<PAGE>
SCHEDULE 14A INFORMATION
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 Section 240.14a-11(c) or Section 240.14a-12
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--Enter Company Name Here--
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] 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:
<PAGE>
LOGO
OF COMMONWEALTH TELEPHONE ENTERPRISES APPEARS HERE
100 CTE DRIVE
DALLAS, PENNSYLVANIA 18612-9774
(717) 674-2700
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 14, 1998
The Annual Meeting of Shareholders of Commonwealth Telephone Enterprises,
Inc., formerly known as C-TEC Corporation, will be held at the Hyatt Regency
Princeton, 102 Carnegie Center, Princeton, New Jersey on Thursday, May 14,
1998, 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 Coopers & Lybrand L.L.P. as independent
auditors of the Company for the fiscal year ending December 31, 1998; and
3.To act upon such other matters as may properly come before the meeting or
any adjournment or postponement thereof.
Only shareholders of record at the close of business on April 14, 1998, will
be entitled to vote at the meeting either in person or by proxy. Each of these
shareholders 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. If you
attend the meeting, you may personally vote your shares regardless of whether
you have signed a proxy.
/s/ Bruce C. Godfrey
Bruce C. Godfrey,
Executive Vice President,
Chief Financial Officer and
Corporate Secretary
Dated: April 17, 1998
<PAGE>
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON THURSDAY, MAY 14, 1998
This Proxy Statement is being mailed to shareholders on or about April 17,
1998, in connection with the solicitation of proxies by the Board of Directors
of Commonwealth Telephone Enterprises, Inc. ("CTE" or the "Company") for use
at the Annual Meeting of Shareholders (the "Annual Meeting") to be held on
Thursday, May 14, 1998, at 11:00 A.M., local time, at the Hyatt Regency
Princeton, 102 Carnegie Center, Princeton, New Jersey 08540, and at any
adjournment or postponement thereof.
At the Annual Meeting, shareholders of CTE 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 Coopers & Lybrand
L.L.P. as independent auditors of CTE for the fiscal year ending December 31,
1998; 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 CTE.
----------------
The date of this Proxy Statement is April 17, 1998.
1
<PAGE>
THE ANNUAL MEETING
PLACE, DATE AND TIME
The Annual Meeting will be held at the Hyatt Regency Princeton, 102 Carnegie
Center, Princeton, New Jersey 08540 on Thursday, May 14, 1998, at 11:00 A.M.,
local time.
PURPOSE OF THE ANNUAL MEETING
Shareholders of CTE 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 Coopers & Lybrand L.L.P. as independent auditors of CTE for
the fiscal year ending December 31, 1998; and (iii) to transact such other
business as may properly come before the meeting.
RECORD DATE, QUORUM, REQUIRED VOTE
The close of business on April 14, 1998, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and at any adjournment or postponement thereof. On April 14,
1998, there were outstanding 15,755,460 shares of CTE Common Stock ("CTE
Common Stock"), and 2,631,060 shares of CTE Class B Stock ("CTE Class B Stock"
(and together with the CTE Common Stock, the "CTE Common Equity")). The
presence at the Annual Meeting, in person or by proxy, of shareholders
entitled to cast a majority of the votes entitled to be cast at the Annual
Meeting shall constitute a quorum at the Annual Meeting. Shareholders will be
entitled to one vote per share for CTE Common Stock and fifteen votes per
share for CTE Class B Stock on all matters to be submitted to a vote at the
Annual Meeting. Shareholders have cumulative voting rights with respect to the
election of Directors. Under cumulative voting, a shareholder's total vote
(the number of votes to which such shareholder is entitled multiplied by the
number of Directors to be elected) may be cast entirely for one candidate or
distributed among two or more candidates. The persons named in the
accompanying Proxy may, at their discretion, cumulate the votes which they are
authorized to cast. Holders of CTE Common Stock and holders of CTE Class B
Stock will vote as a single class on all matters.
In accordance with Pennsylvania law, a shareholder 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 ratification of the appointment of
independent auditors) requires the affirmative vote of a majority of the votes
cast by the holders of CTE Common Stock voting as a single class and a
majority of the votes entitled to be cast by all holders of CTE Common Stock
and CTE Class B Stock voting together as a single class. 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: Michael I. Gottdenker, Frank M. Henry, Eugene Roth and John J.
Whyte. These four (4) nominees, if elected at the 1998 Annual Meeting, will
serve for a term of three (3) years expiring at the Annual Meeting of
Shareholders to be held in 2001.
It is not anticipated that any of these nominees will become unavailable for
any reason, but, if that should occur before the Annual Meeting, the persons
named on the enclosed Proxy reserve the right to substitute another person of
their choice as nominee in his place 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 shareholders 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 1, 1998, concerning the nominees for election as
Class II Directors and for the other current Directors is set forth below.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTOR AGE SINCE
---------------- --- --------
<C> <C> <S> <C>
James Q. Crowe 48 President and Chief Executive Officer of 1993
Level 3 Communications, Inc. ("Level 3"),
formerly known as Peter Kiewit Sons' Inc.
