Level 3 Communications Inc – ‘10-K/A’ for 12/27/97

As of:  Monday, 4/27/98   ·   For:  12/27/97   ·   Accession #:  794323-98-14   ·   File #:  0-15658

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Amendment to Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K/A      Amendment to Annual Report                             9±    49K 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION    
Washington, D.C.  20549     

FORM 10-K/A       
Amendment No. 2 to      
Annual Report Pursuant to Section 13 or 15(d)     
of the Securities Exchange Act of 1934        

For the fiscal year ended                                    Commission File    
December 27, 1997                                             Number 0-15658    

LEVEL 3 COMMUNICATIONS, INC.    
(formerly known as Peter Kiewit Sons', Inc.)    
(Exact name of registrant as specified in its charter)    

Delaware                                                          47-0210602    
(State of Incorporation)                                   (I.R.S. Employer)    
                                                     Identification No.)

1000 Kiewit Plaza, Omaha, Nebraska                                     68131    
(Address of principal executive offices)                          (Zip Code)    

(402) 536-3677    
(Registrant's telephone number,   
including area code)  

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 $.01    

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.  Yes [X]  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]                                                                 

The aggregate market value of the registrant's stock ("Common         
Stock") held by nonaffiliates as of March 15, 1998 was $7.3                     
billion, based on the closing price of the registrant's common                  
stock on the NASDAQ OTC Bulletin Board on that date.                            

As of March 15, 1998, 146,943,752 shares of the Common Stock          
were outstanding.                                                               

INTRODUCTION        

This Form 10-K/A amends the Form 10-K filed by Peter Kiewit     
Sons', Inc. (the "Company") on March 31, 1998, as amended by a                  
Form 10-K/A Amendment No. 1 to Form 10-K filed by the Company on                
April 23, 1998.  This Form 10-K/A is being filed solely to set                  
forth the information required by Part III (Items 10, 11, 12 and                
13) of Form 10-K, because a definitive proxy statement containing               
such information will not be filed within 120 days after the end                
of the fiscal year covered by the Company's original Form 10-K                  
filing.  This Form 10-K/A amends Part III of the Company's                      
original Form 10-K filing only, and all other portions of the                   
Company's original 10-K filing remain in effect.                                

On March 31, 1998, the Company exchanged for all of its then    
outstanding Class C Stock for all of the capital stock of a                     
subsidiary (the "Construction Subsidiary") holding the stock of                 
Kiewit Construction Group Inc. ("KCG"), the construction                        
subsidiary of the Company (the "Split-Off").  In connection                     
with the Split-Off, the Company was renamed "Level 3                            
Communications, Inc." and the Construction Subsidiary was                       
renamed "Peter Kiewit Sons', Inc."  (In this Form 10-K/A, the                   
Construction Subsidiary is referred to as "New PKS").                           

ITEM 10.   MANAGEMENT                                                           

Directors and Executive Officers                                                

Set forth below is information as of April 27, 1998 about       
each director and executive officer of the Company, including his               
business experience during the past five years.                                 

Name                                  Age Position                              

Walter Scott, Jr.                 66     Chairman of the Board                  
James Q. Crowe        48         President, Chief Executive Officer and Director
R. Douglas Bradbury      47  Executive Vice President, Chief Financial Officer  
and Director              
Kevin J. O'Hara          37 Executive Vice President and Chief Operating Officer
Terrence J. Ferguson    55  Senior Vice President, General Counsel and Secretary
Robert B. Daugherty      75      Director                                       
William L. Grewcock      72     Director                                        
Charles M. Harper          70    Director                                       
Richard R. Jaros            46   Director                                       
Robert E. Julian                   58    Director                               
David C. McCourt            40   Director                                       
Kenneth E. Stinson        55     Director                                       
Michael B. Yanney          63    Director                                       

Walter Scott, Jr. has been the Chairman of the Board of the     
Company since September 1979, and a director of the Company since               
April 1964.  Mr. Scott has been Chairman Emeritus of New PKS                    
since the Split-Off.  Mr. Scott is also a director of Berkshire                 
Hathaway Inc., Burlington Resources Inc., CalEnergy Company, Inc.               
("CalEnergy"), ConAgra, Inc., Commonwealth Telephone                            
Enterprises Inc. ("Commonwealth Telephone"), RCN Corporation                    
("RCN"), U.S. Bancorp and Valmont Industries, Inc.                              

