MASTEC INC — Proxy Solicitation & Information Statement 1996

Apr 29, 1996

SCHEDULE 14A (Rule 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant ___ 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 $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-(i)(2), or Item 22(a)(2) of Schedule 14A. ___ $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). ___ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ___________ (2) Aggregate number of securities to which transaction applies: ___________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ___________ (4) Proposed maximum aggregate value of transaction: ___________ (5) Total fee paid: ___________ ___ 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: ___________ (2) Form, Schedule or Registration Statement No.: ___________ (3) Filing Party: ___________ (4) Date Filed: ___________ Page 1 of 18 (LOGO) NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To our stockholders: The 1996 Annual Meeting of Stockholders of MasTec, Inc., a Delaware corporation (the "Company"), will be held on Monday, June 3, 1996, at 9:30 A.M., local time, at the Hotel Sofitel, 5800 Blue Lagoon Drive, Miami, Florida, for the following purposes: * To elect one Class I director for a term expiring in 1999; and * To transact such other business as may properly be brought before the meeting and all adjournments or postponements thereof. * Only stockholders of record at the close of business on April 5, 1996, the record date and time fixed by the Board of Directors (the "Record Date"), are entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements thereof. A list of such stockholders will be available for inspection at the offices of the Company, 8600 N.W. 36th Street, Miami, Florida, during normal business hours during the ten-day period prior to the Annual Meeting. Stockholders, including those whose shares are held by a brokerage firm or in "street" name, will be asked to verify their stockholder status as of the Record Date upon entrance to the meeting. Accordingly, stockholders (or their legal representatives) attending the Annual Meeting should bring some form of identification to the meeting, evidencing stockholder status as of the Record Date or, in the case of a person attending the meeting on behalf of a stockholder, the representative's right to represent the stockholder at the meeting. All stockholders are cordially invited to attend the Annual Meeting in person. However, to ensure that your stock is represented at the meeting in case you are not personally present, you are requested to mark, sign, date and return the enclosed proxy card as promptly as possible in the envelope provided. Stockholders attending the Annual Meeting may vote in person even if they have previously returned a proxy card. By order of the Board of Directors Nancy J. Damon Corporate Secretary Miami, Florida April 30, 1996 Page 2 of 18 (LOGO) PROXY STATEMENT ___ ANNUAL MEETING OF STOCKHOLDERS June 3, 1996 _______ GENERAL This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of MasTec, Inc., a Delaware corporation (the "Company" or "MasTec"), for use at the 1996 Annual Meeting of Stockholders of the Company to be held at the Hotel Sofitel, 5800 Blue Lagoon Drive, Miami, Florida, on Monday, June 3, 1996, at 9:30 A.M., local time, and at all adjournments thereof (the "Annual Meeting"). At the Annual Meeting, stockholders will be requested to act upon the matters set forth in this Proxy Statement. Only stockholders of record at the close of business on April 5, 1996 are entitled to notice of and to vote at the Annual Meeting. If you are not present in person at the Annual Meeting, your shares can be voted only when represented by proxy. The shares represented by your proxy will be voted in accordance with your instructions only if a proxy card is properly completed, signed and returned to the Secretary of the Company prior to the Annual Meeting. If no choice is specified, 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 the Secretary of the Company, by executing and delivering to the Secretary a proxy with a later date, or by attending the Annual Meeting and voting in person. Solicitation of proxies will be made initially by mail. The Company's directors, officers and employees also may solicit proxies in person or by telephone without additional compensation. In addition, proxies may be solicited by certain banking institutions, brokerage firms, custodians, trustees, nominees and fiduciaries who will mail material to or otherwise communicate with the beneficial owners of shares of the Company's Common Stock, $.10 par value ("Common Stock"). In addition, Corporate Investor Communications, Inc. has been engaged by the Company to act as proxy solicitors and will be paid $2,500 for their services. The cost of this solicitation will be borne by the Company. The Company's Annual