("PKS") since August 1997 and Director
since June 1993; Director of RCN
Corporation ("RCN") since September 1997;
President and CEO of MFS Communications
Company, Inc. ("MFS/WorldCom") from June
1993 to June 1997; Chairman of the Board of
Directors of MFS/WorldCom from 1992 to
1996; Director of Inacom Communications,
Inc. since 1997; and Chairman of the Board
of Directors of WorldCom, Inc. ("WorldCom")
from December 1996 to June 1997.
Bruce C. Godfrey 42 Executive Vice President and Chief 1996
Financial Officer of the Company since
April 1994 and Corporate Secretary since
September 1997; Director, Executive Vice
President and Chief Financial Officer of
RCN since September 1997; Director and
Corporate Secretary of Cable Michigan, Inc.
("Cable Michigan") since September 1997;
Executive Vice President and Chief
Financial Officer of Mercom, Inc.
("Mercom") from April 1994 to October 1997;
Director of Mercom since May 1994 and
Corporate Secretary since October 1997;
Senior Vice President and Principal of
Daniels and Associates from January 1984 to
April 1994.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTOR AGE SINCE
---------------- --- --------
<C> <C> <S> <C>
Michael I. Gottdenker 33 President and Chief Operating Officer 1997
of the Company since September 1997;
Executive Vice President of the
Company from September 1995 to
September 1997; Executive Vice
President of the Company's
Communications Services Group from
August 1996 to September 1997; Vice
President of New Business Development
at Revlon Consumer Products
Corporation ("Revlon") from 1994 to
1995; General Manager of Revlon's
State Beauty Supply from 1993 to 1994;
Director of Corporate Finance for
Revlon from 1992 to 1993; Associate,
Real Estate Finance Department at
Salomon Brothers Inc from 1988 to
1991; and Financial Analyst, Corporate
Finance Department at Salomon Brothers
Inc from 1986 to 1988.
Stuart E. Graham 52 President of Skanska USA Inc. since 1990
1994; CEO of several Skanska USA Inc.
subsidiaries, including Sordoni
Skanska, Slattery Skanska and Skanska
E & C; and Director of RCN since
September 1997.
Frank M. Henry 64 Chairman, Frank Martz Coach Company 1980
since 1995 and President of Frank
Martz Coach Company from 1964 to 1995;
President, Gold Line, Inc., since
1975; Director of First Union
Corporation; and Director of Cable
Michigan since September 1997.
Richard R. Jaros 46 President of Kiewit Diversified Group 1993
Inc. and Executive Vice President and
Chief Financial Officer of PKS from
1980 to 1992 and from 1994 to 1997;
Chairman of CalEnergy Company, Inc.
("CECI") from 1993 to 1994 and
President from 1992 to 1993. Mr. Jaros
is a Director of RCN, WorldCom, Level
3 and CECI.
Daniel E. Knowles 68 President of Cambridge Human Resources 1995
since 1989; Vice President of
Personnel and Administration, Grumman
Corporation from 1963 to 1989; and
Director of Cable Michigan since
September 1997.
Michael J. Mahoney 47 Director, President and Chief 1995
Operating Officer of RCN since
September 1997; President and Chief
Operating Officer of the Company from
February 1994 to September 1997;
President and Chief Operating Officer
of Mercom from February 1994 to
September 1997 and a Director of
Mercom since January 1994; Executive
Vice President of the Company's Cable
Television Group from June 1991 to
February 1994; Executive Vice
President of Mercom from December 1991
to February 1994.
David C. McCourt 41 Chairman and Chief Executive Officer 1993
of the Company since October 1993;
Chairman, Director and Chief Executive
Officer of Cable Michigan since
September 1997; Chairman, Director and
Chief Executive Officer of RCN since
September 1997; President and Director
of Level 3 Telecom Holdings, Inc.
("LTH"); Chairman, Director and Chief
Executive Officer of Mercom since
October 1993; 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.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR
NAME OF DIRECTOR AGE SINCE
---------------- --- --------
<C> <C> <S> <C>
David C. Mitchell 56 Former President of Rochester Telephone 1993
Corporation's Telephone Group, Corporate
Executive Vice President and Director of
Rochester Telephone Corporation ("RTC"),
now Frontier Corporation; Director of
Lynch Corporation and USN Communications;
and Director of Cable Michigan since
September 1997. Since 1963, Mr. Mitchell
held various positions throughout RTC
encompassing virtually all disciplines of
the company.
Eugene Roth 62 Senior Partner at Rosenn, Jenkins and 1993
Greenwald L.L.P. since 1964; Director of
the Pennsylvania Regional Board of
Directors of First Union National Bank;
and Director of RCN since September 1997.
Walter Scott, Jr. 66 Chairman and Director of Level 3; Chairman 1993
and Chief Executive Officer of PKS for
over nineteen years; Director of RCN,
Berkshire Hathaway, Inc., Burlington
Resources, Inc., CECI, ConAgra, Inc., U.S.
Bancorp and Valmont Industries, Inc. Mr.
Scott was Chairman of the Board of
WorldCom from December 1996 to July 1997.
