<PAGE>
FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File No. 0-11053
C-TEC CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2093008
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 Carnegie Center, Princeton, New Jersey 08540
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: 609-734-3700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $1.00 per share
Class B Common Stock, par value $1.00 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
Number of shares of the Registrant's Stock ($1.00 par value) outstanding at
February 28, 1997
19,761,454 Common Stock
7,712,713 Class B Common Stock
Aggregate market value of Registrant's voting stock held by non-affiliates at
February 28, 1997 computed by reference to closing price as reported by NASDAQ
for Common Stock ($28.50 per share) and to the bid price as reported for Class B
Common Stock ($27.75 per share), is as follows:
$328,752,972 Common Stock
$ 72,663,098 Class B Common Stock
Documents Incorporated by Reference
-None-
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required under Item 10 of Part III with respect to the
executive officers of the Registrant is set forth at the end of Part I hereof.
Information as of March 1, 1997 for the other current Directors is set forth
below:
<TABLE>
<CAPTION>
Director
Name of Director Age Since
- ---------------- --- --------
<S> <C> <C>
James Q. Crowe 47 Chairman of the Board, WorldCom, Inc. since December 1996. 1993
Mr. Crowe served as Chairman of the Board of MFS Communications
Company, Inc. ("MFSCC") since 1988 and Chief Executive Officer since
November 1991 and was President of MFSCC from January 1988 to June 1989
and April 1990 to January 1992. Mr. Crowe is a director of Peter
Kiewit Sons' Inc. ("PKS"), a construction and mining company and
California Energy Company, Inc., ("CECI"), a geothermal energy producer.
Stuart E. Graham 51 Chairman, President and Chief Executive Officer, Skanska 1990
Engineering and Construction Inc. since 1994 and held various positions
throughout the company, being appointed Vice President of Operations in 1977.
He is also President and Chief Executive Officer of Slattery Associates,
Inc. since 1995.
Frank M. Henry 63 Chairman, Frank Martz Coach Company since 1995 and was President, Frank Martz 1980
Coach Company from 1964 to 1995; President, Gold Line, Inc. since 1975 and
Director, First Union Corporation.
Richard R. Jaros 45 President, Kiewit Diversified Group, Inc. ("KDG"), a wholly owned subsidiary 1993
of PKS, since 1996; Executive Vice President and Chief Financial Officer of
PKS since 1995, and was Vice President of PKS from 1991 until 1992. Mr. Jaros
was Chairman of the Board of CECI from January 1994 until May 1995 and
President and Chief Operating Officer of CECI from 1992 until 1993. Mr. Jaros
is a director of PKS, CECI and WorldCom, Inc.
Robert E. Julian 57 Chairman, PKS Information Services, Inc. since 1995; Executive Vice President 1993
from 1992 to 1995; and Chief Financial Officer of PKS from 1992 to 1995.
Mr. Julian serves as a director of PKS.
Daniel E. Knowles 67 Personnel Consultant of Cambridge Human Resources Consulting Group since 1995
1989; President of Personnel and Administration, Grumman Corporation from
1963 to 1989.
David C. Mitchell 55 Former Corporate Executive Vice President and Director of Rochester Telephone 1993
Corporation. Since 1963, Mr. Mitchell held various positions throughout the
Company, encompassing virtually all disciplines of the Company.
Eugene Roth 61 Partner, Rosenn, Jenkins and Greenwald (Attorneys) since 1964; Mr. Roth is a 1989
director of the Pennsylvania Regional Board of First Fidelity Bank, N.A.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Director
Name of Director Age Since
- ---------------- --- --------
<S> <C> <C>
Walter Scott, Jr. 65 Chairman of the Board and President of PKS for more than the past five years. 1993
Mr. Scott is also a director of Berkshire Hathaway Inc., Burlington Resources,
Inc., CECI, ConAgra, Inc., First Bank System, Inc., Valmont Industries, Inc.,
KDG, Kiewit Telecom Holdings, Inc. ("KTH")(formerly RCN Corporation) and
WorldCom, Inc.
