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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | |
þ | Definitive Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant to §240.14a-12 |
THE KEITH COMPANIES, INC.
Payment of Filing Fee (Check the appropriate box):
þ | Fee not required. | ||||
o | 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: | ||||
o | Fee paid previously with preliminary materials. | ||||
o | 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: |
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TIME | 10:30 a.m. Pacific Standard Time on Tuesday, May 17, 2005. | |
PLACE | 19 Technology Drive, Irvine, California 92618. | |
ITEMS OF BUSINESS | (1) To elect members of the Board of Directors for one-year terms. | |
(2) To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2005. | ||
RECORD DATE | You can vote if at the close of business on March 21, 2005, you were a shareholder of the Company. | |
PROXY VOTING | All shareholders are cordially invited to attend the Annual Meeting in person. However, to ensure your representation at the Annual Meeting, we urge you to vote promptly by signing and returning the enclosed proxy card, or if you hold your shares in street name, by accessing the World Wide Web site indicated on your proxy card to vote via the Internet. |
Gary C. Campanaro,Secretary |
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• | written notice to the Secretary of the Company; | |
• | timely delivery of a valid, later-dated proxy or a later-dated vote on the Internet; or | |
• | if you are a shareholder of record, voting by ballot at the Meeting. |
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George Deukmejian | George Deukmejian joined our board of directors in July 1999. Mr. Deukmejian was the Governor of the State of California, serving in that office from January 1983 until January 1991. Following his departure from the Governor’s office, he joined the law firm of Sidley & Austin in its Los Angeles office where he practiced as a partner until July 1999 and where he practiced as Senior Counsel from July 1999 until his retirement in July 2000. Prior to his election as Governor, Mr. Deukmejian served from 1979 to 1982, as the Attorney General of the State of California and from 1963 to 1978, served in the California State Legislature. Mr. Deukmejian currently serves on the board of directors of Health Net of California, a subsidiary of Health Net, Inc. He also serves as a Deputy Trustee of the Golden Eagle Insurance Trust in Liquidation. Mr. Deukmejian received a B.A. in Sociology from Siena College and a J.D. from St. Johns University Law School. | |
Director Since:1999Age:76 |
Member:Compensation Committee (Chair) and Audit Committee |
Christine D. Iger | Christine D. Iger joined our board of directors in July 1999. Ms. Iger is founder and president of Southern California based Iger & Associates, a government relations consulting company. She served as a partner in the international law firm of Manatt, Phelps & Phillips in the government and real estate practice from August 2001 through September 2003. She was the chief executive officer of the Building Industry Association of Southern California, Orange County chapter |
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1989 through 2001. Prior to joining that organization, she was an appellate lawyer for the Attorney General of the State of California from 1981 to 1983, and served as the director of the California Department of Housing and Community Development from 1983 to 1989. Ms. Iger is a former board member of the Federal National Mortgage Association (Fannie Mae) and the California Housing Finance Agency (Cal HFA). She previously served on the Board of Directors and compensation committee of Tustin based Sunwest Bank. Ms. Iger received a B.A. in English from California State University at San Diego and a J.D. from Western State University, College of Law. | ||
Director Since:1999Age:52 | ||
Member:Compensation Committee and Audit Committee | ||
Edward R. Muller | Edward R. Muller, a private investor, joined our board of directors in July 2001. Mr. Muller was president and chief executive officer of Edison Mission Energy, a wholly owned subsidiary of Edison International, from 1993 until 2000. During his tenure, Edison Mission Energy was engaged in developing, owning and operating independent power production facilities worldwide. From 1999 to 2000, Mr. Muller was Deputy Chairman of the Board of Directors of Contact Energy Ltd., a New Zealand electric generation company partially owned by Edison Mission Energy. Mr. Muller serves on the boards of directors of GlobalSantaFe Corporation, Interval, Inc., Ormat Technologies, Inc., REI Holding Co. (formerly RealEnergy, Inc.), RigNet, Inc. and Strategic Data Corp. Mr. Muller received an A.B. from Dartmouth College and a J.D. from the Yale Law School. | |
