SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant []
Check the appropriate box:
[] Preliminary Proxy Statement
[] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[] Definitive Additional Materials
[] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MASTEC, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant
Payment of Filing Fee (check the appropriate box):
[x] No fee required
[] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 of 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:
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[] Fee paid previously with preliminary materials.
[] 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:
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4) Date Filed:
MASTEC
NOTICE OF 2002 ANNUAL MEETING OF SHAREHOLDERS
To our shareholders:
The 2002 Annual Meeting of Shareholders of MasTec, Inc. will be held on
Thursday, May 23, 2002, at 9:30 a.m., local time, at our corporate
headquarters located at 3155 N.W. 77th Avenue, Miami, Florida. At the
Annual Meeting, shareholders will be asked to vote on the following
proposal:
- - The election of Jorge Mas, Jose Mas and Julia L. Johnson as Class I
directors to serve until the 2005 Annual Meeting of Shareholders; and
- - Such other business as may properly be brought before the Annual
Meeting, and at any adjournments of the Annual Meeting.
The proposal is discussed more fully in the Proxy Statement accompanying
this notice. Shareholders of record at the close of business on March 29,
2002 are entitled to notice of and to vote at the Annual Meeting and at any
adjournments of the Annual Meeting.
All shareholders 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. Return of the proxy card will not prevent you from
voting in person at the meeting should you decide to do so. As an
alternative, all shareholders are encouraged to vote by telephone or
online and enroll for electronic delivery of future proxy and other
materials. Please go to www.mastec.com under Investor Relations or
follow the instructions accompanying your proxy card for more information
and enrollment.
Sincerely,
/s/ Jose Sariego
- ------------------------
Jose Sariego, Secretary
Miami, Florida
April 25, 2002
MASTEC
PROXY STATEMENT
2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 2002
The Board of Directors of MasTec, Inc. ("MasTec") is furnishing this Proxy
Statement to solicit proxies on its behalf for use at the 2002 Annual
Meeting of Shareholders of MasTec to be held at our corporate headquarters
located at 3155 N.W. 77th Avenue, Miami, Florida 33122-1205, on Thursday,
May 23, 2002, at 9:30 a.m. local time. At the Annual Meeting, our
shareholders will be asked to vote on the following proposal, which is
described in greater detail elsewhere in this Proxy Statement:
- - The election of Jorge Mas, Jose Mas and Julia L. Johnson as Class I
directors to serve until the 2005 Annual Meeting of Shareholders; and
- - Such other business as may properly be brought before the Annual
Meeting and at any adjournments of the Annual Meeting.
The Board of Directors recommends that you vote FOR each of the nominees
for Class I director set forth in this Proxy Statement.
This Proxy Statement and accompanying proxy and other materials are first
being mailed or transmitted electronically on or about April 29, 2002 to
shareholders of record at the close of business on March 29, 2002.
VOTING
General
The securities that can be voted at the Annual Meeting consist of our common
stock, with each share entitling its owner to one vote on all matters brought
before the Annual Meeting. Only shareholders of record at the close of
business on March 29, 2002 are entitled to vote at the Annual Meeting. On
the record date, 47,914,099 shares of common stock were outstanding and
eligible to be voted at the Annual Meeting and MasTec had 3,262 record
shareholders.
Proxies
If you are not present in person at the Annual Meeting, your shares can be
voted only if represented by proxy or if you vote telephonically or online.
The shares represented by your proxy will be voted in accordance with your
instructions only if you properly complete, sign and return the accompanying
proxy card to our Secretary prior to the Annual Meeting or vote your ballot
online.
Shareholders may be eligible to vote electronically through the Internet or
by telephone. Please go to www.mastec.com under Investor Relations or
follow the instructions accompanying your proxy card for more information
on voting by telephone or online and registering to receive future proxy
and other materials online.
Shareholders not wishing to vote telephonically or electronically through
the Internet or whose proxy card does not reference telephone or online
voting information should complete and return the enclosed paper proxy
card. Signing and returning the proxy card or submitting the proxy via
telephone or online does not affect the right to vote in person at the
Annual Meeting. If no choice is specified on the proxy card, the shares
represented by the proxy will be voted for the election of all nominees
for director 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 our Secretary, by executing
and delivering to our Secretary a proxy with a later date, by attending the
Annual Meeting and voting in person or by submitting a telephonic or
electronic vote with a later date. With respect to telephonic or electronic
votes, the last vote transmitted will be the vote counted. Attendance at
the Annual Meeting will not, in itself, constitute revocation of a proxy.
Under the rules of the New York and American Stock Exchanges, any beneficial
owner of our common stock whose shares are held in street name by a member
brokerage firm may revoke a proxy and vote their shares in person at the
Annual Meeting only in accordance with applicable rules and procedures of
the exchanges, as employed by the beneficial owner's brokerage firm.
In addition to soliciting proxies through the mail, we may solicit proxies
through our directors, officers and employees in person and by telephone or
facsimile. Brokerage firms, nominees, custodians and fiduciaries also may
be requested to forward proxy materials to the beneficial owners of shares
held of record by them. All expenses incurred in connection with the
solicitation of proxies will be borne by MasTec.
Quorum and Vote Required
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. If a
quorum is present, directors will be elected by the affirmative vote of a
plurality of the shares of common stock voting in person or represented by
proxy at the Annual Meeting, which means that the three nominees receiving
the highest number of votes will be elected to the Board of Directors.
In voting for the proposal to elect nominees to the Board of Directors,
shareholders may vote in favor of all the nominees or any individual
nominee or withhold their votes as to all the nominees or any individual
nominee. In accordance with Florida law, votes that are withheld will be
counted in determining whether a quorum is present but will have no other
effect on the election of directors.
Under the rules that govern most domestic stock brokerage firms, member
brokerage firms that hold shares in street name for beneficial owners may,
to the extent that such beneficial owners do not furnish voting instructions
with respect to any or all proposals submitted for shareholder action, vote
in their discretion upon proposals that are considered "discretionary"
proposals under the rules. Member brokerage firms that have received no
instructions from their clients as to "non-discretionary" proposals do
not have discretion to vote on these proposals. Although "broker non-votes"
will be considered in determining whether a quorum exists at the Annual
Meeting, "broker non-votes" will not be considered as votes cast in
determining the outcome of any proposal. We believe that the proposal
regarding the election of directors is discretionary.
As of March 29, 2002 (the record date for the Annual Meeting), our directors
and executive officers beneficially owned or controlled 23,405,414 shares
of our common stock (670,256 of which are shares beneficially owned through
unvested options), constituting approximately 47.1% of the outstanding
common stock. We believe that these holders will vote their shares of
common stock in favor of the nominees for Class I directors and, therefore,
that the presence of a quorum and the election of the nominees is reasonably
assured.
Voting by Participants in the MasTec 401(k) Retirement Plan
Separate proxy cards are being transmitted to all persons who have shares
of our common stock allocated to their accounts as participants or
beneficiaries under the MasTec, Inc. 401(k) Retirement Plan (the "Plan").