Michael B. Yanney 63 President, Chairman and Chief Executive Officer of America First Companies 1996
L.L.C. since 1984. Mr. Yanney is a director of Burlington Northern Santa Fe
Corporation, Lozier Corporation, Forest Oil Corporation, Freedom Communication,
Inc., and Mid-America Apartment Communities.
</TABLE>
- -----
The Board of Directors is divided into three classes. David C. McCourt, David C.
Mitchell, Daniel E. Knowles and Walter Scott, Jr. are members of Class I with
terms expiring in 1997. Robert E. Julian, Frank M. Henry, Eugene Roth,
Michael B. Yanney, and Bruce C. Godfrey are members of Class II with terms
expiring in 1998. James Q. Crowe, Stuart E. Graham, Richard R. Jaros and Michael
J. Mahoney are members of Class III with terms expiring in 1999.
<PAGE>
Item 11. Executive Compensation
The following table sets forth, for the fiscal years ended December 31,
1994, 1995 and 1996, the cash compensation, as well as certain other
compensation, paid or accrued to the named executive officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payouts
(1) (4) Securities
Other Restricted Underlying (2)
Name and Annual Stock Options LTIP All Other
Position Year Salary ($) Bonus ($) Comp ($) Awards (#) Payouts ($) Compensation ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David C. McCourt 1996 491,154 700,000 - 238,333 - - 5,478
Chairman of the 1995 397,885 700,000 - 220,000 250,000 - 5,612
Board and C.E.O. 1994 375,000 500,000 - - 250,000 - 387
Michael J. Mahoney 1996 235,027 175,000 - 67,017 - - 5,478
President and 1995 222,462 100,000 - 65,000 - - 5,952
Chief Operating 1994 190,719 125,000 - - 100,000 - 5,585
Officer
Bruce C. Godfrey 1996 221,462 165,000 - 74,333 - - 4,965
E.V.P. and 1995 183,731 150,000 - 67,000 - - 4,790
Chief Financial 1994 128,154 53,500 - - 70,000 - 165
Officer
Michael Gottdenker 1996 198,673 115,000 - 59,750 10,000 - 31,549
E.V.P. - Telephone 1995 53,365 100,000 - - 60,000 - 41,013
Group 1994 (3) (3) (3) (3) (3) (3) (3)
Michael A. Adams 1996 138,673 155,000 - 36,950 - - 3,853
President - Technology 1995 122,885 46,000 - 34,200 20,000 - 3,991
and Strategic Development 1994 97,861 35,000 - - 35,000 - 192
</TABLE>
(1) The only type other Annual Compensation for each of the named executive
officers was in the form of perquisites and was less than the level
required for reporting.
(2) Includes the following amounts for the last fiscal year:
(i) David McCourt: $396 - Company paid life insurance; $5,082 - 401(k)
Company match;
(ii) Bruce Godfrey: $396 - Company paid life insurance; $4,569 - 401(k)
Company match;
(iii) Michael Mahoney: $396 - Company paid life insurance; $5,082 -401(k)
Company match;
(iv) Michael Gottdenker: $396 - Company paid life insurance; $1,777 -
401(k) Company match;$29,376 - relocation expenses;
(v) Michael Adams: $363 - Company paid life insurance; $3,490 - 401(k)
Company match.
The following amounts are for 1995 fiscal year:
(i) David McCourt: $530 -Company paid life insurance;$5,082 - 401(k)
Company match;
(ii) Bruce Godfrey: $510 - Company paid life insurance;$4,280 - 401(k)
Company match;
(iii) Michael Mahoney: $870 - Company paid life insurance;$5,082 - 401(k)
Company match;
(iv) Michael Gottdenker: $54- Company paid life insurance; $40,959 -
relocation expenses;
(v) Michael Adams: $253 - Company paid life insurance; $3,738 - 401(k)
Company match.
