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
(Amendment No. 1)
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 (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
ABLE TELCOM HOLDING CORP.
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(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 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):
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(4) Proposed maximum aggregate value of transaction:
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(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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
<PAGE>
March 23, 1998
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Able Telcom Holding Corp. (the "Company"), which will be held on Friday, April
24, 1998 at 10:00 a.m., local time, at The Omni Hotel, 1601 Belvedere Road, West
Palm Beach, Florida 33406.
Please note that attendance at the Annual Meeting will be limited to
Shareholders as of the record date (or their authorized representatives) and to
guests of the Company. If your shares are registered in your name and you plan
to attend the Annual Meeting, please mark the appropriate box on the enclosed
proxy card and you will be pre-registered for the meeting (if your shares are
held of record by a broker, bank or other nominee and you plan to attend the
meeting, you must also pre-register by returning the registration card forwarded
to you by your bank or broker).
The notice of the meeting and proxy statement on the following pages
contain information concerning the business to be considered at the meeting.
Please give these proxy materials your careful attention. It is important your
shares be represented and voted at the Annual Meeting regardless of the size of
your holdings. Accordingly, whether or not you plan to attend the Annual
Meeting, please complete, sign, and return the accompanying proxy card in the
enclosed envelope in order to make sure your shares will be represented at the
Annual Meeting. Shareholders who attend the Annual Meeting will have the
opportunity to vote in person.
The continuing interest of the Shareholders in the business of the Company
is gratefully acknowledged. We hope many will attend the meeting.
Sincerely,
Gideon D. Taylor
Chairman of the Board
<PAGE>
ABLE TELCOM HOLDING CORP.
1601 Forum Place, Suite 1110
West Palm Beach, Florida 33401
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 24, 1998
----------
The Annual Meeting of Shareholders (the "Annual Meeting") of Able Telcom
Holding Corp., a Florida corporation (the "Company"), will be held on Friday,
April 24, 1998 at 10:00 a.m., local time, at The Omni Hotel, 1601 Belvedere
Road, West Palm Beach, Florida 33406 for the following purposes:
1. To elect six directors to serve for a term of one year or until
their respective successors are duly elected and qualified;
2. To consider and vote upon amendments to the Company's 1995 Stock
Option Plan to increase the number of shares of Common Stock authorized for
issuance thereunder from 550,000 to 1,300,000 and to provide for the
granting thereunder of awards of shares of restricted Common Stock;
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent accountants for the fiscal year ending October 31, 1998; and
4. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on February 23, 1998
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. A list of the shareholders entitled to vote
at the Annual Meeting may be examined by any shareholder at the Company's
corporate offices at 1601 Forum Place, Suite 1110, West Palm Beach, Florida
33401.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the accompanying Proxy Statement for further information
with respect to the business to be transacted at the Annual Meeting.
The Board of Directors requests that you complete, sign, date and return
the enclosed proxy card promptly. You are cordially invited to attend the Annual
Meeting in person. The return of the enclosed proxy card will not affect your
right to revoke your proxy or to vote in person if you do attend the Annual
Meeting.
By order of the Board of Directors,
GIDEON D. TAYLOR
CHAIRMAN OF THE BOARD OF DIRECTORS
West Palm Beach, Florida
March 23, 1998
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND
SIGN IT, AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL EXPENSE TO THE
COMPANY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY
PROMPTLY.
<PAGE>
Able Telcom Holding Corp.
1601 Forum Place, Suite 1110
West Palm Beach, Florida 33401
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Able Telcom Holding Corp., a Florida
corporation, ("Able Telcom" or the "Company"), for use at the Company's 1998
Annual Meeting of Shareholders (together with any and all adjournments and
postponements thereof, the "Annual Meeting") to be held on Friday, April 24,
1998, at 10:00 a.m., local time, at The Omni Hotel, 1601 Belvedere Road, West
Palm Beach, Florida 33406 for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders. This Proxy Statement, together with the
foregoing Notice and the enclosed proxy card, is first being sent to
shareholders on or about March 23, 1998.
The Board of Directors has fixed the close of business on February 23, 1998
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. On the record date, there were 9,135,384
shares of common stock of the Company, par value $.001 per share ("Common
Stock"), outstanding and entitled to vote. Each share of Common Stock is
entitled to one vote per share on each matter properly brought before the Annual
Meeting. Shares can be voted at the Annual Meeting only if the shareholder is
present in person or is represented by proxy.
If the enclosed proxy card is properly executed and received by the Company
prior to the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. In the absence of instructions,
shares represented by executed proxies will be voted as recommended by the Board
of Directors. The Board of Directors recommends a vote FOR the election of
directors and the other proposals described in this Proxy Statement. The Board
of Directors knows of no matters which are to be brought before the Annual
Meeting other than those set forth in the accompanying Notice of Annual Meeting
of Shareholders. If any other matters properly come before the Annual Meeting,
the persons named in the enclosed proxy card, or their duly appointed
substitutes acting at the Annual Meeting, will be authorized to vote or
otherwise act thereon in accordance with their judgment on such matters.
Any proxy may be revoked at any time prior to its exercise by attending the
Annual Meeting and voting in person, by notifying the Secretary of the Company
of such revocation in writing or by delivering a duly executed proxy bearing a
later date, provided that such notice or proxy is actually received by the
Company prior to the Annual Meeting.
The presence, in person or by proxy, of at least a majority of the total
number of shares of Common Stock outstanding on the record date will constitute
a quorum for purposes of the Annual Meeting. Abstentions and broker non-votes
will be counted as shares present at the Meeting for purposes of determining the
presence of a quorum. A plurality of the votes cast by holders of the Common
Stock will be required for the election of directors. Abstentions and broker
non-votes as to the election of directors will not affect the election of the
candidates receiving a plurality of votes. The affirmative vote of at least a
majority of the shares of Common Stock present in person or represented by proxy
will be required to approve the other proposals to be considered at the Meeting.
Abstentions as to these proposals will have the same effect as votes AGAINST
such proposals, and broker non-votes as to these proposals will not be included
in calculating the number of votes necessary for approval of such proposals.
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth, as of March 2, 1998 information with respect to
the beneficial ownership of the Company's Common Stock by: (i) each director of
the Company; (ii) each of the Company's executive officers named in the summary
compensation table (excluding those executive officers who resigned during
fiscal year 1997); (iii) each person known by the Company to beneficially own
more than 5% of the outstanding shares of the Company's Common Stock; and (iv)
all directors and executive officers as a group. Unless otherwise indicated,
each of the shareholders named in this table has sole voting and investment
power with respect to all shares of Common Stock beneficially owned and has the
same address as the Company.
Number of Percent of
Name/Address Shares Class
- --------------------------------------------------------------------------------
Jonathan Bratt ................................ 6,500 *
John D. Foster (1) ............................ 1,000 *
Frazier L. Gaines (2) ......................... 652,942 6.99%
Gerry W. Hall (3) ............................. 129,700 1.38%
Robert C. Nelles (3) .......................... 10,000 *
Richard J. Sandulli ........................... -- *
Gideon D. Taylor (4) .......................... 777,038 8.32%
J. Barry Hall (3) ............................. 129,700 1.38%
Billy V. Ray Jr ............................... -- *
All directors and executive officers as a group
(nine persons) .............................. 1,706,920 17.79%
- ----------
(1) Owned by Mr. Foster's wife.
(2) Does not include an aggregate of 9,000 shares held as trustee for four
minors and as to which Mr. Gaines disclaims beneficial ownership.
