As filed with the Securities and Exchange Commission on February 11, 1998.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MASTEC, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 1623 59-1259279
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
3155 N.W. 77TH AVENUE
MIAMI, FL 33122-1205
(305) 599-1800
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
--------------
JOSE M. SARIEGO, ESQ.
SENIOR VICE PRESIDENT - GENERAL COUNSEL
MASTEC, INC.
3155 N.W. 77TH AVENUE
MIAMI, FL 33122-1205
(305) 599-2314
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
STEVEN D. RUBIN, ESQ.
STEARNS WEAVER MILLER WEISSLER
ALHADEFF & SITTERSON, P.A.
150 WEST FLAGLER STREET, SUITE 2200
MIAMI, FLORIDA 33130
(305) 789-3517
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.|_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box.|X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_|
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.|_|
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
PROPOSED PROPOSED
TITLE OF EACH CLASS MAXIMUM MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE AMOUNT OF
REGISTERED REGISTERED SHARE(1) OFFERING PRICE(1) REGISTRATION FEE(1)
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Common Stock, $.10 par value 408,000 shares $33.25 $13,566,000 $4,002
=============================================================================================================================
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(c) on the basis of the average of the high and low
price of the Common Stock on the New York Stock Exchange on February 10,
1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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- -------------------------------------------------------------------------------
PROSPECTUS
408,000 SHARES
MASTEC, INC.
COMMON STOCK
This Prospectus relates to (i) the proposed sale from time to time by
certain selling securityholders (the "Selling Stockholders") of an aggregate of
up to 190,000 shares (the "Shares") of Common Stock, $.10 par value (the "Common
Stock"), of MasTec, Inc., a Delaware corporation (together with its
subsidiaries, the "Company"), and (ii) the issuance by the Company to certain
other selling securityholders (the "Option Holders") and the proposed sale from
time to time by such Option Holders of an aggregate of up to 219,000 shares of
Common Stock (the "Option Shares") upon the exercise of certain outstanding
stock options (the "Stock Options"), in the amount and in the manner and on
terms and conditions described in this Prospectus. The Selling Stockholders may
sell the Shares and the Option Holders may sell the Option Shares on the New
York Stock Exchange or on one or more other exchanges, in the over-the-counter
market or otherwise at prices and at terms then prevailing or at prices related
to the then current market price or in negotiated transactions. The Selling
Stockholders and Option Holders may effect such transactions by selling the
Shares or Option Shares, as the case may be, to or through agents, dealers or
underwriters designated from time to time and such agents, dealers or
underwriters may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or Option Holders and/or the
purchasers of Shares or Option Shares for whom they may act as agent or to whom
they may sell as principals, or both. See "Plan of Distribution" and "Selling
Stockholders and Option Holders." The Company will not receive any of the
proceeds from the sale of the Shares or the Option Shares but will receive
proceeds upon the exercise of the Stock Options. See "Use of Proceeds."
The Common Stock is traded on the New York Stock Exchange under the
symbol MTZ. On February 9, 1998, the closing sale price of the Common Stock on
the New York Stock Exchange was $33-11/16 per share.
SEE "RISK FACTORS" ON PAGE 4 FOR A DISCUSSION OF CERTAIN RISKS
ASSOCIATED WITH AN INVESTMENT IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL,
OR A SOLICITATION OF AN OFFER TO PURCHASE THE SECURITIES OFFERED BY THIS
PROSPECTUS IN ANY JURISDICTION IN WHICH, OR TO OR FROM ANY PERSON TO OR FROM
WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER, OR SOLICITATION OF AN OFFER. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES OFFERED
PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR
IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
The date of this Prospectus is February __, 1998.
TABLE OF CONTENTS
PAGE
----
Available Information................................................. 2
Information Incorporated by Reference................................. 3
The Company........................................................... 4
Risk Factors.......................................................... 4
Use of Proceeds....................................................... 8
Selling Stockholders and Option Holders............................... 8
Plan of Distribution.................................................. 10
Legal Matters......................................................... 10
Experts............................................................... 10
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following regional offices of the Commission: Seven World Trade Center, Suite
1300, New York, New York 10048; and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549. Such information is
also available to the public from commercial documents on the internet web site
monitored by the Commission at http:\\www.sec.gov. The Common Stock is listed on
the New York Stock Exchange under the symbol "MTZ." Reports, proxy and
information statements and other information concerning the Company can also be
inspected at the New York Stock Exchange, 20 Broad Street, New York, New York
10005.