Does not include $68,359 paid to certain senior officers listed for
relocation expenses incurred in moving said senior officers and their
families to the Company's new executive offices in Princeton, New Jersey.
The following amounts are for 1994 fiscal year:
(i) David McCourt: $387 -Company paid life insurance;
(ii) Bruce Godfrey: $165 - Company paid life insurance;
(iii) Michael Mahoney; $503 - Company paid life insurance;$5,082- 401(k)
Company match;
(iv) Michael Adams: $192 - Company paid life insurance.
Does not include $546,891 paid to certain senior officers listed for
relocation expenses incurred in moving said senior officers and their
families to the Company's new executive offices in Princeton, New Jersey.
(3) The information is not required since the named executive was not an
executive officer during 1994.
(4) Represents the market value on the date of grant of restricted stock awards.
Additional information with respect to aggregate restricted stock holdings
awards is as follows as of December 31, 1996:
<TABLE>
<CAPTION>
Aggregate
Shares Value
--------- ---------
<S> <C> <C>
David C. McCourt 13,307.58 $ 322,709
Michael J. Mahoney 3,744.05 $ 90,793
Bruce C. Godfrey 4,034.90 $ 97,846
Michael Gottdenker 1,729.89 $ 41,950
Michael Adams 2,014.89 $ 48,861
</TABLE>
Vesting of restricted shares is accelerated upon a change in control of the
Company. Dividends, if any, are paid on restricted shares. Restricted stock
holdings for the named executives as of December 31, 1996 vest as follows:
<TABLE>
<CAPTION>
<S> <C>
December 1998 10,616.28
On or before December 1999 14,215.03
</TABLE>
<PAGE>
C-TEC OPTIONS/SAR GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Potential Realizable
Value at
% of Assumed Annual
# of Total Rates of Stock
Securities Options Price Appreciation
Underlying Granted Exercise for Option Term
Options to Emp.in or Base Expiration ---------------------
Name Granted Fiscal Yr. 1996 Price Date 5% ($) $10% ($)
- ----------------------------- -------- --------------- -------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
David McCourt - 0.00% - - - -
Michael Mahoney - 0.00% - - - -
Bruce Godfrey - 0.00% - - - -
Michael Gottdenker 10,000 10.53% 26.75 9/18/06 168,231 426,315
Michael Adams - 0.00% - - - -
</TABLE>
C-TEC AGGREGATED OPTIONS EXERCISES IN FISCAL YEAR 1996 AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Unexercised
# of Securities Underlying In-the-Money
Shares Unexercised Options/SAR's Options/SARs
Acquired at FY-End at FY-End
Name on Exercise Value Realized Exercisable/Unexercisable Exercisable/Unexercisable
- ----------------------------- ----------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
David McCourt 0 $ 0 150,000/350,000 $331,250/$887,500
Michael Mahoney 0 0 40,000/ 60,000 0/ 0
Bruce Godfrey 0 0 28,000/ 42,000 0/ 0
Michael Gottdenker 0 0 12,000/ 58,000 0/ 0
Michael Adams 0 0 18,000/ 37,000 2,750/ 11,000
</TABLE>
PENSION BENEFITS
The following table shows the estimated annual benefits payable upon
retirement for the named executive officers based upon the compensation and
years of service classifications indicated under the Company's pension plan.
<TABLE>
<CAPTION>
Years of Service
-----------------------------------------------
Average Compensation 15 20 25 30 35
- ----------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$125,000 $22,961 $30,615 $38,269 $45,923 $53,576
$150,000-$500,000 28,024 37,365 46,706 56,048 65,389
</TABLE>
Pensions are computed on a straight life annuity basis and are not reduced
for social security or other offset amounts. Participants receive a pension
based upon average
<PAGE>
compensation multiplied by the number of years of service. Average compensation
is computed on the basis of the average of the employee's highest five (5)
consecutive annual base salaries in the ten (10) years immediately preceding
retirement. The compensation covered by this plan is generally based upon the
compensation disclosed as salary in the "Summary Compensation Table."
