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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Meadow Valley Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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MEADOW VALLEY CORPORATION
4411 South 40th Street, Suite D-11
Phoenix, Arizona 85040
PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 21, 1999
To the shareholders of Meadow Valley Corporation:
The Annual Meeting of the shareholders of Meadow Valley Corporation (the
"Company") will be held at the Company's Nevada offices, 1501 Highway 168,
Moapa, Nevada at 11:00 A.M. on June 21, 1999, or at any adjournment or
postponement thereof, for the following purposes:
1. To elect three directors of the Company.
2. To consider a proposal requiring shareholder approval for certain
related party transactions.
3. To transact such other business as may properly come before the
meeting.
Details relating to the above matters are set forth in the attached Proxy
Statement. All shareholders of record of the Company as of the close of
business on April 30, 1999 will be entitled to notice of and to vote at such
meeting or at any adjournment or postponement thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. IF YOU DO
NOT PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN, DATE AND PROMPTLY RETURN
THE ENCLOSED PROXY. A REPLY CARD IS ENCLOSED FOR YOUR CONVENIENCE. THE GIVING
OF A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
Bradley E. Larson
Chief Executive Officer
May 7, 1999
<PAGE>
PROXY STATEMENT
MEADOW VALLEY CORPORATION
4411 South 40th Street, Suite D-11
Phoenix, Arizona 85040
Telephone: (602) 437-5400
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 21, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Meadow Valley Corporation (the "Company"),
a Nevada corporation, of $.001 par value Common Stock ("Common Stock") to be
voted at the Annual Meeting of Shareholders of the Company ("Annual Meeting") to
be held at 11:00 A.M. on June 21, 1999, or at any adjournment or postponement
thereof. The Company anticipates that this Proxy Statement and the accompanying
form of proxy will be first mailed or given to all shareholders of the Company
on or about May 7, 1999. The shares represented by all proxies that are
properly executed and submitted will be voted at the meeting in accordance with
the instructions indicated thereon. Unless otherwise directed, votes will be
cast for the election of the nominees for directors hereinafter named. The
holders of a majority of the shares represented at the Annual Meeting in person
or by proxy will be required to approve any proposed matters.
Any shareholder giving a proxy may revoke it at any time before it is
exercised by delivering written notice of such revocation to the Company, by
substituting a new proxy executed at a later date, or by requesting, in person,
at the Annual Meeting, that the proxy be returned.
All of the expenses involved in preparing, assembling and mailing this
Proxy Statement and the materials enclosed herewith and all costs of soliciting
proxies will be paid by the Company. In addition to the solicitation by mail,
proxies may be solicited by officers and regular employees of the Company by
telephone, telegraph or personal interview. Such persons will receive no
compensation for their services other than their regular salaries. Arrangements
will also be made with brokerage houses and other custodians, nominees and
fiduciaries to forward solicitation materials to the beneficial owners of the
shares held of record by such persons, and the Company may reimburse such
persons for reasonable out of pocket expenses incurred by them in so doing.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
The close of business on April 30, 1999 has been fixed by the Board of
Directors of the Company as the record date (the "record date") for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting. On the record date, there were outstanding 3,501,250 shares of Common
Stock, each share of which entitles the holder thereof to one vote on each
matter which may come before the Annual Meeting. Cumulative voting for
directors is not permitted.
A majority of the issued and outstanding shares entitled to vote,
represented at the meeting in person or by proxy, constitutes a quorum at any
shareholders' meeting.
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Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information concerning the holdings of
Common Stock by each person who, as of April 30, 1999, holds of record or is
known by the Company to hold beneficially or of record, more than 5% of the
Company's Common Stock, by each director, and by all directors and executive
officers as a group.
All shares are owned beneficially and of record. The address of all
persons is in care of the Company at 4411 South 40th Street, Suite D-11,
Phoenix, Arizona 85040.