This Prospectus constitutes part of a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") and does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement and to the exhibits and schedules thereto. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and such statement is qualified in its entirety by such
reference.
-2-
INFORMATION INCORPORATED BY REFERENCE
The following documents, previously filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated herein by reference:
The Company's Annual Report on Form 10-K for the year ended December
31, 1996, as amended on Form 10K\A filed February 6, 1998 (the "1996
10-K");
The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30 and September 30, 1997;
The Company's Current Reports on Form 8-K, dated January 20, 1998 and
January 26, 1998; and
The portions of the Company's definitive Proxy Statement for its 1997
Annual Meeting of Stockholders dated April 14, 1997 that have been
incorporated by reference into the 1996 10-K.
Each document filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, subsequent to the date of this Prospectus but
prior to the termination of the offering to which this Prospectus relates, shall
be deemed to be incorporated by reference into this Prospectus and made a part
of this Prospectus from the date any such document is filed. Any statements
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus (or
in any other subsequently filed document which also is incorporated or deemed to
be incorporated by reference herein) specifically modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Prospectus except as so modified or superseded.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON
TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON WRITTEN OR ORAL
REQUEST OF SUCH PERSON TO MASTEC, INC., 3155 N.W. 77TH AVENUE, SUITE 135, MIAMI,
FLORIDA 33122-1205, TELEPHONE (305) 599-1800, ATTENTION: NANCY J. DAMON,
CORPORATE SECRETARY, A COPY OF ANY OR ALL OF THE DOCUMENTS DESCRIBED ABOVE
(OTHER THAN EXHIBITS TO SUCH DOCUMENTS) THAT HAVE BEEN INCORPORATED BY REFERENCE
IN THIS PROSPECTUS.
-3-
THE COMPANY
The Company is one of the world's largest contractors specializing in
the design, installation and maintenance of infrastructure for the rapidly
growing telecommunications industry. The Company focuses on the installation of
aerial and underground copper, coaxial and fiber optic cable networks as well as
wireless antenna networks ("outside plant services"). The Company believes it is
the largest independent contractor for these systems in the United States and
Spain, and one of the largest in Argentina, Brazil, Chile and Peru. The Company
also installs central office switching equipment, and designs, installs and
maintains integrated voice, data and video local and wide area networks inside
buildings ("inside wiring"). Clients for the Company's services include major
domestic and international telecommunication service providers such as the
regional bell operating companies ("RBOCs"), other local exchange carriers,
competitive access providers, cable television operators, long-distance
operators and wireless phone companies. The Company's principal executive
offices are located at 3155 N.W. 77th Avenue, Miami, Florida, 33122, and its
telephone number is (305) 599-1800. For further information about the business
and operations of the Company, reference is made to the Company's reports
incorporated by reference. See "Information Incorporated by Reference."