(3) Includes options that are currently exercisable to purchase 27,500 shares
of Common Stock as follows: Gerry W. Hall - 27,500 shares; Robert C. Nelles
- 10,000 shares; J. Barry Hall - 27,500 shares.
(4) Includes 21,619 shares owned by Mr. Taylor's wife.
* Less than 1%
PROPOSAL No. 1
ELECTION OF DIRECTORS
The Board is currently comprised of six members, all of whom are nominees
for reelection for a term expiring at the 1999 Annual Meeting of Shareholders.
In the election, the six persons who receive the highest number of votes
actually cast will be elected. Information with regard to each of the nominees
is set forth below. The proxies named in the proxy card intend to vote for the
election of the nominees unless otherwise instructed. If a holder does not wish
his or her shares to be voted for a particular nominee, the holder must identify
the exception in the appropriate space provided on the proxy card, in which
event the shares will be voted for the other listed nominees. If any nominee
becomes unable to serve, the proxies may vote for another person designated by
the Board of Directors or the Board may reduce the number of directors. The
Company has no reason to believe that any nominee will be unable to serve.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES FOR
DIRECTOR LISTED BELOW.
<TABLE>
<CAPTION>
Director
Nominee Age Since
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Frazier L. Gaines....... 58 1992 Interim President and Chief Executive Officer of the Company
since March 6, 1998; President of the Company's subsidiary,
Able Telcom International, Inc. ("ATI") since June 22, 1994.
From 1992 to 1994, Mr. Gaines was Chief Operating Officer of
the Company. From 1987 to 1992, Mr. Gaines was Vice President
of
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Director
Nominee Age Since
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Judycom, Inc. and Judycom Construction Corporation, both
of which were located in Lexington, Kentucky and engaged in
fiber optic installation.
Richard J. Sandulli..... 58 1997 Vice President of the Company since August 1997. Mr.
Sandulli served as Managing Director of Berwind Financial
Group from 1994 to 1997. During the past five years, Mr.
Sandulli also has been a sole practicing financial advisor
and attorney.
Jonathan A. Bratt....... 45 1997 Director of the Company's Latin American Operations since
July 1992. Since its inception July 1979, Mr. Bratt has
served as a director of BFGP Incenieros Group, a Venezuelan
company engaged in distributing software.
John D. Foster.......... 54 1997 President of Vedra International Associates, a consulting
company he founded in 1996. From 1992 to 1996, Mr. Foster
served as President and Managing Director of AT&T's
Communications Services Group-Europe. Since 1996, Mr. Foster
has served as a Director of Aerial Communications, Inc., a
Delaware corporation that provides personal communication
services.
Robert C. Nelles........ 59 1995 Interim Chief Operating Officer of the Company since March 6,
1998. President of Nelles & Associates, Inc., an
international telecommunications consulting company, since he
founded the company in 1991. Mr. Nelles has been Executive
Vice President of Northern Telcom since 1986.
Gideon D. Taylor........ 55 1988 Chairman of the Board of the Company since March 25, 1997.
From October 1988 to August 1992, Mr. Taylor was also
President and Chief Executive Officer of the Company. Since
1996, Mr. Taylor has been Chief Executive Officer and
Chairman of the Board of AFRAM, a logging company doing
business in Africa.
</TABLE>
The Board of Directors and Committees of the Board
The Company's Board of Directors met ten times during the fiscal year ended
October 31, 1997 and acted two times by unanimous written consent.
The Board has an Audit Committee, a Compensation Committee, and a
Nominating Committee. The Audit Committee reviews the scope of the accountants'
engagement, including the remuneration to be paid, and reviews the independence
of the accountants. The Audit Committee, with the assistance of the Company's
Chief Financial Officer and other appropriate personnel, reviews the Company's
annual financial statements and the independent auditor's report, including
significant reporting and operational issues; corporate policies and procedures
as they relate to accounting and financial reporting and financial controls;
litigation in which the Company is a party; and use by the Company's executive
officers of expense accounts and other non-monetary perquisites, if any. The
Audit Committee may direct the Company's legal counsel, independent auditors and
internal audit staff to inquire into and report to it on any matter having to do
with the Company's accounting or financial procedures or reporting. During the
fiscal year ended October 31, 1997, the members of the Audit Committee were Mr.
Nelles (Chairman), Mr. Foster, and Mr. Taylor. The Audit Committee held one
meeting during the fiscal year ended October 31, 1997.
Following the end of the 1997 fiscal year, the Board of Directors
established a Compensation Committee consisting exclusively of directors of the
Company who are not executive officers of the Company. The Compensation
Committee is responsible for setting and approving the salaries, bonuses and
other compensation for the Company's executive officers, establishing
compensation programs, and
3
<PAGE>
determining the amounts and conditions of all grants of awards under the
Company's Stock Option Plan. The Compensation Committee consists of Mr. Foster
(Chairman), Mr. Taylor and Mr. Nelles.
At October 31, 1997, the standing Nominating Committee of the Board of
Directors consisted of Mr. Taylor, Mr. Foster and Gerry W. Hall, who resigned as
a director of the Company on March 2, 1998. The purpose of the Nominating
Committee is to identify nominees for election to the Board of Directors. The
Nominating Committee met twice during the fiscal year ended October 31, 1997.
No director attended fewer than 75% of the meetings of the Board of
Directors or of any committee on which such director served held during the
fiscal year ended October 31, 1997.
Compensation of Directors
Directors who are not employees of the Company are paid $12,000 annually
plus $750 for each committee meeting attended and are reimbursed for expenses
associated with Board responsibilities. In addition, non-employee directors
receive one-time automatic grants of options to purchase 5,000 shares of Common
Stock having an exercise price equal to the fair market value at the date of
grant. During fiscal 1997, the Board of Directors opted to grant Robert C.
Nelles, a non-employee director, an option to purchase an 10,000 shares of
Common Stock with an exercise price of $6.00 (a 27% discount from the market
price on the date of the grant). Directors who are also employed by the Company
receive no additional fees or remuneration for acting in their capacity as a
director of the Company.
Compliance With Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers and persons owning more than ten percent of the Common
Stock of the Company to file initial reports of ownership and reports of changes
in ownership of Common Stock with the Securities and Exchange Commission and to
furnish the Company with copies of all such reports. Based on its review of the
copies of such reports received by it, the Company believes that during fiscal
year 1997, its directors, officers and ten percent beneficial owners complied
with all applicable reporting requirements, except as follows: John Foster, a
director of the Company, filed a Form 3 statement of initial beneficial
ownership on November 10, 1997, which was due on June 22, 1997; Jonathan Bratt
and Robert C. Nelles, directors of the Company, and Billy Caudill, a former
director of the Company, each filed one day late a Form 5 with respect to the
fiscal year ended October 31, 1997; Mr. Caudill filed a Form 4 on January 17,
1997, reporting two transactions which were due to be reported by January 10,
1997; William J. Mercurio, the Company's former President, Chief Executive
Officer and Chief Financial Officer, filed a Form 4 on September 12, 1997,
reporting two transactions that were due to be reported by April 10, 1997 and
September 10, 1997, respectively; and on February 28, 1997, Joseph Powers, a
former executive officer of the Company, filed one day late a Form 3 statement
of beneficial ownership.
4
<PAGE>
Executive Officers
Certain biographical information concerning the Company's other executive
officers is presented below.