Number of Shares of Percent of
Common Stock Owned Common Stock
of Record and Owned(1)
Name Beneficially (1)
Kim A. Lewis, Trustee of Richard C. Lewis
GST Marital Sub Trust and Kim A. Lewis
Survivor's Trust 500,000 13.2%
Heartland Advisors, Inc. 332,600 8.8%
Alan Terril (2) 130,866 3.4%
Kenneth D. Nelson (3) 103,533 2.7%
Paul R. Lewis (4) 204,266 5.4%
Bradley E. Larson (5) 111,249 2.9%
Charles E. Cowan (6) 15,333 .4%
Gary A. Agron (6) 15,333 .4%
Earle C. May (7) 44,850 1.18%
Charles R. Norton 0 0%
All officers and directors as a group (11 persons) 706,780 18.6%
(1) Includes stock options exercisable within 60 days from the date hereof.
(2) Includes stock options to purchase 30,866 shares of Common Stock.
(3) Includes stock options to purchase 25,933 shares of Common Stock.
(4) Includes stock options to purchase 33,466 shares of Common Stock.
(5) Includes stock options to purchase 39,000 shares of Common Stock.
(6) Includes stock options to purchase 15,333 shares of Common Stock.
(7) Includes 8,000 shares of Common Stock and 36,850 common stock purchase
warrants held by May Management, Inc., an investment management firm
controlled by Mr. May.
2
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ELECTION OF DIRECTORS
The Company's Bylaws provide for directors with staggered terms of office,
to be divided as equally as possible. Nominees of each class of directors serve
for terms of three years (unless a nominee is changing to a different class) and
until election and qualification of their successors or until their resignation,
death, disqualification or removal from office. Directors not employed by the
Company receive $7,000 per year for attending Board of Directors' meetings and
are reimbursed for out-of-pocket expenses.
The Board of Directors currently consists of eight members, including three
Class A directors whose terms expire in 2000, three Class B directors whose
terms expire in 2002 and two Class C directors whose terms expire in 2001. At
the meeting, the three Class B directors are to be elected to three-year terms
expiring in 2002. The nominees for the Class B directors are Messrs. Agron,
Lewis and May, all of whom presently serve on the Board of Directors of the
Company.
Cumulative voting is not permitted for the election of directors. In the
absence of instructions to the contrary, the person named in the accompanying
proxy will vote in favor of the election of each of the persons named below as
the Company's nominees for directors of the Company. Each of the nominees has
consented to be named herein and to serve if elected. It is not anticipated
that any nominee will become unable or unwilling to accept nomination or
election, but if such should occur, the person named in the proxy intends to
vote for the election in his stead of such person as the Board of Directors of
the Company may recommend.
NAME POSITIONS AND OFFICES WITH THE COMPANY
- ---- --------------------------------------
Nominees Class B Directors
Term Expires in 2002
Gary A. Agron (1)(2) Director
Paul R. Lewis Chief Operating Officer and Director
Earle C. May (1)(2) Director
Continuing Directors Class A Directors
Term Expires in 2000
Charles E. Cowan (1)(2) Director
Kenneth D. Nelson Chief Administrative Officer, Vice President
Director
Alan A. Terril Vice President-Nevada Operations and
Director
Class C Directors
Term Expires in 2001
Bradley E. Larson President, Chief Executive Officer and
Director
Charles R. Norton (1)(2) Director
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
3
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Background
The following is a summary of the business experience of each executive
officer and director of the Company for at least the last five years:
Bradley E. Larson, age 44, has been a director of the Company since 1994
and was appointed President in July 1995 and Chief Executive Officer in November
1995. Mr. Larson was employed by Tanner Companies ("Tanner") from 1976 until
December 1994. He was Division President of the Western Arizona region for
Tanner from 1984 to 1988, Vice President of Operations from 1988 to 1989 and
President of Tanner's Construction Division from 1989 until he joined the
Company as its Chief Operating Officer in December 1994. Mr. Larson earned a BSE
degree in Industrial Engineering from Arizona State University in 1979. He has
been active in several construction industry associations and is past Chairman
and Director of Arizona Rock Products Association, and Secretary and Director of
the Arizona Highway Users Conference.
Paul R. Lewis, age 52, has been a director of the Company since 1993 and
has been involved in the construction industry since 1964 as a construction
worker, subcontractor and general contractor. He joined the Company (which was
founded by his brother Richard C. Lewis) in October 1993 as its Chairman and
became its Chief Executive Officer in October 1994 and Chief Operations Officer
in November 1995. From January 1987 to September 1993, he was President and a
principal stockholder of Ron Lewis Construction Company and from 1993 to 1994,
he was the managing member of Wiser Construction LLC, construction firms
operating primarily in Nevada. Since 1994, Mr. Lewis has been a member of Wiser
Construction LLC, a licensed but inactive entity.
