October 2004
Dear Shareholder:
You are invited to attend Kavilco's 31st Annual Meeting to be held on November
6, 2004 at 1:00 p.m. at Ted Ferry Civic Center, 334 Front Street, Ketchikan
Alaska. Details about the meeting are described in the enclosed Notice of Annual
Meeting and Proxy Statement.
We urge you to attend the Annual Meeting if possible. Attendance at our
shareholder meetings helps maintain good communications and understanding. Scott
Burns and I will be there to report on current operations and discuss future
plans. We will also provide time, as we always do, for your questions and
comments.
Your vote is important! Even if you are unable to attend the Annual Meeting, we
hope you will vote your proxy as soon as possible.
Sincerely,
/s/LOUIS A. THOMPSON
Louis A. Thompson
President\Chief Executive Officer
KAVILCO INCORPORATED
600 University Street, Suite 3010
Seattle, WA 98101-1129
NOTICE OF 31ST ANNUAL
MEETING OF SHAREHOLDERS
DATE November 6, 2004
REGISTRATION 11:00 a.m. - 12 noon
MEETING BEGINS 1:00 p.m.
PLACE Ted Ferry Civic Center, 334 Front Street, Ketchikan, Alaska
ITEMS OF BUSINESS (1) To elect 3 directors to Class III, with a term
expiring in 2007. Incumbents are Laird A. Jones,
Melanie Locklear and Louis A. Thompson.
(2) To ratify the Company's selection of
independent public accountants
(3) To consider such other business as
may properly come before the meeting
or any adjournments thereof.
RECORD DATE You are entitled to vote if you were a shareholder at the
close of business on October 4, 2004.
VOTING BY PROXY Promptly complete, sign and return
the enclosed proxy in the postage paid
envelope provided, even if you plan to
attend the meeting. You may vote in person
at the meeting even though you have
previously signed and mailed a proxy.
THIS PROXY STATEMENT AND PROXY CARD ARE BEING DISTRIBUTED ON OR ABOUT OCTOBER 7,
2004.
By order of the Board of Directors,
/s/JOHN CAMPBELL
John Campbell
Secretary
KAVILCO INCORPORATED
600 University Street, Suite 3010
Seattle, WA 98101-1129
PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
Q. WHY AM I RECEIVING THESE MATERIALS?
A. The Board of Directors of Kavilco Inc. is providing these proxy
materials to you in connection with the solicitation by the Board of
proxies to be voted at Kavilco's Annual Meeting. Only shareholders of
record holding Class A shares at the close of business on October 4,
2004 are entitled to vote. As a shareholder with Class A shares you are
requested to vote on the proposals described in this proxy statement.
All shareholders should complete and mail their proxy even if they plan
to attend the meeting. The bylaws of the Corporation state that at
least a majority of the total number of shares of Class A stock must be
present, either in person or by proxy, to establish a quorum at the
meeting. Conducting business will begin when a quorum is established.
Q. WHAT IS THE QUORUM REQUIREMENT OF THE MEETING?
A. The quorum requirement for holding the meeting and transacting business
is a majority of the shares of Class A stock. The shares may be present
in person or by proxy. Kavilco currently has 11,576.83 shares
outstanding of Class A stock. Kavilco knows of no person to be the
beneficial owner of more than 5% of the outstanding shares of the
Company.
Q. WHAT IS A PROXY?
A. PROXY - 1. the authority to act for another, as in voting, 2. a
document so authorizing one or a person so authorized.
By completing and returning the enclosed proxy card, you will authorize
the Board members elected during our last Annual Meeting, a majority of
them or any of them acting alone in the absence of others to vote your
shares for you. As your proxy, you are authorizing them to vote all of
your shares with all the powers you would have if you were personally
present. If you do not want to appoint the individuals named in the
proxy card to act as your proxy (that is to vote your shares for you)
you may, as provided in the bylaws, appoint someone else to act as your
proxy by giving that person a written authorization to vote your shares
of stock on your behalf at the Annual Meeting. Proxies may also be
solicited personally, by telephone, by employees, officer and agents of
the Company.
Unless otherwise instructed, the proxy holders will vote proxies
received by them for these nominees. In the event any nominee should
not be available for election, the discretionary authority provided in
the proxy will be exercised to vote for such other person(s) as may be
designated by the present Board of Directors.
Q. HOW CAN I VOTE MY SHARES?
A. Each Class A shareholder is entitled to one (1) vote for each share
owned and may vote the total number of his or her shares for as may
persons as there are directors being elected. Alternatively,
shareholders are entitled to cumulative voting and may give a nominee
as many votes as equal to the number of directors to be elected
multiplied by the number of shares owned. Also, shareholders may
allocate these votes on the same principle among any number of
nominees. Using the sample proxy card included in this packet of
materials, complete the Proxy card with your name on it and mail it to
Kavilco's Inspector of Elections in the enclosed envelope.
Q. CAN I CHANGE MY VOTE?
A. If you change your mind after voting, you may revoke your proxy and
change your proxy instructions prior to the Annual Meeting, either by
telephoning Scott Burns, Chief Financial Officer at Kavilco's Seattle
office, providing a written statement to Kavilco at the address above,
or by voting again at the meeting.
