UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ANDEAN DEVELOPMENT CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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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.
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1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction applies:
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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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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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ANDEAN DEVELOPMENT CORPORATION
1 BRICKELL SQUARE,
801 BRICKELL AVENUE, SUITE 900
MIAMI, FLORIDA 33131
(305) 371-0056
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 24, 2000
The 1998 Annual Meeting of Shareholders (the "Annual Meeting") of
Andean Development Corporation, a Florida corporation (the "Company"), will be
held at 10:00 a.m., local time, on Friday, March 24, 2000 at the offices of
Broad and Cassel, 201 South Biscayne Boulevard, Suite 3000, Miami, Florida
33131, for the following purposes:
(1) To elect five members to the Company's Board of Directors to
hold office until the Company's 1999 Annual Meeting of
Shareholders or until their successors are duly elected and
qualified;
(2) To ratify the appointment of PricewaterhouseCoopers, as the
Company's independent certified public accountants for the
fiscal year ending December 31, 1999; and
(3) To transact such other business as may properly come before
the Annual Meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on February 23,
2000, as the record date for determining those shareholders entitled to notice
of, and to vote at, the Annual Meeting and any adjournment thereof.
By Order of the Board of Directors
Miami, Florida
March 14, 2000 PEDRO P. ERRAZURIZ
CHAIRMAN OF THE BOARD
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.
<PAGE>
ANDEAN DEVELOPMENT CORPORATION
1 BRICKELL SQUARE
801 BRICKELL AVENUE, SUITE 900
MIAMI, FLORIDA 33131
(305) 371-0056
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Andean Development Corporation, a Florida
corporation (the "Company"), of proxies from the holders of the Company's common
stock, par value $.0001 per share (the "Common Stock"), for use at the 1998
Annual Meeting of Shareholders of the Company to be held at 10:00 a.m., local
time, on Friday, March 24, 2000 at the offices of Broad and Cassel, 201 South
Biscayne Boulevard, Suite 3000, Miami Florida 33131, and at any adjournment
thereof (the "Annual Meeting"), pursuant to the enclosed Notice of Annual
Meeting of Shareholders.
The approximate date that this Proxy Statement and the enclosed form of
proxy are first being sent to shareholders is March 14, 2000. Shareholders
should review the information provided herein in conjunction with the Company's
1998 Annual Report, which was filed with the Securities and Exchange Commission
on March 31, 1999. The Company's principal executive offices within the United
States are located at 1 Brickell Square, 801 Brickell Avenue, Suite 900, Miami,
Florida 33131, and its telephone number is (305) 371-0056.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. Shareholders who hold their shares through an intermediary must
provide instructions on voting as requested by their bank or broker. The giving
of a proxy does not preclude the right to vote in person should any shareholder
giving the proxy so desire. Shareholders have an unconditional right to revoke
their proxy at any time prior to the exercise thereof, either in person at the
Annual Meeting or by filing with the Company's Assistant Secretary at the
Company's executive office within the United States a written revocation or duly
executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy will be borne by
the Company. In addition to the use of the mail, employees of the Company may
solicit proxies personally and by telephone. The Company's employees will
receive no compensation for soliciting proxies other than their regular
salaries. The Company may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to their principals and
to request authority for the execution of proxies. The Company may reimburse
such persons for their expenses in so doing.