Director Since:2001Age:53 | ||
Member:Audit Committee (Chair) | ||
Aram H. Keith | Aram H. Keith co-founded our company in March 1983 and has served as our chief executive officer and chairman of the board since that time. Mr. Keith also served as our president from 1983 to 1999. Mr. Keith is the president and sole director of the majority of our subsidiaries. Mr. Keith has been a California licensed civil engineer since 1972. He also holds civil engineering licenses in the states of Arizona, Colorado, Nevada, and Texas. Mr. Keith received a B.S. in Civil Engineering from California State University at Fresno. | |
Director Since:1983Age:60 | ||
Gary C. Campanaro | Gary C. Campanaro has served as our chief financial officer since joining our Company in January 1998, as a director since July 1998, and as our secretary since April 1999. Mr. Campanaro is also the chief financial officer and secretary of each of our subsidiaries. In addition, since March 2002, Mr. Campanaro has served as the treasurer of one of our subsidiaries. Mr. Campanaro joined CB Commercial Real Estate Group, Inc. (now CB Richard Ellis), a commercial real estate brokerage firm, in November 1992 as a vice president of the financial consulting group and became senior vice president, managing officer of the financial consulting group in February 1995 and also began serving on the operation management board of CB Commercial Real Estate Group Inc. Mr. Campanaro served in those positions until he joined our Company. From July 1988 to November 1992, Mr. Campanaro held various accounting, finance and real estate positions with CKE Restaurants, Inc., an owner and operator of a restaurant chain. Mr. Campanaro began his professional career with KPMG LLP and is licensed by the State of California as a certified public accountant and as a real estate broker. He is a member of the American Institute of Certified Public Accountants. Mr. Campanaro received a B.S. in Accounting from the University of Utah. | |
Director Since:1998Age:44 |
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Eric C. Nielsen | Eric C. Nielsen has served as our president since July 1999 and as our chief operating officer since March 2001. He was appointed as a member of our board of directors in July 2001 and served in that capacity until our 2003 Annual Meeting of Shareholders. Prior to July 1999, Mr. Nielsen served as the president of our Orange County division since November 1994. Mr. Nielsen joined us in November 1985 as senior designer and became a vice president, engineering and mapping in July 1990. Mr. Nielsen received a B.S. in Civil Engineering from California Polytechnic State University and is a registered engineer in the states of California, Colorado, and Hawaii. | |
Age:44 | ||
Thomas E. Braun | Thomas E. Braun has served as our president of Real Estate Development Services since March 2004. Prior to March 2004, Mr. Braun served as president of our Orange County division since January 2000. Mr. Braun also served as regional president of the Los Angeles and Ventura divisions since March 2002. Mr. Braun joined our company in December 1985 as a senior designer and became vice president of engineering in October 1995. Mr. Braun received both a B.S. in Civil Engineering and an M.S. in Water Resources engineering from California State University, Long Beach. He is registered as a professional engineer in the state of California. | |
Age:42 | ||
Robert J. Ohlund | Robert J. Ohlund has served as our president of Public Works/ Infrastructure Services since November 2004. Prior to November 2004, Mr. Ohlund was employed at Tetra Tech, Inc. since January 1998 and served as the vice president and director of Construction Management/ ISG1 at the time of his departure. From June 1993 to December 1997, Mr. Ohlund served as vice president and a director of Daniel Boyle Engineering, Inc. Mr. Ohlund has been a member of the Orange County Water Association since 1983, was elected to the board of directors from 1994 to 2000, and also has been a member of the American Water Works Association for over twenty years, a member of the American Society of Civil Engineers, and was appointed to the Board of Advisors for the Urban Water Institute. Mr. Ohlund earned a B.S. Civil Engineering degree from the University of Southern California in 1983 and is a Registered Civil Engineer in the State of California. | |
Age:43 | ||
