SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: GOLDFIELD CORP
CENTRAL INDEX KEY: 0000042316
STANDARD INDUSTRIAL CLASSIFICATION: WATER, SEWER, PIPELINE, COMM AND
POWER LINE CONSTRUCTION [1623]
IRS NUMBER: 880031580
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: PREC14A
SEC ACT:
SEC FILE NUMBER: 001-07525
FILM NUMBER: 1599671
BUSINESS ADDRESS:
STREET 1: 100 RIALTO PL STE 500
CITY: MELBOURNE
STATE: FL
ZIP: 32901
BUSINESS PHONE: 321-724-1700
MAIL ADDRESS:
STREET 1: 100 RIALTO PLACE
STREET 2: SUITE 500
CITY: MELBOURNE
STATE: FL
ZIP: 32901
FORMER COMPANY:
FORMER CONFORMED NAME: GOLDFIELD CONSOLIDATED MINES CO
DATE OF NAME CHANGE: 19670628
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: eRaider.com Inc.
CENTRAL INDEX KEY: 0001113228
STANDARD INDUSTRIAL CLASSIFICATION: [ ]
IRS NUMBER: 134067023
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0930
FILING VALUES:
FORM TYPE: PREC14A
BUSINESS ADDRESS:
STREET 1: 372 Central Park West
STREET 2: 9M
CITY: New York
STATE: NY
ZIP: 10025
BUSINESS PHONE: 646-505-0216
MAIL ADDRESS:
STREET 1: PO Box 20170
STREET 2: Park West Station
CITY: New York
STATE: NY
ZIP: 10025
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |_| Filed by a Party other than the Registrant |X|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
THE GOLDFIELD CORPORATION
(Name of Registrant as Specified In Its Charter)
eRaider.com Inc.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined)
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement number,
or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
April [ ], 2001
SOLICITATION, VOTING AND REVOCATION OF PROXIES
Shareholder Unity Slate
My name is Aaron Brown. I want your proxy for the annual shareholder meeting
to vote for a compromise slate of six directors: three directors chosen by the
existing board and three long-term shareholders who will work hard to make the
stock price go up. I will keep this proxy statement as short and clear as
possible, and refrain from any negative comments or unnecessary argument. I
believe Goldfield can thrive only if everyone works together, and a divisive
and expensive proxy fight is bad for business.
I am a long-term shareholder of Goldfield and I believe the company has
enormous value and potential. However I also believe that the board of
directors needs some long term shareholders on it: people who believe in the
company enough to invest their own money, people who will insist on sound
strategy and careful attention to costs, people who will communicate with all
shareholders and act as ambassadors to help the company gain new business. In
short, people who have no interest other than making the stock price go up.
I discussed this with other long-term shareholders and discovered the idea
had a lot of support. So I went down to Florida in December to meet with
Chairman and CEO John Sottile. Although he was polite and open in answering all
my questions about the company, he flat-out refused to consider appointing any
shareholder to the board, either one from a list I had prepared or one of his
own choosing. He also refused to consider redeeming the preferred stock,
another thing I consider important to common shareholder value. So I told him I
would nominate some director candidates and let the shareholders decide.
That touched off a lot of activity on the part of the company, some good,
some bad. On the good side, directors and managers other than John Sottile
began buying significant amounts of stock for the first time. An outsider was
invited to join the board of directors. The board formed an audit committee to
discuss the company's financial statements with the auditors outside
management's presence. I think these are very good both in themselves and as
signs of renewed energy and commitment.
On the bad side, the company has engaged in tactics to block election of
shareholders to the board that I consider unfair, divisive, possibly illegal
and dangerously expensive. I'm not going to complain about them in detail. That
would defeat my purpose. It is enough to say that through a series of rule
changes and legal tricks, the company has set up a winner-take-all situation.
This is a lose-lose situation for me, and I think for all shareholders. If
the company succeeds in shutting shareholders out of the board, I am afraid all
the good changes we have seen will disappear. Also the cost of these
shenanigans is very high. I pay my costs personally (and I have pledged not to
seek reimbursement from the company), but the company's costs are paid by all
shareholders. Moreover, I think the company would continue to languish, the
board would feel embattled, a substantial minority of shareholders would feel
disenfranchised and we would have to go through all this again next year.
If instead shareholders win, and take all the board slots, we will inherit a
divided company with the Chairman, CEO and Secretary all defeated candidates.