RISK FACTORS
THIS PROSPECTUS AND OTHER REPORTS AND STATEMENTS FILED BY THE COMPANY
FROM TIME TO TIME WITH THE COMMISSION (COLLECTIVELY, "COMMISSION FILINGS")
CONTAIN OR MAY CONTAIN FORWARD-LOOKING STATEMENTS, SUCH AS STATEMENTS REGARDING
THE COMPANY'S GROWTH STRATEGY AND ANTICIPATED TRENDS IN THE INDUSTRIES AND
ECONOMIES IN WHICH THE COMPANY OPERATES. THESE FORWARD-LOOKING STATEMENTS ARE
BASED ON THE COMPANY'S CURRENT EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF
RISKS, UNCERTAINTIES AND ASSUMPTIONS RELATING TO THE COMPANY'S OPERATIONS AND
RESULTS OF OPERATIONS, COMPETITIVE FACTORS, SHIFTS IN MARKET DEMAND, AND OTHER
RISKS AND UNCERTAINTIES, INCLUDING IN ADDITION TO THOSE DESCRIBED BELOW AND
ELSEWHERE IN THIS PROSPECTUS OR ANY COMMISSION FILING, UNCERTAINTIES WITH
RESPECT TO CHANGES OR DEVELOPMENTS IN SOCIAL, BUSINESS, ECONOMIC, INDUSTRY,
MARKET, LEGAL AND REGULATORY CIRCUMSTANCES AND CONDITIONS AND ACTIONS TAKEN OR
OMITTED TO BE TAKEN BY THIRD PARTIES, INCLUDING THE COMPANY'S CONTRACTORS,
CUSTOMERS, SUPPLIERS, COMPETITORS, STOCKHOLDERS, LEGISLATIVE, REGULATORY AND
JUDICIAL AND OTHER GOVERNMENTAL AUTHORITIES. SHOULD ONE OR MORE OF THESE RISKS
OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE
INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM RESULTS EXPRESSED OR
IMPLIED IN ANY FORWARD-LOOKING STATEMENTS MADE BY THE COMPANY IN THIS PROSPECTUS
OR ANY COMMISSION FILING. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO
REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR
CIRCUMSTANCES. THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN
ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS BEFORE MAKING AN INVESTMENT
IN THE COMMON STOCK.
DEPENDENCE ON KEY CUSTOMERS AND THE TELECOMMUNICATIONS INDUSTRY
The Company derives a substantial portion of its revenue from customers
in the telecommunications industry, particularly Telefonica de Espana, S.A.
("Telefonica") and its affiliates and BellSouth Telecommunications, Inc.
("BellSouth"). For the year ended December 31, 1996 and the nine months ended
September 30, 1997, approximately 31% and 27%, respectively, of the Company's
revenue was derived from services performed for Telefonica and its affiliates
and approximately 13% of the Company's revenue was derived from services
performed for BellSouth for both periods. The Company anticipates that it will
continue to derive a significant portion of its revenue from services performed
for Telefonica and its affiliates and BellSouth. The Company also anticipates
that it will derive significant revenue in the future from the local telephone
operating companies that form Telecomunicacoes Brasileiras S.A., the Brazilian
government-owned telecommunications system. The loss of any of these customers
or a significant reduction in the amount of business generated by these
customers could have a material adverse effect on the Company's results of
operations.
In addition, there are a number of factors that could adversely affect
these and the Company's other customers and their ability or willingness to fund
capital expenditures in the future, which in turn could have a material adverse
effect on the Company's results of operations. These factors include the
potential adverse nature of, or the uncertainty caused by, changes in
governmental regulation, technological changes, increased competition,
-4-
adverse financing conditions for the industry and economic conditions generally.
Further, the volume of work awarded under contracts with the Company's public
utility customers is subject to periodic appropriations during the term of the
contract, and a failure by the customer to receive sufficient appropriations
could result in a reduction in the volume of work under these contracts or a
delay in payments, which in turn could negatively affect the Company.
CANCELLATION CLAUSES IN CONTRACTS; FAILURE TO WIN PUBLIC BIDS
Many of the Company's contracts with its customers, including most of
its master contracts and contracts with its public utility customers, are
subject to cancellation by the customer without notice or on relatively short
notice, typically 90 to 180 days, even if the Company is not in default under
the contract. There can be no assurance that the Company's customers will not
terminate the Company's contracts pursuant to these termination clauses even if
the Company is in compliance with the contract. Many of the Company's contracts,
including master contracts, also are opened to public bid at the expiration of
the contract term, and there can be no assurance that the Company will be the
successful bidder on existing contracts that come up for bid. Cancellation of a
significant number of contracts by the Company's customers or the failure of the
Company to win a significant number of existing contracts upon re-bid could have
a material adverse effect on the Company.
