<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
RCN Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
[LOGO]RCN(SM)
105 Carnegie Center
Princeton, New Jersey 08540
609-734-3700
Notice of Annual Meeting of Stockholders
May 19, 1999
The Annual Meeting of Stockholders of RCN Corporation ("RCN" or the
"Company") will be held at The Forrestal at Princeton, 100 College Road East,
Princeton, New Jersey, 08540 on Wednesday, May 19, 1999, at 11:00 A.M., local
time. The meeting will be held for the following purposes:
1. To elect four (4) Directors to Class II to serve for a term of three (3)
years;
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
auditors of the Company for the fiscal year ending December 31, 1999; and
3. To act upon such other matters as may properly come before the meeting
or any adjournment or postponement thereof.
Only stockholders of record at the close of business on March 25, 1999, will
be entitled to vote at the meeting either in person or by proxy. Each of these
stockholders is cordially invited to be present and vote at the meeting in
person.
In order to insure that your shares are represented and are voted in
accordance with your wishes, IT WILL BE APPRECIATED IF YOU WILL DATE AND SIGN
THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE. IN THE
ALTERNATIVE, STOCKHOLDERS MAY VOTE VIA THE INTERNET OR BY TELEPHONE. If you
attend the meeting, you may personally vote your shares regardless of whether
you have signed a proxy.
/s/ John J. Jones,
John J. Jones,
Executive Vice President,
General Counsel
and Corporate Secretary
Dated: April 22, 1999
<PAGE>
RCN CORPORATION
105 Carnegie Center
Princeton, New Jersey 08540
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON WEDNESDAY, MAY 19, 1999
This Proxy Statement is being mailed to stockholders on or about April 27,
1999, in connection with the solicitation of proxies by the Board of Directors
of RCN Corporation ("RCN" or the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Wednesday, May 19, 1999, at
11:00 A.M., local time, at The Forrestal at Princeton, 100 College Road East,
Princeton, New Jersey, 08540 and at any adjournment or postponement thereof.
At the Annual Meeting, stockholders of RCN eligible to vote will consider
and vote upon proposals: (i) to elect four (4) Class II Directors to serve for
a term of three (3) years; (ii) to ratify the appointment of
PricewaterhouseCoopers LLP as independent auditors of RCN for the fiscal year
ending December 31, 1999; and (iii) to transact such other business as may
properly come before the meeting.
Any proxy may be revoked at any time prior to its exercise by notifying the
Corporate Secretary in writing, by delivering a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement in connection with the
solicitation made hereby, and if given or made, such information or
representation should not be relied upon as having been authorized by RCN.
----------------
The date of this Proxy Statement is April 22, 1999.
1
<PAGE>
THE ANNUAL MEETING
Place, Date and Time
The Annual Meeting will be held at The Forrestal at Princeton, 100 College
Road East, Princeton, New Jersey, 08540 on Wednesday, May 19, 1999, at 11:00
A.M., local time.
Purpose of the Annual Meeting
Stockholders of RCN will consider and vote upon proposals: (i) to elect four
(4) Class II Directors to serve for a term of three (3) years; (ii) to ratify
the appointment of PricewaterhouseCoopers LLP as independent auditors of RCN
for the fiscal year ending December 31, 1999; and (iii) to act upon such other
matters as may properly come before the meeting or any adjournment or
postponement thereof.
Record Date, Quorum, and Required Vote
The close of business on March 25, 1999, has been fixed as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting and at any adjournment or postponement thereof. On March 25,
1999, there were 66,434,736 outstanding shares of Common Stock and no other
equity securities of RCN. The presence at the Annual Meeting, in person or by
proxy, of stockholders entitled to cast a majority of the votes entitled to be
cast at the Annual Meeting shall constitute a quorum at the Annual Meeting.
Stockholders will be entitled to one vote per share for Common Stock on all
matters to be submitted to a vote at the Annual Meeting. Stockholders do not
have cumulative voting rights with respect to the election of Directors.
In accordance with Delaware law, a stockholder entitled to vote for the
election of Directors can withhold authority to vote for all nominees for
Directors or can withhold authority to vote for certain nominees for
Directors.
Directors will be elected by a plurality of the votes cast at the Annual
Meeting. Abstentions and broker non-votes are not treated as votes cast, and
thus will not be the equivalent of votes against the election of a nominee.
The approval of Proposal 2 (regarding the ratification of the appointment of
independent auditors) requires the affirmative vote of a majority of the votes
cast by the holders of RCN Common Stock. Abstentions and broker non-votes,
because they are not treated as votes cast, will not be the equivalent of
votes against Proposal 2.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three (3) classes and is
currently comprised of thirteen (13) members. One class is elected each year
for a three-year term. Class II Directors whose term will expire at the Annual
Meeting include the following nominees, all of whom are presently Directors of
the Company: Alfred Fasola, Bruce C. Godfrey, Richard R. Jaros and Michael B.
Yanney. These four (4) nominees, if elected at the 1999 Annual Meeting, will
serve for a term of three (3) years expiring at the Annual Meeting of
Stockholders to be held in 2002.
It is not anticipated that any of the above nominees will become unavailable
for any reason, but, if any of the nominees should become so unavailable
before the Annual Meeting, the persons named on the enclosed Proxy reserve the
right to substitute another person of their choice as nominee in place of such
unavailable person, or to vote for such lesser number of Directors as may be
prescribed by the Board of Directors.
The Board of Directors recommends that the stockholders vote FOR the
election of these four (4) nominees as Class II Directors to serve for a term
of three (3) years.
DIRECTOR INFORMATION
Information as of April 13, 1999, concerning the nominees for election as
Class II Directors and the other current Directors is set forth below.
<TABLE>
<CAPTION>
Director
Name of Director Age Since
---------------- --- --------
<C> <C> <S> <C>
James Q. Crowe 49 President and Chief Executive Officer of 1997
Level 3 Communications, Inc., the majority
shareholder of the Company ("Level 3"),
formerly known as Peter Kiewit Sons' Inc.,
an affiliate of the Company ("PKS") since
August 1997 and a Director since June 1993;
President and Chief Executive Officer of
MFS Communications Company, Inc.
