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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): April 14, 2005
THE KEITH COMPANIES, INC.
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 000-26561 33-0203193
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
19 TECHNOLOGY DRIVE
IRVINE, CALIFORNIA 92618
(Address of Principal Executive Offices, Zip Code)
(949) 923-6001
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[x] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On April 14, 2005, The Keith Companies, Inc., a California corporation (the
"Company"), Stantec Inc., a Canadian corporation ("STANTEC") and Stantec
Consulting California Inc., a California corporation and a wholly owned
subsidiary of Stantec ("SCC"), entered into an Agreement and Plan of Merger and
Reorganization (the "MERGER AGREEMENT") pursuant to which, subject to the
satisfaction or waiver of the conditions therein, we will be merged with and
into SCC, with SCC as the surviving corporation (the "MERGER"). As a result of
the Merger, we will become a wholly-owned subsidiary of Stantec.
At the effective time of the Merger, each outstanding share of our common
stock will be exchanged for the right to receive US$11.00 in cash, 0.23 shares
of Stantec common stock, and US$5.50 worth of Stantec common stock to be
calculated by dividing US$5.50 by the simple average of the weighted sales price
of the Stantec common shares on the Toronto Stock Exchange for each of the 20
trading days ending on the second trading day prior to the closing of the
Merger, converted into US dollars for each trading day at the noon buying rate
quoted by the Federal Reserve Bank of New York on such trading day (the "MERGER
CONSIDERATION"). Our shareholders may elect to receive their Merger
Consideration in cash, shares of Stantec common stock, or a combination of cash
and shares of Stantec common stock, in each case subject to proration.
The receipt of Stantec Common Stock in the Merger is expected to be tax
free for U.S. federal income tax purposes and the closing of the Merger is
subject to the receipt of opinions of counsel to Stantec and our counsel to that
effect.
In addition, consummation of the Merger is subject to customary conditions,
including, among others:
o the adoption of the Merger Agreement by our shareholders;
o the Stantec Common Stock issued in the Merger being authorized for
quotation or listing on the Toronto Stock Exchange and either the New
York Stock Exchange or the NASDAQ Stock Market;
o the receipt of all applicable regulatory approvals;
o the absence of any governmental action prohibiting consummation of the
Merger;
o no material adverse effect on the Company or Stantec; and
o our having at least $40 million of cash and cash equivalents at the
effective time of the Merger.
Concurrently with entering into the Merger Agreement, our Chief Executive
Officer and Chairman of the Board, Aram H. Keith, entered into a letter
agreement (the "LETTER Agreement")with Stantec pursuant to which Mr. Keith
agreed, conditional upon the consummation of the Merger, receipt of an offer of
employment from SCC and the payment of $525,000 at the effective time of the
Merger, that the all of his existing employment arrangements would be
superceded, including the change of control agreement dated March 22,
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2001, which was filed by us with the SEC as Exhibit 10.1 to our Annual Report on
Form 10-K for 2004, filed on March 10, 2005. The letter agreement is included as
Exhibit 10.1 hereto.
Concurrently with entering into the Merger Agreement, Stantec and SCC
entered into a Stockholders Support Agreement, dated as of April 14, 2005 (the
"STOCKHOLDERS SUPPORT AGREEMENT"), with Aram H. Keith, Margie R. Keith and the
Aram H. Keith and Margie R. Keith Revocable Trust dated October 23, 1989 (the
"STOCKHOLDERS"). The purpose of the Stockholders Support Agreement is to
facilitate and increase the likelihood that the Merger will be consummated. The
Stockholders Support Agreement is included as Exhibit 10.2 hereto.
Pursuant to the Stockholders Support Agreement, the Stockholders, among
other things, have granted an irrevocable proxy to Stantec to vote, at any
meeting of our stockholders, all of such Stockholders' 1,300,217 shares of our
common stock (i) in favor of the approval of the Merger Agreement, (ii) against
any action, agreement or transaction (other than the Merger Agreement or the
Merger) or proposal that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of ours under
the Merger Agreement or that could result in any of the conditions to our
obligations under the Merger Agreement not being fulfilled, and (iii) in favor
of any other matter necessary to the consummation of the Merger and considered
and voted upon by our stockholders.