PURPOSE OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and
vote upon the following matters:
(1) To elect five members to the Company's Board of Directors to hold
office until the Company's 1999 Annual Meeting of Shareholders or
until their successors are duly elected and qualified;
<PAGE>
(2) To ratify the appointment of PricewaterhouseCoopers as the
Company's independent certified public accountants for the year
ending December 31, 1999; and
(3) To transact such other business as may properly come before the
Annual Meeting and any adjournment thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (a) FOR the election of each of the five nominees for director
named below, and (b) FOR the proposal to ratify the appointment of
PricewaterhouseCoopers, as the Company's independent certified public
accountants. In the event a shareholder specifies a different choice by means of
the enclosed proxy, such shareholder's shares will be voted in accordance with
the specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on February 23,
2000 as the record date (the "Record Date") for determining shareholders of the
Company entitled to receive notice of and to vote at the Annual Meeting. As of
the Record Date there were 2,820,100 shares of Common Stock, $.0001 par value
(the "Common Stock") issued and outstanding, all of which are entitled to be
voted at the Annual Meeting. Each share of Common Stock is entitled to one vote
on each matter submitted to shareholders for approval at 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. If less than a majority
of the outstanding shares of Common Stock are represented at the Annual Meeting,
a majority of the shares so represented may adjourn the Annual Meeting from time
to time without further notice. A plurality of the votes cast by holders of the
Common Stock will be required for the election of directors. The appointment of
PricewaterhouseCoopers as the Company's independent certified public accountants
for the fiscal year ending December 31, 1999, will be approved if the number of
shares of Common Stock voted in favor of ratification exceeds the number of
shares voted against it. Any other matter properly brought before the Annual
Meeting will be approved if the number of shares of Common Stock voted in favor
of the matter exceeds the number of shares voted against, unless such matter is
one for which a greater vote is required by law. Abstentions and broker
non-votes will be counted as shares present at the Annual Meeting for purposes
of determining a quorum. With respect to the outcome of any matter brought
before the Annual Meeting (i) abstentions will be considered as shares present
and entitled to vote at the Annual Meeting, but will not be counted as votes
cast for or against any given matter and (ii) broker non-votes will not be
considered shares present and entitled to vote. Because directors will be
elected by a plurality of the votes cast and the Annual Meeting and the other
matters to be acted upon at the Annual Meeting will be approved if the number of
votes cast in favor of the matter exceeds the number of votes cast against it,
abstentions and broker non-votes will have no effect on the outcome of the
proposals to be voted upon at the Annual Meeting.
Prior to the Annual Meeting, the Company will select one or more
inspectors of election for the Annual Meeting. Such inspector(s) shall determine
the number of shares of Common Stock represented at the Annual Meeting, the
existence of a quorum, and the validity and effect of proxies, and shall
receive, count, and tabulate ballots and votes, and determine the results
thereof.
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A list of shareholders entitled to vote at the Annual Meeting will be
available for examination by any shareholder at the Company's principal
executive office in the United States for a period of 10 days prior to the
Annual Meeting, and at the Annual Meeting itself.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of March 14, 2000 by: (i)
each person known to the Company to own beneficially more than five percent of
the Common Stock; (ii) each director of the Company and nominee for election as
a director; (iii) each executive officer named in the Summary Compensation
Table; and (iv) all executive officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2) OF CLASS(3)
- --------------------------------------- ----------------------- -----------
<S> <C> <C>
Alberto Coddou(4)....................................... 0 0%
Pedro P. Errazuriz(5)(8)................................ 926,500 40.6%
Sergio Jimenez.......................................... 0 0%
Claude Mermier(6)....................................... 2,250 *
Jose Luis Yrarrazaval(7)................................ 11,450 *
Mauricio G. De la Barra(7).............................. 11,450 *
All directors and executive officers as a group
(6 persons)........................................... 940,200 41.2%
Igenor, Ingenierie et Gestion, S. A.(8)................. 900,000 31.9%
Errazuriz y Asociados Arquitectos, Limitada(9).......... 525,000 23%
Berta Dominguez(8)(10).................................. 1,425,000 49.9%
</TABLE>
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* Less than one percent.
(1) Unless otherwise indicated, the address of each beneficial owner is
Avenida Americo Vespucio Sur #100, Piso 16, Las Condes Santiago, Chile.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon
exercise of option and warrants. Each beneficial owner's percentage
ownership is determined by assuming that option and warrants that are
held by such person (but not those held by any other person) and that
are exercisable within 60 days from the date hereof have been
exercised.
(3) Based on 2,280,100 shares issued and outstanding as of the date hereof.
(4) Mr. Coddou's address is Santa Lucia 280-OF.12, Santiago, Chile.
(5) Includes 900,000 shares of Common Stock owned by Igenor, Ingenierie et
Gestion, S.A., a Swiss corporation ("Igenor") of which Mr. Pedro P.
Errazuriz owns 50% the outstanding capital stock. Also includes 26,500
shares of Common Stock owned directly by Mr. Pedro P. Errazuriz.
(6) Mr. Mermier owns a 0.25% interest in Igenor. Mr. Mermier's address is
c/o Etude Montavan-Mermier, 22, rue Etienne Dumont, 1211 Geneve 3,
Switzerland.
(7) Mr. Yrarrazaval and Mr. De La Barra own their shares jointly.
