PRELIMINARY COPIES
CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
SCHEDULE 14A INFORMATION
Information Required in Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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Check the appropriate box:
[ X ] Preliminary Proxy Statement
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(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to /section/240.14a-11(c) or
/section/240.14a-12
MASTEC, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
N/A
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):*
[ X] 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:
[ ] 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:
MASTEC, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 1998
To our stockholders:
The 1998 Annual Meeting of Stockholders of MasTec, Inc. will be held on
Thursday, May 14, 1998, at 9:30 A.M., local time, at the offices of the Company,
3155 N.W. 77th Avenue, Miami, Florida. At the Annual Meeting, stockholders will
be asked to vote on the following proposals:
/bullet/ The election of two Class III directors for terms
expiring in 2001;
/bullet/ The reincorporation of the Company from Delaware to
Florida; and
/bullet/ Such other business as may properly be brought before
the Annual Meeting.
Each of these proposals is discussed more fully in the Proxy Statement
accompanying this notice. Only stockholders of record at the close of business
on March 20, 1998 are entitled to vote at the Annual Meeting. Stockholders,
including those whose shares are held by a brokerage firm or in "street" name,
will be asked to verify their stockholder status as of the record date upon
entrance to the meeting. Accordingly, stockholders (or their legal
representatives) attending the Annual Meeting should bring some form of
identification to the meeting evidencing stockholder status as of the record
date and, in the case of a person attending the meeting on behalf of a
stockholder, the representative's right to represent the stockholder at the
meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure that your stock is represented at the meeting in case
you are not personally present, you are requested to mark, sign, date and return
the enclosed proxy card as promptly as possible in the envelope provided. YOU
MAY NOT VOTE YOUR SHARES OF STOCK AT THE ANNUAL MEETING UNLESS YOU ARE PRESENT
IN PERSON OR REPRESENTED BY PROXY. Stockholders attending the Annual Meeting may
vote in person even if they have previously returned a proxy card.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ NANCY J. DAMON
------------------
Nancy J. Damon
Corporate Secretary
Miami, Florida
April ___, 1998
MASTEC, INC.
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 14, 1998
--------------------
GENERAL
The Board of Directors of MasTec, Inc. (the "Company") is furnishing
this Proxy Statement to solicit proxies for use at the 1998 Annual Meeting of
Stockholders of the Company to be held at the offices of the Company, 3155 N.W.
77th Avenue, Miami, Florida 33122-1205, on Thursday, May 14, 1998, at 9:30 A.M.,
local time.
At the Annual Meeting, stockholders will be requested to vote upon the
following matters, each of which is described in greater detail elsewhere in
this Proxy Statement:
/bullet/ The election of two Class III directors for terms
expiring in 2001;
/bullet/ The reincorporation of the Company from Delaware to
Florida; and
/bullet/ Such other business as may properly be brought before
the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE
NOMINEES FOR ELECTION AS A CLASS III DIRECTOR SET FORTH IN THIS PROXY STATEMENT
AND FOR THE PROPOSAL TO REINCORPORATE THE COMPANY FROM DELAWARE TO FLORIDA.
It is anticipated that this Proxy Statement and accompanying proxy and
other materials will be mailed on or about April ___, 1998 to stockholders of
record on March 20, 1998. Only stockholders of record at the close of business
on March 20, 1998 are entitled to vote at the Annual Meeting. If you are not
present in person at the Annual Meeting, your shares can be voted only when
represented by proxy. The shares represented by your proxy will be voted in
accordance with your instructions only if you properly complete, sign, date and
return the accompanying proxy card to the Secretary of the Company prior to the
Annual Meeting. If no direction is given on a proxy, the shares represented by
the proxy will be voted for the election of all nominees for director, for the
proposal to reincorporate the Company from Delaware to Florida, and in the
discretion of the holder of the proxy on all other matters that may properly
come before the Annual Meeting. A proxy given pursuant to this solicitation may
be revoked at any time prior to its exercise by written notice delivered to the
Secretary of the Company, by executing and delivering to the Secretary a proxy
with a later date, or by attending the Annual Meeting and voting in person.
Attendance at the Annual Meeting will not, in itself, constitute revocation of a
proxy.
The Company's only class of voting securities is its Common Stock, $.10
par value ("Common Stock"). At March 20, 1998, there were __________shares of
Common Stock outstanding, which is the only class of capital stock of the
Company outstanding, and approximately _______record stockholders, which does
not include stockholders whose shares are held by a brokerage firm or otherwise
in "street name." On February 28, 1997, the Company paid a stock dividend of one
share of Common Stock for every two shares of Common Stock outstanding
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to stockholders of record on February 3, 1997. All share amounts described in
this Proxy Statement have been adjusted to account for the stock dividend.
Each share of Common Stock entitles the holder to one vote on all
matters properly brought before the Annual Meeting. The presence, in person or
by proxy, of a majority of the shares entitled to vote is necessary to
constitute a quorum at the Annual Meeting. Directors are elected by a plurality
of the shares of Common Stock voting in person or by proxy at the Annual
Meeting, with the directors receiving the highest number of votes being elected
to the Board of Directors. The proposal to reincorporate the Company in Florida
requires the affirmative vote of a majority of all the issued and outstanding
shares of Common Stock.
Shares that are entitled to vote but that are not voted at the
direction of the beneficial owner ("abstentions"), shares represented by proxies
or ballots that are marked "withhold authority" with respect to the election of
any nominee for election as a director, and votes withheld by brokers in the
absence of instruction from beneficial holders ("broker nonvotes") will be
counted for the purpose of determining whether there is a quorum for the
transaction of business at the Annual Meeting. In determining whether a nominee
for director has received a plurality of the shares voted, withheld votes will
have the same effect as a vote against and broker nonvotes will be disregarded
and will have no effect on the outcome of the vote. Because, however, the
proposal to reincorporate the Company in Florida requires the affirmative vote
of all the issued and outstanding shares of Common Stock, abstentions and broker
nonvotes will have the same effect as a vote against the proposal.
Jorge Mas, the Company's Chairman of the Board, President and Chief
Executive Officer, and members of his family, own in the aggregate more than 50%
of the outstanding Common Stock of the Company. Jorge Mas has informed the
Company that he and his family members intend to vote their shares of Common
Stock in favor of the election of the nominees for election as Class III
directors and for the approval of the proposal to reincorporate in Florida, thus
assuring their election and passage.
ELECTION OF DIRECTORS
The first matter that stockholders will be asked to vote upon at the
Annual Meeting is the election of two Class III directors for terms expiring at
the annual meeting of stockholders in the year 2001. The Board of Directors
currently is comprised of five directors elected in three classes, with two
Class I, one Class II, and two Class III directors. Directors in each class hold
office for three-year terms. The terms of the classes are staggered so that the
term of one class terminates each year. The terms of the current Class III
directors expire at the Annual Meeting; if elected, the nominees for Class III
directors will serve until the annual stockholders meeting in 2001. The terms of
the Class I directors expire at the annual stockholders meeting in 1999 and the
terms of the Class II directors expire at the annual stockholders meeting in
2000.
The following individuals have been nominated by the Nominating
Committee of the Board of Directors for election as the Class III directors to
be elected at the Annual Meeting:
/bullet/ Arthur B. Laffer, a member of the Board of Directors
since 1994; and
/bullet/ Jose Sorzano, a member of the Board of Directors since
1994.
Additional background information regarding each of these nominees is
provided below. The Company has no reason to believe that any of these nominees
will refuse or be unable to serve as a director if elected; however, if any of
the nominees is not able to serve, each proxy that does not direct otherwise
will be voted for a substitute nominee designated by the Board of Directors.
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The election of directors requires the affirmative vote of a plurality
of the shares of Common Stock voting in person or by proxy at the Annual
Meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE
NOMINEES NAMED ABOVE. UNLESS OTHERWISE INDICATED, THE ACCOMPANYING FORM OF PROXY
WILL BE VOTED FOR THE ELECTION OF EACH OF THE NOMINEES FOR ELECTION AS A CLASS
III DIRECTOR NAMED ABOVE.
INFORMATION AS TO NOMINEES AND OTHER DIRECTORS
NOMINEES FOR CLASS III DIRECTOR
ARTHUR B. LAFFER, 57, has been a member of the Board of Directors since
March 1994. Mr. Laffer has been Chairman of the Board of Directors of A.B.
Laffer & Associates, an economic research and financial consulting firm, since
1979; Chief Executive Officer, Laffer Advisors Inc., an investment advisor and
broker-dealer, since 1981; and Chairman of the Board of Directors, Calport Asset
Management, a money management firm, since 1992. Mr. Laffer is a director of
U.S. Filter Corporation, Nicholas Applegate mutual funds, and Coinmach Laundry
Corporation.
JOSE S. SORZANO, 57, has been a member of the Board of Directors since
October 1994. Mr. Sorzano has been Chairman of the Board of Directors of The
Austin Group, Inc., an international corporate consulting firm, since 1989. Mr.
Sorzano was also Special Assistant to the President for National Security
Affairs from 1987 to 1988; Associate Professor of Government, Georgetown
University, from 1969 to 1987; President, Cuban American National Foundation,
from 1985 to 1987; and Ambassador and U.S. Deputy to the United Nations from
1983 to 1985.
CLASS I DIRECTORS
JORGE MAS, 35, has been President, Chief Executive Officer and a
director of the Company since March 1994 and was elected chairman of the Board
of Directors in January 1998. Prior to that time, Mr. Mas was President and
Chief Executive Officer of Church & Tower, Inc., one of the Company's principal
operating subsidiaries. In addition, Mr. Mas is the Chairman of the Board of
Directors of Neff Corporation, an equipment saler and leasing company, Atlantic
Real Estate Holding Corp., a real estate holding company, U.S. Development
Corp., a real estate development company, and Santos Capital, Inc., a merchant
banking firm, all private companies controlled by Mr. Mas, and during all or a
portion of the past five years, has served as the President and Chief Executive
Officer of these corporations.
JOEL-TOMAS CITRON, 35, was elected to the Board of Directors in January
1998. Mr. Citron is the managing partner of Triscope Capital LLC, a private
investment partnership. In addition, Mr. Citron has been Chairman of the United
States subsidiary of Proventus AB, a privately held investment company based in
Stockholm, since 1992.
CLASS II DIRECTOR
ELIOT C. ABBOTT, 48, has been a member of the Board of Directors since
March 1994. Since February 1, 1997, Mr. Abbott has been a partner in the Miami
law firm of Kluger Peretz Kaplan Berlin, P.A. From October 1, 1995 to January
31, 1997, Mr. Abbott was a member of the New York law firm of Kelley Drye &
Warren. From 1976 until September 30, 1995, Mr. Abbott was a stockholder in the
Miami law firm of Carlos & Abbott.
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OTHER INFORMATION REGARDING THE BOARD OF DIRECTORS
BOARD AND COMMITTEE MEETINGS
During 1997, the Board of Directors met or acted by unanimous written
consent on eleven occasions. Each of the directors attended at least 75% of the
aggregate number of Board meetings and meetings of committees of which such
director is a member.