<TABLE>
<CAPTION>
Name and Position Age
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Billy V. Ray, Jr........ 40 Chief Financial Officer of the Company since June 1997. Mr. Ray served
Chief Financial from January 1997 until June as a consultant to the Company's Traffic
Officer and Management Group. Prior to his employment by the Company, Mr. Ray
Assistant Secretary served as a director of Dycom Industries, Inc. from 1990 to 1992, as
Assistant to the President of Burnup & Sims, Inc. from 1992 to 1993, as
Staff Manager with MasTec, Inc. from 1993 to 1994 and as a self
employed consultant from 1994 until his employment with the Company.
J. Barry Hall........... 49 President of the Company's Traffic Management Group since October
President, Traffic 1996. Since 1983, Mr. Hall has been Executive Vice President of GEC.
Management Group
</TABLE>
Executive Compensation
The following table sets forth certain information with respect to the
annual and long-term compensation paid or accrued during the fiscal years
indicated to each of the Company's Chief Executive Officer and the four most
highly compensated officers of the Company (including its subsidiaries).
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Annual Compensation Compensation
-------------------- -------------------
Name and Principal Fiscal Shares Underlying Other
Position Year Salary ($) Options (#) Compensation($)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Frazier L. Gaines (1) 1997 110,000 5,000 1,024,375
Interim President and 1996 110,000 -- 36,000
Chief Executive Officer 1995 104,000 -- 36,000
1997 161,538 -- --
J. Barry Hall 1997 34,615 -- 56,961
President, Traffic
Management Group
Billy V. Ray (2)
Chief Financial Officer
Richard J. Sandulli (3) 1997 71,000 -- 3,750
Vice President
Gerry W. Hall(4) 1997 180,769 27,500 3,200
Former President and
Chief Executive Officer
William J. Mercurio (5) 1997 107,901 75,000 243,100
Former President, 1996 204,000 20,000 6,000
Chief Executive 1995 66,600 -- 2,000
Officer and Chief
Financial Officer
</TABLE>
- ----------
(1) Other compensation consists of an automobile allowance and a housing
allowance and includes for fiscal 1997 an amount of $991,375, which
represents the difference between the price paid by Mr. Gaines upon the
exercise of certain stock options and the fair market value of the
underlying Common Stock on the date of exercise.
(2) Other compensation consists of compensation for consulting services
rendered prior to Mr. Ray's appointment on June 12, 1997 as the Company's
Chief Financial Officer and a travel and housing allowance received after
such appointment.
5
<PAGE>
(3) Other compensation consists of an automobile allowance.
(4) Gerry W. Hall serves as President of GEC, and was appointed President and
Chief Executive Officer of the Company on June 12, 1997 at an annual salary
of $200,000 and resigned from such positions and as a director on March 2,
1998; other compensation consists of an automobile allowance.
(5) Other compensation for fiscal 1995 and 1996 consists of an automobile
allowance; for fiscal 1997 other compensation represents the difference
between the price paid by Mr. Mercurio upon the exercise of certain stock
options and the fair market value of the underlying Common Stock on the
date of exercise. Mr. Mercurio resigned as President, Chief Executive
Officer and Chief Financial Officer of the Company effective June 12, 1997.
Option Grants During the Fiscal Year Ended October 31, 1997
The following table shows all grants during the fiscal year ended October
31, 1997 of stock options under the Company's Stock Option Plan to the persons
named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------
Percent Potential Realizable
of Total Value at Assumed
Number Options Annual Rates of Stock
of Granted to Market Price Appreciation for
Shares Employees Exercise Price on Option Term(2)
Underlying in Fiscal Price Date of Expiration -----------------------
Name Option Year ($/Sh) Grant Date 5%($) 10%($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerry W. Hall 27,500 5.24% $6.00 $8.25 3/10/99 82,130 109,519
J. Barry Hall 27,500 5.24% $6.00 $8.25 3/10/99 82,130 109,519
William J. Mercurio 75,000 14.30% $6.00 $8.25 3/10/99 232,172 298,688
</TABLE>
- ----------
(1) The potential realizable values are based upon assumed 5% and 10%
annualized stock price growth rates and are not intended to forecast future
price appreciation of the Company's Common Stock. Actual gains, if any, on
stock option exercises will depend on the amount, if any, by which the fair
market value exceeds the option exercise price on the date the option is
exercised. There is no assurance that the amounts reflected in this table
will be achieved.
Option Exercises and Period-End Values
The following table provides information on options exercised in the fiscal
year ended October 31, 1997 by the persons named in the "Summary Compensation
Table" above, the number of unexercised options each of them held at October 31,
1997 and the value of the unexercised "in-the-money" options each of them held
as of that date.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying In-the-Money Options
Unexercised Options at Fiscal
Number of at Fiscal Year-End(#) Year-End($)(1)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- -------------------------- --------------- --------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Frazier L. Gaines 110,000 $991,375 --/-- --/--
Gerry W. Hall -- -- 27,500/-- 218,281/--
J. Barry Hall -- -- 27,500/-- 218,281/--
William J. Mercurio 55,000 $243,100 101,800/38,2000 808,038/303,213
</TABLE>
- ---------
(1) Based on the closing sale price of the Common Stock of $7 15/16 on October
31, 1997.
6
<PAGE>
Employment Agreements
Gerry W. Hall, former President and Chief Executive Officer of the Company,
is party to an employment agreement (the "Hall Employment Agreement"), dated
October 12, 1996, with GEC pursuant to which he serves as the President of GEC.
The Hall Employment Agreement terminates on October 11, 2001 and provides for
Mr. Hall to be paid a salary of $150,000 per year, plus insurance and other
benefits. The Hall Employment Agreement also contains a covenant by Mr. Hall not
to compete with the Company for a period of two years following his employment,
unless the Company terminates the Hall Employment Agreement for cause or Mr.
Hall terminates the agreement with good reason, in which case the
non-competition period will terminate after six months (which period may be
extended by the Company up to one year in exchange for additional compensation).
The Board of Directors increased Mr. Hall's annual base salary to $200,000 in
connection with his appointment on June 12, 1997 as the Company's President and
CEO. Mr. Hall resigned from such positions on March 2, 1998, and resumed his
duties with GEC on a full time basis.
J. Barry Hall is party to an employment agreement (the "Barry Hall
Employment Agreement"), dated October 12, 1996, with Transportation Safety
Contractors, Inc., a subsidiary of the Company ("TSCI"). Mr. Hall was
subsequently appointed President of the Company's Traffic Management Group and
currently serves in that capacity. The Barry Hall Employment Agreement
terminates October 11, 2001 and provides for Mr. Hall to be paid a salary of
$150,000 per year, plus insurance, and other benefits. The Barry Hall Employment
Agreement also contains a covenant by Mr. Hall not to compete with the Company
for a period of two years following his employment, unless the Company
terminates the Barry Hall Employment Agreement for cause or Mr. Hall terminates
the agreement with good reason, in which case the non-competition period will
terminate after six months (which period may be extended by the Company up to
one year in exchange for additional compensation).
None of the Company's executive officers are parties to any agreements that
are triggered upon a "change of control" of the Company, although the
acquisition agreement for the purchase of GEC provides for an acceleration of
certain contingent payments of the purchase price to Gerry Hall and Barry Hall
in the event that the Company should sell GEC prior to October 31, 2001. See
"Compensation Committee Interlocks and Insider Participation."
