1997 PROXY STATEMENT
PETER KIEWIT SONS', INC.
1000 KIEWIT PLAZA
OMAHA, NEBRASKA 68131
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Peter Kiewit
Sons', Inc. (the "Company") for use at the annual meeting of
stockholders to be held on June 7, 1997. Class C and Class D
common stock are the only classes of the Company's securities
entitled to be voted at the meeting. There were 9,262,707 shares
of Class C stock and 24,519,905 shares of Class D stock
outstanding on April 23, 1997. Stockholders of record at the
close of business on April 23, 1997 will be entitled to notice
of, and to vote at, the annual meeting. This Proxy Statement and
proxy forms will be mailed or delivered to stockholders on or
about May 2, 1997.
Voting Procedures
The approval of a plurality of the Class D shares present in
person or by proxy at the annual meeting is required to elect the
nominees as the Class D Directors. The approval of a plurality
of the Class C shares present in person or by proxy at the annual
meeting is required to elect the nominees as the Class C
Directors, unless cumulative voting is required. Stockholders
may vote in person at the annual meeting or by proxy.
Separate proxy forms are enclosed for voting Class C and
Class D shares. By marking the enclosed proxy form, the
stockholder may indicate voting preferences by: (i) voting the
full number of the stockholder's shares for each of the Board's
nominees; (ii) voting the full number of shares for some, but not
all, of the Board's nominees; or (iii) voting for none of the
nominees. Proxy forms which are properly signed, dated, and
returned will be voted at the meeting. If no voting instructions
are indicated on a properly signed proxy, it will be voted FOR
the Board's nominees for directors. A person returning the
enclosed proxy may revoke it any time before it is voted at the
meeting by: (i) giving written notice of revocation to the
Assistant Secretary; (ii) sending a later-dated proxy; or (iii)
revoking the proxy in person at the meeting. Abstentions and
broker non-votes will not be counted as shares present on matters
on which they are not voted.
Under the Company's Restated Certificate of Incorporation,
any Class C stockholder is entitled to cumulative voting in any
election of the Class C Directors. Under the cumulative voting
method, the number of the stockholder's shares is first
multiplied by the number of Class C directors to be elected. The
resulting number of votes may then be voted for a single nominee
or distributed unequally among some or all of the nominees.
After the voting is closed, the nominees are ranked in order by
the number of votes received. The highest ranking nominees are
then elected until the number of open directorships is filled.
The enclosed proxy form for Class C shares does not utilize the
cumulative voting method. A separate proxy form which provides
for cumulative voting of Class C shares will be provided promptly
to any stockholder upon request, by writing to Robert L. Giles,
Jr., Stock Registrar and Assistant Secretary, at 1000 Kiewit
Plaza, Omaha, Nebraska 68131, or by telephoning him at 402-342-
2052.
Nominations of Directors
The Board of Directors has determined that 14 directors are
to be elected and has nominated the following persons for
election as the Class C Directors and Class D Directors:
Class C Directors Class D Directors
Richard W. Colf James Q. Crowe
Richard Geary Robert B. Daugherty
Bruce E. Grewcock Charles M. Harper
William L. Grewcock Richard R. Jaros
Tait P. Johnson
Peter Kiewit, Jr.
Allan K. Kirkwood
Walter Scott, Jr.
Kenneth E. Stinson
George B. Toll, Jr.
All the nominees are current directors of the Company, except Mr.
Kirkwood. Each nominee has agreed to serve as a director, if
elected. Directors shall be elected to serve until the next
annual election and until their successors are duly elected and
qualified. The terms of two current directors, Robert E. Julian
and Leonard W. Kearney, will end at the annual meeting.
The Board unanimously recommends a vote FOR the nominees named above.
