SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
(3) Per unit price or other value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated
and state how it was determined):
_____________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
|_| Fee paid previously with preliminary materials:
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount previously paid: _________________________________________________
(2) Form, Schedule or Registration No: ______________________________________
(3) Filing party: ___________________________________________________________
(4) Date filed: _____________________________________________________________
<PAGE>
March 2, 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
------------------------
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 seven 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 2, 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
------------------------
PROXY STATEMENT
------------------------
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, are first being sent to
shareholders on or about March 24, 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.
<TABLE>
<CAPTION>
Name/Address Number of Shares Percent of Class
- ------------------------------------------------------------------------------------------
<S> <C> <C>
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)(3) ................................... 1,706,920 17.79%
</TABLE>
- ----------
(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 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 seven members, all of whom are nominees
for reelection for a term expiring at the 1999 Annual Meeting of Shareholders.
In the election, the seven 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>
Gerry W. Hall........... 52 1997 President and Chief Executive Officer of the Company since
June 12, 1997. Since October 1996, Mr. Hall has also been
President of the Company's Traffic Management Group and since
1997 has also served as President of the Company's
Communications Development Group. Since 1983 Mr. Hall has
been President of Georgia Electric Company ("GEC"), which was
acquired by the
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C> <C>
Company in October 1996. Mr. Hall is also President of
Electric Company of Georgia, and Westwood Management, Inc.,
a real estate management company.
Frazier L. Gaines....... 58 1992 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
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 Executive 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 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
3
<PAGE>
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 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 Mr. Hall. 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 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).
Compliance With Section 16(a) of the Securities Exchange Act
Under federal securities laws, the Company's directors, certain officers,
and persons holding more than 10% of the Common Stock of the Company are
required to report, within specified monthly and annual due dates, their initial
ownership and all subsequent acquisitions, dispositions or other transfers of
interest in Common Stock, if and to the extent reportable events occur which
require reporting of such due dates. The Company is required to describe in this
Proxy Statement whether it has knowledge that any person required to file such
report may have failed to do so in a timely manner. To the Company's knowledge,
all such filing requirements of the Company's directors, officers and each
beneficial owner of more than 10% of the Common Stock were satisfied in full for
fiscal year 1997, except that on November 10, 1997, John Foster filed a Form 3
relating to his share ownership upon joining the Company that was due on June
22, 1997; Jonathan Bratt, Robert C. Nelles 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, 1996; on January 17, 1997, Mr. Caudill filed a Form 4
reporting two transactions that were due to be reported by January 10, 1997; on
September 12, 1997, William J. Mercurio, the Company's former President, Chief
Executive Officer and Chief Financial Officer, filed a Form 4 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 relating to his share
ownership upon joining the Company. The foregoing is based upon reports
furnished to the Company and written representations and information provided to
the Company by the persons required to make such filings.
Directors who also serve as executive officers receive no additional fees
or remuneration for acting in their capacity as a Director of the Company.
Directors who serve on Board committees receive $750 per committee meeting.
4
<PAGE>
Executive Officers
Certain biographical information concerning the Company's other executive
officers is presented below.
Name and Position Age
- --------------------------------------------------------------------------------
Billy V. Ray, Jr........ 40 Mr. Ray has been Chief Financial Officer of
Chief Financial the Company since June 1997, having served
Officer and from January 1997 until June as a consultant
Assistant Secretary to the Company's Traffic Management Group.
Prior to his employment by the Company, Mr.
Ray served as a director of Dycom Industries,
Inc. from 1990 to 1992, as Assistant to the
President of Burnup & Sims, Inc. from 1992 to
1993, as Staff Manager with MasTec, Inc. from
1993 to 1994 and as a self employed
consultant from 1994 until his employment
with the Company.
J. Barry Hall........... 49 Mr. Hall has been President of the Company's
President, Traffic Traffic Management Group since October 1996.
Management Group Since 1983, Mr. Hall has been Executive Vice
President of GEC.
Executive Compensation
The following table sets forth certain information with respect to the
annual and long-term compensation paid or accrued during the fiscal years
indicated to each of the Company's Chief Executive Officer and the four most
highly compensated executive officers of the Company (including its
subsidiaries).