Stock Option Plan
The Company has adopted the Stock Option Plan pursuant to which 550,000
shares of Common Stock have been authorized for issuance. The Stock Option Plan
is proposed to be amended to, among other things, increase the aggregate number
of shares of Common Stock which may be issued pursuant to awards granted
thereunder to 1,300,000. The proposed amendments and the features of the Stock
Option Plan are described in more detail under "Proposal No. 2--Amendment of
Stock Option Plan" elsewhere in this Proxy Statement.
Profit Sharing Plan and Trust
The Company has a profit sharing plan and trust, amended and effective as
of November 1, 1997, under Section 401(k) of the Internal Revenue Code (the
"Profit Sharing Plan"). The Profit Sharing Plan provides that employees of the
Company must complete one year of service in order to be eligible to defer
salary and, if available, receive matching contributions under the Section
401(k) portion of the Profit Sharing Plan. Participants may elect to defer a
specified percentage of their compensation into the Profit Sharing Plan on a
pre-tax basis. The Company may, at its sole discretion, make matching
contributions based upon a percentage of deferred salary contributions at a rate
to be determined by the Company. In addition, the Company may make supplemental
profit sharing contributions in such amounts as determined by the Company.
Participants earn a vested right to the Company's profit sharing contribution in
increasing amounts over six years of service, and the Company's contribution is
100% vested at the end of the six-year period. Regardless of the vesting
schedule, however, participants
7
<PAGE>
will always be 100% vested on the first day of the month coinciding with or next
following the participant's 65th birthday. Distributions from a participant's
deferred account are not permitted before age 59 1/2 except in the event of (a)
death, (b) disability or (c) termination of employment.
Compensation Committee Interlocks and Insider Participation
Compensation for the Company's officers is determined by the entirety of
the Company's Board of Directors. Of the members of the Board of Directors,
Messrs. Gaines and Nelles currently serve as executive officers of the Company.
The Company has established a Compensation Committee consisting of non-employee
members of the Board of Directors to determine compensation for future years.
On December 8, 1995, the Company acquired all of the issued and outstanding
stock of H.C. Connell, Inc., for an aggregate purchase price of approximately
$2.2 million, consisting of $500,000 in cash and approximately $1.8 million in
promissory notes. The Company financed the cash portion of the purchase price
through the issuance of two promissory notes in the amount of $250,000 to
Frazier L. Gaines, a director of the Company and currently the Company's Interim
President and Chief Executive Officer, and a former director. These notes, which
bore interest at the prime rate plus 1%, were repaid by the Company prior to
December 31, 1996. As additional consideration for their agreeing to lend
$500,000 to the Company, the Company issued to each of Mr. Gaines and the former
director 5,000 shares of the Company's Common Stock for $.001 per share. The
closing market price for the Registrant's Common Stock on the Nasdaq National
Market System on December 8, 1995 was $7.187 per share.
On October 12, 1996, the Company acquired all of the issued and outstanding
capital stock of GEC, which prior to the acquisition was owned equally by Gerry
W. and J. Barry Hall (collectively, the "Halls"). In connection with the
acquisition, Gerry Hall was employed as President of GEC and Barry Hall was
employed as President of TSCI pursuant to the employment agreements described
above under "Employment Agreements". Following the acquisition, Gerry Hall was
elected to the board of directors of the Company, and on June 12, 1997, was
elected President and Chief Executive Officer of the Company. Gerry Hall
resigned as President, Chief Executive Officer and a director of the Company on
March 2, 1998. The purchase price for the GEC acquisition was $3,000,000 cash,
plus the issuance at the end of each of the next five fiscal years of a number
of shares of Common Stock to be determined pursuant to a formula contained in
the acquisition agreement by dividing a dollar figure derived from GEC's actual
pre-tax profits and operating margins compared with target profits and margins
for each such fiscal year by a discounted per share price. In the event that GEC
is sold by the Company prior to the end of fiscal year 2001, the Company is
obligated to issue to Gerry Hall and Barry Hall a number of shares of Common
Stock having a market value (as determined in accordance with the contract) of
$1,000,000 for each year that earn-out consideration remains payable. The GEC
acquisition agreement was amended during February 1998 to increase the
percentage discount applicable to the price of the Common Stock for purposes of
determining the number of shares to be issued with respect to each fiscal year
and to limit the total market value of the shares of Common Stock which could be
issued under the agreement to $9,000,000.
On July 1, 1997, the Company entered into a six month consulting agreement
with Nelles & Associates, Inc. ("NAI"), an international telecommunications
consulting firm founded by Robert C. Nelles, a director of the Company. The
consulting agreement provides for NAI to be paid $6,000 per month to provide
consulting services in support of the Company's business activities for eight
days per month and for Mr. Nelles to be granted options to purchase 15,000
shares of Common Stock. On January 1, 1998, the Company entered into a three
month consulting agreement with NAI which provides for NAI to be paid $2,000 per
month to provide consulting services in support of the Company's business
activities for up to three days per month and an hourly fee for additional
services. On March 6, 1998, the Company entered into a four month consulting
agreement with NAI, pursuant to
8
<PAGE>
which Mr. Nelles will serve as the interim Chief Operating Officer of the
Company and the Company will pay consulting fees of $12,500 per month, provide
Mr. Nelles with the use of a leased automobile and reimburse NAI for temporary
living, travel and related expenses incurred in connection with Mr. Nelles'
performance of services as interim Chief Operating Officer.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings, including this Proxy Statement,
in whole or in part, the following Report on Executive Compensation and the
Performance Graph shall not be incorporated by reference into any such filings.
Report On Executive Compensation
During the fiscal year ended October 31, 1997, the Company did not have a
Compensation Committee, and the Board of Directors was responsible for setting
and approving the salaries, bonuses and other compensation for the Company's
executive officers, establishing compensation programs, and determining the
amounts and conditions of all grants of awards under the Stock Option Plan.
Compensation Objectives. The Board of Directors believes that the
objectives of executive compensation are to attract, motivate and retain highly
qualified executives, to align the interests of these executives with those of
the Company's shareholders and to motivate Company executives to increase
shareholder value by improving corporate performance and profitability. To meet
these objectives, the Board of Directors seeks to provide competitive salary
levels and compensation incentives that attract and retain qualified executives,
to recognize individual performance and achievements as well as performance of
the Company relative to its peers, and to encourage ownership of Company stock.
Executive Salaries. Base salaries for executives are determined initially
by evaluating the responsibilities of the position, the experience of the
individual, internal comparability considerations, as appropriate, the
competition in the marketplace for management talent, and the compensation
practices among public companies of the size of, or in businesses similar to,
the Company. Salary adjustments are determined and normally made at twelve-month
intervals.
Annual Bonuses. The Company has historically paid bonuses to executives
whom the Board of Directors determines have contributed materially to the
Company's success during the most recently completed fiscal year. The bonuses
are intended to enable the Company's executives to participate in the Company's
success as well as to provide incentives for future performance. Bonus
compensation has typically been determined as a percentage of the executive's
salary based upon the pre-tax net income of the Company as a whole or the
subsidiary which employs the executive.
Compensation of the Chief Executive Officer. The compensation of Gerry W.
Hall, former President and Chief Executive Officer of the Company, is fixed
pursuant to the Hall Employment Agreement. The Board of Directors increased Mr.