Report on Form 10-K for the year ended December 31, 1995 accompanies this Proxy Statement, and it is anticipated that this Proxy Statement and accompanying proxy and other materials will be mailed on or about April 30, 1996 to stockholders of record on April 5, 1996. The Company's only class of voting securities is its Common Stock. Each share of Common Stock entitles the holder to one vote on all matters properly brought before the Annual Meeting. The presence, in person or by proxy, of a majority of the shares entitled to vote is necessary to constitute a quorum at the Annual Meeting. Directors are elected by a Page 3 of 18 plurality of the votes of the shares eligible to vote present in person or represented by proxy at the Annual Meeting, with the directors receiving the highest number of votes being elected to the Board of Directors. Unless otherwise required by the Company's Certificate of Incorporation, a majority of the votes of the shares eligible to vote present in person or represented by proxy at the Annual Meeting is required for the approval of any other matter requiring stockholder approval. Shares that are entitled to vote but that are not voted at the direction of the beneficial owner ("abstentions"), shares represented by proxies or ballots that are marked "withhold authority" with respect to the election of any nominee for election as a director, and votes withheld by brokers in the absence of instruction from beneficial holders ("broker nonvotes") will be counted for the purpose of determining whether there is a quorum for the transaction of business at the Annual Meeting. In determining whether a matter requiring approval of a majority of the shares present and entitled to vote has been approved or whether a nominee for director has received a plurality of the shares present and entitled to vote, abstentions and withheld votes will have the same effect as a vote against and broker nonvotes will be disregarded and will have no effect on the outcome of the vote. On March 11, 1994, Church & Tower, Inc. and Church & Tower of Florida, Inc., two privately held corporations controlled by the family of Jorge L. Mas (collectively, "Church & Tower"), were acquired through an exchange of stock by Burnup & Sims, Inc. ("Burnup & Sims"), which then changed its name to MasTec, Inc. (the "Acquisition"). Jorge L. Mas, the Company's Chairman of the Board, and Jorge Mas, the Company's President and Chief Executive Officer and the son of Jorge L. Mas, acquired in the aggregate more than 50% of the then outstanding Common Stock of the Company in the Acquisition. Jorge L. Mas and Jorge Mas have both informed the Company that they intend to vote their shares of Common Stock in favor of the election of Jorge Mas as a Class I director, as discussed below, thus assuring his election. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT At April 5, 1996, there were approximately 5,233 stockholders of record of the Company's Common Stock, which is the only class of capital stock of the Company outstanding. At April 5, 1996, there were 16,058,298 shares of Common Stock outstanding. Page 4 of 18 The following table sets forth the beneficial ownership as of April 5, 1996 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 under the caption "Executive Compensation" below ), and (iii) all executive officers and directors of the Company as a group. Unless otherwise indicated, each such stockholder has sole voting and investment power with respect to the shares beneficially owned by such stockholder. Percent of Amount and Nature of Common Stock Name Beneficial Ownership Outstanding - --------------------------- --------------------- ------------- Eliot C. Abbott 10,000 (1) * Samuel C. Hathorn, Jr. 5,200 (2) * Arthur B. Laffer 40,000 (1) * Jorge L. Mas 5,349,965 (3) 33.3% Jorge Mas 3,952,970 (1)(4) 24.6% William A. Morse 0 * Ismael Perera 18,492 (1) * Jose S. Sorzano 0 * Carlos A. Valdes 16,359 (1) * All executive officers and directors as a group (14 persons) 9,399,396 (1) 58.5% (1) The amounts shown include shares covered by options exercisable within 60 days of April 5, 1996 as follows: Jorge Mas 12,000 shares; Eliot C. Abbott 10,000 shares; Arthur B. Laffer 40,000 shares; and Ismael Perera and Carlos A. Valdes 16,000 shares each. (2) Includes 200 shares held by the children of Mr. Hathorn, as to which Mr. Hathorn disclaims beneficial ownership. (3) Includes 5,250,000 shares owned of record by Jorge L. Mas Canosa Holding I Limited Partnership, a Texas limited partnership ("Jorge L. Mas Holdings"), and 99,965 shares owned of record by the Mas Family Foundation, Inc., a Florida not-for-profit corporation (the "Family Foundation"). The sole general partner of Jorge L. Mas Holdings is Jorge L. Mas Holdings Corporation, a Texas corporation that is wholly-owned by Mr. Mas. Jorge L. Mas, Jorge Mas and other members of the