-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ASVkEYOON+haX3CvrGlVhZyeuZOtBUbGO1f3YCl+lAHdPGrmlv7VDx2EcCzJl+WM ypypeSyxlHqEoHriQw78ew== 0000085153-96-000004.txt : 19960429 0000085153-96-000004.hdr.sgml : 19960429 ACCESSION NUMBER: 0000085153-96-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960621 FILED AS OF DATE: 19960426 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROSEVILLE TELEPHONE CO CENTRAL INDEX KEY: 0000085153 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 940817190 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-00556 FILM NUMBER: 96551277 BUSINESS ADDRESS: STREET 1: P O BOX 969 CITY: ROSEVILLE STATE: CA ZIP: 95678-0969 BUSINESS PHONE: 9167861407 MAIL ADDRESS: STREET 1: P O BOX 969 CITY: ROSEVILLE STATE: CA ZIP: 95678-0969 DEF 14A 1 ROSEVILLE TELEPHONE COMPANY NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO THE SHAREHOLDERS: The Annual Meeting of Shareholders of Roseville Telephone Company (hereinafter called the Company) will be held at the Company's Industrial Avenue Facility, 8150 Industrial Avenue, Building A, Roseville, California, on Friday, June 21, 1996 at 8:00 o'clock P.M., for the following purposes: 1. To elect a Board of five (5) Directors; 2. To consider and act upon a proposal to amend the Company's Amended and Restated Articles of Incorporation to increase to 100,000,000 the authorized shares of Common Stock; 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., May 10, 1996 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 26, 1996. ROSEVILLE TELEPHONE COMPANY P.O. BOX 969 211 LINCOLN STREET ROSEVILLE, CALIFORNIA 95678 APRIL 26, 1996 PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of Roseville Telephone Company (hereinafter called the Company) to be used at the Annual Meeting of Shareholders on June 21, 1996, 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 26, 1996. 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 May 10, 1996, will be entitled to vote at the Annual Meeting. As of the close of business on February 29, 1996, there were 14,915,424 shares of the Company's Common Stock outstanding. On February 29, 1996, 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 of Name and Address of Beneficial Owner of Beneficial Ownership Class ------------------------------------ ---------------------- -------- Roseville Telephone Company Retirement Supplement Plan 1,351,663(1) 9.1% 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 five candidates for election as Directors at the Annual Meeting of Shareholders who receive the highest number of affirmative votes will be elected. Approval of the proposal to amend the Company's Amended and Restated Articles of Incorporation requires the affirmative vote of a majority of the outstanding shares of the Company. The approval of 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. 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 1995, the Board of Directors held twelve regular meetings, of which no Director attended less than 75 percent. The Company's Board of Directors has no standing audit or nominating Committee. In 1994 the Board of Directors established a Compensation Committee, composed 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, and Ralph E. Hoeper. 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 seven individuals) beneficially owned, as of February 29, 1996, an aggregate 693,558 shares, or 4.6% of the Company's Common Stock. In respect to the nominees and all the Directors and Officers as a group, the following information is furnished as of February 29, 1996. Principal Occupation and Shares of Business Company Percent Experience for Director Beneficially of Name Age Past Five Years Since Owned(1) Class ---- --- ------------------ ----- ----- ---- Robert L. 77 Chairman of the 1954 311,505 2.1% Doyle(2)(3) Board of Directors of the Company; President and Chief Executive Officer of the Company from 1954 to 1993. Brian H. Strom(4) 53 President and 1993 7,163 * Chief Executive Officer of the Company (since December 1993); Vice President and Chief Financial Officer of the Company from 1989 to 1993. Thomas E. Doyle(2) 67 Vice President 1951 289,532 1.9% (since 1972) and Secretary- Treasurer (since 1965) of the Company; Chairman of the Board, Placer Savings Bank, Auburn, California. Ralph E. Hoeper(5) 71 President, 1987 37,438 * Foresthill Telephone Company, Foresthill, California. John R. Roberts 44 Executive Director 1993 10,456 * III(5) (since 1990), California Rice Industry Association; Executive Director (from 1989 to 1990), Sacramento Metropolitan Chamber of Commerce; Director, Meta Information Services, Inc., Sacramento, California. All Directors and Officers as a group (7 persons) 693,558 4.6% __________ *Less than 1.0%. (1) Each beneficial owner has shared voting and investment power unless otherwise noted. (2) Robert L. Doyle and Thomas E. Doyle are brothers. (3) Included in Robert L. Doyle's share ownership figure are 142,562 shares in respect of which he has sole voting and investment power. (4) Included