It is a very hard job to oversee a company in the best of times. I have no wish
to take over with a depleted treasury, an angry shareholder minority and an
unhappy chief executive. A bitter proxy fight can leave employees uncertain or
demoralized, and can affect the company's business relationships.
Therefore, I have decided not to try to win everything, but instead to
propose a compromise slate. I think this is the best chance for everyone to
pull together and spend their energy making money for the company instead of
war on each other. I pledge to avoid all negative campaigning and to minimize
expenses.
This election is going to be complex. I think the following account is
accurate, but the board has already made three major surprise rule changes. A
prudent person will allow for the possibility they have more surprises in
store. I have no surprises. All the strategies I am currently considering are
fully disclosed here. Even without surprises, the board's plan for the election
is complicated so that the outcome is hard to predict. It relies on items being
brought up in a certain order, defeating points of order raised from the floor,
a mid-meeting recess or adjournment and the Delaware Secretary of State
accepting an amended articles of incorporation during the break. Their plan
also requires the personal approval of CEO John Sottile and his sister Linda
Lonergan. Various court challenges are possible.
There were 26,854,748 shares of common stock outstanding on December 31,
2000. 21,920,394 votes were cast in last year's election (about 19.1 million
for management and 2.8 million opposed). Under cumulative voting rules with six
directors, you get to elect a director for each one-seventh of the votes you
win, that would be 3.1 million votes per director using last year's total. If
cumulative voting is revoked, whichever side gets more votes names all the
directors.
There are some changes to account for this year. First is that 499,999 shares
were issued by the company to the four top managers on March 26, 2001 (for
$110,000 versus a market price at the time of $275,000; this was the result of
exercise of options issued earlier). These are the first new common shares at
least since 1994. Second is that the total votes cast last year included in
management's totals some of the shareholders who didn't vote at all. I have
stopped the practice of counting non-votes as management votes this year.
Management refuses to disclose how many of these votes there were but a typical
figure is that 45 percent of individual shareholders vote; that would imply
about 8.5 million of management's 19.1 million total were shareholders who did
not vote.[1]
A third important factor is that expensive soliciting efforts, such as
calling all non-voting shareholders and lobbying them, can increase the voting
percentage, typically by 10 percent. I estimate this would increase the vote
total by 2.1 million. If management does this and I do not, we can assume those
votes will go almost all to management.
Finally, there is the preferred stock. The board issued 339,407 shares of
this "to certain members of the board of directors, members of their families
and to a company in which they have an interest." CEO John Sottile owns 58
percent of this personally. For some issues the preferred votes like common,
for other issues it has supervoting rights (it also gets all the dividends paid
by the company). The main issue for which the preferred is important is
Proposal 1 to overturn cumulative voting. Consent of 75 percent of the
preferred holders is required. This means that John Sottile can personally
block this proposal. Linda Lonergan, one of John Sottile's sisters, is the only
other person who can unilaterally block this proposal because she holds 27
percent.
Adding all this up means that the top four managers at Goldfield control
about 2.2 million votes. I think they can get about another 2.1 million through
expensive solicitation efforts. I further estimate that there are 11.7 million
additional shares that can be expected to vote based on last year's totals. In
an uncontested election last year, I think management got about 76 percent of
these votes (8.9 million). If they do the same this year, and all other votes
go to my Shareholder Unity Slate, management would not have enough to overturn
cumulative voting, but they would name five of the six directors.
It is impossible to predict how many votes the Shareholder Unity Slate will
get. I hope to attract some votes through this proxy statement. It's also
possible that some people have bought the stock based on eRaider's interest. I
expect to get most of these votes. Purely for the sake of computational
example, assume I can reduce management's share of the votes from 76 percent to
50 percent. Then management would have 10.1 million votes and I would get 5.9
million. Then cumulative voting would be retained, both shareholder proposals
would be defeated, the auditors would be ratified (this is the one issue we
agree on) and I would get to name two of the six directors.
The preceding analysis is based on assumptions that may be false. The actual
result may be much different. It is included only to give you a general idea of
what your vote might mean. Also, if I feel it necessary to prevent winner-take-
all voting for this year's election, I may engage in some of the expensive
solicitation efforts. I would expect that to move some of the 2.1 million votes
from management's to my column.
