Preliminary Copy
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X| 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 toss.240.14a-12
THE GOLDFIELD 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:
------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------------
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)
------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------------
|-| Fee paid previously with preliminary materials.
|-| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------------
1
Preliminary Copy
The Goldfield Corporation
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON [------], 2001
To Our Stockholders:
Notice is hereby given that the Annual Meeting of the Stockholders of The
Goldfield Corporation has been called and will be held at [---------------], on
[------], 2001 at 9:00 a.m. for the following purposes:
1. To consider and act upon a proposal to adopt an amendment to the Restated
Certificate of Incorporation of the Company to eliminate cumulative voting
in the election of directors.
2. To elect six directors to the Company's Board of Directors.
2A. If the proposal to adopt an amendment to the Restated Certificate of
Incorporation of the Company to eliminate cumulative voting in the
election of directors is adopted, to elect six directors to the
Company's Board of Directors, without cumulative voting being
available to stockholders.
2B. If the proposal to adopt an amendment to the Restated Certificate of
Incorporation of the Company to eliminate cumulative voting in the
election of directors is not adopted, to elect six directors to the
Company's Board of Directors, with cumulative voting being available
to stockholders.
3. To ratify the appointment of KPMG LLP as independent certified public
accountants for the fiscal year ending December 31, 2001.
4. To vote on a proposal to give the proxyholders discretion to vote to
adjourn the meeting prior to a vote on Proposal 1 for up to 30 days to
afford additional time for other stockholders to cast their votes if it
appears that a majority of the shares represented at the meeting favor
Proposal 1 above, but the votes represented by such shares are not
sufficient to approve Proposal 1.
5. To transact such other business as may lawfully come before the meeting or
any adjournment thereof.
Only stockholders of record at the close of business on [--------], 2001 will be
entitled to vote at the meeting or any adjournment thereof. The transfer books
of the Company will not be closed.
By Order of the Board of Directors
Dwight W. Severs
Secretary
Melbourne, Florida
[----------], 2001
If you are unable to attend the meeting in person, you are requested by the
Board of Directors of the Company to date, sign, and return the enclosed proxy
in the enclosed envelope. No postage is necessary if mailed in the United
2
Preliminary Copy
States. In the event you later decide to attend the meeting, you may revoke your
proxy and vote your shares in person.
3
Preliminary Copy
The Goldfield Corporation
Suite 500, 100 Rialto Place
Melbourne, Florida 32901
(321) 724-1700
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
[---------], 2001
This proxy statement is furnished in connection with the solicitation
of proxies by the Board of Directors of The Goldfield Corporation (the
"Company"), to be voted at the Annual Meeting of Stockholders of the Company to
be held on [--------], 2001 at 9:00 a.m. and at any and all adjournments
thereof. The meeting will be held for the purposes set forth in the notice and
in this proxy statement. This proxy statement and the accompanying annual report
are being mailed to stockholders on [--------], 2001.
RECORD DATE, STOCKHOLDERS ENTITLED TO VOTE AND REQUIRED VOTE
Only holders of record of outstanding shares of the Company at the close of
business on [--------], 2001 will be entitled to vote at the Annual Meeting of
Stockholders on [--------], 2001. As of [--------], 2001 the Company had
outstanding [ ] shares of common stock, par value $.10 per share (the "Common
Stock"), and [ ] shares of Series A 7% Voting Cumulative Convertible Preferred
Stock, par value $1.00 per share (the "Series A Preferred Stock"). The holders
of the Common Stock and the Series A Preferred Stock will vote together as a
class; in addition, with respect to the proposal to amend the Restated
Certificate of Incorporation to eliminate cumulative voting, the holders of the
Series A Preferred Stock will also vote separately as a class. Each outstanding
share of Common Stock and Series A Preferred Stock is entitled to one vote on
each matter to be voted upon at the meeting other than the election of
directors.
Approval of the proposal of the Board of Directors to amend the Restated
Certificate of Incorporation to eliminate cumulative voting in the election of
directors requires the affirmative vote of (1) the majority of the outstanding
shares of Common Stock and Series A Preferred Stock entitled to vote at the
Annual Meeting, voting together as a class and (2) two-thirds of the outstanding
shares of Series A Preferred Stock entitled to vote at the Annual Meeting,
voting separately as a class. The election of directors requires a plurality of
the votes cast for the election of directors; accordingly, the six directorships
to be filled at the Annual Meeting will be filled by the six nominees receiving
the six highest number of votes. Approval of (1) the proposal ratifying the
selection of KPMG LLP as independent certified public accountants and (2) the
proposal to give the proxyholders discretion to vote to adjourn the meeting
prior to a vote on Proposal 1 for up to 30 days to afford additional time for
other stockholders to cast their votes if it appears that a majority of the
shares present at the meeting favor the proposed amendment to the Restated
Certificate of Incorporation to eliminate cumulative voting but the votes
represented by such shares are not sufficient to approve the amendment, each
requires the affirmative vote of the majority of the shares present in person or
represented by proxy and entitled to vote at the meeting.
4
Preliminary Copy
SOLICITATION, VOTING AND REVOCATION OF PROXIES
This solicitation is made on behalf of the Board of Directors of the
Company. For a description of the expenses incurred by the Company in connection
with this solicitation, see "Additional Information" below.
You are requested to sign, date and return the enclosed proxy in the
postage-paid envelope provided. If the proxy is signed with a voting direction
indicated, the proxy will be voted according to the direction given. If no
direction is given with respect to a proposal, the proxy will be voted as
follows with respect to any such proposal:
1. FOR the proposal relating to the amendment to the Restated Certificate
of Incorporation to eliminate cumulative voting in the election of
directors;
2A. If Proposal 1 to amend the Restated Certificate of Incorporation is
adopted, FOR the election of the nominees for director named herein;
2B. If Proposal 1 to amend the Restated Certificate of Incorporation is
not adopted, "FOR, the Maximum Number of the Listed Nominees that Can
Be Elected" to grant discretionary authority to the proxyholders to
cumulate votes in order to elect as many nominees as believed possible
under the then prevailing circumstances;
3. FOR the ratification of the appointment of KPMG LLP as independent
certified public accountants for the year 2001; and
4. FOR the proposal to give the proxyholders discretion to vote to
adjourn the meeting prior to a vote on Proposal 1 for up to 30 days to
afford additional time for other stockholders to cast their votes if
it appears that the majority of shares represented at the meeting
favor the proposed amendment to the Restated Certificate of
Incorporation to eliminate cumulative voting in the election of
directors, but the votes represented by such shares are not sufficient
to approve the amendment.
Abstentions will be counted to determine the presence of a quorum.