in Brian H. Strom's share ownership figure are 6,248 shares in respect of which he has sole voting and investment power. (5) Ralph E. Hoeper and John R. Roberts III serve on the Compensation Committee. Compensation of Directors All Directors other than Robert L. Doyle and Brian H. Strom (who have not received compensation as Directors since April 1994) were compensated by a fee of $1,000 per month and $500 for each Board meeting they attended in 1995. EXECUTIVE COMPENSATION The following table sets forth the executive compensation paid during the years ended December 31, 1995, 1994 and 1993, to all officers of the Company who earned more than $100,000 in combined salary and bonus in 1995: Summary Compensation Table Annual Compensation Other Annual All Other Name and Salary(2) Bonus Compensation Compensation (3) (4) Principal Position(1) Year $ $ $ $ -------------------- ---- -------- ----- ----------- ------- Robert L. Doyle 1995 369,961 -- 9,685 60,462 Chairman of the 1994 361,496 -- 9,685 21,097 Board of Directors 1993 359,775 -- 9,685 10,000 Brian H. Strom 1995 322,229 -- 1,235 8,335 President and Chief 1994 271,207 -- 1,235 8,493 Executive Officer 1993 201,385 -- 1,080 10,000 A. A. Johnson 1995 262,050 -- 9,685 16,042 Executive Vice 1994 238,428 -- 9,685 8,493 President and Chief Operating Officer 1993 201,865 -- 8,480 10,000 Michael D. Campbell 1995 233,915 -- 745 8,335 Vice President and 1994 163,255 -- 560 -- Chief Financial Officer __________ (1) On December 22, 1993, Brian H. Strom, former Vice President and Chief Financial Officer of the Company was elected President and Chief Executive Officer and A. A. Johnson, former Vice President, Operations of the Company was elected Executive Vice President and Chief Operating Officer. Robert L. Doyle continues to serve as Chairman of the Board of Directors, a position he held in addition to his service to December 1993 as President and Chief Executive Officer. Michael D. Campbell was elected Vice President and Chief Financial Officer effective March 14, 1994. (2) Reflects for Robert L. Doyle and Brian H. Strom, in addition to salary, director's fees in the amount of $3,000 for the year ended December 31, 1994, and for Robert L. Doyle in the amount of $12,000 for the year ended December 31, 1993 and, in respect of Michael D. Campbell, salary from the commencement of his employment on March 14, 1994. (3) 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. (4) Reflects employer contributions to the Company's Retirement Supplement Plan and, for Robert L. Doyle in 1995 and 1994, payments to Mr. Doyle pursuant to the SERP in the amount of $52,313 and $11,864, respectively and, for A. A. Johnson in 1995, a payment to Mr. Johnson pursuant to the SERP in the amount of $7,707. See "Retirement Supplement Plan" and "Pension Plan and SERP" for further information. Retirement Supplement Plan The Company has a Retirement Supplement Plan in which all employees of the Company are eligible to participate after one year of service. Under the Retirement Supplement Plan, eligible employees of the Company are allowed to contribute to the plan not more than 6% of their annual compensation as an "employee savings contribution." Eligible employees may also contribute to the plan not more than 10% of their annual compensation as an "employee retirement contribution." Generally, in accordance with Section 401(k) of the Internal Revenue Code, an employee who makes an employee retirement contribution reduces by the amount of such contribution the amount of his or her taxable income that is otherwise currently reportable for Federal tax purposes. The Company will make employer contributions to the plan equal to 50% of the employee's aggregate savings and retirement contributions. Subject to plan limitations on total contributions and Company matching contributions, an employee may elect to make either a savings contribution or a retirement contribution, or both. Employees may voluntarily withdraw their employee savings contributions upon appropriate notice to the Company, but must reach the age of 59 1/2, or alternatively, demonstrate a financial hardship to withdraw their employee retirement contributions. Employees are always fully vested in employer retirement contributions, and become vested in employer savings contributions at the rate of 20% per year of participation until fully vested or fully vested upon death, disability or the reaching of age 65. Distribution from the plan occurs generally upon termination of employment. 