A copy of the press release announcing the execution of the Merger
Agreement is attached as Exhibit 99.1 hereto and is incorporated herein by this
reference.
The foregoing description of the Merger and the Merger Agreement, the
Letter Agreement and the Stockholder Support Agreement does not purport to be
complete and is qualified in its entirety by reference to the Merger Agreement,
the Letter Agreement and the Stockholder Support Agreement, which are filed as
Exhibits 2.1, 10.1 and 10.2, and are incorporated herein by reference.
The attached Merger Agreement is not in any way intended as a document for
investors to obtain factual information about our current state of affairs. Such
information can be found in our reports filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended. The
Merger Agreement contains representations and warranties made by us and Stantec.
The assertions embodied in our representations and warranties are qualified by
information in confidential disclosure schedules (the "Disclosure Schedules")
that we delivered to Stantec in connection with signing the Merger Agreement.
The Disclosure Schedules contain information that modifies, qualifies and
creates exception to the representations and warranties set forth in the Merger
Agreement. In addition, representations and warranties may be used as a tool to
allocate risks between the parties where the parties do not have complete
knowledge of all facts. Accordingly, investors should not rely on our
representations and warranties as characterizations of the actual state of facts
or our condition, since they may be modified in important part by information
disclosed in the Disclosure Schedules.
FORWARD-LOOKING STATEMENTS
Information set forth in this report contains forward-looking statements.
These statements are not guarantees of future performance, involve certain
risks, uncertainties and assumptions that are difficult to predict, and are
based upon assumptions as to future events that
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may not prove accurate. Therefore, actual outcomes and results may differ
materially from what is expressed herein. For example, if the Company does not
receive required shareholder approvals, if Stantec is unable to list its stock
on a major US exchange or either party fails to satisfy other conditions to
closing, the merger will not be consummated. In addition, the combined companies
may not realize all or any of the expected benefits of the merger. The following
factors, among others, could cause actual results to differ materially from
those described in the forward-looking statements: global capital market
activities, fluctuations in interest rates and currency values, the effects of
war or terrorist activities, the effects of disease or illness on local,
national, or international economies, the effects of disruptions to public
infrastructure, such as transportation or communications, disruptions in power
or water supply, industry and worldwide economic and political conditions ,
regulatory and statutory developments, a downturn in the real estate market, the
effects of competition in the geographic and business areas in which the
companies operate, the actions of management, and technological changes. Actual
results may differ materially from those contained in the forward-looking
statements in this press release.
Additional factors that may affect future results are contained our filings
with the SEC, which are available at the SEC's website www.sec.gov. We disclaim
any obligation to update and revise statements contained in these materials
based on new information or otherwise.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger and Reorganization, dated as of April 14, 2005,
by and among Stantec Inc., Stantec Consulting California Inc., and The Keith
Companies, Inc.
10.1* Letter Agreement, dated April 14, 2005, by and between Stantec Inc. and Aram
H. Keith.
10.2 Stockholders Support Agreement, dated as of April 14, 2005, by and among
Stantec Inc., Stantec Consulting California Inc., Aram H. Keith, Margie R.
Keith and the Aram H. Keith and Margie R. Keith Revocable Trust Dated October
23, 1989.
99.1 Joint Press Release issued by Stantec Inc. and The Keith Companies, Inc., on
April 14, 2005.
* Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
April 18, 2005 THE KEITH COMPANIES, INC.
By: /s/ Gary C. Campanaro
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Name: Gary C. Campanaro
Title: Chief Financial Officer and Secretary
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger and Reorganization, dated as of April 14, 2005,
by and among Stantec Inc., Stantec Consulting California Inc., and The Keith
Companies, Inc.
10.1* Letter Agreement, dated April 14, 2005, by and between Stantec Inc. and Aram
H. Keith.
10.2 Stockholders Support Agreement, dated as of April 14, 2005, by and among
Stantec Inc., Stantec Consulting California Inc., Aram H. Keith, Margie R.
Keith and the Aram H. Keith and Margie R. Keith Revocable Trust Dated October
23, 1989.
99.1 Joint Press Release issued by Stantec Inc. and The Keith Companies, Inc., on
April 14, 2005.
* Management contract or compensatory plan or arrangement.