Abstentions will not affect the outcome of the election of directors;
however, with respect to each other proposal an abstention will have
the same effect as a vote against that proposal. Shares represented by
"broker non-votes" will also be counted for purposes of determining a
quorum. Broker non-votes occur when nominees, such as brokers who hold
shares on behalf of beneficial owners, do not receive timely voting
instructions from beneficial owners. Although brokers may have the
authority to vote with respect to certain matters without voting
instructions from beneficial owners, this authority would not apply to
Proposal 1 or to any other proposal which is the subject of a
counter-solicitation within the meaning of American Stock Exchange
Rule 577. Broker non-votes will have no effect on the election of
directors, the ratification of the appointment of KPMG LLP as
independent certified public accountants or Proposal 4, since the vote
required is based on either a plurality of the votes cast in the case
of the election of directors or the majority of the votes cast with
respect to the other proposals. However, with respect to the proposal
relating to the amendment to the Restated Certificate of Incorporation
to eliminate cumulative voting, a broker non-vote will have the same
effect as a vote against the proposal.
5
Preliminary Copy
If Proposal 1 to Amend the Restated Certificate of Incorporation to Eliminate
Cumulative Voting Is Adopted
If the stockholders adopt Proposal 1 to eliminate cumulative voting in the
election of directors, cumulative voting will not be available and you will have
one vote per share for each nominee for director and the proxy will be voted as
you direct in Proposal 2A on the accompanying proxy card. In the absence of
cumulative voting, any direction to any proxyholder in Proposal 2B, including
any direction to cast more than one vote per share in favor of any nominee, will
be ineffective. If no direction is given with respect to Proposal 2A, the proxy
will be voted FOR Proposal 2A. If you would like to vote FOR the election of
directors but withhold your vote with respect to any particular nominee or
nominees, list that nominee or nominees name in the space on the proxy card
marked "For, except vote withheld from the following nominee(s)."
If the proposal to amend the Restated Certificate of Incorporation to
eliminate cumulative voting in the election of directors is adopted by the
stockholders, the amendment to the Restated Certificate of Incorporation would
become effective upon the filing of the amendment with the Secretary of State of
the State of Delaware. This filing would be made during a recess of the Annual
Meeting or upon an adjournment, if one is necessary to tally the voting results.
Proxyholders may use their discretionary authority to vote for any adjournment
necessary to tally the votes with respect to Proposal 1.
If Proposal 1 to Amend the Restated Certificate of Incorporation to Eliminate
Cumulative Voting Is NOT Adopted
If the stockholders do NOT adopt Proposal 1 to eliminate cumulative voting
in the election of directors, cumulative voting will be available and the proxy
will be voted as you direct in Proposal 2B on the accompanying proxy card. Under
cumulative voting, you can cast a number of votes equal to the number of shares
held as of the record date multiplied by six, the total number of directors to
be elected. You may allocate votes to one or more nominees for director. If
Proposal 1 is not adopted, any direction to any proxyholder in Proposal 2A will
be ineffective.
If cumulative voting is available, the following process will be followed.
If no direction is given with respect to Proposal 2B on the accompanying proxy
card or where a vote "FOR; the Maximum Number of the Listed Nominees that Can Be
Elected" is marked, the proxy will be voted "FOR; the Maximum Number of the
Listed Nominees that Can Be Elected" with respect to Proposal 2B and the
proxyholders will have discretionary authority to cumulate all votes to which
you are entitled and allocate them in favor of any one or more of the nominees,
as the proxyholder may determine. Proxyholders intend to allocate such votes in
order to elect as many nominees to the Board of Directors as believed possible
under the then prevailing circumstances. If you want to vote for the election of
directors, but do not want to grant the proxyholders discretion to cumulate
votes, you can cumulate your votes yourself. If you desire to cumulate your
votes yourself, you should multiply the total number of shares you held as of
the record date by six. Then, you may allocate this number of votes among the
nominees by writing the number of votes you want to allocate to a nominee in the
space opposite that nominee's name. If you elect to cumulate your votes
yourself, the proxyholder will not have discretionary authority to cumulate your
votes. If you would like to vote "FOR; the Maximum Number of the Listed Nominees
that Can Be Elected" for the election of directors but you want to withhold your
vote with respect to any particular nominee or nominees, list that nominee or
6
Preliminary Copy
nominees name in the space on the proxy card marked "'FOR; the Maximum Number of
the Listed Nominees that Can Be Elected' except vote withheld from the following
nominee(s)."
Revocation of Proxy
You may revoke the proxy at any time prior to its exercise by duly
executing and returning a later dated proxy or by filing a written revocation
bearing a later date with the Secretary of the Company. The proxy will be
revoked if you attend the meeting and vote in person.
Item 1.
PROPOSAL 1 -- AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO ELIMINATE CUMULATIVE VOTING
THE BOARD OF DIRECTORS BELIEVES THAT THIS PROPOSAL IS IN THE BEST INTEREST
OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS A VOTE FOR THE PROPOSAL.
On [-----------], the Board of Directors approved an amendment to Article
Fourth of the Company's Restated Certificate of Incorporation to eliminate
cumulative voting in the election of directors.
The Company's Restated Certificate of Incorporation gives stockholders the
ability to cumulate votes in each election of directors. Under cumulative
voting, each stockholder can cast a number of votes equal to the number of
shares held as of the applicable record date multiplied by the total number of
directors to be elected. Votes may be allocated to one or more nominees for
director. Therefore, stockholders with a minority percentage of the outstanding
shares, by cumulating votes, may be able to elect one or more directors.
The Board of Directors proposes that the Restated Certificate of
Incorporation be amended so that directors will be elected by plurality vote as
set forth in the Delaware General Corporation Law. The Board's decision reflects
the fact that cumulative voting has fallen out of favor; today only about 10.7%
of S&P SmallCap companies use cumulative voting. If cumulative voting is
eliminated, each stockholder will be entitled to one vote per share for each
nominee for director. The Board of Directors believes that this method is the
fairest and the most likely to produce a Board that effectively represents the
interests of all of the Company's stockholders and not a particular interest
group.
Reasons for Eliminating Cumulative Voting
The Board of Directors believes that it is in the best interest of the
Company and its stockholders to amend the Restated Certificate of Incorporation
to eliminate cumulative voting. The Board of Directors believes that cumulative
voting threatens to undermine effective Board functioning in several respects.
First, it is the duty of the Board to represent all of the stockholders. To do
so, each director must feel a responsibility toward all the stockholders,
without any special loyalty to any one group. With cumulative voting, one or
more directors might be principally concerned about representing and acting in
the interests of special groups of stockholders rather than in the interests of
all stockholders. Also, cumulative voting may result in a corporation or group
seeking to gain control of the Company, or a faction acting for its own purposes
rather than in the best interests of stockholders, gaining representation on the
7
Preliminary Copy
Board. Second, cumulative voting may result in partisanship among members of the
Board that could impair their ability to work together. We believe eliminating
cumulative voting will protect the Company from unsolicited takeover proposals
or other attempts by minority stockholders to disrupt the operation of the Board
of Directors for personal advantage.