James Q. Crowe has been the President and Chief Executive       
Officer of the Company since August 1997, and a director of the                 
Company since June 1993.  Mr. Crowe was President and Chief                     
Executive Officer of MFS Communications Company, Inc. ("MFS")                   
from June 1993 to June 1997.  Mr. Crowe also served as Chairman                 
of the Board of WorldCom, Inc. ("WorldCom") from January 1997                   
until July 1997, and as Chairman of the Board of MFS from 1992                  
through 1996.  Mr. Crowe is presently a director of Commonwealth                
Telephone, RCN and InaCom Communications, Inc.                                  

R. Douglas Bradbury has been Executive Vice President and       
Chief Financial Officer of the Company since August 1997 and a                  
director of the Company since March 1998.  Mr. Bradbury served as               
Chief Financial Officer of MFS from 1992 to 1996, Senior Vice                   
President of MFS from 1992 to 1995, and Executive Vice President                
of MFS from 1995 to 1996.                                                       

Kevin J. O'Hara has been Executive Vice President of the        
Company since August 1997, and Chief Operating Officer of the                   
Company since March 1998.  Prior to that, Mr. O'Hara served as                  
President and Chief Executive Officer of MFS Global Network                     
Services, Inc. from 1995 to 1997, and as Senior Vice President of               
MFS and President of MFS Development, Inc. from October 1992 to                 
August 1995.  From 1990 to 1992, he was a Vice President of MFS                 
Telecom, Inc. ("MFS Telecom").                                                  

Terrence J. Ferguson has been Senior Vice President, General    
Counsel and Secretary of the Company since August 1997.  Prior to               
that he was a Senior Vice President of MFS from September 1992 to               
February 1997, General Counsel from January 1992 to February 1997               
and Secretary from November 1991 to February 1997.                              

Robert B. Daugherty has been a director of the Company since    
January 1986.  Mr. Daugherty has been a Director of Valmont                     
Industries, Inc. for more than the past five years, and formerly                
was Chairman of the Board and Chief Executive Officer of Valmont                
Industries, Inc.                                                                

William L. Grewcock has been a director of the Company since    
January 1968.  Prior to the Split-Off, Mr. Grewcock was Vice                    
Chairman of the Company for more than five years.                               

Charles M. Harper has been a director of the Company since      
January 1986.  Mr. Harper was Chairman of the Board of RJR                      
Nabisco Holdings Corp. ("RJR Nabisco") from May 1993 to May                     
1996 and Chief Executive Officer of RJR Nabisco from May 1993 to                
December 1995.  Prior to that, Mr. Harper was Chairman of the                   
Board and Chief Executive Officer of ConAgra, Inc.  Mr. Harper is               
currently a director of ConAgra, Inc., E.I. DuPont de Nemours and               
Company, Norwest Corporation and Valmont Industries, Inc.                       

Richard R. Jaros has been a director of the Company since       
June 1993 and served as President of the Company from 1996 to                   
1997.  Mr. Jaros served as Executive Vice President of the                      
Company from 1993 to 1997 and Chief Financial Officer of the                    
Company from 1995 to 1997.  He also served as President and Chief               
Operating Officer of CalEnergy from 1992 to 1993, and is                        
presently a director of CalEnergy, Commonwealth Telephone and                   
RCN.                                                                            

Robert E. Julian has been a director of the Company since       
March 31, 1998.  Mr. Julian has also been Chairman of the Board                 
of PKSIS since 1995.  From 1992 to 1995 Mr. Julian served as                    
Executive Vice President and Chief Financial Officer of the                     
Company.                                                                        

David C. McCourt has been a director of the Company since       
March 31, 1998.  Mr. McCourt has also served as Chairman and                    
Chief Executive Officer of Commonwealth Telephone, Cable                        
Michigan, Inc. and RCN since October 1997.  From 1993 to 1997 Mr.               
McCourt served as Chairman of the Board and Chief Executive                     
Officer of C-TEC Corporation.  Mr. McCourt is also a director of                
Mercom, Inc.                                                                    

Kenneth E. Stinson has been a director of the Company since     
January 1987.  Mr. Stinson has been Chairman of the Board and                   
Chief Executive Officer of New PKS since the Split-Off.  Prior to               
the Split-Off, Mr. Stinson was Executive Vice President of the                  
Company for more than the last five years.  Mr. Stinson is also a               
director of ConAgra, Inc. and Valmont Industries, Inc.                          