LEVERAGE
In February 1998, the Company issued $200.0 million of its 7 3/4%
Senior Subordinated Notes due 2008 (the "Notes") pursuant to an Indenture
between the Company and First Trust National Association, as trustee. A portion
of the net proceeds from the issuance of the Notes was used to repay
approximately $82.4 million of outstanding indebtedness under the Company's
$125.0 million revolving credit facility (the "Credit Facility"). At September
30, 1997, after giving pro forma effect to the issuance of the Notes and the
application of the net proceeds therefrom, the Company would have had
approximately $222.2 million in total indebtedness and approximately $121.5
million of available borrowings under the Credit Facility. In addition, subject
to certain restrictions set forth in the Indenture, the Company may incur
additional indebtedness in the future for acquisitions, capital expenditures and
other corporate purposes. The Company's level of indebtedness will have several
important effects on its future operations, including, without limitation, (i) a
portion of the Company's cash flow from operations must be dedicated to the
payment of interest and principal on its indebtedness, (ii) the Company's
leveraged position will increase its vulnerability to adverse changes in general
economic and industry conditions, as well as to competitive pressure, and (iii)
the Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions, general corporate and other purposes may be
limited. The Company's ability to meet its debt service obligations and to
reduce its total indebtedness will be dependent upon the Company's future
performance, which will be subject to general economic conditions, industry
cycles and financial, business and other factors affecting the operations of the
Company, many of which are beyond its control. There can be no assurance that
the Company's business will continue to generate cash flow at or above current
levels. If the Company is unable to generate sufficient cash flow from
operations in the future to service its debt, it may be required, among other
things, to seek additional financing in the debt or equity markets, to refinance
or restructure all or a portion of its indebtedness, to sell selected assets or
to reduce or delay planned capital expenditures or acquisitions. There can be no
assurance that any such measures would be sufficient to enable the Company to
service its debt or that any such financing, refinancing or sale of assets would
be available on economically favorable terms.
RESTRICTIONS IMPOSED BY CREDIT FACILITY AND INDENTURE
The Credit Facility and the Indenture contain a number of covenants
that restrict the ability of the Company to, among other things, dispose of
assets, merge or consolidate with another entity, incur additional indebtedness,
create liens, make capital expenditures, pay dividends or make other investments
or acquisitions. The Credit Facility also contains requirements that the Company
maintain certain financial ratios and restricts the ability of the Company to
prepay the Company's other indebtedness. The ability of the Company to comply
with such provisions may be affected by events that are beyond the Company's
control. The breach of any of these covenants could result in a default under
the Credit Facility and the Indenture and a subsequent acceleration of such
indebtedness. In addition, as a result of these covenants, the ability of the
Company to respond to changing business and economic conditions and to secure
additional financing, if needed, may be restricted significantly, and the
Company may be prevented from engaging in transactions that might otherwise be
considered beneficial to the Company.
RISK INHERENT IN GROWTH STRATEGY
The Company has grown rapidly through the acquisition of other
companies and its growth strategy is dependent in part on additional
acquisitions. The Company anticipates that it will make additional acquisitions
and is actively seeking and evaluating new acquisition candidates. There can be
no assurance that the Company will be able to continue to identify and acquire
appropriate businesses or obtain financing for acquisitions on satisfactory
terms or that acquired companies will perform as expected. The Company's growth
strategy presents the risks inherent in assessing the value, strengths and
weaknesses of growth opportunities, in evaluating the costs and uncertain
returns of expanding the operations of the Company and in integrating existing
operations with new acquisitions. Future competition for acquisition candidates
could raise prices for these targets and lengthen the time period required to
recoup the Company's investment. The Company's growth strategy also assumes
there will be a significant increase in demand for telecommunications and other
infrastructure services, which may not materialize. The Company's anticipated
growth may place significant demands on the Company's management and its
operational, financial and marketing resources. The Company's operating results
could be adversely affected if it is unable to integrate and manage acquired
companies successfully. Future acquisitions by the Company could also result in
the incurrence of additional debt and contingent liabilities, and amortization
expenses related to goodwill and other intangible assets, which could materially
adversely affect the Company's financial condition and results of operations.
RISK OF FOREIGN OPERATIONS
During 1996 and the first nine months of 1997, approximately 37% of the
Company's revenue was derived from international operations. Some of the
countries in which the Company conducts business have, in the past, experienced
political, economic or social instability, including expropriations, currency
devaluations, hyper-inflation, confiscatory taxation or other adverse
regulatory or legislative developments, or have limited the repatriation of
investment income, capital and other assets. There can be no assurance that some
of these circumstances will not occur in the future or that, if they occur, they
will not have a material adverse effect on the Company's financial condition and
results of operations.
