ABLE TELCOM HOLDING CORP.
1601 Forum Place
Suite 1110
West Palm Beach, Florida 33401
________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 26, 1996
________________________
To Shareholders:
Notice is hereby given that the 1996 Annual Meeting of Shareholders of Able
Telcom Holding Corp., a Florida corporation,("The Company") will be held at
The Omni Hotel, 1601 Belvedere Road, West Palm Beach, Florida, 33406 on Tuesday,
March 26, 1996, at 10:00 A.M., Eastern Daylight Savings Time for the following
purposes:
1. To elect a Board of six Directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected and qualified;
2. To consider and vote upon a proposal to approve the adoption of a stock
option plan for officers, non-employee directors, consultants and key
employees of the Company;
3. To consider and take action upon such other matters as may properly come
before the Annual Meeting and any adjournment or adjournments thereof.
Only Shareholders of record as of the close of business on February 20, 1996
will be entitled to notice and to vote at the meeting and any adjournment
thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT
YOU EXPECT TO ATTEND, YOU ARE REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED
PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES. IF YOU SHOULD BE PRESENT AT THE MEETING AND DESIRE TO
VOTE IN PERSON, YOU MAY WITHDRAW YOUR PROXY.
By Order of the Board of Directors
/s/ William J. Mercurio
-------------------------------------
William J. Mercurio
President and Chief Executive Officer
West Palm Beach, Florida
February 27, 1996
ABLE TELCOM HOLDING CORP.
1601 Forum Place
Suite 1110
West Palm Beach, Florida 33401
________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
________________________
This Proxy Statement is being furnished to you in connection with the
solicitation by the Board of Directors of Able Telcom Holding Corp., a Florida
corporation (the "Company"), of proxies to be voted at the Annual Meeting of
Shareholders (the "Annual Meeting"). The Annual Meeting will be held at The
Omni Hotel, 1601 Belvedere Road, West Palm Beach, Florida, 33406 at 10:00 A.M.
Eastern Daylight Savings Time, on Tuesday, March 26, 1996, and at any
adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. Any Shareholder giving
such a proxy may revoke it by written notice to the Secretary of the Company
at the above address at any time before it is exercised. Attendance at the
meeting will not have the effect of revoking the proxy unless such written
notice is given, or unless the Shareholder votes by ballot at the meeting.
The approximate date on which this Proxy Statement and the accompanying form
of proxy will first be mailed to the Company's Shareholders is March 1, 1996.
SOLICITATION OF PROXIES
The enclosed Proxy is solicited on behalf of the Board of Directors of the
Company. The costs of this mailed solicitation will be borne by the Company.
Solicitation of proxies will be made by mail, personally or by telephone, by
officers, directors and regular employees of the Company. The Company, upon
request, will reimburse brokerage firms and nominees for their reasonable
expenses in forwarding the proxy materials to their beneficial owners.
VOTING SECURITIES
Holders of record of shares of the Company's Common Stock, par value $.001 per
share (the "Common Stock") at the close of business on February 20, 1996
("Record Date") are entitled to vote at the meeting. Each share of the
Company's Common Stock entitles the holder to one vote on any matter coming
before a meeting of Shareholders of the Company. Common Stock is the only class
of capital stock of the Company currently outstanding. The presence, in person
or by proxy, of the holders of shares representing a majority of the outstanding
Common Stock will constitute a quorum. On February 1, 1996, the Company had an
aggregate of 8,193,212 shares of Common Stock issued and outstanding.
The attendance, in person or by proxy, of the holders of a majority of the
issued and outstanding shares of Common Stock entitled to vote at the annual
meeting is necessary to constitute a quorum in order to transact business. The
Florida Business Corporation Act (the "Florida Act") provides that the directors
are elected by a plurality of the votes cast. The Company's by-laws provide
that all other matters are approved if the votes cast in favor of the action
exceed the votes cast against the action (unless the matter is one for which the
Florida Act or the Company's Articles of Incorporation require a greater vote).