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 1995 plan contributions to estimated total covered compensation was 15.0%. Estimated total covered compensation has been determined by increasing the total base annual rate of compensation of plan participants at January 1, 1995 by 6.0%. Robert L. Doyle, Brian H. Strom, A. A. Johnson and Michael D. Campbell are entitled to benefits under the Pension Plan and the SERP and, at December 31, 1995, were credited with 42, 7, 18 and 1 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 1996. Highest Consecutiv e Five-Year Estimated Annual Pension for Average Representative Years of Service Compensati 15 20 25 30 35 40 on ---------- --------- --------- --------- --------- --------- ---------- - $100,000 $ 26,250 $ 35,000 $ 43,750 $ 52,500 $ 61,250 $ 70,000 125,000 32,813 43,750 54,688 65,625 76,563 87,500 150,000 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 78,750 105,000 131,250 157,500 183,750 210,000 400,000 105,000 140,000 175,000 210,000 245,000 280,000 Compensation Committee Interlocks and Insider Participation In early 1994, the Board of Directors established a Compensation Committee of independent Directors comprised of John R. Roberts III, who currently serves as Chairman, and Ralph E. Hoeper. Report of the Compensation Committee Concerning Compensation The Compensation Committee in 1994 assumed the responsibility of reviewing and recommending a compensation program for the Company's officers. Previously such responsibility was held by the entire Board of Directors. Consistent with past practices followed by the Company, and deemed by the Compensation Committee to be a proper articulation of the factors to be utilized in connection with officer compensation, the Compensation Committee considered: (i) operational goals and financial performance and the achievement of stockholder value, together with each officer's individual effectiveness in reaching those goals and achieving desirable financial performance and shareholder value; (ii) the years of service, skill levels and duties of the Company's officers giving effect to the limited number of officers and the resulting determination of increased responsibilities for the Company's officers in relation to other companies; (iii) the compensation earned by officers of other telephone and telecommunications companies; and (iv) officer compensation at general industry companies of similar size to the Company within the Sacramento, California metropolitan area and in other areas of the United States with comparable cost-of-living and compensation levels. The Compensation Committee also realizes the significance of the distinctions between the compensation policy at the Company and at other companies, both within and outside the telecommunications industry. Most importantly, substantially all of the officers' compensation is derived from base salary. Compensation incentives utilized at other companies, such as stock-based or other long-term incentive plans have never been adopted by the Company. As a result, substantially all of the officers' compensation at the Company is determined by base salary with reference to the performance of the Company and the officer in the prior fiscal year and competitive conditions. In addition, the Compensation Committee received the assistance of an independent consulting firm specializing in compensation matters which prepared a report in early 1994 with respect to the Company's compensation policies and related matters. The engagement of the independent consulting firm was implemented in furtherance of the Compensation Committee's goal to provide compensation opportunities that attract, motivate and retains the most qualified officers who can contribute to the long-term performance and growth of the Company. The consulting firm reviewed the appropriateness of the design of the Company's various plans in meeting the stated goal. In addition, the consulting firm provided the Compensation Committee with an analysis of compensation paid to executives in comparable positions in other companies that are representative of the labor markets in which the Company competes for executive talent. For the Company's executive officers 1994 compensation was below median figures for telecommunications and general industry companies with comparable revenues studied and discussed in the 1994 report delivered to the Compensation Committee. 1995 compensation for the Company's executive officers was determined with reference to the information provided in the 1994 report and adjustments effected to implement the compensation considerations identified above. The 1995 compensation awarded to Brian H. Strom, President and Chief Executive Officer, was comprised almost entirely of his salary. Mr. Strom's salary was established taking into consideration the individual and Company compensation criteria and policies described above. In addition, the Compensation Committee also considered that the 1994 compensation for the Company's executive officers, including the Chief Executive Officer, was below median figures for the comparable companies in the 1994 report. As a result, the Compensation Committee has made a conscious effort to advance the salary of the Chief Executive Officer to the median of such comparable companies. In addition, the Compensation Committee also recognized the continued successful financial performance of the Company measured by revenue and net income results, the Company's continued technological advancements, and the contributions of