-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FqZuoM++EP5XGwqoXh0VkdjYZ83Nq88opevXgRwTnLsqed++AN4j+vy3I6nVZkv1 J1TU6OUpgZeyP4iWQinBrA== 0000911420-06-000631.txt : 20061027 0000911420-06-000631.hdr.sgml : 20061027 20061027153029 ACCESSION NUMBER: 0000911420-06-000631 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20061027 DATE AS OF CHANGE: 20061027 GROUP MEMBERS: CD CAPITAL MANAGEMENT LLC GROUP MEMBERS: JOHN D. ZIEGELMAN SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MEADOW VALLEY CORP CENTRAL INDEX KEY: 0000934749 STANDARD INDUSTRIAL CLASSIFICATION: HEAVY CONSTRUCTION OTHER THAN BUILDING CONST - CONTRACTORS [1600] IRS NUMBER: 880328443 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-48695 FILM NUMBER: 061168803 BUSINESS ADDRESS: STREET 1: 4411 S 40TH ST STREET 2: STE D-11 CITY: PHOENIX STATE: AZ ZIP: 85040 BUSINESS PHONE: 6024375400 MAIL ADDRESS: STREET 1: 4411 S 40TH ST STREET 2: STE D-11 CITY: PHOENIX STATE: AZ ZIP: 85040 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CD CAPITAL MANAGEMENT LLC CENTRAL INDEX KEY: 0001271084 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2 N RIVERSIDE PLAZA SUITE 600 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124663239 MAIL ADDRESS: STREET 1: 2 N RIVERSIDE PLAZA SUITE 600 CITY: CHICAGO STATE: IL ZIP: 60606 SC 13D 1 d56557004.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 MEADOW VALLEY CORPORATION - ------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, $0.001 PAR VALUE - ------------------------------------------------------------------------------- (Title of Class of Securities) 583185103 - ------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) CD CAPITAL MANAGEMENT LLC 2 NORTH RIVERSIDE PLAZA, SUITE 720 CHICAGO, ILLINOIS 60606 ATTENTION: JOHN ZIEGELMAN TELEPHONE: (312) 466-3226 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) with copies to: GREENBERG TRAURIG, LLP 77 WEST WACKER DRIVE CHICAGO, ILLINOIS 60601 ATTENTION: PETER H. LIEBERMAN, ESQ. TELEPHONE: (312) 456-8400 OCTOBER 17, 2006 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a Statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D and is filing this Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [_] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). PAGE 1 OF 8 PAGES - ------------------------------------------------------------------------------- CUSIP No. 583185103 SCHEDULE 13D Page 2 of 8 Pages - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: CD CAPITAL MANAGEMENT LLC I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 31-1816593 - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 215,100 (SEE ITEM 5) BENEFICIALLY ----------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH REPORTING -0- (SEE ITEM 5) PERSON ----------------------------------------- WITH 9. SOLE DISPOSITIVE POWER 210,000 215,100 (SEE ITEM 5) ----------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (SEE ITEM 5) - ------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 215,100 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.2% OF COMMON STOCK(1) - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IA, OO - ------------------------------------------------------------------------------- (1) Based on 4,165,963 shares of Common Stock of the Issuer outstanding on August 7, 2006. According to the Current Report on Form 8-K filed by the Issuer on October 23, 2006, on October 20, 2006 the Issuer consummated a private placement of 817,120 units, with each unit consisting of one share of the Issuer's common stock and a warrant to purchase one-tenth of one share of the Issuer's common stock. Assuming the issuance of 817,120 newly-issued shares of the Issuer's Common Stock, the Reporting Person believes that, as of October 20, 2006, the percent of class represented by the amount in row (11) above was reduced to 4.3%. PAGE 2 OF 8 PAGES - ------------------------------------------------------------------------------- CUSIP No. 583185103 SCHEDULE 13D Page 3 of 8 Pages - ------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: JOHN D. ZIEGELMAN I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) - ------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [_] - ------------------------------------------------------------------------------- 3. SEC USE ONLY - ------------------------------------------------------------------------------- 4. SOURCE OF FUNDS OO - ------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) - ------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES - ------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES 215,100 (SEE ITEM 5) BENEFICIALLY ------------------------------------------ OWNED BY 8. SHARED VOTING POWER EACH REPORTING -0- (SEE ITEM 5) PERSON ------------------------------------------ WITH 9. SOLE DISPOSITIVE POWER 215,100(SEE ITEM 5) ------------------------------------------ 10. SHARED DISPOSITIVE POWER -0- (SEE ITEM 5) - ------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 215,100 - ------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.2% OF COMMON STOCK(1) - ------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN - ------------------------------------------------------------------------------- (1) Based on 4,165,963 shares of Common Stock of the Issuer outstanding on August 7, 2006. According to the Current Report on Form 8-K filed by the Issuer on October 23, 2006, on October 20, 2006 the Issuer consummated a private placement of 817,120 units, with each unit consisting of one share of the Issuer's common stock and a warrant to purchase one-tenth of one share of the Issuer's common stock. Assuming the issuance of 817,120 newly-issued shares of the Issuer's Common Stock, the Reporting Person believes that, as of October 20, 2006, the percent of class represented by the amount in row (11) above was reduced to 4.3%. PAGE 3 OF 8 PAGES SCHEDULE 13D ITEM 1. SECURITY AND ISSUER This Statement of Beneficial Ownership on Schedule 13D (this "Schedule 13D") relates to the common stock, $0.001 par value (the "Common Stock"), of Meadow Valley Corporation, a Nevada corporation (the "Issuer"), having its principal executive offices at 4411 South 40th Street, Suite D-11, Phoenix, Arizona 85040. ITEM 2. IDENTITY AND BACKGROUND (a), (b) AND (c) This Schedule 13D is being filed jointly by CD Capital Management LLC, a Delaware limited liability company ("CD Capital"), and John D. Ziegelman ("Mr. Ziegelman" and, together with CD Capital, the "Reporting Persons"). The manager and sole member of CD Capital is ZPII, L.P., a Delaware limited partnership ("ZP-II LP"). C3 Management Inc., a Delaware corporation ("C3"), is the general partner of ZP-II LP. Mr. Ziegelman is the Chairman of the Board, President and Treasurer and the beneficial owner of 100% of the outstanding common stock of C3, and the President of CD Capital. Maria D. Suh ("Ms. Suh") is the Secretary of C3. CD Capital is principally engaged in the business of providing investment management services to various investment funds, including CD Investment Partners Ltd. ("CD Investment"), and managed accounts and of acquiring, holding, voting and disposing of various portfolio securities investments. ZP-II LP's principal business is serving as manager and sole member of CD Capital. C3's principal business is serving as general partner of ZP-II. Mr. Ziegelman's principal occupation is serving as Chairman of the Board, President and Treasurer of C3 and as President of CD Capital. In such capacity, Mr. Ziegelman acts as investment manager of the investment funds and managed accounts to which CD Capital provides investment management services. Mr. Ziegelman also serves as Managing Agent and co-general partner of ZP-LP. Ms Suh's principal occupation is serving as Secretary of C3. The business address of each of CD Capital, ZP-II LP, C3, Mr. Ziegelman and Ms. Suh is 2 North Riverside Plaza, Suite 720, Chicago, Illinois 60606. (d) AND (e) During the last five years, none of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any other person identified in response to this Item 2, has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body resulting in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violations with respect to such laws. (f) Each natural person identified in this Item 2 is a citizen of the United States. Any disclosures made in this Schedule 13D with respect to the historical financial results, business or operations of the Issuer which are not expressly attributed herein to the beliefs or opinions of the Reporting Persons, are derived entirely from the Issuer's registrations, reports, statements and public announcements made by the Issuer under the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Nasdaq Marketplace Rules (the "Issuer's Public Filings"), and the Reporting Persons in quoting from or repeating any information or disclosures made PAGE 4 OF 8 PAGES or contained in the Issuer's Public Filings do not assume any responsibility therefor and have not independently verified the accuracy or completeness thereof. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION All purchases of Common Stock were made in open market transactions with investment funds in accounts under management on behalf of CD Investment, which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business. The total amount of funds expended for such purchases was approximately $2,265,900, which was expended entirely by CD Investment. ITEM 4. PURPOSE OF TRANSACTION CD Capital (for the account of CD Investment) made the investment decision to acquire beneficial ownership of the shares of Common Stock because, in its judgment, the Common Stock is undervalued and represents an attractive investment opportunity. CD Capital has continuously managed shares of Common Stock in the account of CD Investment since February 2006. The Reporting Persons have delivered two letters to Mr. Brad Larson, the Issuer's President and Chief Executive Officer, dated August 15, 2006 and October 27, 2006. Copies of those letters are attached hereto as Exhibits 99.2 and 99.3, respectively, and incorporated by reference herein. Except to the extent which may be set forth in those letters, none of the Reporting Persons has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Form Schedule 13D. The Reporting Persons intend to monitor and evaluate the Issuer's business, financial performance and prospects and their investments in the Issuer on an ongoing basis and to continue to communicate their views to the Issuer. Accordingly, the Reporting Persons reserve the right to propose or take any or all of the actions set forth in subparagraphs (a)-(j) of Item 4 of Form Schedule 13D. ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER (A) As of October 17, 2006, the Reporting Persons beneficially owned 210,000 shares of Common Stock, representing approximately 5.0% of the shares of Common Stock outstanding, and as of October 27, 2006, the Reporting Persons beneficially owned 215,100 shares of Common Stock, representing approximately 5.2% of the shares of Common Stock outstanding, in each case based upon the 4,165,963 shares of Common Stock reported by the Issuer to be outstanding as of August 7, 2006 in the Issuer's Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2006 filed with the Securities and Exchange Commission (the "Commission") on August 14, 2006 (the "Outstanding Shares"). According to the Current Report on Form 8-K filed by the Issuer with the Commission on October 23, 2006, on October 20, 2006 the Issuer consummated a private placement of 817,120 units, with each unit consisting of one share of the Issuer's common stock and a warrant to purchase one-tenth of one share of the Issuer's common stock. Assuming the issuance of 817,120 newly-issued shares of the Issuer's Common Stock, the Reporting Persons believe that, as of October 20, 2006, the 215,100 shares of Common Stock beneficially owned by the Reporting Persons as of October 27, 2006 represented approximately 4.3% of the shares of Common Stock presently outstanding. The Reporting Persons may be deemed to beneficially own shares of Common Stock as follows: PAGE 5 OF 8 PAGES NUMBER OF SHARES APPROXIMATE OF PERCENTAGE OF NAME OF REPORTING PERSON COMMON STOCK OUTSTANDING SHARES - ------------------------------------ ----------------- ------------------ Mr. Ziegelman....................... 215,100 5.2% CD Capital.......................... 215,100 5.2% CD Capital is attorney-in-fact with sole power and authority to effect acquisitions, dispositions and voting decisions with respect to CD Investment's portfolio assets, including 215,100 shares of Common Stock, constituting approximately 5.2% of the Outstanding Shares. Accordingly, by virtue of the foregoing relationship between CD Capital and CD Investment, CD Capital will be deemed to beneficially own an aggregate of 215,100 shares of Common Stock, constituting approximately 5.2% of the Outstanding Shares, consisting of the 215,100 shares of Common Stock held in the account of CD Investment. ZP-II LP, as the manager and sole member of CD Capital, may be deemed to beneficially own the 215,100 shares of Common Stock which CD Capital will be deemed to beneficially own. C3, as the general partner of ZP-II LP, may be deemed to beneficially own the 215,100 shares of Common Stock which ZP-II LP may be deemed to beneficially own. Mr. Ziegelman, as the Chairman of the Board, President and Treasurer and the beneficial owner of 100% of the outstanding shares of common stock of C3, may be deemed to beneficially own the 215,100 shares of Common Stock which C3 may be deemed to beneficially own. Except as otherwise expressly set forth herein, the filing of this statement by the Reporting Persons shall not be construed as an admission that either of the Reporting Persons, or any other person or entity named in Item 2, is, for purposes of Section 13(d) or 13(g) of the Exchange Act or any other provision of the Exchange Act, the beneficial owner of any of the shares of Common Stock described in this statement. (b) CD Capital has the sole power to vote or to direct the vote, and the sole power to dispose or to direct the disposition of the 215,100 shares of Common Stock held in CD Investment's account. ZP-II LP, C3 and Mr. Ziegelman may be deemed to share with CD Capital the power to vote or to direct the vote, and the power to dispose or to direct the disposition of such shares of Common Stock. (c) Schedule A annexed hereto lists all transactions in the Issuer's Common Stock in the last 60 days by the Reporting Persons. (d) Not applicable. (e) As noted above, according to the Current Report on Form 8-K filed by the Issuer with the Commission on October 23, 2006, on October 20, 2006 the Issuer consummated a private placement of 817,120 units, with each unit consisting of one share of the Issuer's common stock and a warrant to purchase one-tenth of one share of the Issuer's common stock. Assuming the issuance of 817,120 newly-issued shares of the Issuer's