def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
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Check the appropriate box:
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READY MIX, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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TABLE OF CONTENTS
READY MIX, INC.
3430 East Flamingo Road, Suite 100
Las Vegas, Nevada 89121
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 11, 2007
To the Shareholders of Ready Mix, Inc.:
The 2007 Annual Meeting of Shareholders of Ready Mix, Inc., a Nevada corporation (the
Company), will be held at 4602 East Thomas Road, Phoenix, Arizona, at 11:00 a.m., Arizona time,
on June 11, 2007, for the following purposes:
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To elect seven directors to serve for a one-year term; |
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To ratify the selection of Semple, Marchal & Cooper, LLP as the independent
registered public accounting firm for the Company for 2007; and |
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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 4, 2007, will be
entitled to notice of and to vote at such meeting or at any adjournment or postponement thereof.
Management of the Company cordially invites you to attend the annual meeting. Your attention
is directed to the attached proxy statement for a discussion of the foregoing proposals and the
reasons why the board of directors encourages you to vote for approval of proposals 1 and 2. A
copy of the Companys 2006 Annual Report, which includes audited financial statements, was mailed
with this notice and proxy statement to all shareholders of record on the record date.
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BY ORDER OF THE BOARD OF DIRECTORS
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/s/ Bradley E. Larson
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Bradley E. Larson
Chief Executive Officer |
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April 27, 2007
IMPORTANT: 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.
READY MIX, INC.
3430 East Flamingo Road, Suite 100
Las Vegas, Nevada 89121
Telephone: (702) 433-2090
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 11, 2007
This Proxy Statement is furnished in connection with the solicitation of proxies by the Board
of Directors of Ready Mix, Inc., a Nevada corporation (the Company), to be used at the 2007
Annual Meeting of Shareholders of the Company (Annual Meeting) to be held at 4602 East Thomas
Road, Phoenix, Arizona, at 11:00 a.m., Arizona time, on June 11, 2007, 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 shareholders of the Company on or about April 27, 2007.
Meeting Agenda
At the Annual Meeting, you will be asked to elect seven directors to serve for a one-year
term, ratify the selection of Semple, Marchal & Cooper, LLP as the independent registered public
accounting firm for the Company for 2007, and transact such other business as may properly come
before the meeting or any postponement(s) or adjournment(s) thereof.
Record Versus Beneficial Ownership of Shares
If your shares are registered directly in your name with our transfer agent, Corporate Stock
Transfer, you are considered, with respect to those shares, the shareholder of record. If you
are a shareholder of record, we sent our Notice of Annual Meeting of Shareholders, Proxy Statement,
Proxy Card and Annual Report to Shareholders directly to you.
If your shares are held in a stock brokerage account or by a bank or other holder of record,
you are considered the beneficial owner of shares held in street name. In that case, our Notice
of Annual Meeting of Shareholders, Proxy Statement, Proxy Card and Annual Report to Shareholders
have been forwarded to you by your broker, bank or other holder of record who is considered, with
respect to those shares, the shareholder of record. Your broker, bank or other holder of record
will also send you instructions on how to vote. If you have not heard from your broker, bank or
other holder of record who holds your stock, please contact them as soon as possible.
Record Date and Number of Votes
The record date for the 2007 Annual Meeting of Shareholders is April 4, 2007. If you were a
shareholder of record at the close of business on April 4, 2007, you may vote at the Annual
Meeting. At the close of business on the record date, there were 3,807,500 shares of our common
stock, par value $.001 per share (Common Stock), outstanding and entitled to vote and
approximately 1500 beneficial and shareholders of record. Each shareholder is entitled to one vote
per share.
How You Can Vote
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 (i) for the election of the nominees for directors hereinafter named; (ii) for
the ratification of Semple, Marchal & Cooper, LLP as the Companys independent registered public
accounting firm; and (iii) to transact such other business as may properly come before the meeting.
Shareholders who hold their shares in street name (i.e., in the name of a bank, broker or other
record holder) must vote their shares in the manner prescribed by their brokers.
Changing Your Vote
You can revoke your proxy at any time before it is exercised in one of three ways:
(1) by delivering to the Secretary of the Company a written instrument of revocation bearing a
date later than the date of the proxy.
(2) by duly executing and delivering to the Secretary of the Company a subsequent proxy
relating to the same shares.
(3) by attending the meeting and voting in person, provided that the shareholder notifies the
Secretary at the meeting of his or her intention to vote in person at any time prior to the voting
of the proxy.
Required Votes
A plurality of votes cast by shareholders who are either present in person or represented by
proxy and entitled to vote at the meeting is required to elect the seven nominees for Director
under Proposal 1. Approval of Proposal 2 requires the affirmative vote of a majority of the shares
present and entitled to vote on this proposal at the Annual Meeting. The total number of votes that
could be cast at the meeting is the number of votes actually cast plus the number of abstentions.
Abstentions are counted as shares present at the meeting for purposes of determining whether a
quorum exists and have the effect of a vote against any matter as to which a specific proportion
of affirmative votes is required for approval. Proxies submitted by brokers that do not indicate a
vote for some or all of the proposals because they do not have discretionary voting authority and
have not received instructions as to how to vote on these proposals (so-called broker non-votes)
are counted for the purpose of determining the presence of or absence of a quorum but are not
counted for determining the number of votes cast for or against a proposal.
Dissenters Rights or Appraisal
Pursuant to applicable Nevada law, there are no dissenters or appraisal rights relating to
the matters to be acted upon at the Annual Meeting.
Other Matters to Be Acted Upon at the Meeting
We do not know of any matters other than the election of directors and the ratification of
independent registered public accounting firm that are expected to be presented for consideration
at the Annual Meeting. If any other matters are properly presented at the meeting, the shares
represented by proxies will be voted in accordance with the judgment of the persons voting those
shares.
2
MATTERS TO BE VOTED ON AT THE ANNUAL MEETING
PROPOSAL 1. ELECTION OF DIRECTORS
The Companys By-Laws provide for the annual election of directors. Directors serve for a one
year term and until election and qualification of their successors or until their resignation,
death, disqualification or removal from office.
The Board of Directors currently consists of seven members, including three Directors employed
by the Company whose terms expire in 2007 and four independent Directors whose terms expire in
2007. At the Annual Meeting, the seven Directors are to be elected to one-year terms expiring in
2008. The seven nominees receiving a plurality of votes by shares represented and entitled to vote
at the Annual Meeting, if a quorum is present, will be elected as directors of the Company.
The nominees for Directors are Charles E. Cowan, Charles R. Norton, Dan H. Stewart, Don A.
Patterson, Bradley E. Larson, Robert R. Morris and Kenneth D. Nelson, all of whom presently serve
on the Board of Directors.
Recommendation of the Board
The Board of Directors recommends that you vote FOR the election of the nominees for
Director.
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 Companys 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. Biographical information
concerning the director nominees is set forth beginning at page 16 of this Proxy Statement.
PROPOSAL 2. THE RATIFICATION OF THE SELECTION OF SEMPLE, MARCHAL & COOPER, LLP
AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR 2007.
Semple, Marchal & Cooper, LLP has been selected by the Audit Committee as the Companys
independent registered public accounting firm for 2007. The Board of Directors recommends to the
shareholders the ratification of the selection of Semple, Marchal & Cooper, LLP, independent
registered public accounting firm, to audit the financial statements of the Company. Unless
otherwise specified, the proxies solicited herein will be voted in favor of the ratification of
Semple, Marchal & Cooper, LLP as the independent registered public accounting firm for the Company
for 2007.