John J. Whyte 57 President of Worldwide PCE Corporation 1997
(Professional Corporate Executive Firm);
Partner of Stavisky, Shapiro & Whyte,
certified public accountants, since 1981.
</TABLE>
- - --------
In connection with the Distribution (as defined herein): (i) Robert E. Julian,
Michael B. Yanney and Bruce C. Godfrey resigned from their positions as
Directors in Class II effective September 30, 1997; (ii) Michael I. Gottdenker
and John J. Whyte were selected by the Board of Directors to fill two (2) of
the vacancies in Class II; (iii) the Board of Directors eliminated the
additional vacancy in Class II by creating a vacancy in Class III; and (iv)
selected Bruce C. Godfrey to Class III.
The Board of Directors is divided into three (3) classes. Michael I.
Gottdenker, Frank M. Henry, Eugene Roth and John J. Whyte, are members of
Class II whose term will expire at the Annual Meeting. James Q. Crowe, Bruce
C. Godfrey, Stuart E. Graham, Richard R. Jaros and Michael J. Mahoney are
members of Class III with terms expiring in 1999. Daniel E. Knowles, David C.
McCourt, David C. Mitchell and Walter Scott, Jr. are members of Class I with
terms expiring in 2000.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
THE COMPANY
Set forth below is certain information regarding the beneficial ownership of
CTE Common Stock and CTE Class B Stock as of April 1, 1998, by each director,
the named executive officers and by all persons, as a group, who are currently
directors or executive officers of the Company. Because the shares of CTE
Class B Stock are convertible at the option of the holder into shares of
Common Stock on a one-for-one basis, at any time and from time to time, the
"Assuming Conversion" columns in the CTE Common Stock table reflect the total
shares of CTE Common Stock which would be beneficially owned by such group
assuming no other conversions. The "Percent of Outstanding Shares" columns
represent ownership, not voting interest. Shares of CTE Common Stock have one
(1) vote per share and shares of CTE Class B Stock fifteen (15) votes per
share. Each director or named 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>
CLASS B
COMMON STOCK(1) COMMON STOCK ASSUMING CONVERSION
------------------------ ------------------------ ------------------------
NUMBER OF NUMBER OF NUMBER OF
SHARES PERCENT OF SHARES PERCENT OF SHARES PERCENT OF
BENEFICIALLY OUTSTANDING BENEFICIALLY OUTSTANDING BENEFICIALLY OUTSTANDING
NAME OF BENEFICIAL OWNER OWNED(2) SHARES(3) OWNED SHARES OWNED(3) SHARES(3)
- - ------------------------ ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Adams(3)..... 6,424 * -- -- 6,424 *
James Q. Crowe.......... 685 * -- -- 685 *
James DePolo............ 1,022 * -- -- 1,022 *
Robert J. Gedrose(3).... 4,301 * -- -- 4,301 *
Bruce C. Godfrey(3)..... 12,642 * -- -- 12,642 *
Michael I.
Gottdenker(3).......... 12,072 * -- -- 12,072 *
Stuart E. Graham........ 650 * 3,101 -- 3,751 *
Frank M. Henry.......... 28,003 * 15,398 -- 43,401 *
Richard R. Jaros........ 661 * -- -- 661 *
Daniel E. Knowles....... 1,031 * -- -- 1,031 *
Michael J. Mahoney(3)... 12,806 * -- -- 12,806 *
David C. McCourt(3)(4).. 30,639 * 4,002 * 34,641 *
David C. Mitchell....... 2,226 * -- -- 2,226 *
Eugene Roth............. 1,211 * 3,735 * 4,946 *
Walter Scott, Jr........ 685 * -- -- 685 *
John J. Whyte........... 455 * -- -- 455 *
All Directors and
Executive Officers as a
group
(25 persons)........... 115,513 * 26,236 * 141,749 *
Level 3 Telecom
Holdings,
Inc. (5)............... 7,537,176 48 1,343,146 51 8,880,322 56
Mario J. Gabelli
Group(6)............... -- -- 264,643 10.05 264,643 10.05
</TABLE>
- - --------
*Less than one percent.
(1) The CTE Class B Stock is convertible, at the option of the holder, into
shares of CTE Common Stock on a one for-one basis at any time and from
time to time. The CTE Common Stock column has been prepared assuming that
no other shares of CTE Class B Stock are converted into CTE Common Stock.
(2) Includes forfeitable Matching Shares (as defined below), and Share Units
(as defined below).