Abstentions and broker non-votes have no legal effect,unless a specific
percentage of those Shareholders entitled to vote is required by the Florida
Act or the Company's Articles of Incorporation to approve a matter.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO SIGN, DATE AND RETURN
THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
If you do attend, you may vote by ballot at the meeting, thereby canceling any
proxy previously given.
If the enclosed proxy is properly signed, dated and returned, the shares of
Common Stock represented thereby will be voted in accordance with the
instructions thereon. If no instructions are indicated, the Common Shares
represented thereby will be voted FOR the election of the nominees set forth
under the caption "Nominees, Current Directors Not Standing for Re-Election and
Other Executive Officers" and FOR the adoption of the stock option plan
described under the caption "Proposed Adoption of 1996 Stock Option Plan."
NOMINEES, CURRENT DIRECTORS NOT STANDING FOR RE-ELECTION AND
OTHER EXECUTIVE OFFICERS
At the meeting, six Directors will be elected by the shareholders to serve
until the next annual meeting and until their successors are elected and
qualified. When signed, dated and returned, the accompanying proxy will be
voted FOR the election as Directors of Messrs. Mercurio, Gaines, Caudill,
Taylor, Nelles and Callahan (the "Nominees"), all of whom are now Directors,
unless the proxy contains contrary instructions. Management has no reason to
believe that any of the Nominees will not be a candidate or will be unable to
serve as a Director. However, in the event that any of the Nominees shall
become unable or unwilling to serve as a Director, the proxy will be voted for
the election of such person or persons as shall be designated by the Board of
Directors.
The following table sets forth certain information regarding the Company's
Nominees, Current Directors Not Standing for Re-election and Other Executive
Officers .
NOMINEES
<TABLE>
<S> <C> <C> <C>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- -------------------------- ---- -------------------------------- -------------
William J. Mercurio 54 President, Chief Executive
Officer, and Director 1995
Frazier L. Gaines 56 President of Able Telcom
International, Inc. ("ATI")
and Director 1992
Bill B. Caudill 49 Director 1992
Gideon D. Taylor 53 Director 1988
Robert C. Nelles 57 Director 1995
William D. Callahan 60 Director 1995
</TABLE>
WILLIAM J. MERCURIO has been President and Chief Executive Officer of the
Company since June 29, 1995. Mr. Mercurio was Sr. Vice President and Director
of Burnup & Sims, Inc. (n/k/a MASTEC, Inc.), a telecommunication and utility
service company, where he served from 1971 until 1986. From 1986 until June
1995, he was the Managing Partner of Mercurio & Associates, P.A., Certified
Public Accountants.
FRAZIER L. GAINES has been a Director of the Company since August 1992 and
President of ATI since June 22, 1994. From August of 1992 to June 22, 1994, Mr.
Gaines was Chief Operating Officer of the Company. Mr. Gaines developed and is
in charge of the Company's Latin American Operations. From 1987 to 1992, Mr.
Gaines was vice President of Judycom, Inc. and Judycom Construction
Corporation, both of which were located in Lexington, Kentucky and engaged in
fiber optic installation. Grass Cable Vision. Mr. Gaines is the father-in-law
of Daniel L. Osborne, the Company's Chief Financial Officer.
BILL B. CAUDILL has been a Director since August 1992. Mr. Caudill resigned as
President of Telecommunications Technologies, Inc. (a former subsidiary of the
Company) in July 1995. He was President and Chief Executive Officer of the
Company from August 1992 to June 22, 1994. From 1988 to 1992, Mr. Caudill was
the President of Teletronics Technologies, Inc., a telecommunications
engineering, maintenance and construction company located in Lexington,
Kentucky.
GIDEON D. TAYLOR was Chairman of the Board of the Company from 1988 until
May 1995. From October 1988 to August 1992, Mr. Taylor was also President and
Chief Executive Officer of the Company.
ROBERT C. NELLES was elected to the Board of Directors in February 1995. Mr.
Nelles is the President and owner of Nelles & Associates, Inc., an international
telecommunications consulting company he founded in 1991. Mr. Nelles is also a
co-founder and chairman of Access-ISDN, Inc. Prior to founding these companies,
Mr. Nelles held senior executive positions both domestically and
internationally for Northern Telecom for over 35 years.