Kenneth D. Nelson, age 41, has been a director of the Company since 1993
and has been involved in the financial reporting and operations management areas
of the construction industry since 1982. He joined the Company in April 1989,
became Vice President of Finance in February 1992, Vice President and Chief
Financial Officer in October 1993 and Chief Administrative Officer in 1997.
From August 1986 until April 1989, he was operations manager for Builders
Unlimited, a construction firm based in Phoenix, AZ. Mr. Nelson earned a
Bachelors of Science Degree in Business Administration from Arizona State
University in 1984.
Alan A. Terril, age 58, joined the Company in May 1992 and became its Vice
President - Nevada Operations and a director in October 1993. From February
1979 until April 1992, he was general superintendent, responsible for on-site
construction management, for Ron Lewis Construction Company, a heavy
construction firm owned and operated by Paul R. Lewis, the Company's Chief
Operations Officer and a director.
Gary A. Agron, age 54, was appointed to the Board of Directors in November
1995. He is an attorney who has specialized in the practice of securities law
since 1977, with emphasis on representation of issuers and broker-dealers in
public offerings and private placements of equity securities. He is also a
director of Xedar Corporation, a publicly-held Boulder, Colorado based high
technology firm, since 1973, and U.S. Pawn, Inc., a publicly-held Denver,
Colorado based pawnshop operator, since 1989.
Charles E. Cowan, age 52, was appointed to the Board of Directors in
November 1995. He is President of Charles Cowan & Associates, Ltd. and has an
extensive background in government and industry consulting. Prior to forming his
own company, he held CEO positions in Arizona's Department of Transportation and
Department of Economic Security, and served with the U.S. Corps of Engineers for
25 years.
4
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Earle C. May, age 81, was appointed to the Board of Directors in March
1999. Since 1969, Mr. May has been Chairman and Chief Executive Officer of May
Management Inc., an investment management firm. He earned a Bachelor of Arts
degree and Master of Arts degree from the University of Wisconsin and Master of
Science degree from the United States Naval Academy. He is a director of Roses
Holdings, Inc., a publicly-held company.
Charles R. Norton, age 58, was appointed to the Board of Directors in March
1999. Since 1963, Mr. Norton has been involved in the highway construction
industry in various capacities. From 1968 to 1972, he was General Manager of
Quaker Empire Construction in Wilkes Barre, Pennsylvania. From 1972 to 1992,
Mr. Norton was Sales Manager, General Manager and Vice President of Syro Steel
Company, headquartered in Girard, Ohio. Since 1992, Mr. Norton has been Vice
President of Trinity Industries, which purchased Syro in 1992. He graduated
with a Bachelor of Science degree from Brigham Young University in 1968.
Gary W. Burnell, age 52, was named Vice President, Treasurer and Chief
Financial Officer effective April 1997. From 1986 until then, Mr. Burnell
served as Chief Financial Officer and in a variety of general management and
advisory capacities for various business interests of Edward L. Taylor
("Taylor"), a pioneer of the cable television and satellite communications
industries. Mr. Burnell's initial duties for Taylor were as vice president,
treasurer and chief financial officer of TEMPO Enterprises, Inc., an American
Stock Exchange-listed cable television and satellite communications company
until TEMPO's acquisition by Tele-Communications, Inc. in December 1988, after
which Mr. Burnell remained with Tele-Communications, Inc. during a six-month
transition period. Mr. Burnell has 30 years of experience in financial
reporting and administration for public and private companies. He is a
certified public accountant and holds undergraduate and graduate degrees in
business administration and accounting, respectively. Mr. Burnell began his
career with Arthur Andersen & Co.
Julie L. Bergo, age 36, was named Secretary and Principal Accounting
Officer and has served as Controller since October 1995. She received her
Bachelor of Science degree with a major in accounting from Moorhead State
University in Moorhead, Minnesota. She has over ten years experience in the
accounting profession, including as a staff auditor from 1989 to 1993 with a
Minneapolis, Minnesota based Certified Public Accounting firm, a regulatory and
credit analyst with a regional broker-dealer in Minneapolis, Minnesota from 1993
to 1994 and a senior audit manager with a Phoenix, Arizona based Certified
Public Accounting firm from 1994 to 1995.