(8) The principal shareholders of Igenor are Mr. Pedro P. Errazuriz (50%),
the Chairman of the Board of the Company; Mrs. Berta Dominguez
(49.25%), the wife of Mr. Pedro P. Errazuriz; Mr. Pedro Pablo
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Errazuriz Dominguez, a son of Mr. Pedro P. Errazuriz and Mrs. Berta
Dominguez (0.25%); Mr. Claude Mermier (0.25%), a director of the
Company; and Pierre Yves Montavon (0.25%), an unrelated third party.
The address for this company is c/o Etude Montavan-Mermier, 22, rue
Etienne Dumont, 1211 Geneve 3, Switzerland.
(9) Errazuriz y Asociados Arquitectos, Limitada, is a Chilean limited
partnership. The partners of this entity are Mrs. Berta Dominguez, who
owns a 58% interest, and the six children of Mr. Pedro P. Errazuriz and
Mrs. Berta Dominguez, who each own a 7% interest and who are (i) Pedro
Pablo Errazuriz Dominguez, (ii) Berta Errazuriz Dominguez, (iii)
Magdalena Errazuriz Dominguez, (iv) Juan Andres Errazuriz Dominguez,
(v) Felipe Errazuriz Dominguez, and (vi) Arturo Errazuriz Dominguez.
The terms of the partnership agreement provide that any four partners,
acting in concert, have the authority to manage the partnership, which
includes the right to purchase and sell securities of other entities.
The partners have appointed Mr. Pedro Pablo Errazuriz Dominguez as the
General Manger of the partnership. In his capacity, Mr. Pedro Pablo
Errazuriz Dominguez has the authority to take certain actions on behalf
of the partnership, including, when acting together with one other
partner, to purchase and sell securities of other entities.
(10) Consists of 900,000 shares of Common Stock owned by Igenor, of which
Mrs. Berta Dominguez owns 49.25% of the outstanding capital stock and
525,000 shares of Common Stock owned by Errazuriz y Asociados
Arquitectos Limitada of which Mrs. Berta Dominguez, owns a 58%
interest. Mrs. Berta Dominguez is the wife of Mr. Pedro P. Errazuriz,
the Company's Chairman of the Board.
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<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
At the 1998 Annual Meeting, five directors are to be elected to hold
office until the 1999 Annual Meeting of Shareholders and until their successors
have been elected and qualified. The five nominees for election as directors are
Pedro P. Errazuriz, Jose Luis Yrarrazaval, Alberto Coddou, Sergio Jimenez, and
Claude Mermier. Each nominee is currently a member of the Board of Directors.
The persons named in the enclosed proxy card have advised that, unless otherwise
directed on the proxy card, they intend to vote FOR the election of the
nominees. Should any nominee become unable or unwilling to accept nomination or
election for any reason, persons named in the enclosed proxy card may vote for a
substitute nominee designated by the Board of Directors. The Company has no
reason to believe the nominees named will be unable or unwilling to serve if
elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES AS
DIRECTORS TO SERVE UNTIL THE COMPANY'S 1999 ANNUAL MEETING OF SHAREHOLDERS AND
UNTIL THEIR SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
DIRECTOR COMPENSATION
Each non-employee director of the Company is paid a fee of $1,000 for
each meeting of the Board of Directors attended. Directors are also reimbursed
for travel and other expenses incurred in connection with their activities as
directors of the Company.
MEETING OF THE BOARD OF DIRECTORS AND COMMITTEES
The Company has five committees: the Audit Committee, the Compensation
and Investment Committee, the Nominating Committee, the Employee Stock Option
Committee, and the Directors Stock Option Committee. The members of each of
these Committees are Pedro P. Errazuriz, Alberto Coddou and Sergio Jimenez.
Messrs. Coddou and Jimenez are non-employee directors. The principal functions
of the Audit Committee are to recommend the annual appointment of the Company's
independent auditors, to consult and review with the Company's auditors
concerning the scope of the audit and the results of their examination, to
review and approve any material accounting policy changes affecting the
Company's operating results and to review the Company's internal control
procedures. The Compensation and Investment Committee reviews and recommends
compensation and benefits for the executives of the Company. The Nominating
Committee seeks qualified persons to serve as members the Company's Board of
Directors. The Employee Stock Option Committee and Director Stock Option
Committee administer and interpret the Company's Stock Option Plan and Director
Option Plan and are authorized to grant options pursuant to the terms of such
plans.
During the fiscal year ended December 31, 1998, the Company's Board of
Directors held one meeting. All of the directors attended this meeting, except
for Mr. Mermier. During the fiscal year ended December 31, 1998 none of the
committees of the Board took any action. The functions of these committees were
performed by the entire Board of Directors during fiscal year 1998.
