Notice of Annual Meeting of Shareholders - May 16, 1995
To the Shareholders:
Notice is hereby given that the Annual Meeting of
Shareholders of MasTec, Inc. (the "Company" or "MasTec"), a
Delaware corporation, will be held on Tuesday, May 16, 1995, at
9:30 A.M., local time, at the Biltmore Hotel, 1200 Anastasia
Avenue, Coral Gables, Florida, for the following purposes:
To elect two directors for terms ending in 1998; and
To transact such other business as may properly be
brought before the meeting and all adjournments thereof.
Only shareholders of record at the close of business on
March 20, 1995, the record date and time fixed by the Board of
Directors (the "Record Date"), are entitled to notice of and to
vote at the meeting or any adjournments thereof. Shareholders,
including those whose shares are held by a brokerage firm or in
"street" name, will be asked to verify their shareholder status
as of the Record Date upon entrance to the meeting. Accordingly,
shareholders (or their legal representatives) attending the meeting
should bring some form of identification to the meeting, such as a
stock certificate, proxy or power of attorney, evidencing such
shareholder status as of the Record Date and, if applicable, the
legal representative's right to represent the shareholder at the
meeting.
All shareholders are cordially invited to attend the 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. Shareholders attending the meeting
may vote in person even if they have previously returned a proxy card.
By order of the Board of Directors,
Nancy J. Damon
Corporate Secretary
Miami, Florida
April 21, 1995
MasTec, Inc.
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of MasTec, Inc.
(the "Company"), a Delaware corporation, for use at the Annual
Meeting of Shareholders of the Company to be held at the Biltmore
Hotel, 1200 Anastasia Avenue, Coral Gables, Florida, on Tuesday,
May 16, 1995, at 9:30 A.M., local time, and at all adjournments
thereof (the "Meeting").
Shareholders who execute a proxy may revoke it at any time
before it is voted by notice in writing to the Secretary of the
Company, by revocation in person at the Meeting or by presenting
a later-dated proxy. Unless so revoked, the shares represented by
proxies will be voted at the Meeting in accordance with the
directions given therein. Shareholders may vote at the Meeting by
casting ballots (in person or by proxy) which are tabulated by a
person who is appointed by the Board of Directors before the
Meeting to serve as inspector of election at the Meeting and who
has executed and verified an oath of office. Abstentions and
broker "non-votes" are included in the determination of the
number of shares present at the Meeting for quorum purposes but
are not counted in the tabulations of the votes cast on proposals
presented to shareholders.
The Company will bear the cost of preparing, assembling and
mailing the enclosed form of proxy, this Proxy Statement and
other material which may be sent to shareholders in connection
with this solicitation. Officers and regular employees of the
Company may solicit proxies by mail, telephone, telegraph and
personal interview, for which no additional compensation will be
paid. In addition, Corporate Investor Communications, Inc., has
been engaged by the Company to act as proxy solicitors and will
receive fees of $2,500, plus expenses. The Company may reimburse
persons holding shares in their names or in the names of nominees
for their reasonable expenses in sending proxies and proxy
material to their principals.
The principal executive offices of the Company are located
at 8600 N.W. 36th Street, Miami, Florida 33166. The approximate
date on which this Proxy Statement and the enclosed form of proxy
will first be sent to shareholders is April 21, 1995.
Only holders of record of the common stock, par value $0.10
per share (the "Common Stock"), of the Company at the close of
business on March 20, 1995, are entitled to vote at the Meeting.
As of such date, there were 16,041,294 outstanding shares of
Common Stock entitled to vote. Each holder of outstanding Common
Stock entitled to vote at the Meeting is entitled to one vote per
share.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership as
of March 22, 1995 of Common Stock by (i) each person known to the
Company to beneficially own more than 5% thereof, (ii) each director
of the Company and each Named Executive Officer (as defined on page 7),
and (iii) all executive officers and directors of the Company
as a group. Unless otherwise indicated, each such shareholder has
sole voting and investment power with respect to the shares
beneficially owned by such shareholder.