There are six standing committees of the Board of Directors: the Audit
Committee, the Executive Committee, the Compensation and Stock Option Committee,
the Nominating Committee, the Special Transactions Committee and the Special
Committee for the Annual Compensation Plan.
The Audit committee is composed of Mr. Laffer, who serves as Chairman,
and Messrs. Abbott and Sorzano. The Audit Committee is charged, among other
things, with:
/bullet/ Reviewing and recommending to the Board of Directors the
independent auditors to be selected to audit the financial
statements of the Company;
/bullet/ Reviewing the scope of the proposed annual audit for the current
year and the audit procedures to be applied, including approving
the annual audit fee proposal from the independent auditors;
/bullet/ Reviewing the completed audit, including any comments or
recommendations by the independent auditors, and monitoring the
implementation of any recommendations adopted by the committee;
/bullet/ Reviewing the adequacy and effectiveness of the Company's
accounting and financial controls;
/bullet/ Reviewing the internal audit function of the Company; and
/bullet/ Investigating any matter brought to its attention within the
scope of its duties, including retaining independent counsel,
accountants and others to assist it in its investigations.
During 1997, the Audit Committee met on four occasions.
The Executive Committee is composed of Jorge Mas, who serves as
Chairman, and Messrs. Abbott and Laffer. The principal function of the Executive
Committee is to act for the Board of Directors when action is required between
full Board meetings. During 1997, the Executive Committee acted by unanimous
written consent four times.
The Compensation and Stock Option Committee (the "Compensation
Committee") is composed of Mr. Laffer, who serves as Chairman, and Mr. Sorzano.
The Compensation Committee is charged with determining compensation packages for
the Chief Executive Officer and the Senior Vice Presidents of the Company,
establishing salaries, bonuses and other compensation for the Company's other
officers, administering the Company's 1997 Non-Qualified Employee Stock Purchase
Plan, 1997 Annual Incentive Compensation Plan, 1994 Stock Incentive Plan and
1994 Stock Option Plan for Non-Employee Directors (collectively, the "Plans")
and recommending to the Board of Directors changes to the Plans. During 1997,
the Compensation Committee met on four occasions.
The Nominating Committee is composed of Mr. Abbott, who serves as
Chairman, and Mr. Mas. The Nominating Committee, which met once during 1997,
recommends to the Board of Directors candidates for election to the Board of
Directors. The Nominating Committee considers candidates recommended by the
stockholders pursuant to written applications submitted to the Secretary.
Stockholder proposals for nominees should include biographical and other
information regarding the proposed nominee sufficient to comply with applicable
disclosure rules and a statement from the stockholder as to the qualifications
and willingness of the candidate to serve on the Company's Board of Directors.
-4-
The Special Transactions Committee is composed of Mr. Abbott, who
serves as Chairman, and Messrs. Laffer and Sorzano. The primary function of the
Special Transactions Committee, which acted once by unanimous written consent
during 1997, is to review related party transactions between the Company and any
officer, director or other affiliate of the Company.
The Special Committee for the Annual Compensation Plan is composed of
Mr. Laffer, who serves as Chairman, and Mr. Sorzano. The primary function of the
Special Committee, which acted once by unanimous written consent during 1997, is
to oversee the 1997 Annual Compensation Plan of the Company.
COMPENSATION OF DIRECTORS
Directors of the Company who are not employees of the Company or of any
subsidiary are paid an annual retainer of $20,000, payable in Common Stock. In
addition, pursuant to the 1994 Stock Option Plan for Non-Employee Directors,
non-employee directors are eligible to receive options to purchase up to 15,000
shares of Common Stock annually at an exercise price equal to the fair market
value of the Common Stock on the date of grant.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership as of March 20,
1998 of Common Stock by (a) each person known to the Company to beneficially own
more than 5% thereof, (b) each director of the Company and each Named Executive
Officer (as defined under the caption "Executive Compensation" below), and (c)
all executive officers and directors of the Company as a group. Unless otherwise
indicated, each named stockholder has sole voting and investment power with
respect to the shares beneficially owned by the stockholder.
PERCENT OF
AMOUNT OF COMMON STOCK
NAME COMMON STOCK OUTSTANDING
- ---- ------------ -----------
Eliot C. Abbott 22,750(1) *
Joel-Tomas Citron 0 -
Edwin D. Johnson 26,884 *
Arthur B. Laffer 120,000(1) *
Jorge Mas 6,169,985(2) 22%
Ismael Perera 78,633(1) *
Ubiratan Simoes Rezende 0 *
Jose S. Sorzano 12,000(1) *
Carlos A. Valdes 63,257(1) *
Jorge L. Mas Canosa
Holding I Limited Partnership 7,675,000(3) 28%
All executive officers and
directors as a group
(11 persons) 14,196,893(1) 51%
- ----------
(1) The amounts shown include shares covered by options exercisable within
60 days of March 20, 1998 as follows: Eliot C. Abbott, 22,750 shares;
Edwin D. Johnson, 7,500 shares; Arthur B. Laffer, 30,000 shares; Ismael
Perera, 46,600 shares; Jose S. Sorzano, 12,000 shares; and Carlos A.
Valdes, 27,830 shares.
(2) Includes 5,587,381 shares owned of record by Jorge Mas Holding I
Limited Partnership, a Texas limited partnership ("Jorge Mas
Holdings"), 388,447 shares owned of record by the Mas Family
Foundation, a Florida not-for-profit corporation (the "Family
Foundation"), 94,000 shares covered by options exercisable within 60
days of March 20, 1998, and 100,157 shares owned of record
individually. The sole general partner of Jorge Mas Holdings is Jorge
Mas Holdings Corporation, a Texas corporation that is wholly-owned by
Mr. Mas. Mr. Mas disclaims beneficial ownership of the shares owned by
the Family Foundation.
(3) The sole general partner of Jorge L. Mas Canosa Holding I Limited
Partnership, is Jorge L. Mas Holdings Corporation, a Texas corporation
that is wholly-owned by the estate of Jorge L. Mas. Jorge Mas is the
sole officer and director of Jorge L. Mas Canosa Holdings Corporation
and is the executor of the estate of Jorge L. Mas. Mr. Mas disclaims
beneficial ownership of the shares owned by the partnership.
* Less than 1%
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon a review of the copies of the forms furnished to the
Company, the Company believes that, during the year ended December 31, 1997, all
filing requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with on a timely basis, except that Mr. Mas filed a Report
on Form 4 on September 3, 1997 which reported the grant of 15,814 shares of
Common Stock in March 1997, Mr. Perera filed a Report on Form 4 on September 3,
1997 which reported the grant of 2,057 shares of Common Stock in March 1997, Mr.
Valdes filed a Report on Form 4 on September 3, 1997 which reported the grant of
634 shares of Common Stock in March 1997, Mr. Johnson filed a Report on
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Form 4 on September 3, 1997 which reported the grant of 634 shares of Common
Stock in March 1997, and Mr. Rezende filed a Report on Form 4 on September 3,
1997 which reported the grant of 475 shares of Common Stock in March 1997.
Additionally, each of Messrs. Mas, Perera, Johnson, Rezende, Valdes and Sariego
filed a Report on Form 4 on March ___, 1998 which reported the repricing of
their 1997 options in December 1997. See "Executive Compensation-- Ten Year
Option Repricings" and "Compensation Committee Report on Executive
Compensation."
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
establishing and administering the policies for the Company's compensation
program and for approving the compensation levels of the executive officers of
the Company, including its Chief Executive Officer. The Compensaton Committee
also reviews with the Chief Executive Officer guidelines for salaries and
aggregate bonus awards applicable to the Company's employees other than its
executive officers. The Compensation Committee is composed of Arthur B. Laffer
and Jose S. Sorzano, both of whom are non-employee directors of the Company and
"disinterested directors" for purposes of Section 162(m) of the Internal Revenue
Code of 1986.
STATEMENT OF PHILOSOPHY OF EXECUTIVE COMPENSATION
The compensation program of the Company is designed to (a) provide base
compensation reasonably comparable to that offered by other leading companies to
their executive officers so as to attract and retain talented executives, (b)
motivate executive officers to achieve the strategic goals set by the Company by
linking an officer's incentive compensation to the performance of the Company
and applicable business units, as well as to individual performance, and (c)
align the interests of its executives with the long-term interests of the
Company's stockholders through the award of stock options and other
stock-related programs. To implement this philosophy, the Company offers its
executive officers compensation packages that include a mix of salary, incentive
bonus awards, and stock options. Incentive bonus awards for all of the Company's
senior executives the past two years have been partly or entirely in the form of
Company Common Stock.
In determining the level and form of executive compensation to be paid
or awarded, the Compensation Committee relies primarily on an assessment of the
Company's overall performance in light of its strategic objectives rather than
on any single quantitative or qualitative measure of performance. The
Compensation Committee considered the following factors in establishing 1997
compensation:
(a) A substantial increase in revenue and income from continuing
operations in comparison to prior years.
(b) The continued strengthening and expansion of the Company's
core telecommunications construction business into new and
existing markets and with new and existing customers.
(c) The continued diversification of the Company's core business
through strategic acquisitions and investments.
(d) The continued divestiture of non-core assets to concentrate
resources on the Company's core business.
SALARY AND INCENTIVE BONUS
The base salary of executive officers is determined initially by
analyzing and evaluating the responsibilities of the position and comparing the
proposed base salary with that of officers in comparable positions in other
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companies. For 1997 performances, the Compensation Committee did not increase
the base salary of any of the executive officers of the Company.
In addition to paying a base salary, the Company awards incentive
bonuses as a component of overall compensation. Bonus awards are made after
considering the performance of the executive officer's area of responsibility or
the operating unit under his control, if any, and the financial performance of
the Company. The Compensation Committee in 1998 recommended the award of bonuses
to certain of the Company's executive officers, including the Named Executive
Officers, for 1997 performance. All of the bonuses were paid in Company Common
Stock.
STOCK INCENTIVE PLAN
Long-term incentive compensation for executives consists of stock-based
awards made under the Company's Stock Incentive Plan. The Stock Incentive Plan
provides for the granting of options to purchase Common Stock to key employees
at exercise prices equal to the fair market value on the date of grant. The
Compensation Committee believes that the use of stock options reinforces the
Compensation Committee's philosophy that management compensation should be
clearly linked to stockholder value. The Compensation Committee awards options
to key employees, including executive officers, based on current performance,
anticipated future contribution based on such performance, and ability to
materially impact the Company's financial results. In 1997, the Compensation
Committee granted stock options under the Stock Incentive Plan to the Company's
executive officers, including the Named Executive Officers, primarily based on
1997 results.