SHAREHOLDER'S PROPOSAL
A shareholder of the Company, who owns a total of 1,000 shares of the
Company's Common Stock purchased on March 19, 1997 for $4.13 per share, has
requested that the Company include the following "Shareholder's Proposal" and
"Supporting Statement" in this Proxy Statement. Although not favored by the
Company's management and directors, the language of the Shareholder's Proposal
and Supporting Statement has been included verbatim as provided by the
shareholder:
"RESOLVED that the company 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 the company 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
5
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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, this resolution shall be deemed a recommendation to adopt a policy
of seeking shareholder approval before engaging in related party
transactions.
SUPPORTING STATEMENT
--------------------
This resolution would require or encourage the Company to get
shareholder approval for related-party transactions over $60,000. The
Company has engaged in at least 14 related-party transactions since
9/30/94, and has not adequately reported them. They include:
. $10,000,000 note to company founder's estate, half to be paid with 10%
annual interest when IPO closed, the other half payable at $1,000,000
per year at 12.5% interest.
. $1,318,000 in materials, construction work and equipment sold and
rented by related parties from 9/15/94 to 1/31/97.
Until a shareholder complained to the SEC in 1998, not since the 1995
prospectus had related parties' names been revealed in reports sent
shareholders (with the exception of noting a director receiving legal fees
from the company). Not knowing the related party's identity makes it hard
to assess whether these transactions are fair to shareholders.
Management inaccurately reported the transaction amounts. Its recent
amendments to 10K's revealing identities also restated the figures: the
1996 10K claimed Lewis affiliates received $381,381 - that was changed to
$539,333. The 1997 10K claimed $19,352 in work, materials and equipment -
that was restated to $90,914.
The SEC can help with disclosure, but does not have the power to
protect shareholders if related-party transactions are unfair.
Shareholders need to protect themselves. This measure would be
unnecessary at most companies (having fewer transactions and better
reporting) - but is needed at MVC."
6
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Recommendation of the Board of Directors
The Board of Directors of the Company recommends that the shareholders vote
against this proposal for the following reasons:
Support for the Shareholder's Proposal was solicited by the Building Trades
Organizing Project ("BTOP") in a prior proxy statement sent to shareholders.
BTOP's stated purpose is to organize (unionize) the work force of non-union
companies, such as the Company. Since it began seeking to organize the Company,
BTOP has:
. Picketed the Company's Nevada job sites,
. Filed unfounded labor charges against the Company,
. Interfered with the work of the Company's subcontractors and
suppliers,
. Attempted to negatively influence the Company's customers, and
. Released a litany of negative publicity about the Company which was
done in the Company's opinion to drive down the price of the Company's
Common Stock
In the Company's opinion, BTOP has taken the above actions to cause the
Company to unionize its Nevada employees. In fact, BTOP describes itself as
being involved in southern Nevada in organizing the Company's non-union
workforce and thus has stated that it may have interests different from other
shareholders. Having been consistently unsuccessful in its campaign against the
Company, the Company believes that BTOP then sought shareholder sponsorship for
the Shareholder's Proposal as another way to interfere with the Company's normal
business operations and to exert further pressure on the Company to unionize its
Nevada employees.
BTOP claims the $10 million promissory note was a related party
transaction. In fact, the $10 million promissory note issued to the estate of
the Company's founder represented the original purchase price to buy the
Company's and its business prior to the Company's initial public offering. The
promissory note was paid in part by funds generated from the Company's initial
public offering and the Company has since repaid the balance of the promissory
note, well in advance of its October 2000 due date. Related party transactions
are common in all corporations, public or private. The aggregate amount of all
related party transactions involving the Company since the closing of its
initial public offering (excluding principal and interest on the original
Richard C. Lewis Family Revocable Trust I promissory note) has been less than 1%
of the Company's revenue for the same period. As with the vast majority of
public companies, all of the Company's related party transactions must be
approved by a majority of the Company's disinterested directors.