These proxy cards appoint Wells Fargo Bank, who acts as Trustee for the
Plan, to vote the shares held for the accounts of the participants or
their beneficiaries in the Plan in accordance with the instructions
noted thereon. In the event no proxy card is received from a participant
or beneficiary or a proxy card is received without instructions, or in
the event shares are not yet allocated to any participant's account, the
Trustee will vote the shares of stock of the participant and any
unallocated shares "FOR" the nominees for director identified in this
proxy statement. The Trustee does not know of any other business to be
brought before the Annual Meeting but it is intended that, if any other
matters properly come before the Annual Meeting, the Trustee as
proxy will vote upon such matters according to its judgment.
Any Plan participant or beneficiary who executes and delivers a proxy card
to the Trustee may revoke it at any time prior to its use by executing and
delivering to the Trustee a duly executed proxy card bearing a later date
or by giving written notice to the Trustee at the following address: Wells
Fargo Bank West, National Association, Attention: Penny Conyers - C7301-027,
1740 Broadway, Denver, Colorado 80274. Under the terms of the Plan, only
the Trustee of the Plan can vote the shares allocated to the accounts of
participants, even if such participants or their beneficiaries attend the
Annual Meeting in person.
ELECTION OF DIRECTORS
The first matter that shareholders will vote upon at the Annual Meeting is
the election of three directors, Jorge Mas, Jose Mas and Julia L. Johnson,
as Class I directors for terms expiring at the annual meeting of
shareholders in the year 2005. The Board of Directors currently is
composed of eight directors elected in three classes, with three Class I,
two Class II, and three 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 only one class terminates each year. The terms of
the current Class I directors expire at the Annual Meeting; if elected,
the nominees for Class I directors will serve until the annual shareholders
meeting in 2005. The terms of the Class II directors expire at the annual
meeting of shareholders in 2003 and the terms of the Class III directors
expire at the annual meeting of shareholders in 2004.
Additional background information regarding the nominees for election is
provided below. MasTec 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 unable to serve, each proxy that does not direct
otherwise will be voted for a substitute nominee designated by the Board
of Directors.
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 I director named above.
Information as to Nominees and Other Directors
Nominees for Class I Directors
Jorge Mas, 39, has been our Chairman of the Board of Directors since
January 1998 and a director since March 1994. From March 1994 to October
1999, Mr. Mas was our Chief Executive Officer. Mr. Mas has been
Chairman of the Board of the Cuban American National Foundation, Inc., a
not-for-profit corporation, since July 1999. In addition, Mr. Mas is
the Chairman of the Board of Directors of Neff Corp. and is a member of
the Board of Directors of Nova Southeastern University. Mr. Mas is the
brother of Jose Mas, another nominee for Class I director.
Jose Mas, 30, has been a member of the Board of Directors since August
2001. Mr. Mas has been our Executive Vice President - Business Development
since August 2001. Mr. Mas has served in a number of capacities at the
operating level with us since 1991, most recently as President of one of
our service offerings from May 1999 to August 2001. He is also a member of
the Board of Directors of Neff Corp. Mr. Mas is the brother of Jorge Mas,
MasTec's Chairman of the Board and another nominee for Class I director.
Julia L. Johnson, 39, has been a member of the Board of Directors since
February 2002. From January 2001 to the present, Ms. Johnson has been
President of NetCommunications, L.L.C., a strategy consulting firm
specializing in the communications, energy, and information technology
public policy arenas. Prior to founding NetCommunications, Ms. Johnson
was Vice President of Marketing for MILCOM Technologies, Inc., a military
technology commercialization company, from March 2000 to August 2001.
From November 2001 to the present, Ms. Johnson has also served as founder
and Chairman of the Emerging Issues Policy Forum, a public policy
organization established to promote open public policy discussions on key
market, industrial and regulatory issues. Ms. Johnson served on the
Florida Public Service Commission from January 1992 until November 1999,
serving as chairwoman from January 1997 to January 1999. Ms. Johnson also
chaired Florida's Information Service Technology Development Task Force,
which advised Florida Governor Jeb Bush on information technology policy
and related legislative issues, from November 1999 to July 2001. In June
2001, Governor Bush appointed Ms. Johnson to the Florida Board of
Education for a four-year term.
Class II Directors
Austin J. Shanfelter, 44, has been our Chief Executive Officer and President
and a member of the Board of Directors since August 2001. From February
2000 until August 2001, Mr. Shanfelter was our Chief Operating Officer.
Prior to being named Chief Operating Officer, he served as President of one
of our service offerings from January 1997. Mr. Shanfelter has been in the
telecommunications infrastructure industry since 1981. Mr. Shanfelter has
been a member of the Board of Directors of the Power and Communications
Contractors Association (PCCA), an industry trade group, since 1993. He
is also the Chairman of the Cable Television Contractors Council of the
PCCA. Mr. Shanfelter has also been a member of the Society of Cable
Television Engineers since 1982 and the National Cable Television
Association since 1991.
William N. Shiebler, 60, has been a member of the Board of Directors since
June 1999. Since March 2002, Mr. Shiebler has been a Managing Director of
Deutsche Bank and Chief Executive Officer of the Americas for Deutsche Asset
Management. Mr. Shiebler was a Senior Managing Director of Putnam
Investments, a Boston based investment management firm, and President of
Putnam Mutual Funds from 1990 until 2000. Before joining Putnam, he was
President and Chief Operating Officer of Dean Witter Reynolds Intercapital,
the investment management division of Dean Witter Reynolds, Inc., and
Executive Vice President and director of Dean Witter Reynolds, Inc. Mr.
Shiebler is a member of the Board of Directors of Oxigene, Inc. Mr. Shiebler
also is a director or trustee of a number of private companies and not-for-
profit charitable institutions.
Class III Directors
Joseph P. Kennedy II, 49, has been a member of the Board of Directors since
October 1999. Mr. Kennedy is Chairman and President of Citizens Energy
Corporation, a not-for-profit energy provider that he founded in 1979, as
well as Chairman and/or President of a number of related companies.
Mr. Kennedy served six terms as a U.S. Representative during which time he
was a member of the House Banking and Financial Services Committee, a
senior member of the House Veteran's Affairs Committee and the co-chair
of the Older American Caucus. He also served as the ranking Democrat on
the Housing and Community Opportunity Subcommittee.
Arthur B. Laffer, 61, has been a member of the Board of Directors since
March 1994. Dr. Laffer has been Chairman of Laffer Associates, an economic
research and financial consulting firm, since 1979; Chief Executive
Officer, Laffer Advisors Inc., a broker-dealer, since 1981; and Chief
Executive Officer, Laffer Investments, an investment management firm,
since 1999. Dr. Laffer is a director of Nicholas Applegate Growth
Fund, Oxigene, Inc., Neff Corp., Pacificare Health Systems Inc. and
Vivendi Environment.
Jose S. Sorzano, 61, has been a member of the Board of Directors since
October 1994. Mr. Sorzano has been Chairman 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; and Ambassador and U.S. Deputy to the
United Nations from 1983 to 1985.