Identification of Directors and Executive Officers
The table below shows information as of April 23, 1997 about
each director, nominee and executive officer, including his
business experience during the past five years (1992-1997) and
current directorships in other public reporting companies. The
public companies include CalEnergy Company, Inc. ("CalEnergy")
and C-TEC Corporation ("C-TEC"). Officers of the Company are
elected annually by the directors. The next election of officers
will be at the first board meeting following the election of
directors on June 7, 1997.
Director
Name Business Experience Age Since
Walter Scott, Jr.* Chairman of Board and President;
also a director 65 1964
of Berkshire Hathaway Inc.,
Burlington Resources Inc.,
CalEnergy, ConAgra, Inc., C-TEC,
First Bank System, Inc., Valmont
Industries, Inc., and WorldCom,Inc.
Peter Kiewit, Jr. Attorney. Of counsel to the law
firm of Gallagher & Kennedy of 70 1966
Phoenix, Arizona.
William L. Grewcock* Vice Chairman 71 1968
Robert B. Daugherty Director (and formerly Chairman
of Board) of Valmont Industries, 75 1986
Inc.
Charles M. Harper Former Chairman of Board of RJR
Nabisco Holdings Corp. Currently 69 1986
a director (and formerly Chairman
of Board) of ConAgra, Inc. and
also a director of E.I DuPont
de Nemours and Company, Norwest
Corporation, and Valmont Industries,
Inc.
Kenneth E. Stinson* Executive Vice President; Chairman
(since 1993), and CEO (since 1992) 54 1987
of Kiewit Construction Group Inc.
("KCG").
Richard Geary* Executive Vice President, KCG;
President of Kiewit Pacific Co.; 62 1988
also a director of Portland
General Corp. and Portland
General Electric Co.
George B. Toll, Jr.* Executive Vice President, KCG (since
1994); Vice President, Kiewit 61 1993
Pacific Co. (1992-1994)
James Q. Crowe Chairman of the Board of WorldCom,
Inc.; also a director of 47 1993
CalEnergy and C-TEC.
Richard R. Jaros* Executive Vice President (since
1993); Chief Financial Officer 45 1993
(since 1995); President of Kiewit
Diversified Group Inc. (since 1996);
President and COO of CalEnergy
(1992-1993); also a director of
CalEnergy, C-TEC, and WorldCom, Inc.
Richard W. Colf* Vice President, Kiewit Pacific Co. 53 1994
Bruce E. Grewcock* Executive Vice President of KCG
(since 1996); Chairman (since 43 1994
1996), President (1992-1996),
Sr. Vice President (1992) of
Kiewit Mining Group Inc.;
also a director of Kinross Gold
Corporation.
Tait P. Johnson* President (1992-1996) and sole
Director (since 1992), Gilbert 47 1995
Gilbert Southern Corp., a PKS
subsidiary
Allan K. Kirkwood Vice President, Kiewit Pacific Co. 53 -
Identified by asterisks are the nine current executive
officers of the Company. The Company considers its executive
officers to be its directors who are employed by the Company or
its subsidiaries. Bruce E. Grewcock is the son of William L.
Grewcock.
Information About the Board of Directors
The Board of Directors has an Audit Committee, an Executive
Compensation Committee, and an Executive Committee.
The current Audit Committee members are Messrs. Kearney
(Chairman), Julian and Kiewit. The functions of the audit
committee are to recommend the selection of the independent
auditors; review the results of the annual audit; inquire into
important internal control, accounting and financial matters; and
report and make recommendations to the full Board of Directors.
The Committee had four meetings in 1996.
The current Executive Compensation Committee members are
Messrs. Daugherty, Harper, and Kiewit, none of whom are employees
of the Company. This committee reviews the compensation of the
Company's executive officers. This committee has also assumed
the functions of the former Management Compensation Committee,
the purpose of which was to review the compensation, securities
ownership, and benefits of the Company's employees other than its
executive officers. The committee had one formal meeting in 1996
and acted twice by written consent action in lieu of meetings.