Notwithstanding BTOP's solicitation mailed to all of the Company's
shareholders to obtain support for the "Shareholder's Proposal," only one other
shareholder requested that the "Shareholder's Proposal" be included in this
Proxy Statement.
Please vote AGAINST on the Shareholder's Proposal.
7
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Executive Compensation
The following table sets forth certain information concerning compensation
paid to the Company's executive officers for the years ended December 31, 1998,
1997 and 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
----------- ------------
Name and Other Annual Awards All Other
Principal Position Year Salary Bonus Compensation Options Compensation
- ------------------ ---- ----------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Bradley E. Larson 1998 $ 150,001 $ 133,026(1) 0 0 0
President, Chief 1997 121,385 0 0 0 0
Executive Officer and 1996 121,106 0 0 0 0
Director
Paul R. Lewis 1998 113,816 94,406(1) 0 0 0
Chief Operating 1997 93,058 0 0 0 0
Officer and Director 1996 100,872(2) 0 0 0 0
Alan A. Terril 1998 103,518 87,304(1) 0 0 0
Vice President- 1997 98,048 45,318(1) 0 0 0
Nevada Operations 1996 114,788(2) 17,000(1) 0 0 0
and Director
Gary W. Burnell 1998 121,578 96,407(1) 0 0 0
Vice President, Treasurer 1997 85,584 0 0 0 0
and Chief Financial Officer 1996 0 0 0 0 0
</TABLE>
__________
(1) Bonus amounts reflect payments made under the Company's bonus plan for
executive officers.
(2) Amounts reflect a performance bonus based on individual project
profitability.
In January 1998, Mr. Larson signed a five-year employment agreement
providing for an annual base salary of $120,000. In January 1997, the Company
entered into a five-year employment agreement with Gary W. Burnell, who was
appointed Chief Financial Officer of the Company on April 1, 1997. Mr.
Burnell's employment agreement provided for an annual base salary of $110,000.
In October 1997, Messrs. Lewis, Terril and Nelson signed five-year employment
agreements providing for annual base salaries of $110,000, $100,000 and $95,000,
respectively. Current annual salaries for these executive officers exceed the
above base salary amounts.
Executive Compensation Bonus Plans
Pursuant to plans adopted in 1996, the Company's executive officers are
eligible for cash bonuses based upon the Company's profitability.
8
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Stock Option Plan
In November 1994, the Company adopted a Stock Option Plan (the "1994 Plan")
which provides for the grant of options intended to qualify as "incentive stock
options' and "nonstatutory stock options" within the meaning of Section 422A of
the United States Internal Revenue Code of 1986 (the "Code"). Incentive stock
options are issuable only to eligible officers, employee directors, and key
employees of the Company. Nonstatutory stock options are issuable only to
nonemployee directors and consultants of the Company.
The 1994 Plan is administered by the Compensation Committee of the Board of
Directors, which is comprised of nonemployee directors. At December 31, 1997,
the Company had reserved 700,000 shares of Common Stock for issuance under the
1994 Plan. Under the 1994 Plan, the Board of Directors determines which
individuals shall receive options, the time period during which the options may
be partially or fully exercised, the number of shares of Common Stock that may
be purchased under each option and the option price.
The per share exercise price of the Common Stock may not be less than the
fair market value of the Common Stock on the date the option is granted. No
person who owns, directly or indirectly, at the time of the granting of an
incentive stock option, more than 10% of the total combined voting power of all
classes of stock of the Company is eligible to receive incentive stock options
under the 1994 Plan unless the option price is at least 110% of the fair market
value of the Common Stock subject to the option on the date of grant. The
option price for nonstatutory options shall be established by the Board of
Directors and shall not be less than 100% of the fair market value of the Common
Stock subject to the option on the date of grant.
No options may be transferred by an optionee other than by will or the laws
of descent and distribution, and during the lifetime of an optionee, the option
may only be exercisable by the optionee. Options may be exercised only if the
option holder remains continuously associated with the Company from the date of
grant to the date of exercise, unless extended under the Plan grant. Options
under the 1994 Plan must be granted within 10 years from the effective date of
the 1994 Plan and the exercise date of an option cannot be later than ten years
from the date of grant. Any options that expire unexercised or that terminate
upon an optionee's ceasing to be employed by the Company become available once
again for issuance. Shares issued upon exercise of an option will rank equally
with other shares then outstanding.