OTHER INFORMATION REGARDING THE BOARD OF DIRECTORS
Board and Committee Meetings
The Board of Directors conducts its business through meetings of the full
Board and through committees of the Board, consisting of the Executive
Committee, the Audit Committee, the Compensation Committee, and the
Nominating Committee. The Board and its committees also act by written
consent. During 2001, the Board of Directors met on five occasions. Each
of the current directors attended 100% of the aggregate of Board meetings
and the meetings of committees of which such director is a member held
during the periods for which they served.
The Executive Committee is composed of Jorge Mas, who serves as Chairman,
Austin J. Shanfelter, Arthur B. Laffer and William N. Shiebler. The
principal function of the Executive Committee is to act for the Board of
Directors when action is required between full Board meetings. During
2001, the Executive Committee met on three occasions.
The Audit Committee is composed of Arthur B. Laffer, who serves as Chairman,
William N. Shiebler and Jose S. Sorzano. The Audit Committee oversees
MasTec's financial reporting and compliance program on behalf of the Board
of Directors. During 2001, the Audit Committee met on five occasions.
Please refer to the section entitled "Audit Committee Information" below
for further information.
The Compensation Committee is composed of Arthur B. Laffer, who serves as
Chairman, William N. Shiebler and Jose S. Sorzano. The Compensation
Committee is charged with determining compensation packages for the
Chief Executive Officer and the other senior management of MasTec,
establishing salaries, bonuses and other compensation for MasTec's
other executive and operating officers, administering MasTec's
stock option, stock purchase and incentive compensation plans and
recommending to the Board of Directors changes to the plans. The
Compensation Committee did not meet during 2001, but did take action
through written consents.
The Nominating Committee is composed of Jorge Mas, who serves as Chairman,
and Joseph P. Kennedy II. The Nominating Committee 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 our Secretary. Shareholder 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 shareholder as to the qualifications and
willingness of the candidate to serve on our Board of Directors. During
2001, the Nominating Committee met on one occasion.
Compensation of Directors
MasTec does not pay its directors an annual cash retainer or other fees for
serving as a director or attending meetings. Directors are reimbursed for
their reasonable expenses in attending Board and committee meetings. Under
MasTec's Stock Option Plan for Non-Employee Directors, our non-employee
directors are eligible to receive options to purchase shares of common
stock. The Compensation Committee sets the amount, exercise price and term
of the options granted under this plan. Options issued under the plan are
in lieu of all other compensation to directors for their services as
directors. The following directors received options to purchase common
stock in the amounts indicated for their service as a director for the
year ended December 31, 2001: Joseph P. Kennedy, II, 75,000; Arthur B.
Laffer, 85,000; William N. Shiebler, 85,000; and Jose S. Sorzano, 50,000.
All options expire ten years from the date of grant and none of the
options are immediately exercisable. All options were granted at an
exercise price equal to the fair market value of MasTec's common stock
based on the mean between the high and low sale prices of our common stock
on the New York Stock Exchange on the date of grant.
SECURITY OWNERSHIP
Directors and Executive Officers
The following table sets forth the beneficial ownership as of March 29,
2002 of common stock by (i) each director of MasTec and each Named
Executive Officer (as defined under the caption Executive Compensation
below), and (ii) all executive officers and directors of MasTec as a
group. Unless otherwise indicated, each named shareholder has sole
voting and investment power with respect to the shares beneficially owned
by the shareholder.
Common Stock Beneficially Owned
-------------------------------
Percent of
Number Common Stock
Name of Shares Outstanding
- -------------------------------------------------------------------------
Jorge Mas
Chairman of the Board 21,210,038(1) 43.3%
Jose Mas
Vice Chairman of the Board and
Executive Vice President 1,207,388(2) 2.5%
Julia L. Johnson
Director 0 --
Joseph P. Kennedy II
Director 61,716(3) *
Arthur B. Laffer
Director 319,069(3) *
William N. Shiebler
Director 86,974(3) *
Jose S. Sorzano
Director 96,169(3) *
Austin J. Shanfelter
Director, President and Chief
Executive Officer 281,500(3) *
Donald P. Weinstein
Executive Vice President and Chief
Financial Officer 10,000 *
Jose Sariego
Senior Vice President and General
Counsel 113,940(3) *
Arlene Vargas
Vice President and Controller 18,707(3) *
All executive officers and
directors as a group (11 persons) 23,405,414(3) 47.1%
Joel-Tomas Citron
Former Director, President and
Chief Executive Officer 852,830(4) 1.8%
Carmen M. Sabater
Former Executive Vice President
and Chief Financial Officer 198,660(4) *
- --------------------
* Represents less than one percent of the outstanding shares of MasTec
common stock.
(1) Includes 11,273,716 shares owned directly by the Jorge L. Mas Canosa
Holdings I Limited Partnership, a Texas limited partnership (the
"Family Partnership"), and indirectly by Jorge Mas, as the president
and sole director of Jorge L. Mas Canosa Holdings Corporation, a Texas
corporation, the sole general partner of the Family Partnership; and
8,380,966 shares owned of record by Jorge Mas Holdings I Limited
Partnership, a Texas limited partnership ("Jorge Mas Holdings"). The
sole general partner of Jorge Mas Holdings is Jorge Mas Holdings
Corporation, a Texas corporation that is wholly-owned by Mr. Jorge Mas.
Also includes 282,670 shares owned of record by the Mas Family
Foundation, Inc., a Florida not-for-profit corporation (the "Family
Foundation") of which Mr. Jorge Mas is the president; 1,054,291 shares
covered by options exercisable within 60 days of March 29, 2002; and
218,395 shares owned of record individually. Mr. Jorge Mas disclaims
beneficial ownership of the shares held by the Family Partnership except
to the extent of his pecuniary interest therein, and disclaims
beneficial ownership of all of the shares owned by the Family
Foundation. The business mailing address for Mr. Jorge Mas is c/o
MasTec, Inc., 3155 N.W. 77th Avenue, Miami, Florida 33122-1205.
(2) Includes 1,114,251 shares owned of record by Jose Ramon Mas Holdings I
Limited Partnership, a Texas limited partnership ("Jose Mas Holdings").
The sole general partner of Jose Mas Holdings is Jose Ramon Mas
Holdings Corporation, a Texas corporation that is wholly-owned by
Mr. Jose Mas. Also includes 81,287 shares covered by options
exercisable within 60 days of March 29, 2002 and 11,850 shares owned
of record individually.
(3) Includes shares of common stock that may be issued upon the exercise of
stock options that are exercisable within 60 days of March 29, 2002 as
follows: Joseph P. Kennedy II, 61,716 shares; Arthur B. Laffer, 146,816
shares; William N. Shiebler, 66,716 shares; Jose S. Sorzano, 93,916
shares; Austin J. Shanfelter, 189,686 shares; Jose Sariego, 94,781
shares; and Arlene Vargas 16,625 shares.