In connection with a possible restructuring, the Company completed a
comprehensive study of its employee benefit plans in 1996. As a result of this
study, effective after December 31, 1996, in general, employees other than those
of the Telephone and Communications Services Groups no longer accrue benefits
under the defined benefit pension plan, but became fully vested in their benefit
accrued through that date. Such benefits, for the named executives affected by
this event, computed as the present value at July 31, 1997 (the expected payout
date) of a life annuity beginning at age 65, are as follows:
<TABLE>
<S> <C>
Daivd C. McCourt $11,679
Michael J. Mahoney $29,124
Bruce C. Godfrey $10,874
Michael Gottdenker N/A
Michael Adams $ 7,249
</TABLE>
DIRECTOR'S COMPENSATION
Non-employee Directors of the Company receive a retainer of $900 per month
and are paid $ 1,000 for each board meeting attended. The Committee Chairmen
and other committee members are paid $500 and $300, respectively, for each
committee meeting attended. In fiscal 1996, Stuart E. Graham, Frank M. Henry,
David C. Mitchell, Daniel E. Knowles, Eugene Roth and Michael B. Yanney were
paid $16,300, $18,200, $20,200, $20,500, $21,100, and $6,600, respectively, for
the foregoing services. Compensation for director services rendered by
Directors not employed as executive officers of the Company but employed as
executive officers at PKS and MFS totaled $67,900 (1) and $15,700 (2),
respectively, in 1996. In addition, in 1996 Stuart E. Graham, Frank M. Henry,
Daniel E. Knowles and Eugene Roth were paid $21,000, $21,000, $21,000 and
$31,039, respectively, for special committee fees in connection with the
Company's possible restructuring.
- --------------------
(1) Messrs. Jaros, Julian, Scott, and Stortz.
(2) Mr. Crowe.
OTHER RELATED INFORMATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Eugene Roth, Stuart E.
Graham, Daniel E. Knowles and Michael B. Yanney
Eugene Roth is a partner in Rosenn, Jenkins and Greenwald, which serves as
counsel to the Company from time to time.
<PAGE>
Peter Kiewit Sons'. Inc., the Company's controlling shareholder, and/or its
affiliates have a substantial stock ownership in California Energy Company,
Inc., Kiewit Telecom Holdings (formerly RCN Corporation) and the Company. These
companies share mutual director representation on their respective boards.
Although members of the current Compensation Committee do not serve on any
Kiewit-related compensation committees, James Q. Crowe and Richard R. Jaros,
members of the Company's Executive Committee, are on the Compensation Committee
of California Energy Company, Inc.
For information regarding certain potential or completed transactions
between the Company, including its subsidiaries and other affiliates of Peter
Kiewit Sons', Inc., see "Certain Relationships and Related Transactions."
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
THE COMPANY
Set forth below is certain information regarding the beneficial ownership
of C-TEC Common Stock and C-TEC Class B Stock of the Company as of March 31,
1997, by each director, the named executive officers and by all persons, as a
group, who are currently directors and executive officers of the Company.