If you want serious, long-term shareholders on the board, I think you should
vote for the Shareholder Unity Slate. Even if you prefer the existing board,
you should consider voting with me. In the famous words of Abraham Lincoln, "a
house divided against itself cannot stand."[2] A compromise board will ensure
that every opinion is represented, and that proposals are considered from all
perspectives. There will be no disaffected minorities, and less potential for
further divisiveness. The shareholder-directors have no interests other than
making the stock price go up, all are committed, qualified, serious, hard-
working people. They pledge to keep their minds open, to try to work with
everyone and to represent the interests of all shareholders, not just the ones
who voted for them.
Also, you don't have to vote entirely for the company or the Shareholder
Unity Slate. The attached proxy allows you to make any vote on any issue,
including to vote for all of the company's board candidates, to use your full
cumulative voting rights and to specify your vote on questions I expect to be
raised from the floor. Even if you intend to vote for the existing board, you
may find it easier to make your instructions using my proxy form. What matters
is how you mark your vote, not whether you send in this proxy or the company's.
And finally, whether you vote for or against the Shareholder Unity Slate,
please make up your mind to support the winners, whoever they are. The newly-
elected board is going to have all the business challenges facing Goldfield,
plus the task of representing all shareholders.
This solicitation is made on behalf of eRaider.com Inc., Aaron Brown, Deborah
Pastor and Sam Rebotsky. All expenses are paid by Aaron Brown, and he will not
seek reimbursement from the company or anyone else. eRaider.com Inc. runs a
website, http://www.eRaider.com devoted to organizing shareholders on the
Internet. The site includes a public message board on which anyone can post
messages relating to Goldfield and this proxy contest.
I ask you to sign, date and return the enclosed proxy in the postage-paid
envelope provided. If the proxy is signed with a voting direction indicated,
the proxy will be voted according to the direction given. If no direction is
given with respect to a proposal, the proxy will be voted as follows with
respect to any such proposal (listed in the probable order of presentation and
using the same numbering as Goldfield's proxy statement for ease of
comparison):
(0.5) FOR a point of order, if it is allowed to be raised and voted upon, to
act on the election of directors before considering changes to the election
rules.
(1) AGAINST the proposal relating to the amendment to the Restated
Certificate of Incorporation to eliminate cumulative voting in the election of
directors;
(1.5) FOR a point of order, if it is allowed to be raised and voted upon, to
act on the election of directors without recessing or adjourning for the
purpose of amending the certificate of incorporation to change the election
rules.
(2) FOR the election of the nominees for directors named herein;
(3) FOR the ratification of the appointment of KPMG LLP as independent
certified public accountants for the year 2001;
(4) FOR the stockholder proposal to require prior shareholder approval of
Golden Parachutes; and
(5) FOR a proposal, expected to be made from the floor, to redeem the Series
A preferred stock.
Aaron Brown, Deborah Pastor and Sam Rebotsky intend to vote their shares of
common stock in accordance with the recommendations above.
I do not know at this time whether the election of directors will be held
under cumulative voting rules or not. Therefore, I have allowed you to mark the
proxy under each set of rules. The simplest thing, if you agree with me, is to
leave everything blank and thereby vote as I recommend. However, you can also
specify exactly which directors you wish to vote for and, if there is
cumulative voting, to assign your votes unevenly. If you do this, you must
specify your votes under both types of voting. I will not use your cumulative
votes to guess how you would vote under non-cumulative if you do not specify
that, nor will I guess your cumulative preferences from your non-cumulative
votes. If there is cumulative voting, and you do not specify an allocation, I
will use your votes at my discretion to elect as many of my candidates as
possible. The election of directors is more fully described in the proxy
materials of Goldfield.
Revocation of Proxy
You may revoke the proxy at any time prior to its exercise by duly executing
and returning a later dated proxy, or by revoking it in writing in a letter
sent to eRaider at the same address as the proxy. The proxy will be revoked if
you attend the meeting and vote in person. Finally, you can send written
revocation to:
Dwight Severs
Secretary
The Goldfield Corporation
100 Rialto Place, Suite 500
Melbourne, Florida 32901
(321) 724-1700
Item0.5.
Point of Order -- Election of directors should precede and changing of
the election rules.
I intend to raise this point from the floor, I may or may not be allowed to
do so. I think it is basic fair play that elected officials do not change the
voting rules for their own re-election. Even if you support the existing board,
you should want a fair election both for its own sake and to make sure the
losers respect the decision. Anything else is asking for continued divisiveness
and lawsuits.
Item 1.