(4) Includes shares of common stock that may be issued upon the exercise of
stock options that are exercisable within 60 days of March 29, 2002 as
follows: Joel-Tomas Citron, 840,000 shares, and Carmen M. Sabater,
185,171 shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, and
regulations of the Securities and Exchange Commission thereunder require
MasTec's directors, officers and persons who own more than 10% of
MasTec's common stock, as well as certain affiliates of such persons, to
file initial reports of their ownership of MasTec's common stock and
subsequent reports of changes in such ownership with the Securities and
Exchange Commission. Directors, officers and persons owning more
than 10% of MasTec's common stock are required by Securities and Exchange
Commission regulations to furnish MasTec with copies of all Section 16(a)
reports they file. Based solely on its review of the copies of such
reports received by it, MasTec believes that during the year ended
December 31, 2001, its directors, officers and owners of more than 10% of
its common stock complied with all applicable filing requirements.
Certain Principal Shareholders
As of December 31, 2001, MasTec was aware of the following shareholder that
owned beneficially more than 5% of MasTec's common stock.
Common Stock Beneficially Owned
-------------------------------
Percent of
Number Common Stock
Name of Shares Outstanding
- --------------------------------------------------------------------------
Mellon Financial Corporation (1) 5,285,937 11.0%
(1) Mellon Financial Corporation and certain of its direct and indirect
subsidiaries ("Mellon") filed a Schedule 13G/A dated February 8, 2002
with the Securities and Exchange Commission reporting beneficial
ownership of more than 5% of MasTec's common stock. As reported in
the Schedule 13G/A, Mellon possesses sole voting power with respect
to 4,511,837 shares and possesses shared voting power with respect to
567,200 shares. As reported in the Schedule 13G/A, Mellon possesses
sole dispositive power with respect to 5,215,261 and shared dispositive
power with respect to 2,276 shares. Mellon's address is One Mellon
Bank Center, 500 Grant Street, Pittsburgh, Pennsylvania 15258-0001.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing and administering the policies for MasTec's
compensation programs and for approving the compensation levels of the
executives of MasTec, including its Chief Executive Officer. The Committee
also reviews with the Chief Executive Officer guidelines for salaries and
bonus awards applicable to MasTec's employees other than its executives.
The Committee is composed of Arthur B. Laffer, who serves as Chairman,
William N. Shiebler and Jose S. Sorzano, all of whom are non-employee
directors of MasTec.
Statement of Philosophy of Executive Compensation
The executive compensation program of MasTec is designed to (i) provide
base compensation reasonably comparable to that offered by other leading
companies to their executives so as to attract and retain talented
personnel, (ii) motivate executives to achieve the strategic goals set
by MasTec by linking an executive's incentive compensation to the
performance of MasTec and applicable business units, as well as to
individual performance, and (iii) align the interests of MasTec's
executives with the long-term interests of its shareholders through the
award of stock options and other stock-related programs. To implement
this philosophy, MasTec offers its executives 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 relies primarily on MasTec's results of operations
and, in the case of senior executives, an assessment of MasTec's overall
performance in light of its strategic objectives. The primary factor the
Committee considered in establishing 2001 compensation for senior
executives was the net loss incurred by MasTec in 2001.
Salary
The base salary of executives is determined initially by analyzing and
evaluating the responsibilities of the position and comparing the proposed
base salary with that of executives in comparable positions in other
companies. Adjustments are determined by objective factors such as
MasTec's performance and the individual's contribution to that performance
and subjective considerations such as additional responsibilities taken
on by the executive. The Committee only increased the base salaries in 2001
of executive officers, including certain of the Named Executive Officers
identified under the caption "Executive Compensation," who increased their
job responsibilities with MasTec.
Incentive Awards
In addition to paying a base salary, MasTec awards incentive bonuses as a
component of overall compensation. MasTec has established formal incentive
compensation plans for our executives at both the corporate and operational
levels that award incentive bonuses based primarily on MasTec's or an
individual unit's performance as measured by earnings before interest and
taxes ("EBIT"). Since bonuses are based on performance during a year and
it takes time to gather and evaluate the necessary financial data to gauge
performance, bonuses for performance in a year are not paid until the
beginning of the next year. Awards are based on a multiple of base salary
or a percentage of EBIT. A portion of the bonus may be awarded in stock
and stock options. MasTec or the individual unit must meet certain minimum
thresholds before any bonus is earned. For performance in 2001, the
Committee awarded cash bonuses to certain of MasTec's executives under
these plans. None of the Named Executive Officers received an incentive
bonus award for 2001 performance.
Chief Executive Officer Compensation
Austin J. Shanfelter became our President and Chief Executive Officer in
August 2001. The general philosophy described above for compensation of
executive officers also applies to compensation for our Chief Executive
Officer. Upon his election, Mr. Shanfelter's salary was increased to
$500,000 per annum. In addition, Mr. Shanfelter was granted options to
purchase 300,000 shares of our common stock to reflect his assumption of
the role of President and Chief Executive Officer. No bonus compensation
was paid for the calendar year 2001 to Mr. Shanfelter, or any other
executive officer, based upon performance criteria established by
incentive compensation plans for the calendar year. The Compensation
Committee considered Mr. Shanfelter's assumption of additional
responsibilities in establishing his base salary and awarding him options
to acquire MasTec's common stock.
Compensation Committee Interlocks and Insider Participation
Mr. Laffer, who is a MasTec director and serves on our Compensation
Committee, is a member of the board of directors of Neff Corp. MasTec
purchases, rents and leases equipment used in its business from a number
of different vendors, on a nonexclusive basis, including Neff. Please
see "Certain Relationships and Related Transactions" below for more
information.
Compensation Committee
Arthur B. Laffer
William N. Shiebler
Jose S. Sorzano
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes all compensation awarded to, earned by or
paid to (a) MasTec's Chief Executive Officer and (b) the four other most
highly compensated executive officers of MasTec whose total salary and
bonus exceeded $100,000 (together, the "Named Executive Officers") for
services rendered in all capacities to MasTec and its subsidiaries for
the years ended December 31, 2001, 2000 and 1999.
Annual Compensation Long Term Compensation
------------------------- -------------------------
Securities
Name and Underlying All Other
Principal Position Year Salary($) Bonus($) Options(4) Compensation($)
- --------------------- ---- --------- --------- ---------- ---------------
Austin J. Shanfelter 2001 391,996 -- 450,000(5) --
President and Chief 2000 213,657 300,000(2) 150,000 --
Executive Officer(1) 1999 -- -- -- --
Jose Mas 2001 157,197 -- 125,000(6) 1,627(7)
Executive Vice 2000 -- -- -- --
President(1) 1999 -- -- -- --
Jose Sariego 2001 239,770 -- 13,940 993(7)
Senior Vice President 2000 224,038 200,000(2) 17,418 888(7)
and General Counsel 1999 175,150 175,000(3) 48,750 935(7)
Arlene Vargas 2001 161,553 -- 12,000 --
Vice President/ 2000 134,892 67,500(2) 9,375 --
Controller 1999 125,225 82,500(3) 7,500 --
Joel-Tomas Citron 2001 369,257 -- -- 2,000,000(8)
Former President and 2000 496,154 931,000(2) -- --
Chief Executive 1999 311,538 1,000,000(3) 450,000 --
Officer(1)
Carmen M. Sabater 2001 274,100 -- 20,000 459(7)
Executive Vice 2000 224,194 337,500(2) 17,420 755(7)
President and Chief 1999 168,462 225,000(3) 97,500 540(7)
Financial Officer(1)
(1) Mr. Shanfelter became President and Chief Executive Officer in August
2001. Mr. Mas became Executive Vice President in August 2001.
Mr. Citron resigned as President and Chief Executive Officer in August
2001. Ms. Sabater resigned as Executive Vice President and Chief
Financial Officer in January 2002.