the Chief Executive Officer in helping the Company achieve such performance and advancements. In connection with the 1994 report utilized to assist in the determination of officer compensation, three of the twelve companies whose compensation policies were considered are among the seventeen companies constituting the Dow Jones Telephone Systems Index. All of the companies whose policies were considered for compensation comparisons are engaged in the telecommunications industry in general, and the local exchange carrier business in particular. In addition to the nature of their business, such comparison companies were comparable to the Company in one or more of the following categories: revenues, access lines, assets and geographic location. Substantially all of the companies in the Dow Jones Telephone Systems Index are larger than the Company and it was determined that comparison of compensation of the Company's officers with the officers of the other companies would not be meaningful. Compensation Committee, John R. Roberts III, Chairman Ralph E. Hoeper EXECUTIVE OFFICERS The following table provides information regarding certain executive officers of the Company as of February 29, 1996: Shares of Principal Occupation and Company Percent Business Experience for Beneficially of Name Age Past Five Years Owned(1) Class ---- --- ----------------------- ----------- ----- Robert L. 77 Chairman of the Board of 311,505 2.1% Doyle(2) Directors; President and Chief Executive Officer (1954 to 1993) Brian H. Strom(3) 53 President and Chief Executive 7,163 * Officer (since December 1993); Vice President and Chief Financial Officer (1989 to 1993) A. A. Johnson 74 Executive Vice President and 33,176 * Chief Operating Officer (since December 1993); Vice President, Operations (1989 to 1993) Michael D. 47 Vice President and Chief 4,288 * Campbell Financial Officer (since March 1994); Partner, Ernst & Young LLP (1983 to 1994) __________ * Less than 1.0%. (1) Each beneficial owner has shared voting and investment power unless otherwise noted. (2) Included in Robert L. Doyle's share ownership figure are 142,562 shares in respect of which he has sole voting and investment power. (3) Included in Brian H. Strom's share ownership figure are 6,248 shares in respect of which he has sole voting and investment power. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, 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 "Commission") 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 Commission'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 two fiscal years ended December 31, 1995, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten-percent beneficial owners were complied with, except, that one initial report of ownership was filed late by Michael D. Campbell. 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 17 telecommunications companies) and Standard & Poor's ("S&P") 500 Stock Index. The comparison of total return on investment (change in year end stock price plus reinvested dividends) for each of the periods assumes that $100 was invested on December 31, 1990 in each of Roseville Telephone Company, the Dow Jones Telephone Systems Index and S&P 500 Stock Index. The stock performance shown on the graph below is not necessarily indicative of future price performance. COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN Among Roseville Telephone Company, DJ Telephone Systems and S&P 500 [graph] AMENDMENT OF AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK The Company's Amended and Restated Articles of Incorporation presently provide that the number of shares of Common Stock which the Company is authorized to issue is 20,000,000. As of February 29, 1996, there were issued and outstanding 14,915,424 shares of Common Stock. On March 26, 1996, the Company's Board of Directors unanimously approved a proposed amendment to the Company's Amended and Restated Articles of Incorporation to increase the number of authorized shares of Common Stock to 100,000,000 shares, subject to approval by the shareholders. The Board of Directors deems it in the best interest of the Company and its shareholders to increase the number of shares of its Common Stock in order to insure that a sufficient number of shares are authorized for issuance for general corporate purposes. The Board of Directors believes that having such additional shares authorized and available for issuance or reservation will allow the Company to have greater flexibility in considering potential future actions involving the issuance of stock, including stock dividends or splits. The Board of Directors has declared a stock dividend every year since 1982, but no determination has been made for 1996. Additional shares authorized may be issued from time to time by authority of the Company's Board of Directors, without further authorization by a vote of the shareholders. There are no present understandings, negotiations, contracts or agreements for the issuance of the additional shares of Common Stock to be authorized. Shareholders