THE GOLDFIELDCORPORATION

PERFORMANCE-BASED BONUSPLAN

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THE GOLDFIELDCORPORATION

Melbourne, Florida

Effective January 1,2002

I.   PURPOSE 

Thepurpose of The Goldfield Corporation Performance-Based Bonus Plan (the"Plan") is to enhance The Goldfield Corporation's continued growthand profitability through a performance-based compensation program that rewardssuperior performance.  The Plan isdesigned to focus a select group of The Goldfield Corporation's officers andkey employees on the establishment and implementation of strategic plans thatwill help ensure the Company's continued growth, profitability and theachievement of superior results by linking a portion of their compensation tothe success of the Company. Accordingly, the Plan is designed to provide participants with incentivecompensation opportunities, as determined by the Board, that focus onindividual and team contributions through the measurement of specific financialperformance goals that are consistent with the Company's corporate objectives. 

II.   DEFINITIONS  

Inaddition to terms defined elsewhere in this Plan, the following terms shallhave the meanings indicated for purposes of the Plan: 

"BASECOMPENSATION" means a Participant's annual base salary earned during theapplicable Plan Year. 

"BENEFICIARY"means the person designated by a Participant in writing pursuant to Section Xof this Plan.  

"BOARD"means the board of directors of the Company.

"BONUSAWARD" means the bonus, if any, as determined by the Board, to be paid toa Participant with respect to a Plan Year. 

"COMMITTEE" means the CompensationCommittee of the Board. 

"COMPANY"means The Goldfield Corporation and any successor thereto, including itsSubsidiaries.

 

 

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"PARTICIPANT"means each officer or key employees of the Company who is designated by theCommittee as eligible to participate in the Plan and subject to the Board'ssole discretion, entitled to receive Bonus Awards under the Plan with respect toa specific Plan Year. 

"PERFORMANCEGOALS" means the Company and individual performance goals applicable forthe Plan Year, as described in Section VII. 

"PLAN"means The Goldfield Corporation Performance-Based Bonus Plan.

"PLANYEAR" means the fiscal year of the Company. 

"SUBSIDIARY"means any corporation, partnership, limited liability company or other entityof which (a) if a corporation, fifty (50) percent or more of the total votingpower of shares of stock entitled (without regard to the occurrence of anycontingency) to vote in the election of directors thereof is at the time ownedor controlled, directly or indirectly, by the Company, one or more of the otherSubsidiaries of the Company or a combination thereof, or (b) if a partnership,limited liability company or other entity, fifty (50) percent or more of thepartnership, membership or other similar equity ownership interest thereof isat the time owned or controlled, directly or indirectly, by the Company, one ormore of the other Subsidiaries of the Company or a combination thereof.  For purposes hereof, the Company and itsSubsidiaries will be deemed to have fifty (50) percent or more ownershipinterest in a partnership, limited liability company or business entity if theCompany and its Subsidiaries are allocated fifty (50) percent or more ofpartnership, limited liability company or other entity gains or losses orcontrol the general partner, managing member or similar managing body of suchpartnership, limited liability company or other entity.

"TARGETBONUS LEVEL" means, for any Plan Year, the fixed dollar amount or thepercentage of the Participant's Base Compensation deemed by the Board to be theTarget Bonus Level for the Participant in that Plan Year.

"TOTALDISABILITY" means a Participant's incapacity due to physical or mentalillness, which entitles the Participant to long-term disability benefits underthe Company's long-term disability plan, or, if no such plan is then in place,incapacity that causes the Participant to be absent from his duties on a fulltime basis for 90 consecutive days or as otherwise provided pursuant toemployment agreement.

III.   EFFECTIVE DATE OF PLAN

ThePlan shall be effective for the fiscal year beginning January 1, 2002, and foreach fiscal year thereafter in which the Committee determines that bonuses willbe awarded under the Plan. 

 

  

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IV.   PLAN ADMINISTRATION 

ThePlan will be administered by the Committee, which is authorized to interpretthe Plan and to establish rules and regulations necessary to administer thePlan.  The decisions of the Committeeshall be final and binding on all Participants and Beneficiaries.  Not withstanding the establishment of aTarget Bonus Level for any Plan Year the Committee and the Board shall havefinal discretion to determine actual award levels, methods of payment, andwhether or not payment shall be made for such Plan Year.  It is expressly understood that participantsare at will employees and do not have a property right or interest in thisBonus Plan.  