("MFS/WorldCom") from June 1993 to June
1997 and Chairman of the Board of Directors
of MFS/WorldCom from 1992 to 1996. Mr.
Crowe is a Director of Commonwealth
Telephone Enterprises, Inc. ("CTE"), an
affiliate of the Company, and Inacom
Communications, Inc., since 1997 and
Chairman of the Board of Directors of
WorldCom, Inc. ("WorldCom") from December
1996 to June 1997.
Alfred Fasola 49 Chief Executive Officer of Jumbo Sports 1997
since March 1999; Chairman of Hot Sports
Inc. since 1997; Chief Executive Officer of
Herman's Sporting Goods from 1992 to 1995;
Chairman and Chief Executive Officer of
Circle Express/Internet from 1990 to 1992;
Chief Executive Officer of Pilot Freight
Carriers, Inc. from 1987 to 1989; and
President of Purolator Courier Corp. from
1986 to 1987.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Director
Name of Director Age Since
---------------- --- --------
<C> <C> <S> <C>
Bruce C. Godfrey 43 Executive Vice President and Chief 1997
Financial Officer of the Company since
September 1997; Mr. Godfrey was Corporate
Secretary from September 1997 to August
1998, Executive Vice President and Chief
Financial Officer of CTE from April 1994
to December 1998; Director since 1996 and
Corporate Secretary from September 1997
to August 1998; Director and Corporate
Secretary of Cable Michigan, Inc.,
formerly an affiliate of the Company
("Cable Michigan") from September 1997 to
November 1998; Executive Vice President
and Chief Financial Officer of Mercom,
Inc., formerly an affiliate of the
Company ("Mercom") from April 1994 to
October 1997; Director of Mercom from May
1994 to November 1998 and Corporate
Secretary from October 1997 to November
1998; Senior Vice President and Principal
of Daniels and Associates from January
1984 to April 1994.
Stuart E. Graham 53 President of Skanska USA Inc. since 1994; 1997
Chief Executive Officer of several
Skanska USA Inc. subsidiaries, including
Sordoni Skanska, Slattery Skanska and
Skanska E&C; and Director of CTE since
1990.
Richard R. Jaros 47 President of Level 3 from 1996 to 1997 1997
and Executive Vice President of PKS, from
1993 to 1997; Chief Financial Officer of
PKS from 1995 to 1997. Chairman of
CalEnergy Company, Inc. ("CECI") from
1993 to 1994 and President of CECI from
1992 to 1993. Mr. Jaros served in various
capacities at PKS between 1980 and 1993.
Mr. Jaros is a Director of Level 3, CECI,
CTE and was a Director of DTN Corporation
from May, 1998 until March, 1999.
Michael J. Levitt 40 Partner of Hicks, Muse, Tate & Furst, 1999
Incorporated ("Hicks Muse"). Mr. Levitt
was appointed to the Board of Directors
pursuant to a stock purchase agreement
described under "Transactions With
Management." Before joining Hicks Muse,
Mr. Levitt was a Managing Director and
Deputy Head of Investment Banking with
Salomon Smith Barney, Inc. from 1993 to
1995. From 1986 through 1993, Mr. Levitt
was with Morgan Stanley & Co.
Incorporated, most recently as a Managing
Director responsible for the Financial
Entrepreneurs Group. Mr. Levitt also
serves as a Director of Capstar
Broadcasting Corporation, Chancellor
Media Corporation, Grupo MVS, S.A. de
C.V., International Home Foods, Inc., LIN
Television Corp., Regal Cinemas, Inc.,
STC Broadcasting, Inc., and Ibero
American Media Partners, L.P.
Michael J. Mahoney 48 President and Chief Operating Officer of 1997
the Company since September 1997;
Director of CTE since 1995, President and
Chief Operating Officer of C-TEC
Corporation from February 1994 to
September 1997; President and Chief
Operating Officer of Mercom from February
1994 to September 1997 and a Director
from January 1994 to November 1998;
Executive Vice President of CTE's Cable
Television Group from June 1991 to
February 1994; Executive Vice President
of Mercom from December 1991 to February
1994.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Director
Name of Director Age Since
---------------- --- --------
<C> <C> <S> <C>
Thomas J. May 51 Chairman, President and Chief 1997
Executive Officer of BEC Energy,
Boston Edison Company ("BECO") since
1994, President and Chief Operating
Officer of BECO from 1993 to 1994 and
Executive Vice President from 1990 to
1993. Mr. May is a Director of
BecoCom, Inc. which is a party to
joint venture with RCN Telecom
Services, Inc.
David C. McCourt 42 Chairman and Chief Executive Officer 1997
of the Company since September 1997;
Chairman and Director of CTE since
October 1993; Chief Executive Officer
of CTE from October 1993 to December
1998; Chairman, Director and Chief
Executive Officer of Cable Michigan
from September 1997 to November 1998;
President and Director of Level 3
Telecom Holdings, Inc., an affiliate
of the Company ("LTH"); Chairman,
Director and Chief Executive Officer
of Mercom from October 1993 to
November 1998; Director of
MFS/WorldCom from July 1990 to
December 1996; President and Director
of Metropolitan Fiber
Systems/McCourt, Inc., a subsidiary
of MFS Telecom, Inc., since 1988;
Director of Cable Satellite Public
Affairs Network ("C-SPAN") since June
1995; Director of WorldCom from
December 1996 to March 1998; and
Director of Level 3 since March 1998.
Thomas P. O'Neill, III 54 Chairman and founder of 1997
McDermott/O'Neill & Associates since
1991 and founder of Bay State
Investors, Inc. in 1983.
Eugene Roth 63 Senior Partner at Rosenn, Jenkins and 1997
Greenwald L.L.P. (Attorneys) since
1964; Director of the Pennsylvania
Regional Board of Directors of First
Union National Bank, Director of
Geisinger Wyoming Valley Medical
Center; and a Director of CTE since
1989.