Hall's annual base salary to $200,000 in connection with his appointment on June
12, 1997 as the Company's President and CEO. The increase was based upon
arms'-length negotiations between Mr. Hall and the remaining members of the
Board of Directors. In agreeing to increase Mr. Hall's compensation, the Board
of Directors sought to provide an appropriate incentive to Mr. Hall, who has
extensive experience in the Company's industry by virtue of his former ownership
and management of GEC, to accept an appointment as the Company's Chief Executive
Officer. The Board of Directors believes that Mr. Hall's salary was appropriate
for the chief executive officer of a public company the size of the Company. See
"Summary Compensation Table" for information concerning Mr. Halls' compensation.
During the fiscal year, the Board of Directors granted Mr. Hall an option that
was immediately exercisable to purchase 27,500 shares of Common Stock at an
exercise price
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<PAGE>
of $6.00 per share. The market value of the Common Stock on the date of the
grant was $8.25 per share. The purpose of the grant of the option was to reward
Mr. Hall based upon the performance of GEC. Mr. Hall resigned as President,
Chief Executive Officer and a director of the Company on March 2, 1998, and
resumed full time performance of his duties at GEC pursuant to the terms of the
Hall Employment Agreement. The Board of Directors approved payment of a bonus to
Mr. Hall of $75,000, based upon the Company's operating results and strategic
accomplishments during the period of Mr. Hall's service as President and Chief
Executive Officer.
Stock Options. The Board of Directors may grant to certain employees of the
Company long-term incentives consisting of non-qualified stock options and
incentive stock options. In order to vary the types of awards that may be
offered, the Board of Directors approved the Plan Amendments, which will
increase the number of shares of stock available for grant under the Stock
Option Plan and will allow for the grant of shares of Common Stock subject to
restrictions. During fiscal year 1997, the Board of Directors approved grants of
stock options to Messrs. Hall and Mercurio at exercise prices that were less
than the fair market value of the underlying stock on the date of the grant. See
"Executive Compensation--Option Grants During the Fiscal Year Ended October 31,
1997".
In November 1997, the Board of Directors established a Compensation
Committee. The purpose of the Compensation Committee is to set and approve the
salaries, bonuses and other compensation for the Company's executive officers,
to establish compensation programs, and to determine the amounts and conditions
of all grants of awards under the Company's Stock Option Plan. The initial
members of the Compensation Committee are Mr. Foster (Chairman), Mr. Taylor and
Mr. Nelles.
Respectfully Submitted:
GIDEON D. TAYLOR, CHAIRMAN
FRAZIER L. GAINES
RICHARD J. SANDULLI
JONATHAN A. BRATT
JOHN D. FOSTER
ROBERT C. NELLES
Stock Performance
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, the NASDAQ Telecommunications Stocks Index, and a
self-determined peer group consisting of Advanced Communications Systems, Inc.,
AmeriLink Corp.; ANTEC Corporation; C-Cor Electronics, Inc.; Comtech
Telecommunications Corp.; Dycom Industries, Inc.; Eltrax Systems, Inc.; Internet
Communications Corp.; IPC Information Systems, Inc.; IWL Communications, Inc.;
MasTec, Inc.; NumereX Corp.; Porta Systems Corp.; Tollgrade Communications
Corp.; View Tech, Inc.; and World Access, Inc. 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 and assuming dividend
reinvestment. No dividends have been paid on the Company's Common Stock.
10
<PAGE>
COMPARISON OF 12-MONTH CUMULATIVE TOTAL RETURN
Among Able Telcom Holding Corp., the S&P 500 Index, a self-determined
peer group and the NASDAQ Telecommunications Stocks Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
10/31/92 10/31/93 10/31/94 10/31/95 10/31/96 10/31/97
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Able Telcom Holding Corp. 100 463 363 275 431 397
- ----------------------------------------------------------------------------------------------------------------------
Peer Group 100 127 149 109 159 219
- ----------------------------------------------------------------------------------------------------------------------
S&P 500 100 115 119 151 187 247
- ----------------------------------------------------------------------------------------------------------------------
NASDAQ
Telecommunications 100 200 168 189 198 289
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
In the Company's proxy statement for its 1997 annual meeting of
shareholders, the Company compared returns of its Common Stock to returns of the
NASDAQ Telecommunications Stocks Index. The self-determined peer group used in
the graph presented above has been added because the Company believes that the
peer group consists of companies whose business is more comparable to the
Company's business.
PROPOSAL No. 2
AMENDMENT TO STOCK OPTION PLAN
The Company's 1995 Stock Option Plan (the "Stock Option Plan" or the
"Plan") permits the Company to grant awards of options to purchase Common Stock
to eligible persons. An aggregate of 550,000 shares of Common Stock may be
issued upon the exercise of stock options granted under the Stock Option Plan.
On January 23, 1998, the Company's Board of Directors approved amendments
to the Stock Option Plan (the "Plan Amendments"), subject to the approval of the
Company's shareholders, to (i) to increase by 750,000 to 1,300,000 the maximum
number of shares of Common Stock that may be issued pursuant to awards granted
under the Stock Option Plan and (ii) provide for the granting of awards of
shares of Common Stock, which may be subject to such restrictions as the
committee administering the Stock Option Plan may determine. The Company's
shareholders are being requested to consider and approve the Plan Amendments.
Purpose. The Company's Board of Directors believes that awards under the
Stock Option Plan serve to attract, retain and motivate key employees and
enhance the incentive of employees to perform at the highest level. The Stock
Option Plan enables the Company to offer long term performance-based
compensation in the form of stock options, thereby aligning employees' interests
more closely with those of
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<PAGE>
the Company's shareholders. The availability of awards under the Plan also
serves to encourage qualified persons to seek and accept employment with the
Company.
Shares Available for Issuance. The Stock Option Plan currently provides for
up to 550,000 shares of Common Stock to be available for issuance pursuant to
options granted under the Stock Option Plan. As of December 31, 1997, the
Company had issued 82,175 shares of Common Stock upon the exercise of options
granted under the Stock Option Plan and options to purchase an additional
352,065 shares remained outstanding (after giving effect to options which have
been forfeited without being exercised). Accordingly, 115,760 shares of Common
Stock remain available for additional option grants. The Board of Directors
believes this number of shares is insufficient to adequately serve the purposes
and objectives of the Stock Option Plan, and has therefore adopted the Plan
Amendments to make an additional 750,000 shares of Common Stock available for
issuance under the Stock Option Plan. The Plan Amendments will also provide the
Company with additional flexibility in structuring stock-based incentive
compensation, by enabling the Company to grant awards under the Stock Option
Plan consisting of shares of Common Stock, which awards may be subject to
vesting requirements, risks of forfeiture and other restrictions determined by
the committee administering the Stock Option Plan. Upon approval of the Plan
Amendments by the shareholders, an aggregate of 865,760 shares of Common Stock
(having a market value of $7,358,960 based on the closing price of the Common
Stock on February 26, 1998) will be available for issuance pursuant to future
awards granted under the Stock Option Plan, which, together with options
currently outstanding, represents approximately 11.54% of the total issued and
outstanding shares of Common Stock (assuming the issuance of all such shares).
Shares of Common Stock subject to options which expire unexercised or are
terminated shall again be available for the granting of awards under the Stock
Option Plan.
Eligibility. All salaried employees, non-employee directors who do not own
more than 5% of any class of the outstanding capital stock of the Company,
consultants or advisors of the Company and its affiliates are eligible to
participate in the Stock Option Plan. Non-employee directors, consultants and
advisors are eligible to receive only non-qualified stock options.