(3) Under the CTE Executive Stock Purchase Plan ("ESPP"), participating
executive officers who forgo current compensation are credited with CTE
"Share Units," the value of which is based on the value of a share of CTE
Common Stock. ESPP participants who elect to receive Share Units in lieu
of current compensation are also credited with restricted "Matching
Shares," which vest over a period of three (3)
6
<PAGE>
years from the grant date, subject to continued employment. Matching
Shares, unless forfeited, have voting and dividend rights. (In connection
with the September 1997 restructuring, CTE distributed to the holders of
CTE Common Equity all of the shares of common stock of RCN and Cable
Michigan (the "Distribution"). Share Units and Matching Shares were
adjusted in an equitable manner for the Distribution.) The holdings
indicated include Share Units and Matching Shares. The table below shows,
with respect to each named executive officer, the number of shares of CTE
Common Stock purchased outright, Share Units relating to CTE Common Stock
acquired by such named executive officer in lieu of current compensation,
and the forfeitable Matching Shares of CTE Common Stock held by such named
executive officer:
<TABLE>
<CAPTION>
TOTAL SHARES
SHARE UNITS PURCHASED AND
ACQUIRED UNDER ACQUIRED AND
SHARES THE ESPP IN TOTAL SHARES RESTRICTED RESTRICTED
PURCHASED LIEU OF CURRENT PURCHASED MATCHING MATCHING
OUTRIGHT COMPENSATION AND ACQUIRED SHARES SHARES
--------- --------------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C>
David C. McCourt........ 5,335 12,652 17,987 12,652 30,639
Michael I. Gottdenker... 2,178 4,947 7,125 4,947 12,072
Bruce C. Godfrey........ 3,338 4,652 7,990 4,652 12,642
Robert J. Gedrose....... 2,049 1,126 3,175 1,126 4,301
Michael J. Mahoney...... 3,738 4,534 8,272 4,534 12,806
Michael A. Adams........ 450 2,987 3,437 2,987 6,424
</TABLE>
--------
(4) Includes 150 shares of CTE Common Stock which are owned by Mr. McCourt's
wife. Mr. McCourt disclaims beneficial ownership of such shares.
(5) 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. In conjunction with the Split-Off, PKS changed its
name to "Level 3 Communications, Inc." and the new PKS, 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 100 Peter
Kiewit Plaza, Omaha, Nebraska 68131.
(6) Based on information obtained from Schedule 13Ds and amendments thereto
for the CTE Common Stock and the CTE Class B Stock filed through March 20,
1998, 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., each of whose
address is One Corporate Center, Rye, New York 10580-1434.
The information set forth above and in "Director Information" does not give
effect to the ownership of Company securities by 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 by LTH, see "Security of Ownership Certain Beneficial Owners and
Management."
7
<PAGE>
LEVEL 3 COMMUNICATIONS, INC.
Set forth below is certain information regarding the beneficial ownership of
equity securities of Level 3 Common Stock as of April 1, 1998, by each
director, the named executive officers and by all persons, as a group, who are
currently directors and executive officers of the Company.
<TABLE>
<CAPTION>
NUMBER PERCENT
NAME OF SHARES OF SHARES
- - ---- ---------- ---------
<S> <C> <C>
Michael A. Adams...................................... -- --
James Q. Crowe........................................ 5,666,360 3.9
James DePolo.......................................... -- --
Robert J. Gedrose..................................... -- --
Bruce C. Godfrey...................................... -- --
Michael I. Gottdenker................................. -- --
Stuart E. Graham...................................... -- --
Frank M. Henry........................................ -- --
Richard R. Jaros...................................... 748,749(1) *
Daniel E. Knowles..................................... -- --
Michael J. Mahoney.................................... 1,000 --
David C. McCourt...................................... 57,500 *
David C. Mitchell..................................... -- --
Eugene Roth........................................... -- --
Walter Scott, Jr...................................... 17,636,397 12.0
John J. Whyte......................................... -- --
All Directors and Executive Officers as a Group (25
persons)............................................. 24,112,561 16.4
</TABLE>
- - --------
(*) Less than one percent of the outstanding shares of the class.
(1) Includes 185,000 shares in the Jaros Family Limited Partnership.
