SCHEDULE 14A
SCHEDULE 14 INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Name of Registrant as Specified in Its Charter:
Meadow Valley Corporation
Name of Person(s) Filing Proxy Statement:
Building Trades Organizing Project
Payment of Filing Fee (check the appropriate box)
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
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Revised Proxy Statement
For release to shareholders 2/22/99
Building Trades Organizing Project
4151 East Bonanza
Las Vegas, NV 89110
(702) 452-8600
REVISED NOTICE OF UPCOMING PROXY CONTEST AT MEADOW VALLEY
CORPORATION
TO FELLOW MEADOW VALLEY SHAREHOLDERS:
You previously received a letter and survey from us about
an upcoming vote at the 1999 shareholders meeting on a
proposal requiring that management obtain shareholder approval
for future related-party transactions. You did not receive a
return envelope allowing you to return this survey: that is now
enclosed. Also new is the fact that a modified version of this
proposal was recently submitted to the Company by another
shareholder. No substantive changes were intended; the text of
modified proposal appears below.
Background of Proposal to Restrict Related-Party
Transactions:
Meadow Valley has given shareholders ample reason to
distrust the way it handles related-party transactions. It has
engaged in many such transactions: at least 14 since
9/30/94. Many have not been minor or incidental. They include:
- $10 million note in 1994 to company founder's
estate, half to be paid with interest of 10%/yr when IPO
closed, the other half payable at $1 million/yr plus interest at
12.5%/yr. Still not refinanced as of 6/30/98.
- $1,318,000 (approx.) in materials, construction work, and
equipment rented and sold by related parties to the company from
9/15/94 to 1/31/97<F1>, including:
-- 1996: $163,450 of ready-mix concrete
-- 1997: $90,914 of ready-mix concrete
-- 1996: $375,893 in equipment rental and purchases.
The most disturbing thing by far, however, has been the
Company's disclosure practices with respect to these
transactions. The first problem has been the Company's
practice not to set forth the names of the related parties in the
documents sent all shareholders, with the exception of disclosing
a Company attorney serving as a board member. Before the 10K
amendments, just sent out, the last time these names were
included in such documents was in the S-1 prospectus
(10/16/95).<FN2> Not knowing the related party's identity makes
it difficult to assess the character of each transaction and the
overall importance to the corporation of all these transactions,
including whether management is putting insiders' interests ahead
of those of shareholders.
<FN1>
This is based on our totalling amounts reported by the
Company in its SEC filings. As noted below, we do not warrant the
accuracy of such filings.
<FN2>
Of the $1,318,000 total above, the S-1 disclosed identities of
related parties receiving about $400,000.
<PAGE>
The second problem is what appears to be inaccuracies in
the amounts reported for such transactions in the 1996 and 1997
10Ks. After we complained to the SEC about the Company's
disclosures, the Company filed amendments to its previous 10Ks
providing certain further details about these transactions,
including new dollar amounts and identifying the related entities
as controlled by Chief Operating Officer Paul Lewis or his
sister. The 1996 10K originally reported $381,381 paid related
parties for work materials or rented or purchased equipment. The
recent amendment now shows a total of $539,333 for that year.
Similarly, what was reported as $19,352 for 1997 in work,
materials or equipment was restated to $90,914.
SEC regulations require disclosure of the related party's
name and transaction amount when a related party has a material
interest in a transaction over $60,000. But the SEC does not have
the power to protect shareholders if these related-party
transactions are unfair. Such protection can only come from
shareholders themselves.
This resolution would amend the by-laws to stop these
related-party transactions unless approved in advance by the
shareholders.
This measure would be unnecessary at many companies, where
related-party transactions are infrequent or are fully-disclosed.
But Meadow Valley needs it because of a track record of multiple
insider transactions and questionable disclosure
practices.
REVISED TEXT OF THE PROPOSAL:
RESOLVED that the company's by-laws be amended to add the
following:
"Section 15. Related Party Transactions. (a) The
Board shall not cause the company to enter into any Related Party
Transactions to which it is not contractually committed on the
Effective Date, and shall cause the company to terminate any
existing Related Party Transactions to which it is contractually
committed as of the Effective Date if termination can be
accomplished without violating a contract or costing the company
any money. "Related Party Transaction" refers to those
transactions which must be reported under SEC Regulation S-K Item
404(a). Effective Date means the date shareholders approved
amendment of the by-laws to add this Section.
(b) Notwithstanding any other bylaw, this section may
not be amended or deleted by the Board without prior shareholder
approval.
(c) The provisions of subsection (a) shall not apply to any
Related Party Transaction approved as a separate item of business
by holders of a majority of outstanding stock at an annual or
special shareholders meeting."