The Company conducts business in several foreign currencies that are
subject to fluctuations in the exchange rate relative to the U.S. dollar. The
Company's results of operations from foreign activities are translated into U.S.
dollars at the average prevailing rates of exchange during the period reported,
which average rates may differ from the actual rates of exchange in effect at
the time of actual conversion into U.S. dollars. The Company monitors its
currency exchange risk but currently does not hedge against this risk. At
September 30, 1997, the Company had recorded a $1.6 million cumulative negative
currency translation adjustment on its balance sheet to account for currency
fluctuations in the foreign countries in which it does business. There can be no
assurance that
-5-
currency exchange fluctuations will not adversely affect the Company's financial
condition or results of operations. Additionally, although the Company currently
has no plans to repatriate significant earnings from its international
operations, there is no assurance that the Company could repatriate such
earnings without incurring significant tax liabilities.
SINTEL LABOR RELATIONS
In April 1996, the Company purchased Sistemas e Instalaciones de
Telecomunicacion, S.A. ("Sintel"), a company engaged in telecommunications
infrastructure construction services in Spain, Argentina, Chile and Peru, from
Telefonica. Substantially all of Sintel's work force in Spain is unionized. On
September 3, 1997, Sintel filed a petition with the Spanish labor authorities to
approve a restructuring of Sintel's work force. Following the filing of this
labor petition, Sintel's labor unions commenced half-day work stoppages which
continued through the first week of October 1997. Sintel has entered into an
agreement with its unions to resolve the current labor dispute, subject to
ratification and final documentation. There can be no assurance that workers
will ratify the agreement or that final documentation can be completed.
Additionally, any future work stoppages or the failure to negotiate future labor
agreements on competitive terms could have a material adverse effect on Sintel
and on the Company's results of operations.
DEPENDENCE ON LABOR FORCE
The Company's business is labor intensive with high employee turnover
in many operations. The low unemployment rate in the United States has made it
more difficult to find qualified personnel at low cost in some areas where the
Company operates. Shortages of labor or increased labor costs could have a
material adverse effect on the Company's operations. There can be no assurance
that the Company will be able to continue to hire and retain a sufficient labor
force of qualified persons.
DEPENDENCE ON SENIOR MANAGEMENT
The Company's businesses are managed by a small number of key executive
officers, including Jorge Mas, the Company's President and Chief Executive
Officer. The loss of services of certain of these executives could have a
material adverse effect on the Company. The Company's growth strategy also is
dependent on its ability to hire and retain additional qualified management
personnel. There can be no assurance that the Company will be able to hire and
retain such personnel.
COMPETITION
The industry in which the Company competes is highly competitive and
fragmented. The Company competes with a number of contractors in the markets in
which it operates, ranging from small independent firms servicing local markets
to larger firms servicing regional markets, as well as with large national and
international equipment vendors on turn-key projects who subcontract
construction work to contractors other than the Company. These equipment vendors
typically are better capitalized and have greater resources than the Company.
There are relatively few barriers to entry into these markets and, as a result,
any business that has access to persons who possess technical expertise and
adequate financing may become a competitor of the Company. Because of the highly
competitive bidding environment in the United States for the services provided
by the Company, the price of a contractor's bid is often the deciding factor in
determining whether such contractor is awarded a contract for a particular
project. Internationally, the Company expects that there will be increasing
price competition as a result of privatization and deregulation of previously
monopolistic markets. There can be no assurance that the Company's competitors
will not develop the expertise, experience and resources to provide services
that achieve greater market acceptance or that are superior in both price and
quality to the Company's services, or that the Company will be able to maintain
and enhance its competitive position. In addition, many turn-key infrastructure
projects require vendor-financing, and there can be no assurance that the
Company will be able to provide such financing on satisfactory terms or at all.
-6-
The Company also faces competition from the in-house service
organizations of RBOCs and other customers and potential customers, which employ
personnel who perform some of the same types of services as those provided by
the Company. The Company's growth strategy is dependent in part on increased
outsourcing by these customers of their infrastructure construction work. There
can be no assurance that existing or prospective customers of the Company will
continue to outsource telecommunication or other infrastructure services or
increase their outsourcing of these services in the future.