WILLIAM D. CALLAHAN has been a Director since September, 1995. Mr. Callahan
retired from Deloitte & Touche, LLP, as an audit partner where he served for
more than 23 years, having SEC reporting responsibility for a variety
of publicly-traded companies.
CURRENT DIRECTORS NOT STANDING FOR RE-ELECTION
<TABLE>
<S> <C> <C> <C>
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION SINCE
- ------------------- ---- --------------------------------- ---------
Clark W. Barlow 57 Chairman of the Board 1995
C. Douglas Hubbard 46 President of Transportation
Safety Contractors, Inc. ("TSCI") 1995
James C. Nix, Jr. 52 Retired 1994
</TABLE>
CLARK W. BARLOW has been the Chairman of the Board of the Company since
May 17, 1995. Mr. Barlow was also President and Chief Executive Officer of the
Company from June 22, 1994 until his resignation from those positions on June
29, 1995. Mr. Barlow retired from GTE after more than 35 years of service. Mr.
Barlow will not stand for re-election.
C. DOUGLAS HUBBARD has been President of Transportation Safety Contractors,
Inc. ("TSCI") and its affiliate since June 22, 1994. Mr. Hubbard was elected
to the Board of Directors of the Company in November of 1994 and will not stand
for re-election.
JAMES C. NIX, JR. was elected to the Board of Directors on May 19, 1994. Mr.
Nix retired from GTE after more than 25 years where he held various operational
positions. Mr. Nix will not stand for re-election.
OTHER EXECUTIVE OFFICERS
<TABLE>
<S> <C> <C> <C>
SERVING
NAME AGE POSITION SINCE
- ----------------------- ----- -------------------------------------- -------
Daniel L. Osborne 38 Chief Financial Officer and Secretary 1993
</TABLE>
DANIEL L. OSBORNE has been the Secretary and Chief Financial and Accounting
Officer of the Company since January 1993. From February 1991 to December
1992, Mr. Osborne was an operations analyst for BTR, Inc. From May 1989 to
February 1991, Mr. Osborne was the Controller of Ivex Corp. From 1986 to May
1989, Mr. Osborne was a Senior Auditor for Arthur Anderson & Co.
EXECUTIVE COMPENSATION
The following table provides information concerning the annual compensation of
each of the named Executive Officers of the Company, as defined under applicable
Securities and Exchange Commission rules, for services rendered to the Company
in Fiscal Years 1995, 1994 and 1993, respectively.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------
Securities
Name and Other Annual Restricted Stock Underlying
Principal Position Year Salary ($) Compensation Awards ($)(7) Options (#)
- --------------------------------------------- ---- ---------- ------------ ---------------- -----------
<S> <C> <C> <C> <C> <C>
Clark W. Barlow - Chairman of the Board(1) 1994 81,731 4,057
1995 117,185 2,954
William J. Mercurio - President, Chief 1995 66,600 2,000 100,000
Executive Officer and Director(2)
Daniel L. Osborne, Chief Financial Officer 1993 48,750 --- 100,000
and Secretary 1994 60,000 --- 9,000 25,000
1995 60,000 ---
Frazier L. Gaines, President of ATI 1993 104,000 6,000 260,000
and Director(3) 1994 104,000 62,125 75,000
1995 104,000 35,000
C. Douglas Hubbard - President of TSCI and 1994 54,814 4,186
Director(4) 1995 150,000 3,048
Bill B. Caudill - Director(5) 1993 104,000 6,000
1994 104,000 6,000
1995 36,000 4,000
Gideon D. Taylor - Director(6) 1993 104,000 6,000
1994 56,000 1,500
1995 36,000 ---
</TABLE>
_____________________________
(1) Mr. Barlow resigned as Chief Executive Officer and President in June 1995
and as Chairman of the Board effective March 26, 1996. Upon his
resignation as Chief Executive Officer, Mr. Barlow's existing Employment
Agreement was terminated. Commencing June 1995. Mr. Barlow receives, as
compensation, a base salary of $24,000 annually, plus an automobile, with
the annual payments included in other annual compensation. Included in Mr.