Because the shares of C-TEC Class B Stock are convertible at the option of the
holder into shares of C-TEC Common Stock on a one-for-one basis at any time and
from time to time, the "Assuming Conversion" columns in the C-TEC Common Stock
table reflect the total shares of C-TEC Common Stock which would be beneficially
owned by such group assuming no other conversions. The "Percent of Class"
columns represent ownership not voting interest. Shares of C-TEC Common Stock
have one vote per share and shares of C-TEC Class B Stock have 15 votes per
share. Each director or executive officer has sole investment and voting power
over the shares listed opposite his name except as set forth in the footnotes
hereto:
<PAGE>
The Company
Set forth below is certain information regarding the beneficial ownership
of C-TEC Common Stock and C-TEC Class B Stock of C-TEC as of March 31, 1997, by
each director, the named executive officers and by all persons, as a group, who
are currently directors and executive officers of the Company. Because the
shares of C-TEC Class B Stock are convertible at the option of the holder into
shares of C-TEC Common Stock on a one-for-one basis at any time and from time to
time, the "Assuming Conversion" columns in the C-TEC Common Stock table reflect
the total shares of C-TEC Common Stock which would be beneficially owned by such
group assuming no other conversions. The "Percent of Class" columns represent
ownership not voting interest. Shares of C-TEC Common Stock have one vote per
share and shares of C-TEC Class B Stock have 15 votes per share. Each director
or executive officer has sole investment and voting power over the shares listed
opposite his name except as set forth in the footnotes hereto:
<TABLE>
<CAPTION>
Assuming Conversion
Number of Shares of -------------------
C-TEC Common Stock Percent of Percent of
Name of Beneficial Owner Beficially Owned Class Total Class Approx.
- ------------------------ ------------------- ---------- ----- -------------
<S> <C> <C> <C> <C>
James Q. Crowe -0- -0-% -0- -0-%
Stuart E. Graham -0- -0- -0- -0-
Frank M. Henry 41,040 * 64,137 *
Richard R. Jaros -0- -0- -0- -0-
Robert E. Julian 4,100 * 4,100 *
Daniel E. Knowles 500 * 500 *
David C. Mitchell 2,300 * 2,300 *
Eugene Roth 753 * 6,353 *
Walter Scott, Jr. -0- -0- -0- -0-
Michael B. Yanney -0-/(7)/ -0- -0- -0-
Michael A. Adams 5,111/(1)/ * 5,111 *
Bruce C. Godfrey 17,523/(2)/ * 17,523 *
Michael I. Gottdenker 6,357/(3)/ * 6,357 *
David C. McCourt 39,306/(4)(5)/ * 45,306 *
Michael J. Mahoney 19,774/(6)/ * 19,774 *
All Directors and Named Executive
Officers as a Group (15 persons) 136,764 * 176,111 *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of Shares of
C-TEC Class B Stock Percent of
Name of Beneficial Owner Beficially Owned Class Total
- ------------------------ ------------------- ---------- -----
<S> <C> <C> <C>
James Q. Crowe -0- -0-% -0-
Stuart E. Graham 4,650 * 4,650
Frank M. Henry 23,097 * 23,097
Richard R. Jaros -0- -0- -0-
Robert E. Julian -0- -0- -0-
Daniel E. Knowles -0- -0- -0-
David C. Mitchell -0- -0- -0-
Eugene Roth 5,600 * 5,600
Walter Scott, Jr. -0- -0- -0-
Michael B. Yanney -0- -0- -0-
Michael A. Adams -0- -0- -0-
Bruce C. Godfrey -0- -0- -0-
Michael I. Gottdenker -0- -0- -0-
David C. McCourt 6,000 * 6,000
Michael J. Mahoney -0- -0- -0-
</TABLE>
All Directors and Named Executive
Officers as a Group (15 persons) 39,347 * 39,347
<PAGE>
_______
(*) Less than 1% of the outstanding of the class.
/(1)/ Includes the 4,349 shares which are comprised of C-TEC Common and the C-
TEC matching restricted stock awards.
/(2)/ Includes the 11,766 shares which are comprised of C-TEC Common Stock and
the C-TEC matching restricted stock awards.
/(3)/ Includes the 5,304 shares which are comprised of C-TEC Common and the C-
TEC matching restricted stocks awards.
/(4)/ Includes the 30,670 shares which are comprised of C-TEC Common Stock and
the C-TEC matching restricted stock awards.