Jorge L. Mas family are the sole members and directors of the Family Foundation. Mr. Mas disclaims beneficial ownership of the shares owned by the Family Foundation. (4) Includes 3,853,000 shares owned of record by Jorge Mas Holding I Limited Partnership, a Texas limited partnership ("Jorge Mas Holdings"), 99,965 shares owned of record by the Family Foundation, 12,000 shares covered by options exercisable within 60 days of April 5, 1996, and five shares owned of record individually. The sole general partner of Jorge Mas Holdings is Jorge Mas Holdings Corporation, a Texas corporation that is wholly-owned by Mr. Mas. Mr. Mas disclaims beneficial ownership of the shares owned by the Family Foundation. * Less than 1% Page 5 of 18 ELECTION OF DIRECTORS The Board of Directors currently is comprised of seven directors elected in three 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 terms of the current Class I directors expire at the Annual Meeting; if elected, the nominee for Class I director will serve until the annual stockholders meeting in 1999. The terms of the Class II directors expire at the annual stockholders meeting in 1997 and the terms of the Class III directors expire at the annual stockholders meeting in 1998. William A. Morse, one of the current Class I directors, has informed the Company that he does not wish to stand for reelection. The Company does not wish to nominate a replacement for Mr. Morse at the Annual Meeting and the Bylaws of the Company have been amended to provide for only six directors. Consequently, only one Class I director will be elected at the Annual Meeting and Jorge Mas, the other current Class I director, has been nominated by the Board of Directors to be reelected as a Class I director at the Annual Meeting. The Company has no reason to believe that Mr. Mas will refuse or be unable to accept election; however, if he 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 Annual Meeting and entitled to vote for the election of directors. Unless otherwise indicated, the accompanying form of proxy will be voted FOR the election of Mr. Mas as a Class I director. Information as to Nominee and Other Directors Class I Director Jorge Mas, 33, was elected President, Chief Executive Officer and a director of the Company on March 11, 1994, the effective date of the Acquisition. Prior to that time and during the past five years, Mr. Mas has served as President and Chief Executive Officer of Church & Tower, Inc. (and its predecessor, Communication Contractors, Inc.). In addition Mr. Mas is the Chairman of the Board of Directors of Neff Corporation, Atlantic Real Estate Holding Corp. and U.S. Development Corp., all private companies controlled by Mr. Mas, and during all or a portion of the past five years, has served as the President and Chief Executive Officer of these corporations. Class II Directors Jorge L. Mas, 56, was elected Chairman of the Board of Directors of the Company on March 11, 1994, in connection with the Acquisition. Mr. Mas has been the President and Chief Executive Officer of Church & Tower of Florida, Inc., the Company's largest subsidiary, since 1969. Mr. Mas serves on the Board of Directors of First Union National Bank of Florida. Eliot C. Abbott, 46, was elected to the Board of Directors on March 11, 1994 in connection with the Acquisition. From 1976 until September 30, 1995, Page 6 of 18 Mr. Abbott was a stockholder in the Miami law firm of Carlos & Abbott. Since October 1, 1995, Mr. Abbott has been a member of the New York law firm of Kelley Drye & Warren. Samuel C. Hathorn, Jr., 53, has been a member of the Board of Directors since 1981. He has been president and a director of Trendmaker Homes since 1981 and president of Centennial Homes, Inc. since December 1, 1990, each of which is a subsidiary of Weyerhaeuser Co. Class III Directors Arthur B. Laffer, 55, was elected to the Board of Directors on March 11, 1994 in connection with the Acquisition. Mr. Laffer has been Chairman of the Board of Directors of A.B. Laffer, V.A. Canto & Associates, an economic research and financial consulting firm, since 1979; Chief Executive Officer, Laffer Advisors Inc., an investment advisor and broker- dealer, since 1981; and Chief Executive Officer, Calport Asset Management, a money management firm, since 1992. Mr. Laffer is a director of U.S. Filter Corporation and Valve Vision, Inc. Jose S. Sorzano, 55, was elected to the Board of Directors on November 6, 1994. Mr. Sorzano has been Chairman of the Board of Directors of The Austin Group, Inc., an international corporate consulting firm, since 1989. Mr. Sorzano was also Special Assistant to the President for National Security Affairs from 1987 to 1988; Associate Professor of Government, Georgetown University, from 1969 to 1987; President, Cuban American National Foundation, from 1985 to 1987; and Ambassador and U.S. Deputy to the United Nations from 1983 to 1985. Board Committees and Meetings There are five standing committees of the Board of Directors: the Executive Committee, the Audit Committee, the Compensation and Stock Option Committee, the Nominating Committee, and the Special Transactions Committee. Mr. Morse currently is a member of the Audit Committee, the Compensation and Stock Option Committee, and the Special Transactions Committee; he will no longer serve on those committees after his term of office as a director of the Company expires at the Annual Meeting. 