do not have pre-emptive rights with respect to shares of Common Stock of the Company. On June 16, 1995 the Company's shareholders approved an Agreement and Plan of Reorganization (the "Reorganization") to reorganize the corporate structure of the Company and its one existing subsidiary to create a new holding company to be the publicly-held parent of the Company. The Reorganization continues to be subject to the approval of the California Public Utilities Commission, and it is currently anticipated that the Reorganization will be implemented by the end of 1996. The Articles of Incorporation of the proposed holding company are currently substantially identical to the Amended and Restated Articles of Incorporation of the Company. Accordingly, if the amendment to the Company's Amended and Restated Articles of Incorporation is approved by the Company's shareholders, the Articles of Incorporation of the holding company will also be amended to increase its authorized number of shares of Common Stock to 100,000,000. The Board of Directors recommends a vote FOR the proposed amendment to the Amended and Restated Articles of Incorporation. The affirmative vote of the holders of a majority of the issued and outstanding shares of Common Stock of the Company is necessary to further amend the Amended and Restated Articles of Incorporation to increase the number of shares of Common Stock authorized. INDEPENDENT AUDITORS Ernst & Young LLP, the Company's auditors since 1960, has been selected by the Company as its independent auditors for the current year. A representative of Ernst & Young LLP is expected to be present at the meeting to be available to respond to appropriate questions and will have the opportunity to make a statement if such representative desires to do so. COST OF SOLICITATION The total cost of preparing, assembling and mailing the proxy statement, the form of proxy, any additional material intended to be furnished to shareholders concurrently with the proxy statement, and any additional material relating to the same meeting or subject matter furnished to shareholders subsequent to the furnishing of the proxy statement, will be borne by the Company. The Company will, upon request, reimburse brokers and other nominees for costs incurred by them in mailing the proxy statement, the form of proxy and any additional material intended to be furnished to shareholders concurrently with the proxy statement to beneficial owners. In addition, officers and regular employees may solicit proxies by telephone or in person. OTHER MATTERS AND SHAREHOLDER PROPOSALS As of this date, there are no other matters the management intends to present or has reason to believe others will present to the meeting. If other matters now unknown to the management come before the meeting, those who shall act as proxies will vote in accordance with their best judgment. Proposals of shareholders intended to be presented at the 1997 Annual Meeting must be received by the Company not later than January 7, 1997 to be considered for inclusion in the Company's proxy statement. Roseville, California, April 26, 1996. BY ORDER OF THE BOARD OF DIRECTORS /s/ ROBERT L. DOYLE ROBERT L. DOYLE Chairman of the Board ROSEVILLE TELEPHONE COMPANY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING JUNE 21, 1996 THE UNDERSIGNED STOCKHOLDER HEREBY APPOINTS ROBERT L. DOYLE, BRIAN H. STROM, THOMAS E. DOYLE, RALPH E. HOEPER AND JOHN R. ROBERTS III OR ANY ONE OR MORE OF THEM, WITH FULL POWER OF SUBSTITUTION, TO ACT AS PROXY FOR AND TO VOTE THE STOCK OF THE UNDERSIGNED AT THE ANNUAL MEETING OF STOCKHOLDERS OF ROSEVILLE TELEPHONE COMPANY, TO BE HELD AT THE COMPANY'S INDUSTRIAL AVENUE FACILITY, 8150 INDUSTRIAL AVENUE, BUILDING A, ROSEVILLE, CALIFORNIA, ON JUNE 21, 1996, OR ANY ADJOURNMENT THEREOF ON THE MATTERS BELOW: (1) Election of Directors (The Board of Directors recommends a vote "FOR"): FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY (except as marked to the contrary to vote for all nominees listed below) / / below / /
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THAT NOMINEE'S NAME ROBERT L. DOYLE, THOMAS E. DOYLE, RALPH E. HOEPER, JOHN R. ROBERTS III, BRIAN H. STROM (2) Approval of the amendment to the Amended and Restated Articles of Incorporation to increase the authorized Common Stock to 100,000,000 shares (The Board of Directors recommends a vote "FOR"): 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 26, 1996, 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) DATED: - - --------------- DAY OF - - ------------------, 1996. SIGNED: - - ------------------------------------------------------------------ - - ------------------------------------------------------------------ SIGNATURE OF STOCKHOLDER(S) PLEASE DATE PROXY AND SIGN EXACTLY AS NAME OR NAMES APPEAR AT RIGHT. IF STOCK IS REGISTERED IN THE NAME OF TWO OR MORE PERSONS, EACH MUST SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL 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 -----END PRIVACY-ENHANCED MESSAGE-----