(2) The bonus amounts indicated for 2000 were awarded in the beginning of
2001 for performance during the year ending December 31, 2000. The
following portion of the 2000 bonuses were awarded in stock valued at
fair market value on the date of the grant as follows: Jose Sariego,
$30,000; Arlene Vargas, $10,125; and Carmen M. Sabater, $50,625.
(3) The bonus amounts indicated for 1999 were awarded in the beginning of
2000 for performance during the year ending December 31, 1999. The
following portion of the 1999 bonuses were awarded in stock valued at
fair market value on the date of grant as follows: Jose Sariego,
$26,250; Arlene Vargas, $9,375; Joel-Tomas Citron, $150,000; and
Carmen M. Sabater, $26,250.
(4) The options were granted in the year indicated based on performance in
the previous year unless otherwise noted. Option amounts granted
prior to June 19, 2000 have been adjusted for a three-for-two stock
split effective June 19, 2000.
(5) Represents options to acquire 300,000 shares of our common stock that
were granted to Mr. Shanfelter for his increased responsibilities in
connection with becoming President and Chief Executive Officer in
August 2001 and options to acquire 150,000 shares of our common stock
granted for performance during the year ending December 31, 2000 that
were awarded in early 2001.
(6) Represents options to acquire 125,000 shares of our common stock that
were granted to Mr. Mas for his increased responsibilities in
connection with becoming Vice Chairman of the Board and Executive
Vice President in August 2001.
(7) Represents premiums paid by MasTec for the term portion of life
insurance on the lives of the individuals referenced.
(8) Represents the portion of severance paid to Mr. Citron in 2001. See
"Employment and Other Agreements" below for more information.
Option Grants in Last Fiscal Year
The following table provides information with respect to options to purchase
common stock granted to the Named Executive Officers for the year ended
December 31, 2001:
Individual Grants
-------------------------
Percent
of Total Potential Realizable Value
Number Options at Assumed Annual Rates
of granted to of Stock Price
Shares Employees Appreciation for
Underlying for Exercise Option Term (3)
Options Fiscal Price Expiration ---------------
Name Granted Year(1)($/sh)(2) Date 5% 10%
- ---- ------- ------ ------- ------ ----- -----
Austin J. Shanfelter 150,000 15.4% $12.70 03/22/08 $ 775,221 $1,806,595
300,000 30.9% $10.56 08/22/08 $1,289,694 $3,005,536
Jose Mas 125,000 12.9% $10.56 08/22/08 $ 537,373 $1,252,307
Jose Sariego 13,940 1.4% $12.70 03/22/08 $ 72,044 $ 167,893
Arlene Vargas 12,000 1.2% $12.70 03/22/08 $ 62,018 $ 144,528
Joel-Tomas Citron -- -- -- -- -- --
Carmen M. Sabater 20,000 2.1% $12.70 03/22/08 $ 103,363 $ 240,879
(1) Based on options to purchase an aggregate of 971,794 shares of common
stock granted to employees in 2001.
(2) All options were granted at an exercise price equal to fair market
value based on the mean between the high and low sale prices of our
common stock on the New York Stock Exchange on the date of grant.
(3) Amounts represent hypothetical gains assuming exercise at the end of
the option term and assuming rates of stock price appreciation of 5%
and 10% compounded annually from the date the respective options were
granted to their expiration date. The 5% and 10% assumed rates of
appreciation are mandated by the rules of the Securities and Exchange
Commission. These assumptions are not intended to forecast future
appreciation of our stock price. The potential realizable value
computation does not take into account federal or state income tax
consequences of option exercises or sales of appreciated stock. The
actual gains, if any, on the stock option exercises will depend on the
future performance of our common stock, the optionee's continued
employment through applicable vesting periods and the date on which
the options are exercised and the underlying shares are sold. The
closing price of our common stock on March 28, 2002, the last trading
date prior to our record date, was $8.05 per share.
Aggregate Option Exercises and Year-End Option Values
The following table sets forth information with respect to each exercise
of stock options during the year ended December 31, 2001 by the Named
Executive Officers and the value at December 31, 2001 of unexercised stock
options held by the Named Executive Officers.
Number of Shares Value of Unexercised
Underlying Unexercised in the Money Options
Shares Options at December at December 31,
Acquired 31, 2001 2001(1)
on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable Unexercisable
(#) ($) (#) ($)
-------- -------- ------------- -------------
Austin J. Shanfelter 0 0 85,786/570,143 0/0
Jose Mas 0 0 76,787/144,642 0/0
Jose Sariego 0 0 89,047/32,262 0/0
Arlene Vargas 0 0 12,625/23,750 0/0
Joel-Tomas Citron 0 0 840,000/0 0/0
Carmen M. Sabater 0 0 143,808/41,363 $18,526/0
(1) Market value of shares underlying in-the-money options at December 31,
2001 based on the product of $6.625 per share, the fair market value
of MasTec's common stock on the New York Stock Exchange on December
31, 2001, less the exercise price of each option, multiplied by the
number of in-the-money options as of that date.
Employment and Other Agreements
Effective January 1, 2001, MasTec entered into employment agreements with
Austin J. Shanfelter, Carmen M. Sabater and Jose Sariego relating to their
employment as Chief Operating Officer, Chief Financial Officer and General
Counsel, respectively. Each of the agreements is for a term of two years
unless earlier terminated, and provides that Mr. Shanfelter, Ms. Sabater
and Mr. Sariego will be paid an annual salary of not less than $325,000,
$270,000 and $240,000, respectively. Each agreement also provides for a
bonus to be paid pursuant to an incentive compensation plan to be agreed
upon, which plan may not be less favorable than the plan in effect for
2000. Additionally, if there is a change of control of MasTec during the
employment term, the executive will be entitled to all of the unpaid
portion of his or her salary for the remaining term of the agreement, to
an immediate bonus payment and to immediate vesting of any previously
unvested options. The agreements also contain non-competition and non-
solicitation provisions during the term of the agreements. In August
2001, Mr. Shanfelter was elected President and Chief Executive Officer
and his annual salary was increased from $325,000 to $500,000. We are in
the process of negotiating a new employment agreement with Mr. Shanfelter
to reflect his increased responsibilities. Ms. Sabater resigned as
Executive Vice President and Chief Financial Officer in January 2002.
In June 2001, MasTec agreed to pay up to $300,000 over a four year period
of the premiums on policies of life insurance on Mr. Shanfelter and members
of his family in exchange for a promissory note from Mr. Shanfelter in the
full amount of the premiums to be paid plus interest together with an
assignment of the policies as collateral for the promissory note. The
full amount of the promissory note plus interest is payable solely from
the cash surrender value or the proceeds of the policies, when paid, which
are assigned to MasTec. The balance of the cash surrender value or proceeds
from the policies, after repayment of the promissory note plus interest,
will be remitted to the applicable insured's beneficiary.