Dean J. Palumbo | Dean J. Palumbo has served as our president of Energy/ Industrial Services since January 1, 2005. Prior to January 2005, Mr. Palumbo served as president of our Scottsdale, Arizona Division since January 2004, and president of our Palm Desert Division since April 2001. Prior thereto, Mr. Palumbo served as vice president of our Palm Desert Division since October 1998. Mr. Palumbo joined our company in November of 1997, as the director of Surveying Services in our Palm Desert division. Mr. Palumbo was the sole proprietor of his own consulting firm providing civil engineering, land surveying and land planning services from 1991 through November 1997. Mr. Palumbo has an A.A.S. degree in Civil Engineering and continued coursework in civil engineering at Rochester Institute of Technology in Rochester, N.Y. and at Arizona State University in Phoenix, Arizona. Mr. Palumbo is a registered Professional Land Surveyor in the states of California and Colorado. | |
Age:39 |
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• | appointing and retaining, and terminating when appropriate, the independent registered public accounting firm; | |
• | setting the independent registered public accounting firm’s compensation, and pre-approving all audit services to be provided by the independent registered public accounting firm; | |
• | establishing policies and procedures for the engagement of the independent registered public accounting firm to provide permitted non-audit services and pre-approving the performance of any permitted non-audit services; and | |
• | establishing procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by the Company’s employees of concerns regarding questionable accounting or auditing matters. |
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Fiscal Year Ended | ||||||||
December 31, | ||||||||
2003 | 2004 | |||||||
Audit fees:(1) | $ | 143,500 | $ | 488,500 |
(1) | Includes aggregate fees billed by KPMG LLP for the audit of the Company’s annual financial statements and the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q of $143,500 in 2003 and $184,900 in 2004. In 2004, audit fees also include the aggregate fees billed by KPMG LLP for the audit of internal control over financial reporting, which totaled $303,600. |
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Long Term | |||||||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||||||
Annual Compensation | Number of | ||||||||||||||||||||||||||||
Fiscal Year | Restricted | Securities | |||||||||||||||||||||||||||
Name and | Ended | Other | Stock | Underlying | All Other | ||||||||||||||||||||||||
Principal Position | December 31, | Salary | Bonus | Compensation | Awards(1) | Options | Compensation(2) | ||||||||||||||||||||||
Aram H. Keith | 2004 | $ | 461,011 | — | $ | 33,999 | (3) | — | — | $ | 8,200 | ||||||||||||||||||
Chief Executive | 2003 | $ | 388,233 | — | $ | 34,478 | (3) | — | 40,000 | $ | 8,000 | ||||||||||||||||||
Officer & Chairman | 2002 | $ | 374,100 | — | $ | 26,736 | (3) | — | 30,000 | $ | 8,000 | ||||||||||||||||||
of the Board | |||||||||||||||||||||||||||||
Eric C. Nielsen | 2004 | $ | 300,575 | $ | 75,000 | $ | 28,011 | (4) | $ | 104,775 | (5) | — | $ | 8,200 | |||||||||||||||
President & Chief | 2003 | $ | 219,252 | $ | 10,000 | $ | 25,031 | (4) | $ | 102,900 | (5) | 30,000 | $ | 8,000 | |||||||||||||||
Operating Officer | 2002 | $ | 204,663 | — | $ | 15,805 | (4) | — | 20,000 | $ | 8,000 | ||||||||||||||||||
Gary C. Campanaro | 2004 | $ | 300,575 | $ | 75,000 | $ | 22,312 | (6) | $ | 104,775 | (5) | — | $ | 8,200 | |||||||||||||||
Chief Financial | 2003 | $ | 219,252 | $ | 17,000 | $ | 20,694 | (6) | $ | 102,900 | (5) | 30,000 | $ | 8,000 | |||||||||||||||
Officer & Secretary | 2002 | $ | 204,663 | — | $ | 16,690 | (6) | — | 20,000 | $ | 8,000 | ||||||||||||||||||
Thomas E. Braun(7) | 2004 | $ | 261,976 | $ | 75,000 | $ | 9,140 | (8) | $ | 177,375 | (9) | — | $ | 8,200 | |||||||||||||||
President of Real | |||||||||||||||||||||||||||||
Estate Development | |||||||||||||||||||||||||||||
Services | |||||||||||||||||||||||||||||
Jerald H. Evans(10) | 2004 | $ | 170,962 | — | $ | 7,340 | (11) | — | — | $ | 6,838 | ||||||||||||||||||
President of Energy/ | |||||||||||||||||||||||||||||
Industrial Services |
(1) | The Company does not currently pay dividends. If in the future, dividends are declared, they will be payable on the restricted stock reported in this table in the same manner and to the same extent as dividends may be payable on other shares of our common stock. |
(2) | Represents matching contributions made by us under our 401(k) plan. |
(3) | For fiscal 2004, this amount includes a $24,000 auto allowance and $8,300 in membership dues paid by us on behalf of Mr. Keith; for fiscal 2003, this amount includes a $21,000 auto allowance and $8,463 in membership dues paid by us on behalf of Mr. Keith; for fiscal 2002, this amount includes an $18,000 auto allowance and $8,471 in membership dues paid by us on behalf of Mr. Keith. |