The current Executive Committee members are Messrs. Scott
(Chairman), William Grewcock, Julian, Stinson, and Jaros. The
committee exercises the powers of the Board between Board
meetings, except powers assigned to other committees. During
1996, the committee had no formal meetings, acted by written
consent action in lieu of a meeting on three occasions, and had
several informal meetings.
The Company does not have a nominating committee. The
Company's Restated Certificate of Incorporation provides that the
incumbent Class C Directors may nominate a slate of Class C
Directors and the incumbent Class D Directors may nominate a
slate of Class D Directors, for election at the annual meeting of
stockholders. On April 23, 1997, the incumbent Class C and Class
D Directors nominated the respective slates listed on the second
page of this Proxy Statement.
The Board of Directors of the Company had three formal
meetings in 1996 and acted by written consent action on two
occasions. In 1996, no director attended less than 75% of the
meetings of the Board of Directors and the committees of which he
was a member, except Mr. Crowe and Mr. Geary, each of whom was
absent at one meeting.
Directors who are employees of the Company or its
subsidiaries do not receive directors' fees. Non-employee
directors are paid annual directors' fees of $30,000, plus $1,200
for attending each meeting of the Board of Directors, and $1,200
for attending each meeting of a committee of the Board.
Compensation Committee Interlocks and Insider Participation
Mr. Scott is a member of the Compensation Committee of
WorldCom, Inc. Mr. Jaros is a member of the Compensation
Committee of CalEnergy. Mr. Julian was a member of the
Compensation Committee of C-TEC until October 1996.
Security Ownership of Certain Beneficial Owners and Management
The table below shows information about the ownership of the
Company's common stock as of April 23, 1997 by the Company's
directors and executive officers (individually and as a group),
and each person who beneficially owns more than 5 percent of a
class of the Company's voting securities.
Management Table.
Number of Percent of Number of Percent of
Class C Class C Class D Class D
Name Shares Shares Shares Shares
Walter Scott, Jr. 250,000 2.7% 3,393,374(1) 13.8%
William L. Grewcock 2,048 <.1 1,116,219(2) 4.6
Kenneth E. Stinson 636,416 6.9 32,216 0.1
Richard Geary 533,768 5.8 36,360(3) 0.1
George B. Toll, Jr. 386,883 4.2 87,711 0.4
Richard W. Colf 383,217 4.1 72,282 0.3
Tait P. Johnson 180,934 2.0 38,616 0.2
Bruce E. Grewcock 177,775 1.9 52,787(4) 0.2
Richard R. Jaros 25,772 0.3 121,128 0.5
James Q. Crowe - - 134,369 0.5
Robert B. Daugherty - - 19,000 <.1
Charles M. Harper - - 19,000 <.1
Peter Kiewit, Jr. - - 10,000 <.1
Directors and
Executive Officers
as a Group 2,576,813 27.8% 5,133,062 20.9%
Beneficial Owner Table.
Donald L. Sturm(5) - - 1,822,375 7.4%
___________________________________________________________________________
(1) Table does not include 2,040,156 Class D shares held in
irrevocable trusts for children. Does not include
26,245 Class D shares owned by the Suzanne and Walter
Scott Foundation.
(2) Does not include 25,200 Class D shares held by the
Bill and Berniece Grewcock Foundation, nor 772
Class D shares owned by Mrs. Grewcock.
(3) Does not include 40,000 Class D shares owned by
Mrs. Geary.
(4) Does not include 25,200 Class D shares held in
irrevocable trusts for which Mr. Grewcock is a trustee.
(5) Mr. Sturm's business address is 3033 East First
Ave., Denver, Colorado 80206.
____________________________________________________________
Report of Executive Compensation Committee
The Executive Compensation Committee of the Board of
Directors has furnished the following report on executive
compensation:
The Executive Compensation Committee of the Board of
Directors is composed entirely of non-employee directors. This
Committee is responsible for reviewing and approving on an annual
basis the compensation of the Company's chief executive officer
and the other executive officers of the Company. The objectives
of the Company's executive compensation program are to (a)
support the achievement of desired Company performance, (b)
provide compensation that will attract and retain superior
talent, (c) reward performance, (d) and align the executive
officers' interests with the success of the Company by placing a
portion of total compensation at risk. The executive
compensation program has two elements: salaries and bonuses.