Ratification of the appointment of Semple, Marchal & Cooper, LLP as the Companys independent
registered public accounting firm for fiscal year 2007 will require the affirmative vote of the
holders of at least a majority of the outstanding Common Stock represented in person or by proxy at
the Annual Meeting. All of the directors and executive officers of the Company have advised the
Company that they will vote their shares of Common Stock FOR the ratification of the appointment
of Semple, Marchal & Cooper, LLP as the Companys independent registered public accounting firm for
fiscal year 2007. If the holders of at least a majority of the outstanding Common Stock fail to
ratify the appointment of Semple, Marchal & Cooper, LLP as the Companys independent registered
public accounting firm, the Audit Committee will consider such failure at a subsequent meeting of
the Audit Committee and determine, in its discretion, what actions it should take, if any.
Recommendation of the Board
The board recommends a vote FOR the ratification of Semple, Marchal & Cooper, LLP as
the Companys independent registered public accounting firm for the fiscal year ending December 31,
2007.
3
CORPORATE GOVERNANCE
Director Independence
We are authorized by our Bylaws to maintain a Board of Directors comprised of seven directors.
Our Board currently consists of seven directors, four of whom, Messrs. Norton, Patterson, Cowan,
and Stewart, are independent as defined under rules promulgated by the Securities and Exchange
Commission (SEC) and the American Stock Exchange. In accordance with the independence standards
of the American Stock Exchange, a director must be determined to have no personal, professional,
familial or other relationship with our company other than as a director. Messrs. Norton,
Patterson and Cowan are also independent directors of Meadow Valley Corporation, our majority
shareholder and under rules of the American Stock Exchange we are considered a controlled entity
of Meadow Valley, such that its independent directors are also considered independent directors of
our company. Our directors are elected for one year terms, or until an earlier resignation, death
or removal. There are no family relationships among any of our directors or officers.
Board of Directors and Board Committees
The Board of Directors held four regularly scheduled meetings during the last full fiscal year
and one special meeting. No director attended less than 75% of the aggregate of such meetings and
meetings held by committees of the Board on which he served. We do not have a formal policy
regarding attendance by members of the Board of Directors at our annual meeting of shareholders,
but strongly encourage directors to attend. All members of our Board of Directors attended the 2006
Annual Meeting of Shareholders.
The standing committees of the Board are as follows: Audit, Nominating and Governance, and
Compensation Committee. The Board has adopted a charter for its Audit Committee, which is
available on our website at www.readymixinc.com by following the link Investor Information. The
Nominating and Governance and Compensation Committees are not operating under written charters.
Shareholders may also receive a free copy of the Audit Committee charter by sending a written
request to 3430 East Flamingo Road, Suite 100, Las Vegas, Nevada 89121, Attention: Secretary, or
calling (702) 433-2090.
Members of the Companys Audit Committee, Compensation Committee and Nominating and Governance
Committee are footnoted below.
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Positions and Offices with the Company |
Charles E. Cowan (1) (2) (3)
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Director |
Charles R. Norton (1) (2) (3)
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Director |
Dan H. Stewart (1) (2) (3)
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Director |
Don A. Patterson (1) (2) (3)
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Director |
Bradley E. Larson
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Chief Executive Officer and Director |
Robert R. Morris
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President and Director |
Kenneth D. Nelson
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Vice President and Director |
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Member of the Compensation Committee |
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Member of the Audit Committee |
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Member of the Nominating and Governance Committee |
The Audit Committee
Our Audit Committee consists of Messrs. Patterson, Cowan, Stewart and Norton. Mr. Patterson is
our Audit Committee Chairman and has been determined by the Board to be a financial expert as
defined by the Securities and Exchange Commission. In the opinion of the Board and as independent
is defined under current standards of the American Stock Exchange, these directors are independent
of management and free of any relationship that would interfere with their exercise of independent
judgment as a member of this committee. The Audit Committee reviews in detail and recommends
approval by the Board of our annual and quarterly financial statements, recommends approval of the
remuneration of our auditors to the Board, reviews the scope of the audit procedures and the final
audit report prepared by our auditors and reviews our overall accounting practices, procedures and
internal controls with our auditors.
4
The Nominating and Governance Committee
The Nominating and Governance Committee is currently comprised of Messrs. Cowan, Norton,
Patterson and Stewart, our independent directors. Mr. Cowan is our Nominating and Governance
Committee Chairman. The committee met four times during fiscal 2006. The purpose of the Nominating
and Governance Committee is as follows:
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identify, consider and nominate candidates for membership on the Board, including any nominees properly received by the Secretary of the Corporation from any shareholder; |
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develop, recommend and evaluate corporate governance guidelines and a code of business conduct and ethics applicable to the Company; |
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make recommendations regarding the structure and composition of the Board and Board committees; and |
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advise the Board on corporate governance matters. |
All members of our Nominating and Governance Committee are independent, as defined under
applicable law and the listing standards for companies traded on the American Stock Exchange.
Nominations of candidates for election as Directors may be made by the Board of Directors upon
recommendation by the Nominating and Governance Committee, or by shareholders. Shareholders may
nominate candidates for election as directors if they follow the procedures and conform to the
deadlines specified in our By-laws. For more information, see the disclosure in this Proxy
Statement under the caption Proposals of Shareholders for Presentation at the 2008 Annual Meeting
of Shareholders.
In evaluating the suitability of potential nominees for membership on the Board, the
Nominating and Governance Committee will consider the Boards current composition, including
expertise, diversity, and balance of inside, outside and independent directors, and consider the
general qualifications of the potential nominees, such as:
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Unquestionable integrity and honesty; |
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The ability to exercise sound, mature and independent business judgment in the best interests of the shareholders as a whole; |
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Recognized leadership in business or professional activity; |
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A background and experience that will complement the talents of the other Board members; |
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Willingness and capability to take the time to actively participate in Board and Committee meetings and related activities; |
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Ability to work professionally and effectively with other Board members and the Companys management; |
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An age to enable the Director to remain on the Board long enough to make an effective contribution; and |
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Lack of realistic possibilities of conflict of interest or legal prohibition. |
The Committee will also see that all necessary and appropriate inquiries are made into the
backgrounds of such candidates. Other than the foregoing, there are no stated minimum criteria for
director nominees, although the Nominating and Governance Committee may also consider such other
factors as it may deem to be in the best interests of the Company and its shareholders.
The Compensation Committee on Executive Compensation
Our Compensation Committee consists of Messrs. Patterson, Cowan, Stewart and Norton. Mr.
Norton is our Compensation Committee Chairman. The purpose of the Compensation Committee is to
determine the compensation to be paid to the Companys executive officers, and to approve any
incentive compensation plans. The Compensation Committee will recommend approval to the Board of
the compensation of our executive officers, the annual compensation budget for all other employees,
bonuses, grants of stock options and any changes to our benefit plans. The committee met four times
during fiscal 2006.
5
Shareholder Communications with Directors
Shareholders may communicate with any and all members of the Companys Board of Directors by
transmitting correspondence by mail or facsimile addressed to one or more directors by name or, for
a communication to the entire board, to the Chairman of the Board at the following address and fax
number: Ready Mix, Inc., 3430 East Flamingo Road, Suite 100, Las Vegas, Nevada 89121; facsimile:
(702) 433-0189.
Communications from our shareholders to one or more directors will be collected and organized
by our Corporate Secretary under procedures adopted by our independent directors. The Corporate
Secretary will forward all communications to the Chairman of the Board or to the identified
director(s) as soon as practicable, although communications that are abusive, in bad taste or that
present safety or security concerns may be handled differently. If multiple communications are
received on a similar topic, the Corporate Secretary may, in his direction, forward only
representative correspondence.