PROPOSAL 1 -- AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO ELIMINATE CUMULATIVE VOTING
There are good pro and con arguments for cumulative voting. Basically,
cumulative voting gives more representation to minority views, possibly at the
risk of creating a divided and therefore inefficient board. I prefer cumulative
myself, because I believe that lack of diversity is a much bigger and more
common problem than too much diversity, at least for corporate boards. But read
the company's arguments here and vote your feelings, I make no recommendation
(if you don't specify, I will vote AGAINST eliminating cumulative voting). If
you do decide to vote to eliminate cumulative voting, the company has stated
they will try to apply that decision to this year's election, which I consider
unfair. You may or may not want to weigh that in your decision.
Item 1.5.
Point of Order -- The meeting should not be recessed or adjourned to
amend the certificate of incorporation.
I intend to raise this point from the floor, I may or may not be allowed to
do so. A meeting's a meeting and should be held under one set of rules. The
plan to break the meeting into two parts results in complicated proxies and
bases the outcome on legal strategy (and legal expense) rather than what
shareholders' want. Everyone knows how to have a fair election, you set the
rules, then you vote. Period. No games. The State of Wisconsin Investment Board
recently sued Peerless Computer Systems in Delaware Chancery Court contending
that adjourning an annual meeting to manipulate the vote count is illegal (the
case has recently been settled, but the terms have not yet been released except
that Wisconsin prevailed in overturning the tainted election results). The case
is not directly comparable (Peerless adjourned the annual meeting when it
became apparent the company was going to lose on a vote, and used the
adjournment to lobby employee shareholders who had not voted to vote in favor
of the company) but supports the same general principle.[3] I recommend you
vote FOR this point.
Item 2.
PROPOSAL 2 -- ELECTION OF DIRECTORS
Six directors will be elected at the annual meeting to serve for one year
terms, or until their successors are elected and qualified. There is only a
single class of directors, these six are the entire board. I have proposed
three long-term shareholders, along with three nominees of the existing board.
All three of my candidates have consented to be named in this proxy, and to
serve if elected. The other three have not consented to be named in this proxy,
and may refuse to serve if elected along with my candidates. In selecting three
candidates recommended by the existing board, I included John Sottile, because
he is CEO of the company, Dwight Severs, because he is Secretary of the
company, and Al Marino, because he is the largest shareholder (2,066,300
shares, including his father's holdings) among the candidates. In fact, these
are the largest three shareholders among the directors (counting family
shares). None of the other three candidates nominated by the existing board
holds any position in the company other than director, and they held only 1,700
shares between them until some last-minute buying on March 22, 2001. I tried to
select the three strongest candidates, the ones that make it most likely the
unity board will represent all segments of shareholder opinion and be accepted
by the largest possible number of shareholders.
Information About Nominees
Information about John Sottile, Dwight Severs and Al Marino can be found in
the company's proxy statement.
Aaron Brown runs Allied Owners Action Fund, a fund that is the largest
institutional holder of Goldfield with 290,000 shares. Aaron is also the third-
largest investor in Allied with approximately 10 percent of the shares. His
principal employment for the last twelve years has been teaching finance at
Yeshiva University. Yeshiva's address is 500 West 185th Street, New York, NY
10033. In the last two years he has also devoted time to running eRaider and
Allied Owners Action Fund. He has invested professionally in small cap
companies for 18 years and takes an active role in the companies he buys, both
lobbying management and producing analysis for other institutional investors.
Mr. Brown is 44 years old. He holds an undergraduate degree in Applied
Mathematics from Harvard University and an MBA in Finance from the University
of Chicago.
Deborah Pastor is the portfolio manager for the Allied Owners Action Fund.
For the last two years she has been working in the development and management
of eRaider and the Fund. For two years before that she managed money for
wealthy individuals. From August 1993 to May 1997 she was a director and Senior
Foreign Exchange Advisor at Bank of Montreal. For nearly seven years prior to
August 1993 she was Vice President of the foreign exchange department of J. P.
Morgan. She is an expert in the trading and valuation of small cap value
companies, and brings expertise and contacts to help make Goldfield stock
attractive to major institutional investors. Ms. Pastor is 44 years old and
married to Aaron Brown. She holds an undergraduate degree in Near Eastern
Languages from Yale University and an MBA in Finance from the University of
Chicago.