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that the Company directors and executive officers, and persons who own
more than ten percent (10%) of the Company's outstanding
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Common Stock, file with the Securities and Exchange Commission (the
"Commission") initial reports of ownership and reports of changes in ownership
of Common Stock. Such persons are required by the Commission to furnish the
Company with copies of all such reports they file.
Based solely on a review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that, during the year ended December 31, 1998, all Section
16(a) filing requirements applicable to its officers, directors and greater then
ten percent beneficial owners were complied with.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to compensation
paid by the Company to the Chief Executive Officer and each executive officer
whose salary and bonus exceeded $100,000 for the fiscal year ended December 31,
1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- --------------------------- ---- -------- ------- ------------
<S> <C> <C> <C> <C>
Pedro P. Errazuriz(1) 1998 $ 0.00 $ 0.00 $ 0.00
President Chief Executive Officer 1997 $178,130 $70,705 $20,000(2)
Chairman 1996 $ 51,475 $96,000 $73,016(3)
Jose L. Yrarrazaval (1) 1998 $ 76,201 $11,000 $17,000(4)
Vice Chairman of the Board 1997 $ 75,040 $35,000 $17,000(4)
Treasurer/Secretary/Director 1996 $ 37,419 $35,000 $32,932(5)
</TABLE>
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(1) The gross salary includes social security and retirement benefits.
Social Security in Chile was established as a private system that
requires all companies to retain 20% of the gross salaries of its
employees which is used to pay both Administrators of Pension Funds
Companies ("AFP") and Institutions of Provisional Health ("ISAPRE").
The allocation of this 20% to each service is as follows:
(a) 10% to the AFP: This amount is deposited in an individual
interest-bearing account of each employee to cover their retirement. In
Chile, the age of retirement is 60 years in case of women and 65 years
for men.
(b) 3% to the AFP: This amount covers any partial or permanent
disability and, in the case of death, will provide a monthly amount to
the deceased's spouse. The amount paid corresponds to 70% of an
employee's average salary, based upon the last 10 years of the
employee's life.
Both item (a) and (b) are limited to approximately $1,700 per
month.
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<PAGE>
(c) 7% to the ISAPRE: This amount covers medical fees,
hospitalization and clinical examinations, although in many instances
it may be necessary to pay additional costs for health care.
Chilean law requires the payment of one month salary for each
year worked by the employee when he is dismissed. When the employee
terminates his or her employment, no compensation is legally required.
(2) This is allocated to an annual automobile allowance.
(3) Includes an annual allowance of $15,000 for automobile costs and
maintenance; and annual housing/vacation allowance of $10,500, $7,200
for domestic employees; and $40,316, based upon a percentage of the
profit of the Company. The profit percentage was based on approximately
3% of the total net profits of all related companies for 1996.
(4) This is allocated to an annual automobile allowance.
(5) Includes an annual allowance of $17,000 for automobile costs and
expenses, and an annual housing and vacation allowance of $15,932.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Pedro
P. Errazuriz, Jose Luis Yrarrazaval and Juan Phillips. Each of these agreements
remains in effect until such time as either party provides to the other 30-days
advance notice of its desire to terminate the agreement. The agreements provide
that the salaries and social security benefits will not be less than those for
fiscal year 1995, and shall be determined by the Company's Board of Directors.
Additionally, these individuals will also be entitled to a bonus, as determined
by the Company's Board of Directors. Effective May 1998, Mr. Pedro P. Errazuriz
resigned his positions as President and Chief Executive Officer of the Company
and his employment contract with the Company was terminated. Additionally, on
September 15, 1998 the Company entered into an employment agreement with Mr.
Mauricio De la Barra, which remains in effect until such time as either party
provides to the other 30-days advance notice of its desire to terminate the
agreement. Mr. De la Barra's base salary is $60,000, plus an annual bonus of
approximately $12,000. Mr. De la Barra is also entitled to social security
benefits.