The Chairman of the Board will determine whether any communication addressed to the entire
Board of Directors should be properly addressed by the entire Board of Directors or a committee
thereof. If a communication is sent to the Board of Directors or a committee, the Chairman of the
Board or the chairman of that committee, as the case may be, will determine whether a response to
the communication is warranted. If a response to the communication is warranted, the content and
method of the response may be coordinated with our counsel.
Other Corporate Governance Policies
We have adopted a Code of Ethics that applies to all of our directors and senior management.
Amendments to and waivers, if any, from our Code of Ethics will be disclosed on our website. Our
Code of Ethics is available on our website at www.readymixinc.com by following the links Investor
Information Code of Ethics. Shareholders may also receive a free copy of these documents by
sending a written request to 3430 East Flamingo Road, Suite 100, Las Vegas, Nevada 89121,
Attention: Secretary, or calling (702) 433-2090.
DIRECTOR COMPENSATION
We use a combination of cash and long-term equity incentive awards to compensate members of
our board of directors. The following table provides information regarding compensation earned in
2006 by each individual who served as a member of our board of directors in 2006.
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Change in |
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Pension Value and |
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Fees Earned |
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Nonqualified Deferred |
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or Paid in |
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All Other |
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Total |
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Charles E. Cowan |
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13,000 |
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33,300 |
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$ |
46,300 |
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Charles R. Norton |
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$ |
13,000 |
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33,300 |
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$ |
46,300 |
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Don A. Patterson |
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$ |
13,000 |
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33,300 |
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$ |
46,300 |
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Dan H. Stewart |
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$ |
13,000 |
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33,300 |
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$ |
46,300 |
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$ |
52,000 |
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133,200 |
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$ |
185,200 |
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Directors not employed by the Company receive $7,000 per year for being a member of the
Board of Directors and $2,000 for each committee upon which they serve and are reimbursed for
out-of-pocket expenses. The above amounts do not include out-of-pocket expenses. Directors who are
employed by the Company are not compensated for their service on the Board. |
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Directors are entitled to participate in our equity incentive plan and each has been issued
10,000 stock options, on November 30, 2006, for their service on the Board during 2006. This column
represents the aggregate dollar amount of the awards granted in 2006. Therefore, the values shown
here are not representative of the amounts that may eventually be realized by a director. Pursuant
to the rules of the Securities and Exchange Commission, we have provided a grant date fair value
for Stock Awards in accordance with the provisions of Statement of Financial Accounting Standards
No. 123(R), Share-based Payments. At December 31, 2006, there were no restricted stock units,
deferred stock units or dividend equivalent units accumulated in any director accounts. |
6
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Overview of Executive Compensation Program
The Compensation Committee of the Companys Board is responsible for assisting the Board in
defining and overseeing the Companys general compensation practices. During fiscal 2006, the
Compensation Committee engaged FMI Management Consulting to assist it in evaluating executive
compensation matters and to revise the executive compensation package for the fiscal year ending
2007.
The persons who served as our Chief Executive Officer and Chief Financial Officer during 2006,
as well as other individuals named in our Summary Compensation Table for 2006, are referred to as
the named executive officers through this proxy statement.
Executive Summary
As discussed in more detail below, the following actions concerning the compensation of the
Companys named executive officers were taken for fiscal 2006:
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Robert A. De Ruiter, Ready Mix, Inc.s vice-president, received a salary increase for fiscal 2006. |
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Robert R. Morris, Robert A. De Ruiter and Clint Tryon, received bonuses pursuant to Ready Mix, Inc.s Annual Performance Bonus Plan (the Bonus Plan). |
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Bradley E. Larson, Robert R. Morris and Clint Tryon, each received 10,000 stock options issued under the Companys equity incentive plan (the Equity Incentive Plan). |
Oversight of Executive Compensation Program and Role of Executive Officers in Compensation
Decisions
While the Compensation Committee approves all aspects of our executive compensation program,
it reports to the full Board of Directors on a regular basis and seeks approval for certain
actions. The Committee coordinates with its consultants and management to obtain marketplace and
internal data analyses, project reports and program recommendations to assist the Committee in
making executive compensation decisions. Our Chief Executive Officer and, in some cases, other
executive officers make recommendations to the Committee with respect to various elements of
executive compensation.
Compensation Objectives and Philosophy
The Companys primary objectives when determining compensation for its named executive officers are to:
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set levels of annual salary, bonus and equity compensation that are competitive and that will attract and retain superior executives, taking into account the difficult industry conditions and competitive environment that the Company faces, |
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incorporate a performance-based component to executive compensation by linking the bonus to the Companys financial and operational performance, and |
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provide long-term equity-based compensation, thereby further aligning the interests of the Companys executives with those of its other shareholders. |
These objectives are designed to reward each executives (1) past individual performance and
contribution to the Companys corporate performance, (2) level and scope of responsibility and
experience, and (3) ability to influence the Companys future growth and profitability.
Components of 2006 Executive Compensation
Our executive compensation has three main parts: a salary paid in cash, an annual cash incentive
bonus plan, in which payment is contingent on the financial performance of the Company, and a
long-term equity incentive that the Company provides through the award of options to purchase the
Companys common stock. The salary component is intended to reward executives for their current,
day-to-day work. The cash incentive bonus is intended
7
to be a reward for the executives contribution to the financial success of the Company in a given
year. Awards of equity are intended to create longer-term incentive for the executive to remain
with the Company since the benefit is realized, if the Company is successful, over a multi-year
period similar to our shareholders.
Annual Salary
Because an executives annual salary is meant to reflect his value to the Company on a
day-to-day basis, it is a fixed, predetermined element of his compensation. When the Compensation
Committee reviews the level of an executives salary for a possible increase at the end of the term
of his employment agreement or annual basis if no employment agreement is in place, that review is
based on two main factors: his prior salary and the salary range of executives in comparable
companies at a comparable level of responsibility. The Compensation Committee members take an
executives prior salary into account because they believe that it reflects the assessment of prior
boards and/or compensation committees of the executives value to the Company. Compensation levels
of comparable companies are obtained from industry trade publications, management consulting firms
such as FMI Management Consulting and other public companies similar to our size and industry. In
addition, the Compensation Committee provides their knowledge of construction industry compensation
levels gained in the course of the work each independent director performs in their daily business
activity.
Cash Incentive Bonus Plan
The level of compensation that an executive can earn under the Companys cash incentive bonus
plan is based on the Companys attainment of financial success when compared to a predetermined
objective, which the Board of Directors has approved in advance. Financial performance that exceeds
expectations can enable the Companys management team including its Chief Financial Officer,
President, Vice-President and other management personnel to earn a bonus. The amount of the cash
incentive bonus in a given year, if any, is derived from a formula based principally on the
Companys income before tax, by the managers primary geographic area of responsibility. The
amount of income before tax for each year must be approved by the Board of Directors, which has a
majority of directors who are not employees of the Company and are independent. The cash incentive
bonus plan also has a discretionary element. In exercising this discretion, members of the
Compensation Committee use their personal judgment of appropriate amounts after taking into account
information about the executives work during the year, his past compensation, his current cash
incentive bonus, his perceived contribution to the Company generally, his level of responsibility,
and any notable individual achievements or failings in the year in question.
The Compensation Committee authorizes the payment of incentive bonuses and, if applicable,
makes any decisions on discretionary amounts, when the results for the year in question are known,
typically in late February of the following year. Bonuses for 2006 were approved in March 2007.