8
<PAGE>
COMPENSATION INFORMATION
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ending December 31,
1995, 1996 and 1997, the cash compensation, as well as certain other
compensation, paid or accrued to the named executive officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- -------------------------------
AWARDS
----------
RESTRICTED
COMPEN- STOCK SECURITIES ALL OTHER
SATION/ AWARDS UNDERLYING COMPEN-
NAME AND POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS(#) SATION
- - ----------------- --------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
David C. McCourt(3)..... 1997 500,000 1,400,000 380,000 -- 2,703
Chairman and Chief 1996 491,154 700,000 238,333 -- 5,478
Executive Officer 1995 397,885 700,000 220,000 166,750 5,612
Michael I. Gottdenker... 1997 209,038 250,000 64,808 -- 6,563
President and Chief 1996 198,673 115,000 59,750 6,670 31,549
Operating Officer 1995 53,365 100,000 -- 40,020 41,013
Bruce C. Godfrey(3)..... 1997 243,077 500,000 148,615 -- 5,763
Executive Vice
President 1996 221,462 165,000 74,333 -- 4,965
Chief Financial Officer 1995 183,731 150,000 67,000 -- 4,790
and Corporate Secretary
James DePolo(4)......... 1997 138,713 45,000 -- -- --
Executive Vice
President 1996 (5) (5) -- -- (5)
1995 (5) (5) -- -- (5)
Robert J. Gedrose....... 1997 54,519 50,000 -- -- 16,000
Executive Vice
President 1996 (5) (5) -- -- (5)
1995 (5) (5) -- -- (5)
Michael J. Mahoney(3)... 1/97-9/97 181,346 375,000(6) 84,731 -- 2,721
President and Chief 1996 235,027 175,000 67,017 -- 5,478
Operating Officer 1995 222,462 100,000 65,000 -- 5,952
Michael A. Adams(3)..... 1/97-9/97 146,731 112,500(6) 70,654 10,005 1,493
President--Technology 1996 138,673 155,000 36,950 -- 3,853
& Network Development 1995 122,885 46,000 34,200 13,340 3,991
</TABLE>
- - --------
(1) Represents the market value on the date of grant of restricted stock
awards. In connection with 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 restricted shares of common stock of CTE, RCN and
Cable Michigan. On October 1, 1997, the shareholders voted to approve a 2-
for-3 reverse stock split. Restricted stock award share units have been
retroactively restated to reflect the reverse split. As of December 31,
1997, the aggregate holdings and value of restricted stock awards for CTE
Common Stock were as follows:
9
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE
SHARES VALUE($)
------ ---------
<S> <C> <C>
David C. McCourt............................................... 12,652 327,374
Michael I. Gottdenker.......................................... 2,715 70,257
Bruce C. Godfrey............................................... 4,653 120,386
James DePolo................................................... -- --
Robert J. Gedrose.............................................. -- --
Michael J. Mahoney............................................. 4,534 117,312
Michael A. Adams............................................... 2,987 77,281
</TABLE>
Vesting of restricted shares is accelerated upon a change in control of the
Company. Dividends, if any, are paid on restricted shares. Subject to
continued employment, restricted share units credited to participants'
accounts vest in three (3) 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:
(i)David C. McCourt: $486--Company paid life insurance; $2,217--401(k)
Company match; (ii) Michael I. Gottdenker: $486--Company paid life
insurance; $4,988--401(k) Company match; $1,098--relocation expenses;
(iii) Bruce C. Godfrey: $486--Company paid life insurance; $5,277--
401(k) Company match; (iv) James DePolo: None; (v) Robert J. Gedrose:
$146--Company paid life insurance; $15,854--relocation expenses; (vi)
Michael J. Mahoney: $365--Company paid life insurance; $2,356--401(k)
Company match; and (vii) Michael A. Adams: $362--Company paid life
insurance; $1,131--401(k) Company match.
(3) Effective as of and following the Distribution, Messrs. McCourt, Godfrey,
Mahoney and Adams receive no direct compensation from the Company. They
are employees of and compensated by RCN, the compensation committee of
which determines their annual base salaries and short and long term bonus
opportunities.
(4) Mr. DePolo is employed as an independent consultant for the Company.
(5) The information is not required since the named executive was not an
executive officer during 1996 and 1995.
(6) Represents nine (9) months ratable portion of total bonus paid by RCN in
December 1997.
CTE OPTIONS/SAR GRANTS IN FISCAL YEAR 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE
UNDERLYING GRANTED EXERCISE APPRECIATION FOR
OPTIONS TO EMP. IN OR BASE OPTION TERM
GRANTED FISCAL YR. PRICE EXPIRATION --------------------
NAME (#) 1997 ($/SH) DATE 5%($) 10%($)
- - ---- ---------- ---------- -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
David C. McCourt........ -- -- -- -- -- --
Michael I. Gottdenker... -- -- -- -- -- --
Bruce C. Godfrey........ -- -- -- -- -- --
James DePolo............ -- -- -- -- -- --
Robert J. Gedrose....... -- -- -- -- -- --
Michael J. Mahoney...... -- -- -- -- -- --
Michael A. Adams........ 10,005 4.26 11.10 2/12/2007 69,834 176,988
</TABLE>
10
<PAGE>
CTE FY-END OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1997(2) AT DECEMBER 31, 1997(2)(3)
------------------------------- -------------------------------
EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
-------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
David C. McCourt........ 166,750 166,750 2,789,094 2,808,203
Michael I. Gottdenker... 17,342 29,348 276,637 464,067
Bruce C. Godfrey........ 28,014 18,676 462,147 308,098
James DePolo............ -- -- -- --
Robert J. Gedrose....... -- -- -- --
Michael J. Mahoney...... 40,020 26,680 660,210 440,140
Michael A. Adams........ 19,343 27,347 316,738 430,399
</TABLE>
- - --------
(1) No CTE stock options were exercised by the named executive officers during
the fiscal year ended December 31, 1997.
(2) Denominated in shares of CTE Common Stock, as adjusted for the 2-for-3
reverse stock split.
(3)The fair market value of CTE Common Stock at December 31, 1997, was $25.875
per share.
PENSION BENEFITS
The following table shows the estimated annual benefits payable under the
Company's pension plan upon retirement for the named executive officers based
upon the compensation and years of service classifications indicated:
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------
AVERAGE
COMPENSATION 5 10 15 20 25
------------ ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
$100,000 $5,985 $11,970 $17,955 $23,940 $29,925
$125,000 7,673 15,345 23,018 30,690 38,363
$150,000-250,000 9,360 18,720 28,080 37,440 46,800
</TABLE>
Pensions are computed on a single straight life annuity basis and are not
reduced for social security or other offset amounts. Participants receive a
pension based upon average 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. The credited years of service for Mr. Gottdenker as of
December 31, 1997 is 2.