Barlow's base salary in 1995 and 1994 is $60,032 and $29,731, respectively,
for earned compensation that has not been paid.
(2) Mr. Mercurio was employed by the Company effective June 29, 1995 under a
three year employment contract which provides Mr. Mercurio a base annual
salary of $200,000 and a grant of 100,000 stock options with an exercise
price of 90% of the fair market value on the date of grant. Said options
vest at varying percentages over a three-year period. Mr. Mercurio is also
supplied an auto allowance of $6,000 which is included in other annual
compensation.
(3) Included in other annual compensation for fiscal years 1994 and 1995 is
$35,000 that Mr. Gaines receives as a living allowance while overseas.
(4) Mr. Hubbard resigned as a Director effective March 26, 1996. Under the
terms of a three-year employment agreement which commenced on June 22,
1994, Mr. Hubbard is compensated at an annual base salary of $150,000 plus
an automobile, with the annual payments included in other annual
compensation. His employment with the Company commenced on June 22, 1994
with the acquisition of TSCI.
(5) Mr. Caudill resigned from the Company as President of Telecommunication
Technologies, Inc. (a former subsidiary of the Company) as of July 1995.
Since his resignation, Mr. Caudill has provided consulting services to the
Company and is compensated under terms negotiated on a project by project
basis. Mr. Caudill has not earned compensation for consulting services
through February 1, 1996.
(6) Mr. Taylor resigned as Chairman of the Board on May 17, 1995.
(7) Executive officers held no restricted stock at October 31, 1995 relating to
the restricted stock awards issued in fiscal year 1993.
OPTIONS GRANTED TABLE
<TABLE>
<CAPTION>
Potential Realized Value
@ Assumed Annual Rates
of Stock Price Application
for Option Term
<S> <C> <C> <C> <C> <C> <C> <C> <C>
No. of Securities % of Total Options Excercise Market Expiration
Underlying Granted to Employees or Base Price/Date of Date
Options Granted in Fiscal Year Price Grant 0% 5% 10%
- ---------- ------------------- --------------------- ---------- ---------------- --------------- ---------- ---------- ----------
William J. 100,000(1) 80% $ 4.83 $ 5.37 June 29, 2005 $ 54,000 $ 401,000 $ 971,000
Mercurio
Daniel L. 25,000(2) 20% 6.44 6.44 Sept. 28, 2005 --- 104,250 274,750
Osborne
</TABLE>
(1) Options exercisable as follows: fifty percent (50%) at the end of year
one, twenty five percent (25%) at the end of year two, and twenty five
percent (25%) at the end of year three.
(2) Options vest ratably over a three-year period, commencing September 28,
1995.
AGGREGATED OPTION EXERCISES and OPTION VALUE TABLE
The following table provides information on options exercised in the fiscal
year ended October 31, 1995 by the executive officers named in the "Summary
Compensation Table" above, the number of unexercised options each of them held
at October 31, 1995 and the value of the unexercised "in-the-money" options each
of them held as of that date.
<TABLE>
<S> <C> <C> <C> <C>
Number of Securities Value of Unexercised
Underlying Unexercisable In-the-Money Options at
Options at Fiscal Year- Fiscal Year-End($)(1)
End(#)
Acquired on Value
Name Exercise Realized Excercisable/Unexercisable Exercisable/Unexercisable
- ------------------- ------------- -------- -------------------------- -------------------------
William J. Mercurio -0- -0- -0-/100,000 -0-/67,000
Daniel L. Osborne -0- -0- 50,500/25,000 252,500/-0-
Frazier L. Gaines -0- -0- 110,000/-0- 599,500/-0-
</TABLE>
(1) Options are "in-the-money" at the fiscal year-end if the fair market value
of the underlying securities on such date exceeds the exercise price of the
option. The amounts set forth represent the difference between the fair
market value of the securities underlying the options at the close of
trading on October 31, 1995, based on the average of the bid and the asked
price of $5.50 per share of Common Stock on that date (as quoted on NASDAQ)
and the exercise price of the options, multiplied by the applicable number
of options.
RETIREMENT BENEFITS
The Company currently does not have any retirement.