CONTROLLING STOCKHOLDERS
Jorge Mas, the Company's President and Chief Executive Officer,
together with other family members beneficially own more than 50% of the
outstanding shares of Common Stock of the Company. Accordingly, they have the
power to control the affairs of the Company.
VOLATILITY OF STOCK PRICE
The Company's Common Stock has experienced significant price and volume
fluctuations. Future announcements concerning the Company or its competitors or
customers as well as general economic, political and market conditions may cause
the market price of the Common Stock to fluctuate significantly. There can be no
assurance that these fluctuations will not occur in the future or that the
market price for the Common Stock will not decline below its current market
price.
ANTI-TAKEOVER PROVISIONS
The Company's certificate of incorporation and bylaws and certain
provisions of the Delaware General Corporation Law may make it difficult to
effect a change in control of the Company and replace incumbent management. The
existence of these provisions may have a negative impact on the price of the
Common Stock, may discourage third party bidders from making a bid for the
Company, or may reduce any premiums paid to stockholders for their Common Stock.
In addition, the Board of Directors of the Company has the authority to fix the
rights and preferences of, and to issue shares of, the Company's preferred
stock, and to take other actions that may have the effect of delaying or
preventing a change of control of the Company without the action of its
stockholders.
USE OF PROCEEDS
In the event that the Stock Options are exercised in full, the Company
will receive proceeds of approximately $6.1 million, before deducting related
expenses. The Company will use the proceeds received from the exercise of the
Stock Options for general corporate purposes. After exercise of the Stock
Options, the Option Shares will be offered solely by the Option Holders and none
of the proceeds of the sale thereof will be received by the Company. The Company
will not receive any of the proceeds from the sale of the Shares.
SELLING STOCKHOLDERS AND OPTION HOLDERS
The following table sets forth (i) the name of each Selling Stockholder
and the number of shares of Common Stock owned by such Selling Stockholder as of
February 4, 1998 and the number of Shares offered hereby and (ii) the name of
each Option Holder and the number of shares of Common Stock owned by such Option
Holder as of February 4, 1998 and the number of Option Shares issuable upon
exercise of the Stock Options and offered hereby:
-7-
SHARES OF COMMON
STOCK ISSUABLE UPON
SHARES OF EXERCISE OF STOCK
NAME OF SELLING STOCKHOLDER NUMBER OF SHARES OF COMMON STOCK OPTIONS OFFERED
OR OPTION HOLDER COMMON STOCK OWNED (1) OFFERED HEREBY HEREBY
------------------ ---------------------- -------------- -------------------
Arthur B. Laffer(3) 150,000(2) 150,000
Ubiratan Simoes Rezende(4) 40,000(2) 40,000
Henry ("Hank") N. Adorno(5) 15,000 100,000
Joel-Tomas Citron (3) 0 10,000
James W. Wilde 233,485 42,500
Wayne M. Wilde 372,089 35,500
Daniel B. Wilde 232,556 4,500
Virgil Wilde 79,900 7,500
Travis Wilde 0 10,000
Robert W. Pine 9,675 4,500
Austin J. Shanfelter 30,981 4,500
- --------------------
(1) Represents, in each case, less than 1% of the Company's outstanding
Common Stock as of February 4, 1998.
(2) All of Mr. Rezende's Shares and 60,000 of Mr. Laffer's Shares are
covered by currently exercisable options granted by the Company to
acquire Common Stock at an exercise price of $21.09, with respect to
Mr. Rezende and $3.833 per share, with respect to Mr. Laffer. The
shares of Common Stock issued to Mr. Laffer were not, and any shares
of Common Stock issued to Mr. Rezende or Mr. Laffer upon exercise of
their stock options will not be, registered under the Securities Act
of 1933, as amended (the "Securities Act"), in reliance on an exemption
offered by Section 4(2) of the Securities Act.
(3) Messrs. Laffer and Citron are Directors of the Company.
(4) Mr. Rezende is the Senior Vice President--International Operations of
the Company.
(5) Mr. Adorno is the Executive Vice President and Special Counsel of
the Company.
Because the Selling Stockholders and Option Holders may offer all, a
portion or none of the Shares or Option Shares, as the case may be, pursuant to
this Prospectus, no estimate can be given as to the number of shares of Common
Stock that will be held by the Selling Stockholders or Option Holders upon
termination of such offering.