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
------------------------------
Name and Principal Fiscal Shares Underlying Other
Position Year Salary ($) Options (#) Compensation($)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gerry W. Hall(1) 1997 180,769 27,500 3,200
President and Chief
Executive Officer
Frazier L. Gaines (2) 1997 110,000 5,000 1,024,375
President of ATI and 1996 110,000 -- 36,000
Director 1995 104,000 -- 36,000
J. Barry Hall 1997 161,538 -- --
Traffic Management
Group
Billy V. Ray (3) 1997 34,615 -- 56,961
Chief Financial
Officer and Assistant
Secretary
Richard J. Sandulli (4) 1997 71,000 -- 3,750
Executive Vice
President and Director
William J. Mercurio (5) 1997 107,901 75,000 243,100
Former President and 1996 204,000 20,000 6,000
Chief Executive 1995 66,600 -- 2,000
Officer and Chief
Financial Officer
</TABLE>
- ----------
(1) Gerry W. Hall was appointed President and Chief Executive Officer of the
Company on June 12, 1997 at an annual salary of $200,000; other
compensation consists of an automobile allowance.
(2) Other compensation consists of an automobile allowance and a housing
allowance and includes for fiscal 1997 an amount of $991,375, which
represents the difference between the price paid by Mr.
5
<PAGE>
Gaines upon the exercise of certain stock options and the fair market value
of the underlying Common Stock on the date of exercise.
(3) Other compensation consists of compensation for consulting services
rendered prior to his appointment on June 12, 1997 as the Company's Chief
Financial Officer and a travel and housing allowance received after such
appointment.
(4) Other compensation consists of an automobile allowance.
(5) Other compensation for fiscal 1995 and 1996 consists of an automobile
allowance; for fiscal 1997 other compensation represents the difference
between the price paid by Mr. Mercurio upon the exercise of certain stock
options and the fair market value of the underlying Common Stock on the
date of exercise. Mr. Mercurio resigned as President, Chief Executive
Officer and Chief Financial Officer of the Company effective June 12, 1997.
Option Grants During the Fiscal Year Ended October 31, 1997
The following table shows all grants during the fiscal year ended October
31, 1997 of stock options under the Company's Stock Option Plan to the executive
officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------------------
Percent Potential Realizable
of Total Value at Assumed
Options Annual Rates of Stock
Number Granted Price Appreciation for
of to Market Option Term(2)
Shares Employees Exercise Price on ----------------------
Underlying Name in Fiscal Price Date of Expiration
Option Year ($/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 $8.25 3/10/99 232,172 298,688
</TABLE>
- ----------------
(1) The potential realizable values are based upon assumed 5% and 10%
annualized stock price growth rates and are not intended to forecast future
price appreciation of the Company's Common Stock. Actual gains, if any, on
stock option exercises will depend on the amount, if any, by which the fair
market value exceeds the option exercise price on the date the option is
exercised. There is no assurance that the amounts reflected in this table
will be achieved.
Option Exercises and Period-End Values
The following table provides information on options exercised in the fiscal
year ended October 31, 1997 by the executive officers named in the "Summary
Compensation Table" above, the number of unexercised options each of them held
at October 31, 1997 and the value of the unexercised "in-the-money" options each
of them held as of that date.
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying In-the-Money Options
Unexercised Options at Fiscal
Number of at Fiscal Year-End(#) Year-End($) (1)
Shares
Acquired on Exercisable/ Exercisable/
Name Exercise Value 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 $715/16 on October
31, 1997.
6
<PAGE>
Executive Employment Agreements
Gerry W. Hall, President and Chief Executive Officer of the Company, is
party to an employment agreement (the "Hall Employment Agreement") dated October
12, 1996 with 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 with the Company, 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.
J. Barry Hall, who serves as President of the Traffic Management Group, is
party to an employment agreement (the "Barry Hall Employment Agreement") dated
October 12, 1996 with GEC. The James 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 with the Company, 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).
The Company appointed Richard J. Sandulli as Executive Vice President at an
annual salary of $175,000 per year. In connection with this appointment, the
Company has further agreed to terminate his employment only upon six month's
prior notice.
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 Company's
contract with Gerry Hall and Barry Hall for the purchase of GEC provides for an
acceleration of certain contingent payments of the purchase price in the event
that the Company should sell GEC prior to October 31, 2001. See "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
7
<PAGE>
100% vested at the end of the six-year period. Regardless of the vesting
schedule, however, participants 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.