Percent of
Amount and Nature of Common Stock
Name Beneficial Ownership Outstanding
Eliot C. Abbott 5,000 shs. (1) *
Samuel C. Hathorn, Jr. 5,200 shs. (4) *
Arthur B. Laffer 20,000 shs. (1) *
Jorge L. Mas 5,380,000 shs. (6) 33.5%
Jorge Mas 3,986,005 shs. (6) 24.8%
William A. Morse - *
Ismael Perera 6,837 shs. (1) (5) *
Jose S. Sorzano - *
Carlos A. Valdes 4,005 shs. (1) *
Nick A. Caporella (2) 190,050 shs. 1.2%
All executive officers and
directors as a group
(eleven persons) (3) 9,498,307 shs. 59.2%
(1) The amounts shown include shares covered by options exercisable
within 60 days of March 22, 1995 as follows: 5,000 shares Eliot Abbott
(1) 20,000 shares Arthur Laffer; and 4,000 shares each Ismael Perera
and Carlos A. Valdes.
(2) Mr. Caporella resigned as Chairman of the Board of Directors,
Chief Executive Officer and President of the Company on March 11, 1994.
(3) Excludes amounts owned by Nick A. Caporella as he was not an
executive officer of the Company at December 31, 1994.
(4) Includes 200 shares held by the children of Mr. Hathorn, as to
which Mr. Hathorn disclaims beneficial ownership.
(5) Includes 332 shares held by the children of Mr. Perera, as to
which Mr. Perera disclaims beneficial ownership.
(6) Includes 100,000 shares owned by The Mas Family Foundation,
Inc., a Florida not-for-profit corporation. The voting and
investment power with (1) respect to those shares is shared by
Messrs. Jorge L. Mas, Jorge Mas, Juan Carlos Mas and Jose Ramon
Mas.
*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
fiscal year ended December 31, 1994, all filing requirements
under Section 16(a) of the Securities Exchange Act of 1934
(the Exchange Act) applicable to its officers, directors and
greater than ten percent beneficial owners were complied with on
a timely basis, except for a late filing in November 1994 by
Arthur B. Laffer with respect to 100,000 stock options granted
outside the Company's Non-Employee Director's Stock Option Plan
and a late filing in January 1995 by Jose S. Sorzano with respect
to his appointment as director of the Company.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of seven
directors elected in three classes (the " Classes"), with two
Class I, three 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 term of the current Class III Directors expires at
the Meeting.
Arthur B. Laffer and Jose S. Sorzano, the current Class III
Directors, have been nominated by the Board of Directors to be
reelected as the Class III Directors at the Meeting. The Company
has no reason to believe that Mr. Laffer and Mr. Sorzano will
refuse or be unable to accept election; however, in the event
that any nominee should not be available to serve, each proxy
that does not direct otherwise will be voted for such substitute
nominee as may be designated by the Board of Directors.
The election of directors requires the affirmative vote of a
plurality of the shares of Common Stock present in person or by
proxy at the Meeting and entitled to vote on the election of
directors. Unless otherwise indicated, the accompanying form of
proxy will be voted FOR the nominees listed below.
Information as to Nominees and Other Directors
Class III (Term, if elected, will expire at the Annual
Meeting of Shareholders in 1998)
Name, Age and Year
First Elected a Director Principal Occupation
Arthur B. Laffer, 54 Chairman, A.B. Laffer, V.A. Canto & Associates,
1994 an economic research and financial consulting
firm (f/k/a A.B. Laffer Associates), since 1979;
Chief Executive Officer, Laffer Advisors Inc.,
an investment advisor and broker-dealer, since
1981; Chief Executive Officer, Calport Asset
Management, a money management firm, since June
1992.
Jose S. Sorzano, 54 Director, Chairman and Founder of The Austin
1994 Group, Inc., since 1989; 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; Ambassador and
U.S. Deputy to the United Nations, from 1983
to 1985; Economic and Social Council, from 1981
to 1983; Peace Corps, Country Director-Colombia,
from 1976 to 1979.
Class I (Terms expire at the Annual Meeting of Shareholders in 1996)
Jorge Mas, 32 Director, President and Chief Executive Officer
1994 of MasTec, Inc., since March 11, 1994. During the
past five years has served for part or all of
such period as President and Chief Executive
Officer of Church & Tower, Inc. (and its
predecessor, Communication Contractors, Inc.),
and of Neff Rental, Inc., Neff Machinery, Inc.,
Atlantic Real Estate Holding Corp. and U.S.
Development Corp., each a company controlled by
Mr. Mas.