Effective August 7, 2001, MasTec entered into a severance agreement with
Joel-Tomas Citron relating to his separation from MasTec. Under the
agreement, MasTec is obligated to pay Mr. Citron $10,000,000 in equal
installments, without interest, on September 3, 2001, January 2, 2002,
April 1, 2002, July 1, 2002 and October 1, 2002. The final installment
will be reduced by $750,000 to offset the amount due to MasTec under a
non-interest bearing demand promissory note between MasTec and Mr. Citron.
The severance agreement specifies that Mr. Citron will provide certain
consulting services to MasTec upon MasTec's request until August 7, 2003.
All of Mr. Citron's stock options to acquire MasTec common stock became
fully vested and immediately exercisable under the severance agreement.
Under the agreement, Mr. Citron agreed to certain restrictions on his
ability to provide services to persons or entities that compete with
MasTec or any of its affiliates, to solicit customers and employees of
MasTec and to disclose MasTec's confidential information. Mr. Citron
also agreed to aid MasTec in any legal proceedings or investigations and
agreed to release MasTec from any claims relating to his employment
with MasTec.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of December 31, 2001, Carmen M. Sabater was indebted to MasTec for
$125,000 under a non-interest bearing demand promissory note.
Ms. Sabater's obligation to repay her loan was forgiven by MasTec as
part of her severance arrangement, which was effective January 1, 2002.
As of December 31, 2001, Jose Mas, Vice Chairman of the Board and
Executive Vice President, and Juan Carlos Mas, the brother of Jorge and
Jose Mas, were indebted to MasTec for an aggregate of $72,673 and
$116,533, respectively, representing advances made to them to pay their
tax obligations resulting from the termination of the subchapter S
corporation election of MasTec's predecessor company at the time of the
merger of the predecessor company with Burnup & Sims Inc. in 1994.
Interest on the advances has accrued at an annual rate of prime plus
two percent. Subsequent to December 31, 2001, Jose and Juan Carlos Mas
have paid this indebtedness in full.
MasTec purchases, rents and leases equipment used in its business from a
number of different vendors, on a non-exclusive basis, including Neff
Corp., in which Jorge Mas, Jose Mas and Arthur B. Laffer serve as directors.
Additionally, Jorge Mas, Juan Carlos Mas and Jose Mas have a significant
ownership interest in Neff. During the year ended December 31, 2001,
MasTec paid Neff approximately $2.3 million for equipment purchases,
rentals and leases, which constituted approximately 3.5% of MasTec's
total expense for equipment purchases, rentals and leases during the
year. MasTec believes the amount paid to Neff is equivalent to the
payments that would have been made between unrelated parties for similar
transactions acting at arm's length.
Julia L. Johnson, a nominee for director, entered into a one-year
consulting agreement with MasTec through NetCommunications on June 1, 2000.
The agreement specifies that Ms. Johnson will provide business development
consulting to MasTec on a nonexclusive basis for a flat fee of $12,500
per month. Pursuant to the agreement, Ms. Johnson will identify new
customers, identify additional business opportunities with existing
customers, arrange meetings and presentations with new and existing
customers, assist in the preparation of proposals, and provide guidance to
develop additional business opportunities for MasTec. The agreement may
be terminated by either party upon 90-days notice and contains customary
non-compete, non-solicitation and confidential information provisions.
The agreement expired in May 2001 but was continued on a month-to-month
basis until April 2002, at which time the parties mutually agreed to
terminate the agreement.
STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
MasTec's common stock from December 31, 1996 through December 31, 2001
with the cumulative total return of the Standard & Poors 500 Stock Index
and a company-constructed index of seven peer companies consisting of
Arguss Holdings, Inc., Black Box Corp., Dycom Industries, Inc.,
International Fibercom, Inc., LCC International Inc., Quanta Services,
Inc., and Wireless Facilities Inc. The graph assumes that the value of
the investment in the common stock was $100 on December 31, 1996 and that
all dividends were reinvested. This data is not necessarily indicative
of future results.
[GRAPH]
Comparison of 5-Year Cumulative Total Return among MasTec, Inc.,
the S&P 500 Index and a Peer Group.
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
MasTec $100.00 $ 64.74 $ 59.43 $125.94 $ 94.90 $ 29.50
S&P 500 $100.00 $133.36 $171.47 $207.56 $188.66 $166.24
Peer Group $100.00 $103.02 $146.84 $198.67 $200.10 $ 96.91
AUDIT COMMITTEE AND AUDIT RELATED INFORMATION
Audit Committee Report
Our Audit Committee is composed entirely of independent, nonmanagement
directors. The Audit Committee members meet the independence and
experience requirements established by the New York Stock Exchange.
The Audit Committee adopted an Audit Committee Charter that was filed with
the Proxy Statement for the 2000 Annual Meeting of Shareholders. In March
2002, the Board of Directors approved an amendment to the Audit Committee
Charter that sets forth the current duties and obligations of the Audit
Committee. A copy of the amended Audit Committee Charter is filed with
this Proxy Statement.
During 2001, the Audit Committee met with senior members of our financial
management team, those responsible for the internal audit, our counsel and
representatives of our independent auditors. The Audit Committee engaged
PricewaterhouseCoopers LLP to audit the financial statements of MasTec for
2001. The Audit Committee also reviewed and approved the scope of the
proposed audit for 2001, the procedures and schedules to be followed in
connection with the audit and the audit fee proposed by
PricewaterhouseCoopers.
The Audit Committee also discussed with the independent auditors the matters
required to be reviewed by Statement on Auditing Standards No. 61
(Communications with Audit Committees), as amended by Statement on Auditing
Standards No. 90 (Audit Committee Communications), and reviewed the written
disclosures and related correspondence from the independent auditors
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). The Audit Committee reviewed and
discussed with the independent auditors their independence from MasTec.
In connection with discussions regarding independence, the Audit Committee
also considered with the independent auditors whether the provision of
nonaudit services by independent auditors to MasTec is compatible with the
auditors' independence.
Our management has reviewed the audited financial statements contained in
the Annual Report on Form 10-K with the Audit Committee, including a
discussion of the accounting principles, the reasonableness of judgments
and estimates, the clarity of disclosure in the financial statements and
the conformity of the consolidated financial statements of MasTec with
generally accepted accounting principles.
In performing its functions, the Audit Committee acts in an oversight
capacity. The Audit Committee relies on the work and assurances of our
management, which has the primary responsibility for the financial
statements and reports, and of the independent auditors, who, in their
report, express an opinion on the conformity of our annual financial
statements to generally accepted accounting principles.
In reliance on these reviews and discussions, and the report of the
independent auditors, the Audit Committee has recommended to the Board
of Directors, and the Board of Directors has approved, that the audited
financial statements be included in MasTec's Annual Report on Form 10-K
for the year ended December 31, 2001, for filing with the Securities and
Exchange Commission.
Arthur B. Laffer, Chairman
William N. Shiebler
Jose S. Sorzano
Audit Fees
PricewaterhouseCoopers' fees for audit services related to the audit of our
2001 consolidated financial statements were $427,616.
Financial Information Systems Design and Implementation Fees
During 2001, MasTec paid no fees to PricewaterhouseCoopers in connection
with financial information systems design and implementation.