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. Hall and Sandulli also 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 obtained 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 member of the Board of Directors of the Company, and a
former member of the Board. These notes, which bore interest at the prime rate
plus 1%, were paid 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"). Following the acquisition, the
Halls were employed by the Company and Gerry W. Hall was appointed to the
Company's Board of Directors and has served as President and Chief Executive
Officer of the Company since June 1997. The purchase price for the GEC
acquisition was $3,000,000 to be paid in 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: then 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. In connection with the acquisition of
GEC, the Company entered into employment agreements with the Halls, each of
which expires on October 11, 2001, that provided for the Halls to serve,
respectively, as President of the Company's traffic management group and of
Transportation Safety Contractors, Inc., a member company of the traffic
management group. 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
(the "Consulting Agreement") with Nelles & Associates, Inc., an international
telecommunications consulting firm founded by Robert C. Nelles, a director of
the Company. The Consulting Agreement provides for Nelles & Associates, Inc. to
be paid $6,000 per month to provide consulting services in support of the
Company's business activities for eight days per month. In addition, the
Consulting Agreement provides that Mr. Nelles be granted options to purchase
15,000 shares of Common Stock. On January 1, 1998, the Company entered into a
second three-month consulting agreement with Nelles & Associates, Inc.
8
<PAGE>
(the "Second Consulting Agreement"). The Second Consulting Agreement provides
for Nelles & Associates, Inc. to provide certain consulting services in support
of the Company's business activities in exchange for $2,000 per month and $150
per hour of services beyond three days of labor.
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 Board Compensation Committee 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's Board of
Directors took responsibility 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 the
highest quality executives, to align the interests of these executives with
those of the Company shareholders and to motivate the 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 performances and achievements as well as
performance of the Company relative to its peers, and to encourage ownership of
the 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 who
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. The amount of bonuses, if any, to be granted to the executive
officers of the Company for services performed in fiscal 1997 has not yet been
determined.
Compensation of the Chief Executive Officer. The compensation of Gerry W.
Hall, who serves as 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 is appropriate for the chief executive 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 of $6.00 per share. The market value of the
Company's 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. The Board of Directors has not yet determined whether to award a bonus to
Mr. Hall with respect to services performed during the fiscal year ended October
31, 1997. To the extent that such a bonus is awarded, it is expected to be based
upon pre-tax income of the Company and the success of the Company's strategic
acquisitions.
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
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<PAGE>
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
GERRY W. HALL
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.
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 Telcommunications Stocks Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------------------------------
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 Hldg Corp ABTE 100.00 462.50 362.50 275.00 431.25 396.88
PEER GROUP 100.00 127.35 148.65 108.73 159.46 219.34
S & P 500 100.00 114.94 119.39 150.96 187.33 247.49
NASDAQ TELECOMMUNICATIONS 100.00 199.57 168.27 189.08 198.28 288.72
</TABLE>
10
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------
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 the fiscal year ended October 31,
1996, 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 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
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<PAGE>
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 Compensation
Committee of the Board of Directors (the "Compensation Committee" or the "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. Certain specified awards that apply to non-employee
directors of the Company are not subject to the discretion of the Plan
Administrators. 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. In addition, the Stock Option
Plan provides for the automatic grant of NQSOs to directors of the Company who
are not employees of the Company or its affiliates ("Outside Directors").
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 term shall expire on the earlier of six years from the date of the grant or
in the case of Outside 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 an Outside 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
12
<PAGE>
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 (except for transfers to immediate
family members or trusts for their benefit). 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.
Outside Director Options. Under the Stock Option Plan, Outside Directors
receive a one-time grant of NQSOs entitling them to purchase 5,000 shares of
Common Stock upon joining the Company's Board of Directors. All such options are
exercisable at 100% of the fair market value on the date of grant. Neither the
Plan Administrators, the Company's Board of Directors nor any committee of the
Board of Directors has any discretion with respect to options granted to Outside
Directors pursuant to the Plan, although the Board may elect to grant additional
options to Outside Directors otherwise than pursuant to the Plan.
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.
Change of Control. In order to maintain all of the participant's rights in
the event of a change of control of the Company, all outstanding options will
become exercisable and all remaining restrictions on awards of Common Stock
shall terminate 30 days after the receipt of written notice regarding the
occurrence of the change of control. A change of control is deemed to occur as a
result 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.
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
13
<PAGE>
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 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.
14
<PAGE>
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 2, 1998
15
<PAGE>
ABLE TELCOM HOLDING CORP.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING APRIL 24, 1998
PROXY
The undersigned stockholder hereby appoints Gideon D. Taylor, Gerry W.
Hall, Billy V. Ray, or any of them, attorneys and provides 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 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:
Gerry W. Hall
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: _____________________________
_____________________________
FOR AGAINST ABSTAIN
2. APPROVAL OF AMENDMENT TO STOCK OPTION PLAN / / / / / /
3. RATIFY ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
FOR FISCAL YEAR 1998 / / / / / /
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