The Company has agreed to pay all fees and expenses incident to the
registration of the Shares owned by the Selling Stockholders and the issuance of
the Option Shares to the Option Holders under the Securities Act, including all
registration and filing fees, all fees and expenses of complying with state blue
sky or securities laws, all costs of preparation of the Registration Statement,
and reasonable fees and disbursements of counsel for the Company and its
independent public accountants.
-8-
PLAN OF DISTRIBUTION
The Selling Stockholders and Option Holders or their respective
pledgees, donees, transferees or other successors in interest may sell the
Shares or Option Shares, as the case may be, in transactions on the New York
Stock Exchange or on one or more other exchanges, in the over-the-counter
market, at prices and on terms then prevailing or at prices related to the then
current market price, or in negotiated transactions. The Selling Stockholders or
Option Holders may effect such transactions by selling the Shares or Option
Shares, as the case may be, to or through agents, dealers or underwriters
designated from time to time, and such agents, dealers or underwriters may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders or Option Holders or the purchasers of
Shares or Option Shares, as the case may be, for whom they may act as agent or
to whom they sell as principals, or both. The Shares and Option Shares may be
sold by one or more of the following methods: (a) a block trade in which the
broker or dealer engaged will attempt to sell the Shares or Option Shares, as
the case my be, as agent but may position and resell a portion of the block as
principal to facilitate the transaction; (b) purchases by a broker or dealer as
principal and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) an exchange distribution in accordance with the rules of such
exchange; and (d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers. In effecting sales, brokers or dealers engaged by
the Selling Stockholders or Option Holders may arrange for other brokers or
dealers to participate. The Selling Stockholders or Option Holders and any
agents, dealers or underwriters that act in connection with the sale of Shares
or Option Shares might be deemed to be "underwriters" for purposes of the
Securities Act, and any discount or commission received by them and any profit
on the resale of Shares or Option Shares, as the case may be, as principal might
be deemed to be underwriting discounts or commissions under the Securities Act.
In addition, any Shares or Option Shares covered by this Prospectus that qualify
for resale under Rule 144 of the Securities Act may be sold under Rule 144
rather than under this Prospectus.
To the extent required, the number of Shares or Option Shares to be
sold, the purchase price and public offering price, the name or names of any
agent, dealer or underwriter, and any applicable commissions or discounts with
respect to a particular offering will be set forth in a supplement to this
Prospectus to be filed with the Commission pursuant to Rule 424 under the
Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered in this Prospectus
will be passed upon for the Company by Jose M. Sariego, Senior Vice President
and General Counsel of the Company.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995 and
the consolidated statements of income, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1996, incorporated by
reference in this Prospectus, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
-9-
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth expenses and costs payable by the Company
(other than underwriting discounts and commissions) expected to be incurred in
connection with the issuance and distribution of the securities described in
this Registration Statement. All amounts are estimated except for the Commission
registration fee.
AMOUNT
------
Registration fee under Securities Act $4,002
Legal fees and expenses
Accounting fees and expenses
Miscellaneous expenses _______
Total $
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") provides that the Company shall indemnify to the fullest extent
authorized by the Delaware General Corporation Law (the "DGCL"), each person who
is involved in any litigation or other proceeding because such person is or was
a director or officer of the Company, against all expense, loss or liability
reasonably incurred or suffered in connection therewith. The Company's By-laws
provide that a director or officer may be paid expenses incurred in defending
any proceeding in advance of its final disposition upon receipt by the Company
of an undertaking, by or on behalf of the director or officer, to repay all
amounts so advanced if it is ultimately determined that such director or officer
is not entitled to indemnification.
Section 145 of the DGCL permits a corporation to indemnify any director
or officer of the corporation against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with any action, suit or proceeding brought by reason of the fact
that such person is or was a director or officer of the corporation, if such
person acted in good faith and in a manner that he reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, if he had no reason to believe his conduct
was unlawful. In a derivative action, (i.e., one brought by or on behalf of the
corporation), indemnification may be made only for expenses, actually and
reasonably incurred by any director or officer in connection with the defense or
settlement of such an action or suit, if such person acted in good faith and in
a manner that he reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged to be liable to the corporation, unless and
only to the extent that the court in which the action or suit was brought shall
determine that the defendant is fairly and reasonably entitled to indemnity for
such expenses despite such adjudication of liability.