All Other Fees
During 2001, MasTec paid PricewaterhouseCoopers $262,262 for all other
services, principally tax structuring advice.
Selection of Auditors
The Audit Committee appointed PricewaterhouseCoopers to audit MasTec's
financial statements for 2001. Based on MasTec's policy to review
periodically the selection of independent auditors, the Audit
Committee has selected Ernst & Young LLP as MasTec's independent auditors
for 2002. MasTec expects that representatives of the independent auditors
for 2001 and 2002 will be present at the Annual Meeting. The
representatives will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions from
shareholders.
MISCELLANEOUS
List of MasTec's Shareholders
A list of MasTec's shareholders as of March 29, 2002, the record date for
the Annual Meeting, will be available for inspection at our corporate
headquarters located at 3155 N.W. 77th Avenue, Miami, Florida, during
normal business hours during the 10-day period prior to the Annual Meeting.
Shareholders' Proposals for 2003 Annual Meeting
Under our bylaws, MasTec must receive any proposal of an eligible
shareholder intended to be presented at the Annual Meeting of Shareholders
of MasTec in 2003 on or before December 9, 2002, for the proposal to be
eligible for inclusion in our Proxy Statement and Proxy related to that
meeting. If a shareholder notifies MasTec after December 9, 2002, of an
intent to present a proposal at MasTec's Annual Meeting of Shareholders
in the year 2003 (and for any reason the proposal is voted upon at that
Annual Meeting), MasTec's proxy holders will have the right to exercise
discretionary voting authority with respect to the proposal, if presented
at the meeting, without including information regarding the proposal in
our proxy materials. Any notice regarding a shareholder proposal must
include the information specified in Article I, Section 9 of our bylaws.
A copy of these bylaw requirements will be provided upon written request
to: MasTec Legal Department, 3155 N.W. 77th Avenue, Miami, Florida
33122-1205.
Delivery of Proxy Materials - Householding
Only one Annual Report for the year ended December 31, 2001 and Proxy
Statement for the 2002 Annual Meeting is being delivered to multiple
shareholders of record who share the same address and last name unless
MasTec received contrary instructions from an affected shareholder.
This practice is known as "householding" and helps reduce our expenses.
Certain brokers and banks that hold MasTec stock for their customers
may also household. Each shareholder who resides at a householded
address will be mailed a separate proxy card. MasTec will promptly
deliver a separate paper copy of the Annual Report and Proxy Statement
to a shareholder at a shared address to which a single copy of these
documents was delivered upon receiving an oral or written request from
the shareholder. Any such shareholder who wishes to receive a separate
paper copy of our Annual Report and Proxy Statement for the 2002 Annual
Meeting or future meetings should contact MasTec Investor Relations by
telephone at 1-305-599-1800 or by mail to: MasTec Investor Relations,
3155 N.W. 77th Avenue, Miami, Florida 33122-1205.
Any shareholders of record sharing an address who now receive multiple
copies of our Annual Report and Proxy Statement and who wish to receive
only one copy of these materials per household in the future should also
contact MasTec Investor Relations by telephone or mail as instructed
above. Any shareholders sharing an address whose shares of our stock
are held by a broker or bank, who now receive multiple copies of our
Annual Report and Proxy Statement and who wish to receive only one copy
of these materials per household, should contact the broker or bank to
request that only one set of these materials be delivered in the future.
Other Matters that May Come Before the 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
Shareholders. 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.
MasTec's Annual Report on Form 10-K for the year ended December 31, 2001
is being mailed or transmitted with this Proxy Statement to shareholders
of record as of March 29, 2002. The Form 10-K does not form any part of
the material for the solicitation of proxies.
/s/ Jose Sariego
- -------------------------
Jose Sariego, Secretary
Miami, Florida
April 25, 2002
EXHIBIT A
MASTEC
AUDIT COMMITTEE CHARTER
April 1, 2002
General
The Audit Committee will assist the Board of Directors in fulfilling its
responsibility to the shareholders regarding the quality and integrity of
the Company's financial statements, accounting and reporting practices,
and internal controls. The Audit Committee will have general responsibility
for the review of the financial, accounting, reporting and audit activities
of the Company and its subsidiaries.
Auditor Selection and Independence
The Audit Committee recognizes that (a) the outside auditor for the
Company is ultimately accountable to the Audit Committee and the Board of
Directors; (b) the Audit Committee on behalf of the Board of Directors has
the ultimate authority and responsibility to select and evaluate, and where
appropriate, replace the outside auditor (or to nominate the outside auditor
to be proposed for shareholder approval in any proxy statement); (c) the
Audit Committee is responsible for ensuring that the outside auditor
submits on a periodic basis to the Audit Committee a formal written statement
delineating all relationships between the auditor and the Company; and (d)
the Audit Committee is responsible for actively engaging in discussions with
the outside auditor with respect to any disclosed relationships or services
that may impact the objectivity and independence of the outside auditor and
for recommending that the Board of Directors take appropriate action in
response to the outside auditors' report to satisfy itself of the outside
auditors' independence.
Organization and Authority
The Audit Committee will be composed of three or more members of the Board
of Directors who (1) are free of any relationship to the Company that, in
the opinion of the Board of Directors, may interfere with their exercise
of independent judgment in carrying out their responsibilities without
influence from management and the Company, and (2) are financially
literate, as determined by the Board of Directors in its business judgment.
At least one member must have accounting or related financial management
expertise, as determined by the Board of Directors in its business judgment.
In determining independence and financial literacy, the Board of Directors
will apply the rules of the New York Stock Exchange and other applicable
rules and regulations. The Board of Directors will designate one member
as Chairman.
The Audit Committee will have the authority to retain legal, accounting or
other advisors to the Committee. The Audit Committee may request any
officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with
any members of or consultants to the Committee. The Audit Committee will
have the authority to conduct or authorize investigations into any matters
within its scope of responsibilities and will have the authority to retain
outside advisors to assist it in connection with the conduct of any
investigation.
Responsibilities
The Audit Committee is responsible for the following on behalf of the
Board of Directors:
1. Reviewing and engaging the independent auditors to be selected to
audit the financial statements for the Company, including confirming
the competence and independence of the auditors as required by
Independence Standards Board Standard No. 1, as may be modified or
supplemented.
2. Reviewing and approving the scope of the proposed annual audit for
the current year and the audit procedures to be applied, and approving
the annual audit fee proposal from the independent auditors.
3. Discussing with the independent auditors the matters required to be
discussed by Statement of Auditing Standards No. 61, as may be
modified or supplemented.
4. Reviewing the completed audit, including any comments or
recommendations by the independent auditors, and monitoring the
implementation of any recommendations adopted by the Committee.
5. Reviewing the financial statements and audit results with management.
6. Reviewing the financial statements contained in the Company's filed
reports to determine that the independent auditors are satisfied with
the acceptability and the quality of the Company's accounting
principles as applied in the financial statements and that the
information contained in the reports are consistent with the
financial statements.
7. Recommending to the Board of Directors whether to include the audited
financial statements in the Company's Annual Report or Form 10-K.