Walter Scott, Jr. 67 Chairman of Level 3 since 1979 and 1997
Director since April 1964; Chairman
and Chief Executive Officer of PKS
for over nineteen years; Director of
CTE; Berkshire Hathaway, Inc.,
Burlington Resources, Inc., CECI,
ConAgra, Inc., U.S. Bancorp and
Valmont Industries, Inc. Mr. Scott
served as a Director of WorldCom from
December 1996 to July 1997.
Michael B. Yanney 65 Chairman and Chief Executive Officer 1997
of America First Companies L.L.C.
since 1984; Director of Burlington
Northern Santa Fe Corporation, Forest
Oil Corporation, Freedom
Communications, Inc., PKS Information
Services, Inc. and Level 3. Mr.
Yanney served as Director of WorldCom
from December 1996 to July 1997 and
CTE from August 1996 to September
1997.
</TABLE>
- - --------
The Board of Directors is divided into three classes. Stuart E. Graham,
Michael J. Levitt, Michael J. Mahoney, Thomas J. May, and Thomas P. O'Neill,
III are members of Class I with terms expiring in 2001. Alfred Fasola, Bruce
C. Godfrey, Richard R. Jaros and Michael B. Yanney are members of Class II
whose terms will expire at the Annual Meeting. James Q. Crowe, David C.
McCourt, Eugene Roth and Walter Scott, Jr. are members of Class III with terms
expiring in 2000.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company
Set forth in the table below is information as of April 7, 1999 (or as of
the date specified in the explanatory footnotes in the case of the five-
percent stockholders) with respect to the number of shares of Common Stock
beneficially owned by (i) each person or entity known by the Company to own
more than five percent of the outstanding RCN Common Stock, (ii) each Director
of the Company, (iii) each of the named executive officers of the Company and
(iv) all Directors and executive officers of the Company as a group. To the
Company's knowledge, unless otherwise indicated, each person or entity has
sole voting and investment power with respect to the shares set forth opposite
the person's or entity's name.
<TABLE>
<CAPTION>
Common Stock
------------------------
Number of
Shares Percent of
Beneficially Outstanding
Name of Beneficial Owner Owned(1) Shares(%)
- - ------------------------ ------------ -----------
<S> <C> <C>
Directors and Named Executive Officers
Michael A. Adams(1)(2)................................. 175,375 *
James Q. Crowe(3)...................................... 6,711 *
Alfred Fasola(3)....................................... 6,211 *
Bruce C. Godfrey(1)(4)................................. 284,934 *
Stuart E. Graham(3).................................... 16,053 *
Mark Haverkate(1)(5)................................... 183,679 *
Richard R. Jaros(3).................................... 29,910 *
Michael J. Levitt(10).................................. -- *
Michael J. Mahoney(1)(6)............................... 354,322 *
Thomas J. May(3)....................................... 8,211 *
David C. McCourt(1)(7)(8)(9)........................... 1,205,713 *
Thomas P. O'Neill, III(3).............................. 8,211 *
Eugene Roth(3)......................................... 20,487 *
Walter Scott, Jr.(3)................................... 7,326 *
Michael B. Yanney(3)................................... 11,392 *
All Directors and Executive Officers as a Group
(22 persons)(1)....................................... 2,727,544 *
Level 3 Telecom Holdings, Inc.(9)...................... 26,640,970 40.1%
HM4 RCN Partners(10)................................... 6,410,256 8.79%
</TABLE>
- - --------
(*) Less than 1% of outstanding shares.
(1) Under the RCN Executive Stock Purchase Plan ("ESPP"), participating
executive officers who forgo current compensation are credited with
"Share Units" with a value equal to the amount of the foregone pretax
compensation. The value of a Share Unit is based on the value of a share
of RCN Common Stock. The Company also credits each participant's matching
account under the ESPP with 100 percent of the number of Share Units
credited based on the participant's elective contributions. Share Units
credited to participants' elective contribution accounts are fully and
immediately vested. Share Units credited to participants' matching
accounts generally vest on the third anniversary of the date they are
credited, subject to continued employment. Share Units credited to a
participant's matching account become fully vested on a change in control
of the Company, or on the participant's death or disability while
actively employed. If the RCN Common Stock pays dividends, a dividend
equivalent is deemed paid with respect to Share Units and credited to
participants' accounts in the form of additional Share Units. The Company
has established a grantor trust to hold Common Stock corresponding to the
number of Share Units credited to participants' accounts in the ESPP.
Participants do not have the right to vote Share Units, provided that the
Company may, but is not required to, make arrangements for participants
to direct the trustee of the grantor trust as to how to vote a number of
shares held by the grantor trust corresponding to the number of Share
Units
6
<PAGE>
credited to the participants' matching account. The holdings indicated
below include all Share Units credited under the ESPP, whether or not
vested. The table below shows with respect to each named executive officer,
Share Units relating to the RCN Common Stock acquired by each such named
executive officer in lieu of current compensation and the forfeitable Share
Units credited to the ESPP account of each such executive officer, as of
December 31, 1998:
<TABLE>
<CAPTION>
Share Units
Acquired Under
the ESPP In Total Shares
Lieu of Current Share Acquired and
Name Compensation Units Share Units
- - ---- --------------- ------ ------------
<S> <C> <C> <C>
David C. McCourt............................ 64,272 64,272 128,554
Michael J. Mahoney.......................... 22,806 22,806 45,612
Bruce C. Godfrey............................ 23,245 23,245 46,490
Mark Haverkate.............................. 12,728 12,728 25,456
Michael A. Adams............................ 12,065 12,065 24,130
</TABLE>
- - --------
(2) Includes options to purchase 146,000 shares of Common Stock exercisable
within 60 days after the date of this Proxy Statement.
(3) Includes options to purchase 4,000 shares of Common Stock exercisable
within 60 days after the date of this Proxy Statement.
(4) Includes options to purchase 220,000 shares of Common Stock exercisable
within 60 days after the date of this Proxy Statement.
(5) Includes options to purchase 112,000 shares of Common Stock exercisable
within 60 days after the date of this Proxy Statement.