AND FURTHER, that article III, Section I be amended to add
the following underlined language:
"All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the corporation
shall be managed under the direction of, its board of directors,
except as otherwise provided under Nevada law, [or] the articles
of corporation or these Bylaws."
AND FURTHER that if the law bars shareholders from binding
directors as above<FN3>, this resolution shall be deemed a
recommendation to adopt a policy of seeking shareholder approval
before engaging in related party transactions.
<FN3>
Management (or others) might ask a court to declare a bylaw
amendment beyond the power of shareholders under the law of
Nevada (where the Company is incorporated). Our counsel (Richard
McCracken and Andrew Kahn) advise us that in their professional
opinion, this amendment would likely be held proper. However, no
assurances can be offered shareholders in this regard. There is
no published Nevada court opinion on point. For more information
on this, feel free to contact us.
<PAGE>
VOTING RIGHTS
An individual shareholder has submitted this proposal to
management for inclusion in the proxy card and proxy statement
you will receive from the Company. We also intend to solicit
for the proposal using our own proxy card and a new proxy
statement: look for these after you receive your proxy card from
the Company. If the proposal appears on management's card, you
can vote either on that card or on ours. We intend to solicit at
least a majority of the voting power of the outstanding stock.
The Company's annual meetings have occurred in June in Phoenix.
Passage of the proposal will require a favorable vote by a
majority of the stock represented at the meeting. The Company's
principal offices are at 4411 South 40th St., Suite D-11, Phoenix
AZ 85040; (tel.) 602-437-5400.
PROXY SOLICITATION
This solicitation is conducted by Building Trades Organizing
Project (BTOP), a group of labor organizations based in Las
Vegas, NV. BTOP owns 263 shares of common stock. The shareholder
who has submitted the proposal, Fred Romkema is not affiliated
with BTOP or other labor organizations and owns 1000 shares. He
decided to present the current proposal after returning our
previous survey. We supplied Mr. Romkema with counsel (above-
named) in this matter and will continue to do so if he needs and
wishes such assistance. BTOP representatives attended the
1998 shareholders meeting where they inquired about related-party
transactions. BTOP is involved in Southern Nevada in organizing
the Company's non-union workforce and subcontractors (some of its
subcontractors are unionized), and thus may have interests
differing from other shareholders. BTOP will vote each proxy card
it gathers in accordance with the shareholder's instructions,
regardless of the outcome of labor relations matters. BTOP will
seek no discretionary voting authority: it will not vote on any
matters on which no instructions are provided. BTOP will bear all
solicitation costs (anticipated at $5000) and not seek
reimbursement from the Company. It intends to solicit proxies by
mail, phone, fax, e-mail and meetings.
TRANSACTIONS WITH MANAGEMENT AND DIRECTORS/RECORD DATE/EXECUTIVE
COMPENSATION/STOCK OWNERSHIP OF MANAGEMENT, DIRECTORS AND 5%
OWNERS/ELECTION OF DIRECTORS
We do not have information on these matters more current
than the Company's 5/1/98 proxy statement (pages 1 through 20)
and its 10/7/98 amendments to its previous 10K filings. These
are incorporated by reference herein. You may obtain a copy
from the SEC's EDGAR database (www.sec.gov), or by contacting us
at the address and phone above.
SHAREHOLDER PROPOSALS
Under SEC Rule 14a-8, any shareholder who has held at least
$2000 worth of the Company's stock for at least one year is
entitled to submit a proposal for inclusion in the Company's
proxy materials. The deadline for submission for the annual
meeting in the year 2000 will appear in the Company's upcoming
proxy statement. Feel free to contact us for more information
about this process.
PLEASE RETURN THE ENCLOSED SURVEY TODAY.
FOR MORE INFORMATION, CONTACT US AT BTOP c/o Allen Smith (702)
452-8600
<PAGE>
SURVEY OF MEADOW VALLEY SHAREHOLDERS
This is a voluntary survey, not a proxy card, and cannot be used
to vote on the proposal.
The information from your response will not be used for any
purpose except communicating with shareholders and the Company
about matters for shareholder vote. We will keep your identity
confidential. Regardless of how you respond to this survey, you
will be able to formally approve or disapprove the proposal upon
receiving a proxy card.
1. YOUR VIEW OF THE PROPOSAL (TO REQUIRE RELATED-PARTY
TRANSACTIONS BE SUBJECT TO SHAREHOLDER APPROVAL):
[ ] Strongly Support
[ ] Likely to Support
[ ] Likely to Oppose because __________________________________
[ ] Undecided
2. FOR MORE INFORMATION:
[ ] Please provide me more information about the issues on which
we shareholders will be voting:
Mailing address:__________________________
E-mail address: __________________________
Telephone:________________________________
Fax: _____________________________________
_______________________ __________
PRINT SHAREHOLDER NAME # SHARES
Please return by March 30, 1999 in the enclosed envelope.