Sam Rebotsky bought his first share of Goldfield in the late 1960s and has
been actively following the company ever since. He currently owns 491,100
shares. His principal occupation for the last five years is a registered
representative specializing in analyzing, valuing and recommending microcap
stocks. Since 2000, he has been employed as Vice President of Sales for Adolph
Komorsky Investments, a brokerage firm. Their address is 660 White Plains Road,
Tarrytown, New York 10591. For the two prior years he was a self-employed
financial advisor. In 1998 he worked for National Securities Corp., another
brokerage firm. For the four years before that he worked for Carlin Equities
Corp., another brokerage firm. He holds Series 7, 24 and 63 licenses. He is a
certified public accountant and a member of the New York State Society of
CPA's. He also has extensive experience in the areas of taxation and has worked
for the IRS. Mr. Rebotsky also worked as assistant controller for a
construction sub-contractor and has expertise in accounting and taxation issues
for construction companies. He is 61 years old and graduated from City College
in New York.
Aaron Brown and Deborah Pastor live at:
215 West 91st Street, #112
New York, NY 10024
Sam Rebotsky's address is:
10 Holder Place, Suite 3B
Forest Hills, NY 11375
The following table lists all purchases (there were no sales) of Goldfield
common stock by Allied Owners Action Fund.
Date Shares Price Cost
10-Mar 7,000 1 5/16 9,187.50
16-Mar 5,000 1 5,000.00
22-Mar 3,000 1.0600 3,180.00
24-Mar 5,000 1 5,000.00
28-Mar 5,000 15/16 4,687.50
29-Mar 5,000 15/16 4,687.50
29-Mar 5,000 15/16 4,687.50
7-Apr 5,000 15/16 4,687.50
10-Apr 10,000 15/16 9,375.00
14-Apr 5,000 11/16 3,437.50
17-Apr 5,000 5/8 3,125.00
18-Apr 5,000 5/8 3,125.00
22-Sep 2,000 13/16 1,625.00
25-Sep 3,000 13/16 2,437.50
27-Sep 5,000 13/16 4,062.50
29-Sep 700 13/16 568.75
10-Oct 4,000 11/16 2,750.00
11-Oct 4,000 11/16 2,750.00
12-Oct 20,000 11/16 13,750.00
13-Oct 10,000 5/8 6,250.00
16-Oct 5,100 3/4 3,818.88
18-Oct 15,000 3/4 11,250.00
19-Oct 10,000 23/32 7,188.00
20-Oct 8,500 0.7169 6,093.65
23-Oct 6,100 11/16 4,193.75
24-Oct 2,100 11/16 1,443.75
26-Oct 2,700 11/16 1,856.25
8-Nov 11,000 3/4 8,250.00
13-Nov 55,000 0.4943 27,186.50
14-Nov 20,000 9/16 11,250.00
15-Nov 20,000 9/16 11,250.00
17-Nov 20,800 9/16 11,700.00
Total 290,000 0.6892 199,854.53
Sam Rebotsky has bought 334,600 shares of Goldfield at an aggregate price of
$177,593 over the last two years (from March 16, 1999 to September 13, 2000).
He also sold 151,700 shares for $157,227 during that period (from January 31,
2000 to August 7, 2000).
Section 16(a) of the Securities Exchange Act of 1934 requires that persons
who own more than 10 percent of a registered class of Goldfield's equity
securities file with the Securities and Exchange Commission and the American
Stock Exchange initial reports of ownership and reports of changes in ownership
of common stock and series A preferred stock of the company. I believe that
Aaron Brown, Deborah Pastor and Sam Rebotsky complied with all filing
requirements applicable to them with respect to transactions during the year
ended December 31, 2000.