Michael B. Yanney has been a director of the Company since      
March 31, 1998.  He has served as Chairman of the Board,                        
President and Chief Executive Officer of America First Companies                
L.L.C. for more than the last five years.  Mr. Yanney is also a                 
director of Burlington Northern Santa Fe Corporation, RCN, Forest               
Oil Corporation and Mid-America Apartment Communities, Inc.                     

ITEM 11.   COMPENSATION                                                         

1997 Executive Officer and Director Compensation                                

The table below shows the annual compensation of the chief      
executive officer and the next four most highly compensated                     
executive officers of the Company for the 1997 fiscal year (the                 
"Named Executive Officers").                                                    

Annual Compensation           

Name and                                                  Other Annual          
Principal Position       Year     Salary ($) Bonus ($)    Compensation ($)      

Walter Scott, Jr.                                                               
Chief Executive Officer  1997     872,551    2,000,000     191,109(1)           
           1996     715,000    2,000,000     276,400
           1995     630,000    1,250,000     157,800

Kenneth E. Stinson                                                              
Executive Vice                                                                  
President                1997     476,669    1,500,000                          
1996     402,500      900,000 
1995     351,300      600,000 

Richard Geary                                                                   
Executive Vice                                                                  
President of KCG         1997     285,919      770,000                          
1996     270,750      600,000 
1995     252,800      525,000 

George B. Toll, Jr.                                                             
Executive Vice                                                                  
President of KCG         1997     257,705      650,000                          
1996     231,250      500,000 
1995     201,250      400,000 

Allan K. Kirkwood                                                               
Senior Vice President of                                                        
Kiewit Pacific Co., a                                                           
KCG subsidiary           1997     221,250      360,000                          
1996     192,350      310,000 
1995     166,150      240,000 

(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.                                                                          

Each of the Named Executive Officers other than Mr. Scott       
set forth above is now employed by New PKS and is no longer an                  
officer of the Company.  Mr. Scott continues as Chairman of the                 
Board of the Company, but is no longer the Chief Executive                      
Officer of the Company.  Richard R. Jaros, who resigned as an                   
Executive Vice President of the Company effective July 31, 1997,                
received a salary of $458,574 and a bonus of $262,350 for fiscal                
year 1997.  Messrs. Crowe, Bradbury, O'Hara and Ferguson, the                   
four current executive officers of the Company who were employed                
by the Company during 1997, were paid salaries for 1997 of                      
$144,129, $102,564, $82,051 and $52,019 respectively, and no                    
other reportable compensation, during 1997.  Each such executive                
officer was employed by the Company for only part of fiscal year                
1997.                                                                           

During 1997, each of the directors of the Company who were      
not employed by the Company during 1997 received directors fees                 
consisting of an annual retainer of $30,000 (pro-rated in the                   
case of Mr. Crowe, who was employed by the Company for part of                  
1997) and fees of $1,200 per board meeting and $1,500 for the                   
annual shareholder's meeting.                                                   

Compensation Committee Interlocks and Insider Participation                     

Prior to the Split-Off, the Compensation Committee of the       
Company consisted of Messrs. Daugherty and Harper and Mr. Peter                 
Kiewit, Jr., none of whom is an officer or employee of PKS.  Each               
of Messrs. Daugherty, Harper and Kiewit purchased Common Stock                  
from PKS in 1997.  See "Certain Relationships and Related                       
Transactions."                                                                  

After the Split-Off, the Compensation Committee of the          
Company consists of Messrs. Yanney, McCourt and Jaros, none of                  
whom is an officer or employee of the Company.  Each of Messrs.                 
Yanney and McCourt purchased Common Stock from the Company in                   
1997.  Mr. Jaros has entered into a separation agreement with the               
Company, pursuant to which, among other things, he has received                 
certain severance payments.  See "Certain Relationships and                     
Related Transactions."                                                          

Change in Control Arrangements                                                  

The Company's 1995 Stock Plan (the "Plan") provides that        
upon a change in control of the Company (as defined in the Plan),               
(i) all awards under the Plan shall become immediately vested and               
(ii) the Committee may cancel any outstanding awards under the                  
Plan upon ten days' advance written notice, and pay the value of                
such awards to the holders thereof in cash or stock.  Messrs.                   
Crowe, Bradbury, O'Hara and Ferguson are all participants in the                
Plan.                                                                           

