If your system is working then you do not need to re format the drive.
Do not remove the System reserved partition - this is your recovery partition.
In Disk Management you should have the option to "Shrink Volume" - This would let you shrink C:
Then you will have an Unallocated section in which you can create a new partition.
I would do this and then Google for "Move my documents folders to another drive." This is an easy process and would move all your data to the new partition. This gives a measure of protection for your data should you need to re install windows.