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<PAGE>
PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers, as the
Company's independent certified public accountants for the fiscal year ending
December 31, 1999. Although the Board is not required to do so, it is submitting
its selection of the Company's independent certified public accountants for
ratification at the Annual Meeting, in order to ascertain the views of its
shareholders. The Board will not be bound by the vote of the shareholders;
however, if the selection is not ratified, the Board would reconsider its
selection.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF PRICEWATERHOUSECOOPERS, AS THE COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AGUAS Y ECOLOGIA S.A. ("A&E")
During 1995 the Company acquired a 45% interest in A&E, which equals a
4.5% interest in the Bayesa Project. The interest was acquired from an affiliate
of the Company, Invdemco, which is a Chilean investment company. Immediately
following the Company's initial public offering in November 1996, the Company
purchased an additional 22.5% interest in A&E from shares held by Invdemco,
which translates into an additional 2.25% interest in the Bayesa Project, for
$141,750. The shareholders of Invdemco are (i) Mr. Pedro P. Errazuriz (50%),
President, CEO, and Chairman of the Board of the Company, (ii) Berta Dominguez,
the wife of Mr. Pedro P. Errazuriz and Director and President of A&E, one of the
principal shareholders of the Company (45%); (iii) and Berta Errazuriz (5%), a
daughter of Mr. Pedro P. Errazuriz and Mrs. Berta Dominguez. As of August 1,
1997, the Company owned a 6.7% interest in the Bayesa Project.
VILLARRICA PROPERTY
In November 1996, the Company sold to Invdemco a non-performing asset
of the Company consisting of a house located near Villarrica, in the south of
Chile, situated on approximately 13.5 acres (the "Villarrica Property").
Invdemco paid $606,031.50, (50% of the purchase price) of the Villarrica
Property in cash at closing, with the balance being paid in four annual
installments of principal together with interest at the rate of 8-1/2% on the
unpaid balance, commencing January 15, 1998, which first installment payment has
been paid.
VILLARRICA LAND
The Company, through Igenor Andina S.A. ("INA"), a wholly owned
subsidiary of the Company, currently owns land for future developments. However,
the land is limited in its capacity to be subdivided by local Chilean
regulations. The land is located near Villarrica in the south of Chile and
consists of approximately 107.75 acres of non-irrigated land, which is
classified as non-performing property. As of December 31, 1998, the book value
of the land was $789,447 and had outstanding mortgages in favor of Banco Sud
Americano as a collateral for loans extended by them for a total of $262,630.
PROYECTOS Y EQUIPOS S.A. AND ELECTROMECANICA OSORNO S.A.
Errazuriz & Asociados Arquitectos Limitada ("EAA") and INA, the
principal shareholders of the Company, also own, in the aggregate, controlling
interest in Proyectos y Equipos S.A. and Electromecanica Osorno S.A., two
Chilean corporations located in Santiago, Chile. These companies specialize in
the sale of air
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compressors and ventilators and related products and small electrical equipment,
respectively. The Company, from time to time, intends to enter into agreements
with these companies to perform certain services, based upon competitive bids
received from these companies.
CONSONNI/ECESA
In May 1997, Mr. Pedro P. Errazuriz, the Company's Chairman of the
Board, acquired a 20% interest in Construcciones Electromecanicas Consonni S.A.,
a Spanish corporation that manufactures motor control centers and switchgear
("Consonni") and an interest in Equipos de Control Electrico S.A., a Spanish
corporation and the international marketing and sales arm of Consonni ("ECESA",
and collectively with Consonni, "Consonni/ECESA") from unrelated third parties,
increasing his equity interest in Consonni/ECESA to 77%. Consonni/ECESA are
Spanish corporations that market, manufacture, distribute and sell motor control
centers and switchgear. In June and July 1997, the Company purchased an 11%
equity interest in Consonni/ECESA for approximately $671,000 from unrelated
third parties.
Subsequently, during August 1997, Mr. Pedro P. Errazuriz, on behalf of
his interest of 77% and the 11% interest owned by the Company, entered into a
share exchange agreement with Consonni USA, Inc. ("CONUSA"), a holding company,
whereby the 88% interest of Consonni/ECESA owned by Mr. Pedro P. Errazuriz and
the Company was exchanged for 2,300,000 shares of CONUSA common stock
(representing approximately a 77.7% interest in CONUSA). CONUSA's main asset is
88% of Construcciones Electromecanicas Consonni S.A. of Bilbao, Spain, a
manufacturer of electric control panels and substations,
On June 30, 1999, the Company acquired 1,332,710 shares of common stock
of CONUSA representing 44.4% of the issued and outstanding common stock of
CONUSA from Mr. Pedro P. Errazuriz. The Company acquired the CONUSA common stock
in exchange for certain assets, including certain non-performing assets, some
long-term receivables, as well as the forgiveness of debt in the sum of $127,514
due from Mr. Pedro P. Errazuriz, which in total net present value represents
$1,923,511. The Company obtained an independent appraisal of the common stock of
CONUSA as well as an independent appraisal of certain of the assets exchanged
for the stock.