8. Reviewing with management and the independent auditors the interim
financial reports before they are filed with the SEC or other
regulators.
9. Reviewing with financial management and the independent accountants
the Company's quarterly earnings releases prior to release and the
Company's Form 10-Q prior to its filing.
10. Reviewing the adequacy and effectiveness of the Company's accounting
and financial controls, including computerized information systems
controls and security. Particular emphasis should be given to the
adequacy of such internal controls to expose any payments,
transactions, or procedures that might be deemed illegal or otherwise
improper.
11. Reviewing the internal audit function of the Company, including the
independence and authority of its reporting obligations, the proposed
audit plans for the coming year, and the coordination of such plans
with the independent auditors.
12. Providing sufficient opportunity for the independent auditors to meet
with the members of the Audit Committee without members of management
present. Among the items to be discussed in these meetings are the
independent auditors' evaluation of the Company's financial,
accounting and auditing personnel, the adequacy of the Company's
internal controls, any difficulties encountered in the course of the
audit, and the cooperation that the independent auditors received
during the course of the audit.
13. Adopting a Code of Conduct for the Company and periodically reviewing
with appropriate Company personnel the actions taken to ensure
compliance with the Code of Conduct and the results of violations
of the Code.
14. Reviewing the programs and policies of the Company designed to ensure
compliance with applicable laws and regulations and monitoring the
results of these compliance efforts.
15. Reviewing and discussing with management and the independent
auditors: (a) any material financial or non-financial arrangements
of the Company that do not appear on the financial statements of the
Company; and (b) transactions or courses of dealing with parties
related to the Company that are significant in size or involve terms
or other aspects that differ from those that likely would be
negotiated with independent parties, and which arrangements or
transactions are relevant to an understanding of the Company's
financial statements.
16. Reviewing and discussing with management and the independent auditors
the accounting policies and practices that may be viewed as critical,
and reviewing and discussing any significant changes in the accounting
policies or practices of the Company and accounting and financial
reporting proposals that may have a significant impact on the Company's
financial statements.
17. Reviewing material pending legal proceedings involving the Company and
any other contingent liabilities or commitments.
18. Reviewing with the Company's counsel legal matters that may have a
material impact on the financial statements, the Company's compliance
policies and any material reports or inquiries received from regulators
or governmental agencies.
19. Submitting the minutes of all meetings of the Audit Committee to, or
discussing the matters discussed at each Committee meeting with, the
Board of Directors.
20. 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.
21. Reviewing and updating the Committee's Charter on an annual basis.
22. Issuing such reports and certifications as may be required under the
rules and regulations of the Securities and Exchange Commission, the
New York Stock Exchange and any other similar requirements.
23. Considering such other matters in relation to the financial affairs
of the Company and its accounts, and in relation to the internal and
external audits of the Company, as the Audit Committee may, in its
discretion, determine to be advisable.
The Audit Committee does not prepare financial statements or perform
audits and its members are not auditors nor does it certify the Company's
financial statements. Although the Audit Committee has the
responsibilities and powers set forth in this Charter, it is not a duty or
function of the Audit Committee to plan or conduct the audit, or to
determine that the Company's financial statements are complete and
accurate or that the financial statements are in accordance with generally
accepted accounting principles. These are the duties and responsibilities
of management and the independent auditor. Likewise, it is not the duty
of the Audit Committee to initiate investigations, although it will have
the authority to do so, to resolve disagreements between management and
the independent auditor, or to ensure compliance with laws
and regulations and the policies of the Company.
- ------------------------------------------------------------------------------
PROXY FOR 2002 ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS OF MASTEC, INC.
The undersigned hereby constitutes and appoints Donald P. Weinstein and Jose
Sariego (the "Proxies"), or any one of them, with full power of substitution,
attorneys and proxies for the undersigned, to vote all shares of common
stock of MasTec, Inc. ("MasTec") that the undersigned would be entitled to
vote at the 2002 Annual Meeting of Shareholders to be held at MasTec's
corporate offices, 3155 N.W. 77th Avenue, Miami, FL 33122, at 9:30 a.m. on
Thursday, May 23, 2002, or any adjournments or postponements thereof, on all
matters properly coming before the Annual Meeting, including, but not
limited to, the matters stated on the reverse side.
If shares of MasTec common stock are issued to or held for the account of
the undersigned under the MasTec 401(k) Retirement Plan (the "Plan"), then
the undersigned hereby directs the trustee of the Plan to vote all vested
shares of MasTec common stock in the undersigned's name and/or account
under the Plan in accordance with the instructions given herein, at the
Annual Meeting and at any adjournments or postponements thereof, on all
matters properly coming before the Annual Meeting, including, but not
limited to, the matters stated on the reverse side.
ANY PROPER PROXY RECEIVED BY MASTEC AS TO WHICH NO CHOICE HAS BEEN
INDICATED WILL BE VOTED BY THE PROXIES "FOR ALL" THE NOMINEES SET FORTH
ON THE REVERSE SIDE AND IN THE PROXIES' DISCRETION ON ANY OTHER MATTER
PROPERLY BROUGHT BEFORE THE ANNUAL MEETING. YOUR PROXY CANNOT BE VOTED
UNLESS YOU SIGN, DATE AND RETURN THIS CARD OR FOLLOW THE INSTRUCTIONS FOR
INTERNET OR TELEPHONE VOTING SET FORTH ON THE REVERSE SIDE.
(Continued and to be signed on reverse)
MasTec [LOGO]
3155 NW 77th AVENUE
MIAMI, FL 33122
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before
the cut-off date or meeting date. Have your proxy card in hand when you
access the web site. You will be prompted to enter your 12-digit Control
Number which is located below to obtain your records and to create an
electronic voting instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until
11:59 P.M. Eastern Time the day before the cut-off date or meeting date.
Have your proxy card in hand when you call. You will be prompted to enter
your 12-digit Control Number which is located below and then follow the
simple instructions the Vote Voice provides you.
VOTE BY MAIL -
Mark, sign and date your proxy card and return it in the postage-paid
envelope we have provided or return it to MasTec, Inc., c/o ADP,
51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS IN BLUE OR BLACK INK KEEP THIS PORTION FOR YOUR RECORDS
- -----------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
MasTec, Inc.
(1) Election of three (3) Class I Directors For Withhold For All
as described in the Proxy Statement of All All Except
the Board of Directors. The Board of
Directors recommends a vote FOR ALL [ ] [ ] [ ]
nominees listed below.
To withhold authority to vote,
The nominees are: mark "For All Except" and write
Jorge Mas, Jose Mas, Julia L. Johnson the nominee's name on the line
below:
(2) In the Proxies' discretion, upon any other
business that may properly be presented _______________________________
at the Annual Meeting or any adjournments
or postponements thereof.
Receipt of the Notice and Proxy Statement for the
2002 Annual Meeting of Shareholders and MasTec's
Annual Report on Form 10-K for the year ended
December 31, 2001 is acknowledged.
(Please sign exactly as your name or names appear
on this proxy. When signing as executor, guardian,
trustee, joint owners, agent, authorized
representative or a corporate owner, or other
representative, please give your full title
as such.)
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Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date