William A. Morse, 67 Attorney-at-law, Danville, California;
1974 President, Behring-Hoffman Educational Institute
Class II (Terms expire at the Annual Meeting of Shareholders in 1997)
Jorge L. Mas, 55 President and Chief Executive Officer of
1994 Church & Tower of Florida, Inc., since 1968.
Eliot C. Abbott, 45 Attorney-at-law, shareholder, Carlos & Abbott,
1994 P.A., since 1976.
Samuel C. Hathorn, Jr., 51, Director and President of Trendmaker Homes and
1981 President of Centennial Homes, Inc.,
subsidiaries of Weyerhaeuser Co.
Board Committees and Meetings
There are five standing committees of the Board of
Directors: the Audit Committee, the Compensation and Stock Option
Committee, the Nominating Committee, the Executive Committee and
the Special Transaction Committee. The Audit Committee is
composed of Mr. Laffer, who serves as Chairman, and Messrs.
Hathorn and Morse. The Audit Committee is charged with
recommending to the Board of Directors the engagement or
discharge of independent auditors, reviewing the plan and results
of the audit engagement with the officers of the Company, and
reviewing the scope and nature of the Company's internal
accounting controls with the officers of the Company. During the
year ended December 31, 1994, the Audit committee met on three
occasions.
The Compensation and Stock Option Committee (the "Compensation
Committee") is composed of Mr. Abbott, who serves as Chairman,
and Messrs. Hathorn and Morse. 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 executive
officers, and administering the Company's 1994 Stock Incentive Plan
(the "Stock Incentive Plan") and the 1994 Stock Option Plan for
Non-Employee Directors (the "Non-Employee Directors Plan", and,
together with the Stock Incentive Plan, the "Plans") and recommending
to the Board of Directors changes to the Plans. During the year ended
December 31, 1994, the Compensation Committee met on four occasions.
The Nominating Committee is composed of Mr. Abbott, who
serves as Chairman, and Mr. Jorge Mas. The Nominating Committee,
which met once during 1994, recommends to the Board of Directors
candidates for election to the Board of Directors. The Committee
considers candidates recommended by the shareholders pursuant to
written applications submitted to the Corporate Secretary.
The Special Transaction Committee is composed of Mr. Hathorn,
who serves as Chairman, and Messrs. Laffer and Morse. The primary
function of the Special Transaction Committee, which met once during
1994, is to review related party transactions between the Company
and any officer, director or affiliate of the Company.
The Executive Committee is composed of Mr. Jorge L. Mas, who
serves as Chairman, and Messrs. Abbott, Laffer and Jorge Mas. The
principal function of the Executive Committee is to act for the
Board of Directors when action is required between Board
meetings. During 1994, the Executive Committee did not meet.
During the year ended December 31, 1994, the Board of Directors
met on five occasions. Each of the directors attended at least 75
percent of the aggregate number of Board meetings and meetings of
committees of which such director is a member.
Jorge L. Mas is Jorge Mas father. There is no other family
relationship among any other directors or executive officers of
the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Report of the Compensation and Stock Option Committee
The Compensation and Stock Option Committee of the Board of
Directors (the "Compensation Committee") 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 Compensation 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 Eliot
C. Abbott, Samuel C. Hathorn, Jr., and William A. Morse, all of who
are non-employee directors of the Company.
Statement on Philosophy of Executive Compensation
The compensation program of the Company is designed to (i)
motivate executive officers to achieve the strategic goals set by
the Company by linking an officer s compensation to the performance
of the Company and applicable business units, as well as to individual
performance, (ii) provide compensation reasonably comparable to that
offered by other leading companies to their executive officers so as
to attract and retain talented executives, and (iii) align the
interests of its executives with the long-term interests of the
Company's shareholders through the award of stock options and other
stock-related programs. In order to implement this philosophy, the
Company offers compensation packages that include a mix of salary,
incentive bonus awards, and stock options.
In determining the level and form of executive compensation
to be paid or awarded, the Committee relied on the assessment of
the Company's overall performance in light of its strategic
objectives rather than on any single quantitative or qualitative
measure of performance. Some of the factors considered by the
Committee included, among others, increases in the Company's earnings
and productivity in a period of intensified competition and
improvements in the Company's national and international competitive
position through a number of strategic transactions designed to
strengthen the Company's core business, such as the acquisition of
Design Traffic Installation and Buchanan Company.
The Committee also relied on a survey conducted by an
outside consulting firm, Pearl Myer & Associates, retained by the
Company. Pearl Myer & Associates prepared a study on the compensation
of executives at companies in three different industries closely
related to the Company s business with revenues comparable to the
revenues of the Company (the "Compensation Study"). The group of
companies reflected in the Compensation Study was not necessarily
the same group of peer companies set forth in the Performance Graph
on page 13.