The Summary Compensation Table for 2006, below, shows the total 2006 cash incentive bonuses of each
named executive officer.
Equity Incentive Plan
The award of an option to buy the Companys common stock is a long-term element of
compensation since on the date of the award, the exercise price, or purchase price, of the shares
subject to the option is the same as the price of those shares on the open market. The recipient of
a stock option will only realize its value if the market price of the shares increases over the
life of the option, the award gives the executive an incentive to remain with the Company and
aligns his interests with those of our shareholders.
The Company calculates the value of a stock option award on the date of its grant under
accounting requirements that involve the use of a complex formula consisting of estimates about the
Company, its stock price and the likelihood of the option holder forfeiting the stock option.
Beginning in fiscal year 2006, recording stock option awards as an expense was required of all
companies under Financial Accounting Standard No. 123 (revised 2004), or FAS 123R. The dollar
amount shown in the Summary Compensation Table for 2006, below, for stock option awards is the
value of the options computed under SFAS 123R.
In determining the size of a stock option award, the Compensation Committee takes into account
both the value of the award to the recipient and the corresponding accounting cost to the Company.
8
Other Compensation
The only other forms of compensation of the executive officers are the personal use of company
vehicles, term life insurance and other benefits made available to all salaried employees and the
perquisites shown in the Summary Compensation Table for 2006, below, in the column labeled All
Other Compensation. A detailed description of the perquisites is shown in footnote 4 to the table.
In the case of Mr. De Ruiter, the car allowances and the payment of expenses of commuting to work
reflect the fact that the use of personally owned vehicle is used for business purposes, such as
visiting construction sites, attending meetings with customers and providing transportation to
out-of-town business colleagues. In the case of Messrs. Morris and Tryon any amount was determined
for personal use of Company vehicles. The payment of Mr. Morris, De Ruiter and Tryons term life
insurance premiums is a benefit that has been provided to them by the Company for many years and
was established when the company determined to carry a key officer life policy on each of the
executives in the same amounts as the policy provided each officer.
Overall Compensation Levels
As with salary, the Company attempts to provide its executives with a total compensation
package that is comparable to their peers in the industry and that the members of the Compensation
Committee believe in their personal judgment based on their business experience is fair and
appropriate for the executives level of responsibility and contribution to the Company. The
Compensation Committee, which consists of only our independent members of the Board of Directors,
makes the final determination of the compensation of the named executive officers. However, the
Committee discusses their compensation recommendations for each executive officer with the Chief
Executive Officer in advance of making a decision.
Employment Agreements
Messrs. Morris and De Ruiter currently are employed pursuant to employment agreements. In
February 2005, the Company entered into three-year employment agreements with Messrs. Morris and De
Ruiter providing for an annual base salary and including non-competition provisions for a period of
two years following termination of the agreements. Both individuals are eligible to receive
bonuses based upon performance as determined by our Compensation Committee and approved by our
Board of Directors. In the event we terminate either individual without cause (as defined in the
agreements) or we are the subject of a change of control, all options held by the individual will
vest and we will be required to pay the remaining term of compensation to Mr. Morris and one year
of compensation to Mr. De Ruiter. Mr. Larsons employment agreement is with Meadow Valley
Corporation. Mr. Tryon does not have an employment agreement with the Company.
Compensation of the Chief Executive Officer
Employment Agreement and Compensation Elements
Mr. Larsons 2006 compensation was principally established by the terms of his employment
agreement with Meadow Valley Corporation (Meadow Valley) that was in effect during 2006, which
was approved by the Compensation Committee of the Board of Directors of Meadow Valley. Mr.
Larsons salary and bonus is paid by Meadow Valley Corporation and his services rendered to Ready
Mix are reimbursed to Meadow Valley through an administrative service agreement. For a more
complete description of the management service agreement, please see the section of this proxy
statement entitled Certain Relationships and Related Transactions.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion
and Analysis with management. Based on our review and discussions with management, we have
recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy
Statement.
Submitted by the Compensation Committee of the Board of Directors:
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Charles R. Norton
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Don A. Patterson |
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Dan H. Stewart
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Charles E. Cowan |
9
Notwithstanding anything to the contrary set forth in any of our previous filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that
incorporates future filings, including this Proxy Statement, in whole or in part, the foregoing
Compensation Committee Report shall not be incorporated by reference into any such filings.
The Securities and Exchange Commission recently adopted enhanced executive compensation
disclosure requirements for public companies. As a result, the following disclosure regarding the
compensation of our executive officers and directors will be somewhat different in content and
format from previous years.
Summary Compensation Table for 2006
The following table provides information regarding total compensation earned in 2006 by the
named executive officers, which include our Chief Executive Officer, Chief Financial Officer,
President and Vice-President, who are the only executive officers whose total compensation for 2006
exceeded $100,000. The amounts include any compensation that was deferred by the executive through
contributions to his defined contribution plan account under Section 401(k) of the Internal Revenue
Code. All amounts are rounded to the nearest dollar.
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Change in |
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Pension Value |
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and |
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Non-Equity |
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Nonqualified |
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Name and |
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Incentive Plan |
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Deferred |
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All Other |
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Principal |
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Salary |
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Bonus |
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Stock Awards |
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Option Awards |
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Compensation |
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Compensation |
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Compensation |
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Total |
Position |
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Year |
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($) |
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($) |
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($) |
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($) (2) |
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($) (3) |
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Earnings ($) |
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($) (4) |
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($) |
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Bradley E. Larson (1) |
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2006 |
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33,300 |
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33,300 |
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Chief Executive Officer
and Director |
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Clint Tryon (5) |
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2006 |
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140,000 |
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33,300 |
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216,664 |
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7,810 |
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397,774 |
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Chief Financial Officer,
Secretary and Treasurer |
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Robert R. Morris |
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2006 |
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150,000 |
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33,300 |
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126,000 |
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9,055 |
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318,355 |
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President and Director |
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Robert A. De Ruiter |
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2006 |
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126,000 |
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136,080 |
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7,448 |
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269,528 |
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Vice-President |
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(1) |
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Mr. Larson was compensated by Meadow Valley, as his services were provided to us through
our Administrative Services Agreement with Meadow Valley. See the disclosure under the caption
Certain Relationships and Related Transactions. Mr. Larson is the Chief Executive Officer of
Meadow Valley, our majority shareholder. During fiscal 2006, Mr. Larson spent approximately 25% of
his time working for us. We did not pay Meadow Valley directly for his services. However, under
the Administrative Services Agreement we pay $22,000 per month to Meadow Valley for the services of
their executives to the Company, as well as for other administrative services provided by Meadow
Valley to us. Messrs. Tryon, Morris and De Ruiter had the principal responsibility for our
day-to-day operations. |
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(2) |
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This column represents the aggregate dollar amount of the awards granted in 2006. Therefore,
the values shown here are not representative of the amounts that may eventually be realized by an
executive. Pursuant to the rules of the Securities and Exchange Commission, we have provided a
grant date fair value for option awards in accordance with the provisions of Statement of Financial
Accounting Standards No. 123(R), Share-based Payments. For option awards, the fair value is
estimated as of the date of grant using the Black-Scholes option pricing model, which requires the
use of certain assumptions, including the risk-free interest rate, dividend yield, volatility and
expected term. The risk-free interest rate is based on the yield at the date of grant of a U.S.