(4) | For fiscal 2004, this amount includes an $18,000 auto allowance and $4,865 in payout of accrued vacation; for fiscal 2003, this amount includes a $15,000 auto allowance and $4,635 in payout of accrued vacation; for fiscal 2002, this amount includes a $12,000 auto allowance. |
(5) | For fiscal 2004, these amounts reflect 7,500 shares of restricted common stock granted multiplied by the closing market price of our common stock on the date of grant. For fiscal 2003, these amounts reflect 10,000 shares of restricted common stock granted multiplied by the closing market price of our common stock on the date of grant. The number and value of the aggregate restricted stock holdings for each of these executives at December 31, 2004, was 14,167 shares and $246,364, respectively. | |
(6) | For fiscal 2004, this amount includes an $18,000 auto allowance; for fiscal 2003, this amount includes a $15,000 auto allowance; for fiscal 2002, this amount includes a $12,000 auto allowance. | |
(7) | In March 2004, Mr. Braun was promoted to the position of President of Real Estate Development Services. The annual salary shown is for the full year. | |
(8) | For fiscal 2004, this amount includes a $9,000 auto allowance. |
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(9) | This amount reflects 12,500 shares of restricted common stock granted multiplied by the closing market price of our common stock on the date of grant. The number and value of the aggregate restricted stock holdings for this executive at December 31, 2004, was 12,500 shares and $217,375, respectively. |
(10) | Mr. Evans was appointed President Emeritus of Energy/ Industrial Services effective January 1, 2005 through his retirement date of January 31, 2005. |
(11) | For fiscal 2004, this amount includes a $7,200 auto allowance. |
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Shares | Underlying Unexercised | In-the-Money Options at | ||||||||||||||||||||||
Acquired | Options at December 31, 2004 | December 31, 2004 | ||||||||||||||||||||||
on | Value | |||||||||||||||||||||||
Name | Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Aram H. Keith | -0- | -0- | 66,000 | 50,000 | $ | 438,260 | $ | 288,180 | ||||||||||||||||
Eric C. Nielsen | 2,000 | $ | 25,850 | 70,893 | 48,000 | $ | 623,676 | $ | 274,960 | |||||||||||||||
Gary C. Campanaro | -0- | -0- | 69,982 | 44,000 | $ | 631,424 | $ | 222,920 | ||||||||||||||||
Thomas E. Braun | -0- | -0- | 24,240 | 8,000 | $ | 264,568 | $ | 69,300 |
Number of | ||||||||||||
Number of | Securities | |||||||||||
Securities to Be | Available for | |||||||||||
Issued upon | Weighted-Average | Future Issuance | ||||||||||
Exercise of | Exercise Price of | under the Equity | ||||||||||
Plan Category | Outstanding Options | Outstanding Options | Compensation Plan | |||||||||
Equity compensation plan approved by security holders | 794,999 | $ | 9.56 | 276,595 |
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COMPENSATION COMMITTEE | |
George Deukmejian (Chair) | |
Christine D. Iger |
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AUDIT COMMITTEE | |
George Deukmejian | |
Christine D. Iger | |
Edward R. Muller (Chair) |
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1999 | 2000 | 2001 | 2002 | 2003 | 2004 | ||||||||||||||||||||||||||
The Keith Companies, Inc. | $ | 100 | $ | 183 | $ | 233 | $ | 299 | $ | 311 | $ | 397 | |||||||||||||||||||
NASDAQ INDUSTRIALS | $ | 100 | $ | 66 | $ | 62 | $ | 46 | $ | 72 | $ | 84 | |||||||||||||||||||
WILSHIRE 5000 | $ | 100 | $ | 89 | $ | 80 | $ | 63 | $ | 83 | $ | 93 | |||||||||||||||||||
Peer Group | $ | 100 | $ | 159 | $ | 179 | $ | 99 | $ | 180 | $ | 168 | |||||||||||||||||||
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Number of Shares of | |||||||||
Common Stock | |||||||||
Name and Address | Beneficially Owned(1) | Percent(1) | |||||||
Named Executive Officers and Directors: | |||||||||
Aram H. Keith | 1,366,217 | (2) | 17.2 | % | |||||
Gary C. Campanaro | 98,008 | (3) | 1.2 | % | |||||
Eric C. Nielsen | 97,793 | (4) | 1.2 | % | |||||
Thomas E. Braun | 55,650 | (5) | ** | ||||||
George Deukmejian | 12,307 | (6) | ** | ||||||
Christine D. Iger | 9,407 | (7) | ** | ||||||
Edward R. Muller | 3,000 | (8) | ** | ||||||
Jerald H. Evans(9) | -0- | ** | |||||||
5% Holders: | |||||||||
Royce & Associates, LLC | |||||||||
1414 Avenue of the Americas, New York, NY 10019 | 1,101,400 | 13.9 | % | ||||||
Wedbush, Inc. and related parties | |||||||||
1000 Wilshire Blvd., Los Angles, CA 90017 | 606,315 | (10) | 7.6 | % | |||||
Third Avenue Management LLC | |||||||||
622 Third Avenue, New York, NY 10017 | 597,583 | 7.5 | % | ||||||
Babson Capital Management LLC | |||||||||
One Memorial Drive, Cambridge, MA 02142 | 592,840 | 7.5 | % | ||||||
Wells Fargo & Company | 569,040 | 7.2 | % | ||||||
420 Montgomery Street, San Francisco, CA 94104 | |||||||||
Snow Capital Management, L.P. | |||||||||
2100 Corporate Drive, Suite 300, Pittsburg, PA 15237 | 546,907 | 6.9 | % | ||||||