CEO COMPENSATION
In setting the incentive compensation for Jorge Mas, the Company's
Chairman, President and Chief Executive Officer, Compensation the Committee
reviewed the Company's financial performance in 1997 with respect to revenue,
income from continuing operations and income per share compared to the
performance of other companies in its industry and the Company's prior
performance, as well as the other factors described above. Based on its review
of this information, the Compensation Committee decided not to recommend an
increase in salary for Mr. Mas but awarded an incentive bonus of 10,000 shares
of Company Common Stock for 1997 performance. The Compensation Committee also
awarded Mr. Mas stock options to purchase 100,000 shares of Common Stock for
1997 performance to further link his compensation to the performance of the
Common Stock of the Company.
REPRICING OF 1997 OPTIONS
Because the market value of the Company's Common Stock in 1997 fell
significantly below the exercise price of options granted during the year, the
Compensation Committee believed that the value of the options granted in 1997 as
a means of motivating and retaining key employees had been significantly
diminished. As a result, on December 29, 1997, the Compensation Committee
approved (a) the amendment of all options to purchase Common Stock granted in
1997 (the "1997 Options") from incentive stock options under the Internal
Revenue Code of 1986 to non-qualified stock options and (b) the repricing of the
1997 Options to an exercise price of $21.0938 per share, the then fair market
value of the Common Stock. Other than the repricing and the change from
incentive stock option to non-qualified stock option, the terms of all of the
repriced 1997 Options remain the same as before the repricing, including the
term and vesting schedule. In the aggregate, options to purchase 305,975 shares
with exercise prices ranging from $28.19 to $48.20 were repriced, of which
options to purchase an aggregate of 133,000 shares belonging to the Named
Executive Officers were repriced.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes all compensation awarded to, earned by
or paid to (a) the Company's Chief Executive Officer, (b) Mr. Jorge L. Mas, the
Chairman of the Board of the Company until November, 1997, and (c) the four
other most highly compensated executive officers of the Company whose total
salary and bonus exceeded $100,000 (together, the "Named Executive Officers")
for services rendered in all capacities to the Company and its subsidiaries for
the years ended December 31, 1997, 1996, and 1995.
LONG TERM COMPENSATION
------------------------
ANNUAL COMPENSATION AWARDS
------------------------------- ------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPEN- AWARDS OPTIONS COMPEN-
PRINCIPAL POSITION YEAR ($) ($)(2) SATION(3) ($) # (4) SATION(7)
- ------------------ ---- --------- ---------- --------- ----------- ----------- ---------
Jorge L. Mas 1997 $275,000 $ -- $ -- $ -- -- $ --
1996 293,000 675,000 -- 500,000 -- --
1995 311,000 -- -- -- -- --
Jorge Mas, Chairman of 1997 325,000 234,100 -- -- 100,000 6,000
the Board of Directors, 1996 325,000 675,000 -- 500,000 50,000(5) 3,500
Chief Executive Officer 1995 322,000 -- -- -- 75,000 --
and President
Ismael Perera, 1997 180,000 187,280 -- -- 15,000 721
Senior Vice President- 1996 150,000 160,000 -- 65,000 20,000(5) 392
Operations 1995 144,000 30,000 -- -- 15,000 --
Edwin D. Johnson, 1997 150,000 152,165 -- -- 15,000 966
Senior Vice President- 1996 150,000 70,000 -- 20,000 37,500(5) 490
Chief Financial Officer 1995(1) -- -- -- -- -- --
Ubiratan Simoes 1997 150,000 163,870 -- -- 80,000(6) --
Rezende, Senior Vice 1996 140,000 40,000 -- -- 10,000 --
President-International 1995(1) -- -- -- -- -- --
Operations
Carlos A. Valdes, 1997 150,000 152,165 -- -- 15,000 1,005
Senior Vice President- 1996 130,000 50,000 -- 20,000 8,000(5) 490
Corporate Development 1995 124,000 10,000 -- -- -- --
- ----------
(1) Mr. Johnson and Mr. Rezende were hired in March 1996 as the Senior Vice
President-Chief Financial Officer and Senior Vice
President-International Operations, respectively. They were not
employed by the Company in 1995.
(2) All of the bonuses awarded in 1997 were paid in Company Common Stock.
(3) The Named Executive Officers also received certain perquisites and
personal benefits that did not exceed applicable reporting thresholds.
(4) The exercise prices for all options granted to the Named Executive
Officers in 1997 were repriced on December 19, 1997. See "Executive
Compensation--Ten Year Option Repricings" and "Compensation Committee
Report on Executive Compensation."
(5) Reflects options actually granted in March 1997 for compensation
attributable to the executive officer in 1996.
(6) Includes options to purchase 15,000 and 10,000 shares of the Company's
Common Stock (25,000 shares in the aggregate) issued to Mr. Rezende on
March 17, 1997 and May 20, 1997, respectively, with exercise prices of
$31.63 and $28.19 per share, respectively, which were cancelled and
replaced with options to purchase 40,000 shares.
(7) Represents premiums paid by the Company for term life insurance on the
lives of the Named Executive Officers.
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OPTION GRANTS
The following table provides information with respect to stock options
to purchase Common Stock granted to the Named Executive Officers during the year
ended December 31, 1997 pursuant to the Company's Stock Incentive Plan:
STOCK OPTION GRANTS IN FISCAL YEAR 1997
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR INDIVIDUAL GRANTS
----------------------------------------------- --------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SHARES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED (1) YEAR(2) ($/SH)(3) DATE 5% 10%
---- ----------- ------- --------- ---------- ---- -----
Jorge L. Mas 0 0% $ -- -- $ -- $ --
Jorge Mas 50,000 5.7% 21.09 3/17/07 1,602,444 3,176,352
4,740(4) 0.5% 23.20 12/29/07 52,881 149,351
95,260 10.9% 21.09 12/29/07 1,263,690 3,202,446
Ismael Perera 20,000 2.3% 21.09 3/17/07 640,978 1,270,541
15,000 1.7% 21.09 12/29/07 198,985 504,269
Edwin D. Johnson 15,000 1.7% 21.09 3/17/07 480,733 952,905
15,000 1.7% 21.09 12/29/07 198,985 504,269
Ubiratan Simoes 40,000(5) 4.6% 21.09 12/29/07 530,628 1,344,718
Rezende
Carlos A. Valdes 8,000 0.9% 21.09 3/17/07 256,391 508,216
15,000 1.7% 21.09 12/29/07 199,345 504,269
- ----------
(1) Based on options to purchase an aggregate of 874,725 shares of Common
Stock granted to employees during 1997.
(2) Except as otherwise indicated, all options were granted at an exercise
price equal to fair market value based on the mean between the high and
low sales prices of the Company's Common Stock on the date of grant.
The exercise prices for each of these options were repriced on December
29, 1997. See "Executive Compensation--
Ten Year Option Repricings" and
"Compensation Committee Report on Executive Compensation."
(3) Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only, based on Securities and Exchange Commission rules,
and do not represent the Company's estimate or projection of the price
of the Company's stock in the future. Actual gains, if any, on stock
option exercises depend upon the actual future performance of the
Company's Common Stock and the continued employment of the option
holders throughout the vesting period. Accordingly, the potential
realizable values set forth in this table may not be achieved or may be
exceeded.
(4) Stock option grant made with an exercise price of $23.20, which was
110% of the fair market value of the underlying stock on the date of
grant.
(5) Does not include options to purchase 15,000 and 10,000 shares of the
Company's Common Stock (25,000 shares in the aggregate) issued to Mr.
Rezende on March 17, 1997 and May 20, 1997, respectively, with exercise
prices of $31.63 and $28.19 per share, respectively, which were
cancelled and replaced with the options to purchase 40,000 shares set
forth above.
-10-
AGGREGATE OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information with respect to each
exercise of stock options during the fiscal year ended December 31, 1997 by the
Named Executive Officers and the value at December 31, 1997 of unexercised stock
options held by the Named Executive Officers.
Number of Shares
Shares Underlying Unexercised Value of Unexercised In-
Acquired Options at the-Money Options
On Value December 31, 1997(1) At December 31, 1997(2)
Exercise Realized (#) ($)
(#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------- ----------- ------------------------- -------------------------
Jorge L. Mas 0 $ 0 0 0 $ 0 $ 0
Jorge Mas 0 0 51,000 264,000 713,993 1,899,063
Ismael Perera 3,900 65,887 27,600 95,000 355,858 795,321
Edwin D. Johnson 4,500 76,312 0 48,000 0 331,685
Ubiratan Simoes 1,100 26,813 40,000 0 71,248 0
Rezende
Carlos A. Valdes 12,000 444,480 24,000 71,000 356,740 754,447
- ------------------
(1) Option amounts have been adjusted for a three-for-two stock split
effected on February 28, 1997.
(2) Market value of shares underlying in-the-money options at December 31,
1997 based on the product of $22.875 per share, the closing price of
the Company's Common Stock on the New York Stock Exchange on December
31 1997, less the exercise price of each option times the number of
in-the-money options as of that date.
The following sets forth certain information concerning the repricing,
replacement or cancellation and regrant of options, within the last ten fiscal
years, of options held by executive officers of the Company.
TEN-YEAR OPTION REPRICINGS
Length of
Number of Original
Shares Market Price of Exercise Price Term
Underlying Stock at Time at Time of New Remaining
Date of Options of Repricing Repricing Exercise at Date of
NAME Repricing Repriced ($) ($) Price($) Repricing
- ---- --------- -------- --------------- -------------- -------- ---------
Jorge Mas 12/29/97 50,000 $21.09 $31.63 $21.09 9.25 years
Ismael Perera 12/29/97 20,000 21.09 31.63 21.09 9.25 years
Edwin D. Johnson 12/29/97 15,000 21.09 31.63 21.09 9.25 years
Ubiratan Simoes 12/29/97 40,000 21.09 31.63 21.09 9.25 years
Rezende
Carlos A. Valdes 12/29/97 8,000 21.09 31.63 21.09 9.25 years
Jose M. Sariego 12/29/97 8,000 21.09 31.63 21.09 9.25 years
-11-
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on
the Company's Common Stock from December 31, 1992 through December 31, 1997 with
the cumulative total return of the S & P 500 Stock Index and a
Company-constructed index of two peer companies consisting of Dycom Industries,
Inc. and MYR Group, Inc. (the "Peer Index"). The graph assumes that the value of
the investment in the Common Stock was $100 on December 31, 1992 and that all
dividends were reinvested. This data is not necessarily indicative of future
results.
12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
MasTec, Inc. $100 $215 $374 $483 $1,815 $1,149
Peer Index $100 $ 75 $ 64 $111 $ 169 $ 313
S&P 500 $100 $107 $105 $141 $ 174 $ 215
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1994, Church & Tower, Inc. and Church & Tower of Florida, Inc.
provided Messrs. Jorge L. Mas, Chairman of the Board and President of Church &
Tower of Florida, Inc., Jorge Mas, President and Chief Executive Officer of
Church & Tower, Inc., and Juan Carlos Mas and Jose Ramon Mas, each a shareholder
of Church & Tower, Inc. and a son of Jorge L. Mas, with a loan of $2,000,000,
$1,280,000, $158,000 and $132,000, respectively, bearing interest at prime plus
2% (10.50% at December 31, 1997) with interest due annually and principal due on
December 31, 1997. The loans were made to assist these individuals in meeting
their estimated federal income tax obligations related to the 1993 S corporation
earnings of Church & Tower, Inc. and Church & Tower of Florida, Inc. As of
December 31, 1997, Jorge L. Mas, Jorge Mas, Juan Carlos Mas and Jose Ramon Mas
remained indebted to the Company for $500,000, $400,000, $58,000 and $32,000,
respectively, plus accrued interest.