Common Stock, the Reporting Persons believe that, as of October 20, 2006, the 215,100 shares of Common Stock beneficially owned by the Reporting Persons represented approximately 4.3% of the shares of Common Stock presently outstanding, and that the Reporting Persons therefore ceased to be the beneficial owners of more than 5% of the outstanding Common Stock on that date. PAGE 6 OF 8 PAGES ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Pursuant to Rule 13d-1(k)(1) promulgated under the Exchange Act, the Reporting Persons have entered into an agreement with respect to the joint filing of this Schedule 13D, and any amendment or amendments hereto. Reference is made to Items 2 and 5 of this Schedule 13D, which are incorporated by reference herein, for a description of the relationships between CD Capital and CD Investment. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 99.1 Joint Filing Agreement, dated as of October 27, 2006, between CD Capital and Mr. Ziegelman. Exhibit 99.2 Letter to Issuer, dated as of August 15, 2006. Exhibit 99.3 Letter to Issuer, dated as of October 27, 2006. PAGE 7 OF 8 PAGES SIGNATURE After reasonable inquiry and to the best of each of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. DATED: October 27, 2006 CD CAPITAL MANAGEMENT LLC By: ZP II LP, its Managing Member By: C3 Management Inc., its General Partner BY: /s/ John D. Ziegelman Name: John D. Ziegelman Title: President /s/ John D. Ziegelman JOHN D. ZIEGELMAN PAGE 8 of 8 SCHEDULE A This schedule sets forth information with respect to each purchase and sale of Common Stock which was effectuated by a Reporting Person within the last 60 days. All transactions were effectuated in the open market through a broker. PURCHASE (SALE) OF SHARES EFFECTED BY CD CAPITAL FOR THE ACCOUNT OF CD INVESTMENT
Number of Shares Aggregate Date Purchased (Sold) Price Per Share($) Price($)(1) - ----------------------- ------------------------ ---------------------- ---------------- August 23, 2006 13,900 9.5871 133,260.69 August 24, 2006 900 9.5465 8,591.85 August 25, 2006 (100) 9.6235 (962.35) August 29, 2006 1,000 9.882 9,882.00 August 31, 2006 4,800 10.0063 48,030.24 September 1, 2006 2,500 10.0365 25,091.25 September 13, 2006 1,075 10.04 10,793.00 September 14, 2006 1,000 9.8465 9,846.50 September 15, 2006 3,300 9.8532 32,515.56 September 18, 2006 500 9.9565 4,978.25 September 19, 2006 6,000 9.8661 59,196.60 September 20, 2006 5,921 10.008 59,257.37 September 22, 2006 3,262 10.1448 33,092.34 October 2, 2006 1,000 9.7615 9,761.50 October 3, 2006 1,000 9.9555 9,955.50 October 4, 2006 4,000 9.9433 39,773.20 October 6, 2006 100 9.9455 994.55 October 17, 2006 4,900 10.8255 53,044.95 October 24, 2006 5,000 9,806 $49,027.50 October 25, 2006 100 9,606 $960.55 (1) Excludes commissions and other execution-related costs.
EXHIBIT INDEX Exhibit 99.1 Joint Filing Agreement, dated as of October 27, 2006, between CD Capital and Mr. Ziegelman. Exhibit 99.2 Letter to Issuer, dated as of August 15, 2006. Exhibit 99.3 Letter to Issuer, dated as of October 27, 2006. EX-99.1 2 e56557004.txt JOINT FILING AGREEMENT EXHIBIT 99.1 JOINT FILING AGREEMENT THIS AGREEMENT (this "Agreement") is made and entered into as of the 27th day of October, 2006 by and among the undersigned parties (collectively, the "Reporting Persons"). W I T N E S S E T H: WHEREAS, the Reporting Persons have each acquired beneficial ownership of shares of common stock, $.001 par value per share (the "Common Stock"), of Meadow Valley Corporation, a Nevada corporation (the "Company"); WHEREAS, due to the nature of their relationship to one another, the Reporting Persons may be deemed to constitute a "group" within the meaning of Section 13(d)(3) under the Securities Exchange Act of 1934, as amended (the "Act"); and WHEREAS, the Reporting Persons desire to jointly file a Schedule 13D with the Securities and Exchange Commission (the "Commission") to satisfy their obligations pursuant to Section 13(d) of the Act and the regulations promulgated thereunder. NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants herein contained and of other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. In accordance with Rule 13D-1(k)(1) under the Act, each of the parties hereto hereby consents to the filing of, and shall jointly file, or cause to be filed, with the Commission, a Schedule 13D with respect to their investments in the Company in order to satisfy their obligations under Section 13(d) of the Act and the regulations promulgated thereunder. Each Reporting Person is eligible to use the Schedule 13D on which such information is filed. 2. Each of the parties hereto hereby consents to the filing of, and shall jointly file, or cause to be filed with the Commission, any and all subsequent amendments to the Schedule 13D, including, if permitted, the filing of a Schedule 13G, which may hereafter be required to be filed by the Reporting Persons with respect to their investments in the Company in order to satisfy their obligations under Section 13(d) of the Act and the regulations promulgated thereunder. 