The program provides base salaries which are intended to be
competitive with salaries provided by other comparable companies.
Bonuses are the vehicle by which executive officers can earn
additional compensation depending on individual, business unit,
and Company performance, subject to the Bonus Plan. In 1996 the
Board adopted, and the shareholders approved, the Peter Kiewit
Sons', Inc. Bonus Plan ("Bonus Plan"), and the Compensation
Committee established certain Performance Goals under the Bonus
Plan for 1996 and for subsequent years. The Compensation
Committee has certified that for 1996 the maximum Performance
Goals under the Bonus Plan have been met. The Compensation
Committee uses its discretion to set executive compensation at
levels warranted in its judgment by external, internal, or
individual's circumstances.
The Committee determines the salary and bonus of the chief
executive officer. in 1996, the Committee approved an annual
salary (for the 1996-1997 pay cycle) for Mr. Scott of $250,000 as
to Construction and $500,000 as to Diversified. In 1997, the
Committee again separately looked at Mr. Scott's
responsibilities, contributions and performance as to the
Construction business and the Diversified business. The
Committee approved an annual salary (for the 1997-1998 pay cycle)
of $150,000 as to Construction, and $700,000 as to Diversified.
In recognition of Mr. Scott's contributions to the Company's
performance in 1996, the Committee has approved a bonus of
$500,000 as to Construction, and $1,500,000 as to Diversified. A
number of factors were considered in setting Mr. Scott's bonus.
These factors included meeting the Bonus Plan Performance Goals,
the Company's overall performance, the increase in the combined
stock formula prices, as well as Mr. Scott's personal effort and
accomplishments in managing the Company. The Committee reviewed
each factor as to both Construction and Diversified. After
considering all of the factors, the Committee felt the approved
bonus was well within a reasonable range.
The foregoing report dated April 23, 1997 was presented by
the Executive Compensation Committee, Messrs. Daugherty, Harper
and Kiewit.
Stock Performance Graph
The graphs below compare the cumulative total return (stock
appreciation plus reinvested dividends) of the Company's common
stock with four indexes of publicly traded stocks. Unlike
publicly traded stocks, the Company's stock is valued by a
formula contained in the Company's certificate of incorporation.
Company stock is valued at the end of the Company's fiscal year
and the formula value is reduced as dividends are declared during
the following year. For purposes of the graphs, it is assumed
that dividends are immediately reinvested in additional shares of
the Company's common stock, although such reinvestment is not
permitted in actual practice. Although the Company's fiscal year
ends on the last Saturday in December, its stock is compared
against indexes which assume a fiscal year ending December 31.
Because of two corporate restructuring events during the
last five years, further assumptions about total return are
required. The Company's stock was reclassified on January 8,
1992. Each old Class C share was exchanged for one new Class C
share and one Class D share. The five year cumulative total
return is shown as if the change occurred on January 1, 1992.
On September 30, 1995, the Company spun-off its stock in MFS
Communications Company, Inc. to its Class D shareholders. For
each Class D share, 1.741 shares of MFS common stock and .651
share of MFS preferred stock were distributed. On the
distribution date, 1.741 shares of MFS common stock had a public
market value of $76.17 and .651 share of MFS preferred stock had
a value of $.65 (together, a "distribution unit" of $76.82). For
purposes of the graph below, it is assumed that each distribution
unit was immediately sold for $76.82 and the proceeds reinvested
in additional Class D shares, which then had the reduced formula
price of $40.40 per share.
The formula value of the new Class C shares is linked to the
performance of the Company's Construction & Mining Group; that
Group's revenues come primarily from construction operations.