The Company purchases and leases construction equipment from a company
controlled by Jorge Mas. The Company also makes available certain office space
and the part-time services of certain employees to affiliates. The Company
believes the value of these transactions is not material.
-12-
PROPOSAL TO REINCORPORATE THE COMPANY
FROM DELAWARE TO FLORIDA
On March ____, 1998, the Board of Directors approved a Plan and
Agreement of Merger by which the Company will be merged into a wholly owned
subsidiary organized under Florida law (the "Subsidiary") with the Subsidiary
becoming the surviving corporation (the "Surviving Corporation"). Stockholders
are being requested at the Annual Meeting to consider and approve the Plan and
Agreement of Merger. The full text of the Plan and Agreement of Merger is
attached as Appendix "A". The description set forth below is a summary of the
Plan and Agreement of Merger, does not purport to be complete, and is subject to
and qualified in its entirety by reference to the text of the Plan and Agreement
of Merger itself. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote in person or by proxy at the
Annual Meeting is necessary for approval of the Plan and Agreement of Merger.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE PLAN AND
AGREEMENT OF MERGER.
REASON FOR PROPOSED MERGER
The Company is requesting stockholder approval of the Plan and
Agreement of Merger to effect the change of the Company's state of incorporation
from Delaware to Florida. The primary reason for the change in the state of
incorporation is to achieve cost savings to the Company. Under the Delaware
General Corporation Law (the "DGCL"), Delaware corporations are required to pay
a franchise tax. The annual franchise tax payable by the Company to Delaware for
1998 absent the change of domicile will be approximately 150,000. By contrast,
corporations organized under the Florida Business Corporation Act (the "FBCA")
do not pay annual franchise taxes to the State of Florida but instead pay a
nominal fee of $200 in connection with the filing of annual reports.
If the Plan and Agreement of Merger is approved and the Company is
merged with and into the Subsidiary, the Company will be required to pay the
pro-rata portion of the 1998 Delaware franchise tax applicable to the portion of
1998 in which it existed as a Delaware corporation. The Company also will incur
certain one-time costs in connection with the implementation of the merger,
which costs are not expected to be material.
In addition to the proposed cost savings, the Board believes
reincorporation of the Company from Delaware to Florida is consistent with the
Company's philosophy of maintaining a positive corporate presence in Florida.
The Company maintains its principal executive and administrative offices as well
as the offices of several of its principal operating subsidiaries in Miami,
Florida.
The Board believes that the FBCA will meet the Company's business
needs, and that the DGCL does not offer corporate law advantages sufficient to
warrant payment of the franchise tax burden that results from maintaining a
Delaware domicile. The FBCA is a comprehensive modern and flexible statute based
on the Revised Model Business Corporation Act. For the most part, it provides
the flexibility in management of a corporation and in the conduct of various
business transactions that is characteristic of the DGCL.
NO CHANGE IN NAME, BUSINESS OR PHYSICAL LOCATION
The proposed merger will effect a change in the legal domicile of the
Company and other changes of a legal nature, the most significant of which are
described in this Proxy Statement. However, the merger will not result in any
change in the name, business, management, location of the principal executive
officers, assets, liabilities or net worth of the Company (other than as a
result of the costs incident to the merger, which are immaterial). The Company's
employee benefit plans, including the Plans, will be continued after the merger
by the Surviving Corporation upon the same terms and conditions. The management
of the Company, including all directors and officers, will remain the same after
the merger and will assume identical positions with the Surviving Corporation.
-13-
It also is anticipated that trading in the Company's Common Stock will continue
uninterrupted on the New York Stock Exchange.
A vote for approval and adoption of the Plan and Agreement of Merger
will constitute approval of the assumption by the Surviving Corporation of the
Plans and outstanding stock option agreements thereunder, and the substitution
of shares of the Surviving Corporation's Common Stock as the security to be
received upon exercise of options, if any, granted or to be granted under the
Plans.
THE SUBSIDIARY
The Subsidiary is a corporation which was incorporated under the FBCA
on March ___, 1998, exclusively for the purpose of merging with the Company in
accordance with the Plan and Agreement of Merger. Prior to the merger, the
Subsidiary will have no material assets or liabilities and will not carry on any
business.
The Subsidiary's Articles of Incorporation and Bylaws are substantially
identical to the Company's current Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws, except for statutory references
necessary to conform to the FBCA and other differences attributable to the
differences between the FBCA and the DGCL. A copy of the Subsidiary's Articles
of Incorporation is attached as Appendix "B".
THE PLAN AND AGREEMENT OF MERGER
The Plan and Agreement of Merger provides that the Company will merge
into and with the Subsidiary, with the Subsidiary then becoming the Surviving
Corporation. The Surviving Corporation will assume all assets and liabilities of
the Company, including contractual obligations and obligations under the
Company's outstanding indebtedness. The existing Board of Directors and officers
of the Company will become the Board of Directors and officers of the Surviving
Corporation for identical terms of office. The Subsidiary will also assume the
name of "MasTec, Inc." in the merger so that the Surviving Corporation will
operate under the same name as the Company.
Upon the effective date of the merger, each share of the Company's
Common Stock issued and outstanding will automatically be converted into one
fully-paid and nonassessable share of the Common Stock, $0.10 par value per
share, of the Surviving Corporation. In addition, each currently outstanding
stock option automatically will be converted into an option to purchase the same
number and series of Common Stock of the Surviving Corporation at the same
option exercise price per share and upon the same terms and subject to the same
conditions as set forth in the option. The Company does not intend to issue new
stock certificates to stockholders of record upon the effective date of the
merger. Instead, each certificate representing issued and outstanding shares of
Common Stock of the Company immediately prior to the effective date of the
merger will continue to evidence ownership of the shares of Common Stock of the
Surviving Corporation after the effective date of the merger. Each share of the
Company's Common Stock converted into one share of Common Stock of the Surviving
Corporation will be fully paid and nonassessable.
It is anticipated that the Common Stock of the Company will continue to
be listed on the New York Stock Exchange under its current symbol without
interruption and that delivery of existing stock certificates of the Company
will constitute "good delivery" of shares of the Surviving Corporation in
transactions on the New York Stock Exchange subsequent to the merger.
STOCKHOLDERS OF THE COMPANY NEED NOT EXCHANGE THEIR EXISTING STOCK
CERTIFICATES FOR STOCK CERTIFICATES OF THE SURVIVING CORPORATION. HOWEVER,
ANY STOCKHOLDERS DESIRING NEW STOCK CERTIFICATES REPRESENTING COMMON
STOCK OF THE SURVIVING CORPORATION MAY SUBMIT THEIR EXISTING STOCK
-14-
CERTIFICATES REPRESENTING COMMON STOCK OF THE COMPANY TO FIRST UNION
NATIONAL BANK OF NORTH CAROLINA, THE TRANSFER AGENT OF THE COMPANY AND THE
SURVIVING CORPORATION, AND OBTAIN NEW CERTIFICATES.
COMPARISON OF THE RIGHTS OF HOLDERS OF THE COMPANY'S COMMON STOCK AND THE
SURVIVING CORPORATION'S COMMON STOCK
The Company is incorporated in the State of Delaware, and the Surviving
Corporation will be incorporated in the State of Florida. Stockholders of the
Company, whose rights are currently governed by the DGCL and the Certificate of
Incorporation and Bylaws of the Company will, upon consummation of the Plan and
Agreement of Merger, become shareholders of the Surviving Corporation and their
rights will be governed by the FBCA and the Articles of Incorporation and Bylaws
of the Surviving Corporation.
Although it is not practical to compare all of the differences between
(a) Delaware law and the Certificate of Incorporation and Bylaws of the Company
and (b) Florida law and the Articles of Incorporation and Bylaws of the
Surviving Corporation, the following is a summary of certain of those
differences which may significantly affect the rights of the Company
stockholders. This summary is not intended to be relied upon as an exhaustive
list of all such differences or a complete description of the provisions
discussed, and is qualified in its entirety by reference to the DGCL, the FBCA
and the forms of the Articles of Incorporation and Bylaws of the Surviving
Corporation.
DIVIDENDS AND REPURCHASES. Under the FBCA, a corporation may make
distributions to stockholders (subject to any restrictions contained in the
corporation's articles of incorporation) as long as, after giving effect to the
distribution, (a) the corporation will be able to pay its debts as they become
due in the usual course of business and (b) the corporation's total assets will
not be less than the sum of its total liabilities plus (unless the articles of
incorporation permit otherwise) the amount that would be needed, if the
corporation were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights
are superior to those receiving the distribution. A Florida corporation may
purchase its own shares and, unless otherwise provided in the articles of
incorporation, shares repurchased remain authorized but unissued. However,
pursuant to the FBCA, a corporation's redemption of its own capital stock is
deemed to be a distribution. The Surviving Corporation's articles of
incorporation do not alter these provisions of Florida law.
A Delaware corporation may pay dividends out of "surplus" or, if there
is no surplus, out of net profits for the fiscal year in which the dividend is
declared or for the preceding fiscal year. Surplus is defined as the net assets
of the corporation over the corporation's capital. Under the DGCL, a corporation
may repurchase or redeem its shares only if the capital of the corporation is
not impaired and such repurchase does not impair the corporation's capital.
SPECIAL MEETINGS. Under Florida law, special meetings of the
shareholders may be called by the Board of Directors or by such persons as may
be authorized by the articles of incorporation or the bylaws. In addition,
Florida law permits the holders of not less than 10% of all votes entitled to be
cast on any issue to be considered at the special meeting (unless a greater
percentage, not to exceed 50%, is specified in the Articles of Incorporation) to
call a special meeting. Under Delaware law, special meetings of the stockholders
may be called by the Board of Directors or by such persons as may be authorized
by the certificate of incorporation or the bylaws. The Company's and the
Surviving Corporation's Bylaws each provide that special meetings may be called
by the Board of Directors, or by the President and shall be called by the
President or the Secretary upon the request in writing of the holders of record
of at least 25% of the issued and outstanding shares of stock entitled to vote
at such meeting.
-15-
QUORUM FOR SHAREHOLDER MEETINGS
Under the FBCA, unless otherwise provided in a corporation's articles
of incorporation (but not its bylaws), a majority of shares entitled to vote on
a matter constitutes a quorum at a meeting of shareholders, but in no event may
a quorum consist of less than one-third of the shares entitled to vote on such
matter. The Surviving Corporation's Articles of Incorporation do not include a
provision altering the shareholder quorum requirement.