None of three nominees listed above: (i) owns of record any securities of
Goldfield that are not beneficially owned by them; (ii) is, or was within the
past year, a party to any contract, arrangement or understanding with any
person with respect to Goldfield or any of its directors, officers or employees
or any shareholder owning more than 5 percent of Goldfield, including, but not
limited to, joint ventures, loan or option agreements, puts or calls,
guarantees against loss or guarantees of profit, division of losses or profits,
or the giving or withholding of proxies; (iii) has any substantial interest,
direct or indirect, by security holdings or otherwise, in any matter to be
acted upon at the Annual Meeting; (iv) beneficially owns any securities of any
parent or subsidiary of the Company; (v) borrowed any funds to purchase any
securities listed above, (vi) has been convicted in a criminal proceeding,
(vii) is a director of any public for-profit corporation, (viii) has any
material interest adverse to Goldfield or any of its directors, officers or
employees, (ix) is a party to a proceeding against Goldfield or any of its
directors, officers or employees, (x) is an owner of 10 percent or more of
Goldfield shares, (xi) is a family member of any director, officer or employee
of Goldfield, or any shareholder owning more than 5 percent of Goldfield
shares, (xi) a petitioner in state or federal bankruptcy court within the last
five years, (xii) the subject during the past five years of any order, judgment
or decree, not subsequently reversed, of any court of competent jurisdiction
permanently or temporarily enjoining him from: acting as futures commission
merchant, introducing broker, commodity trading advisor, commodity pool
operator or any other person regulated by the Commodity Futures Trading
Commission, investment advisor, underwriter, broker or dealer in securities,
affiliated person, director or employee of any investment company, bank,
savings and loan association or insurance company, engaging in any kind of
business practice, engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of
federal or state securities law or federal commodities laws. None of the
nominees nor any of their associates has any arrangement or understanding with
any person with respect to future employment by the Company or its affiliates
or with respect to any future transactions to which the Company or any of its
affiliates will or may be a party, nor any material interest, direct or
indirect, in any transaction which has occurred since January 1, 2000 or any
currently proposed transaction, or series of similar transactions, to which the
Company or its affiliates was or is to be a party.
PARTICIPANTS IN THE SOLICITATION
Aaron Brown, Deborah Pastor and Sam Rebotsky are participants in this
solicitation. Participants control 893,100 shares of Goldfield, 3.2 percent of
the 27,694,154 shares I estimate will be eligible to vote at the meeting.
In addition, I have held significant discussions with other shareholders, and
some of them are actively supporting this solicitation. Upon careful
consideration of the rules of the Securities and Exchange Commission, I feel
that none of them are participants. However, I list them here because I would
rather overdisclose than underdisclose. Although I speak with all these people
about Goldfield, none of them direct eRaider's proxy efforts, and I do not
direct any of their actions.
eRaider.com Inc. runs a website devoted to shareholder activism,
http://www.eRaider.com. It was founded is owned by Aaron Brown and Martin
Stoller, and is run by Aaron Brown. eRaider runs message boards on general
shareholder activism topics and also on specific companies: Comshare, Jameson
Inns, Goldfield, Employee Solutions and Transmedia Asia Pacific. Allied Owners
Action Fund, a private fund managed by Aaron Brown and Deborah Pastor, owns
substantial positions in the first three of these companies. With respect to
target companies, eRaider's goal is to improve the stock price through informed
discussion and active shareholder oversight.
Martin Stoller is Aaron Brown's partner in eRaider, but does not participate
in the business day-to-day. He is also the largest single investor in Allied
Owners Action Fund. He owns no shares of Goldfield, except indirectly through
the Fund.
Joe Cocalis sponsored the Golden Parachute shareholder resolution in
cooperation with eRaider. I asked him to be a candidate for the board of
directors and have had detailed discussions with him about strategies for
change. He holds over 400,000 shares of Goldfield.
James Cocalis, Joe's father, was a candidate for the board of directors until
I decided to run a unity slate instead. He holds approximately 50,000 shares of
Goldfield. He is Joe Cocalis' father.
Moshe Rosen was a candidate for the board of directors until I decided to run
a unity slate instead. He holds over 69,000 shares of Goldfield.
Anthony Ford sponsored a shareholder resolution in cooperation with eRaider,
the resolution was subsequently withdrawn. I asked him to be a director
candidate. He owns 2,065,300 shares of Goldfield.
eRaider.com Inc. runs a public Internet message board for discussions about
Goldfield. Several anonymous posters have expressed opinions and engaged in
discussions that suggest general support for eRaider's efforts (other posters
have expressed contrary opinions). I think it likely that some of these people
own Goldfield stock and are promoting eRaider's side of this proxy fight on
other Internet message boards and elsewhere.
I recommend a vote FOR the election of Aaron Brown, Deborah Pastor, Sam
Rebotsky and make no recommendation concerning the election of Al Marino and
the re-election of John Sottile and Dwight Severs.
Item 3.
PROPOSAL 3 -- RATIFICATION OF APPOINTMENT OF ACCOUNTANTS
I recommend a vote FOR the ratification of the appointment of KPMG LLP as
independent certified public accountants of the Company.
Item 4.
PROPOSAL 4 -- STOCKHOLDER PROPOSAL TO REQUIRE PRIOR SHAREHOLDER
APPROVAL OF GOLDEN PARACHUTES.