In order to eliminate the factionalism promoted by cumulative voting, the
modern trend has been to eliminate cumulative voting. The State of California,
considered to be one of the most protective states of stockholder interests,
amended its laws in 1989 to facilitate the repeal of cumulative voting by
corporations. In supporting the change, the Committee on Corporations of the
Business Law Section of the State Bar of California concluded:
"While a healthy diversity of opinion and experience, as represented by
independent directors, is desirable, factionalism is not appropriate in the
board's essential executive function. The principal objective of a business
enterprise should be profit and gain for its stockholders, not political
accommodation of competing interests...Practical experience has shown that
effective management of a corporation requires candor and consensus in the
Boardroom, not rancor and contention."
Possible Effects of Eliminating Cumulative Voting
The elimination of cumulative voting will enable the holders of a majority
of the shares entitled to vote in an election of directors to elect all of the
directors being elected at that time, and make it more difficult for minority
stockholders to elect a director. In addition, elimination of cumulative voting
might, under certain circumstances, render more difficult, or discourage, a
merger or tender offer that is not approved by the Board of Directors or a proxy
contest.
IF ADOPTED, THE AMENDMENT WOULD APPLY AT THIS ANNUAL MEETING TO THE
ELECTION OF DIRECTORS AND CUMULATIVE VOTING WOULD NOT BE AVAILABLE.
The affirmative vote of (1) a majority of the outstanding shares of the
Company's Common Stock and Series A Preferred Stock voting together as a class
and (2) two-thirds of the outstanding shares of the Company's Series A Preferred
Stock voting separately as a class is required to approve the amendment to the
Restated Certificate of Incorporation to eliminate cumulative voting. Please
note that any shares not voted (whether by abstention, broker non-vote or
otherwise) will have the same effect as a vote against the proposal.
The Board of Directors unanimously recommends a vote FOR the adoption of
the amendment to the Restated Certificate of Incorporation to eliminate
cumulative voting in the election of directors.
Item 2.
PROPOSALS 2A and 2B -- ELECTION OF DIRECTORS
Six directors are to be elected at the Annual Meeting, to serve for a term
of one year or until their successors are elected and qualified.
If Proposal 1 to amend the Restated Certificate of Incorporation to
eliminate cumulative voting is adopted, cumulative voting will not be available
8
Preliminary Copy
and the proxy will be voted as you direct on Proposal 2A on the accompanying
proxy card. See "Solicitation, Voting and Revocation of Proxies" above.
If Proposal 1 is NOT adopted, cumulative voting will be available and the
proxy will be voted as you direct in Proposal 2B on the accompanying proxy card.
See "Solicitation, Voting and Revocation of Proxies " above.
With respect to Proposal 2A, the Board of Directors unanimously recommends
a vote FOR the re-election of John H. Sottile, Harvey C. Eads, Jr., John P.
Fazzini, Danforth E. Leitner, and Dwight W. Severs and the election of Al
Marino.
With respect to Proposal 2B, the Board of Directors unanimously recommends
a vote "FOR; the Maximum Number of the Listed Nominees that Can Be Elected" so
that the proxyholders will have discretionary authority to cumulate all votes to
which you are entitled and allocate them in favor of any one or more nominees,
as the proxyholder may determine.
Information About Nominees
Reference is made to the information set forth below under "Ownership of
Voting Securities by Certain Beneficial Owners and Management" as to the stock
ownership of the nominees. The following table sets forth with respect to each
nominee, his address, the office presently held by him with the Company or his
principal occupation if not employed by the Company, the year in which he first
became a director of the Company and his age.
9
Preliminary Copy
Principal Occupation Director
Name and Business Address For the Last Five Years Since Age (1)
------------------------- ----------------------- ----- -------
Harvey C. Eads, Jr. City Manager of Coral Gables, Florida since May 1988. 1999 55
Office of the City Manager
City of Coral Gables
405 Biltmore Way
Coral Gables, FL 33134
John P. Fazzini Real Estate Developer; President of Bountiful Lands, 1984 56
Bountiful Lands, Inc. Inc. (real estate development corporation) since
101 East Stuart Avenue 1980.
Lake Wales, FL 33853
Danforth E. Leitner Real Estate Broker; Real Estate Appraiser; President 1985 60
The Leitner Company of The Leitner Company (real estate brokerage and
528 North Main Street appraisal corporation) since 1984.
Hendersonville, NC 28792
Al Marino Architectural Designer; President of A.M. Marino -- 43
A.M. Marino Design, Inc. Design, Inc. (architectural design firm) since 1986
1483 Main Street (Mr. Marino is the son of Anthony J. Ford who owns
Weymouth, MA 02190 2,065,300 shares of the Company's Common Stock).
Dwight W. Severs Secretary of the Company since 1999; City Attorney 1998 57
Titusville City Attorney for City of Titusville, Florida since January 1999;
555 South Washington Avenue Principal for the firm of Dwight W. Severs &
Titusville, FL 32796 Associates, P.A. since March 1998; a member of the
law firm of Severs, Stadler & Harris, P.A. between
January 1995 and March 1998.
John H. Sottile Chairman of the Board of Directors of the Company 1983 53
The Goldfield Corporation since May 1998; President of the Company since 1983
100 Rialto Place, Suite 500 and Chief Executive Officer of the Company since
Melbourne, FL 32901 1985.
----------
(1) As of December 31, 2000.
If any of the foregoing nominees should withdraw or otherwise become
unavailable, which the Board of Directors does not presently anticipate, it is
intended that proxies will be cast for such person or persons as the Board of
Directors may designate in place of such nominee or nominees.
Directors who are also employees of the Company are not paid any fees or
other remuneration for service on the Board or on any Board committee. Each
non-employee director receives an aggregate annual fee of $15,000, with $1,250
paid each month, and an additional $500 paid for each Board meeting attended in
person.
PARTICIPANTS IN THE SOLICITATION
Under applicable regulations of the Securities and Exchange Commission (the
"SEC"), each of the directors and nominees of the Company is deemed to be a
10
Preliminary Copy
"participant" in the Company's solicitation of proxies. The following sections
set forth certain additional information regarding the Company's nominees and
directors.
Transactions in the Company's Securities in the Last Two Years
No director or nominee sold any Company securities during the past two
years. The following table sets forth all purchases made by these persons.
Number of Shares Purchased
--------------------------
Name Date
---- ----
Harvey C. Eads 1,000 December 17, 1999
John P. Fazzini 14,000 April 4, 2001
6,000 March 29, 2001
Danforth E. Leitner 20,000 March 22, 2001
Al Marino 1,000 April 4, 2001
Dwight W. Severs 9,700 December 28, 2000
10,300 December 27, 2000
15,200 December 26, 2000
4,800 December 22, 2000
John H. Sottile 250,000 March 26, 2001 (1)
63,300 December 29, 1999
14,600 December 28, 1999
3,900 December 27, 1999
16,600 December 23, 1999
29,500 December 22, 1999
4,900 December 21, 1999
5,200 December 17, 1999
2,200 December 16, 1999
3,700 December 15, 1999
2,000 December 14, 1999
200 December 13, 1999
2,600 December 10, 1999
3,100 December 9, 1999
5,900 December 8, 1999
200 December 2, 1999
3,200 December 1, 1999
4,100 November 22,1999
2,600 November 18,1999
16,200 November 17,1999
7,000 November 16,1999
300 November 15,1999
5,000 November 9,1999
2,400 November 8,1999
13,500 November 5,1999
1,300 November 4,1999
13,800 November 2,1999
--------------------------------
(1) Option exercise.