The DGCL is similar to the FBCA, except that under the DGCL a
corporation's certificate of incorporation or bylaws may specify the percentage
of votes which constitutes a quorum at a meeting of stockholders, but in no
event may a quorum consist of less than one-third of the shares entitled to
vote. The Company's Bylaws provide that a quorum exists if a majority of the
voting power entitled to vote is present in person or by proxy at a meeting.
SHAREHOLDER VOTING REQUIREMENTS
Under both the FBCA and the DGCL, directors are generally elected by a
plurality of the votes cast by the shareholders entitled to vote at a
shareholders' meeting at which a quorum is present. With respect to matters
other than the election of directors, unless a greater number of affirmative
votes is required by the FBCA or a Florida corporation's articles of
incorporation (but not its bylaws), if a quorum exists, action on any matter
generally is approved by the shareholders if the votes cast by the holders of
the shares represented at the meeting and entitled to vote on the matter
favoring the action exceed the votes cast opposing the action. In the case of a
merger, consolidation, or a sale, lease or exchange of all or substantially all
of the assets of a Florida corporation, except in limited circumstances in which
no shareholder vote is required, the affirmative vote of the holders of a
majority of the issued and outstanding shares entitled to vote is required under
the FBCA. The Surviving Corporation's Articles of Incorporation do not include a
provision requiring a greater vote on any matter than required by the FBCA,
except upon mergers, consolidations and certain other corporate transactions and
upon amendments or alterations to the Surviving Corporation's Articles of
Incorporation and its Bylaws, as discussed below.
Under the DGCL, and unless otherwise provided by the DGCL or a Delaware
corporation's certificate of incorporation or bylaws, if a quorum exists, action
on a matter is approved by the affirmative vote of a majority of the shares
represented at a meeting and entitled to vote on the matter. In the case of a
merger, the affirmative vote of the holders of a majority of the issued and
outstanding shares entitled to vote is required by the DGCL. Accordingly, under
the DGCL abstentions have the same effect as votes against a matter. The
Company's Certificate of Incorporation and its Bylaws do not contain a provision
requiring a greater vote on any matter than required by the DGCL, except upon
mergers, consolidations and certain other corporate transactions and upon
amendments or alterations to the Company's Certificate of Incorporation and its
Bylaws, as discussed below.
MERGER, CONSOLIDATION AND SALES OF ASSETS. The FBCA and the DGCL each
provide that a merger, consolidation or sale of all or substantially all of the
assets of a corporation requires (a) approval by the Board of Directors and (b)
the affirmative vote of a majority of the outstanding stock of the corporation
entitled to vote thereon. The FBCA allows the Board of Directors or the articles
of incorporation and the DGCL allows the certificate of incorporation or bylaws
to establish a higher vote requirement. The Surviving Corporation's Articles of
Incorporation and the Company's Certificate of Incorporation each provide that,
with certain exceptions, the affirmative vote or consent of the holders at least
80% of the shares of such company's stock entitled to vote for the election of
directors shall be required to approve a merger, consolidation, or a sale, lease
or exchange of all or substantially all of the assets of such company to any
person who, on the record date for the determination of stockholders entitled to
vote thereon, is the beneficial owner of 10% or more of such company's
outstanding shares of stock entitled to vote for the election of directors. This
super-majority voting requirement does not apply to (a) any merger or
consolidation in which the Board of Directors of the Company shall have by
resolution approved a memorandum of understanding with such other corporation
with respect to and substantially consistent with such transaction prior to the
time such other person became the beneficial owner of more than 10% of the
outstanding
-16-
shares of the company's stock entitled to vote for the election of directors or
(b) any merger, consolidation with or sale or exchange of all or substantially
all of the assets of the Company to any corporation where the majority of the
outstanding shares of all classes of stock entitled to vote for the election of
directors is owned of record or beneficially by the Company and/or any one or
more of its subsidiaries.
AFFILIATED TRANSACTIONS AND CONTROL SHARE ACQUISITIONS. The FBCA
provides that an "affiliated transaction" (as defined in the FBCA) with an
"interested shareholder" must generally be approved by the affirmative vote of
the holders of two-thirds of the voting shares, other than the shares owned by
the interested shareholder. An interested shareholder is any person who is the
beneficial owner of 10% or more of the outstanding voting stock of the
corporation. The two-thirds approval requirement does not apply if, among other
things: (a) the transaction has been approved by a majority of the corporation's
disinterested directors (as defined in the statute); (b) the interested
shareholder has been the beneficial owner of at least 80% of the corporation's
outstanding voting shares for at least five years preceding the transaction; (c)
the interested shareholder is the beneficial owner of at least 90% of the
outstanding voting shares; (d) the corporation has not had more than 300
shareholders of record at any time during the preceding three years; or (e)
certain fair price and procedural requirements are satisfied. These restrictions
do not apply if a corporation's articles of incorporation or an amendment to its
articles of incorporation or bylaws approved by the affirmative vote of the
holders of a majority of the outstanding voting shares of the corporation (other
than those held by the interested shareholder) contain a provision expressly
electing not to be governed by these rules.
Under the DGCL, a corporation may not engage in any "business
combination" (as defined in the DGCL) with an "interested stockholder" for three
years after such stockholder becomes an interested stockholder. An interested
stockholder is any person who is the beneficial owner of 15% or more of the
outstanding voting stock of the corporation. A corporation may enter into a
business combination with an interested stockholder if (a) the Board of
Directors approves either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder before the date
on which the stockholder becomes an interested stockholder; (b) upon
consummation of the transaction resulting in the stockholder reaching the 15%
threshold, the stockholder owned 85% of the outstanding voting shares at the
time the transaction commenced, excluding those shares held by directors who are
also officers or employee stock plans in which the participants do not have the
right to determine confidentially whether shares subject to the plan will be
tendered in a tender or exchange offer; or (c) on or subsequent to becoming an
interested stockholder, the business combination is approved by the Board of
Directors and is authorized at a meeting by the affirmative vote of at least
two-thirds of the outstanding voting stock not owned by the interested
stockholder. These restrictions do not apply if the corporation's original
certificate of incorporation or an amendment to its certificate of incorporation
or bylaws approved by a majority of the shares entitled to vote thereon contains
a provision expressly electing not to be governed by these rules, or if the
corporation does not have a class of stock (a) listed on a national securities
exchange; (b) authorized for quotation on the Stock Market; or (iii) held
of record by more than 2,000 stockholders unless any of the foregoing results
from the actions of the interested stockholder.
Neither the Company's Certificate of Incorporation or the Surviving
Corporation's Articles of Incorporation contain provisions electing to be exempt
from these provisions. However, because the definition of "disinterested
director" under the FBCA affiliated transaction statute could be interpreted in
a manner that would result in a finding that none of the Surviving Corporation's
directors would be deemed disinterested directors under the statute, the
Surviving Corporation has, as permitted by the FBCA, specified that a
"disinterested director" for purposes of the statute shall be any member of the
Board of Directors of the Surviving Corporation on the date of the merger (other
than any member who is an "interested shareholder") and any member of the Board
of Directors of the Surviving Corporation who was recommended for election by,
or was elected to fill a vacancy and received the affirmative vote of, a
majority of the disinterested directors then on the Board.
-17-
The FBCA also contains a control share acquisition statute which
provides that a person who acquires shares in an issuing public corporation in
excess of certain specified thresholds will generally not have any voting rights
with respect to such shares unless such voting rights are approved by a majority
of the shares entitled to vote, excluding interested shares. The thresholds
specified in the FBCA are the acquisition of a number of shares representing:
(a) 20% or more, but less than 33% of all voting power of the corporation, (b)
33% or more but less than a majority of all voting power of the corporation or
(c) a majority or more of all voting power of the corporation. This statute does
not apply to acquisitions of shares of a corporation if, prior to the pertinent
acquisition of shares, the corporation's articles of incorporation or bylaws
provide that the corporation shall not be governed by the statute. This statute
also permits a corporation to adopt a provision in its articles of incorporation
or bylaws providing for the redemption by the corporation of such acquired
shares in certain circumstances. Unless otherwise provided in the corporation's
articles of incorporation or bylaws prior to the pertinent acquisition of
shares, in the event that such shares are accorded full voting rights by the
shareholders of the corporation and the acquiring shareholder acquires a
majority of the voting power of the corporation, all shareholders who did not
vote in favor of according voting rights to such acquired shares are entitled to
dissenters' rights.
Delaware does not have any comparable statutory provision to Florida's
control share acquisition statute.
OTHER CONSTITUENCIES. The FBCA provides that directors of a Florida
corporation, in discharging their fiduciary duties to the corporation, may
consider the social, economic, legal or other effects of corporate action on the
employees, suppliers and customers of the corporation or its subsidiaries and
the communities in which the corporation and its subsidiaries operate, in
addition to the effect on shareholders. Delaware does not have a comparable
statutory provision
REMOVAL OF DIRECTORS. The FBCA provides that the shareholders may
remove one or more directors with or without cause unless the Articles of
Incorporation provide otherwise. The Surviving Corporation's Articles of
Incorporation do not contain such a provision. The FBCA further provides that a
director generally may be removed only if the number of votes cast to remove the
director exceed the number of votes cast not to remove the director.
The DGCL provides that in the case of a corporation, such as the
Company, with a classified board of directors, and unless the corporation's
certificate of incorporation otherwise provides, which the Company's does not,
stockholders may remove any director or the entire board of directors only for
cause. Such a removal may only be effected by a majority vote of the shares
entitled to vote for the election of directors.
DISSENTERS' RIGHTS. Under the FBCA, dissenting shareholders who follow
prescribed statutory procedures are, in certain circumstances, entitled to
appraisal rights in the case of (a) a merger or consolidation; (b) a sale or
exchange of all of substantially all the assets of a corporation; (c) amendments
to the articles of incorporation that adversely affect the rights or preferences
of shareholders; (d) consummation of a plan of share exchange if the shareholder
is entitled to vote on the plan; and (e) the approval of a control share
acquisition pursuant to Florida law. Such rights are not provided when (a) such
shareholders are shareholders of a corporation surviving a merger or
consolidation where no vote of the shareholders is required for the merger or
consolidation; or (b) shares of the corporation are listed on a national
securities exchange, designated as a national market security by the Nasdaq
Stock Market or held of record by more than 2,000 shareholders.
Under the DGCL, dissenters' rights are afforded to stockholders who
follow prescribed statutory procedures in connection with a merger or
consolidation (subject to restrictions similar to those provided by the FBCA).
Under the DGCL, there are no appraisal rights in connection with sales of
substantially all the assets of a corporation, reclassifications of stock or
other amendments to the certificate of incorporation which adversely affect a
class of stock, unless specifically provided in the certificate of
incorporation. The Company's Certificate of Incorporation does not provide for
dissenters' rights in these circumstances. Similar to the FBCA , dissenters'
rights do not apply
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to a stockholder of a Delaware corporation if his shares were (1) listed on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Security
Dealers, Inc. or (2) held of record by more than 2,000 stockholders.