3. Each Reporting Person will be responsible for the timely filing of the Schedule 13D, and all amendments thereto, and for the completeness and accuracy of the information concerning such party contained therein. No Reporting Person will be responsible for the completeness or accuracy of the information concerning any other Reporting Person contained in the Schedule 13D or any amendment thereto, except to the extent such Reporting Person knows or has reason to believe that such information is inaccurate. 4. This Agreement may be executed in counterparts, all of which when taken together will constitute one and the same instrument. [Signatures on Following Page] IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. CD CAPITAL MANAGEMENT LLC By: ZPII L.P., its Managing Member By: C3 Management Inc., its General Partner /s/ John D. Ziegelman ------------------------------------------- Name: John D. Ziegelman Title: President /s/ John D. Ziegelman ------------------------------------------- John D. Ziegelman EX-99.2 3 e56561707.txt EXHIBIT 99.2 August 15, 2006 Brad Larson President and CEO Meadow Valley Corporation 4411 S. 40th Street, Suite D-11 Phoenix, AZ 85082 Dear Brad: Thank you again for speaking with me this morning regarding Meadow Valley and its sagging share price. As you may know, an affiliate of CD Capital Management owns approximately 3.7% of Meadow Valley's outstanding shares, which we began acquiring in February 2006. As one of your major holders, we - as I'm sure you are - are perplexed with the stock's terrible performance over the past 6 months or so. This is especially frustrating given your business seems to be very good and growing, definitely turning the corner from the not so distant past. Moreover, despite the potential troubles in the end market for housing, Meadow Valley seems to be winning new projects structuring them to be profitable and has built a significant backlog of new and profitable business. We believe your exposure to housing is limited and mitigated further by the particular geographical markets you are in. However, perception looms large and will, for the foreseeable future, be a drag on share performance. At $8.80, the stock is currently approaching the 52-week low set last October at $7.88. The stock seemed to have swooned following Monday's earnings release, falling more than 12% since Friday's close. In addition, the stock is down almost 44% since reaching its 52 week high on February 27th. We feel the following factors, in no particular order, are contributing to share price trading at a significant discount to intrinsic value, which based on a 6x EV/EBITDA ratio would translate into approximately a $20 stock price. Meadow Valley is a micro-capitalization stock whose sector is dominated by large E&C firms with more financial resources and scale to win business. Small-cap and micro-cap stocks are out of favor in the capital markets at present, and in addition, Meadow Valley does not have any Wall Street research coverage promoting the stock's discount to intrinsic value. Meadow Valley is a public company in name only in that its shares have virtually no liquidity, with concentrated holdings in just a few investors' hands. One such investor, Praesidium, may have recently sold some of its stock, bleeding more confidence out from the dwindling ranks of your investor base. Notwithstanding the lack of liquidity in the stock, Meadow Valley has all of the regulatory burdens and cost of being a public company, eating into its earnings power and cash flows. Given the strength in your business which is constrained by your resources, we ask that you consider hiring an investment banking firm to help management and the Board to assess what your strategic options are, including the sale of the Company. I look forward to hearing how today's Board meeting went and where we can be helpful. Regards, /s/John D. Ziegelman EX-99.3 4 e56557744.txt EXHIBIT 99.3 October 27, 2006 Brad Larson President and CEO Meadow Valley Corporation 4411 S. 40th Street, Suite D-11 Phoenix, AZ 85082 Dear Brad: Thank you again for speaking with Ross Nelson and me Wednesday regarding, among other topics, Meadow Valley's recent private placement. As you know, just prior to the announcement of the private placement, we crossed the 5% threshold, and will be filing our 13D simultaneously with sending this letter. Please note that although our position crossed the 5% threshold, it was unexpectedly diluted by the financing and, therefore, our filing will reflect that fact. As you know, we believe the Company's stock is currently highly undervalued and thus are very frustrated by the Company's dilutive stock issuance. The private placement upset us on two fronts: a) the Company sold the stock at a large all-in discount (including the value of the warrants) to market price; and b) we believe that the placement was at a huge discount to intrinsic value, more