TheCommittee shall establish its own procedures and the time and place for itsmeetings and provide for the keeping of minutes of all meetings.  A majority of the members of the Committeeshall constitute a quorum for the transaction of business at a meeting of theCommittee.  Any action of the Committeemay be taken upon the affirmative vote of a majority of the members of theCommittee at a meeting or, at the direction of its chairman, without a meeting,provided that all members of the Committee are informed of their right to voteon the proposal and of the outcome of the vote thereon. 

Nomember of the Committee shall be personally liable by reason of any contract orother instrument executed by him or on his behalf in his capacity as a memberof the Committee nor for any mistake of judgment made in good faith inconnection with the administration or interpretation of the Plan, and theCompany shall indemnify and hold harmless each member of the Committee and eachother officer, employee or director of the Company to whom any duty or powerrelating to the administration or interpretation of the Plan has beendelegated, against any cost or expense (including counsel fees) or liability(including any sum paid in settlement of a claim with the approval of theCommittee) arising out of any act or omission to act in connection with thePlan, unless arising out of such person's own fraud or bad faith. 

V.   PARTICIPANTS

Participantswill be selected by the Committee from among officers and key employees workingat or for the Company or a Subsidiary who are in a position to make significantcontributions to the success of the Company.  In the Committee's discretion, Participants may be added to the Plan orremoved from the Plan at any time during the Plan Year.  Participation in the Plan for a particularPlan Year shall not entitle such Participant to participation in the Plan infuture Plan Years.  

VI.   TARGET BONUS LEVELS

Foreach Plan Year, the Committee shall recommend to the Board the annual TargetBonus Level for each Participant, denominated as a fixed dollar amount orpercentage of Base Compensation in effect at the beginning of the Plan Year(or, if the Participant became a Participant during that Plan Year, at the timethe individual became a Participant) or other quantitative standard, such as apercentage of operating income of a Subsidiary for which Participantworks.  Each Subsidiary or otheroperating unit may be eligible to receive an incentive pool, will be availablefor the officer in charge of Subsidiary or unit to distribute to Participantsat his or her discretion based on employee performance.  The Target Bonus Levels shall becomeeffective upon Board approval. Establishment of a Target Bonus Level for a Participant for a Plan Yearshall not imply or require that the same Target Bonus Level for suchParticipant be set for any subsequent Plan Year.  The Target Bonus Level for a Participant who becomes aParticipant after the beginning of a Plan Year shall be adjusted as necessaryto reflect the partial year of participation. 

 

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Foreach Plan Year and for each Participant, the Board, upon recommendation fromthe Committee, shall prescribe a formula to determine the percentages (whichmay be lesser than or greater than 100%) of the Participant's Target BonusLevel which may, in the discretion of the Board, be payable based upon thedegree of attainment of the Performance Goals during the Plan Year. 

VII.   PERFORMANCE GOALS

  

Foreach Plan Year and with respect to each Participant, the Board shall, uponrecommendation from and after consultation with the Committee, select one ormore quantitative components and/or individual components that shall serve asPerformance Goals for that year, determine the conditions necessary forattainment of any Performance Goals and, if more than one Performance Goal isselected for a Participant, determine the weight given each such goal indetermining the Participant's total available Bonus Award.

QuantitativeComponents:  The Committee isresponsible for defining the performance measures which support or correspondwith the Company's financial goals, as expressed in the Company's annualbusiness plan for the Plan Year.  Ingeneral, quantitative measures of the Company's financial performance during aPlan Year shall be selected by the Committee on a year-to-year basis and mayinclude one or more of the following: shareholder value, earnings per share (with or without extraordinaryitems), net income (with or without extraordinary items), return on equity,return on assets, net interest income, net interest margin, net interestspread, non-performing assets, total assets, operating expenses, otherexpenses, other income, loan income, fee income, and any sub-categories orratios of or between any of the above, on a GAAP basis, tax-equivalent basis orany other regularly-utilized method of financial or regulatory accounting orpresentation. 