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 full Board meetings. During 1995, the Executive Committee met one time and acted by written consent two times. The Audit committee is composed of Mr. Laffer, who serves as Chairman, and Messrs. Abbott, Hathorn, Morse and Sorzano. The Audit Committee is charged, among other things, with reviewing and recommending to the Board of Directors the independent auditors to be selected to audit the financial statements of the Company; reviewing the scope of the proposed annual audit for the current year and the audit procedures to be applied, including approving the annual audit fee proposal from the independent auditors; reviewing the completed audit, including any comments or recommendations by the independent auditors, and monitoring the Page 7 of 18 implementation of any recommendations adopted by the committee; reviewing the adequacy and effectiveness of the Company's accounting and financial controls; reviewing the internal audit function of the Company; and investigating any matter brought to its attention within the scope of its duties, including retaining independent counsel, accountants and others to assist it in its investigations. During the year ended December 31, 1995, the Audit Committee met on four 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, 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, 1995, 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 1995, recommends to the Board of Directors candidates for election to the Board of Directors. The Committee considers candidates recommended by the stockholders pursuant to written applications submitted to the Secretary. Stockholder proposals for nominees should include biographical information regarding the proposed nominee with a statement from the stockholder as to the qualifications and willingness of the candidate to serve on the Company's Board of Directors. The Special Transactions Committee is composed of Mr. Laffer, who serves as Chairman, and Messrs. Morse and Sorzano. The primary function of the Special Transactions Committee, which met once during 1995, is to review related party transactions between the Company and any officer, director or affiliate of the Company. During the year ended December 31, 1995, the Board of Directors met, or acted by unanimous written consent, on 12 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. Page 8 of 18 Compliance with Section 16(a) of the Securities Exchange Act of 1934 Based solely upon a review of the copies of the forms furnished to the Company, the Company believes that, during the year ended December 31, 1995, all filing requirements under Section 16(a) of the Securities Exchange Act of 1934 applicable to its officers, directors and greater than ten percent beneficial owners were complied with on a timely basis, except for a late filing by Jose S. Sorzano to report his election as director in November 1994; late filings by Jorge Mas, Ismael Perera, the Company's Senior Vice President - Operations, and Carlos A. Valdes, the Company's Senior Vice President, in each case to report the grant of options to purchase 60,000, 40,000 and 40,000 shares of Common Stock, respectively, on February 3, 1995; and a late filing by Ismael Perera and Carlos A. Valdes to report shares of Common Stock purchased in 1994 through the MasTec, Inc. 401(K) Retirement Savings Plan. 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 whom are non- employee directors of the Company. Statement of Philosophy of Executive Compensation The compensation program of the Company is designed to (i) provide base compensation reasonably comparable to that offered by other leading companies to their executive officers so as to attract and retain talented executives, (ii) motivate executive officers to achieve the strategic goals set by the Company by linking an officer's incentive compensation to the performance of the Company and applicable business units, as well as to individual performance, and (iii) align the interests of its executives with the long-term interests of the Company's stockholders through the award of stock options and other stock-related programs. To implement this philosophy, the Company offers its executive officers compensation packages that include a mix of salary, incentive bonus awards, and stock