Additional Information
Except as disclosed elsewhere in this Proxy Statement, to the knowledge of
the Company none of the Company's directors and nominees: (i) owns of record any
securities of the Company that are not beneficially owned by them; (ii) is, or
was within the past year, a party to any contract, arrangement or understanding
with any person with respect to the securities of the Company, including, but
not limited to, joint ventures, loan or option agreements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits,
11
Preliminary Copy
or the giving or withholding of proxies; (iii) has any substantial interest,
direct or indirect, by security holdings or otherwise, in any matter to be acted
upon at the Annual Meeting; (iv) beneficially owns any securities of any parent
or subsidiary of the Company; or (v) borrowed any funds to purchase any
securities set forth under "Participants in the Solicitation." Except as
disclosed elsewhere in this Proxy Statement, to the knowledge of the Company
none of the Company's directors or nominees nor any of their associates has any
arrangement or understanding with any person with respect to future employment
by the Company or its affiliates or with respect to any future transactions to
which the Company or any of its affiliates will or may be a party, nor any
material interest, direct or indirect, in any transaction which has occurred
since January 1, 2000 or any currently proposed transaction, or series of
similar transactions, to which the Company or its affiliates was or is to be a
party and in which the amount involved exceeds $60,000.
OWNERSHIP OF VOTING SECURITIES BY CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of [--------], 2001, certain stock
ownership information regarding all stockholders known by the Company to be the
beneficial owners of 5% or more of the outstanding shares of Common Stock and
Series A Preferred Stock of the Company and executive officers and directors of
the Company.
12
Preliminary Copy
Amount Beneficially Owned (1)
Common Percent of Class (2)
Obtainable Upon -------------------- Percent
Common Conversion of Series A Common Series A of Voting
Beneficial Owners (3) Preferred (4) Preferred (1) Preferred Securities (5)
----------------- ---------- ------------- --------- ---- ----- --------- --------------
(a) Holders of more than 5%
(other than directors):
Anthony J. Ford (6)
33 Van Ripper Street
Staten Island, NY 10302 2,065,300 7.53% 7.53%
Suzanne S. Guanci
1130 Placetas Avenue
Coral Gables, FL 33146 33,043 28,860 * 8.50% *
Linda Lonergan
1202 Pawnee Terrace
Indian Harbor Beach,
Florida 32937 103,044 90,000 * 26.52% *
Mary H. Leitner
2344 Brookside Drive
Indialantic, FL 32903 49,130 21,188 18,506 * 5.45% *
(b) Executive Officers,
Directors and Nominees:
Harvey C. Eads, Jr. 1,000 * *
John P. Fazzini 20,100 * *
Patrick S. Freeman 133,533 * *
Robert L. Jones 208,333 * *
Danforth E. Leitner 20,600 * *
Al Marino (7) 1,000
Dwight W. Severs 42,000 * *
John H. Sottile (8) 913,288 225,360 196,833 3.33% 57.99% 4.12%
Stephen R. Wherry 93,333 * *
(c) All Executive Officers
and Directors as a group
(8 in number): 1,432,187 225,360 196,833 5.23% 57.99% 6.01%
-----------------
* less than 1%
(1) Includes holdings of spouses, minor children, relatives and spouses of
relatives living in the same household, even if beneficial ownership is
disclaimed.
(2) All percentages have been determined as of April 26, 2001 in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. For
purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days after April 26, 2001.
(3) Excludes shares of Common Stock obtainable upon conversion of Series A
Preferred Stock.
(4) Each share of Series A Preferred Stock is currently convertible into
1.144929 shares of Common Stock.
(5) In accordance with the rules of the SEC, the percentage shown in this
column opposite the name of each person or group has been computed assuming
the conversion of any Series A Preferred Stock and the exercise of any
options held by such person or group and that no conversions or exercises
by others have occurred.
(6) Information as to shares beneficially owned by Mr. Ford is based on
information provided by Mr. Ford to the Company.
(7) Does not include 2,065,300 shares of the Company's Common Stock owned by
Mr. Marino's father, Anthony J. Ford, as to which Mr. Marino disclaims
beneficial ownership.
(8) Includes 140,400 shares of Common Stock owned by Mr. Sottile's wife, Ann
Sottile, and 27,451 shares of Common Stock owned by Mr. Sottile's son, John
Nicholas Sottile. Does not include 118,860 shares of the Company's Series A
Preferred Stock, convertible into 136,087 shares of Common Stock, owned by
Mr. Sottile's sisters, Suzanne S. Guanci and Linda Lonergan, as to which
Mr. Sottile disclaims beneficial ownership.
13
Preliminary Copy
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities, to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and Series A Preferred Stock of the Company. Copies of all such
reports filed with the SEC are required to be furnished to the Company. Based
solely on the Company's review of the copies of such reports it has received,
the Company believes that all of its executive officers, directors and greater
than ten percent beneficial owners complied with all filing requirements
applicable to them with respect to transactions during the year ended December
31, 2000.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the cash compensation
for the Company's Chief Executive Officer and executive officers, including two
executive officers of subsidiaries, whose compensation exceeded $100,000 during
the years ended December 31, 2000, 1999 and 1998. The information provided under
the heading "Executive Compensation" is that required by "small business
issuers" as defined by the rules of the SEC.
Summary Compensation Table
Long-term
Compensation
Annual Compensation Awards
All Other Stock Options
Name and Salary Bonus Compensation (in shares)
Principal Position Year ($) (1) ($) (1) ($) (2) (3)
------------------ ---- ------- ------- ------- ---
John H. Sottile 2000 380,333 -- 250,158 --
Chairman, President and 1999 369,556 -- 9,676 375,000
Chief Executive Officer 1998 361,252 -- 9,480 --
Patrick S. Freeman 2000 112,500 8,758 96,773 --
President of mining 1999 112,500 18,000 4,989 125,000
subsidiaries 1998(4) 116,827 -- 4,958 --
Robert L. Jones 2000 105,000 189,089 97,379 --
President of electrical 1999 105,000 266,042 6,965 125,000
construction subsidiary 1998 104,827 110,000 6,719 --
Stephen R. Wherry 2000 118,229 65,000 96,070 --
Vice President, Treasurer 1999 108,750 24,000 4,693 125,000
and Chief Financial Officer 1998 100,250 17,500 3,854 --
14
Preliminary Copy
---------------
(1) Amounts reported represent compensation earned for the year, some of which
may have been paid in a subsequent year.
(2) All other compensation for 2000 included (a) payments related to the
termination of the Company's Employee Benefit Agreements ($240,000 for Mr.