Q. WHO WILL COUNT THE VOTE?
A. Representatives of Mecham, Richardson & Company will tabulate the votes
and act as the Inspectors of Election.
Q. WHO WILL BEAR THE COST OF SOLICITING VOTES AND SEC COMPLIANCE FOR THE
MEETING? A. Kavilco Incorporated will pay the entire cost of preparing,
assembling, printing, mailing and
distributing these proxy materials as well as submitting it to the
Securities and Exchange Commission for review.
Q. MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING
OR NOMINATE INDIVIDUALS TO SERVE AS DIRECTORS?
A. You may submit proposals for consideration at future shareholder
meetings as follows:
o TO BE INCLUDED IN THE PROXY STATEMENT. In order for a shareholder
proposal to be considered for inclusion in Kavilco's proxy
statement for next year's Annual Meeting, the written proposal
must be received by the Secretary no later than August 1, 2005.
These proposals must be in writing and sent to: Kavilco
Incorporated, 600 University Street, Suite 3010, Seattle,
Washington 98101. These proposals also will need to comply with
Securities and Exchange Commission regulations regarding the
inclusion of shareholder proposals in Company-sponsored proxy
materials.
o TO BE RAISED FROM THE FLOOR. Similarly, in order for a shareholder
proposal to be raised from the floor during next year's Annual
Meeting, the shareholder's written notice must be received before
May 2, 2005 and must contain certain information as required.
Pursuant to regulations, this proxy and accompanying materials have been
submitted to the Securities and Exchange Commission for review in conjunction
with this mailing.
PROPOSALS TO BE VOTED ON
(1) ELECTION OF DIRECTORS
Kavilco's bylaws provide that the corporation shall be managed by a Board of
Directors composed of nine (9) members elected in three classes, each consisting
of three (3) members. The election of directors is staggered so that only three
(3) directors are elected each year. The Board of Directors recommends the
election of the three nominees listed below, all of who are presently Board
members, to serve a three (3) year term and until their successors are elected
and qualified:
Laird A. Jones
Melanie Locklear
Louis A. Thompson
Unless otherwise instructed, the proxy holders will vote proxies received by
them for these nominees. In the event any nominee should not be available for
election, the discretionary authority provided in the proxy will be exercised to
vote for such other person(s) as may be designated by the present Board of
Directors.
BOARD STRUCTURE AND COMPENSATION
The Board officers as defined by the corporate by-laws are President/Chairman,
Vice President, Secretary and Treasurer. However, Kavilco does not currently
have a Treasurer, but employs a Chief Financial Officer. The Board
President/Chairman also is employed as Chief Executive Officer. The Board of
Directors recommends the election of the Class III incumbents: Laird Jones,
Melanie Locklear and Louis A. Thompson.
All cash compensation paid by the Company for the year ended December 31, 2003,
to each of the most highly paid Executive Officers, whose cash compensation
exceeds $60,000.00, and to all executive officers as a group, is as shown in the
following table:
CASH COMPENSATION TABLE
(A) (B) (C)
Name of Individual Capacities In Cash
or Number in Group Which Served Compensation
------------------ ------------ ------------
Louis A. Thompson Chief Executive $ 90,826
Officer, Chairman and
President
Scott Burns Chief Financial $ 112,720
Officer
All the executive officers as a group (2 persons) $ 203,546
COMPENSATION PURSUANT TO PLANS
The Company has a retirement plan for its employees that is a defined
contribution plan with the annual contribution being equal to 20% of the
participant's salary. All contributions are pooled in a brokerage trust account
held at Charles Schwab.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
On the Record Date, there were 11,576.83 shares of Class A Stock of the Company
outstanding. The following table shows the beneficial ownership of the officers
and Directors of the Company, individually and as a group, of Class A stock as
of October 4, 2004:
- -----------------------------------------------------------------------------------------------------------------
Term
Positions & Office as Principal Occupation & Amount of Beneficial
Offices with the Director Director Employment During Past Ownership/% of Class
Name Company Class Expires Since Five Years A on 9/30/04
- ------------------ -------------------- ----- ----------- -------- ------------------------- --------------------
Louis A. President/CEO III 2004 1972 Chief Executive Officer 137
Thompson 1.18%
Age 68
Louis Jones, Sr. Director/Vice II 2006 1979 Chief Engineer 130
Age 67 President Alaska Marine Hwy. 1.12%
John Campbell Director/ II 2006 1994 Self-employed 162
Age 35 Secretary 1.39%
Jeane Breinig Director I 2005 1993 English Professor 140
Age 49 University of Alaska 1.20%
Kenneth Gordon Director II 2006 1994 Self employed house 100
Age 44 painter/student .86%
Ramona Hamar Director I 2005 1973 Office Manager for a 150
Age 61 Dentist's office 1.29%
Laird A. Jones Director III 2004 1994 Community Director Quota 100
Age 49 Specialist .86%
Melanie Locklear Director III 2004 1997 Sign Shop Owner 100
Age 35 .86%
Marie K. Miller Director I 2005 2003 Human Resources Manager 100
Age 39 .86%
Scott Burns Chief Financial Chief Financial Officer - 0 -
Age 58 Officer for Kavilco - 0 -%
- -----------------------------------------------------------------------------------------------------------------
FAMILY RELATIONSHIPS
BOARD MEMBER RELATIONSHIP
Louis A. Thompson, President/CEO No relationship to any Board Members
Louis Jones, Sr., Vice President 1st Cousin to Laird Jones and Jeane Breinig
Brother to Ramona Hamar
John Campbell, Secretary 1st Cousin to Kenneth Gordon
Jeane Breinig, Director 1st Cousin to Laird Jones, Ramona Hamar and
Louis Jones, Sr.