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT       

The following table sets forth certain information with         
respect to the beneficial ownership of Common Stock as of March                 
31, 1998 by the Company's directors, certain executive officers                 
and directors and executive officers as a group, and each person                
known by the Company to beneficially own more than 5% of the                    
outstanding Common Stock.                                                       

                                                  Number of Shares of Percent of
                Name(1)                             Common Stock    Common Stock

                Walter Scott, Jr.(2)             17,686,247                12.1%
                James Q. Crowe                  5,666,360                   3.9%
                R. Douglas Bradbury                       1,277,595            *
    Kevin J. O'Hara(3)                   878,080                       *
                Robert B. Daugherty                               -            *
                William L. Grewcock(4)                    5,762,070         3.9%
                Charles M. Harper                              95,000          *
                Richard R. Jaros(5)                              1,748,749  1.2%
                Robert E. Julian                                  1,996,790 1.4%
                David C. McCourt                                       57,500  *
                Kenneth E. Stinson                                  150,280    *
                Michael B. Yanney                              50,000          *
Directors and Executive                         
Officers as a Group          35,886,556                      24.2%        
                Donald L. Sturm(6)                                9,111,875 6.2%
_______________                                 

*Less than 1%                                   

(1)     The address of each person set forth above other than Mr.               
Sturm is c/o the Company, 3555 Farnam Street, Omaha,                            
Nebraska 68131.                                                                 

(2)     Includes 49,850 shares of Common Stock held by the Suzanne              
Scott Irrevocable Trust as to which Mr. Scott shares voting                     
and investment powers, and 30,769 shares of Common Stock to                     
be owned by Mr. Scott as a result of the conversion of the                      
80,000 shares of Class R Stock owned currently by Mr. Scott,                    
assuming a Conversion Value (as defined in the Level 3                          
Certificate of Incorporation) of $25 and a stock price of                       
$65 per share.                                                                  

(3)     Includes 23,000 shares of Common Stock held by Kevin J.                 
O'Hara Family LTD Partnership.                                                  

(4)     Includes 577,320 shares of Common Stock held by Grewcock                
Family Limited Partnership.  Includes 175,615 shares of                         
Common Stock held by the Bill & Berniece Grewcock Foundation                    
as to which Mr. Grewcock shares voting and investment                           
powers, and 630 shares of Common Stock to be owned by Mr.                       
Grewcock as a result of the conversion of the 1,638 shares                      
of Class R Stock owned currently by Mr. Grewcock, assuming a                    
Conversion Value of $25 and a stock price of $65 per share.                     

(5)     Includes 185,000 shares of Common Stock held by the Jaros               
Family Limited Partnership.  Includes 1,000,000 shares of                       
Common Stock subject to options granted to Mr. Jaros.  See                      
"Certain Relationships and Related Transactions."                               

(6)     Mr. Sturm's business address is 3033 East First Avenue,                 
Denver, Colorado 80206.  Based on the Company's records as                      
of February 28, 1998, Mr. Sturm owns 7,805,155 shares of                        
Common Stock, and has voting and investment power with                          
respect to 1,306,720 shares held by trusts and partnerships                     
established for family members.                                                 

ITEM 13.   CERTAIN TRANSACTIONS AND RELATIONSHIPS                               

In connection with his retention as Chief Executive Officer     
of the Company, Mr. Crowe entered into an engagement agreement                  
(the "Engagement Agreement") with the Company.  Under the                       
Engagement Agreement, the Company acquired from Mr. Crowe, Mr.                  
Bradbury and Mr. Ferguson, Broadband Capital Group, L.L.C., a                   
company formed to develop investment opportunities, for a                       
purchase price of $68,523, the owners' cash investment in that                  
company.  Pursuant to the Engagement Agreement, the Company sold                
5,000,000 shares of Common Stock to Mr. Crowe and 1,250,000                     
shares of Common Stock to Mr. Bradbury, in each case at $10.85                  
per share.  The Engagement Agreement also provided that the                     
Company would make available for sale, from time to time prior to               
the consummation of the Split-Off, to certain employees of the                  
Company designated by Mr. Crowe, including Mr. O'Hara and Mr.                   
Ferguson, in connection with the implementation of the current                  
business plan of the Company ("Employees"), up to an aggregate                  
of 5,250,000 shares of Common Stock at $10.85 per share.                        