Sottile; $90,000 for Mr. Freeman; $90,000 for Mr. Jones; and $90,000 for
Mr. Wherry), (b) the economic benefit related to the life insurance
policies under the terminated Employee Benefit Agreements ($5,058 for Mr.
Sottile; $1,673 for Mr. Freeman; $2,279 for Mr. Jones; and $970 for Mr.
Wherry) and (c) Company contributions to the Company's Cash Deferred Profit
Sharing Plan ($5,100 each for Messrs. Sottile, Freeman, Jones and Wherry).
Amounts for 1999 included (a) the economic benefit related to the insurance
policies under the terminated Employee Benefit Agreements ($4,876 for Mr.
Sottile; $1,614 for Mr. Freeman; $2,165 for Mr. Jones; and $906 for Mr.
Wherry) and (b) Company contributions to the Company's Cash Deferred Profit
Sharing Plan ($4,800 for Mr. Sottile; $3,375 for Mr. Freeman; $4,800 for
Mr. Jones; and $3,787 for Mr. Wherry). Amounts for 1998 included (a) the
economic benefit related to the insurance policies under the terminated
Employee Benefit Agreements ($4,680 for Mr. Sottile; $1,453 for Mr.
Freeman; $1,919 for Mr. Jones; and $846 for Mr. Wherry) and (b) Company
contributions to the Company's Cash Deferred Profit Sharing Plan ($4,800
for Mr. Sottile; $3,505 for Mr. Freeman; $4,800 for Mr. Jones; and $3,008
for Mr. Wherry).
(3) All stock option awards were made pursuant to The Goldfield Corporation
1998 Executive Long-term Incentive Plan.
(4) Mr. Freeman's 1998 annual salary included 27 bi-weekly pay periods, while
each of his 2000 and 1999 annual salaries included 26 such periods.
The persons named in the foregoing table, together with Dwight W. Severs,
Secretary of the Company, are all of the executive officers of the Company.
Information concerning the executive officers is set forth in the Company's
Annual Report on Form 10-K/A for the year ended December 31, 2000, filed April
30, 2001.
Employee Benefit Agreements
Beginning in 1989, the Company entered into Employee Benefit Agreements
(each, a "Benefit Agreement") with Messrs. Sottile, Jones, Freeman and Wherry
and certain employees of the Company. Under the terms of each Benefit Agreement,
the Company owned life insurance policies that accumulated cash surrender value
for the retirement of the employee, at age sixty-five, while also providing a
life insurance benefit for the employee. Under the terms of each Benefit
Agreement, the Company was entitled to a refund of the lesser of the previously
paid premiums or the cash surrender value of the insurance policy, either upon
retirement of the employee, the death of the employee or upon the termination of
the Benefit Agreement. The Company had the right to terminate the Benefit
Agreement without any future obligation by giving written notice to the
employee. If the Benefit Agreement was terminated, the Company was entitled to
receive the lesser of the cash surrender value of the insurance policy or the
total of previously paid premiums. In 2000, the Board of Directors reviewed the
Benefit Agreements and related insurance policies and decided it was in the best
interest of the Company to terminate the Benefit Agreements to eliminate the
annual insurance premium obligations. During the second quarter of 2000, the
Company entered into Cancellation and Release Agreements pursuant to which the
Benefit Agreements were terminated. In consideration of terminating the future
retirement benefit associated with the Benefit Agreements, the Company decided
to compensate the affected employees. The net expense to the Company was
$425,311. Although the Company does not anticipate making any further cash
premium payments, the Company will continue to own the policies and has granted
each employee the right to name the beneficiary for the death benefits in excess
of premiums previously paid by the Company, less any outstanding loans.
15
Preliminary Copy
OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUE
The following table shows the number and value of stock options (exercised
and unexercised) held by the named executive officers in 2000. Value is
calculated using the difference between the option exercise price ($0.21875) and
the 2000 year-end stock price ($0.4375) multiplied by the number of shares
underlying the options.
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-the-money Options
on Value Options at End of 2000(1) at End of 2000
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- ------------
(#) ($) (#) (#) ($) ($)
John H. Sottile -- -- 125,000 250,000 27,344 54,688
Robert L. Jones -- -- 41,667 83,333 9,115 18,229
Patrick S. Freeman -- -- 41,667 83,333 9,115 18,229
Stephen R. Wherry -- -- 41,667 83,333 9,115 18,229
----------
(1) In March 2001, each optionee exercised all options listed above that were
exercisable at the end of 2000. Also, each optionee exercised additional
options that became exercisable on March 9, 2001 in the following amounts:
Mr. Sottile - 125,000; Messrs. Jones, Freeman and Wherry - 41,666.
On January 15, 1985, the Company entered into an employment agreement with
John H. Sottile. This agreement, as amended on February 25, 1986, September 23,
1988, February 27, 1990, January 29, 1992, September 15, 1995 and September 20,
1999, expires on December 31, 2009 and provides for continuous employment until
December 31, 2009. This contract currently entitles Mr. Sottile to a salary of
$330,333, which salary may be increased as a result of future annual increases
in the Consumer Price Index. If his employment by the Company is terminated
(which will be deemed to have occurred if he is relocated), Mr. Sottile is
entitled to receive, within ten days of notice of termination, an amount equal
to the full cash salary that he would have received in the absence of such
termination from the date of termination through December 31, 2009. In the event
of his permanent disability or death, he or his estate will be entitled to his
salary through the end of the month of his permanent disability or death and for
one year thereafter. In addition, on January 11, 1986, a subsidiary of the
Company entered into an employment agreement with Mr. Sottile. Such agreement,
as amended on September 13, 1988, January 29, 1992, September 11, 1995 and
September 20, 1999, provides for continuous employment until December 31, 2009
and thereafter from year to year until terminated and entitles him to be paid
$50,000 per year. If his employment by the subsidiary is terminated without
cause (which will be deemed to have occurred if he is relocated), he is entitled
to receive an amount equal to his full cash salary from the date of such
termination through December 31, 2009. In the event of permanent disability or
death, he or his estate will be entitled to his salary for one year.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During 2000, the Board of Directors met four times. The Board of Directors
has, among others, the following committees: an Audit Committee, a Compensation
Committee, a Nominating Committee and a Stock Option Committee.
The Audit Committee, which monitors the activities of the Company's
independent certified public accountants and its accounting department and
16
Preliminary Copy
reports on such activities to the full Board of Directors, consists of Harvey C.
Eads, Dwight W. Severs, Danforth E. Leitner and John P. Fazzini. During 2000,
the Audit Committee held three meetings.
The Compensation Committee reviews the compensation of the executive
officers of the Company and makes recommendations to the Board of Directors
regarding such compensation. The members of the Compensation Committee are
Dwight W. Severs and John P. Fazzini. The Compensation Committee held one
meeting during 2000.
The Nominating Committee recommends qualified candidates for election to
the Board of Directors of the Company, including the slate of directors which
the Board of Directors proposes for election by stockholders at the Annual
Meeting. The Nominating Committee consists of John H. Sottile, John P. Fazzini
and Danforth E. Leitner. During 2000, the Nominating Committee held one meeting.