options. In determining the level and form of executive compensation to be paid or awarded, the Committee relies primarily on an assessment of the Company's overall performance in light of its strategic objectives rather than on any single quantitative or qualitative measure of performance. The Compensation Committee considered the following factors in establishing 1995 compensation: Page 9 of 18 * A substantial increase in revenue in comparison to prior years. * A significant strengthening and expansion of the Company's core telecommunications construction business into new and existing markets and with new and existing customers. * The diversification of the Company's core business through strategic acquisitions and investments. * The continued divestiture of non-core assets to concentrate resources on the Company's core business. * The substantial completion of the integration of Church & Tower and Burnup & Sims following the Acquisition as well as an increase in overall efficiency among the Company's business units. Salary The base salary of executive officers is determined initially by analyzing and evaluating the responsibilities of the position and comparing the proposed base salary with that of officers in comparable positions in other companies. Adjustments are determined by objective factors such as the Company's performance and the individual's contribution to that performance and subjective considerations such as additional responsibilities taken on by the executive. Although the Compensation Committee believes that the Company made substantial progress in 1995 as indicated above, the benefits of strategic actions during the year have not yet been fully realized in the financial results of the Company. Accordingly, no increase in base salary for 1995 performance was recommended by the Compensation Committee for the executive officers of the Company, including the Named Executive Officers identified under the caption "Executive Compensation - Summary Compensation Table" below. 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, and the financial performance of the Company. The Compensation Committee did not recommend the award of bonuses to the Company's executive officers, including the Named Executive Officers, for 1995. Stock Incentive Plan Long-term incentive compensation for executives consists of stock- based awards made under the Company's Stock Incentive Plan. The Stock Incentive Plan provides for the granting of options to purchase Common Stock to key employees at exercise prices equal to the fair market value on the date of grant. The Compensation Committee believes that the use of stock options reinforces the Committee's philosophy that management compensation should be clearly linked to stockholder value. The Compensation Committee awards options to key employees, including executive officers, based on current performance, anticipated future contribution based on such performance, and ability to materially impact the Company's financial results. In 1995, the Compensation Committee granted stock options under the Stock Incentive Plan to the Company's executive officers, Page 10 of 18 including the Named Executive Officers, primarily based on 1994 results. In addition, based on the indicators described above and to further link his compensation to stockholder value, the Compensation Committee in 1996 recommended the award to Jorge Mas, the Company's President and Chief Executive Officer, of options to purchase 50,000 shares of the Company's Common Stock at an exercise price equal to the fair market value of the stock on the date of grant. CEO Compensation In setting the salary and incentive compensation for Jorge Mas, the Company's Chief Executive Officer, the Compensation Committee reviewed the Company's financial performance in 1995 with respect to revenue, net income and income per share (before special charges) compared to the performance of other companies in its industry and the Company's prior performance, as well as the other factors described above. Based on its review of this information, the Compensation Committee decided not to recommend an increase in salary or a bonus award for the Chief Executive Officer for 1995 performance. The Compensation Committee did award Mr. Mas stock options for 1995 performance to further link his 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 Page 11 of 18 EXECUTIVE COMPENSATION Summary Compensation Table The following table summarizes all compensation awarded to, earned by or paid to (a) the Company's Chief Executive Officer, and (b) the four other most highly compensated executive officers of the Company whose total salary and bonus exceeded $100,000 (of which there were only three) (together, the "Named Executive Officers") for services rendered in all capacities to the Company and its subsidiaries for the Company's last fiscal year.