Current directors and executive officers as a group (9 persons) | 1,669,034 | (11) | 21.0 | % |
** | Less than one percent. |
(1) | Under Rule 13d-3, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding at March 9, 2005. The percentage ownership is based on 7,934,833 shares of common stock outstanding as of March 9, 2005. | |
(2) | Includes (a) 1,300,217 shares of common stock held in the Aram H. Keith and Margie R. Keith Trust, for which Mr. and Mrs. Keith serve as co-trustee and (b) 66,000 shares of common stock reserved for issuance upon exercise of stock options which are or will become exercisable on or prior to May 8, 2005. |
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(3) | Includes (a) 7,359 shares of common stock held jointly by Mr. Campanaro and his wife and (b) 73,982 shares of common stock reserved for issuance upon exercise of stock options, which are or will become exercisable on or prior to May 8, 2005. | |
(4) | Includes 76,893 shares of common stock reserved for issuance upon exercise of stock options, which are or will become exercisable on or prior to May 8, 2005. | |
(5) | Includes 26,240 shares of common stock reserved for issuance upon exercise of stock options, which are or will become exercisable on or prior to May 8, 2005. | |
(6) | Includes (a) 2,400 shares of common stock held jointly by Mr. Deukmejian and his wife and (b) 8,407 shares of common stock reserved for issuance upon exercise of stock options which are or will become exercisable on or prior to May 8, 2005. | |
(7) | Includes 8,407 shares of common stock reserved for issuance upon exercise of stock options which are or will become exercisable on or prior to May 8, 2005. | |
(8) | Includes (a) 2,000 shares of common stock held by a family trust established for the benefit of Mr. Muller’s family in which Mr. Muller and his wife share voting and investment powers and (b) 1,000 shares of common stock reserved for issuance upon exercise of stock options which are or will become exercisable on or prior to May 8, 2005. | |
(9) | Mr. Evans retired as President Emeritus of Energy/ Industrial Services effective January 31, 2005. |
(10) | Edward W. Wedbush is the Chairman of Wedbush, Inc. (formerly E*Capital Corporation) and owns a majority of the outstanding shares of Wedbush, Inc. Mr. Wedbush is the President of Wedbush Morgan Securities and owns a majority of the shares of common stock of Wedbush Morgan Securities. Wedbush, Inc. has sole ownership of 369,011 shares of our common stock, Mr. Wedbush has sole ownership of 167,934 shares of our common stock and Wedbush Morgan Securities has sole ownership of 50,000 shares of our common stock. Wedbush, Inc., Mr. Wedbush, and Wedbush Morgan Securities have sole power to vote and dispose of 369,011 shares, 167,934 shares, and 50,000 shares, respectively. Each of Wedbush, Inc., Mr. Wedbush and Wedbush Morgan Securities has shared power to vote with respect to 586,945 shares and shared power to dispose of 606,315 shares. Mr. Wedbush may be deemed the beneficial owner of our shares that are owned by Wedbush, Inc. However, Mr. Wedbush disclaims beneficial ownership of the shares of common stock owned by Wedbush, Inc. |
(11) | Includes 273,599 shares of common stock reserved for issuance upon exercise of stock options, which are or will become exercisable on or prior to May 8, 2005. |
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ON BEHALF OF THE BOARD OF DIRECTORS | |
Gary C. Campanaro,Secretary |
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I. | Purpose |
II. | Structure |
III. | Meetings |
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IV. | Responsibilities |
A. | The Charter |
B. | Selection and Oversight of Outside Auditor |
1. Appoint and make all determinations with respect to the retention of the outside auditor; which firm is ultimately accountable to the Committee and the Board, as representatives of the shareholders. | |
2. Review and evaluate the qualifications, performance and independence of the outside auditor. To assist in this undertaking, the Committee shall require the outside auditor to submit a report (which report shall be reviewed by the Committee) describing (a) the outside auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the accounting firm or by any inquiry or investigations by governmental or professional authorities (within the preceding five years) respecting one or more independent audits carried out by the outside auditor, and any steps taken to deal with any such issues, and (c) all relationships the outside auditor has with the Company, its executive officers and relevant third parties to determine the outside auditor’s independence. The Committee shall also consider whether the provision of any non-audit services is compatible with the independence standards under the guidelines of the SEC and of the Independence Standards Board. | |