The Nominating Committee is not precluded from considering written
recommendations for nominees from stockholders. Such recommendations for the
2002 election of directors, together with a description of the proposed
nominee's qualifications and other relevant biographical information, should be
sent to the Secretary of the Company prior to [--------], 2001.
The Stock Option Committee administers The Goldfield Corporation 1998
Executive Long-term Incentive Plan (the "Plan"). The Stock Option Committee has
complete discretion in determining the number of shares subject to options
granted to an employee eligible under the Plan and in determining the terms and
conditions pertaining to such options, consistent with the provisions of the
Plan. The Stock Option Committee consists of John P. Fazzini, Dwight W. Severs
and Danforth E. Leitner. During 2000, the Stock Option Committee held one
meeting.
During 2000, no incumbent director attended fewer than 100% of the total
number of meetings of the Board of Directors and all committees of the Board
that he was eligible to attend.
Item 3.
PROPOSAL 3 -- RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
The Board of Directors of the Company has appointed the firm of KPMG LLP as
its independent certified public accountants for the year ending December 31,
2001, subject to the appointment being ratified by the Company's stockholders.
KPMG LLP (including a predecessor firm, W. O. Daley & Company) has been serving
the Company and its subsidiaries for the past 38 years.
A representative of KPMG LLP is expected to be present at this year's
Annual Meeting of Stockholders, at which time he will be given an opportunity to
make a statement and is expected to be available to respond to appropriate
questions. The appointment of KPMG LLP was made upon the recommendation of the
Audit Committee. If the stockholders do not ratify the selection of KPMG LLP,
the selection of independent certified public accountants will be reconsidered
by the Board of Directors of the Company.
17
Preliminary Copy
The Board of Directors unanimously recommends a vote FOR the ratification
of the appointment of KPMG LLP as independent certified public accountants of
the Company.
AUDIT COMMITTEE REPORT AND FEE INFORMATION
Audit Committee Report
The Board of Directors appoints an Audit Committee each year to review the
Company's financial matters. Each member of the Company's Audit Committee meets
the independence requirements set by the American Stock Exchange. The Audit
Committee members reviewed and discussed the audited financial statements for
the fiscal year ended December 31, 2000 with management. The committee also
discussed all the matters required to be discussed by Statement of Auditing
Standard No. 61 with the company's independent accountants, KPMG LLP. The Audit
Committee received a written disclosure and letter from KPMG LLP as required by
Independence Standards Board Standard No. 1 and has discussed with KPMG LLP its
independence. Based on its review and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report to stockholders and that the Form 10-K
be filed with the Securities and Exchange Commission.
The Board of Directors has adopted a written charter to govern the Audit
Committee. A copy of the Company's Audit Committee Charter has been included as
Exhibit A to this proxy statement.
HARVEY C. EADS, JR.
DWIGHT W. SEVERS
DANFORTH E. LEITNER
JOHN P. FAZZINI
Audit Fees
The aggregate fees billed for professional services by KPMG LLP rendered
for the audit of the company's annual financial statements for the year ended
December 31, 2000 and the reviews of the financial statements included in the
Forms 10-Q for the year 2000 are $41,189.
Financial Information System Design and Implementation Fees
No fees were billed by KPMG LLP for information technology services
rendered during the fiscal year ended December 31, 2000.
All Other Fees
In addition to the fees described above, the aggregate fees billed by KPMG
LLP for professional services for the fiscal year ended December 31, 2000 were
$5,975.
Item 4.
PROPOSAL 4 - PROPOSAL TO ADJOURN THE MEETING IF IT APPEARS A
MAJORITY OF SHARES REPRESENTED AT THE MEETING FAVOR PROPOSAL 1
The Board of Directors proposes that, if it appears that a majority of the
shares represented at the Annual Meeting in person or by proxy and entitled to
vote at the meeting favor the proposed amendment to the Restated Certificate of
Incorporation of the Company to eliminate cumulative voting in the election of
directors (Proposal 1, above), but the votes represented by such shares are not
18
Preliminary Copy
sufficient to satisfy the requirement that such amendment be approved by (1) a
majority of the outstanding shares of the Company's Common Stock and Series A
Preferred Stock voting together as a class and (2) two-thirds of the outstanding
shares of the Company's Series A Preferred Stock voting separately as a class,
then the proxyholders will have the discretion to vote to adjourn the meeting
prior to a vote on Proposal 1 for up to 30 days in order to afford additional
time for other stockholders to cast their votes. The proxy will not be voted to
adjourn the meeting pursuant to this authority if it does not appear that a
majority of the shares represented at the meeting favor the proposed amendment.
During any such adjournment, stockholders who have not yet voted may be apprised
of the adjournment and be solicited by the persons and through the means listed
under "Additional Information" below.
If the meeting is adjourned pursuant to this proposal, voting on the
election of directors will take place at the adjourned meeting.
The Board of Directors unanimously recommends a vote FOR the proposal to
give the proxyholders discretion to vote to adjourn the meeting for up to 30
days to afford additional time for other stockholders to cast their votes if it
appears that a majority of the shares represented at the meeting favor Proposal
1, but the votes represented by such shares are not sufficient to approve
Proposal 1.
ADDITIONAL INFORMATION
The Company will pay the cost of soliciting proxies and will reimburse all
bankers, brokers and other custodians, nominees and fiduciaries for forwarding
proxies and proxy materials to the beneficial owners of the shares. In addition
to solicitation by mail, solicitation of proxies may be made personally or by
telephone, facsimile, telegram or other means by regular employees of the
Company with no specific additional compensation to be paid for such services.
Innisfree M&A Incorporated has been retained to assist in the solicitation of
proxies for a fee of $50,000 plus out-of-pocket expenses. It is expected that
Innisfree will use up to approximately [50] persons in such solicitation.
Although no precise estimate can be made at this time, the Company
anticipates that the aggregate amount to be spent by the Company in connection
with the solicitation of proxies will be approximately [$--------], of which
approximately [$-------] has been incurred to date. This amount includes legal
fees, printing costs, the fees payable to Innisfree, distribution costs and
transportation costs, but excludes (i) the salaries and fees of officers,
directors and employees of the Company and (ii) the normal expenses of an
uncontested election. The aggregate amount to be spent will vary depending on,
among other things, any future developments that may occur.
