This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Shenandoah Telecommunications Company for use at Shenandoah Telecommunications Company’s 20132015 annual meeting of shareholders to be held in the auditorium of the Company’s offices at 500 Shentel Way, Edinburg, Virginia, on Tuesday, April 16, 2013,21, 2015, at 11:00 a.m., local time.  The purpose of the annual meeting and the matters to be acted upon are set forth in the accompanying notice of annual meeting.

 

The Company will pay the cost of this proxy solicitation.  In addition to the solicitation of proxies by use of the mails,electronic delivery, officers and other employees of the Company may solicit proxies by personal interview, telephone and e-mail.  None of these individuals will receive compensation for such services, which will be performed in addition to their regular duties.  The Company also has made arrangements with brokerage firms, banks, nominees and other fiduciaries to forward proxy solicitation material for shares held of record by them to the beneficial owners of such shares.  The Company will reimburse such persons for their reasonable out-of-pocket expenses in forwarding such material.

 

A list of shareholders entitled to vote at the annual meeting will be open to the examination of any shareholder, for any purpose germane to the meeting, during ordinary business hours for a period of ten days before the meeting at the Company’s offices at 500 Shentel Way, Edinburg, Virginia, and at the time and place of the meeting during the whole time of the meeting.

 

This proxy statement and the enclosed proxy cardvoting instructions are first being maileddelivered to the Company’s shareholders on or about March 8, 2013.12, 2015.  In accordance with the rules of the Securities and Exchange Commission, we are furnishing certain proxy materials (Proxy Statement, Proxy Card and Annual Report on Form 10-K) by providing access to these materials electronically on the Internet.  As such, we are not mailing a printed copy of these proxy materials to each shareholder of record or beneficial owner, and our shareholders will not receive printed copies of these proxy materials unless they request this form of delivery.  Printed copies will be provided upon request at no charge.  We are delivering a Notice of Meeting and a Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”) to our shareholders on or about March 12, 2015.  The Notice of Internet Availability is in lieu of mailing the printed proxy materials, and contains instructions for our shareholders as to how they may: (1) access and review our proxy materials on the Internet; (2) submit their proxy; and (3) receive printed proxy materials.  Shareholders may request to receive printed proxy materials by mail or electronically by e-mail on an ongoing basis by following the instructions in the Notice of Internet Availability.  We believe that providing proxy materials electronically will enable us to save costs associated with printing and delivering the materials and reduce the environmental impact of our annual meetings.  A request to receive proxy materials in printed form will remain in effect until such time as the shareholder elects to terminate it.

 

Shares of the Company’s common stock represented by a properly executed proxy, if such proxy is received in time and not revoked, will be voted at the annual meeting in accordance with the instructions indicated in such proxy.  If no instructions are indicated, such shares will be voted FOR: (1) the election of the three director nominees to the Company’s Board of Directors; (2) auditor ratification;ratification; and (3) the approval, in a non-binding vote, of the named executive officer compensation.compensation.  Discretionary authority is provided in the proxy as to any matters not specifically referred to in the proxy.  Management is not aware of any other matters that are likely to be brought before the annual meeting.  If any other matter is properly presented at the annual meeting for action, including a proposal to adjourn or postpone the annual meeting to permit the Company to solicit additional proxies in favor of any proposal, the persons named in the accompanying proxy will vote on such matter in their own discretion.

 

A shareholder executing a proxy card or submitting a proxy through the Internet may revoke the proxy at any time before it is exercised by giving written notice revoking the proxy to the Company’s Secretary, by subsequently filing another proxy bearing a later date or by attending the annual meeting and voting in person.  Attending the annual meeting will not automatically revoke the shareholder’s proxy.  All written notices of revocation or other communications with respect to revocation of proxies should be addressed to Shenandoah Telecommunications Company, 500 Shentel Way, P.O. Box 459, Edinburg, Virginia 22824, Attention: Corporate Secretary.

 

All holders of record of the common stock at the close of business on March 1, 2013,February 27, 2015, will be eligible to vote at the annual meeting.  Each holder of common stock is entitled to one vote at the annual meeting for each share held by such shareholder.  As of March 1, 2013,February 27, 2015, there were 23,987,57924,178,656 shares of common stock outstanding.

 

A majority of the shares of common stock issued and outstanding and entitled to vote at the annual meeting, present in person or represented by proxy, will constitute a quorum at the annual meeting.  Votes cast in person or by proxy at the annual meeting will be tabulated by the inspectors of election appointed for the annual meeting, who will determine whether or not a quorum is present.  Abstentions and any broker non-votes, which are described below, will be counted for purposes of determining the presence of a quorum at the annual meeting.

 

The election of directors requires the affirmative vote of a majority of the votes cast for the election of directors.  Accordingly, the directorships to be filled at the annual meeting will be filled by the nominees receiving more than half of the votes cast in favor of their election.  In the election of directors, votes may be cast in favor of or withheld with respect to any or all nominees.

 

The proposal to ratify the Audit Committee’s selection of KPMG LLP as the Company’s independent registered public accounting firm for 20132015 will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against approval of the proposal.  Abstentions and broker non-votes will have no effect on the outcome of the vote on this proposal.