on that below. While we understand the Company's need for capital in order to increase its bonding ability to, in turn, increase its share price; we strongly believe that you could have raised equity capital on significantly more attractive terms. As you explained to us on our call, we also understand that using debt, convertible debt or convertible preferred stock instead of common stock would not have achieved the goal of increasing your bonding capacity. Notwithstanding, we believe that the issuance was unneccessarily very expensive to the Company's existing owners. Despite our frustrations with respect to the financing, we are pleased on four fronts. First, it seems to us that Management should be able to reduce its operating expenses commensurate with the size of the enterprise. While Sarbanes-Oxley compliance costs will increase over time, we believe Management should be successful in more than offsetting the SOX costs with other reductions in corporate spending and litigation costs, thus increasing both cash flows and value. Furthermore, we see one of two outcomes for the Company's Ready Mix, Inc. subsidiary. Either, sometime down the road, you will sell it for fair value and redeploy the capital into your undervalued E&C business; or now that Ready Mix has increased its output capacity, you will start to realize synergies between the two companies. In either case, we see another opportunity for Management to decrease operating expenses as a percentage of total revenues. Second, we believe that both the Board and Management are cognizant of the need to take action to unlock shareholder value and are taking such steps. We look forward to seeing the effect of those actions soon to reduce the substantial gap between the Company's market price and its intrinsic value. Third, we see great opportunity for internal growth stimulated by the increased bonding capacity and the robust markets in which you operate profitably. We believe that your exposure to homebuilding is a small portion of your overall business and not material to your future prospects for both government and commercial work. Moreover, we believe that both the Nevada and Arizona markets are quite robust and should continue to grow at rates exceeding the overall U.S. construction spending rates. Fourth, as you undertake the three activities above, and in particular, as you scale your business and demonstrate the leverage in your business model, we believe that there is an opportunity for the Company to take its story to the Street to create awareness of your hidden value. In terms of intrinsic value, we conducted several valuation methodologies including a "multiples analysis" using 5 comparable, public engineering & construction (and ready mix concrete) companies (GVA, STRL, PCR, MTRX, RMIX). The average multiples of this peer group implies significant upside opportunity in the Company's stock and we believe a valuation opportunity in the range of $18-$20 per share. For example, on a trailing twelve month basis, the average Price/Sales, Enterprise Value/Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) and P/E multiples of this peer group would imply a value range of $16-$22 per share. Applying the same valuation methodologies to forward Sales, EBITDA and EPS, which does not assume a material increase in bonding capacity now available to Management, we believe Meadow Valley's stock could be worth over $20 per share. We also believe that downside risk is substantially mitigated due to Meadow Valley being cash flow positive and profitable, having a moderate amount of debt and that its share of consolidated cash and Ready Mix Inc. common stock equaling approximately $8.25 per share (relative to yesterday's closing price of $10.25 per share). Lastly, we feel that once the valuation gap starts to be eliminated and the stock price starts to reflect intrinsic value, the Company may want to consider a sale to a larger organization to achieve efficiencies of scale. For example, the five companies we have identified as your peer group are all bigger E&C (and ready mix concrete) companies with more financial resources. We also note that of the 5 peer group companies, several of them could potentially benefit from the geographic diversification/expansion that Meadow Valley could provide. Based upon all of the foregoing, and notwithstanding our frustrations cited above, we continue to believe that Management and the Board have a great opportunity here to unlock the Company's latent value. Moreover, we are confident that the Board and Management will take actions to eliminate the valuation gap and maximize value for the Company's owners. Accordingly, we are not making any formal demands of the Company at this time. As we have always stressed in our communications with you, we are available to help the Company in this, or any, regard and will be monitoring our investment and the Company's actions closely. Regards, /s/John D. Ziegelman -----END PRIVACY-ENHANCED MESSAGE-----