OTHER MATTERS
A group of stockholders filed a Schedule 13D under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") with respect to the Company on each
of January 3, 2001 and February 28, 2001. A member of this group, eRaider, Inc.,
filed proxy materials on February 26, 2001, March 21, 2001, April 16, 2001,
April 19, 2001, April 23, 2001 and May 1, 2001. According to these filings and
letters sent to the Company, eRaider has nominated six individuals to the Board
of Directors. Three of these nominees are in opposition to three of the nominees
of your Board of Directors. The other three nominees are Messrs. Sottile, Marino
and Severs, who are nominees of the Company's Board of Directors. None of
19
Preliminary Copy
Messrs. Sottile, Marino or Severs has consented to or will consent to being
named as a nominee in eRaider's proxy materials, which is a violation by eRaider
of Rule 14a-4(d) under the Exchange Act, and each of these nominees has
requested that his name be removed. According to the information contained in
these filings, for which the Company disclaims any responsibility, the three
other nominees by eRaider are: Aaron Brown, 44, who runs Allied Owners Action
Fund and eRaider, 215 West 91st Street, #112, New York, NY 10024; Deborah
Pastor, 44, who is the portfolio manager for the Allied Owners Action Fund and
is the wife of Aaron Brown, 215 West 91st Street, #112, New York, NY 10024; and
Sam Rebotsky, 61, a registered representative and Vice President of Sales for
Adolph Komorsky Investments, 10 Holder Place, Suite 3B, Forest Hills, NY 11375.
If eRaider or any member or members of this group solicits proxies from
stockholders for the election of its proposed nominees, the Company intends to
oppose any such solicitation using the methods described above under "Additional
Information."
Neither the Board of Directors nor management intends to bring before the
meeting any business other than the matters referred to in the Notice of Meeting
and this Proxy Statement. If any other business should come properly before the
meeting, or any adjournment thereof, the proxyholders will vote on such matters
according to their best judgment.
2002 STOCKHOLDER PROPOSALS
To be considered for inclusion in the proxy statement relating to the 2002
Annual Meeting, stockholder proposals must be received by the Company no later
than [---------], 2001. In addition, the Company's Restated Bylaws, as amended,
require timely advance written notice to the Company by any stockholder who
intends to nominate a director to the Company's Board of Directors, to present
any proposal or to bring any business before any meeting of the stockholders of
the Company. Notice will be considered timely for the 2002 Annual Meeting if it
is received not later than [---------], 2002 and not earlier than [---------],
2002.
By Order of the Board of Directors
Dwight W. Severs
Secretary
Dated: [---------], 2001
* * *
20
Preliminary Copy
The Annual Report to Stockholders for the year ended December 31, 2000, which
includes financial statements, is being mailed concurrently to stockholders. The
Annual Report does not form any part of the material for the solicitation of
proxies.
A copy of the Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 2000 filed with the Securities and Exchange Commission is available
without charge to those stockholders who would like more detailed information
concerning the Company. If you would like a copy of the Form 10-K, please write
to: The Goldfield Corporation, Suite 500, 100 Rialto Place, Melbourne, Florida
32901.
In addition, financial reports and recent filings with the Securities and
Exchange Commission, including the Form 10-K, are available on the Internet at
http://www.sec.gov. Company information is also available on the Internet at
http://www.goldfieldcorp.com.
21
Preliminary Copy
Exhibit A
The Goldfield Corporation
Audit Committee Charter
I. Preamble:
The board of directors of The Goldfield Corporation (the "corporation") has
formed an audit committee to promote the financial transparency of the
corporation and to ensure the integrity of the corporation's financial
reporting processes and products. This charter is meant to identify the
personnel and functions of the audit committee.
II. Audit Committee Membership and Function:
A. Definitions.
1. Independence: Independent directors are not officers of the
corporation and are, in the view of the corporation's board of
directors, free of any relationship that would interfere with the
exercise of independent judgment. The following persons shall not be
considered independent:
(a) a director who is employed by the corporation or any of its
affiliates for the current year or any of the past three years;
(b) a director who accepts any compensation from the corporation or
any of its affiliates in excess of $60,000 during the previous
fiscal year, other than compensation for board service or
benefits under a tax-qualified retirement plan;
(c) a director who is a member of the immediate family of an
individual who is, or has been in any of the past three years,
employed by the corporation or any of its affiliates as an
executive officer. Immediate family includes a person's spouse,
parents, children, siblings, mother-in-law, father-in-law,
sister-in-law, son-in-law, daughter-in-law, and anyone who
resides in such person's home;
(d) a director who is a partner in, or a controlling stockholder or
an executive officer of, any for-profit business organization to
which the corporation made, or from which the corporation
received, payments (other than those arising solely from
investments in the corporation's securities) that exceed 5% of
the corporation's or business organization's consolidated gross
revenues for that year, or $200,000, whichever is more, in any of
the past three years;
(e) a director who is employed as an executive of another entity
where any of the corporation's executives serve on that entity's
compensation committee.
2. Financial Literacy: A member of the audit committee shall have
financial literacy when he has the ability to read and understand
fundamental financial statements, including a company's balance sheet,
22
Preliminary Copy
income statement, and cash flow statement. Directors who have limited
familiarity with finance can achieve such "literacy" through
corporation-sponsored training programs.
B. Audit Committee Membership.
1. For so long as the corporation remains a small business filer (such
that it files reports under the Securities and Exchange Commission
Regulation S-B), the audit committee will have at least two members, a
majority of which will be independent directors. Otherwise, the
corporation will have an audit committee composed of three or more
directors, all of who will be independent directors.
2. Each director must be financially literate or become financially
literate within a reasonable period of time after his or her
appointment to the audit committee, and at least one member of the
audit committee shall have accounting or related financial management
experience.
3. Each audit committee member will be selected by the chairman of the
board of directors and will serve at the pleasure of the board of
directors.
The audit committee members shall elect a chairman and a secretary from
among its members.
C. Audit Committee Function.
The board of directors and the audit committee have the ultimate authority
and responsibility to select, oversee, evaluate, and, where appropriate, to
replace the independent auditor (or to nominate the independent auditor to
be proposed for stockholder approval in any proxy statement). All employees
of the corporation are directed to cooperate as requested by committee
members. Oversight responsibilities over the independent auditor are
described further in Section III, below.
The independent auditor is ultimately accountable to the board of directors
and the audit committee as the representatives of the stockholders.
The audit committee shall meet at least four times annually, inclusive of
telephonic meetings, or more frequently as circumstances may require.
Special meetings may be called by the chairman of the committee or at the
request of the independent auditor.
1. The audit committee will do whatever else the law, the corporation's
charter or bylaws or the board of directors requires.
III. Independent Auditor Oversight:
A. Auditor Qualifications.
1. The audit committee is responsible for ensuring its receipt from the
independent auditor of a formal written statement delineating all
23
Preliminary Copy
relationships between the auditor and the corporation, consistent with
Independence Standards Board Standard No. 1.
2. The audit committee is also responsible for actively engaging in a
dialogue with the independent auditors with respect to any disclosed
relationships or services that may impact the objectivity and
independence of the auditor and to take or recommend that the full
board of directors take appropriate action to ensure the independence
of the auditor.
B. Auditor Engagement Letter. The auditor's engagement letter should define
the nature and scope of the audit engagement and provide a written contract
for the professional services of the auditing firm.
C. Annual Audit Review. In connection with the annual audit, the audit
committee shall:
1. Ascertain any disagreements between audit personnel and corporation
management.
2. Review corporate accounting policies and practices.
3. Affirm that accounting policies are consistent with industry practices
and are consistent with a fair presentation of the financial statement
in conformity with generally accepted accounting principles.