The Company intends to acquire the remaining equity interest in CONUSA
through a merger with a wholly owned subsidiary. The Company signed a plan of
merger with CONUSA on February 28, 2000. Under the terms of the plan of merger,
each outstanding share of the common stock of CONUSA not owned by Andean
Development Corporation will be converted into and exchanged for the equivalent
of the common stock of the Company having a value of $2.00 per share, provided
the following conditions are satisfied: (i) the holders of not more than 5% of
the shares of common stock of CONUSA exercise their dissenters rights under the
Florida Business Corporation Act; (ii) the value of the Company common stock to
be exchanged for the CONUSA common stock on the effective date of the merger
shall be no less than $2.00 per share; and (iii) the shares of the Company
common stock to be exchanged for the CONUSA common stock shall be registered on
a Form S-4 Registration Statement declared effective by the Securities and
Exchange Commission.
TRANSACTIONS BETWEEN THE COMPANY AND ITS OFFICERS, DIRECTORS AND AFFILIATES
In May 1997, the Company loaned Mr. Pedro P. Errazuriz the principal
sum of $200,000, plus interest at an annual rate of 8% to buy shares in
Consonni/ECESA. As of March 1999, this debt has been reduced to $127,514.
All transactions between the Company and its officers, shareholders and
each of their affiliated companies have been made on terms no less favorable to
the Company than those available from unaffiliated
10
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parties. In the future, the Company intends to handle transactions of a similar
nature on terms no less favorable to the Company than those available from
unaffiliated parties.
OTHER MATTERS
The Board of Directors is not aware of any other matters to come before
the Annual Meeting. However, if other matters properly come before the Annual
Meeting, it is the intention of the persons named in the enclosed form of proxy
to vote said proxy in accordance with their judgment in such matters.
SHAREHOLDER PROPOSALS TO BE PRESENTED AT THE
COMPANY'S NEXT ANNUAL MEETING OF SHAREHOLDERS
Shareholder proposals intended to be presented at the Company's 1999
Annual Meeting of Shareholders pursuant to the provisions of Rule 14a-8 of the
Securities and Exchange Commission promulgated under the Securities Exchange Act
of 1934, as amended, must be received by the Company at its executive offices by
April 7, 2000, for inclusion in the Company's proxy statement and form of proxy
relating to such meeting.
FORM 10-KSB ANNUAL REPORT
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1998, INCLUDING THE EXHIBITS FILED THEREWITH WITH THE SECURITIES
AND EXCHANGE COMMISSION, IS PROVIDED HEREWITH.
By Order of the Board of Directors
March 14, 2000 PEDRO PABLO ERRAZURIZ
CHAIRMAN OF THE BOARD
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PROXY
ANDEAN DEVELOPMENT CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
MARCH 24, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder hereby appoints Pedro P. Errazuriz and
Constanza Cea, and each of them, as proxy or proxies and attorney-in-fact, each
with the power to appoint his or her substitute, on behalf and in the name of
the undersigned to represent the undersigned at the Annual Meeting of
Shareholders of ANDEAN DEVELOPMENT CORPORATION (the "Company") to be held on
March 24, 2000 and at any adjournments thereof, and to vote all shares of Common
Stock which the undersigned would be entitled to vote if personally present, as
indicated on the reverse side of this card. The undersigned acknowledges receipt
of the Notice of Annual Meeting of Shareholders and the Proxy Statement
furnished herewith.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR ALL OF THE NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2. IN THEIR DISCRETION
THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
(CONTINUED ON FOLLOWING PAGE)
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ALL OF THE NOMINEES IN PROPOSAL 1 AND FOR PROPOSAL 2
1. ELECTION OF DIRECTORS.
[ ] FOR ALL NOMINEES LISTED BELOW
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
Nominees: Pedro P. Errazuriz, Jose Luis Yrarrazaval, Alberto Coddou,
Sergio Jimenez, Claude Mermier
INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW:
2. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS THE
COMPANY'S INDEPENDENT AUDITORS FOR 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Date: _______________________________ ____________________________________
Signature
Date: _______________________________ ____________________________________
Signature
Please sign exactly as name appears on this proxy. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