/(5)/ Includes the 225 shares of C-TEC Common Stock which are owned by Mr.
McCourt's wife and of which Mr. McCourt disclaims beneficial ownership.
/(6)/ Includes the 11,291 shares which are comprised of C-TEC Common Stock and
the C-TEC matching restricted stock awards.
/(7)/ Excludes the 833 shares of C-TEC Common Stock which are owned by Mr.
Yanney's wife and of which Mr. Yanney disclaims beneficial ownership.
<PAGE>
Mercom, Inc.
Set forth below is certain information regarding the beneficial ownership
of Common Stock Mercom, Inc., a subsidiary of the Company, as of March 31, 1997,
by each director, the named executive officers and by all persons, as a group,
who are currently directors and executive officers of the Company. Each
director or executive officer has sole investment and voting power over the
shares listed opposite his name except as set forth in the footnotes hereto:
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned of Class
- -------------------------- ------------------ --------
<S> <C> <C>
James Q. Crowe -- --%
Stuart E. Graham -- --
Frank M. Henry -- --
Richard R. Jaros -- --
Robert E. Julian -- --
Daniel E. Knowles -- --
David C. Mitchell -- --
Eugene Roth -- --
Walter Scott, Jr. -- --
Michael B. Yanney -- --
Michael A. Adams -- --
Bruce C. Godfrey -- --
Michael I. Gottdenker -- --
David C. McCourt --/(1)/ --
Michael J. Mahoney -- --
All Directors and Named Executive
Officers as a Group (15 persons) -0- *
</TABLE>
(*) Less than 1% of the outstanding of the class.
/(1)/ Mr. McCourt disclaims beneficial ownership of 50,000 shares which are
owned by his wife which constitute approximately 1.69% of the Class.
<PAGE>
Peter Kiewit Sons' Inc.
Set forth below is certain information regarding the beneficial ownership
of equity securities of PKS as March 31, 1997, by each director, the named
executive officers and by all persons, as a group, who are currently directors
and executive officers of the Company. Class B Construction & Mining Group
Nonvoting Restricted Redeemable Convertible Exchangeable Common Stock (none of
which is owned by managment), Class C Construction and Mining Group Restricted
Redeemable Convertible Exchangeable Common Stock ("Class C"), and Class D
Diversified Group Convertible Exchangeable Common Stock ("Class D").
<TABLE>
<CAPTION>
Number of Percent of Number of Percent of
Class C Class C Class D Class D
Name Shares Shares Shares Shares
- ---- ------ ------ ------ ------
<S> <C> <C> <C> <C>
James Q. Crowe -- --% 134,369 *%
Stuart E. Graham -- -- -- --
Frank M. Henry -- -- -- --
Richard R. Jaros 25,772 * 121,128 *
Robert E. Julian -- -- 403,908 1.6
Daniel E. Knowles -- -- -- --
David C. Mitchell -- -- -- --
Eugene Roth -- -- -- --
Walter Scott, Jr. 250,000 2.7 3,393,374 13.8
Michael B. Yanney -- -- -- --
Michael A. Adams -- --
Bruce C. Godfrey -- -- -- --
Michael I. Gottdenker -- --
David C. McCourt -- -- 1,500 *
Michael J. Mahoney -- -- -- --
</TABLE>
(*) Less than 1% of the outstanding of the class.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information with respect to the
beneficial ownership of shares of C-TEC Common Stock and C-TEC Class B Stock of
the Company by any person or group known to the Company to be a beneficial owner
of more than five percent (5%) of either class of shares. The "Total" columns
are unlikely to represent the sum of the related columns because most forms of
ownership require that the same shares be disclosed in two of the columns.