Treasury security with a maturity period equal to or approximating the options expected term. The
dividend yield assumption is based on our historical dividend payouts, which is zero. The
volatility assumption is based on the historical volatility of our common stock over a period equal
to the options expected term or trading stocks trading history which ever is shorter. The
expected term of options granted is based on expectations about future exercises and represents the
period of time that options granted are expected to be outstanding. |
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(3) |
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The non-equity incentive plan payments were made on March 9, 2007. See discussion of
non-equity incentive plans under heading Compensation Discussion and Analysis above. None of the
named executive officers elected to defer their 2006 non-equity incentive plan payment. |
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(4) |
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The amounts shown include company-paid life insurance premiums and defined contribution plan
payments for the fiscal year ended 2006. The following table identifies the separate amounts
attributable to each category of perquisites and other compensation: |
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Company Paid |
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Defined |
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Life |
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Contribution |
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Name |
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Insurance |
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Plan |
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Total |
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Clint Tryon |
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$ |
310 |
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$ |
7,500 |
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$ |
7,810 |
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Robert R. Morris |
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$ |
1,555 |
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$ |
7,500 |
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$ |
9,055 |
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Robert A. De Ruiter |
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$ |
675 |
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$ |
6,773 |
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$ |
7,448 |
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10
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(5) |
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Included in Mr. Tryons total non-equity incentive plan compensation was $88,200 of
compensation associated with his services rendered to Meadow Valley during the fiscal year 2006.
Mr. Tryon also received from Meadow Valley an option to purchase 10,000 shares of common stock with
an aggregate dollar amount value of $48,100. The value shown here does not represent the amount
that may eventually be realized by Mr. Tryon. |
Grants of Plan-Based Awards in 2006
The following table provides information regarding cash incentive awards and options granted
under our equity incentive plan to the named executive officers in 2006.
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Estimated Future Payouts Under |
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All Other Option |
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Non-Equity Incentive Plan |
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Estimated Future Payouts Under |
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All Other Stock |
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Awards: Number of |
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Awards |
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Equity Incentive Plan Awards |
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Awards: Number of |
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Securities |
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Exercise or Base |
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Grant |
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Threshold |
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Target |
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Maximum |
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Threshold |
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Target |
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Maximum |
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Shares of Stock or |
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Underlying Options |
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Price of Option |
Name |
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Date |
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($) |
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($)(1) |
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($)(2) |
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($) |
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($) |
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($) |
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Units (#) |
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(#) |
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Awards ($/Sh) |
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Bradley E. Larson |
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11/30/2006 |
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$ |
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$ |
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N/A |
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10,000 |
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$ |
10.35 |
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Clint Tryon |
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11/30/2006 |
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$ |
21,000 |
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$ |
216,664 |
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N/A |
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10,000 |
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$ |
10.35 |
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Robert R. Morris |
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11/30/2006 |
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$ |
22,500 |
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$ |
126,000 |
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N/A |
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10,000 |
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$ |
10.35 |
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Robert A. De Ruiter |
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$ |
18,900 |
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$ |
136,080 |
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N/A |
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$ |
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(1) |
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The non-equity incentive plan payments were made on March 9, 2007 and related to the
achievement of specified financial performance objectives, as discussed under the heading
Compensation Discussion and Analysis above. |
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(2) |
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No individual maximum is applicable since the payments were made under Non-Equity Incentive
Plan, which has no individual cap. |
Outstanding Equity Awards at Fiscal Year-End(1)
The following table provides information regarding all outstanding equity awards held by the
named executive officers as of December 31, 2006. The Company did not issue any stock awards
during fiscal 2006.
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Equity Incentive |
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Plan Awards: |
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Number of |
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Number of |
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Number of |
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Securities |
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Securities |
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Securities |
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Underlying |
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Underlying |
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Underlying |
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Unexercised |
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Unexercised |
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Unexercised |
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Option |
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Option |
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Options (#) |
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Options (#) |
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Unearned |
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Exercise |
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Expiration |
Name |
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Exercisable |
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Unexercisable |
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Options (#) |
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Price ($)(2) |
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Date |
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Bradley E. Larson |
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4,500 |
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2,250 |
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$ |
11.00 |
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1/28/2010 |
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Chief Executive Officer and |
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10,000 |
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$ |
10.35 |
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11/30/2011 |
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Director |
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Clint Tryon |
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4,500 |
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2,250 |
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$ |
11.00 |
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1/28/2010 |
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Chief Financial Officer, |
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10,000 |
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$ |
10.35 |
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11/30/2011 |
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Secretary and Treasurer |
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Robert R. Morris |
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45,000 |
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22,500 |
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$ |
11.00 |
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1/28/2010 |
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President and Director |
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10,000 |
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$ |
10.35 |
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11/30/2011 |
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Robert A. De Ruiter |
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33,750 |
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16,875 |
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$ |
11.00 |
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1/28/2010 |
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Vice-President |
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(1) |
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Outstanding options vest in one-third increments on each anniversary date of grant. |
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(2) |
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Pursuant to the 2005 Equity Incentive Plan, the exercise price for all outstanding options is
based on the grant date fair market value, which is the market closing price of our Common Stock on
the AMEX on the date of grant. |
11
Option Exercises and Stock Vested in 2006
The following table provides information regarding each exercise of stock options, if any, by
the named executive officers in 2006.
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Option Awards |
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Stock Awards |
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Number of |
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Number of |
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Shares Acquired |
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Value Realized |
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Shares Acquired |
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Value Realized |
Name |
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on Exercise (#) |
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on Exercise ($) |
|
on Exercise (#) |
|
on Exercise ($) |
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Bradley E. Larson |
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$ |
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$ |
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Clint Tryon |
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Robert R. Morris |
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Robert A. De Ruiter |
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Retirement Plans
Pension Benefits
During the fiscal year 2006 we did not have a pension benefit plan. We do not intend on
implementing a pension plan in the near future.
Nonqualified Deferred Compensation
During the fiscal year 2006 we did not have a nonqualified deferred compensation plan. We do
not intend on implementing a nonqualified deferred compensation plan in the near future.
Equity Incentive Plan
In January 2005, we adopted an equity incentive plan, which we refer to as our Plan, which
provides for the grant of options intended to qualify as incentive stock options and
non-statutory stock options within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, together with the grant of bonus stock and stock appreciation rights at the
discretion of our Board of Directors. Incentive stock options are issuable only to our eligible
officers, directors and key employees. Non-statutory stock options are issuable only to our
non-employee directors and consultants.
The Plan is administered by our Compensation Committee. Currently, we have 675,000 shares of
common stock reserved for issuance under the Plan. Under the Plan, the Board of Directors
determines which individuals shall receive options, grants or stock appreciation rights, the time
period during which the rights may be exercised, the number of shares of common stock that may be
purchased under the rights and the option price.
With respect to stock options, 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 our stock is eligible to receive
incentive stock options under the 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
non-statutory options is established by the Board and may 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
us from the date of grant to the date of exercise, unless extended under the Plan grant. Options
under the Plan have no expiration date and the exercise date of an option cannot be longer than 10
years from the date of grant, but can be shorter when established by the plan administrator. Any
options that expire unexercised or that terminate upon an optionees ceasing to be employed by us
become available once again for issuance. Shares issued upon exercise of an option rank equally
with other shares then outstanding.
12
We have reserved 675,000 shares of common stock for issuance to officers, directors and
employees under our equity incentive plan described above. Options will be issued to employees and
executive officers based on the recommendation of the Compensation Committee of the Board of
Directors according to the following:
|
|
|
employees holding positions of responsibility with us whose performance can have a significant effect on our success; and |
|
|
|
|
non-employee directors. |
Currently, we have granted under the Plan an aggregate of 348,125 stock options to officers,
directors and employees at an exercise price from $10.35 to $12.50. From the grant date 33% of the
options are exercisable after one year of continuous service to us, 66% after two years of
continuous service and 100% after three years of continuous service.