COMPENSATION OF DIRECTORS
The Board of Directors of the Company held 13 meetings in fiscal year 1995 with
each member attending at least 75% of these meetings. Currently, the members
of the Board of Directors that also serve as executive officers receive no fees
or remuneration for acting in their capacity as a Director of the Company.
Compensation in the amount of $750.00 per meeting attended, including committee
meetings, and reimbursement of expenses for activities associated with Board
responsibilities will be paid to non-employee directors. In addition, non-
employee directors will be granted 5,000 stock options each, with an exercise
price of fair market value at the date of grant.
The Board of Directors has a standing Compensation Committee, Audit Committee
and a Nominating Committee.
Compensation Committee - The members of the Compensation Committee, appointed
on September 19, 1995, are Messrs. Barlow, Nelles and Callahan. The Compensation
Committee reviews and makes recommendations to the Board of Directors regarding
the compensation of officers of the Company; examines periodically the
compensation structure of the Company; and reviews and recommends the grant of
stock options and bonuses for all officers of the Company.
Audit Committee - The members of the Audit Committee of the Board of Directors,
appointed on September 19, 1995, are Messrs. Barlow, Callahan, and Nelles. The
Audit Committee of the Board of Directors meets independently with the Company's
senior management and with representatives of the Company's independent
auditors. The duties of the Audit Committee of the Board of Directors are to
recommend the engagement or discharge of the Company's independent auditors; to
review the scope, fees and results of the annual audit; monitor compliance with
the Company's policies; and to review the effectiveness of the Company's
internal control systems. The Audit Committee of the Board of Directors meets
at least once each year.
Nominating Committee - The current members of the Nominating Committee,
which committee was created in July 1995, are Messrs. Barlow, Mercurio, Gaines,
Nelles and Taylor. The Nominating Committee reviews and makes recommendations
to the Board of Directors regarding candidates for election to the Board of
Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Chief Executive Officer has an employment agreement which
governs his compensation. The Chief Executive Officer's salary, as set forth
in his employment agreement, was determined by arm's-length negotiation between
the Board of Directors and Mr. Mercurio. The salaries of the Company's other
executive officers were determined by the entire Board of Directors, based on
recommendations of the Chief Executive Officer and the Compensation Committee,
created by the Board in January 1995. The Compensation Committee currently
consists of two outside, non-employee directors: Messrs. Nelles and Callahan;
and Clark W. Barlow, Chairman of the Board.
COMPENSATION COMMITTEE REPORT
Executive Compensation Policy - The Company's overall compensation philosophy
is as follows:
To attract and retain quality talent, which is critical to both short and long-
term success of the Company; and
To Create mutual interest between executive officers and shareholders
through compensation structures which share the rewards and risks of strategic
decision making.
Base Compensation - The Company's approach to base compensation for principal
executive officers is to offer competitive salaries in comparison with market
practices. Increases in base compensation will be based on the competence and
performance of the Company's executives and will take into account the
performance of the Company.
In determining compensation, the Board examines market compensation levels
and trends observed in the labor market. Market information is used as a frame
of reference for compensation decisions. The salary of all officers is
determined by the Board acting as a whole and is based on the recommendations of
the Chief Executive Officer and Compensation Committee.
The Board and the Committee believes that it is appropriate to specifically
tie a portion of the compensation of its executive officers to the performance
of the company and its subsidiaries. Consequently, as discussed below, each
executive officer's salary has two components: base salary and bonus
compensation. Bonus compensation is determined as a percentage of the pre-tax
net income of the subsidiary which employs the executive.
CEO Compensation - On June 29, 1995, the Company entered into an employment
agreement with Mr. Mercurio. The terms of such agreement, including the base
salary and bonus compensation thereunder, were based on arms'-length
negotiations between Mr. Mercurio and the remaining members of the Board of
Directors. See "Summary Compensation Table" for information concerning Mr.
Mercurio's compensation.