 

The proposal to approve, in a non-binding vote, the named executive officer compensation will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against the proposal.  Abstentions and broker non-votes will have no effect on the outcome of the vote on this proposal.

 

Broker-dealers who hold their customers’ shares in street name may, under the applicable rules of the exchanges and other self-regulatory organizations of which the broker-dealers are members, vote the shares of their customers on routine proposals, which under such rules typically include the ratification of auditors, when they have not received instructions from their customers.  Under these rules, brokers may not vote shares of their customers on non-routine matters without instructions from their customers.  A broker non-vote occurs with respect to any proposal when a broker holds shares of a customer in its name and is not permitted to vote on that proposal without instruction from the beneficial owner of the shares and no instruction is given.  A broker non-vote will not affect whether any proposal to be acted upon at the annual meeting is approved.

 

A copy of the Company’s annual report to shareholders and annual report on Form 10-K for the year ended December 31, 2012 accompanies this proxy statement.  The Company is required to file an annual report on Form 10-K for the year ended December 31, 20122014 with the Securities and Exchange Commission (the “SEC”).  A copy of the Company’s annual report on Form 10-K does not accompany this proxy statement.  Shareholders may obtain, free of charge, a copy of the 20122014 Form 10-K, without exhibits, by following the instructions in the Notice of Internet Availability or by writing to Shenandoah Telecommunications Company, 500 Shentel Way, P.O. Box 459, Edinburg, Virginia 22824, Attention: Corporate Secretary.  The annual report on Form 10-K is also available through the Company’s website at www.shentel.com.  The annual report to shareholders and the Form 10-K are not proxy- solicitingproxy-soliciting materials.

 

The Company has taken advantage of the “householding” rules of the SEC thatSEC.  For shareholders requesting to receive proxy materials in printed form, the householding rules permit the delivery of one set of the printed proxy materials to shareholders who have the same address, to conserve resources and achieve the benefit of reduced printing and mailing costs. Shareholders residing at a shared address will continueIf you wish to receive separate proxy cards. If you did not receive an individuala paper copy of our annual report to shareholders or this proxy statement, and wish to do so,you may follow the Company will send a copy to you if youinstructions on the Notice of Internet Availability or make a written request to Shenandoah Telecommunications Company, 500 Shentel Way, P.O. Box 459, Edinburg, Virginia 22824, Attention: Shareholder Services, or call us at 540-984-5200.  If you are receiving multiple copies of our annual report to shareholders and proxy statement, you can request householding or electronic delivery by contacting Shareholder Services in the same manner.

The following table presents, as of March 1, 2013,February 27, 2015, information based upon the Company’s records and filings with the SEC regarding beneficial ownership of the common stock by the following persons:

 

The information presented below regarding beneficial ownership of the Company’s common stock has been presented in accordance with rules of the SEC and is not necessarily indicative of beneficial ownership for any other purpose.  Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security.  A person is also deemed to be the beneficial owner of any security as to which a person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right.  More than one person may be deemed to be a beneficial owner of the same securities.

 

The percentage of beneficial ownership as to any person as of March 1, 2013,February 27, 2015, is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of March 1, 2013,February 27, 2015, plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days.  Consequently, the denominator used for calculating such percentage may be different for each beneficial owner.  Except as otherwise indicated below and under applicable community property laws, the Company believes that the beneficial owners of the Company’s common stock listed in the table have sole voting and investment power with respect to the shares shown.

 

 

The shares of common stock shown as beneficially owned by Mr. Burch include 567 shares of common stock owned of record by his spouse.  Mr. Burch disclaims beneficial ownership of such shares.

 

The shares of common stock shown as beneficially owned by Mr. French include 55,230 shares of common stock owned of record by his spouse, 20,502 shares of common stock owned of record by his adult children, 734,801699,454 shares owned of record by 1413 trusts for the benefit of Mr. French’s family members for which Mr. French serves as trustee, and options exercisable within 60 days of March 1, 2013February 27, 2015 to purchase 49,565102,599 shares of common stock.  Mr. French disclaims beneficial ownership of the shares owned of record by his spouse and children.  Of the shares shown as beneficially owned by Mr. French, 10,64023,000 shares are pledged as security for personal indebtedness, and an aggregate of 33,450 shares owned of record by trusts for the benefit of Mr. French’s family members are pledged as security for lines of credit.

 

The shares of common stock shown as beneficially owned by Mr. Zerkel include 750 shares of common stock owned of record by his spouse.  Mr. Zerkel disclaims beneficial ownership of such shares.

 

The shares of common stock shown as beneficially owned by Mr. MacKenzie include 143,758100,758 shares of common stock owned of record by his spouse, and options exercisable within 60 days of March 1, 2013February 27, 2015 to purchase 59,406144,597 shares of common stock.  Mr. MacKenzie disclaims beneficial ownership of the shares owned of record by his spouse.