3. Approve the fees to be paid to the outside auditor for audit services. | |
4. Approve the retention of the outside auditor for any material non-audit service and the fee for such service. | |
5. Review with the outside auditor the experience and qualifications of the senior members of the audit team, including the knowledge and experience of the senior members of the audit team with respect to the Company’s industry. The Committee shall ensure the regular rotation of the lead audit partner and audit review partner as required by law and consider whether there should be a periodic rotation of the Company’s outside auditor. | |
6. Establish and periodically review Company policies on hiring former employees of the outside auditor. | |
7. Direct and supervise any special audit inquiries by the independent auditor as the Board or the Committee may request. |
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8. Review with the outside auditor any problems or difficulties the auditor may have encountered and any “management” or “internal control” letter provided by the outside auditor and the Company’s response to that letter. Such review shall include: |
a. any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information and any disagreements with management; | |
b. any accounting adjustments that were proposed by the outside auditor that were not agreed to by the Company; and | |
c. communications between the outside auditor and its national office regarding any issues on which it was consulted by the audit team and matters of audit quality and consistency. |
9. Communicate with the outside auditor regarding (a) alternative treatments of financial information within the parameters of GAAP, (b) critical accounting policies and practices to be used in preparing the audit report and (c) such other matters as the SEC and the NASDAQ National Sock Market may direct by rule or regulation. | |
10. Periodically consult with the outside auditor out of the presence of management about internal controls and the completeness and accuracy of the Company’s financial statements and the adequacy of its accounting personnel. | |
11. Oversee the relationship with the outside auditor by discussing with the outside auditor the nature and rigor of the audit process, receiving and reviewing audit reports and ensuring that the outside auditor has full access to the Committee (and the Board) to report on any and all appropriate matters. | |
12. Discuss with the outside auditor prior to the audit the general planning and staffing of the audit. | |
13. Obtain a representation from the outside auditor that Section 10A of the Securities Exchange Act of 1934 has been followed. |
C. | Internal Auditor |
D. | Oversight and Review of Accounting Principles and Practices and Internal Controls and Legal Compliance |
1. In consultation with the outside auditor, review the integrity of the Company’s financial reporting processes, both internal and external. | |
2. Annually discuss with management and the outside auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including the factors which resulted in the selection of the GAAP methods on the Company’s financial statements and a description of any transactions as to which management obtained Statement on Auditing Standards No. 50 letters. | |
3. Discuss with and make inquiries of management and the outside auditor concerning the adequacy and effectiveness of the internal financial, accounting and operating controls and procedures of the Company and its subsidiaries, including but not limited to procedures designed to prevent any fraud, illegal acts or deficiencies in internal control, and ensure that the outside auditor informs the Committee of any fraud, illegal acts or deficiencies in internal control of which it becomes aware. | |
4. Discuss with management and legal counsel the status of any pending litigation, income taxation matters, regulatory compliance policies and other legal and compliance matters material to the operations of the Company. |
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5. Review with management and the outside auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements. | |
6. Meet at least annually with the chief financial officer, the chief executive officer, and the outside auditor in separate executive sessions. | |
7. Review and approve all related party transactions in accordance with the rules of the SEC and the NASDAQ National Stock Market. | |
8. Confirm with management and the outside auditor that the Company and its subsidiaries are in conformity with applicable legal requirements, including disclosures of insider and affiliated party transactions; advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations. |