(6) Includes options to purchase 280,000 shares of Common Stock exercisable
within 60 days after the date of this Proxy Statement.
(7) Includes options to purchase 1,000,000 shares of Common Stock exercisable
within 60 days after the date of this Proxy Statement.
(8) Includes 450 shares of Company Common Stock, which are owned by Mr.
McCourt's wife. Mr. McCourt disclaims beneficial ownership of such
shares.
(9) As a result of PKS separating its construction and mining management
businesses ("Construction Group") from its other businesses on March 31,
1998 (the "Split-Off"), PKS no longer owns any interest in the
Construction Group. Following the Split-Off, PKS changed its name to
"Level 3 Communications, Inc." and the company formed in the Split-Off to
hold the Construction Group's business, changed its name to "Peter Kiewit
Sons', Inc." Level 3 holds 90% of the Common stock of LTH and all of the
preferred stock of LTH. David C. McCourt owns the remaining 10% of the
common stock of LTH. The address of Level 3 is 3555 Farnam Street, Omaha,
Nebraska 68131. The address of LTH is 3555 Farnam Street, Omaha, Nebraska
68131.
(10) Consists of 6,410,256 shares of Common Stock deemed beneficially owned
by HM4 RCN Partners by virtue of its ownership of record of 250,000
shares of convertible preferred stock convertible into 6,410,256 shares
of Common Stock. HM4 RCN Partners is a general partnership of which the
limited partners are HM4 RCN Qualified Fund, L.P., HM4 RCN Private Fund,
L.P. and HM4 RCN Coinvestors, L.P., each a limited partnership of which
the sole general partner is Hicks, Muse GP Partners IV, L.P., a limited
partnership of which the sole general partner is Hicks, Muse Fund IV
LLC, a limited liability company of which Thomas O. Hicks is the sole
member. Accordingly, Mr. Hicks may be deemed to be the beneficial owner
of all or a portion of the stock owned of record by such partnerships.
Mr. Hicks expressly disclaims (i) the existence of any group and (ii)
beneficial ownership with respect to any shares of Common Stock not
owned of record by him. The address of Thomas O. Hicks is 200 Crescent
Court, Suite 1600, Dallas, Texas 75201-6950. Michael J. Levitt, a senior
executive officer of Hicks, Muse Fund IV LLC and a limited partner of
Hicks, Muse GP Partners IV, L.P., has been designated by HM4 RCN
Partners to serve as a Director of the Company.
7
<PAGE>
The information set forth above and in "Director Information" does not give
effect to the ownership of Company securities in LTH. Certain executive
officers or Directors of the Company are directly or indirectly affiliated
with LTH. For information with respect to the beneficial ownership of
securities in LTH, see footnote 9 of this section.
Level 3 Communications, Inc.
Set forth below is certain information regarding the beneficial ownership of
shares of Common Stock of Level 3 ("Level 3 Common Stock") as of January 31,
1999, held by each Director, the named executive officers and by all persons,
who are currently Directors and executive officers of the Company, as a group.
<TABLE>
<CAPTION>
Number of Percent of
Name Shares Shares(%)
- - ---- ---------- ----------
<S> <C> <C>
Michael A. Adams......................................... -- --
James Q. Crowe........................................... 11,327,614 3.7
Alfred Fasola............................................ -- --
Bruce C. Godfrey......................................... -- --
Stuart E. Graham......................................... -- --
Mark Haverkate........................................... 300 *
Richard R. Jaros (1)..................................... 3,497,498 1.1
Michael J. Levitt........................................ -- --
Michael J. Mahoney....................................... 2,000 *
Thomas J. May............................................ -- --
David C. McCourt......................................... 115,000 *
Thomas P. O'Neill, III................................... -- --
Eugene Roth.............................................. -- --
Walter Scott, Jr. (2).................................... 34,980,455 11.3
Michael B. Yanney........................................ 100,000 *
All Directors and Executive Officers as a Group (22
Persons)................................................ 50,022,567 16.1
</TABLE>
- - --------
(*) Less than 1% of the outstanding shares of the class.
(1) Includes 370,000 shares Level 3 Common Stock held by the Jaros Family
Limited Partnership. Includes 1,200,000 shares of Level 3 Common Stock
held by Mr. Jaros and 800,000 shares of Level 3 Common Stock subject to
options held by a grantor trust, of which Mr. Jaros is the residual
beneficiary.
(2) Includes 99,700 shares of Level 3 Common Stock held by the Suzanne Scott
Irrevocable Trust as to which Mr. Scott shares voting and investment
powers.
8
<PAGE>
COMPENSATION INFORMATION
Executive Compensation
The following table sets forth, for the fiscal years ending December 31,
1996, 1997 and 1998, the cash compensation, as well as certain other
compensation, paid or accrued to the named executive officers. The Company
paid a Stock Dividend was during 1998. Stockholders of record at the market
close on March 20, 1998 received an additional share of Common Stock for each
share held. The distribution date for the Stock Dividend was April 3, 1998.
All share and per share data, stock option data and market prices (including
historical trading prices) of Common Stock have been restated to reflect this
stock dividend.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-
Annual Compensation Term Compensation Awards
------------------- ----------------------------
All Other
Share Securities Compen-
Units Underlying sation
Name and Position Year Salary($) Bonus($) ($)(1) Options(#) ($)(2)
- - ----------------- ---- --------- --------- ------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
David C. McCourt......... 1998 500,000 1,250,000 310,000 -0- 38,165
Chairman and Chief 1997 500,000 1,400,000 380,000 1,000,000 8,144
Executive Officer 1996 491,154 700,000 238,333 -0- 13,638
Michael J. Mahoney....... 1998 250,327 250,000 117,500 -0- 6,176
President and Chief 1997 248,654 500,000 149,731 400,000 5,871
Operating Officer 1996 235,027 175,000 67,017 -0- 5,478
Bruce C. Godfrey.........