I recommend a vote FOR the Proposal.
Item 5.
FLOOR PROPOSAL -- STOCKHOLDER PROPOSAL TO REDEEM SERIES A PREFERRED
STOCK.
I recommend a vote FOR the Proposal.
RECORD DATE / SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE
OFFICERS / EXECUTIVE COMPENSATION / ELECTION OF DIRECTORS
Information on these subjects appears in Goldfield's proxy materials.
ADDITIONAL INFORMATION
I will pay the cost of soliciting proxies and will reimburse all bankers,
brokers and other custodians, nominees and fiduciaries for forwarding proxies
and proxy materials to the beneficial owners of the shares. eRaider will make
efforts to communicate with shareholders and solicit proxies on the Internet.
In addition to solicitation by Internet and mail, solicitation of proxies may
be made personally or by telephone, facsimile, telegram or other means.
Although no precise estimate can be made at this time, I hope to limit my
expenses in this proxy contest to $100,000. I will attempt to make an agreement
with the company to abide by an expense cap in order to save money for
shareholders. To date, the only expenses have been routine office expenses with
total value under $5,000. The only major additional expense I anticipate is a
mailing to shareholders. The cost of the solicitation will be much lower for
both sides if I can persuade the company to agree to a single joint mailing,
with costs split (this will also, in my opinion, make things much easier for
shareholders and result in a fairer election).
A major factor influencing the expense is whether I think the company can get
the 13,847,078 votes they need to overturn cumulative voting (that number is
based on the common shares outstanding as of December 31, 2000, plus preferred
shares which vote as common in this matter, plus 499,000 shares issued for
recent option exercises by management). If so, I will have to engage in
expensive tactics to try to prevent that, including aggressive solicitation and
possibly legal action. If not, I am content to gather the votes I can cheaply
and get two or three of my candidates elected. The main way to cut expenses is
to mail the solicitation only to the larger shareholders.
Preliminary Copy
THE GOLDFIELD CORPORATION PROXY
Annual Meeting of Stockholders to be Held on [__________, 2001]
THIS PROXY IS SOLICITED ON BEHALF OF ERAIDER.COM INC, AARON BROWN, DEBORAH
PASTOR AND SAM REBOTSKY; RUNNING AS THE SHAREHOLDER UNITY SLATE. IT IS NOT
SOLICITED ON BEHALF OF GOLDFIELD'S BOARD OF DIRECTORS OR MANAGEMENT.
The undersigned hereby appoints Aaron Brown proxy, with full power of
substitution, to vote with the same force and effect as the undersigned at the
Annual Meeting of the Stockholders of The Goldfield Corporation to be held at
[________________] on [__________, 2001] at 9:00 a.m., and any adjournment or
postponement thereof, upon the matters set forth on the reverse hereof and upon
such other matters as may properly come before the meeting, all in accordance
with the notice and accompanying proxy statement for said meeting, receipt of
which is acknowledged. (THIS PROXY REVOKES ALL PRIOR PROXIES GIVEN BY THE
UNDERSIGNED.)
This proxy, when properly executed, will be voted in the manner directed
herein. If no direction is given, the proxy will be voted FOR Point of
Order0.5, AGAINST Proposal 1, FOR Point of Order 1.5, FOR Proposal 3, FOR
Proposal 4 and FOR Proposal 5. If there is cumulative voting for directors, and
no direction is given with respect to the cumulative election of directors
(Proposal 2) the cumulative votes represented by a proxy will be cast at the
discretion of Aaron Brown in order to elect as many nominees as he believes
possible under the then prevailing circumstances. This will be true even if you
give direction with respect to non-cumulative election of directors. If there
is no cumulative voting for directors, and no direction is given with respect
to non-cumulative voting, the proxy will be voted for the unity slate of
directors. This is true even if the proxy contains direction with respect to
cumulative election of directors. Aaron Brown is authorized to vote in his
discretion on any other matters that properly come before the meeting.
Continued and to be signed on the reverse side.
Please date, sign and mail your
proxy card back today.
A X Please mark your votes as in this example.
FOR AGAINST ABSTAIN
.5. Point of Order to elect directors before considering changes of the
election rules. / / / / / /
I recommend a vote FOR this point of order.
FOR AGAINST ABSTAIN
1. AMEND THE RESTATED CERTIFICATE OF
INCORPORATION TO ELIMINATE
CUMULATIVE VOTING. / / / / / /
I make no recommendation on this proposal, but will vote proxies without
direction AGAINST it.