E. | Oversight and Monitoring of the Company’s Financial Statements and Documents and Reports |
1. Review and discuss with the outside auditor and with senior management the results of the audit and any reports or opinions to be rendered in connection therewith, including major issues regarding accounting and auditing principles and practices. | |
2. Review quarterly and annual financial results with management and the outside auditor, prior to any interim or year-end filings, including the results of the outside auditor’s reviews of the quarterly financial statements, and consider whether the information is adequate and consistent with the Committee’s knowledge about the Company and its operations. | |
3. Review and discuss with management all (i) press releases reporting annual or quarterly financial results or other material financial developments, and (ii) financial guidance to analysts and other members of the financial community, in each case prior to release to the public. | |
4. Discuss with management any significant variances in the annual financial statements between years and determine whether the data are consistent with the management’s discussion and analysis section of the annual and quarterly reports. | |
5. Review with management the management’s discussion and analysis section of annual and quarterly reports and confirm that the outside auditor and legal counsel have completed their review. | |
6. Review with management and the outside auditor any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding the Company’s financial statements or accounting policies. | |
7. Establish and periodically review procedures for receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. | |
8. Implement policies designed to ensure that no officer, director or any person acting under their direction fraudulently influences, coerces, manipulates or misleads the outside auditor for purposes of rendering the Company’s financial statements materially misleading. | |
9. Periodically review the Committee’s policies with respect to the participation of Committee members in educational programs conducted by the Company or an outside consultant to enhance their knowledge of accounting and financial matters. |
F. | Audit Committee Reports |
A-4
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A-5
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A-6
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q DETACH PROXY CARD HERE q
1. ELECTION OF DIRECTORS | oFORall nominees listed below (except as indicated to the contrary below). | oWITHHOLD AUTHORITYto vote for all nominees listed below | oEXCEPTIONS |
Director Nominees: Aram H. Keith, Gary C. Campanaro, George Deukmejian, Christine D. Iger, and Edward R. Muller
(INSTRUCTIONS: To withhold authority to vote for any individual nominee mark the “Exceptions” box and write that nominee’s name on the space below.)
EXCEPTIONS | ||
2. | RATIFICATION OF APPOINTMENT OF KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2005. |
oFOR | oAGAINST | oABSTAIN |
If you wish to vote in accordance with the recommendations of management, all you need to do is sign and return this card. The proxies cannot vote your shares unless you sign and return the card.
Please sign exactly as name appears hereon. Joint owners should each sign. Where applicable, indicate position or representative capacity.
Dated: | , 2005 | |||
Signature | ||||
Signature |
Please Detach Here
Before Returning it in the Enclosed Envelope
Table of Contents
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
THE KEITH COMPANIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Aram H. Keith and Gary C. Campanaro, and each of them, with full power of substitution, as the proxies of the undersigned, to vote all shares of Common Stock of any class of The Keith Companies, Inc. (the “Company”) that the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Company to be held at 19 Technology Drive, Irvine, California, on May 17, 2005 at 10:30 a.m. Pacific Standard Time, and at all adjournments thereof (the “Annual Meeting”), upon the following matters, which are described in the Company’s Proxy Statement for the Annual Meeting.
The undersigned hereby revokes any other proxy to vote at the Annual Meeting, and hereby ratifies and confirms all that said proxies, and each of them, may lawfully do by virtue hereof. With respect to matters not known at the time of the solicitation hereof, said proxies are authorized to vote in accordance with their best judgment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED. IF NO DIRECTION IS MADE, IT WILL BE VOTED “FOR” THE ELECTION OF DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS AND “FOR” RATIFICATION OF THE APPOINTMENT OF KPMG LLP.
PLEASE SIGN AND DATE ON REVERSE SIDE