11
<PAGE>
COMPENSATION COMMITTEE REPORT
The compensation programs for the Company's executive officers are
administered by the Compensation Committee ("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 1997 fiscal year.
COMPENSATION PHILOSOPHY
Prior to September 30, 1997, the Company operated as C-TEC Corporation ("C-
TEC"). On September 30, 1997, C-TEC distributed 100 percent of the outstanding
shares of Common Stock of RCN Corporation ("RCN") and Cable Michigan, Inc.
("Cable Michigan"), another wholly-owned subsidiary of C-TEC, to the
shareholders of C-TEC (as previously defined, the "Distribution"). In
connection with, and at the time of, the Distribution, certain principal
executive officers of C-TEC became the principal executive officers of the
Company. In connection with the Distribution, the Company continued the same
executive compensation policies, criteria and plans as those of C-TEC. In
connection with the Distribution, RCN agreed to provide or cause to be
provided to the Company the following services: (i) accounting; (ii) payroll;
(iii) management supervision; (iv) cash management; (v) human resources; (vi)
insurance administration; (vii) legal; (viii) tax; (ix) internal audit; and
(x) other miscellaneous administrative services ("Services"). The fee per year
for the Services will be 3.5% of the first $175 million of revenue of the
Company and 1.75% of any additional revenue. As a result, the RCN executive
officers providing Services to the Company (including Messrs. McCourt,
Godfrey, Mahoney and Adams) will not be compensated by the Company, but will
be compensated by RCN or one of its affiliates.
The philosophy of the Company's compensation program, which is consistent
with the philosophy of C-TEC, is, generally, to provide a performance-based
executive compensation program that rewards executives whose efforts enable
the Company to achieve its business objectives and enhance shareholder value.
The Company's compensation plan policies and philosophies are to:
1. Establish and implement the concept of Total Direct Compensation
("TDC"), which is intended to provide a base salary slightly below that of
the Company's peer group, a short term bonus opportunity equivalent to that
of the Company's peer group, and a long term bonus opportunity above that
of the Company's peer group.
2. Establish market-based levels or "bands" for the executive group and
develop a TDC profile for each band. The bands for the executive group are
based on those adopted by C-TEC. An executive's placement in the bands will
be based on individual performance, level and scope of responsibility, and
impact on decision making.
3. Make a greater portion of an executive's potential total compensation
opportunity conditional on attainment of performance incentives, with a
smaller portion derived from base salary, as an executive's level of
responsibility increases.
4. Align the interests of executives with the interests of shareholders
through ownership of Company stock.
The Compensation Committee determines base salary and makes recommendations
with respect to short term incentive grants, and stock option grants as they
deem appropriate and consistent with the TDC guidelines and the compensation
philosophy of the Company. The base salary structure guidelines and short-term
incentive objectives adopted by C-TEC were continued in effect with respect to
the Company after the Distribution.
The Company continues to utilize stock options as long term compensation. In
connection with the Distribution, all outstanding C-TEC Stock options held by
the Company's executives were converted into stock options of the Company on a
basis intended to maintain the same aggregate option value for each stock
option holder after the Distribution as the stock option holder had before the
Distribution.
To further align the interests of the Company's executives with that of
shareholders, the Company requires that executives acquire and maintain a
significant equity stake in the Company. Generally, executives of the
12
<PAGE>
Company are required to own by the year 2000 Company stock with a value
ranging, depending on an executive's position, from 100% to 300% of their
annual base salary. To assist executives in accumulating this equity position
on a pre-tax basis, the Company implemented the Executive Stock Purchase Plan
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 during the fourth
quarter of 1997, the period in which the Company became publicly traded, were
consistent with the salaries received by such persons from C-TEC. Such
salaries were targeted to be slightly below that of executive officers in the
C-TEC 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.
The amount of cash bonuses paid to executive officers for 1997 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. Special emphasis was
placed on the officers' contribution to the Restructuring (as defined below).
The Compensation Committee believes that 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 the evaluation of each executive's individual performance and contribution
to the Company's performance presented to the Compensation Committee.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. McCourt was paid a base salary and bonus of $500,000 and $1.4 million,
respectively, for services rendered to the Company, RCN and Cable Michigan in
1997. Mr. McCourt's compensation for 1997 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 1997, which was earned under the short-term plan adopted by the
Company, reflects the extraordinary corporate activity that took place in
1997, the accomplishment of certain strategic corporate objectives, and
attainment of certain corporate financial and non-financial goals including
the restructuring of C-TEC into three (3) separate publicly traded
enterprises, a reorganization intended to increase shareholder value.
From and after the Distribution, Mr. McCourt will be compensated by RCN or
an affiliate thereof for services rendered to the Company, RCN and Cable
Michigan.