As of April 30, 1999, options had been granted under the 1994 Plan to
officers, directors, employees and consultants at an exercise price ranging from
$4.38 per share to $6.25 per share. The exercise prices represented the fair
market value of the Company's Common Stock at the date such options were
granted. Thirty-three percent of the options indicated in the table below are
exercisable after one year of continuous service to the Company, sixty-six
percent following two years of continuous service to the Company and one hundred
percent after three years of continuous service to the Company.
9
<PAGE>
The table below sets forth the total number of options issued to each
executive officer and director of the Company through April 30, 1999:
Number of
Options Exercise Expiration
Granted Price Date
Bradley E. Larson 20,000 $6.25 11/13/05
25,000 4.38 12/16/06
7,000 5.88 01/16/08
Kenneth D. Nelson 14,000 6.25 11/13/05
15,000 4.38 12/16/06
5,800 5.88 04/16/08
Paul R. Lewis 18,000 6.25 11/13/05
20,000 4.38 12/16/06
6,400 5.88 04/16/08
Alan A. Terril 15,600 6.25 11/13/05
20,000 4.38 12/16/06
5,800 5.88 04/16/08
Gary A. Agron 10,000 6.25 11/13/05
7,500 4.38 12/16/06
1,000 5.88 04/16/08
Charles E. Cowan 10,000 6.25 11/13/05
7,500 4.38 12/16/06
1,000 5.88 04/16/08
Earle C. May 10,000 4.56 03/01/09
Charles R. Norton 10,000 4.56 03/01/09
Gary W. Burnell 80,000 5.31 01/21/07
5,400 5.88 04/16/08
Julie L. Bergo 10,000 6.25 11/13/05
5,000 4.38 12/16/06
3,650 5.88 04/16/08
10
<PAGE>
Certain Transactions
The Company was incorporated in Nevada on September 15, 1994. Effective
October 1, 1994, following the death of the founder and sole stockholder of
Meadow Valley Contractors, Inc. ("MVC"), the Company purchased all of the
outstanding Common Stock of MVC for $11.5 million comprised of (i) a $10 million
promissory note payable to the Richard C. Lewis Family Revocable Trust I,
bearing interest at 10% per annum of which $5 million was due the earlier of 10
days after the closing of the Company's initial public offering or October 31,
1995, and the remaining $5 million was due in five equal annual payments of $1
million bearing interest at 12.5% per annum commencing one year after the
initial $5 million was paid and (ii) a promissory note payable to the Richard C.
Lewis Family Revocable Trust I valued at $1.5 million paid in full in 1995 by
the issuance of 500,000 restricted shares of the Company's Common Stock valued
at $3.00 per share. During the year ended December 31, 1997 and 1998, the
Company made principal payments on the $10 million promissory note totaling $1.0
million and $1.5 million, respectively, to the Kim A. Lewis Survivors Trust and
the Richard C. Lewis Marital Trust, each of which was created pursuant to the
Richard C. Lewis Family Revocable Trust I.
During the years ended December 31, 1997 and 1998, the Company incurred
interest expense in the amounts of $412,842 and $243,322, respectively, related
to the $10 million promissory note payable to the Richard C. Lewis Family
Revocable Trust I and paid interest totaling $437,500 and $278,938,
respectively, regarding the same note to the Kim A. Lewis Survivors Trust and
the Richard C. Lewis Marital Trust. The note was paid in full by the Company in
January 1999.
During the years ended December 31, 1997 and 1998, the Company purchased
ready mix concrete for its prestressed products subsidiary from Leavitt Ready
Mix, Inc., a company owned by a sister of Paul R. Lewis, a director and officer
of the Company. Leavitt was paid $90,914 in 1997 and $166,703 in 1998.
In January 1998, Paul R. Lewis repaid a loan from the Company in the amount
of $257,575 originally extended to Mr. Lewis in December 1994.
In 1998, the Company paid mining royalties to Paul R. Lewis in the amount
of $109,569 and purchased equipment from Wiser Construction LLC, a company owned
by Mr. Lewis, in the amount of $295,000.
