SC 13D/A 1 wwvy13d3.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------- SCHEDULE 13D/A (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (AMENDMENT No. 3 SCHEDULE 13D) Under the Securities Exchange Act of 1934 WARWICK VALLEY TELEPHONE COMPANY ----------------------------------------------------------- --------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $1.00 PER SHARE ----------------------------------------------------------- --------------------- (Title of Class of Securities) 936750108 ----------------------------------------------------------- --------------------- (CUSIP Number) 1865 Palmer Avenue Larchmont, NY 10538 ----------------------------------------------------------- --------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) SANTA MONICA PARTNERS, L.P. 914-833-0875 ----------------------------------------------------------- --------------------- (Date of Event that Requires Filing of This Statement) N/A (Continued on following pages) (Page 1 of 6 Pages) CUSIP No. 936750108 13D/A Page 2 of 6 Pages ___________________________________________________________ _____________ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SANTA MONICA PARTNERS, L.P. 13-3100474 ___________________________________________________________ _____________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] ___________________________________________________________ _____________ 3 SEC USE ONLY ___________________________________________________________ _____________ 4 SOURCE OF FUNDS WC ___________________________________________________________ _____________ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ___________________________________________________________ _____________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK ___________________________________________________________ _____________ 7 SOLE VOTING POWER NUMBER OF N/A SHARES ___________________________________________________________ _____________ 8 SHARED VOTING POWER BENEFICIALLY N/A OWNED BY ___________________________________________________________ _____________ EACH 9 SOLE DISPOSITIVE POWER CUSIP No. 936750108 13D/A Page 3 of 6 Pages REPORTING N/A PERSON ___________________________________________________________ ______ 10 SHARED DISPOSITIVE POWER WITH N/A ___________________________________________________________ _____________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON N/A (LESS THAN 5%) ___________________________________________________________ _____________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] ___________________________________________________________ _____________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) N/A ___________________________________________________________ _____________ 14 TYPE OF REPORTING PERSON PN 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SMP ASSET MANAGEMENT LLC ___________________________________________________________ _____________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] ___________________________________________________________ _____________ 3 SEC USE ONLY ___________________________________________________________ _____________ 4 SOURCE OF FUNDS OO ___________________________________________________________ _____________ CUSIP No. 936750108 13D/A Page 4 of 6 Pages 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ___________________________________________________________ _____________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE ___________________________________________________________ _____________ 7 SOLE VOTING POWER NUMBER OF N/A SHARES ___________________________________________________________ _____________ 8 SHARED VOTING POWER BENEFICIALLY N/A OWNED BY ___________________________________________________________ _____________ EACH 9 SOLE DISPOSITIVE POWER REPORTING N/A PERSON ___________________________________________________________ _____________ 10 SHARED DISPOSITIVE POWER WITH N/A ___________________________________________________________ _____________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON N/A ___________________________________________________________ _____________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] ___________________________________________________________ _____________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) CUSIP No. 936750108 13D/A Page 5 of 6 Pages ___________________________________________________________ _____________ 14 TYPE OF REPORTING PERSON OO (LLC) The inclusion of SMP Asset Management LLC in this Statement shall not be construed as an admission that such party is, for purposes of Section 13(d) of the Securities Exchange Act of 1934, the beneficial owner of any securities covered by this Statement. WARWICK VALLEY TELEPHONE COMPANY SCHEDULE 13D/A Item 1. Security and Issuer. This statement on Schedule 13D/A (this "Statement") relates to the common stock with $1.00 par value (the "Shares") of Warwick Valley Telephone Company (the "Issuer"). The principal offices of the Issuer are located at 47 Main Street, Warwick, New York 10990. Item 2. Identity and Background. (a) Pursuant to Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, this Statement is being filed by Santa Monica Partners, L.P., a New York limited partnership ("Santa Monica Partners") 1865 Palmer Avenue, Larchmont, NY 10538. Item 3. Source and Amount of Funds or Other Consideration. N/A Item 4. Purpose of Transaction. Santa Monica Partners wrote a letter to the Board of Directors of Warwick Valley Telephone Company on February 26, 2004 containing five suggestions for maximizing shareholder value. The Company appears to have chosen to respond to that letter on page 3 of the 2003 annual report. Santa Monica Partners has written a further response to Mr. M. Lynn Pike, President & CEO and The Board of Directors pointing out that they may have overlooked some very important points and offering to meet with the Board to discuss the options which it believes will significantly enhance value for all shareholders. Item 5. Interest in Securities of the Issuer. (a) -e N/A Less than 5% ownership CUSIP No. 936750108 13D/A Page 6 of 6 Pages Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. None Item 7. Material to be filed as Exhibits. Exhibit 1: Letter to M. Lynn Pike, President & CEO and the Board of Directors. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: April 27, 2004 SANTA MONICA PARTNERS, L.P. By: SMP ASSET MANAGEMENT LLC By: /s/LAWRENCE J. GOLDSTEIN ------------------- --------------------- Lawrence J. Goldstein, President SMP ASSET MANAGEMENT LLC By: /s/LAWRENCE J. GOLDSTEIN ------------------- --------------------- Lawrence J. Goldstein, President Attention. Intentional misstatements or omissions of fact constitute federal criminal violations (see 18 U.S.C. 1001). Exhibit 1: April 27, 2004 M. Lynn Pike, President & CEO and The Board of Directors Warwick Valley Telephone Company 47 Main Street Warwick, NY 10990 Dear Lynn and members of the Board: Thank you for addressing our February 26, 2004 letter to you in the annual report. However, you may have overlooked some very important points. With respect to our suggestion to spin-off all of WWVY's assets and liabilities to Newco except for the OCP, HVDN and ZefCom investments, after the spin-off, there would be two public entities: Newco, (which could be renamed Warwick Valley Telephone Company) which would be the present operating business (POTS) and Warwick Capital (name could be changed from WVT Communications), an investment company holding WWVY's passive investments. The spin-off would not cause any tax liability to be incurred by either WWVY, its shareholders or the OCP itself. Warwick Capital could raise additional capital through a private placement, public offering or rights offering and then make additional investments in order to allow it to meet the IRS's diversification rules for pass-through tax status. We believe the IRS would treat the spin-off as a non- taxable distribution. Many companies have successfully spun off, tax-free, their operating businesses to leave the original company with a business or an investment or even a shell corporation or in the case of Warwick Capital, a company with some passive investments. Warwick Capital could retain Newco to manage its investments for a fee based in part on a percentage (typically 20%) of the profits. Most importantly, we estimate that Warwick Capital, as an investment company, would be able to pay a current annual dividend of about $1.85 per share vs. the present $0.76. In light of the low maximum tax rate of 15% on dividends, shareholders would derive a huge economic benefit from such an increase in the dividend. As for as our proposal to spin-off just the OCP to shareholders, we understand that Verizon may not unreasonably withhold permission. Moreover, the publicly held vehicle would not need to be traded publicly. The OCP could simply close its transfer books while investors could continue to buy and sell beneficial interests held in street name of the OCP via CEDE book entry transfers as do all other such public entities. This would eliminate the long list of "problems" you mentioned. We would greatly like to meet with you and the Board to discuss these options which we believe would significantly enhance value for all shareholders. Thank you very much for your attention to this matter. Warmly, Lawrence J. Goldstein LJG/es