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 (4) 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. Consistent with C-TEC, the Company
adopted the 1996 Bonus Plan, which is intended to serve as a qualified
performance-based compensation program under Section 162(m).
COMPENSATION COMMITTEE
Eugene Roth, Chairman
Daniel E. Knowles
John J. Whyte
Dated: April 8, 1998
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Eugene Roth, Esq., Chairman,
Daniel E. Knowles and John J. Whyte.
Eugene Roth, Esq. is a 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 shareholder, 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."
14
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the performance of CTE's Common
Stock and Class B Stock to the Nasdaq Stock Market Index and the Nasdaq
Telecommunications Index. The graph assumes that the value of the investment
in the Company's Common Stock, Class B Stock and each index was $100 at
December 31, 1992. The Common and Class B Stock includes the reinvestment of
dividends.
Comparison of Five Year Cumulative Total Return
Among Commonwealth Telephone Enterprises, Inc.,
The Nasdaq Stock Market (U.S.) Index and The Nasdaq Telecommunications Index
12/92 12/93 12/94 12/95 12/96 23/97
----- ----- ----- ----- ----- -----
D O L L A R S
Commonwealth
Telephone Enterprises 100 214 142 221 173 381
Nasdaq Stock Market
(U.S.) Index 100 115 112 159 195 240
Commonwealth Telephone
Enterprises - Class B 100 246 136 214 167 556
Nasdaq Telecommunications
Index 100 154 129 169 173 254
15
<PAGE>
TRANSACTIONS WITH MANAGEMENT AND CERTAIN CONCERNS
David C. McCourt, Chairman, Chief Executive Officer and Director of the
Company, served as a director of WorldCom from December 1996 to March 1998.
During 1997, the Company earned $1,654,870 in revenue from WorldCom primarily
for network costs and construction management services.
Each of CTE, RCN and Cable Michigan is effectively controlled by Level 3. In
addition, the majority of the Company's directors and executive officers also
are directors and/or executive officers of RCN and/or Cable Michigan. Set
forth below is a brief description of certain aspects of the relationship
among CTE, RCN and Cable Michigan.
RELATIONSHIP AMONG CTE, RCN AND CABLE MICHIGAN
The Distribution Agreement dated September 5, 1997, among C-TEC Corporation,
RCN and Cable Michigan entered into in connection with the Distribution
defines certain aspects of the relationship among CTE, RCN and Cable Michigan,
including the provision of services described below, and provides for the
allocation of certain assets and liabilities among CTE, RCN and Cable
Michigan. CTE, RCN and Cable Michigan have 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.
RCN 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; (vi)
insurance administration; (vii) legal; (viii) tax; (ix) internal audit; and
(x) other miscellaneous administrative services. The fee per year for these
services will be 3.5% of the first $175 million of revenue of CTE and 1.75% of
any additional revenue. Assuming the Distribution Agreement was in effect for
the entire 1997 calendar year, based on the terms outlined above, the total
fee for these services for 1997 would have been $6,503,000.
CTE has agreed to provide or cause to be provided to the RCN Group and the
Cable Michigan Group 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 all three
(3) companies.
OTHER MATTERS
On September 30, 1997, the Company distributed 100 percent of the
outstanding shares of common stock of its wholly owned subsidiaries, RCN and
Cable Michigan, to holders of record of CTE Common Equity, as of the close of
business on September 19, 1997, in accordance with the terms of a Distribution
Agreement dated September 5, 1997 among CTE, RCN and Cable Michigan. RCN
consists primarily of CTE's former bundled residential voice, video and
Internet access operations in the Boston to Washington, D.C. corridor, its
existing New York, New Jersey and Pennsylvania cable television operations, a
portion of its long distance operations, and its international investment in
Megacable, S.A. de C.V. and Cable Michigan consists of CTE's former Michigan
cable operations, including its 62% ownership in Mercom. In connection with
the Distribution, CTE changed its name from C-TEC Corporation to Commonwealth
Telephone Enterprises, Inc. and amended its articles of incorporation to
effect a two-for-three reverse stock split.
16
<PAGE>
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The Board of Directors of the Company held five (5) meetings during 1997,
the Audit Committee met one (1) time and the Compensation/Pension Committee
met four (4) times.
EXECUTIVE COMMITTEE
The Executive Committee exercises, to the maximum extent permitted by law,
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, Michael I. Gottdenker, Bruce C.
Godfrey and Walter Scott, Jr.
AUDIT COMMITTEE
The Audit Committee reviews the services provided by the Company's
independent auditors, consults with the independent auditors and reviews the
need for internal auditing procedures and the adequacy of internal controls.
The current Audit Committee consists of John J. Whyte, Chairman, Stuart E.
Graham and Frank M. Henry.