 

 

The shares of common stock shown as beneficially owned by Mr. Pirtle include options exercisable within 60 days of March 1, 2013February 27, 2015 to purchase 10,1767,294 shares of common stock.

 

The shares of common stock shown as beneficially owned by Ms. FlowersMr. Whitaker include options exercisable within 60 days of March 1, 2013February 27, 2015 to purchase 19,7966,169 shares of common stock.

 

The shares of common stock shown as beneficially owned by all directors, nominees and executive officers as a group includesinclude options exercisable within 60 days of March 1, 2013February 27, 2015 to purchase 193,279325,920 shares of common stock.

 

The following table presents, as of March 1, 2013,February 27, 2015, information based upon the Company’s records and filings with the SEC regarding beneficial ownership of the common stock by each person known to the Company to be the beneficial owner of more than 5% of the common stock.  The information is based on the most recent Schedule 13G filed with the SEC on behalf of such persons.

 

 

The shares of common stock shown as beneficially owned by BlackRock, Inc. were reported on Schedule 13G filed with the Securities and Exchange Commission on February 4, 2013.January 23, 2015.  BlackRock, Inc. reported sole power to vote or1,864,966 shares and sole power to dispose of all 2,031,0331,917,454 shares shown.

 

 

The shares of common stock shown as beneficially owned by The Vanguard Group, Inc. were reported on Schedule 13G filed with the Securities and Exchange Commission on February 7, 2013.11, 2015.  The Vanguard Group, Inc. reported sole power to vote 38,47733,544 shares, sole power to dispose of 1,584,0471,203,277 shares, and shared power to dispose of 36,87731,944 shares.

 

The Company’s articles of incorporation provide that the Board of Directors is to be divided into three classes of directors, with the classes to be as nearly equal in number as possible.  The terms of office of the three current classes of directors expire at this annual meeting, at the annual meeting of shareholders in 20142016 and at the annual meeting of shareholders in 2015,2017, respectively.  Upon the expiration of the term of office of each class, the nominees for such class will be elected for a term of three years to succeed the directors whose terms of office expire.

 

Ken L. Burch, Richard L. Koontz, Jr. and James E. Zerkel IIJonelle St. John have been nominated for election to the class with a three-year term that will expire at the annual meeting of shareholders in 2016.2018.  All nominees are incumbent directors who have served on the Board of Directors since 1996, 20041995, 2006 and 1985,2007, respectively.

 

 

The Board of Directors has, by resolution, adopted a director nomination policy.  The purpose of the nomination policy is to describe the process by which candidates for possible inclusion in the Company’s recommended slate of director nominees are selected.  The nomination policy is administered by the Nominating and Corporate Governance Committee of the Board of Directors.

 

The Nominating and Corporate Governance Committee takes a variety of factors into account in selecting candidates for nomination as directors, including:including  the Company’s current needs and the qualities needed for board service, includingservice; experience and achievement in business, finance, technology or other areas relevant to the Company’s activities; the candidate’s reputation, ethical character and maturity of judgment; the desirability of establishing a diversity of viewpoints, backgrounds and experiences among board members; the candidate’s independence under SEC and Nasdaq Marketplace Rules; the candidate’s service on other boards of directors; the absence of conflicts of interest that might impede the proper performance of the candidate’s responsibilities as a director; the candidate’s ability to devote sufficient time to board matters; and the candidate’s ability to work effectively and collegially with other Board members.  The Committee does not give particular weight to any one factor, but instead considers how the attributes of a candidate or nominee would enhance the Board’s overall qualifications and effectiveness.  In the case of an incumbent director whose term of office is set to expire, the Nominating and Corporate Governance Committee will review such director’s overall service to the Company during his or her term, including the number of meetings attended, level of participation, quality of performance, and any transactions of such directors with the Company during the term.  For those potential new director candidates who appear upon first consideration to meet the Board’s selection criteria, the Nominating and Corporate Governance Committee will conduct appropriate inquiries into their background and qualifications and, depending on the result of such inquiries, arrange for in-person meetings with the potential candidates.  The effectiveness of the Nominating and Corporate Governance Committee’s candidate selection criteria is assessed through the Committee’s annual review of policies regarding Board and committee membership.

 

The Nominating and Corporate Governance Committee may use multiple sources for identifying director candidates, including its own contacts and referrals from other directors, members of management, the Company’s advisors, and executive search firms.  The Nominating and Corporate Governance Committee will consider director candidates recommended by shareholders and will evaluate such director candidates in the same manner in which it evaluates candidates recommended by other sources.  In making recommendations for director nominees for the annual meeting of shareholders, the Nominating and Corporate Governance Committee will consider any written recommendations of director candidates by shareholders received by the Secretary of the Company not later than 120 days before the anniversary of the previous year’s annual meeting of shareholders.  Recommendations must include the candidate’s name and contact information and a statement of the candidate’s background and qualifications, and must be mailed to Shenandoah Telecommunications Company, 500 Shentel Way, P.O. Box 459, Edinburg, Virginia 22824, Attention: Corporate Secretary.

 

 

 

Biographical information concerning each of the nominees and each of the directors continuing in office is presented below.