FOR AGAINST ABSTAIN
1.5. Point of order that the meeting should not be recessed or adjourned to
amend the certificate of incorporation. / / / / / /
I recommend a vote FOR this point of order.
2. ELECTION OF DIRECTORS. At the time of writing this proxy, I do not know if
there will be cumulative voting or not. Therefore, I have to ask you to
indicate your votes twice. If you place no mark on this portion of the ballot,
I will vote at my discretion if there is cumulative voting, and vote for the
six indicated candidates if there is no cumulative voting.
IF THERE IS CUMULATIVE VOTING
You can allocate up to six votes in any manner you choose: all six for one
candidate, one each for six candidates or any other combination. If you leave
this blank, I will allocate your six votes at my discretion. If you fill it out
with numbers that do not add up to six, I will ignore your markings and vote at
my discretion.
Votes
_____ Aaron Brown
_____ Deborah Pastor
_____ Sam Rebotsky
I have nominated the three candidates above and recommend you vote FOR them by
allocating one or more votes to each candidate.
_____ Al Marino
_____ Dwight Severs
_____ John Sottile
The board has nominated the three candidates above. In the interests of
shareholder unity, I make no recommendation about allocation, except that you
give them no more than one vote each.
_____ Harvey Eads, Jr.
_____ John Fazzini
_____ Danforth Leitner
The board has nominated the three candidates above and I recommend you vote
AGAINST them by allocating zero votes to each. However, I place their names on
this ballot in order to accommodate as many shareholders as possible.
IF THERE IS NO CUMULATIVE VOTING
If you make no mark on this part of the ballot, I will vote for Aaron Brown,
Deborah Pastor, Sam Rebotsky, Al Marino, Dwight Severs and John Sottile. If you
wish to withhold votes for any of these candidates, strike through their names.
I recommend voting FOR Aaron Brown, Deborah Pastor and Sam Rebotsky. I make no
recommendation about Al Marino, Dwight Severs and John Sottile.
If you wish to vote for other candidates, write their names in here. The board
has nominated and recommended Harvey Eads, John Fazzini and Danforth E.
Leitner. I recommend you do not vote for them.
________________________________________________
FOR AGAINST ABSTAIN
3. RATIFY SELECTION OF KPMG LLP AS
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS OF THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2001
/ / / / / /
I recommend a vote FOR this proposal.
FOR AGAINST ABSTAIN
4. SHAREHOLDER PROPOSAL TO REQUIRE PRIOR SHAREHOLDER APPROVAL OF GOLDEN
PARACHUTES / / / / / /
I recommend a vote FOR this proposal.
FOR AGAINST ABSTAIN
5. SHAREHOLDER PROPOSAL TO REDEEM PREFERRED STOCK / / / / / /
I recommend a vote FOR this proposal.
*Note* In his discretion, Aaron Brown is authorized to vote upon such other
business as may properly come before the meeting or at any adjournments or
postponements thereof.
PLEASE SIGN, DATE AND RETURN TODAY IN ENCLOSED ENVELOPE.
DATE ___________________, 2001
Signature ________________________
Signature ________________________
Title(s) ________________________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
Footnotes
[1]This figure is derived by excluding the institutional shares listed on
13G's and D's, assuming that the 5.3 million uncounted votes represent 55
percent of the individual holders of record, subtracting the holders of record
and assuming 55 percent of the remaining shareholders did not vote but were
counted for management. The figure is subject to large uncertainty.
[2]June 17, 1858. Speech before the Republican State Convention, Springfield,
Illinois. Lincoln, of course, was paraphrasing Matthew 25. Neither Abraham
Lincoln nor Matthew has endorsed the Shareholder Unity Slate, nor has either
given permission for the quote to be used. They were each talking about
entirely different things than the Goldfield board of directors meeting
(Lincoln about the country half slave and half free, Matthew about doctrinal
differences among Pharisees, Sadducees and Essenes).
[3]None of the State of Wisconsin Investment Board, Peerless Computer Systems
or the Delaware Chancery Court has endorsed the Shareholder Unity Slate. None
has given permission for their name to be used in this proxy solicitation. The
account given is by Aaron Brown, none of the cited entities has reviewed or
approved it. Because the case was settled rather than decided, it is not a
formal legal precedent and, in any case, differences in facts might make it
irrelevant in court to the Goldfield annual meeting.