.04. Shareholder Rights. No Participant shall have any rights as a stockholder
with respect to shares subject to his Option or SAR until the date of exercise
of such Option or SAR.
ARTICLE IX.
STOCK AWARDS
9.01. Award. In accordance with the provisions of Article IV, the Administrator
will designate each individual to whom a Stock Award is to be made and will
specify the number of shares of Common Stock covered by the award.
9.02. Vesting. The Administrator, on the date of the award, may, but shall not
be required to, prescribe that a Participant's rights in the Stock Award shall
be forfeitable or otherwise restricted for a period of time set forth in the
Agreement. By way of example and not of limitation, the restrictions may
postpone transferability of the shares or may provide that the shares will be
forfeited if the Participant separates from the service of the Company and its
Affiliates before the expiration of a stated term or if the Company, an
Affiliate, an operating unit or the Participant fails to achieve stated
objectives, including objectives stated with respect to Performance Criteria. If
the vesting or transferability of a Stock Award is conditioned upon the
achievement of objectives stated with respect to Performance Criteria, the Stock
Award shall become vested, transferable or both only if the Committee determines
that such objectives have been achieved.
9.03. Shareholder Rights. Prior to their forfeiture (in accordance with the
terms of the Agreement and while the shares are forfeitable or nontransferable),
a Participant will have all rights of a shareholder with respect to the Stock
Award, including the right to receive dividends and vote the shares; provided,
however, that while the shares are forfeitable or nontransferable (i) a
Participant may not sell, transfer, pledge, exchange, hypothecate, or otherwise
dispose of the Stock Award, (ii) the Company shall retain custody of the
certificates evidencing the Stock Award, and (iii) the Participant will deliver
to the Company a stock
power, endorsed in blank, with respect to each Stock Award. The limitations set
forth in the preceding sentence shall not apply after the shares are
nonforfeitable and transferable.
9.04. Employee Status. If the terms of a Stock Award provide that the Stock
Award will become nonforfeitable, transferable or both only if the Participant
completes a stated period of employment or continued service, the Administrator
may decide to what extent leaves of absence for governmental or military
service, illness, temporary disability or other reasons shall not be deemed
interruptions of continuous employment or service.
ARTICLE X.
PERFORMANCE SHARE AWARDS
10.01. Award. In accordance with the provisions of Article IV, the Administrator
will designate individual to whom an award of Performance Shares is to be
granted and will specify the number of shares of Common Stock covered by the
award.
10.02. Earning the Award. The Administrator, on the date of the grant of an
award, may prescribe that the Performance Shares, or portion thereof, will be
earned, and the Participant will be entitled to receive payment pursuant to the
award of Performance Shares, only upon satisfaction of criteria stated with
respect to Performance Criteria or such other criteria as may be prescribed by
the Administrator. With respect to Performance Shares that are earned based upon
the achievement of objectives stated with respect to Performance Criteria, a
payment will be made pursuant to such Performance Shares only to the extent that
the Committee determines that such performance objectives have been achieved.
10.03. Payment. In accordance with the Agreement, the amount payable when an
award of Performance Shares is earned may be settled in cash, a Stock Award or a
combination of cash and a Stock Award. A fractional share shall not be
deliverable when an award of Performance Share is earned, but a cash payment
will be made in lieu thereof.
10.04. Shareholder Rights. No Participant shall, as a result of receiving an
award of Performance Shares, have any rights as a shareholder until and to the
extent that the Performance Shares are earned and settled with a Stock Award. To
the extent that an award of Performance Shares is earned and settled with a
Stock Award, a Participant will have all the rights of a shareholder with
respect to those shares.
10.05. Nontransferability. A Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of a Performance Share award or the
right to receive a payment thereunder other than by will or the laws of descent
and distribution.
10.06. Employee Status. If the terms of a Performance Share award provide that a
payment will be made thereunder only if the Participant completes a stated
period of employment or continued service, the Administrator may decide to what
extent leaves of absence for governmental or military service, illness,
temporary disability or other reasons shall not be deemed interruptions of
continuous employment or service.
ARTICLE XI.
ADJUSTMENT UPON CHANGE IN COMMON STOCK
The maximum number of shares (as set forth in Section 5.01 and 5.02) as to which
Stock Awards may be granted and as to which Options, SARs and Performance Shares
may be granted under this Plan shall be proportionately adjusted, and the terms
of outstanding Stock Awards, Performance Shares, Options and SARs shall be
adjusted, as the Committee shall determine to be equitably required in the event
that (a) the Company (i) effects one or more stock dividends, stock split-ups,
subdivisions or consolidations of shares or (ii) engages in a transaction to
which Section 424 of the Code applies or (b) there occurs any other event
(e.g. extraordinary cash dividend or other distribution) that, in the judgment
of the Committee, necessitates such action. Any determination made under this
Article XI by the Committee shall be final and conclusive.
The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, outstanding
Stock Awards, Performance Shares, Options or SARs.
The Committee may award Stock Awards, Performance Shares, Options or SARs in
substitution for stock awards, stock options, stock appreciation rights, or
similar awards held by an individual who is or becomes an employee of the
Company or an Affiliate in connection with a transaction described in the first
paragraph of this Article XI. Notwithstanding any provision of the Plan (other
than the limitation of Section 5.01), the terms of such substituted Stock
Awards, Performance Shares, Options or SARs shall be as the Committee, in its
discretion, determines is appropriate.
ARTICLE XII.