IndividualComponent:   Individual performancemeasures will be established for each Participant.  These measures shall relate to the strategic objectives and/orspecial projects of the Company and/or a Subsidiary, as applicable, and shallbe weighted according to their importance to the Company and/or Subsidiary andthe impact of the Participant on their achievement. 

ThePerformance Goals shall be established in writing not later than 90 days afterthe commencement of the period of service to which the Performance Goalrelates; provided, however, that while the Company intends that PerformanceGoals will be objective and will not be subject to adjustment once established,the Board retains the right to adjust Performance Goals in the discretion ofthe Board. At the end of each Plan Year, the Board will, upon recommendationfrom the Committee, determine the extent, if any, to which the applicablePerformance Goals have been attained in order to determine the Bonus Award, ifany, to be paid to each Participant.

VIII.   COMMUNICATION 

Ifa group of employees of a Subsidiary or unit will participate in an incentivepool, the officer in charge of such Subsidiary or unit will be advised of theaggregate Target Bonus Level.

  

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IX.   PAYMENT OF AWARDS

BonusAwards, if any, shall be payable in cash as soon as practicable after the closeof the Plan Year; provided, however, that unless otherwise determined by theBoard, Bonus Awards shall be paid by not later than March 15.  In the event of an employee's death, retirementor Total Disability while employed by the Company, the Committee may pay a prorata portion of his Bonus Award based on the time employed during the Plan Yearprior to his death, retirement, or Total Disability unless otherwise determinedby the Committee and approved by the Board, if termination of employment is forany other reason, participation in the Plan shall cease and no Bonus Award maybe payable.  Any amounts to which aParticipant is entitled, if any, shall be paid to the Participant or hisBeneficiary or, in the absence of such designation, to his estate.

Notwithstandinganything in this Plan to the contrary, the Bonus Award payable to the ChiefExecutive Officer of the Company in any Plan Year shall be reduced, to theextent necessary, so that it will not, when added to the Participant's BaseCompensation payable in such year, exceed the limitation for deductibility ofemployee remuneration described in Section 162(m) of the Internal Revenue Codeof 1986, as amended.  

X.   AMENDMENT OR TERMINATION OF THE PLAN

TheBoard reserves the right at any time to amend, suspend or terminate the Plan inwhole or in part, and for any reason and without the consent of any Participantor Beneficiary.  Participants shall nothave a claim or cause of action under this Plan if the Board amends, suspends,or terminates this Plan.

XI.   MISCELLANEOUS PROVISIONS

A.            Limitation of Rights

            No provision of the Plan or anydocument describing the Plan or establishing rules or regulations regarding thePlan's administration shall be deemed to confer on any Participant the right tocontinue in the Company's employer or to affect the right of the Company toterminate any such Participant's employment or service.  The Plan shall not be treated as an employeebenefit plan within the meaning of Title I of the Employee Retirement IncomeSecurity Act of 1974, as amended.  TheCompany shall not establish any fund to assist it in paying any Bonus Awards,and no Participant or any other person shall have any right to any specificassets or funds of the Company to satisfy the payment of a Bonus Award.

B.            Disputes 

            If a Participant has a disputeregarding his Bonus Award under the Plan, he should prepare a written requestfor review addressed to the Committee. The request for review should include any facts supporting the Participant'srequest as well as any issues or comments the Participant deems pertinent.  The Committee will send the Participant awritten response documenting the outcome of this review in writing no laterthan 60 days following the date of the Participant's written request. (Ifadditional time is necessary, the Participant shall be notified inwriting.)  The determination of thisrequest shall be final and conclusive upon all persons. 

 

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C.            Withholding Taxes 

            The Company shall deduct from allpayments under the Plan an amount necessary to satisfy federal, state and localtax withholding requirements. 

D.            Assignment 

            No Participant shall have any rightor power to pledge or assign any rights, privileges, or Bonus Awards providedfor under the Plan. 

E.             Gender and Number

            Except where otherwise indicated bythe context, any masculine term used herein also shall include the feminine,the plural shall include the singular, and the singular shall include theplural.

F.            Governing Law

            ThisPlan shall be governed by the laws of the State of Florida, without regards tothe conflict of law principles thereof.