EQUITY COMPENSATION PLAN INFORMAITON
The following table provides information as of December 31, 2006 regarding compensation plans
(including individual compensation arrangements) under which equity securities of the Company are
authorized for issuance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities |
|
|
|
|
|
Number of Securities |
|
|
to be Issued upon |
|
Weighted-Average |
|
Remaining Available for |
|
|
Exercise of |
|
Exercise Price of |
|
Future Issuance Under |
Plan Category |
|
Outstanding Options |
|
Outstanding Options |
|
Equity Compensation Plans |
Equity Compensation
Plans Approved by
Security Holders (1) |
|
|
466,875 |
|
|
$ |
11.47 |
|
|
|
324,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation
Plans Not Approved by
Security Holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
466,875 |
|
|
|
|
|
|
|
324,375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
- Includes an individual compensation agreement for 116,250 warrants issued to our
underwriters as a portion of their compensation in connection with our initial public
offering. |
|
(2) |
|
- Includes 350,625 stock options issued to employees, directors and
consultants from our 2005 equity incentive plan. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to our initial public offering in 2005, we were a wholly-owned subsidiary of Meadow
Valley and were provided certain administrative services by Meadow Valley, including some
bookkeeping services, limited review of our operations by Meadow Valleys Chief Executive Officer
and Principal Accounting Officer, review and preparation of our financial reporting by Meadow
Valleys Principal Accounting Officer and Controller and assistance from Meadow Valleys human
resources personnel, which included administering certain insurance coverage and other benefits for
us. In order to quantify the value of these services and provide for a fair payment to Meadow
Valley for such services, in January 2005 we entered into a three-year Administrative Services
Agreement with Meadow Valley. Under the terms of the agreement, we pay Meadow Valley $22,000 per
month for all such administrative services including the time of our Chief Executive Officer who
performs similar services for Meadow Valley. For the years ended December 31, 2006 and 2005, the
total fees associated with the above services totaled $264,000 each year.
Notwithstanding the agreement, each company has its own separate field facilities, operating
management and employees. We believe that the administrative service to be provided by Meadow
Valley represents less than 33% of the total administrative services required to operate our
business.
13
During the years ended December 31, 2006 and 2005, the Company provided construction materials
to Meadow Valley in the amounts of $436,865 and $683,633, respectively. During the years ended
December 31, 2006 and 2005, the Company received construction services from Meadow Valley in the
amounts of $1,012,085 and $590,376, respectively. The balance due to Meadow Valley at December 31,
2006 and 2005 was $73,395 and $84,810, respectively. The advances are considered short-term in
nature. Prior to August 2005, the Company agreed to pay interest at Chase Manhattan Banks prime,
plus 1.25%, on such balances. For the years ended December 31, 2006 and 2005, the Company paid
interest in the amount of $0 and $77,561, respectively. The Company repays each current month-end
balance in the following month for expenses incurred by the affiliate on behalf of the Company. As
a result, the Company has not been charged interest.
During the year ended December 31, 2006, the Company acquired equipment from Meadow Valley in
the amount of $224,058. During the year ended December 31, 2005, the Company acquired equipment
from Meadow Valley in the amount of $207,341 and assumed a debt obligation in the amount of
$17,541.
For the years ended December 31, 2006 and 2005, the Company, pursuant to a tax sharing
agreement, utilized a net operating loss carry-forward incurred by the Meadow Valley in the amounts
of approximately $0 and $2,416,000, respectively. The intercompany income tax allocation payable
was paid in full during 2005, bore no interest and was considered short term. As a result of the
Companys initial public offering the Company no longer qualifies to be consolidated with Meadow
Valley for income tax purposes.
During the year ended December 31, 2006, the Company leased office space to Meadow Valley in
the amount of $10,326. The lease agreement is for approximately 7,500 square feet of office space
for a monthly rent of $10,326, plus a proportionate charge for common area maintenance and the
lease term is month to month.
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
The Compensation Committee currently consists of the following four members of the Board of
Directors: Messrs. Cowan, Norton, Patterson and Stewart. No member of this Committee was at any
time during the Companys 2006 fiscal year, or at any other time, an officer or employee of the
Company.
No executive officer of the Company has served on the compensation committee of any other
entity that has, or has had, one or more executive officers serving as a member of the Companys
Board of Directors.
Three of our independent Directors, Messrs. Cowan, Norton and Patterson, are also members of
the Board of Directors of Meadow Valley.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table on the following page sets forth information concerning the holdings of Common Stock
by each person who, as of April 4, 2007, holds of record or is known by the Company to hold
beneficially or of record, more than 5% of the Companys Common Stock, by each director, named
executive officer, and by all directors and executive officers as a group.
14
|
|
|
|
|
|
|
|
|
|
|
Amount and |
|
|
|
|
Nature of |
|
|
|
|
Beneficial |
|
Percent of |
Name and Address of Beneficial Owner |
|
Ownership (1) |
|
Class (1) |
Bradley E. Larson (2)(3) |
|
|
2,029,500 |
|
|
|
51.8 |
% |
|
|
|
|
|
|
|
|
|
Meadow Valley Corporation (3) |
|
|
2,025,000 |
|
|
|
51.7 |
% |
|
|
|
|
|
|
|
|
|
Bulldog Investors (4) |
|
|
458,270 |
|
|
|
11.7 |
% |
|
|
|
|
|
|
|
|
|
Robert R. Morris (5) |
|
|
45,000 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Robert A. De Ruiter (6) |
|
|
34,250 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Kenneth D. Nelson (2) |
|
|
5,500 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Charles E. Cowan (2) |
|
|
4,500 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Charles R. Norton (2) |
|
|
4,500 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Don A. Patterson (2) |
|
|
2,250 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Dan H. Stewart (2) |
|
|
4,500 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
Clint Tryon (2) |
|
|
4,500 |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
All executive officers and directors as a group (nine persons) |
|
|
2,134,500 |
|
|
|
54.5 |
% |
|
|
|
* |
|
Less than 1%. |
|
(1) |
|
Beneficial ownership includes direct and indirect ownership of shares of our Common
Stock, including rights to acquire beneficial ownership of shares upon the exercise of stock
options exercisable as of April 4, 2007 and that would become exercisable within 60 days of
such date. To our knowledge and unless otherwise indicated, each shareholder listed below has
sole voting and investment power over the shares listed as beneficially owned by such
shareholder, subject to community property laws where applicable. Percentage of ownership is
based on 3,807,500 shares of Common Stock outstanding as of April 4, 2007 and options
exercisable within 60 days. Unless otherwise indicated, all shareholders listed below have an
address in care of our principal executive offices which are located at 3430 East Flamingo
Road, Suite 100, Las Vegas, Nevada 89121. |
|
(2) |
|
Includes vested portion of stock options to purchase 16,750 shares of Common Stock. |
|
(3) |
|
Mr. Larson is Chief Executive Officer and majority shareholder of Meadow Valley, which
owns 2,025,000 shares of our Common Stock, and may be deemed a beneficial owner of these
shares under the rules of the SEC. The Board of Directors of Meadow Valley, by majority vote,
votes these shares through Mr. Larson. |
|
(4) |
|
Based solely on a Schedule 13D filed with the SEC on December 27, 2006. According to
the Schedule 13D, the address of Bulldog Investors is 60 Heritage Drive, Pleasantville, New
York 10570. |
|
(5) |
|
Includes vested portion of stock options to purchase 77,500 shares of Common Stock. |
|
(6) |
|
Includes vested portion of stock options to purchase 50,625 shares of Common Stock. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive
officers and persons who beneficially own more than 10% of our Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of change in their
ownership of our Common Stock. Securities and Exchange Commission regulations require our
directors, executive officers and greater than 10% shareholders to furnish us with copies of these
reports. Based solely upon a review of such reports and related information furnished to us, we
believe that, during the 2006 fiscal year, each person who served as a director or executive
officer of our company or held more than 10% of our Common Stock complied with the Section 16(a)
filing requirements.