Kenneth Gordon, Director 1st Cousin to John Campbell
Ramona Hamar, Director 1st Cousin to Laird Jones and Jeane Breinig
Sister to Louis Jones, Sr.
Laird Jones, Director 1st Cousin to Jeane Breinig, Ramona Hamar
and Louis Jones, Sr.
Melanie Locklear, Director Sister to Marie Miller
Marie Miller, Director Sister to Melanie Locklear
The Securities and Exchange Commission Section 8.08[3][b] requires "if any of
the persons listed are related by blood, marriage or adoption (up through first
cousins), the relationship must be explained."
Laird Jones, John Campbell and Jeane Breinig also serve on the Board of
Directors of Kasaan Haida Heritage Foundation. None of Kavilco's other directors
hold directorships anywhere else.
The Company does not have an auditing, nominating or compensation committee.
However the Board of Directors reviews annually the auditor's independence
letter, management letter, statement of auditing standards letter and internal
control memo. The Board of Directors selects nominees from incumbent directors
of the Company. The Board of Directors review employee's compensation every
three years and occasionally reviews per diem and fees, the last review and
subsequent increase took place in January 2000.
The Board of Directors held six regular bimonthly meetings for the year ended
December 31, 2003.
COMPENSATION OF DIRECTORS
Each officer and director receives $1,100 in fees and $500 in per diem for each
meeting they attend. In addition the Company pays for up to 4 days of travel and
hotel expenses to attend the meetings. Several directors also participate in a
Company medical insurance program.
(2) RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The approval of selection of Anderson ZurMuehlen & Company, P.C. as independent
public accountants of the Company is voted on by the Board of Directors at their
Board meeting prior to the Annual meeting. Shareholders are asked to approve or
ratify this selection. Unless the proxy holders are instructed otherwise,
proxies will vote for the selection of Anderson ZurMuehlen & Company, P.C. as
independent public accountants. If this selection is not approved, the Board of
Directors intends to take the matter under advisement. No representative of
Anderson ZurMuehlen & Company, P.C. is expected to be present at the Annual
meeting.
Kavilco paid Anderson ZurMuehlen & Company, P.C. $2,500 for income tax
preparation and $13,500 for audit services for the fiscal year ended December
31, 2003 for a total of $16,000.
OTHER MATTERS
The Board of Directors knows of no matters, other than those mentioned in the
proxy, to be brought before the meeting. However, if other matters do properly
come before the meeting, it is the intention of the proxy holders to vote
proxies according to their best judgment.
By Order of the Board of Directors
/s/LOUIS A. THOMPSON
Louis A. Thompson,
President
Seattle, Washington
October, 2004
KAVILCO INCORPORATED
PROXY SOLICITED BY BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
NOVEMBER 6, 2004
As to matters 1 and 2, discretionary authority is hereby granted to any such
matter as to which no choice is indicated. Discretionary authority is hereby
granted as to any other matters that may lawfully come before the meeting.
Management knows of no other matters to be considered by the Shareholders.
CHECK BOX (A) OR (B)
(1)
(A) [ ] TO VOTE DISCRETIONARY for the election of three Nominees as
set forth in the Board of Directors' Proxy Statement for the
three-year terms ending in 2007. The undersigned hereby appoints
John Campbell, Kenneth Gordon, and Louis Jones, Sr. or any of
them, Proxies for the undersigned to vote on their behalf.
(B) [ ] TO VOTE DIRECTED in the manner set forth below for the
election of the Nominees below for the Board of Directors of the
Corporation for three-year terms ending in 2007.
Nominee Number of Shares X 3 = Number of Votes Cast
------------------------------------------------------------
Laird A. Jones X 3
---------- --------------------
Melanie Locklear X 3
---------- --------------------
Louis A, Thompson X 3
---------- --------------------
(2) To ratify the selection of Anderson ZurMuehlen & Co., P.C., as the
independent public accountants for the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THE BOARD OF DIRECTORS MAKES THE FOREGOING PROPOSALS AND THE PROXY IS SOLICITED
BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS SPECIFIED.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE POSTAGE PAID ENVELOPE
PROVIDED.
Number of shares _________________
Dated ______________________________, 2004
Name: X_____________________________________________
Class
# of Shares Sign here as name appears to the left
IMPORTANT: Executors, Administrators, Trustees, Guardians
should so indicate.