Respectfully submitted,
COMPENSATION COMMITTEE
/s/ Clark W. Barlow
- --------------------------
Clark W. Barlow
/s/ William D. Callahan
- --------------------------
William D. Callahan
/s/ Robert C. Nelles
- --------------------------
Robert C. Nelles
PERFORMANCE GRAPH
The following performance graph compares the cumulative total return on the
Company's common stock with the cumulative total return of the companies in the
Standard and Poor's 500 index and the NASDAQ Telecommunications Stocks.
The cumulative total return for each of the periods shown in the performance
graph is measured assuming an initial investment of $100 on October 31, 1991.
Due to the low volume of activity related to the sale of the Company's Common
Stock prior to the second quarter of fiscal year 1991 on the Over the Counter
Market, there is no price quotation as of October 31, 1990; accordingly only
four years of data is available for comparison. No dividends have been paid on
the Company's Common Stock.
-------------------------------------------
| "A" - Able Telcom Holding Corp. |
| "N" - NASDAQ Telecommunications Services |
| "S" - S & P 500 |
--------------------------------------------
$600
__________________________________________________________________
$550
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$500
__________________________________________________________________
$450
________________________________A_________________________________
$400
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$350
______________________________________________A___________________
$300
____________________________________________________________A_____
$250
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$200
________________________________N_________________________________
$150
________________________________________________N_____________N,S___
$100
__A,N,S__________S,N_____________S______________S____________________
$50
__________________A__________________________________________________
$0
____|_____________|______________|______________|______________|_____
1991 1992 1993 1994 1995
<TABLE>
<S> <C> <C> <C> <C> <C>
1991 1992 1993 1994 1995
- ---------------------------------- ------- ------- ------- ------- -------
Able Telcom Holding Corp. $100.00 $65.00 $465.00 $350.00 $278.00
NASDAQ Telecommunications Services $100.00 $106.60 $212.67 $179.60 $192.70
S&P 500 $100.00 $109.95 $126.39 $131.25 $175.88
</TABLE>
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table sets forth information regarding beneficial ownership of
the Company's Common Stock as of February 1, 1996 by: (i) persons who held of
record and beneficially owned more than 5% of the outstanding common stock of
the Company; (ii) each of the Company's Named Executive Officers, Directors and
nominees for Director; and (iii) all Directors and Named Executive Officers of
the Company as a group. As of February 1, 1996, there were 8,193,212 shares of
common stock outstanding.
<TABLE>
<S> <C> <C>
Names of Beneficial Owner No. of Outstanding Percentage
Shares of Shares
- ------------------------------------- ------------- --------------------
Clark W. Barlow 224,517 3%
William J. Mercurio 2,000 ---
Daniel L. Osborne 50,500(1) 1%
Frazier L. Gaines 646,942(2) 8%
C. Douglas Hubbard 223,237 3%
Bill B. Caudill 461,983 5%
Gideon D. Taylor 827,352(3) 10%
Robert C. Nelles --- ---
William D. Callahan --- ---
All officers and directors as a group 2,437,811 30%
(1) Represents the 50,500 shares which Mr. Osborne is entitled to acquire from
a stock purchase option currently exercisable at a price of $.50 per share.
(2) Includes an aggregate of 9,000 shares held as trustee UGMA for four minors,
for which Mr. Gaines disclaims beneficial ownership. Also includes the
shares issuable to Mr. Gaines on the exercise of a stock purchase option
for 110,000 shares of Common Stock, which is currently exercisable at a
price of $.05 per share.
(3) Includes 21,619 shares owned by Mr. Taylor's wife, Willoughby Taylor.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
To the Company's knowledge, and based on a review of available forms and
reports filed with the Company by the Company's Directors and officers, the
filing requirements of Section 16(a) with regard to Forms 3 and 4 were not
complied with during fiscal year 1995 by Messrs. Mercurio, Gaines, Caudill and
Taylor, each of whom were late filing one report.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1995, Mr. Clark W. Barlow and Mr. C. Douglas Hubbard each accepted
129,717 shares of Common Stock (259,434 shares in the aggregate) as payment of
$750,000 of the amounts owed on their promissory notes, each in the amount of
$1,000,000, issued in connection with the acquisition of TSCI in June 1994.
Messrs. Barlow and Hubbard each received $18,500 of interest during 1995, at
the prime rate, on the remaining unpaid balance of $250,000.