4. In consultation with the independent auditors, review the integrity of
the corporation's financial reporting processes, both internal and
external.
D. Quarterly Review. Prior to the time that the corporation files its
Quarterly Report on Form 10-Q, the independent auditor will conduct an SAS
71 Interim Financial Review (or such other auditing standard that may in
time modify, supplement or replace SAS 71). The committee shall review and
approve the process for preparing the financial statements to be submitted
on Form 10-Q.
E. Annual Report.
1. Review corporate annual report to evaluate whether it contains a fair
and meaningful presentation of financial statements, footnotes, and
supplementary information.
2. Affirm that the annual report discusses changes in corporate reporting
or accounting practices (for example, departures from generally
accepted accounting principles, exceptions to the consistent
application of accounting principles, etc.).
3. Review disclosure and ensure that practices are fully and fairly
disclosed.
4. Affirm appropriate use of statutory "safe harbor" disclosure if report
contains forward looking information.
5. Prepare for the inclusion in the annual meeting proxy statements a
letter to stockholders stating whether with respect to the prior
fiscal year:
24
Preliminary Copy
(a) management has reviewed the audited financial statements with the
audit committee;
(b) the independent auditors have discussed with the audit committee
the matters required to be discussed by SAS 61;
(c) the members have discussed among themselves, without management
or the independent auditors present, the information disclosed to
the audit committee described in a) and b) above;
(d) the audit committee recommended to the board of directors that
the annual financial statements be included in the corporation's
Form 10-K; and
(e) the audit committee has received written disclosures and letters
from the auditors required by Independence Standards Board
Standard No. 1.
IV. Audit Committee Report:
A. Annual Report. The audit committee shall report at least annually to the
board of directors. The report should:
1. set forth the audit committee's function and responsibilities;
2. set forth a summary of the committee's recommendations, particularly
with respect to the selection of the auditing firm and the review of
the auditor's report;
3. attach critical audit reports and management letters.
B. Committee Charter. The audit committee shall:
1. At least annually, affirm in the proxy statement the existence of an
audit committee charter and compliance with the charter;
2. At least annually, review charter for any necessary revisions and
refer all revisions to the board of directors;
3. At least triennially attach audit committee charter to the annual
proxy statement.
25
Preliminary Copy
THE GOLDFIELD CORPORATION PROXY
Annual Meeting of Stockholders to be Held on [ ], 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John H. Sottile and Dwight W. Severs, and
each of them, jointly and severally, proxies, with full power of substitution,
to vote with the same force and effect as the undersigned at the Annual Meeting
of the Stockholders of The Goldfield Corporation to be held at
[----------------] on [ ], 2001 at 9:00 a.m., and any adjournment or
postponement thereof, upon the matters set forth on the reverse hereof and upon
such other matters as may properly come before the meeting, all in accordance
with the notice and accompanying proxy statement for said meeting, receipt of
which is acknowledged. (THIS PROXY REVOKES ALL PRIOR PROXIES GIVEN BY THE
UNDERSIGNED.)
This proxy, when properly executed, will be voted in the manner directed
herein. The individuals named above are authorized to vote in their discretion
on any other matters that properly come before the meeting, including voting on
any proposal to adjourn the meeting if necessary to tally the votes with respect
to Proposal 1.
Continued and to be signed on the reverse side.
Please date, sign and mail your
proxy card back today.
A X Please mark your votes as in this example.
Your Board of Directors recommends a vote FOR Proposal 1.
If no direction is given, the proxy will be voted FOR Proposal 1.
FOR AGAINST ABSTAIN
1. AMENDMENT TO THE RESTATED
CERTIFICATE OF
INCORPORATION / / / / / /
26
Preliminary Copy
2A. If Proposal 1 to amend the Restated Certificate of Incorporation to
eliminate cumulative voting is adopted, cumulative voting will NOT be available
and the proxy will be voted as directed in this Proposal 2A.
Your Board of Directors recommends a vote FOR Proposal 2A.
If no direction is given, the proxy will be voted FOR Proposal 2A.
FOR WITHHELD
ELECTION OF DIRECTORS / / / /
Nominees:
Harvey C. Eads, Jr.
John P. Fazzini
Danforth E. Leitner
Al Marino
Dwight W. Severs
John H. Sottile
/ / FOR, except vote withheld from the following nominee(s)
------------------------------------------
27
Preliminary Copy
2B. If Proposal 1 to amend the Restated Certificate of Incorporation to
eliminate cumulative voting is NOT adopted, cumulative voting will be available
and the proxy will be voted as directed in this Proposal 2B.
If a vote "FOR; The Maximum Number of the Listed Nominees that Can Be Elected"
is marked, the cumulative votes represented by the proxy will be cast at the
discretion of the proxies named herein in order to elect the maximum number of
the listed nominees as believed possible under the then prevailing
circumstances.
If you do not wish to grant the proxyholder discretion to cumulate your votes,
then you can cumulate your votes yourself. To cumulate your votes for director
yourself, multiply the total number of shares you held as of the record date by
six. Then, you may allocate this number of votes among the nominees by writing
the number of votes you wish to allocate to a nominee in the space next to that
nominee's name. Please note that if you choose to cumulate votes yourself, this
may reduce the likelihood of one or more of the nominees of your choice being
elected. If you elect to cumulate your votes yourself, the proxyholder will not
have discretionary authority to cumulate your votes.
Your Board of Directors recommends a vote "FOR; The Maximum Number of the Listed
Nominees that Can Be Elected " for Proposal 2B.
If no direction is given, the proxy will be voted "FOR; The Maximum Number of
the Listed Nominees that Can Be Elected" for Proposal 2B.
FOR;
The Maximum Number of
the Listed Nominees Nominees
that Can Be Elected WITHHELD
ELECTION OF / / / /
DIRECTORS
----- Harvey C. Eads, Jr.
----- John P. Fazzini
----- Danforth E. Leitner
----- Al Marino
----- Dwight W. Severs
----- John H. Sottile
/ / "FOR; the Maximum Number of the Listed Nominees that Can Be Elected" except
vote withheld from the following nominee(s)
------------------------------------------
28
Preliminary Copy
Your Board of Directors recommends a vote FOR Proposal 3.
If no direction is given, the proxy will be voted FOR Proposal 3.
FOR AGAINST ABSTAIN
3. RATIFICATION OF APPOINTMENT
OF ACCOUNTANTS
/ / / / / /
Your Board of Directors recommends a vote FOR Proposal 4.
If no direction is given, the proxy will be voted FOR Proposal 4.
FOR AGAINST ABSTAIN
4. ADJOURNMENT PRIOR TO VOTE
ON PROPOSAL 1 / / / / / /
*Note* In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or at any adjournments or
postponements thereof.
PLEASE SIGN, DATE AND RETURN TODAY IN ENCLOSED ENVELOPE.
DATE -------------------, 2001
Signature ------------------------
Signature ------------------------
Title(s) ------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
29