COMPENSATION/PENSION COMMITTEE
The Committee made recommendations to the Board of Directors concerning the
salaries and incentive compensation awards for the top levels of management of
the Company and its subsidiaries and established compensation policy. The
Committee also administered the Company's Short-Term Incentive Plan, 1994
Stock Option Plan, 1996 Equity Incentive Plan, as well as the Executive Stock
Purchase Plan. The Committee reviewed and evaluated the investment performance
of the various pension investment funds and monitored the performance of the
administrators, investment managers and trustees of such funds, as well as
reviewed the actuarial assumptions used in setting the Company's funding
policies for such funds. The current Compensation/Pension Committee consists
of Eugene Roth, Chairman, Daniel E. Knowles and John J. Whyte.
DIRECTORS' COMPENSATION
Directors of CTE 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' fee of $9,000 in CTE Common Stock based upon
the average fair market value of the CTE Common Stock during the ten (10)
trading days prior to such date, plus $750 per Board of Directors meeting. The
Committee Chairman and other committee members are paid $1,000 and $750,
respectively, for each committee meeting attended. Pursuant to the 1997 Non-
Management Directors Compensation Plan, each non-employee director will
receive an annual grant of a non-qualified option covering 2,000 shares of CTE
Common Stock on the date of the annual meeting of shareholders based upon the
fair market value of the CTE Common Stock on the date the option is granted.
17
<PAGE>
PROPOSAL 2:
RATIFICATION OF INDEPENDENT AUDITORS
The Company is asking the shareholders to ratify the appointment of Coopers
& Lybrand L.L.P. as the Company's independent auditors for the fiscal year
ending December 31, 1998.
If the shareholders do not ratify this appointment, other independent
auditors will be considered by the Board of Directors. Notwithstanding the
shareholders' ratification of the selection of the independent auditors, the
Board reserves the right to select other independent auditors at its
discretion.
Representatives of Coopers & Lybrand L.L.P. 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 Coopers & Lybrand L.L.P. as the Company's independent auditors
for the year ending December 31, 1998, requires the affirmative vote of a
majority of the votes cast by holders of CTE Common Stock and CTE Class B
Stock voting together as a single class.
The Board of Directors recommends that the shareholders vote FOR the
proposal to ratify the appointment of Coopers & Lybrand L.L.P. to serve as
independent auditors of the Company for the fiscal year ending December 31,
1998.
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 1997 Annual Report to Shareholders containing the
Consolidated Financial Statements of the Company, including the report thereon
dated March 27, 1998, of Coopers & Lybrand L.L.P., independent accountants,
accompanies this Proxy Statement.
Upon the written request of any person who, on April 14, 1998, was a record
owner of CTE Common Stock or CTE Class B Stock, or who represents in good
faith that he was on such date a beneficial owner of such Stock entitled to
vote at the Annual Meeting, the Company will furnish, without charge, a copy
of the Company's 1997 annual report on Form 10-K, including the financial
statements, schedules, and exhibits filed with the Securities and Exchange
Commission. Written requests for the Report should be directed to: Investor
Relations Department, Commonwealth Telephone Enterprises, Inc., 100 CTE Drive,
Dallas, Pennsylvania 18612, Attn: David G. Weselcouch, Vice President of
Investor Relations.
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, shareholders
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 the United
States.
18
<PAGE>
SHAREHOLDERS' PROPOSALS
Any shareholder who desires to submit a proposal to be considered for
inclusion in the proxy statement and proxy of the Company relating to the 1999
Annual Meeting of Shareholders must submit such proposal in writing to the
Company by December 17, 1998. Such proposals should be hand delivered or
mailed, return receipt requested, to the Corporate Secretary of the Company.
By order of the Board of Directors.
/s/ Bruce C. Godfrey
Bruce C. Godfrey,
Executive Vice President,
Chief Financial Officer, and
Corporate Secretary
Dated: April 17, 1998
19
<PAGE>
COMMONWEALTH TELEPHONE ENTERPRISES, INC.
100 CTE DRIVE
DALLAS, PENNSYLVANIA 18612-9774
PROXY -- ANNUAL MEETING OF SHAREHOLDERS -- MAY 14, 1998
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 and Class B
Common Stock of the undersigned in COMMONWEALTH TELEPHONE ENTERPRISES, INC.
(the "Company") entitled to vote at the Annual Meeting of Shareholders of the
Company to be held at the Hyatt Regency Princeton, 102 Carnegie Center,
Princeton, New Jersey, on May 14, 1998, at 11:00 a.m., local time, and at any
adjournment or postponement thereof, all as set forth in the related notice of
proxy statement for the 1998 Annual Meeting.
1. To elect four FOR all nominees listed
(4) Directors to below (except as marked to WITHHOLD AUTHORITY to
Class II to the contrary) [_] vote for all nominees
serve for a term listed below [_]
of three years;
and
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Michael I. Gottdenker, Frank M. Henry, Eugene Roth and John J. Whyte
2. To ratify the selection of Coopers & Lybrand L.L.P., as independent auditors
of the Company for the fiscal year ending December 31, 1998; 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 [_]
(Continued, and to be Signed and Dated, on Reverse Side)
<PAGE>
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.
The undersigned acknowledges receipt of the notice and proxy statement
relating to the 1998 Annual Meeting and the Company's annual report for 1997.
Dated: _____________________________
____________________________________
Signature
____________________________________
Signature, if held jointly
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