Pursuant to Section 102(b)(7) of the DGCL, the Company's Certificate
eliminates the liability of a director to the corporation or its stockholders
for monetary damages for such breach of fiduciary duty as a director, except for
liabilities arising (a) from any breach of the director's duty of loyalty to the
corporation or its stockholders, (b) from acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 174 of the DGCL, or (d) from any transaction from which the director
derived an improper personal benefit.
The Company has obtained primary and excess insurance policies insuring
the directors and officers of the Company and its subsidiaries against certain
liabilities they may incur in their capacity as directors and officers. Under
such policies, the insurer, on behalf of the Company, may also pay amounts for
which the Company has granted indemnification to the directors or officers.
II-1
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following documents are filed as exhibits to this Registration Statement:
5.1 Opinion of Jose M. Sariego, Senior Vice President and General Counsel
of the Company.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Jose M. Sariego (included in Exhibit 5.1 above).
24.1 Power of attorney (included on the signature page of this Registration
Statement).
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes: (a) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; provided, however, that the undertakings set forth in paragraphs (i)
and (ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement; (b) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof; and (c) to remove from registration by
means of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act")(and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami, State of Florida, on February 11, 1998.
MASTEC, INC.
/S/ EDWIN D. JOHNSON
----------------------------------------------
Edwin D. Johnson
Senior Vice President-Chief Financial Officer
(Principal Financial and Accounting Officer)
The undersigned directors and officers of MasTec, Inc. hereby
constitute and appoint Edwin D. Johnson and Jose M. Sariego, and each of them
with full power to act without the other and with full power of substitution and
resubstitution, our true and lawful attorneys in fact with full power to execute
in our name and behalf in the capacities indicated below this Registration
Statement on Form S-3 and any and all amendments thereto and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission and hereby ratify and confirm all that such
attorneys in fact, or any of them, or their substitutes shall lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/S/JORGE MAS Chairman of the Board of Directors,
- ---------------------------------- President and Chief Executive Officer February 11, 1998
Jorge Mas (Principal Executive Officer)
/S/ELIOT C. ABBOT Director February 11, 1998
- ----------------------------------
Eliot C. Abbot
Director ___________, 1998
- ----------------------------------
Joel-Tomas Citron
/S/ARTHUR B. LAFFER Director February 11, 1998
- ----------------------------------
Arthur B. Laffer
/S/JOSE S. SORZANO Director February 11, 1998
- ----------------------------------
Jose S. Sorzano
II-3
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
5.1 Opinion of Jose M. Sariego, Senior Vice President and General
Counsel of the Company.
23.1 Consent of Coopers & Lybrand L.L.P.
EXHIBIT 5.1
February 10, 1998
MasTec, Inc.
3155 N.W. 77th Avenue
Miami, Florida 33122-1205
Re: Registration Statement on Form S-3 of MasTec, Inc.
Dear Sir or Madam:
I am Senior Vice President and General Counsel to MasTec., Inc., a
Delaware corporation (the "Company"). I have reviewed the referenced
registration statement relating to the sale by the Company and certain selling
securityholders of up to 408,000 shares of the Company's voting common stock,
$.10 par value (the "Shares"). It is my opinion that the Shares have been duly
and validly authorized and, when issued, delivered and paid for, will be validly
issued, fully paid and nonassessable.
I consent to the use of this opinion in the referenced registration
statement and to the reference to my opinion under the caption "Legal Matters"
in the prospectus constituting part of the registration statement.
Sincerely,
/s/ Jose M. Sariego
Senior Vice President
and General Counsel
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of MasTec, Inc. and subsidiaries on Form S-3 of our report dated
December 5, 1997 on our audits of the consolidated financial statements of
MasTec, Inc. and subsidiaries as of December 31, 1996 and 1995, and for the
years ended December 31, 1996, 1995 and 1994, which report is incorporated by
reference in the Annual Report on Form 10-K/A. We also consent to the reference
to our firm under the caption "Experts".
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Miami, Florida
February 6, 1998