Salary
The base salary of executive officers is initially determined by analyzing and
evaluating the responsibilities of the position and comparing the proposed base
salary with that of officers in comparable positions in other companies included
in the Compensation Study. Adjustments are determined by objective factors such
as the Company's performance and the individual's contribution thereto and
subjective considerations such as additional responsibilities taken on by the
executive.
Incentive Bonus Awards
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. The Compensation Committee believes that the
Company demonstrated substantial progress in 1994 based upon the following
indicators:
- Substantial increase in profitability in comparison to prior years;
- Restored faith of the financial community in the Company (as
measured by the performance of the Company's common stock); and
- The clear momentum and credibility that the Company has achieved
over the past year.
In view of the Company's improvements as measured by these qualitative factors,
the Committee decided to award bonuses to Messrs. Jorge Mas, Ismael Perera and
Carlos A. Valdes.
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 prices
equal to the fair market value on the date of grant. The Compensation Committee
believes that the use of stock options reinforces the Committee's philosophy
that management compensation should be clearly linked to shareholder 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 1994, the Compensation Committee granted 125,500 stock options under
the Stock Incentive Plan.
CEO Compensation
In setting the salary and incentive bonus for the Chief Executive Officer, the
Committee reviewed the Company's financial performance in 1994 with respect to
net earnings and earnings per share compared to the performance of other
companies in its industry and the Company's prior performance. The Committee
also reviewed base salary data for chief executive officers listed in the
Compensation Study and the Company's progress in achieving its strategic goals.
Based on its review of this information, the Committee decided that the Chief
Executive Officer performance merited an 8.3% increase in salary. In addition,
the Committee awarded Mr. Jorge Mas a bonus for the improved performance of the
Company and stock options to link a portion of Mr. Mas compensation to the
performance of the common stock of the Company.
Compensation and Stock Option Committee
Eliot C. Abbott
Samuel C. Hathorn, Jr.
William A. Morse
Information Regarding Executive Compensation
Summary Compensation Table
The following table summarizes all Plan and non-Plan compensation awarded to,
earned by or paid to the Company s Chief Executive Officer, as well as for the
four other most highly compensated executive officers of the Company (together,
the "Named Executive Officers"), whose total salary and bonus exceeded $100,000,
for services rendered in all capacities to the Company and its subsidiaries for
the Company's last fiscal year.
Annual Long Term All Other
Compensation Compensation Compensation
Awards
Securities
Underlying
Name and Salary Bonus Options
Principal Position Year $ $ # $
Officers until
March 11, 1994
Nick A. Caporella,
Chief Executive 1992 - - - -
Officer and 1993 - - - -
President 1994 - - - -
Officers from
March 11, 1994(1)
Jorge Mas, President 1994 230,800 200,000 - -
and Chief Executive
Officer
Jorge L. Mas, Chairman 1994 250,000 350,000 - -
of the Board and
President of
Church & Tower of
Florida, Inc.
Ismael Perera 1994 108,000 50,000 20,000 -
Senior Vice
President/
Operations
Carlos A. Valdes 1994 84,100 50,000 20,000 -
Senior Vice President/
Finance
(1) The annual compensation shown in the table is for the period
March 11, 1994 through December 31,1994.
No restricted stock awards or stock appreciation rights (all as defined in the
proxy regulations of the Securities and Exchange Commission) were awarded to,
earned by, or paid to the Named Executive Officers during the Company's last
fiscal year.
Option Grants
The following table provides information with respect to stock options to
purchase Common Stock granted to the Named Executive Officers during the
fiscal year ended December 31, 1994, pursuant to the Stock Incentive Plan:
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term(1)
Percent of
Total
Number of Options
Shares Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted Year(2) ($/sh)(3) Date 5% 10%
Nick A. Caporella - - - - - -
Jorge Mas - - - - - -
Jorge L. Mas - - - - - -
Ismael Perera 20,000 16% 7.94 03/11/2004 $43,860 $96,918
Carlos A. Valdes 20,000 16% 7.94 03/11/2004 $43,860 $96,918
(1) Potential gains are net of exercise price, but before taxes associated with
exercise. These amounts represent certain assumed rates of appreciation only,
based on Securities and Exchange Commission rules, and do not represent the
Company's estimate or projection of the price of the Company's stock in the
future. Actual gains, if any, on stock option exercises depend upon the actual
future performance of the Company's Common Stock and the continued employment
of the option holders throughout the vesting period. Accordingly, the potential
realizable values set forth in this table may not be achieved or may be
exceeded.