Because the shares of C-TEC Class B Stock are convertible at the option of
the holder into shares of C-TEC Common Stock on a one-for-one basis at any time
and from time to time, the "Assuming Conversion" columns in the C-TEC Common
Stock table reflect the total shares of C-TEC Common Stock which would be
beneficially owned upon conversion by each group, as well as the related
percentage beneficially owned by such group assuming no other conversions. The
"Percent of Class" columns represent ownership not voting interest. Shares of
C-TEC Common Stock have one vote per share and shares of C-TEC Class B Stock
have 15 votes per share. In addition, shares of both classes can be voted
cumulatively with respect to the election of directors.
<PAGE>
<TABLE>
<CAPTION>
C-TEC Common Stock
At March 31, 1997
Assuming
Without Conversion Conversion
========================================================================== =======================
Sole Sole Shared Shared Percent Percent of
Voting Investment Voting Investment of Class Class
Power Power Power Power TOTAL Approx. TOTAL Approx.
========= ========== ====== ================== ========= ======= ========== ==========
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kiewit Telecom Holdings,
Inc.(1) 8,226,262 8,226,262 0 0 8,226,262 41.5% 13,320,485 67%
Mario J. Gabelli Group (2) 1,575,537 1,576,037 0 0 1,576,037 7.94% 2,257,232 11.4%
<CAPTION>
C-TEC Class B Stock
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kiewit Telecom Holdings,
Inc.(1) 5,094,223 5,094,223 0 0 5,094,223 60.82%
Mario J. Gabelli Group (2) 681,195 681,195 0 0 681,195 9%
</TABLE>
- -------------
1. PKS is the sole stockholder of KDG, which holds 90% of the stock of KTH.
David C. McCourt owns the remaining 10% of the stock of KTH. The address for
KTH, KDG and PKS is 1000 Kiewit Plaza, Omaha, Nebraska 68131.
2. Based on information obtained from Schedule 13Ds and amendments thereto for
the C-TEC Common Stock and the C-TEC Class B Stock filed through March 31,
1997, with the Securities and Exchange Commission (the "SEC") by Mario J.
Gabelli, together with GAMCO Investors, Inc., Gabelli Funds, Inc., Gabelli
Performance Partnership, L.P., Gabelli International Limited, Gabelli
International II Limited and Gabelli & Company, Inc., all of whose address is
One Corporate Center, Rye, New York 10580-1434.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
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 1996, the Company paid $240,523 to C-SPAN
for programming services.
Frank M. Henry, a Director of the Company, is a principal in Martz Travel
and Frank Martz Coach Company which perform certain travel and related services
for the Company. In 1996, the Company paid $17,208 to Martz Travel and Frank
Martz Coach Company.
Frank M. Henry, together with his spouse, owns a 50% partnership interest
in Frank M. Henry Associates, which leases office space to the Company under an
amended lease which expired May 31, 1996. A total of $212,211 was paid by the
Company to Frank M. Henry Associates for rent, utility, parking and maintenance
services for 1996.
Eugene Roth, a Director of the Company, is a partner in Rosenn, Jenkins and
Greenwald which serves as counsel for the Company from time to time. In 1996,
the Company paid $17,552 to Rosenn, Jenkins and Greenwald for legal services.
David C. Mitchell, a Director of the Company, serves as a consultant to the
Company and was paid $85,500 by the Company in 1996.
During 1996, the Company paid MFS $4,872,518 primarily for network costs.
Also during 1996, the Company earned $2,209,098 in revenue from MFS, primarily
for construction management services. MFS is now a WorldCom subsidiary.
See Part I, Item 1, "Other Matters" for a description of the terms of a
sale and related rescission of the sale of certain of the Company's businesses
to Kiewit Telecom Holdings (formerly RCN Corporation).
The Company believes that all transactions described herein were on terms
at least as favorable to the Company as would have been available from an
unrelated third party in an arm's-length transaction.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
C-TEC CORPORATION
DATE: April 30, 1997 /s/ Bruce C. Godfrey
----------------------------
Bruce C. Godfrey
Executive Vice President and
Chief Financial Officer