Executive Vice President 1998 250,327 300,000 116,500 -0- 6,176
and 1997 243,077 500,000 148,615 400,000 5,763
Chief Financial Officer 1996 221,462 165,000 74,333 -0- 4,965
Mark Haverkate........... 1998 210,327 200,000 62,000 -0- 5,576
Executive Vice President 1997 205,192 100,000 61,038 80,000 2,985
1996 158,231 135,000 51,667 -0- 3,641
Michael A. Adams.........
President--Technology 1998 210,327 200,000 72,000 -0- 576
and 1997 203,269 150,000 70,654 230,000 16,045
Network Development 1996 138,673 155,000 36,950 -0- 3,853
</TABLE>
- - --------
(1) Represents the market value on the date of grant of Share Units. In
connection with the distribution of RCN Common Stock as well as CTE
Common Stock and Cable Michigan Stock to holders of C-TEC Common Equity
in September 1997 (the "Distribution"), shares of restricted CTE Common
Stock purchased under the ESPP and Share Units awarded under the ESPP
that relate to CTE Common Stock were adjusted so that following the
Distribution, each such participant was credited with an aggregate
equivalent value of Share Units of common stock of CTE, RCN and Cable
Michigan.
As of December 31, 1998, the aggregate holdings and the value of Share
Units for RCN Common Stock were as follows:
<TABLE>
<CAPTION>
Share Aggregate
Name Units Value($)
---- ------- ---------
<S> <C> <C>
David C. McCourt........................................... 128,544 2,273,622
Michael J. Mahoney......................................... 45,612 806,762
Bruce C. Godfrey........................................... 46,490 822,292
Mark Haverkate............................................. 25,456 450,253
Michael A. Adams........................................... 24,130 426,799
</TABLE>
9
<PAGE>
Vesting of Share Units is accelerated upon a change in control of the
Company. Dividends, if any, are paid on restricted shares. Subject to
continued employment, Share Units credited to participants' accounts
generally vest in three calendar years following the date on which the
Share Units were initially credited to the participant's account.
(2) Includes the following amounts for the last fiscal year:
David C. McCourt: $576--Company paid life insurance; $5,600--401(k)
Company match; $31,989-- Company provided transportation;
Bruce C. Godfrey: $576--Company paid life insurance; $5,600--401(k)
Company match;
Michael J. Mahoney: $576--Company paid life insurance; $5,600--401(k)
Company match;
Mark Haverkate: $576--Company paid life insurance; $5,000--401(k)
Company match;
Michael A. Adams: $576--Company paid life insurance; $0--401(k) Company
match.
RCN FY-End Option Values(1)
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-The-Money Options
Fiscal Year End(2) at Fiscal Year End(3)
------------------------------- -------------------------------
Name Exercisable(#) Unexercisable(#) Exercisable($) Unexercisable($)
- - ---- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
David C. McCourt........ 900,000 1,100,000 8,040,200 5,173,050
Michael J. Mahoney...... 240,000 360,000 1,889,600 1,184,900
Bruce C. Godfrey........ 192,000 348,000 1,379,720 1,057,430
Michael A. Adams........ 126,000 214,000 992,734 917,171
Mark Haverkate.......... 98,000 102,000 922,804 657,521
</TABLE>
- - --------
(1) No RCN stock options were exercised by the Named Executive Officers
during the fiscal year ended December 31,1998.
(2) Denominated in shares of RCN Common Stock.
(3) The fair market value of RCN Common Stock at December 31, 1998 was
$17.6875 per share.
10
<PAGE>
COMPENSATION COMMITTEE REPORT
The compensation programs for the Company's executive officers are
administered by the Compensation Committee, (the "Compensation Committee") of
the Company's Board of Directors. The Compensation Committee makes
recommendations and/or determinations with respect to all executive
compensation matters.
The Compensation Committee submits the following report on compensation for
the Company's executive officers for the 1998 fiscal year:
Compensation Philosophy
As an emerging telecommunication company in highly competitive markets, the
Company's compensation philosophy must provide a framework for flexibility,
with a core component of compensation performance based, with significant
portions of pay at risk. In order to achieve such a philosophy, during 1998,
the Compensation Committee conducted a review of the Company's compensation
program which included recommendations from an outside compensation consultant
and management. To assess the competitiveness of the Company's compensation
program, the Company developed an Executive Value Index ("EVI"). The EVI
includes predictive compensation models designed from comparisons to a
combination of public and private compensation survey data as well as specific
data from the proxy statements of publicly-traded companies. As a result of
the review of the Company's compensation program, the Company adopted the
basic philosophy of providing base salaries slightly below that of the
Company's peer group, a short-term (annual) incentive opportunity equal to
that of the peer group, and a long-term incentive opportunity significantly
above that of the Company's peer group. The peer group is a selected group of
high-technology telecommunications and internet companies.
The Company's compensation plan policies and philosophies have been
restructured as follows:
1. Establish target base salary in broad bands which are slightly below the
market median using predicted EVI values.
2. Establish short-term incentives with target and threshold performance
payment levels established for corporate financial goals at the outset of
the fiscal year. Target annual incentives are based on band midpoint
recommendation (based on predicted EVI values).
3. Establish long-term incentives based on band midpoint recommendation
(based on predicted EVI values). These incentives are generally in the form
of stock options.
4. Align the interests of executives with the interests of shareholders
through ownership of Company stock.
The Chief Executive Officer, with the review and approval of the
Compensation Committee, determines base salaries and makes recommendations
with respect to short-term incentive grants and stock option grants as he
deems appropriate and consistent with the EVI guidelines and the compensation
philosophy of the Company.
To further align the interests of the Company's executives with that of
shareholders, the Company encourages executives to acquire and maintain an
equity stake in the Company. To assist executives in accumulating this equity
position on a pre-tax basis, the company implemented the ESPP pursuant to
which an executive may purchase Company stock through deferral of earned and
otherwise payable compensation, which is matched by the Company.
Executive Officer Compensation
The salaries paid to executive officers by the Company for 1998 were
targeted to be slightly below that of executive officers of the Company's peer
group and were based upon the consideration of certain employment data, an
assessment of the Company's and the officers' performance during the prior
year and certain subjective criteria.