Mr. William E. Barlow, brother of Mr. Clark W. Barlow, is employed by the
Company at a salary of approximately $100,100 per year under a three year
employment contract entered into in connection with the acquisition of TSCI in
June 1994.
In September 1995, Mr. Hubbard provided a working capital loan to the Company
in the amount of $250,000. Interest of $6,842, based on the prime rate, has
been paid to Mr. Hubbard in connection with the borrowing. The Company repaid
the loan in full on January 30, 1996.
In November 1994, the Company entered into a Joint Venture arrangement with
Digital Communication Services, Inc. ("DCS"), a company principally owned by J.
Theodore Snedeker, a former Director of the Company, pursuant to which the
Company paid DCS $300,000 cash in exchange for exclusive rights to install
certain telecommunication equipment being developed by DCS. In addition, on
April 7, 1995, Able Telcom International, Inc., a subsidiary of the Company,
loaned DCS 51,000,000 bolivars, the currency of Venezuela, or the equivalent of
$300,000 U.S. dollars with interest accruing at 9% per annum. On October 31,
1995, the Company entered into an agreement terminating the joint venture and
purchasing Mr. Snedeker's interest in the equipment in exchange for the
cancellation and forgiveness of the loan to DCS.
In connection with the acquisition of H.C. Connell, Inc., on December 8, 1995,
Messrs. Gaines and Caudill loaned the Company $250,000 each with interest based
on the prime rate plus 1%. The loans are due on June 8, 1996, and are secured
by certain receivables of the acquired Company. Messrs. Gaines and Caudill each
received 5,000 shares of restricted Common Stock as consideration for the loan.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company's former independent accountants, Mercurio & Associates, P.A. and
KPMG Peat Marwick LLP, which had been engaged by the Company to audit its
consolidated financial statements for the fiscal years ended October 31, 1993
and 1994, respectively, were dismissed by the Company on June 7, 1994 and
October 9, 1995, respectively. The reports of Mercurio & Associates, P.A. and
KPMG Peat Marwick LLP on the consolidated financial statements of the Company
contained no adverse opinion or disclaimer of opinion, nor were the reports
qualified or modified as to uncertainty, audit scope, or accounting principles
used, with the exception of the adoption of Financial Accounting Standards No.
109, "Accounting for Income Taxes" for the year ended October 31, 1994. Both
decisions by the Company to change accountants were recommended by the audit
committee and approved by its Board of Directors. From the terms of their
appointment to the dismissal of the former accountants, there were no
disagreements on any matters of accounting principles or practice, financial
statement disclosure, or auditing scope or procedure in connection with their
reports.
On October 11, 1995, the Board of Directors of the Company approved the
appointment of Ernst & Young LLP as its Independent Certified Public Accountants
to audit the Company's Consolidated Financial Statements for the year ended
October 31, 1995.
PROPOSED ADOPTION OF 1996 STOCK OPTION PLAN
On September 28, 1995, the Board of Directors of the Company approved the
adoption of the 1996 Stock Option Plan (the "Plan"). Under the Plan, the
Company has reserved an aggregate of 550,000 shares of Common Stock for
issuance. The purpose of the Plan is to encourage stock ownership by certain
officers, non-employee directors and key personnel, including consultants and
advisors of the Company and its wholly-owned subsidiaries, to give such persons
a greater personal interest in the success of the Company's business, and to
provide incentive to continue to advance and contribute to the Company. The
Plan is administered by those members of the Board of Directors of the Company
who are "disinterested persons" within the meaning of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended, which committee selects
the persons who will be granted options under the Plan, prescribes the terms and
provisions of each option granted (which need not be identical), specifies the
number of shares subject to each option, sets the option price and determines
the maximum period during which options may be exercised.