Administration. The Plan is currently administered by the Board of
Directors ("Plan Administrators"). The Plan Administrators have the authority to
select those eligible persons to whom awards are granted, to determine the types
of awards and the number of shares subject thereto, and to set the terms,
conditions and provisions of such awards. The Plan Administrators are authorized
to interpret the Stock Option Plan, to establish, amend and rescind any rules
and regulations relating to the Stock Option Plan, and to make all other
determinations which may be necessary or advisable for the administration of the
Stock Option Plan.
Awards under the Stock Option Plan. The Stock Option Plan permits the
granting of the following types of awards: (i) stock options, which may be
either options which qualify as "incentive stock options" ("ISOs") under the
Internal Revenue Code of 1986, as amended (the "Code"), or options which do not
so qualify ("NQSOs"), and (ii) other awards valued in whole or in part by
reference to, or otherwise based on Common Stock.
Stock Options. Stock options may be granted, from time to time, to those
salaried employees, consultants and other persons providing services to the
Company and its affiliates as may be selected by the Plan Administrators. The
purchase price per share of Common Stock purchasable under any stock option
granted is determined by the Plan Administrators, but may not be less than 100%
of the fair market value of a share of Common Stock on the date of grant. The
term of each such option, and the time or times when it may be exercised, is
fixed by the Plan Administrators, provided, however, that in the case of NQSOs,
the
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<PAGE>
term shall expire on the earlier of six years from the date of the grant or in
the case of non-employee Directors, the date which is 30 days after the optionee
shall no longer serve as a member of the Board. All terms and conditions
relating to the options are the subject of separate stock option agreements
between the Company and the grantees and approved by the Plan Administrators.
The grant and terms of ISOs are restricted to the extent required by the Code.
Options may be exercised by payment of the purchase price either (i) in cash,
(ii) at the discretion of the Plan Administrators, in Common Stock having a fair
market value on the date the option is exercised equal to the option exercise
price, (iii) at the discretion of the Plan Administrators, by delivery of the
optionee's personal recourse note bearing interest payable at least annually at
no less than 100% of the lowest Federal rate, or (iv) any combination of (i),
(ii) or (iii) above. Participants have no shareholder rights with respect to any
options granted until shares have been issued upon the proper exercise of the
option.
Termination. Each stock option shall expire on such date or dates as the
Plan Administrators shall determine at the time the stock option is granted. Any
NQSO granted to a non-employee Director shall expire on the earlier of (i) the
date which is six years from the date of its grant or (ii) the date which is 30
days after the date that such optionee ceases to serve as a member of the Board.
Stock options may also be terminated under certain circumstances following a
Change of Control. See "--Change of Control" below.
Restricted Stock. If the Plan Amendments are approved by the shareholders,
the Company will be permitted to grant awards to salaried employees under the
Stock Option Plan consisting of shares of Common Stock, which may be subject to
such restrictions and on such terms and conditions as the Plan Administrators
may determine, including the time period over which such shares shall become
vested, the date or dates as of which the risk of forfeiture of the shares shall
lapse, the establishment of conditions for the lapse or termination of the risk
of forfeiture other than the expiration of the vesting period, and the
circumstances under which vesting requirements will be waived or accelerated.
The Plan Administrators will select the recipients of such awards. Shares of
Common Stock awarded under the Stock Option Plan which are subject to
restrictions shall not be transferable, nor shall the recipient be entitled to
receive stock certificates representing such shares, until the lapse or
termination of all such restrictions. Recipients of such awards will otherwise
have all rights as a shareholder of the Company with respect to the shares of
Common Stock so awarded, including the right to vote such shares and to receive
dividends paid on the Common Stock.
Nonassignability of Awards. The Stock Option Plan provides that no award
granted under the Stock Option Plan may be sold, assigned, transferred, pledged
or otherwise encumbered by a participant, otherwise than by will or by the laws
of descent and distribution. Each stock option awarded is exercisable, during
the participant's lifetime, only by the participant.
Adjustments. The Stock Option Plan provides that, in the event of any
change in the corporate structure or shares of the Company, the Plan
Administrators will make such substitution or adjustment in the aggregate number
or class of shares which may be distributed under the Stock Option Plan and in
the number, class and option price or other price of shares subject to the
outstanding awards granted under the Stock Option Plan as it deems to be
appropriate in order to maintain the purpose of the original grant. For purposes
of the Stock Option Plan, a change in the corporate structure or shares of the
Company shall include, but is not limited to, changes resulting from
recapitalization, stock split, reverse stock split, consolidation, rights
offering, stock dividend, reorganization, or liquidation.
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<PAGE>
Change of Control. Upon the occurrence of any dissolution or liquidation of
the Company, or a reorganization, merger or consolidation of the Company with
one or more corporations in which the Company is not the surviving corporation,
or a transfer of substantially all of the Company's property or more than 80% of
the then outstanding shares of the Company to another corporation not controlled
by the Company's stockholders (a "Change of Control"), the Plan and any
outstanding Options shall be terminated unless provision is made in connection
with such transaction for the assumption and continuation of the Plan and such
Options or the substitution of new Options covering the shares of a successor
corporation, and all vesting requirements, risks of forfeiture and other
restrictions on awards of Common Stock shall lapse and terminate. If no such
provision for Options is made, the Company is required to give all option
holders advance written notice of the Change of Control, all Options shall
become fully exercisable and the option holders shall have 30 days in which to
exercise their Options.
Federal Income Tax Aspects of the Stock Option Plan. The following is a
summary of the federal income tax consequences generally arising with respect to
awards under the Stock Option Plan. The grant and exercise of an ISO result in
no taxable income to the participant and no tax deduction for the Company,
except that, upon exercise, the difference between the fair market value of the
underlying shares of Common Stock and the exercise price of the ISO is
includable in the participant's income for alternative minimum tax purposes. If
the participant holds the shares acquired upon exercise of an ISO for at least
two years from the date of the grant of the ISO and at least one year from the
date of exercise, he will recognize taxable capital gain or capital loss upon a
subsequent sale of the shares based upon the difference between the sale
proceeds and the fair market value of the shares on the exercise date. In either
of these events, no deduction would be allowed to the Company for federal income
tax purposes. If the participant disposes of the shares acquired upon exercise
of an ISO within either of the holding periods described above, the option will
be treated as an NQSO.
The grant of an NQSO has no tax consequences to the Company or to the
participant. Upon exercise of an NQSO, however, the participant will recognize
taxable ordinary income in the amount of the excess of the fair market value on
the date of exercise of the shares of Common Stock acquired over the exercise
price, and such amount will be deductible for federal income tax purposes by the
Company. The holder of such shares will, upon a subsequent disposition of the
shares, recognize short-term or long-term capital gain or loss, depending on the
holding period of the shares.
An award of shares of Common Stock has no tax consequences to the recipient
or the Company so long as the shares so awarded are subject to a substantial
risk of forfeiture. When the substantial risk of forfeiture terminates with
respect to any shares included in such an award, the then fair market value of
such shares will constitute taxable ordinary income to the recipient, and the
Company will be allowed a tax deduction in the same amount. Dividends received
by the participant during the restriction period are treated as compensation
income and therefore are taxed as ordinary income to the participant and are
deductible by the Company. Awards of shares of Common Stock which are not
subject to a substantial risk of forfeiture will result in taxable ordinary
income to the recipient equal to the fair market value of the shares on the
grant date, and the Company will receive a tax deduction in the same amount.