11
<PAGE>
The amount of cash bonuses paid to executive officers for 1998 pursuant to
the bonus plan, as adopted by the Company was determined through a combination
of factors including the attainment of certain corporate business unit and
individual objectives (financial and non-financial), the compensation
practices of the Company's peer group, results of corporate and business unit
financial performances and certain subjective criteria.
Stock options were granted to the executive officers named in the Summary
Compensation Table. The Compensation Committee believes that such stock
options provide an incentive for retention of executive talent and the
creation of shareholder value in the long-term since the full benefit of the
compensation package cannot be realized unless the price of the Company's
stock appreciates over a specified number of years and the executive continues
to perform services for the Company. The number of stock options granted to
each executive officer and/or mid-level management employee was based on the
individual's salary band, title and evaluation of each executive's individual
performance and contribution to the Company's performance as presented to the
Compensation Committee.
Chief Executive Officer Compensation
Mr. McCourt was paid a base salary and bonus of $500,000 and $1,250,000,
respectively for services rendered in 1998. Mr. McCourt's compensation for
1998 was structured so that his base compensation was slightly below the level
paid to persons holding similar positions at similarly situated companies. Mr.
McCourt's short-term incentive award for 1998, which was earned under the
short-term plan adopted by the Company, reflects the outstanding
accomplishments that took place in 1998, the attainment of certain strategic
corporate objectives, and achievement of certain corporate financial and non-
financial goals including the acquiring and integrating of numerous internet
companies intended to increase shareholder value.
Compliance with Internal Revenue Code Section 162 (m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code")
denies a deduction by an employer for certain compensation in excess of $1
million per year paid by a publicly traded corporation to the chief executive
officer and the four most highly compensated executive officers other than the
chief executive officer, unless such compensation is awarded pursuant to a
qualified performance-based program. Subject to the needs of the Company, the
Company's compensation plans are generally intended to qualify for such
qualified performance-based exemption.
COMPENSATION COMMITTEE
Eugene Roth, Esq., Chairman
Alfred Fasola
Michael B. Yanney
Dated: April 8, 1999
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Eugene Roth, Esq., Chairman,
Alfred Fasola, and Michael B. Yanney.
Eugene Roth, Esq. is a Senior Partner at Rosenn, Jenkins and Greenwald,
which serves as counsel to the Company from time to time.
OTHER RELATED INFORMATION
Level 3, the Company's controlling stockholder, and/or its affiliates has a
substantial stock ownership in LTH and the Company. These companies share
mutual director representation on their respective boards.
For information regarding certain potential or contemplated transactions
between the Company, including its subsidiaries, and other affiliates of Level
3, see "Transactions with Management and Certain Concerns."
12
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of RCN's Common
Stock to the NASDAQ Stock Market (U.S.) Index and the NASDAQ Telecommunications
Index. The graph assumes that the value of the investment in RCN's Common Stock
was $100 at September 22, 1997 and in each index at August 31, 1997,
respectively.
[GRAPH APPEARS HERE]
COMPARISON OF 15 MONTH CUMULATIVE TOTAL RETURN
AMONG RCN CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX AND
THE NASDAQ TELECOMMUNICATIONS INDEX
<TABLE>
<CAPTION>
Measurement Period RCN NASDAQ NASDAQ
(Fiscal Year Covered) CORPORATION STOCK MARKET TELECOMMUNICATIONS
- - ------------------- ----------- ------------ ------------------
<S> <C> <C> <C>
Measurement Pt-
09/22/1997 $100 $100 $100
FYE 09/1997 $116 $ 99 $102
FYE 12/1997 $126 $ 93 $111
FYE 03/1998 $184 $109 $141
FYE 06/1998 $145 $112 $150
FYE 09/1998 $ 95 $102 $133
FYE 12/1998 $130 $131 $181
</TABLE>
13
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND CERTAIN CONCERNS
David C. McCourt, Chairman, Chief Executive Officer and Director of the
Company, is a Director of C-SPAN. In 1998, the Company paid approximately
$246,000 to C-SPAN for programming services.
David C. McCourt served as a Director of MFS/WorldCom from December 1997 to
March 1998. From January 1, 1998 to March 1998, the Company paid approximately
$279,000 to MFS/WorldCom for telephone usage, circuit charges and network
access charges.
The Company paid BECO approximately $74,288,000 for network construction and
approximately $211,000 for utility services.
On April 7, 1999, the Company announced that Hicks, Muse through HM4 RCN
Partners L.P. purchased $250 million of a new issue of Series A 7% Senior
Convertible Preferred Stock ("Series A Preferred Stock") of the Company in a
private placement transaction. The Series A Preferred Stock has an annual
dividend rate of 7% payable quarterly in cash or additional shares of Series A
Preferred Stock at the option of the Company and has an initial conversion
price of $39.00 per share (which represents a 30% premium over the average
five-day closing price of the Common Stock of the Company as of March 18,
1999). The Series A Preferred Stock is convertible into Common Stock of the
Company at any time. The issue has a final maturity of 15 years, but may be
called by the Company after four years. In connection with the placement of
Series A Preferred Stock, the Company agreed to provide HM4 RCN Partners L.P.
with the right to appoint one Director to the Company's Board of Directors so
long as HM4 RCN Partners L.P. owns at least 50% of its initial investment and
to provide HM4 RCN Partners L.P. with certain registration rights. Michael J.
Levitt has been appointed to the Company's Board of Directors in connection
with this agreement.
Each of the Company and CTE are effectively controlled by Level 3. Cable
Michigan was controlled by Level 3 during 1998, until the outstanding stock of
Cable Michigan was sold to Avalon Cable of Michigan, Inc. on November 6, 1998.
In addition, the majority of the Company's Directors and executive officers
during 1998 prior to the sale of Cable Michigan to Avalon also were Directors
and/or executive officers of CTE and/or Cable Michigan. Set forth below is a
brief description of certain aspects of the relationship among the Company,
CTE and Cable Michigan.