The formula value of the Class D shares is linked to the
performance of the Company's Diversified Group, which is
primarily engaged in coal mining, telecommunications, and energy
generation and distribution businesses.
The first graph compares the cumulative total return of the
Company's Class C shares for the five year period 1992-1996 with
the Standard and Poors Composite 500 Index and the Dow Jones
Heavy Construction Index. The graph assumes that the value of
the investment was $100 on December 31, 1991 and that all
dividends and other distributions were reinvested.
[INSERT GRAPH]
1991 1992 1993 1994 1995 1996
Class C Stock 100 134 165 196 257 335
S&P 500 Index 100 108 118 120 165 203
Dow Jones Heavy Construction Index 100 97 102 98 137 130
The second graph compares the cumulative total return of the
Company's Class D shares for the five year period 1992-1996 with
the Dow Jones Coal Index, the NASDAQ Telecommunications Index,
and the S&P Utilities Index. The graph assumes that the value of
the investment was $100 on December 31, 1991, and that all
dividends and other distributions were reinvested.
[INSERT GRAPH]
1991 1992 1993 1994 1995 1996
Class D Stock 100 110 131 132 316 350
Dow Jones Coal Index 100 90 133 130 138 150
NASDAQ Telecommunications Index 100 123 189 158 207 212
S&P Utilities Index 100 108 124 114 160 167
Summary Compensation Table
The table below shows the annual compensation of the
Company's chief executive officer and the next four most highly
compensated executive officers (the "Named Executive Officers").
Peter Kiewit Sons', Inc. does not currently have plans under
which options, stock appreciation rights, restricted stock
awards, long-term incentive compensation, profit sharing, or
pension benefits are held by the Named Executive Officers, other
than options granted under the Class D Stock Plan.
Long-Term
Annual Compensation Compensation
Other Annual Securities
Name and Compensation Underlying
Principal Position Year Salary($) Bonus($) ($) Options (#)
Walter Scott, Jr.
Chief Executive
Officer 1996 715,000 2,000,000 276,400(1)
1995 630,000 1,250,000 157,800
1994 630,000 500,000 126,900
Kenneth E. Stinson
Executive Vice
President 1996 402,500 900,000
1995 351,300 600,000
1994 310,800 475,000
Richard Geary
Executive Vice
President of KCG 1996 270,750 600,000
1995 252,800 525,000
1994 234,800 450,000
Richard R. Jaros
Executive Vice
President 1996 371,200 450,000 50,000(2)
1995 304,100 400,300 150,000
1994 276,000 300,000 -
George B. Toll, Jr.(3)
Executive Vice
President of KCG 1996 231,250 500,000
1995 201,250 400,000
1994 171,250 300,000
(1) Other Annual Compensation means perquisites and other
personal benefits received by each of the Named
Executive Officers, if over $50,000. The only
reportable amounts are the non-business use of Company
aircraft attributable to Mr. Scott. Aircraft usage
values are calculated under federal income tax
regulations and are reported as taxable income by Mr.
Scott.
(2) Class D stock options (see Tables on following pages).
(3) The Company loaned Mr. Toll $800,000 during 1994 in
connection with the purchase of a residence and
relocation expenses. The full principal amount of his
demand note payable to the Company is currently
outstanding.
Option Tables
In June 1996, the Company's stockholders approved a Class D
Stock Plan. Mr. Jaros is the only Named Executive Officer
participating in this Plan. He was granted 150,000 options,
effective November 1, 1995, to purchase Class D shares at an
exercise price of $40.40 per share and 50,000 options, effective
November, 1996, to purchase Class D shares at $49.50 per share.
Messrs. Scott and Jaros also hold certain options on CalEnergy
common stock. The Company no longer has a stock appreciation
rights plan.
<TABLE>
Option Grants in Last Fiscal Year
<S> <C> <C> <C> <C> <C>
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation for
Underlying Granted to Exercise of Option Term
Option Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
Walter Scott,
Jr.