15
Executive Officers and Directors
Information concerning our directors and executive officers is set forth below:
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer or |
|
|
|
|
|
|
Director |
Name |
|
Age |
|
Position |
|
Since |
Bradley E. Larson |
|
52 |
|
Chief Executive Officer and Director |
|
1996 |
Robert R. Morris |
|
62 |
|
President and Director |
|
1996 |
Robert A. De Ruiter |
|
47 |
|
Vice President |
|
2005 |
Clint Tryon |
|
37 |
|
Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer |
|
2002 |
Kenneth D. Nelson |
|
49 |
|
Vice President and Director |
|
1996 |
Don A. Patterson |
|
53 |
|
Director |
|
2005 |
Charles R. Norton |
|
65 |
|
Director |
|
2005 |
Charles E. Cowan |
|
60 |
|
Director |
|
2005 |
Dan H. Stewart |
|
54 |
|
Director |
|
2005 |
Business Experience of Each Executive Officer and Director
The following is a summary of the business experience of each executive officer and director,
or nominee for director, of the Company for at least the last five years:
Bradley E. Larson has been the Chief Executive Officer of Meadow Valley Corporation, our
majority shareholder, since 1995. He has been an executive officer and director of our company
since inception in 1996. Mr. Larson was employed by Tanner Companies, a contracting and materials
company located in Phoenix, Arizona, from 1976 until 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 Tanners Construction Division from 1989 until 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 The Arizona Rock
Products Association and past Director of the Arizona Heavy Highway Chapter of the Associated
General Contractors.
Robert R. Morris has been the President of our company since he initiated our business for us
as a start-up in 1996. In 2005 he was appointed as a director. From 1985 to 1996 he was the Sales
Manager for Bonanza Materials, a Henderson, Nevada, ready-mix concrete producer. From 1983 to 1985
he was Vice President of Sales for Basic Ready Mix, a ready-mix concrete producer also located in
Henderson, Nevada.
Robert A. De Ruiter has been the General Manager of our metropolitan Phoenix, Arizona
ready-mix concrete business since we organized our Phoenix operations in 2000. In January 2005, Mr.
De Ruiter was named our Vice President. From 1998 to 2000, he was the Regional Manager for Mineral
Resources Technologies, Phoenix, Arizona, where he was responsible for operation, sales and
marketing of mineral resources fly ash products in Arizona, New Mexico, Texas and California. From
1995 to 1998, Mr. De Ruiter was a Technical Sales Representative for Grace Construction Products,
Las Vegas, Nevada, and he sold concrete admixtures to concrete producers, contractors, architects
and engineers. From 1990 to 1995, he was a sales representative for Sunward Materials, Phoenix,
Arizona, where he sold concrete and aggregate to contractors, architects and engineers.
Clint Tryon has been the Secretary and Treasurer since September 2002 and was named our Chief
Financial Officer in January 2005. He joined Meadow Valley in May 2002 and was named its
Secretary, Treasurer and Principal Accounting Officer in September 2002. Mr. Tryon received his
Bachelor of Science degree with a major in Finance from the University of Nevada Las Vegas in 1993.
He then completed his post-baccalaureate certificate in accountancy from Arizona State University
West in 1997 and received his Certified Public Accountants certificate from the State of Arizona
in 1997. From 1996 to 1999, he was a supervisor at Toback CPAs/ McGladrey & Pullen. From 1999 to
2002, he held a regional financial reporting role for International FiberCom.
16
Kenneth D. Nelson has been an executive officer and director of our company since 1996 and has
been involved in the financial reporting and operations management areas of the construction
industry since 1982. He joined Meadow Valley in April 1989, became its Vice President of Finance in
February 1992 and its Vice President and Chief Administrative Officer in April 1996. Mr. Nelson
earned a Bachelors of Science Degree in Business Administration from Arizona State University in
1984.
Don A. Patterson has been a director since November 2005. Mr Patterson began his career in
public accounting, working for eight years at Arthur Andersen where he developed an extensive
background in accounting for the construction and construction material industry. He left to
become the managing partner of Mansperger, Patterson & McMullin CPAs where he worked for 19 years,
continuing to provide accounting service and consultation to clients in both the construction
materials and contracting industries. During that period he founded Legacy Window Coverings, LLC,
an importing and distribution business where he currently serves as CEO. He has devoted his full
time attention to Legacys operations since 2004. Mr. Patterson graduated with a degree in
accounting from Arizona State University in 1978 and received his Certified Public Accountants
certificate in 1983.
Charles R. Norton has been a director of Meadow Valley Corporation since March 1999 and a
director of our company since January 2005. Since 1963, Mr. Norton has been involved in the highway
construction industry as a construction foreman, subcontractor, general manager and vice president.
He graduated with a Bachelor of Science degree from Brigham Young University in 1968. 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 1972.
Charles E. Cowan has been a director of Meadow Valley Corporation since November 1995 and a
director of our company since January 2005. Since 1993 he has been President of Charles Cowan &
Associates, Ltd. and has an extensive background in government and heavy construction industry
consulting. From 1991 to 1993, he held chief executive positions in Arizonas Department of
Transportation and Department of Economic Security. He graduated with a Bachelor of Economics
Degree from St. Martins College in Olympia, Washington, and a Masters Degree in Public
Administration from the University of Missouri at Kansas City, Missouri.
Dan H. Stewart has been a director of our company since April 2005. Since 2004, he has been
President of Stewart Development Company, a firm specializing in master planned communities and
mixed-use developments. From 2003 to 2004, Mr. Stewart was Vice President of American Nevada
Company, a privately-held firm specializing in the design and development of master planned
communities and other commercial properties. Mr. Stewarts responsibilities include identifying,
evaluating and acquiring commercial properties and evaluating future opportunities in connection
with the Bureau of Land Management auctions. From 1994 to 2003, Mr. Stewart was President and Chief
Executive Officer of Basic Management, Inc. and a number of its subsidiaries and affiliates. Basic
Management, Inc. is a privately-held, Henderson, Nevada based firm engaged in land development,
water delivery systems, power distribution and switching systems and remediation of
environmentally-challenged properties. He earned a B.S. degree in civil engineering from Brigham
Young University, an M.S. degree in civil engineering, construction engineering and management from
Stanford University and completed the Advanced Management Development Program at Harvard University
Graduate School of Design. Mr. Stewart is a registered professional civil engineer, a licensed
general engineering contractor and a licensed real estate broker.
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Companys financial reporting process on behalf of the Board
of Directors. Management has the primary responsibility for the financial statements and the
reporting process including the systems of internal controls. In fulfilling its oversight
responsibilities, the Committee reviewed the audited financial statements in the Annual Report with
management including a discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of disclosures in the
financial statements.
The Committee reviewed with the independent auditors, who are responsible for expressing an opinion
on the conformity of those audited financial statements with generally accepted accounting
principles, their judgments as to the quality, not just the acceptability, of the Companys
accounting principles and such other matters as are
17
required to be discussed with the Committee under generally accepted auditing standards. In
addition, the Committee has discussed with the independent auditors the auditors independence from
management and the Company including the matters in the written disclosures required by the
Independence Standards Board and considered the compatibility of nonaudit services with the
auditors independence.