Relationship with Independent Public Accountants
BDO Seidman, LLP, independent accountants, has served as the independent
accountants of the Company since 1994. It is the Company's understanding that
this firm is obligated to maintain audit independence as prescribed by the
accounting profession and certain requirements of the Securities and Exchange
Commission. As a result, the directors of the Company do not specifically
approve, in advance, non-audit services provided by the firm, nor do they
consider the effect, if any, of such services on audit independence.
11
<PAGE>
PERFORMANCE GRAPH
[GRAPH APPEARS HERE]
COMPARISON OF 38 MONTH CUMULATIVE TOTAL RETURN
AMONG MEADOW VALLEY CORPORATION, THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE DOW JONES HEAVY CONSTRUCTION INDEX
MEADOW NASDAQ STOCK DOW JONES
MEASUREMENT PERIOD VALLEY MARKET (U.S.) HEAVY CONSTRUCTION
(FISCAL YEAR COVERED) CORPORATION INDEX INDEX
- --------------------- ----------- ------------- ------------------
MEASUREMENT PT -
10/17/95 $ 100 $ 100 $ 100
FYE 12/95 $ 88 $ 102 $ 109
FYE 12/96 $ 72 $ 126 $ 104
FYE 12/97 $ 102 $ 154 $ 78
FYE 12/98 $ 80 $ 216 $ 82
12
<PAGE>
PROPOSALS OF SHAREHOLDERS FOR PRESENTATION AT THE NEXT ANNUAL MEETING OF
SHAREHOLDERS
Any shareholder of record of the Company who desires to submit a proper
proposal for inclusion in the proxy materials relating to the next annual
meeting of shareholders must do so in writing and it must be received at the
Company's principal executive offices prior to December 31, 1999. The proponent
must be a record or beneficial shareholder entitled to vote at the next annual
meeting of shareholders on the proposal and must continue to own the securities
through the date on which the meeting is held.
OTHER BUSINESS
BTOP has advised the Company that it may present its own proposal, similar
to the Shareholder's Proposal, at the Annual Meeting. Management of the Company
is not aware of any other matters which are to be presented at the Annual
Meeting, nor has it been advised that other persons will present any other
proposals. However, if other matters properly come before the Annual Meeting,
the individual named in the accompanying proxy shall vote on such matters in
accordance with his best judgment.
The above notice and Proxy Statement are sent by order of the Board of
Directors.
Bradley E. Larson
Chief Executive Officer
May 7, 1999
<PAGE>
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
MEADOW VALLEY CORPORATION
TO BE HELD JUNE 21, 1999
The undersigned hereby appoints Bradley E. Larson as the lawful agent and
Proxy of the undersigned (with all the powers the undersigned would possess if
personally present, including full power of substitution), and hereby authorizes
him to represent and to vote, as designated below, all the shares of Common
Stock of Meadow Valley Corporation held of record by the undersigned on April
30, 1999, at the Annual Meeting of Shareholders to be held June 21, 1999, or any
adjournment or postponement thereof.
1. ELECTION OF DIRECTORS
_____ FOR the election as a director of all nominees listed below (except
as marked to the contrary below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
NOMINEES: Gary A. Agron, Paul R. Lewis and Earle C. May
INSTRUCTION: To withhold authority to vote for individual nominees, write their
names in the space provided:
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote "AGAINST" Item 2.
2. SHAREHOLDER'S PROPOSAL
_____ FOR _____ AGAINST _____ ABSTAIN
3. In his discretion, the Proxy is authorized to vote upon any matters
which may properly come before the Annual Meeting, or any adjournment or
postponement thereof.
It is understood that when properly executed, this proxy will be voted in
the manner directed herein by the undersigned shareholder. WHERE NO CHOICE IS
SPECIFIED BY THE SHAREHOLDER ,THE PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS NAMED IN ITEM 1 ABOVE AND AS AN ABSTENTION TO THE SHAREHOLDER'S
PROPOSAL.
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and confirms all that said Proxy may do by virtue hereof.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, 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.
Dated:____________________________ __________________________________________
PLEASE MARK, SIGN, DATE AND RETURN Signature
THE PROXY CARD PROMPTLY USING THE __________________________________________
ENCLOSED ENVELOPE. Signature, if held jointly
PLEASE CHECK BELOW IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING
_______ YES, I, (WE), PLAN TO ATTEND