The participant may, under Section 83(b) of the Code, elect to report the
current fair market value of restricted stock as ordinary income in the year the
award is made, even though the stock is subject to restrictions. In such a case,
the Company will receive a tax deduction for such fair market value in the year
of grant, but will receive no deduction for any subsequent appreciation during
or after the restriction period. In addition, dividends paid during or after the
restriction period would be treated as dividends to the participant and
therefore would not be deductible by the Company. If a Section 83(b) election is
made, any appreciation in the value of the stock after the date of grant will
not be recognized as capital gain by the participant until such time as the
participant disposes of the stock in a taxable transaction. If the participant
forfeits the stock (i.e., because he has not met the requirements for lapse of
restrictions), the participant will receive no refund or deduction on account of
taxes paid in the year of grant as a result of the Section 83(b) election.
Approval of the Plan Amendments requires the affirmative vote of the
holders of a majority of the shares present in person or represented by proxy at
the Annual Meeting. Unless authority to so vote is
14
<PAGE>
withheld, the persons named in the proxy card intend to vote shares as to which
proxies are received in favor of the Plan Amendments.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL OF THE
PLAN AMENDMENTS.
PROPOSAL No. 3
APPROVAL OF INDEPENDENT
CERTIFIED ACCOUNTANTS
The Board of Directors has selected Ernst & Young LLP to serve as the
Company's principal accountants for the year ending October 31, 1998. In the
event the appointment of Ernst & Young LLP for 1998 is ratified, it is expected
that Ernst & Young LLP will also audit the books and accounts of the Company's
subsidiaries at the close of their current fiscal years. A representative of
Ernst & Young LLP will be present at the Annual Meeting and will have the
opportunity to make a statement, if such person desires to do so, and to respond
to appropriate questions.
The proposal to ratify the appointment of Ernst & Young LLP will be
approved by the shareholders if it receives the affirmative vote of a majority
of the votes cast by shareholders entitled to vote on the proposal. If a proxy
card is specifically marked as abstaining from voting on the proposal, the
shares represented thereby will not be counted as having been voted for or
against the proposal. Unless otherwise instructed, the persons named on the
proxy card intend to vote shares as to which a proxy is received in favor of the
proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
OTHER MATTERS
Shareholder Proposals
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as
amended, shareholders may present proper proposals for inclusion in the
Company's proxy statement and for consideration at the next Annual Meeting of
Shareholders by submitting such proposals to the Company in a timely manner. In
order to be so included for the 1998 Annual Meeting, shareholder proposals must
be received by the Company no later than December 27, 1998 and must otherwise
comply with the requirements of Rule 14a-8.
Expenses of Solicitation
The cost of solicitation of proxies for use at the Annual Meeting will be
borne by the Company. Solicitations will be made primarily by mail or by
facsimile, but regular employees of the Company may solicit proxies personally
or by telephone.
Other Information
The Company's Annual Report on Form 10-K for fiscal year 1997 and all
subsequent Quarterly Reports on Form 10-Q filed before the date of the Annual
Meeting are incorporated by reference in this Proxy Statement. The Company will
provide to any shareholder, upon written request and without charge, a copy
(without exhibits) of all information incorporated by reference in this Proxy
Statement. Requests should be addressed to Investor Relations, Able Telcom
Holding Corp., 1601 Forum Place, Suite 1110, West Palm Beach, Florida 33401.
Dated: West Palm Beach, Florida
March 23, 1998
15
<PAGE>
APPENDIX
Amendment No. 1 to Able Telcom Holding Corp. 1995 Stock Option Plan.
<PAGE>
AMENDMENT No. 1 TO
ABLE TELCOM HOLDING CORP.
1995 STOCK OPTION PLAN
Pursuant to Section 12 of the Able Telcom Holding Corp. Stock Option Plan
(the "Plan"), and subject to the approval of the shareholders of Able Telcom
Holding Corp. (the "Corporation"), the Board of Directors of the Corporation
(the "Board") has approved the following amendment (the "Amendment") to the
terms of the Plan.
1. Section 1 of the Plan is amended to read in its entirety as follows:
This 1995 Stock Option Plan is intended to provide incentives to the
officers, employees and other eligible persons performing services for Able
Telcom Holding Corp. and its present and future subsidiaries to acquire an
ownership interest in the Company through the exercise of options to
purchase Common Stock or the receipt of awards of shares of Common Stock
which may be granted pursuant to this Plan.
2. A new Section 2(b) is added as follows:
"Award" means an Option or a Stock Award granted to an eligible person
pursuant to this Plan.
3. Section 2(b) (relettered as Section 2(c)) is amended to read in its
entirety as follows:
(c) "Board of Directors" means the Board of Directors of the Company.
4. A new Section 2(r) is added as follows:
(r) "Stock Award" shall mean an award of shares of Common Stock under
Section 6-A hereof.
5. The existing subparagraphs of Section 2 shall be relettered to reflect
the amendments set forth in 2 and 3 above.
6. Section 2(m) (2(n) as so relettered) shall be amended to read in its
entirety as follows:
(n) "Plan" means this 1995 Stock Option Plan of Able Telcom Holding
Corp.
7. Section 3 of the Plan is amended to read in its entirety as follows:
Subject to adjustments pursuant to Section 9 of the Plan, no more than
One Million Three Hundred Thousand (1,300,000) shares in the aggregate of
the Company's Common Stock (the "Reserved Shares") may be issued pursuant
to the Plan to eligible participants. The number of the Reserved Shares
shall be reduced by the number of Options or Stock Awards granted
<PAGE>
under the Plan. The Reserved Shares may be made available from
authorized but unissued Common Stock of the Company, from Common Stock
of the Company held as treasury stock, from any shares which may
become available due to the expiration, cancellation or other
termination of any Option or the forfeiture of any Common Stock issued
pursuant to a Stock Award previously granted by the Company, or from
any combination of the foregoing.
8. Section 4 of the Plan is amended to read in its entirety as follows:
The individuals eligible to receive Awards under this Plan shall be
such valued Employees, Non-Affiliate Directors, advisors or consultants of
the Company or any Subsidiary, as the Plan Administrators may from time to
time determine and select. Non-Affiliate Directors, advisors and
consultants shall be eligible to receive only Nonqualified Stock Options.
Employees shall be eligible to receive Incentive Stock Options,
Nonqualified Stock Options and Stock Awards. An Optionee may receive more
than one Option or Stock Award or any combination of the two. No Employee
of the Company or any Subsidiary is eligible to receive any Incentive Stock
Options if such Employee, at the time the option is granted, owns,
beneficially or of record, in excess of 10% of the outstanding voting stock
of the Company or a Subsidiary; provided, however, that such Employee will
be eligible to receive an Incentive Stock Option if at the time such Option
is granted the Option price is at least 110% of the fair market value
(determined with regard to Section 422(c)(7) of the Internal Revenue Code)
of the stock subject to the Option and such Option by its terms is not
exercisable after the expiration of five years from the date such Option is
granted. Pursuant to Section 422(d) of the Internal Revenue Code, no Option
granted pursuant to this Plan shall be treated as an Incentive Stock Option
to the extent that the aggregate fair market value, determined at the time
the Option was granted, of Common Stock with respect to which Options that
otherwise qualify as Incentive Stock Options are exercisable for the first
time by an Employee during any calendar year, under all plans of the
Company and its Subsidiaries, exceeds $100,000.