The Distribution Agreement dated September 5, 1997, among C-TEC, the Company
and Cable Michigan entered into in connection with the Distribution defined
certain aspects of the relationship among CTE, the Company and Cable Michigan,
including the provision of services described below, and provided for the
allocation of certain assets and liabilities among CTE, the Company and Cable
Michigan. CTE, the Company and Cable Michigan also entered into a Tax Sharing
Agreement dated as of September 5, 1997, to define certain aspects of their
relationship with respect to taxes and to provide for the allocation of tax
assets and liabilities. As a result of the sale of Cable Michigan in November
1998, Cable Michigan has no on-going relationship with the Company and CTE
subsequent to the sale, with the exception of the Tax Sharing Agreement. The
Company has agreed to provide or cause to be provided to CTE certain specified
services for a transitional period after the Distribution. The transitional
services to be provided include the following: (i) accounting; (ii) payroll;
(iii) management supervision; (iv) cash management; (v) human resources and
benefit plan administration; (vi) insurance administration; (vii) legal;
(viii) tax; (ix) internal audit; and (x) other miscellaneous administrative
services. The fee per year for these services was 3.5% of the first million of
revenue of CTE and 1.75% of any additional revenue. The fee paid by CTE to the
Company for 1998 was approximately $7,016,000. Cable Michigan paid to the
Company approximately $2,931,000 for ten (10) months of services for 1998.
CTE has agreed to provide or cause to be provided to the Company financial
data processing applications, lockbox services, storage facilities, local area
network and wide area network support services, building maintenance and other
miscellaneous administrative services for a transitional period after the
Distribution. The fees for such services and arrangements are an allocated
portion (based on relative usage) of the cost incurred by the Company to
provide such services and arrangements to CTE and the Company and, prior to
November 1998,
14
<PAGE>
Cable Michigan. In 1998, the Company incurred approximately $500,000 of
expenses associated with such services provided by CTE.
The Company's subsidiary RCN Long Distance Company ("RCN LD") entered into
an agreement with CTE whereby CTE and its subsidiaries purchased long-distance
service from RCN LD. In 1998, CTE incurred approximately $13,000,000 of
expenses associated with this long-distance resale agreement and related
customer service expenses. This agreement is the result of arm's length
negotiations and fees are paid to RCN LD based on usage.
During 1998, the Company leased certain facilities to Commonwealth Telephone
Company, a subsidiary of CTE, ("CT"). CT paid rent to the Company on such
facilities totaling approximately $200,000 in 1998.
The Company paid CT and CTSI, Inc., a subsidiary of CTE ("CTSI")
approximately $1,600,000 in access charges as a result of the Company
originating and terminating traffic on CT and CTSI's networks. CT also
received approximately $300,000 long-distance switch rental revenue from RCN
LD. In addition, CT and CTSI received approximately $500,000 for local
services, telephone access, toll services and vertical service revenue from
the Company.
The Company paid CTE, doing business as Commonwealth Communications
approximately $700,000 in 1998 for engineering design and consulting service
business.
OTHER MATTERS
On December 14, 1998, the Company filed an 8-K regarding the November 13,
1998 purchase by David C. McCourt, the Chairman and Chief Executive Officer of
the Company of $2 million aggregate principal amount of 11 1/8% Senior
Discount Notes due October 15, 2007.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The Board of Directors of the Company held four (4) meetings during 1998,
the Audit Committee met three (3) times and the Compensation Committee met
four (4) times. The Company currently does not have a nominating committee.
The Executive Committee met on numerous occasions throughout the year.
Executive Committee
The Executive Committee exercises, to the extent permitted by law and
delegated by the Board of Directors, all powers of the Board of Directors
between board meetings, except those functions assigned to specific
committees. The current Executive Committee consists of David C. McCourt,
Chairman, Walter Scott, Jr., Michael J. Mahoney and James Q. Crowe.
Audit Committee
The Audit Committee reviews and considers the overall scope and approach of
the annual audit and makes recommendations from the audit performed by the
independent accountants; recommends the appointment of the independent
accountants; considers significant accounting methods adopted or proposed to
be adopted; and considers procedures for internal controls. The current Audit
Committee consists of Alfred Fasola, Chairman, Thomas P. O'Neill, III, Thomas
J. May and Stuart E. Graham.
Compensation Committee
The Compensation Committee makes recommendations to the Board of Directors
on matters related to employee compensation and plans concerning the orderly
succession of officers and key management personnel.
15
<PAGE>
The current Compensation Committee consists of Eugene Roth, Chairman, Alfred
Fasola and Michael B. Yanney.
Directors' Compensation
Directors of RCN who are employees of the Company and its subsidiaries
receive no directors' fees. Non-employee Directors of the Company receive on
January 1 an annual directors' compensation fee of $10,800 in Common Stock
based upon the average fair market value of the RCN Common Stock during the
ten (10) trading days prior to such date, plus $1,000 per Board of Directors
meeting. The Committee Chairman and other committee members are paid $1,500
and $1,000, respectively, for each committee meeting attended. Pursuant to the
Company's 1997 Stock Plan for non-employee directors, each non-employee
director receives an annual grant of a non-qualified option covering 4,000
shares of RCN Common Stock on the date of the meeting of stockholders based
upon the fair market value of the RCN Common Stock on the date the option is
granted. The following fees were paid in 1998; James Q. Crowe $3,000; Alfred
Fasola $14,500; Stuart E. Graham $7,000; Richard R. Jaros $5,000; Thomas J.
May $6,000; Thomas P. O'Neill, III $8,000; Eugene Roth $11,000; Walter Scott,
Jr. $5,000 and Michael B. Yanney $9,000.
16
<PAGE>
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
The Company is asking the stockholders to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors for the
fiscal year ending December 31, 1999.
If the stockholders do not ratify this appointment, other independent
auditors will be considered by the Board of Directors. Notwithstanding the
stockholders' ratification of the selection of the independent auditors, the
Board reserves the right to select other independent auditors at its
discretion.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting, will have the opportunity to make a statement if they
desire to do so and will be able to respond to appropriate questions.
Ratification of PricewaterhouseCoopers LLP as the Company's independent
auditors for the year ending December 31, 1999, requires the affirmative vote
of a majority of the votes cast by holders of Common Stock.