(2) Based on options to purchase an aggregate of 125,500 shares granted to
employees during fiscal year 1994.
(3) All options were granted at an exercise price equal to fair market value
based on the mean between the bid and asked prices of the Company's Common
Stock on the date of grant.
AGGREGATE OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth information with respect to each exercise of
stock options during the fiscal year ended December 31, 1994, by the Named
Executive Officers and the value at December 31, 1994, of unexercised stock
options held by the Named Executive Officers.
Number of Shares Value of Unexercised In-the-
Underlying Unexercised Money Options at December
Shares Options at December 31, 31, 1994(2)
Acquired Value 1994
on Excercise Realized(1) (#) ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
Nick A. Caporella 100,000 $696,250 - - - -
Jorge Mas - - - - - -
Jorge L. Mas - - - - - -
Ismael Perera - - - 20,000 - $46,200
Carlos A. Valdes - - - 20,000 - $46,200
(1) Market value of underlying shares (based on the fair market value
of the Company's Common Stock on the Nasdaq National Market System) at the
time of exercise, minus the exercise price.
(2) Market value of shares underlying in-the-money options at
December 31, 1994, (based on $10.25 per share, the closing price of the
Company's stock on the Nasdaq National Market on December 31, 1994) minus
exercise price.
The Company does not have any employment contracts or termination
of employment or change in control arrangements.
The Company does not have a long-term incentive or retirement plan.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
Common Stock from December 31, 1989, through December 31, 1994, 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 the L.E. Myers Company (the "Peer Index"). The graph assumes that the
value of the investment in Common Stock was $100 on December 31, 1989, and
that all dividends were reinvested. This data does not take into consideration
what the cumulative shareholder return on common stock would have been had the
Burnup Acquisition happened at an earlier date and is not necessarily indicative
of future results.
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
MasTec, Inc. $100.00 $52.59 $ 23.70 $ 16.30 $ 34.81 $ 60.74
S & P 500 100.00 93.44 118.02 123.29 131.99 129.96
Peer Index 100.00 90.00 100.69 64.08 47.38 40.09
Compensation Committee Interlocks and Insider Participation
The members of the Compensation and Stock Option Committee are Eliot C. Abbott,
Samuel C. Hathorn and William A. Morse, none of whom are former or current
officers or employees of the Company or any of its subsidiaries. Mr. Abbott
is a stockholder in the law firm of Carlos & Abbott, P.A. During fiscal year
1994, the Company retained Carlos & Abbott, P.A., with regard to variety of
legal matters and paid such firm approximately $94,000 for legal services.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the Compensation
and Stock Option Committee Report and Performance Graph above shall not be
incorporated by reference into any such filings.
Compensation of Directors
Except as described below, the directors of the Company who are not employees
of the company or of any subsidiary are paid an annual retainer of $15,000.
The directors also receive a board meeting fee of $600, $400 for each committee
meeting they attend as a member, and $600 for each committee meeting they
attend as Chairman, regardless of the number of committees on which they
serve.
In 1994, the Company granted Eliot C. Abbott an option to acquire up to 15,000
shares of Common Stock at $7.94 per share, the fair market value of the Common
Stock on the date of grant of the option, in accordance with the terms of the
Non-Employee Directors Plan, approved by the shareholders on March 11, 1994.
In 1994, the Company granted Arthur B. Laffer an option to acquire up to
100,000 shares of Common Stock at $5.75 per share exercisable over a
five-year period commencing on March 11, 1995, based upon continued service as
a director of the Company. Mr. Laffer was granted this option in lieu of
options under the Non-Employee Directors Stock Option Plan and directors fees.
Certain Relationships and Related Transactions
On January 15, 1994, Church & Tower, Inc. and Church & Tower
of Florida, Inc. provided Messrs. Jorge Mas, President and Chief
Executive Officer of Church & Tower, Inc., Juan Carlos Mas and
Jose Ramon Mas, each shareholders of Church & Tower, Inc.and
Jorge L. Mas, Chairman of the Board and President of Church &
Tower of Florida, Inc., a loan of $1,280,000, $158,000, $132,000
and $2,000,000, respectively, bearing interest at prime plus 2%
(10.5 % at December 31, 1994) with interest due annually and
principal due at maturity (July 15, 1996). The loans were made to
assist Messrs. Jorge Mas, Juan Carlos Mas, Jose Ramon Mas and
Jorge L. Mas in their federal estimated tax payment obligation
related to the 1993 Subchapter S earnings of the Church & Tower,
Inc. and Church & Tower of Florida, Inc., as applicable.