Notwithstanding the foregoing, however, under the DGCL a stockholder does have
dissenters' rights with respect to such shares if the stockholder is required by
the terms of the agreement of merger or consolidation to accept anything for his
shares other than (1) shares of stock of the corporation surviving or resulting
from the merger or consolidation, (2) shares of stock of any other corporation
which is so listed or designated or held of record by more than 2,000
stockholders, (3) cash in lieu of fractional shares, or (4) any combination of
the foregoing.
AMENDMENT TO ARTICLES OR CERTIFICATE. The FBCA and the DGCL generally
provide that an amendment to the articles of incorporation or certificate of
incorporation, as the case may be, must be approved by the Board of Directors
and by the corporation's stockholders. Unless the FBCA, a Florida corporation's
articles of incorporation or the Board of Directors requires a greater vote, an
amendment to a Florida corporation's articles of incorporation generally
requires that the votes cast in favor of the amendment exceed the votes cast
against the amendment. The DGCL provides that a vote to amend the corporation's
certificate of incorporation requires the approval of a majority of the
outstanding stock entitled to vote. The Company's Certificate of Incorporation
and the Surviving Corporation's Articles of Incorporation each provide that the
affirmative vote of the holders of at least 80% of the shares of such company's
stock entitled to vote for the election of directors shall be required to amend
the provision of the Company's Certificate of Incorporation or the Surviving
Corporation's Articles of Incorporation (as applicable) relating to the
super-majority voting requirements relating to mergers, consolidation or other
corporate transactions discussed above and the provisions establishing the
foregoing super-majority voting requirement for the amendment of the Company's
Certificate of Incorporation or the Surviving Corporation's Articles of
Incorporation.
AMENDMENTS TO BYLAWS. The FBCA provides that the shareholders, as well
as the directors, may amend the bylaws, unless such power is reserved to the
shareholders by the articles of incorporation or by specific action of the
shareholders. The DGCL provides that the stockholders and, if provided in the
certificate of incorporation, the Board of Directors, are entitled to amend the
Bylaws. The Surviving Corporation's Articles of Incorporation will permit the
Board of Directors to amend the Bylaws, as is currently permitted under the
Company's Certificate of Incorporation. However, the Company's Certificate of
Incorporation and the Surviving Corporation's Articles of Incorporation each
provide that the affirmative vote of the holders of at least 80% of the shares
of such company's stock entitled to vote for the election of directors shall be
required to amend the provisions of such company's bylaws relating to the
number, quorum, term, vacancies and removal of members of the Board of
Directors.
LIABILITY OF DIRECTORS. Under the FBCA, a director is not personally
liable for monetary damages to the corporation or any other person for any
statement, vote, decision or failure to act, regarding corporate management or
policy, by a director unless the director breached or failed to perform his
duties as a director and such breach or failure constitutes: (a) a violation of
criminal law unless the director had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful; (b) a
transaction from which the director derived an improper personal benefit; (c) a
circumstance resulting in an unlawful distribution; (d) in a proceeding by or in
the right of the corporation to procure a judgment in its favor or by or in the
right of a shareholder, conscious disregard for the best interests of the
corporation or willful misconduct; or (e) in a proceeding by or in the right of
one other than the corporation or a shareholder, recklessness or an act or
omission which was committed in bad faith or with malicious purpose or in a
manner exhibiting wanton and willful disregard of human rights, safety, or
property.
The DGCL permits a Delaware corporation to include in its certificate
of incorporation a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for
breaches of fiduciary duty, including conduct which could be characterized as
negligence or gross negligence. The DGCL expressly provides, however, that the
liability for (a) breaches of the director's duty of
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loyalty; (b) acts or omissions not in good faith or involving intentional
misconduct or knowing violation of the law; (c) an unlawful distribution; or (d)
the receipt of improper personal benefits cannot be eliminated or limited in
this manner. The DGCL further provides that no such provision will eliminate or
limit the liability of a director for any act or omission occurring prior to the
date when such provision becomes effective. The Company's Certificate of
Incorporation includes a provision eliminating director liability for monetary
damages for breaches of fiduciary duty to the extent permitted by the DGCL.
INDEMNIFICATION
Under both the FBCA and the DGCL, a corporation may generally indemnify
its officers, directors, employees and agents against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement of any
proceedings (other than derivative actions), if they acted in good faith and in
a manner they reasonably believed to be in or not opposed to the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in derivative actions, except that indemnification may be made only
for (1) expenses (including attorneys' fees) and certain amounts paid in
settlement and (2) in the event the person seeking indemnification has been
adjudicated liable, amounts deemed proper, fair and reasonable by the
appropriate court upon application thereto. The FBCA and the DGCL each provide
that to the extent that such persons have been successful in defense of any
proceeding, they must be indemnified by the corporation against expenses
actually and reasonably incurred in connection therewith. The FBCA also provides
that, unless a corporation's articles of incorporation provide otherwise, if a
corporation does not so indemnify such persons, they may seek, and a court may
order, indemnification under certain circumstances even if the board of
directors or shareholders of the corporation have determined that the persons
are not entitled to indemnification.
The Bylaws of the Company and the Bylaws of the Surviving Corporation
each provide that directors and officers and former directors and officers will
be indemnified to the fullest extent permitted by the DGCL or the FBCA, as the
case may be.
SHAREHOLDER INSPECTION OF BOOKS AND RECORDS
Under the FBCA a shareholder is entitled to inspect and copy the
articles of incorporation, bylaws, certain board and shareholder resolutions,
certain written communications to shareholders, a list of the names and business
addresses of the corporation's directors and officers, and the corporation's
most recent annual report during regular business hours if the shareholder gives
at least five business days' prior written notice to the corporation. In
addition, a shareholder of a Florida corporation is entitled to inspect and copy
other books and records of the corporation during regular business hours if the
shareholder gives at least five business days' prior written notice to the
corporation and (1) the shareholder's demand is made in good faith and for a
proper purpose, (2) the demand describes with particularity its purpose and the
records to be inspected or copied and (3) the requested records are directly
connected with such purpose. The FBCA also provides that a corporation may deny
any demand for inspection if the demand was made for an improper purpose or if
the demanding shareholder has, within two years preceding such demand, sold or
offered for sale any list of shareholders of the corporation or any other
corporation, has aided or abetted any person in procuring a list of shareholders
for such purpose or has improperly used any information secured through any
prior examination of the records of the corporation or any other corporation.
The provisions of the DGCL governing the inspection and copying of a
corporation's books and records are generally less restrictive than those of the
FBCA. Specifically, the DGCL permits any stockholder the right, during usual
business hours, to inspect and copy the corporation's stock ledger, stockholders
list and other books and records for any proper purpose upon written demand
under oath stating the purpose thereof.
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TREASURY STOCK
A Delaware corporation may reacquire its own issued and outstanding
capital stock, and such capital stock is deemed treasury stock which is issued
but not outstanding. A Florida corporation may also reacquire its own issued and
outstanding capital stock. Under the FBCA, however, all capital stock reacquired
by a Florida corporation is automatically returned to the status of authorized
but not issued or outstanding, and is not deemed treasury stock.
POSSIBLE DISADVANTAGES OF A CHANGE IN DOMICILE
Despite the belief of the Board of Directors that the proposed merger
and change in domicile is in the best interests of the Company and its
stockholders, stockholders should be aware that Florida corporation law is not
as well developed as Delaware corporation law. The State of Delaware has long
been the leader in adopting, construing and implementing comprehensive, flexible
corporation laws that are conducive to the operational needs of corporations
domiciled in that state. The corporation law of Delaware also is widely regarded
as the most extensive and well-defined body of corporate law in the United
States. Both the legislature and the courts of Delaware have demonstrated an
ability and a willingness to act quickly and effectively to meet changing
business needs. The Delaware judiciary has acquired considerable expertise in
dealing with complex corporate issues and has repeatedly shown its willingness
to accelerate the resolution of such complex corporate legal issues within the
very limited time available to meet the needs of parties engaged in corporate
litigation. It is anticipated that the DGCL will continue to be interpreted and
construed in significant court decisions, thereby lending predictability to
corporate legal affairs.
Florida corporate law, by contrast, is not as well developed and many
of the provisions of the FBCA have not yet received as extensive scrutiny and
interpretation as the DGCL. However, Florida courts often rely on Delaware
decisions to establish their own corporate doctrines, although Delaware
decisions are not binding on Florida courts.
TAX CONSEQUENCES OF THE MERGER
The merger and resulting reincorporation of the Company from Delaware
to Florida will constitute a tax-free reorganization within the meaning of
Section 368(h) of the Internal Revenue Code of 1986, as amended. Accordingly,
for federal income tax purposes, no gain or loss will be recognized by
stockholders upon the conversion of the Company's Common Stock into the
Surviving Corporation's Common Stock. Each stockholder whose shares are
converted from the Company's Common Stock into the Surviving Corporation's
Common Stock will have the same basis in his or her Common Stock of the
Surviving Corporation as he or she had in his or her Common Stock of the Company
immediately prior to the effective date of the merger and his or her holding
period of the Surviving Corporation's Common Stock will include the period
during which he or she held the corresponding shares of the Company's Common
Stock, provided such corresponding shares of the Company's Common Stock were
held as a capital asset on the effective date of the merger.
No gain or loss will be recognized by the Company or by the Surviving
Corporation as a result of the merger and reincorporation, and the Surviving
Corporation generally will succeed, without adjustment, to the tax attributes of
the Company. Because the Company is based in Florida, it already is qualified to
transact business in Florida and pays Florida corporate income tax. Changing the
state of incorporation of the Company will not affect the amount of corporate
income and other taxes payable, other than eliminating liability for the
Delaware franchise tax.
NO INFORMATION IS PROVIDED IN THIS PROXY STATEMENT REGARDING THE TAX
CONSEQUENCES, IF ANY, UNDER APPLICABLE STATE, LOCAL OR FOREIGN LAWS, AND EACH
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STOCKHOLDER IS ADVISED TO CONSULT HIS OR HER PERSONAL ATTORNEY OR TAX ADVISOR AS
TO THE FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF THE PROPOSED
REINCORPORATION IN VIEW OF THE STOCKHOLDER'S INDIVIDUAL CIRCUMSTANCES.
STOCKHOLDER APPRAISAL RIGHTS
Section 262 of the DGCL provides that any stockholder of a Delaware
corporation who satisfies the requirements of the section and files with the
corporation a written demand for appraisal of his or her shares prior to the
taking of a vote on a proposed merger and who does not vote in favor of the
proposed merger is entitled to an appraisal by the Delaware Court of Chancery of
the fair value of his or her shares of common stock. Section 262, however,
excepts from appraisal rights, shares of any class or series of stock that were
listed on the New York Stock Exchange at the record date fixed to determine the
stockholders entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger. Because the Company's Common
Stock is so listed, stockholders will not be entitled to appraisal rights under
Section 262.
VOTE REQUIRED
The Plan and Agreement of Merger must be approved by the affirmative
vote of the holders of a majority of the outstanding shares of Common Stock
entitled to vote at the Annual Meeting.