The Company entered into agreements with each Business Plan     
Employee that provided that the Company may repurchase any Common               
Stock sold to the Business Plan Employee if the Business Plan                   
Employee resigns at any time before January 1, 1999.                            

On August 5, 1997, the Company purchased a jet aircraft from    
a company controlled by Mr. Crowe for $5.7 million, the price                   
paid by the company for the aircraft in June 1997.  The Company                 
and Mr. Crowe have entered into an aircraft operating lease,                    
under which Mr. Crowe may lease the aircraft for personal use at                
rates specified by certain Federal Aviation Administration                      
regulations.  The Company anticipates that Mr. Crowe will lease                 
approximately 15% of the aircraft's annual flight time, and will                
pay the Company approximately $70,000 per year at the current                   
lease rate.                                                                     

The Company entered into a separation agreement with Mr.        
Jaros, a director of the Company, in connection with the                        
resignation of Mr. Jaros as President of Kiewit Diversified Group               
Inc., a subsidiary of the Company, effective July 31, 1997.                     
Under the separation agreement, the Company paid Mr. Jaros $1.8                 
million on July 31, and agreed to pay Mr. Jaros the balance of                  
his 1997 salary ($187,500) between August 1 and December 31, 1997               
and a bonus payment of $262,350 when the Company made its                       
customary executive bonus payments in 1998.  The Company also                   
agreed to amend the option agreements with Mr. Jaros with respect               
to the options to purchase 750,000 shares of Common Stock at                    
$8.08 per share granted to Mr. Jaros in 1995, and the options to                
purchase 250,000 shares of Common Stock at $9.90 per share                      
granted to Mr. Jaros in 1996, to provide that those options would               
be fully vested on July 31, 1997, and would be exercisable at any               
time during the ten-year term of the original option agreements.                

In December 1996, the Company agreed to sell 50,000 shares      
of Common Stock to Mr. Harper, 50,000 shares of Common Stock to                 
Mr. Daugherty and 40,000 shares of Common Stock to Mr. Kiewit, in               
each case at $9.90 per share.  Those stock purchase transactions                
were consummated in March 1997.                                                 

In October 1997, the Company sold 50,000 shares of Common       
Stock to Mr. Yanney and 50,000 shares of Common Stock to Mr.                    
McCourt, in each case at $10.85 per share.                                      

The Company loaned George B. Toll, Jr. $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.  Mr. Toll was a director               
and executive officer of the Company prior to the Split-Off, but                
is no longer either a director or executive officer of the                      
Company.                                                                        

SIGNATURES            

Pursuant to the requirements of Section 13 or 15(d) 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, on the 27th day of April, 1998.                      

                    LEVEL 3 COMMUNICATIONS, INC.

               By:  /s/ James Q. Crowe
                James Q. Crowe
           President

Pursuant to the requirements of the Securities Exchange Act of                  
1934, this report has been signed below by the following persons on             
behalf of the registrant and in the capacities indicated on the                 
27th day of April, 1998.                                                        

/s/ James Q. Crowe                           Chairman of the Board and President
James Q. Crowe                        (Director and Principal Executive Officer)

/s/ R. Douglas Bradbury             Chief Financial Officer                     
R. Douglas Bradbury                   (Director and Principal Financial Officer)

/s/ Eric J. Mortensen                                           Controller      
Eric J. Mortensen                                 (Principal Accounting Officer)

/s/ Walter Scott, Jr.                                    /s/ Robert B. Daugherty
Walter Scott, Jr., Director                        Robert B. Daugherty, Director

/s/ William L. Grewcock                                    /s/ Charles M. Harper
William L. Grewcock, Director                        Charles M. Harper, Director

/s/ Richard R. Jaros                                        /s/ Robert E. Julian
Richard R. Jaros, Director                            Robert E. Julian, Director

/s/ David C. McCourt                                      /s/ Kenneth E. Stinson
David C. McCourt, Director                          Kenneth E. Stinson, Director

/s/ Michael B. Yanney                                                           
Michael B. Yanney, Director                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K/A’ Filing		Date		Other Filings
		1/1/99
Filed on:		4/27/98
		4/23/98		10-K/A
		3/31/98		10-K,  10-Q
		3/15/98
		2/28/98
		12/31/97
For Period End:		12/27/97		10-K,  10-K/A,  NT 10-K
		8/5/97
		7/31/97
				List all Filings