The Company leases and purchases construction equipment from
companies controlled by Mr. Jorge Mas. During 1994, 1993 and
1992, the Company incurred approximately $617,000, $249,000 and
$222,000 of equipment rental expense and purchased approximately
$528,000, $1,432,000 and $127,000, respectively, from these
affiliates. Additionally, at December 31, 1994 and 1993 the
Company had recorded $169,000 and $97,450 as amounts due from
affiliates for the sale of a computer system, and certain other
administrative charges which occurred prior to the acquisition by
Burnup & Sims Inc. of Church & Tower, Inc. and Church and Tower
of Florida, Inc. (the Burnup Acquisition ). No interest is being
charged on the amounts due from the affiliates.
Primarily, as a result of accrued interest receivable on the
previously described loans made by the Company to Messrs. Jorge
L. Mas and Jorge Mas and certain travel advances made to each of
them prior to the Burnup Acquisition, the Company has amounts due
from Messrs. Jorge L. Mas and Jorge Mas totaling $612,000 and
$273,000, as of December 31, 1994 and 1993 respectively. The
Company expects to receive payment from Messrs. Jorge L. Mas and
Jorge Mas in fiscal year 1995.
Church & Tower, Inc., also leases one equipment storage
facility from Jorge L. Mas at an annual rent of $48,000 expiring
on October 31, 1998. Such lease was entered into in 1983.
Carlos & Abbott, P.A., a law firm of which Eliot C. Abbott
is a stockholder, has provided legal services to the Company and
is expected to provide such services during 1995. For the year
ended December 31, 1994, legal fees paid to such firm by the
Company were approximately $94,000.
The Austin Group, Inc., a corporation of which Jose S.
Sorzano is the sole shareholder, chairman and director, expects
to receive a success fee from Peoples Telephone Co. ("PTC") in
the amount of approximately $50,000 for the consummation on
January 26, 1995 of a joint venture between PTC and the Company.
SELECTION OF AUDITORS
On March 11, 1994, Deloitte & Touche LLP was terminated as
the Company's independent auditors. The Audit Committee of the
Board of Directors met to consider a replacement and unanimously
recommended to the Board of Directors that Price Waterhouse LLP
be retained as the new independent auditors. The Board of Directors
considered and approved this recommendation, and Price Waterhouse
LLP was retained as the Company's independent auditors, on March
11, 1994.
None of the reports of Deloitte & Touche LLP on the
financial statements of the Company filed for each of the past
two fiscal years contained an adverse opinion or a disclaimer of
opinion, or were qualified or modified as to uncertainty, audit
scope or accounting principles. During the Company's two most
recent fiscal years and the subsequent interim period preceding
the resignation of Deloitte & Touche LLP, there was no
disagreement between the Company and Deloitte & Touche LLP on any
manner of accounting principle or practice, financial statement
disclosure, or auditing scope or procedure which would have
caused Deloitte & Touche LLP to have made reference to the
subject matter of the disagreement in connection with its
reports, and no reportable event as defined in Item 304(a)(I)(v)
of Regulation S-K occurred.
At the recommendation of the Audit Committee, the Board of
Directors reappointed Price Waterhouse LLP to serve as
independent auditors of the Company for the fiscal year ending
December 31, 1995. Representatives of Price Waterhouse LLP will
be present at the Meeting, will have an opportunity to make a
statement if they so desire and will be available to respond to
appropriate questions from shareholders.
MISCELLANEOUS
Any proposal of an eligible shareholder intended to be presented at the
next Annual Meeting of Shareholders of the Company must be received by
the Company by December 31, 1995, to be eligible for inclusion in the
Company's proxy statement and form of proxy relating to such meeting.
The Board of Directors does not intend to present and knows of no others
who intend to present at the Meeting any matter or business other than
that set forth in the accompanying Notice of Annual Meeting of Shareholders.
If other matters are properly brought before the 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 Annual Report to Shareholders for the fiscal year ended December 31, 1994,
is being mailed to shareholders simultaneously with this Proxy Statement.
By order of the Board of Directors,
Nancy J. Damon
Corporate Secretary
Miami, Florida
April 21, 1995