CalEnergy(1) 1,000 - 25.75 5-16-06 16,200 41,000
1,000 - 29.0625 12-06-06 18,300 46,300
Kenneth E.
Stinson - - - - - -
Richard Geary - - - - - -
Richard R. Jaros
CalEnergy(1) 1,000 - 25.75 5-16-06 16,200 41,000
Class D (2) 50,000 27.9 49.50 11-01-06 1,556,500 3.944,500
George B.
Toll, Jr. - - - - - -
</TABLE>
(1) As fees for serving on the CalEnergy board of directors,
Messrs. Scott and Jaros received options to purchase CalEnergy
stock.
(2) Under the Class D Stock Option Plan, options vest 20% per
year on the anniversaries of the November 1, 1996 grant date.
The options expire ten years from the grant date. The last two
columns show the value of the options (in excess of the exercise
price) assuming that the underlying shares appreciate at an
annual compounded rate of 5% or 10% for the ten year period.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values Table
<TABLE>
<S> <C> <C> <C> <C>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired Options at In-the-Money Options
on Value Fiscal Year End (#) at Fiscal Year End ($)
Name Exercise Realized Unexer- Unexer-
(#) ($) Exercisable cisable Exercisable cisable
Walter Scott,
Jr.
CalEnergy (1) 10,000 147,500 2,100 - 13,900 -
Kenneth E.
Stinson - - - - - -
Richard Geary - - - - - -
Richard R.
Jaros
CalEnergy(1) 3,210 91,500 401,100 - 7,471,900 -
Class D (2) - - 30,000 170,000 415,500 1,899,500
George B. Toll,
Jr. - - - - - -
</TABLE>
(1) The value of the CalEnergy options is the difference between
the exercise prices of the options and the closing price of
the CECI common stock on the New York Stock Exchange of
$33.50 per share on December 31, 1996.
(2) The value of the Class D options is the difference between
the exercise prices of the options and the formula price of
$54.25 per share on December 28, 1996.
Other Matters
Management knows of no other matters to be voted upon at the
annual meeting. The discretion of the proxyholders is limited to
casting votes as directed by stockholder proxies and voting on
procedural matters incidental to fulfilling those directions.
Accountants
Coopers & Lybrand, certified public accountants, have been
selected by the Board of Directors as the independent public
accountants for the Company. Representatives of Coopers &
Lybrand are expected to be present at the stockholders' meeting
and will have the opportunity to make a statement and to respond
to appropriate questions.
Solicitation Expenses
The Company will bear the cost of the solicitation of
proxies. In addition to the use of mail, proxies may be
solicited in person or by telephone by management or other
employees of the Company, for which they will receive no
additional compensation.
1998 Stockholder Proposals
Any proposals from stockholders intended to be presented at
the 1998 annual meeting of stockholders must be received by the
Company by January 2, 1998, in order to be included in the proxy
materials for that meeting. Any such proposals should be sent to
the Secretary, Peter Kiewit Sons', Inc., 1000 Kiewit Plaza,
Omaha, Nebraska 68131.
Annual Report
The Company is mailing to each stockholder, along with this
Proxy Statement, a copy of its annual report. The Company's
annual report is its Form 10-K for the fiscal year ending
December 28, 1996, as filed with the U.S. Securities and Exchange
Commission.
THE COMPANY WILL FURNISH WITHOUT CHARGE UPON THE WRITTEN
REQUEST OF A STOCKHOLDER A COPY OF THE COMPANY'S ANNUAL REPORT ON
FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES, AND
EXHIBITS, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
WRITTEN REQUESTS SHOULD BE ADDRESSED TO STOCK REGISTRAR, PETER
KIEWIT SONS', INC., 1000 KIEWIT PLAZA, OMAHA, NEBRASKA 68131.
PETER KIEWIT SONS', INC.
April 28, 1997