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
No Option or SAR shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a party, and the
rules of all domestic stock exchanges on which the Company's shares may be
listed. The Company shall have the right to rely on an opinion of its counsel as
to such compliance. Any share certificate issued to evidence Common Stock for
which Stock Awards are granted (including the settlement of Performance Shares)
or for which an Option or SAR is exercised may bear such legends and statements
as the Administrator may deem advisable to assure compliance with federal and
state laws and regulations. No Option or SAR shall be exercisable, no Stock
Awards or Performance Shares shall be granted, no Common Stock shall be issued,
no certificate for shares shall be delivered, and no payment shall be made under
this Plan until the Company has obtained such consent or approval as the
Administrator may deem advisable from regulatory bodies having jurisdiction over
such matters.
ARTICLE XIII.
GENERAL PROVISIONS
13.01. Effect on Employment. Neither the adoption of this Plan, its operation,
nor any document describing or referring to this Plan (or any part thereof)
shall confer upon any individual any right to continue in the employ or service
of the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment or service of any individual
at any time with or without assigning a reason therefor.
13.02. Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon any contractual obligations that may be created pursuant to this
Plan. No such obligation of the Company shall be deemed to be secured by any
pledge of, or other encumbrance on, any property of the Company.
13.03. Disposition of Stock. A Participant shall notify the Administrator of any
sale or other disposition of Common Stock acquired pursuant to an Option that
was an incentive stock option if such sale or disposition occurs (i) within two
years of the grant of an Option or (ii) within one year of the issuance of the
Common Stock to the Participant. Such notice shall be in writing and directed to
the Secretary of the Company.
13.04. Rules of Construction. Headings are given to the articles and sections of
this Plan solely as a convenience to facilitate reference. The reference to any
statute, regulation, or other provision of law shall be construed to refer to
any amendment to or success of such provision of law.
13.05. Section 409A Compliance. To the extent that the Administrator determines
that a Participant would be subject to the additional 20% tax imposed on certain
deferred compensation arrangements pursuant to Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code"), as a result of any provision of
any Stock Award, Performance Share Award, SAR or Option granted under this Plan,
such provision shall be deemed amended to the minimum extent necessary to avoid
application of such additional tax. If an amendment to an Option granted in
tandem with a SAR is required by reason of the previous sentence and unless the
Administrator determines that such an amendment is not practical, the amendment
shall be to treat the SAR as if had never been granted.
ARTICLE XIV.
AMENDMENT
The Board may amend or terminate this Plan from time to time; provided, however,
that no amendment may become effective until shareholder approval is obtained if
(i) the amendment increases the aggregate number of shares of Common Stock that
may be issued under the Plan, (ii) the amendment changes the class of
individuals eligible to become Participants, or (iii) the amendment must be
approved by shareholders under the rules of a stock exchange on which the Common
Stock is listed. No amendment shall, without a Participant's consent, adversely
affect any rights of such Participant under any outstanding Stock Award,
Incentive Award, Performance Share, Option or SAR outstanding at the time such
amendment is made.
ARTICLE XV.
DURATION OF PLAN
No Stock Awards, Options, SARs or Performance Shares may be granted under this
Plan more than ten years after the earlier of the date that the Plan is adopted
by the Board or the date that the Plan is approved by shareholders as provided
in Article XVI. Stock Awards, Performance Shares, Options and SARs granted
before that date shall remain invalid in accordance with their terms.
ARTICLE XVI.
EFFECTIVE DATE OF PLAN
Stock Awards, Options, SARs and Performance Shares may be granted under this
Plan upon its adoption by the Board, provided that no Stock Award, Option, SAR
or Performance Share will be effective unless this Plan is approved by a
majority of the votes entitled to be cast by the Company's shareholders, voting
either in person or by proxy, at a duly held shareholders' meeting within twelve
months of such adoption.
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Shenandoah Telecommunications Company:
We consent to the use of our reports incorporated by reference herein.
Richmond, Virginia
August 9, 2005
Exhibit 24.1
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints CHRISTOPHER E. FRENCH AND
EARLE A. MACKENZIE and each of them, to be the undersigned's true and lawful
attorney-in-fact for thirteen months from the date hereof to:
(1) execute for and on behalf of the undersigned any registration
statements on Form S-8 and any amendments (including post-effective
amendments) thereto relating to the Company's employee benefit
plans, provided that any registration statement or amendment in
final form is first reviewed by my attorney-in-fact; and his or her
name, when thus signed, shall have the same force and effect as
though I had manually signed the registration statement and/or
amendment; and
(2) take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required of, the
undersigned, it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant to this Power
of Attorney shall be in such form and shall contain such terms and
conditions as such attorney-in-fact may approve in his discretion.
The undersigned hereby grants to each such attorney-in-fact full power and
authority to do and perform all and every act and thing whatsoever necessary and
proper to be done in the exercise of any of the rights and powers herein
granted, with full power of substitution or revocation, hereby ratifying and
confirming all that such attorney-in-fact, or his substitute or substitutes,
shall lawfully do or cause to be done by virtue of this power of attorney and
the rights and powers herein granted. The undersigned hereby revokes any and all
powers of attorney previously granted by the undersigned relating to the subject
matter of this Power of Attorney.
The undersigned has caused this Power of Attorney to be executed as of
this 9th day of August 2005.
/s/ DOUGLAS C. ARTHUR
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Douglas C. Arthur
/s/ NOEL M. BORDEN
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Noel M. Borden
/s/ KEN L BURCH
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Ken L. Burch
/S/ TRACY FITZSIMMONS
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Tracy Fitzsimmons
/S/ CHRISTOPHER E. FRENCH
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Christopher E. French
/s/ GROVER M. HOLLER
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Grover M. Holler, Jr.
/S/ DALE S. LAM
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Dale S. Lam
/S/ WILLIAM A. TRUBAN, JR.
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William A. Truban, Jr.
/s/ JAMES E. ZERKEL II
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James E. Zerkel II