Options granted under the Plan may either be options qualifying as incentive
stock options (the "Incentive Options") under Section 422(a) of the Internal
Revenue Code of 1986, as amended, or non-qualifying options ("Nonqualified
Options"). Any Incentive Option granted under the Plan must provide for an
exercise price of not less than 100% of the fair market value of the underlying
shares on the date of such grant; provided, however, that the exercise price of
any Incentive Option granted to an eligible employee owning more than 10% of the
outstanding Common Stock of the Company must not be less than 110% of such fair
market value as determined on the date of the grant. The term of each option
and the manner in which it may be exercised is determined by the Board of
Directors, provided that no option may be exercisable more than ten years after
the date of its grant and, in the case of an Incentive Option granted to an
eligible employee owning more than 10% of the Common Stock, no more than five
years after the date of the grant.
The individuals eligible to receive options under the Plan are employees, non-
employee directors, advisors and consultants of the Company and its
subsidiaries. Non-employee directors, advisors and consultants shall only be
eligible to receive Nonqualified Options. Employees are eligible to receive
both Incentive Options and Nonqualified Options. The Company currently has five
non-employee directors and approximately 930 employees who are eligible to
participate in the Plan. In the event that an outstanding option terminates for
any reason, the shares of Common Stock subject to the unexercised portion of
such option shall again be available for grants under the Plan.
Options granted under the Plan are nontransferable and nonassignable by the
optionee, other than by will or the laws of descent and distribution, and are
exercisable only by the optionee during his or her lifetime. No option may be
exercised after the expiration of its term. The Company receives no proceeds
upon the grant of options. Any proceeds received by the Company from the sale
of Common Stock on the exercise of options shall be used for general corporate
purposes.
Upon the occurrence of certain events involving a recapitalization or
reorganization of the Company, the committee will make appropriate adjustments
to the number of shares covered by each outstanding option and the per share
exercise price thereof, in its discretion to prevent dilution or enlargement of
rights.
The Board of Directors of the Company may at any time suspend or discontinue
the Plan, or revise or amend it in any respect whatsoever; provided, however,
that without approval of the stockholders, no revision or amendment shall
increase the number of shares of Common Stock that may be issued under the Plan,
materially increase the benefits accruing to individuals holding options granted
pursuant to the Plan or materially modify the requirements as to eligibility for
participation in the Plan.
The Plan provides that each existing non-employee director of the Company as of
September 28, 1995, or any other non-employee as of the date he or she first
becomes a director, shall automatically be granted a Nonqualified Option to
purchase 5,000 shares of Common Stock. The options granted to the Company's
initial non-employee directors have an exercise price equal to 100% of the fair
market value per share of the Common Stock as of September 28, 1995, shall not
be exercisable for a period of one year from the date of grant and shall expire
on the earlier of (i) six years from the date of grant or (ii) 30 days after the
optionee ceases to be a member of the Board.
As of February 20, 1996, options with respect to 177,000 shares of common stock
had been granted and were outstanding under the Plan, subject to the approval of
the Plan by the Company's shareholders. All options granted under the plan have
an exercise price of the fair market value at the date of grant.
The Company did not have any stock option or similar plans prior to September
28, 1995.
Vote Required
- -------------
For approval of the Plan, the affirmative vote of a majority of the shares of
Company Common Stock represented at the meeting, in person or by proxy, is
required. The Board of Directors recommends a vote FOR the adoption of the
Plan.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal that a holder of Common Stock intends to present at next year's
annual meeting of stockholders must be received by the Company, at the address
appearing on the first page of this Proxy Statement, no later than December 15,
1996, in order to be included in the proxy statement and form of proxy relating
to that meeting.
ADDITIONAL INFORMATION
Copies of the Company's Annual Report filed with the Securities and Exchange
Commission are being mailed to stockholders of the Company with this Proxy
statement. Additional copies are available without charge upon request.
Requests should be addressed to the Secretary, Able Telcom Holding Corp., at the
address on the first page of this Proxy Statement.
MISCELLANEOUS; OTHER MATTERS
The Company is not aware of any business to be acted on at the Annual Meeting
other than that which is explained in this Proxy Statement. In the event that
any other business calling for a vote of the shareholders is properly presented
at the meeting, the holders of the proxies will vote your shares in accordance
with their best judgment.
By Order of the Board of Directors
/s/ William J. Mercurio
-------------------------------------
William J. Mercurio
President and Chief Executive Officer
West Palm Beach, Florida
February 27, 1996
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