The Board of Directors recommends that the stockholders vote FOR the
proposal to ratify the appointment of PricewaterhouseCoopers LLP to serve as
independent auditors of the Company for the fiscal year ending December 31,
1999.
OTHER MATTERS
The Board of Directors does not know of any other matters that may come
before the meeting. However, if any other matters properly come before the
meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy in accordance with their judgment on such matters.
GENERAL INFORMATION
Financial Information
A copy of the Company's 1998 Annual Report to Stockholders containing the
Consolidated Financial Statements of the Company, including the report thereon
dated March 8, 1999, except Note 20, as to which the date is March 18, 1999,
of PricewaterhouseCoopers LLP, independent accountants, will be forwarded at a
later date. However, the Form 10-K, including the financial statements,
schedules, and exhibits filed with the Securities and Exchange Commission
("SEC") accompanies this Proxy Statement.
Upon the written request of any person who on March 25, 1999, was a record
owner of Common Stock or who represents in good faith that he was on such date
a beneficial owner of such Common Stock entitled to vote at the Annual
Meeting, the Company will furnish, without charge, a copy of the Company's
1999 annual report on Form 10-K, including the financial statements,
schedules, and exhibits, filed with the SEC. Written requests for the Annual
Report should be directed to: Investor Relations Department, RCN Corporation,
105 Carnegie Center, Princeton, New Jersey 08540, Attn: Valerie Haertel, Vice
President of Investor Relations, e-mail: [email protected].
Solicitation of Proxies
The Company will bear the cost of solicitation of proxies. In addition to
the use of the mail, proxies may be solicited by officers, Directors and
regular employees of the Company, personally or by telephone, telecopy or
telegraph, and the Company may reimburse persons holding stock in their names
or those of their nominees for their expenses in forwarding soliciting
materials to their principals.
It is important that proxies be returned promptly. Therefore, stockholders
are urged to promptly fill in, date, sign and return the enclosed proxy in the
enclosed envelope, to which no postage need be affixed if mailed in
17
<PAGE>
the United States. In the alternative, stockholders are urged to promptly vote
their proxy via the internet or by telephone.
Stockholders' Proposals
Any stockholder who desires to submit a proposal to be considered for
inclusion in the proxy statement and proxy of the Company relating to the 2000
Annual Meeting of Stockholders must submit such proposal in writing to the
Company by December 23, 1999. The Company's by-laws contain a separate
provision requiring that notice of shareholder proposal must be delivered at
least 60, but no more than 90 days in advance of the meeting. Such proposal
should be hand delivered or mailed, return receipt requested, to the Secretary
of the Company.
By order of the Board of Directors.
/s/ John J. Jones
John J. Jones,
Executive Vice President,
General Counsel, and
Corporate Secretary
Dated: April 22, 1999
18
<PAGE>
RCN CORPORATION
105 Carnegie Center
Princeton, New Jersey 08540
PROXY -- Annual Meeting of Stockholders -- May 19, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, hereby revoking any contrary proxy previously given,
hereby appoints David C. McCourt, James Q. Crowe and Richard R. Jaros, and each
of them, his true and lawful agents and proxies, with full power of substitution
and revocation, to vote as indicated below, all the Common Stock of the
undersigned in RCN CORPORATION (the "Company") entitled to vote at the Annual
Meeting of Stockholders of the Company to be held at The Forrestal at Princeton,
100 College Road East, Princeton, New Jersey, on May 19, 1999 at 11:00 a.m.,
local time, and at any adjournment of postponement thereof, all as set forth in
the related notice and proxy statement for the 1999 Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS
LISTED ON THE REVERSE SIDE. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF
THE PROPOSALS ON THE REVERSE SIDE.
(Continued, and to be Signed and Dated, on Reverse Side)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark your vote as indicated in the example [ X ]
1. To elect four (4) Directors to Class II to serve for a term of three (3)
years; and
FOR all nominees listed to the right
(except as marked to the contrary) [ ]
WITHHOLD AUTHORITY to vote for all
nominees listed to the right [ ]
(Instructions: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list below.)
01 Alfred Fasola, 02 Bruce C. Godfrey, 03 Richard R. Jaros and
04 Michael B. Yanney
2. To ratify the election of PricewaterhouseCoopers LLP as independent auditors
of the Company for the fiscal year ending December 31, 1999; and
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To act upon such other matters as may properly come before the meeting or any
adjournment or postponement thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
The undersigned acknowledges receipt of the notice
and proxy statement relating to the 1999 Annual Meeting
and the Company's Form 10-K.
Dated: ___________________________________________
__________________________________________________
(Signature)
__________________________________________________
Signature, if held jointly
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE.
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE
YOUR VOTE IS IMPORTANT! -- YOU CAN VOTE IN ONE OF THREE WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone 24
hours a day-7 days a week
There is NO CHARGE to you for this call. -- Have your proxy card in hand.
You will be asked to enter a Control Number, which is located in the box
in the lower right hand corner of this form
OPTION 1: To vote as the Board of Directors recommends
on ALL proposals,--press 1
When asked, please confirm by Pressing 1.
OPTION 2: If you choose to vote on each proposal separately, press 0.
You will hear these instructions:
Proposal 1 -- To vote FOR ALL nominees, press 1;
to WITHHOLD FOR ALL nominees, press 9
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the instructions
Proposal 2 -- To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
When asked, please confirm by Pressing 1.
The instructions are the same for all remaining proposals,
or
--
2. VOTE BY INTERNET: Follow the instructions at our Website
Address: http://www.eproxy.com/
To wish to view RCN Corporations' Annual Report and Proxy Statement on-line,
and receive your proxy card via E-Mail in the future, please vote via the
internet and register your E-Mail address on-line.
or
--
3. TO VOTE BY PROXY: Mark, sign and date your proxy card and return promptly
in the enclosed envelope.
NOTE: If you vote by internet or telephone,
THERE IS NO NEED TO MAIL BACK your Proxy Card
THANK YOU FOR VOTING.