9. Section 5(a) of the Plan is amended to read in its entirety as follows:
(a) The Plan shall be administered by the Board of Directors or a
committee thereof consisting solely of two or more "Non-Employee Directors"
(as such term is defined in Rule 16b-3 under the Securities Exchange Act of
1934, as amended) as determined by the Board of Directors, which may be the
Compensation Committee or a subcommittee of the Compensation Committee (in
any such case, the "Plan Administrators").
10. Section 5(b) of the Plan is amended to read in its entirety as follows:
(b) The Plan Administrators shall have the power, subject to, and
within the limits of, the express provisions of the Plan:
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<PAGE>
(i) To determine from time to time which eligible persons shall
be granted Awards under the Plan, and the time when any Award shall be
granted;
(ii) To determine the number of shares of Common Stock to be
subject to any Option or included in any Stock Award granted to any
person and, in the case of Options, whether such Options are Incentive
Stock Options, Nonqualified Stock Options or any combination thereof;
(iii) To determine the duration and purposes of leaves of absence
which may be granted to Optionees without constituting a termination
of their employment for purposes of the Plan;
(iv) To prescribe the terms and provisions of each Option granted
under the Plan (which need not be identical), including the exercise
price and the period of time during which such Option may be exercised
or shall become exercisable, and the conditions, restrictions, risks
of forfeiture and other limitations, if any, applicable to any Stock
Award;
(v) To construe and interpret the Plan and Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration; and
(vi) Generally, to exercise such powers and perform such acts as
are deemed necessary or expedient to promote the best interests of the
Company with respect to the Plan.
11. Section 5(c) of the Plan is deleted, the remaining subparagraphs of
Section 5 are relettered accordingly and the word "Option" in each of Sections
5(d) and 5(f) (5(c) and 5(e) as so relettered) is replaced by the word "Award."
12. A new Section 6-A shall be added as follows:
Section 6-A. Stock Awards
Subject to the limitations of this Plan, the Plan Administrators
may select persons to receive Stock Awards and determine the time when
each Award shall be granted, the number of shares of Common Stock
subject to each Award, the period of time, if any, during which all or
a portion of such shares shall be subject to forfeiture and the other
terms and conditions of such Award, if any. Subject to the
restrictions set forth below, the recipient of a Stock Award shall
have all the rights of a shareholder of the Company with respect to
the shares of Common Stock subject to such Award, including voting
rights and the right to receive all dividends and other distributions
of the Company with respect to such shares. Certificates representing
shares of Common Stock issued upon the grant of a Stock Award may be
held in escrow
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<PAGE>
by the Company until the lapse of any conditions to vesting or risks
of forfeiture. Shares of Common Stock included in any Stock Award are
not transferable until fully vested or until the lapse or termination
of any other risks of forfeiture.
13. Section 7(d) of the Plan is amended to read in its entirety as follows:
(d) Other Terms. All grants of Nonqualified Stock Options
pursuant to this Section 7 shall in all other respects be made in
accordance with the provisions of this Plan applicable to other
eligible persons. The provisions of this Section 7 shall not be
amended more than once in any six month period, other than to comply
with changes in the Internal Revenue Code, the Employee Retirement
Income Security Act of 1974, as amended, or other applicable federal
or state law.
14. Section 9(a) is amended by adding the following at the end thereof:
Any additional shares of Common Stock or other securities or rights
issued or issuable with respect to any portion of a Stock Award which
is unvested or remains subject to risks of forfeiture or other
conditions at the time of any such change shall be subject to the same
restrictions, risks or other conditions, for the same period of time,
as are then applicable to such portion of the Stock Award.
15. Section 9(b) is amended by inserting "(i)" in the sixth line before the
phrase "the Plan" and by adding the following before the period at the end
thereof:
, and (ii) all vesting requirements for any portion of a Stock Award
which is unvested shall be deemed satisfied and the shares subject
thereto fully vested, and all risks of forfeiture or other
restrictions or conditions applicable to any Stock Award shall lapse
and terminate.
16. Section 12 is amended to read in its entirety as follows:
Subject to the provisions of Section 7(d) hereof, the Board of
Directors shall have the power to amend or revise the terms of this
Plan or any part thereof without further action of the stockholders;
provided, however, that no such amendment shall impair any Award or
deprive any Optionee of shares that may have been granted to him under
the Plan without his consent; and provided further that no such
amendment shall, without shareholder approval:
(a) increase the aggregate number of the Reserved Shares;
(b) change the class of persons eligible to receive Awards under
the Plan;
(c) extend the maximum period during which any Option may be
granted or exercised;
(d) reduce the Option price per share of any outstanding Option
below fair market value at the time such Option was granted; or
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<PAGE>
(e) extend the term of the Plan.
17. Section 13(b) is amended to replace the word "Options" with the word
"Awards."
18. Section 14 is amended to read in its entirety as follows:
Whenever under the Plan shares are to be issued in respect of
Awards granted hereunder, the Company shall have the right to require
the recipient to make arrangements to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax
requirements, if any, prior to or following the delivery of any
certificate or certificates for such shares.
The Board of Directors shall cause the Plan, as amended as provided above,
to be restated and set forth in a single document for convenience of future
reference.
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<PAGE>
ABLE TELCOM HOLDING CORP.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING APRIL 24, 1998
PROXY
The undersigned hereby appoints Gideon D. Taylor and Billy V. Ray, or
either of them, as proxies for the undersigned with power of substitution in
each to act for and to vote, as designated on the reverse, with the same force
and effect as the undersigned, all shares of Able Telcom Holding Corp. Common
Stock standing in the name of the undersigned on February 23, 1998, at the
Annual Meeting of Shareholders to be held at The Omni Hotel, 1601 Belvedere
Road, West Palm Beach, Florida at 10:00 a.m. on Friday, April 24, 1998 and at
any adjournments thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
GRANT AUTHORITY TO THE PROXY HOLDERS TO VOTE ON BEHALF OF THE UNDERSIGNED
SHAREHOLDER AND WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR" THE
OTHER PROPOSALS.
IN THEIR DISCRETION, THE PROXY HOLDERS ARE AUTHORIZED TO VOTE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF. THE
PROXY WILL BE VOTED IN ACCORDANCE WITH THE PROXY HOLDERS' BEST JUDGMENT AS TO
ANY OTHER MATTER.
(Continued and to be Signed on Other Side)
<PAGE>
/x/ PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
1. ELECTION OF DIRECTORS.
Nominees:
Frazier L. Gaines
Gideon D. Taylor
Jonathan Bratt
John D. Foster
Robert C. Nelles
Richard J. Sandulli
/ / FOR ALL THE NOMINEES LISTED ABOVE
/ / WITHHOLD ALL AUTHORITY TO VOTE FOR THE NOMINEES LISTED ABOVE EXCEPT AS
LISTED BELOW:
List Exceptions:
-----------------------------
-----------------------------
2. APPROVAL OF AMENDMENTS TO STOCK OPTION PLAN
FOR AGAINST ABSTAIN
/ / / / / /
3. RATIFY ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR FISCAL YEAR 1998
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
SIGNATURE SIGNATURE
------------------------- -------------------------
DATED: , 1998
-----
IMPORTANT: PLEASE MARK, DATE AND SIGN EXACTLY AS YOUR NAME APPEARS HEREON, JOINT
OWNERS SHOULD EACH SIGN. IF THE SIGNER IS A CORPORATION, PLEASE SIGN IN FULL
CORPORATE NAME BY A DULY AUTHORIZED OFFICER. EXECUTORS, ADMINISTRATORS, TRUSTEES
ETC. SHOULD GIVE FULL TITLE AS SUCH.
2