EFFECTIVE DATE
The merger will become effective as soon as practicable after
stockholder approval is obtained and all other conditions to the merger are
satisfied. The merger may be abandoned at any time prior to its effectiveness if
the Board of Directors determines, in its discretion, that consummation of the
merger is no longer advisable.
SELECTION OF AUDITORS
Coopers & Lybrand L.L.P. was appointed by the Board of Directors of the
Company to audit the Company's financial statements for 1998. Coopers & Lybrand
has acted as independent public accounts for the Company since 1995.
Representatives of Coopers & Lybrand L.L.P. will be present at the Annual
Meeting, will have an opportunity to make a statement if they so desire and will
be available to respond to appropriate questions from stockholders.
MISCELLANEOUS
A list of the Company's stockholders as of March 20, 1998, the record
date for the Annual Meeting, will be available for inspection at the offices of
the Company, 3155 N.W. 77th Street, Miami, Florida, during normal business hours
during the ten-day period prior to the Annual Meeting.
Solicitation of proxies will be made initially by mail. The Company's
directors, officers and employees also may solicit proxies in person or by
telephone without additional compensation. In addition, proxies may be solicited
by certain banking institutions, brokerage firms, custodians, trustees, nominees
and fiduciaries who will mail material to or otherwise communicate with the
beneficial owners of shares of the Company's Common Stock. In addition,
Corporate Investor Communications, Inc. has been engaged by the Company to act
as proxy solicitors and will be paid $4,000 for their services. The cost of this
solicitation will be borne by the Company.
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Any proposal of an eligible stockholder intended to be presented at the
next annual meeting of stockholders of the Company must be received by the
Company by January 14, 1999 to be eligible for inclusion in the Company's proxy
statement and form of proxy relating to that annual meeting.
The Board of Directors does not intend to present and knows of no
others who intend to present at the Annual Meeting any matter or business other
than that set forth in the accompanying Notice of Annual Meeting of
Stockholders. If other matters are properly brought before the Annual Meeting,
it is the intention of the persons named in the accompanying form of proxy to
vote any proxies on such matters in accordance with their judgment.
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 is being mailed with this Proxy Statement to stockholders of
record on March 20, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ NANCY J. DAMON
-------------------------------------
Nancy J. Damon
Corporate Secretary
Miami, Florida
April ___, 1998
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APPENDIX A
PLAN AND AGREEMENT OF MERGER
THIS PLAN AND AGREEMENT OF MERGER, dated March ___, 1998 (the
"Agreement"), is entered into between MASTEC REINCORPORATION, INC., a Florida
corporation ("FLORIDA"), and MASTEC, INC., a Delaware corporation ("MasTec").
RECITALS
A. MasTec has an aggregate authorized capital of 105 million shares,
consisting of 100 million shares of Common Stock, par value $0.10 per share (the
"MasTec Common Stock"), and 5 million shares of preferred stock, par value $1.00
per share (the "MasTec Preferred Stock"). As of March ___, 1998, there were
______ shares of MasTec Common Stock and no shares of MasTec Preferred Stock
issued and outstanding.
B. FLORIDA has an aggregate authorized capital stock of 105 million
shares, consisting of 100 million shares of Common Stock, par value $0.10 per
share (the "FLORIDA Common Stock"), and 5 million shares of preferred stock, par
value $1.00 per share (the "FLORIDA Preferred Stock"). As of the date hereof,
there were 100 shares of FLORIDA Common Stock and no shares of FLORIDA Preferred
Stock issued and outstanding.
C. The respective Boards of Directors of FLORIDA and MasTec believe
that the best interests of FLORIDA and MasTec and their respective stockholders
will be served by the merger of MasTec with FLORIDA under and pursuant to the
provisions of this Agreement and the Delaware General Corporation Law and the
Florida General Corporation Act.
AGREEMENT
In consideration of the Recitals and of the mutual agreements contained
in this Agreement, the parties hereto agree as set forth below.
1. MERGER. MasTec shall be merged with and into FLORIDA (the
"Merger").
2. EFFECTIVE DATE. The Merger shall become effective immediately
upon the later of the filing of this Agreement or a certificate of merger with
the Secretary of State of Delaware in accordance with the Delaware General
Corporation Law and the filing of articles of merger with the Secretary of State
of Florida in accordance with the Florida General Corporation Act. The time of
such effectiveness is hereinafter called the "Effective Date."
3. SURVIVING CORPORATION. FLORIDA shall be the surviving
corporation of the Merger and shall continue to be governed by the laws of the
State of Florida. On the Effective Date, the separate corporate existence of
MasTec shall cease.
4. NAME OF SURVIVING CORPORATION. On the Effective Date, the
Articles of Incorporation of FLORIDA shall be amended to change the name of
FLORIDA to "MasTec, Inc."
5. CERTIFICATE OF INCORPORATION. Except as provided in Section 4,
the Articles of Incorporation of FLORIDA as it exists on the Effective Date
shall be the Articles of Incorporation of FLORIDA following the Effective Date,
unless and until the same shall thereafter be amended or repealed in accordance
with the laws of the State of Florida.
6. BYLAWS. The Bylaws of FLORIDA as they exist on the Effective
Date shall be the Bylaws of FLORIDA following the Effective Date, unless and
until the same shall be amended or repealed in accordance with the provisions
thereof and the laws of the State of Florida.
7. BOARD OF DIRECTORS AND OFFICERS. The members of the Board of
Directors and the officers of MasTec immediately prior to the Effective Date
shall be the members of the Board of Directors and the officers, respectively,
of FLORIDA following the Effective Date, and such persons shall serve in such
offices for the terms provided by law or in the Bylaws, or until their
respective successors are elected and qualified.
8. RETIREMENT OF OUTSTANDING FLORIDA STOCK. Forthwith upon the
Effective Date, each of the 100 shares of the FLORIDA Common Stock presently
issued and outstanding shall be retired, and no shares of FLORIDA Common stock
or other securities of FLORIDA shall be issued in respect thereof.
9. CONVERSION OF OUTSTANDING MASTEC STOCK. Forthwith upon the
Effective Date, each issued and outstanding share of MasTec Common Stock and all
rights in respect thereof shall be converted into one fully-paid and
nonassessable share of FLORIDA Common Stock, and each certificate representing
shares of MasTec Common Stock shall for all purposes be deemed to evidence the
ownership of the same number of shares of FLORIDA Common Stock as are set forth
in such certificate. After the Effective Date, each holder of an outstanding
certificate representing shares of MasTec Common Stock may, at such
shareholder's option, surrender the same to FLORIDA's registrar and transfer
agent for cancellation, and each such holder shall be entitled to receive in
exchange therefor a certificate(s) evidencing the ownership of the same number
of shares of FLORIDA Common Stock as are represented by the MasTec
certificate(s) surrendered to FLORIDA's registrar and transfer agent.
10. STOCK OPTIONS, WARRANTS AND CONVERTIBLE DEBT. Forthwith upon
the Effective Date, each stock option, stock warrant, convertible debt
instrument and other right to subscribe for or purchase shares of MasTec Common
Stock shall be converted into a stock option, stock warrant, convertible debt
instrument or other right to subscribe for or purchase the same number of shares
of FLORIDA Common Stock, and each certificate, agreement, note or other document
representing such stock option, stock warrant, convertible debt instrument or
other right to subscribe for or purchase shares of MasTec Common Stock shall for
all purposes be deemed to evidence the ownership of a stock option, stock
warrant, convertible debt instrument or other right to subscribe for or purchase
shares of FLORIDA Common Stock.
11. RIGHTS AND LIABILITIES OF FLORIDA. At and after the Effective
Date, and all in the manner of and as more fully set forth in Section 607.1106
of the Florida General Corporation Act and Section 259 of the Delaware General
Corporation Law, the title to all real estate and other property, or any
interest
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therein, owned by each of MasTec and FLORIDA shall be vested in FLORIDA without
reversion or impairment; FLORIDA shall succeed to and possess, without further
act or deed, all estates, rights, privileges, powers, and franchises, both
public and private, and all of the property, real, personal and mixed, of each
of MasTec and FLORIDA without reversion or impairment; FLORIDA shall thenceforth
be responsible and liable for all the liabilities and obligations of each of
MasTec and FLORIDA; any claim existing or action or proceeding pending by or
against MasTec or FLORIDA may be continued as if the Merger did not occur or
FLORIDA may be substituted for MasTec in the proceeding; neither the rights of
creditors nor any liens upon the property of MasTec or FLORIDA shall be impaired
by the Merger; and FLORIDA shall indemnify and hold harmless the officers and
directors of each of the parties hereto against all such debts, liabilities and
duties and against all claims and demands arising out of the Merger.
12. TERMINATION. This Agreement may be terminated and abandoned by
action of the respective Boards of Directors of MasTec and FLORIDA at any time
prior to the Effective Date, whether before or after approval by the
stockholders of either or both of the parties hereto.
13. AMENDMENT. The Boards of Directors of the parties hereto may
amend this Agreement at any time prior to the Effective Date; provided that an
amendment made subsequent to the approval of this Agreement by the stockholders
of either of the parties hereto shall not: (a) change the amount or kind of
shares, securities, cash, property or rights to be received in exchange for or
on conversion of all or any of the shares of the parties hereto, (b) change any
term of the Articles of Incorporation of FLORIDA, or (c) change any other terms
or conditions of this Agreement if such change would adversely affect the
holders of any capital stock of either party hereto.
14. REGISTERED OFFICE. The registered office of FLORIDA in the
State of Florida is located at 660 E. Jefferson Street, Tallahassee, Florida
32301, and CT Corporation System is the registered agent of FLORIDA at such
address.
15. INSPECTION OF AGREEMENT. Executed copies of this Agreement
will be on file at the principal place of business of FLORIDA at 3155 N.W. 77th
Avenue, Suite 300, Miami, Florida 33122-1205. A copy of this Agreement shall be
furnished by FLORIDA, on request and without cost, to any stockholder of either
MasTec or FLORIDA.
16. GOVERNING LAW. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the laws
of the State of Florida.
17. SERVICE OF PROCESS. On and after the Effective Date, FLORIDA
agrees that it may be served with process in Delaware in any proceeding for
enforcement of any obligation of MasTec or FLORIDA arising from the Merger.
18. DESIGNATION OF DELAWARE SECRETARY OF STATE AS AGENT FOR
SERVICE OF PROCESS. On and after the Effective Date, FLORIDA irrevocably
appoints the Secretary of State of Delaware as its agent to accept service of
process in any suit or other proceeding to enforce the rights of any
stockholders of MasTec or FLORIDA arising from the Merger. The Delaware
Secretary of State is requested to mail a copy of any such process to FLORIDA at
3155 N.W. 77th Avenue, Suite 300, Miami, Florida 33122-1205, Attention: Jose M.
Sariego.
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IN WITNESS WHEREOF, each of the parties hereto, pursuant to authority
duly granted by their respective Board of Directors, has caused this Plan and
Agreement of Merger to be executed, respectively, by its President and attested
by its Secretary.