The Committee discussed with the Companys independent auditors the overall scope and plans
for their audit. The Committee meets with the independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the Companys internal
controls, and the overall quality of the Companys financial reporting. The Committee held four
meetings during fiscal 2006.
In reliance on the reviews and discussions referred to above, the Committee recommended to the
Board of Directors (and the Board has approved) that the audited financial statements be included
in the Annual report on Form 10-K for the year ended December 31, 2006 for filing with the
Securities and Exchange Commission. The Committee and the Board have also recommended and approved
the selection of the Companys independent auditors.
Don A. Patterson, Audit Committee Chair
Dan H. Stewart, Audit Committee Member
Charles R. Norton, Audit Committee Member
Charles E. Cowan, Audit Committee Member
Dated: March 6, 2007
INDEPENDENT REGISTERED ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Semple, Marchal & Cooper, LLP to
continue as the Companys independent registered public accounting firm for the fiscal year ending
December 31, 2007. A representative of Semple, Marchal & Cooper, LLP is expected to be present at
the Annual Meeting. He will not make a statement but will respond to appropriate questions.
Disclosure of Audit and Non-Audit Fees
The following table shows the aggregate fees paid or accrued by the Company for the audit and
other services provided by the Companys accountants for the fiscal years ended December 31, 2006
and 2005:
|
|
|
|
|
|
|
|
|
|
|
For the years ended December 31, |
|
|
2006 |
|
2005 |
Audit fees for the years ended December 31 and
fees for the review of financial statements included
in quarterly reports on Form 10-Q |
|
$ |
68,000 |
|
|
$ |
47,000 |
|
Audit related fees (1) |
|
$ |
4,322 |
|
|
$ |
131,712 |
|
Tax fees |
|
$ |
12,000 |
|
|
$ |
12,000 |
|
|
|
|
(1) |
|
Fees paid in 2006 were associated with the registration of our common stock shares
underlying the equity incentive plan. Fees paid in 2005 were associated with our initial
public offering. |
The Audit Committee has concluded that the provision of services by Semple, Marchal & Cooper,
LLP are compatible with maintaining their independence and has approved the above mentioned
services performed.
Audit Committee Approval of Audit and Non-Audit Services
The Audit Committee has a Pre-approval Policy (Policy) governing the approval of all audit
and non-audit services performed by the independent registered public accountants in order to
ensure that the performance of such services does not impair the independent registered public
accountants.
18
According to the Policy, the Audit Committee will annually review and pre-approve the services
and fees that may be provided by the independent registered public accountants during the following
year. The Policy specifically describes the services and fees related to the annual audit, other
services that are audit-related, preparation of tax returns and tax related compliance services and
all other services that have the pre-approval of the Audit Committee. The term of any general
pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically
provides for a different period.
Any service to be provided by the independent registered public accountants that has not
received general pre-approval under the Policy is required to be submitted to the Audit Committee
for approval prior to the commencement of a substantial portion of the engagement. Any proposed
service exceeding pre-approved cost levels is also required to be submitted to the Audit Committee
for specific approval.
The Audit Committee will revise the list of general pre-approved services from time to time
based on subsequent determinations. The Committee does not delegate its responsibilities to
pre-approve services performed by the independent registered public accountant to management.
Code of Ethics
Our Board of Directors has adopted a Code of Ethics that applies to our executive officers,
senior financial officers and directors of our company. We have posted the Code of Ethics on our
website.
In accordance with the Sarbanes-Oxley Act of 2002 and the listing standards of the American
Stock Exchange, we have adopted procedures to facilitate the submission, on a confidential and
anonymous basis, of complaints, reports and concerns by any person regarding (1) accounting,
internal accounting controls or auditing matters, (2) actual or potential violations of laws, rules
or regulations, and (3) other suspected wrongdoing, including in connection with our Code of
Ethics.
OTHER INFORMATION
Solicitation
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, facsimile, 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.
Shareholder Proposals for the 2008 Annual Meeting of Shareholders
If you wish to submit a proposal for possible inclusion in our 2008 proxy materials, we must
receive your notice, in accordance with the rules of the Securities and Exchange Commission, on or
before December 30, 2007. The proposal should be sent in writing to the Companys principal
executive offices, Attention: Secretary.
Director Nominations
A Director nomination must be accompanied by a Notice of Nomination and proposals of
shareholder business must be accompanied by a Notice of Business. Each such Notice must include
(i) the name and record address of the shareholder and/or beneficial owner proposing such
shareholder business or nomination, as they appear on the Companys books, (ii) the class and
number of shares of stock held of record and beneficially by such shareholder and/or such
beneficial owner, (iii) a representation that the shareholder is a holder of record of stock of the
Company entitled to vote at the meeting and intends to appear in person or by proxy at the meeting
to propose such business or nomination, and (iv) all other information that would be required to be
filed with the SEC if the person proposing such shareholder business or nomination were a
participant in a solicitation subject to Section 14 of the Exchange Act.
19
Notices of Nominations must also include all information regarding each shareholder nominee
that would be required to be set forth in a definitive proxy statement filed with the SEC pursuant
to Section 14 of the Exchange Act, and the written consent of each such shareholder nominee to
being named in a proxy statement as a nominee and to serve if elected. Notices of Business must
include a brief description of the shareholder business desired to be brought before the annual
meeting, the text of the proposal including the text of any resolutions proposed for consideration
and, in the event that such business includes a proposal to amend the By-laws, the language of the
proposed amendment, and the reasons for conducting such business at the annual meeting and any
material interest of the shareholder and/or beneficial owner in such shareholder business. The
proponent must be a record or beneficial shareholder entitled to vote at the Annual Meeting of
shareholders on the proposal and must continue to own the securities through the date on which the
meeting is held and attend the annual meeting to present the shareholder business or Director
nomination.
OTHER BUSINESS
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.
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/s/ Bradley E. Larson
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Bradley E. Larson
Chief Executive Officer |
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Phoenix, Arizona
April 27, 2007
20
PROXY
FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
READY MIX, INC.
TO BE HELD JUNE 11, 2007
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 Ready Mix, Inc. held of record by the undersigned on April
4, 2007, at the Annual Meeting of Shareholders to be held June 11, 2007, or any adjournment or
postponement thereof.
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1. |
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Election of directors: |
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FOR |
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AGAINST |
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WITHHOLD AUTHORITY |
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NOMINEES: |
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Bradley E. Larson, Robert R. Morris, Kenneth D. Nelson, Charles E. Cowan,
Charles R. Norton, Dan H. Stewart and Don A. Patterson |
INSTRUCTIONS: To withhold authority to vote for individual nominees, write their names in the
space provided:
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2. |
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Proposal to ratify the selection of Semple, Marchal & Cooper, LLP as
independent auditors for the fiscal year ending December 31, 2007: |
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FOR |
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AGAINST |
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WITHHOLD AUTHORITY |
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 AND FOR THE REMAINING PROPOSAL ABOVE.
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.
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Date
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Signature |
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Signature, If Held Jointly |
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY BY FOLDING THIS CARD IN HALF, SEAL WITH
THE MAILING ADDRESS SHOWING, ATTACH CORRECT POSTAGE AND MAIL.
PLEASE CHECK IF YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING:
READY MIX, INC.
Attention: Clint Tryon
3430 East Flamingo Road
Suite 100
Las Vegas, Nevada 89121