ATTEST: MASTEC REINCORPORATION, INC.,
a Florida corporation
By:___________________________
Secretary ________________
ATTEST: MASTEC, INC.,
a Delaware corporation
By:___________________________
Secretary ________________
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APPENDIX B
ARTICLES OF INCORPORATION
OF
MASTEC REINCORPORATION, INC.
ARTICLE I - NAME AND ADDRESS
The name of this corporation is MasTec Reincorporation, Inc. (the
"Corporation"). The address of the principal office and the mailing address of
this Corporation is 3155 N.W. 77th Avenue, Miami, Florida 33122-1205.
ARTICLE II - PURPOSE
This Corporation is organized for the purpose of transacting any and
all lawful business for corporations organized under the Florida Business
Corporation Act.
ARTICLE III - CAPITAL STOCK
The aggregate number of shares which this Corporation shall have
authority to issue is one hundred five million (105,000,000) shares, consisting
of (a) one hundred million (100,000,000) shares of Common Stock, par value $0.10
per share (the "Common Stock"); and (b) five million (5,000,000) shares of
preferred stock, par value $1.00 per share (the "Preferred Stock"). The Board of
Directors is authorized to issue shares of Preferred Stock in one or more series
by adoption of amendments to these Articles of Incorporation setting forth the
number of shares to be included in each such series and the designation,
preferences, limitations and relative rights of the shares of each such series.
ARTICLE IV - REGISTERED OFFICE AND AGENT
The street address of the registered office of this Corporation and the
name of the registered agent of this Corporation at such office are:
NAME ADDRESS
---- -------
CT Corporation System 660 E. Jefferson Street
Tallahassee, Florida 32301
ARTICLE V - SPECIAL MEETINGS OF SHAREHOLDERS
The shareholders of this Corporation may only call a special meeting of
shareholders if the holders of at least 25% all of the votes entitled to be cast
on any issue proposed to be considered at
the proposed special meeting sign, date and deliver to this Corporation's
secretary one or more written demands for the meeting describing the purpose or
purposes for which it is to be held.
ARTICLE VI - APPROVAL OF MERGERS, CONSOLIDATIONS
AND CERTAIN OTHER CORPORATE TRANSACTIONS
6.1 REQUISITE VOTE. Except as hereinafter set forth, the affirmative
vote or consent of the holders of 80% of all shares of capital stock of the
Corporation entitled to vote generally at an election of directors, considered
for the purposes of this Article VI as one class, shall be required (i) for the
adoption of any agreement for the merger or consolidation of the Corporation
with or into any other corporation, or (ii) to authorize any sale or lease of
all or any substantial part of the property and assets of the Corporation to, or
any sale or lease to the Corporation or any subsidiary thereof in exchange for
securities of the Corporation of any property and assets (except property and
assets having an aggregate fair market value of less than $1,000,000) of, any
other corporation, person or other entity, if, in either case, as of the record
date for the determination of shareholders entitled to notice thereof and to
vote thereon or consent thereto such other corporation, person or entity is the
beneficial owner, directly or indirectly, of more than 10% of the outstanding
shares of capital stock of the Corporation entitled to vote generally in
elections of directors considered for the purposes of this Article VI as one
class. Such affirmative vote or consent shall be in addition to the vote or
consent of the holders of the capital stock of the Corporation otherwise
required by law or any agreement between the Corporation and any national
securities exchange.
6.2 BENEFICIAL OWNERSHIP. For the purposes of this Article VI, (i) any
corporation, person or other entity shall be deemed to be the beneficial owner
of any shares of capital stock of the Corporation (x) which it has the right to
acquire pursuant to any agreement or arrangement, or upon exercise of conversion
rights, warrants or options, or otherwise or (y) which are beneficially owned,
directly or indirectly (including shares deemed owned through application of
clause (x) above), by any other corporation, person or entity with which it or
its "affiliate" or "associate" (as defined below) has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting or disposing of
capital stock of the Corporation, or which is its "affiliate" or "associate" as
those terms are defined in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934 as in effect on June 1, 1970, and (ii) the
outstanding shares of any class of stock of the Corporation shall include shares
deemed owned through application of clauses (x) and (y) above but shall not
include any other shares which may be issuable pursuant to any agreement, or
upon exercise of conversion rights, warrants or options, or otherwise.
6.3 DETERMINATION OF THE BOARD. The Board of Directors shall have the
power and duty to determine for the purposes of this Article VI, on the basis of
information known to the Corporation, whether (i) such other corporation, person
or other entity beneficially owns more than 10% of the outstanding shares of
capital stock of the Corporation entitled to vote generally at an election of
directors, (ii) a corporation, person or entity is an "affiliate" or "associate"
(as defined above) of another, (iii) the property and assets being acquired by
the Corporation, or any subsidiary thereof, have an aggregate fair market value
of less than $1,000,000 and (iv) the memorandum of
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understanding referred to below is substantially consistent with the transaction
covered thereby. Any such determination shall be conclusive and binding for the
purposes of this Article VI.
6.4 APPLICATION OF SECTION. The provisions of this Article VI shall not
be applicable to (i) any merger or consolidation of the Corporation with or into
any other corporation, or any sale or lease of all or any substantial part of
the property and assets of the Corporation to, or any sale or lease to the
Corporation or any subsidiary thereof in exchange for securities of the
Corporation of any property and assets of, any corporation if the Board of
Directors of the Corporation shall by resolution have approved a memorandum of
understanding with such other corporation with respect to and substantially
consistent with such transaction prior to the time that such other corporation
shall have become a holder of more than 10% of the outstanding shares of stock
of the Corporation entitled to vote in elections of directors or (ii) any merger
or consolidation of the Corporation with, or any sale or lease to the
Corporation or any subsidiary thereof of any of the property and assets of any
corporation of which a majority of the outstanding shares of all classes of
capital stock entitled to vote generally in elections of directors is owned of
record or beneficially by the Corporation and/or any one or more of its
subsidiaries.
ARTICLE VII - INDEMNIFICATION
This Corporation shall indemnify any director, or any former director
of this Corporation, to the fullest extent permitted by law.
ARTICLE VIII - AFFILIATED TRANSACTIONS
For purposes of Section 607.0901 of the Florida Business Corporation
Act pursuant to Section 607.0901(1)(h) thereof, the term "disinterested
director" shall mean any member of the Board of Directors of the Corporation who
was a member of the Board of Directors of MasTec, Inc., a Delaware corporation,
immediately prior to the date these Articles of Incorporation are first filed
with the Department of State of the State of Florida and any member of the Board
of Directors of this Corporation who was recommended for election by, or was
elected to fill a vacancy and received the affirmative vote of, a majority of
the disinterested directors then on the Board.
ARTICLE IX - BYLAWS
The Bylaws of the Corporation may be altered, amended or repealed, and
new Bylaws adopted, by the affirmative vote of at least a majority of the
members of the Board of Directors then in office or by the affirmative vote of
the holders of at least a majority of the voting power of all shares of capital
stock of the Corporation then entitled to vote generally in the election of
directors, voting as a single class; provided, however, that any proposal to
amend, alter, change or repeal the provisions of Section 1 of Article II of the
Bylaws of the Corporation shall require the affirmative vote of the holders of
at least 80% of the voting power of all the shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class.
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ARTICLE X - AMENDMENT OF ARTICLES OF INCORPORATION
The Corporation hereby reserves the right from time to time to amend,
alter, change or repeal any provision contained in these Articles of
Incorporation in any manner permitted by law and all rights and powers conferred
upon shareholders, directors and officers herein are granted subject to this
reservation. In addition to any vote otherwise required by law, any proposal to
amend, alter, change or repeal the provisions of Article VI and this Article X
shall require the affirmative vote of the holders of at least 80% of the voting
power of all the shares of capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
ARTICLE XI - INCORPORATOR
The name and address of the person filing these Articles of
Incorporation are Steven D. Rubin, 150 West Flagler Street, Suite 2200, Miami,
Florida 33130.
IN WITNESS WHEREOF, the undersigned Incorporator has executed these
Articles of Incorporation on March ____, 1998.
_____________________________
Steven D. Rubin, Incorporator
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ACCEPTANCE OF APPOINTMENT
OF
REGISTERED AGENT
I hereby accept the appointment as registered agent contained in the
foregoing Articles of Incorporation and state that I am familiar with and accept
the obligations of Section 607.0501 of the Florida Statutes.
By:____________________________________
Its Agent:_____________________________
As Registered Agent:___________________
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PROXY
MASTEC, INC.
ANNUAL MEETING OF STOCKHOLDERS - MAY 14, 1998
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of MasTec, Inc. (the "Company") hereby
appoints Jorge Mas and Edwin D. Johnson, and each of them, the undersigned's
proxies, with full power of substitution, to vote all shares of Common Stock of
the Company which the undersigned would be entitled to vote if personally
present at the Annual Meeting of Stockholders to be held on Thursday, May 14,
1998 at 9:30 A.M. local time, at the offices of the Company, 3155 N.W. 77th
Avenue, Miami, Florida and at any adjournments or postponements thereof, to the
same extent and with the same power as if the undersigned was personally present
at said meeting or such adjournments or postponements thereof and, without
limiting the generality of the power hereby conferred, the proxy nominees named
above and each of them are specifically directed to vote as indicated below.
WHERE A CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL
BE VOTED AS SPECIFIED. IF NO CHOICE IS INDICATED, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR THE ELECTION OF THE TWO NOMINEES LISTED IN ITEM NO. 1
AND FOR THE ADOPTION OF THE PROPOSAL FOR THE REINCORPORATION OF THE COMPANY FROM
DELAWARE TO FLORIDA AS SET FORTH IN ITEM NO. 2.
If there are amendments or variations to the matters proposed at the
meeting or at any adjournments or postponements thereof, or if any other
business properly comes before the meeting, this proxy confers discretionary
authority on the proxy nominees named herein and each of them to vote on such
amendments, variations or other business.
(Continued, and to be signed and dated on the other side.)
1. Election of two Class III Directors. Arthur B. Laffer and Jose Sorzano
FOR each nominee listed WITHHOLD AUTHORITY
(except as marked to to vote for all
the contrary) nominees listed
_________________________________
[ ] [ ] (Instruction: To withhold
authority to vote for either
nominee, write that nominee's
name in the
space provided above.)
2. Proposal for the reincorporation
of the Company from Delaware to
Florida
FOR AGAINST ABSTAIN
[ ] [ ] [ ] The undersigned acknowledges
receipt of the accompanying
Notice of Annual Meeting of
Stockholders and Proxy Statement
for the May 14, 1998 meeting.
Dated: ____________________, 1995
_________________________________
Signature of Stockholder(s)
_________________________________
Print Name(s) Here
(Please sign exactly as name or
names appear hereon. Full title
of one signing in representative
capacity should be clearly
designated after signature. Names
of all joint holders should be
written even if signed by only
one.)
PLEASE COMPLETE, DATE, SIGN AND MAIL
THIS PROXY IN THE ENVELOPE PROVIDED
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