<PAGE>
SCHEDULE 14A INFORMATION
------------------------
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
DECTRON INTERNATIONALE INC.
-----------------------------------------------
(Name of Registrant as specified in its charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement), if other than Registrant
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l) or
14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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: (A)
--------
(4) Proposed maximum aggregate value of transaction:
--------
(5) Total fee paid:
------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any 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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<PAGE>
DECTRON INTERNATIONALE INC.
4300 Poirier Blvd
Montreal, Quebec H4R 2C5
-----------
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD July 28, 2000
-----------
TO THE STOCKHOLDERS OF Dectron Internationale Inc.:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders
(the "Meeting") of Dectron Internationale Inc. (the "Company") will be held at
Dorval Airport Hilton Hotel, 12505 Cote de Liesse, Dorval, Quebec, Canada on
July 28, 2000, at 2:00 p.m., local time for the following purposes:
1. To elect directors to hold office for a term of one year;
2. To ratify the appointment of Schwartz Levitsky Feldman, LLP as the
Company's independent certified public accountants for the ensuing
year; and
3. To act upon such other business as may properly come before the
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on June 30, 2000
are entitled to notice of and to vote at the Meeting and any adjournments
thereof.
In order to ensure the presence of a quorum at the Meeting, it is
important that Stockholders representing a majority of the voting power of all
stock outstanding be present in person or represented by their proxies.
Therefore, whether you expect to attend the Meeting in person or not, please
vote your shares by signing, filling out, dating and promptly returning the
enclosed proxy card in the enclosed self-addressed, postage-paid envelope. If
you attend the Meeting and prefer to vote in person, you can revoke your proxy.
In addition, please note that abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, for
purposes of determining the presence or absence of a quorum for the transaction
of business. Neither abstentions nor broker non-votes are counted as voted
either for or against a proposal.
Dated: July 7, 2000 By Order of the Board of Directors
/s/ Ness Lakdawala
------------------------------------
Ness Lakdawala
Chairman and Chief Executive
Officer
<PAGE>
Dectron Internationale Inc.
4300 Poirier Blvd
Montreal, Quebec H4R 2C5
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PROXY STATEMENT
---------------------------
2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held at 2:00 p.m., at Dorval Airport Hilton Hotel, 12505 Cote de Liesse,
Dorval, Quebec, Canada
on July 28, 2000
This Proxy Statement is furnished in connection with a solicitation of
proxies by the Board of Directors of Dectron Internationale Inc. (the "Company")
for use at the 2000 Annual Meeting of Stockholders of the Company (the
"Meeting") to be held at 2:00 p.m. at Dorval Airport Hilton Hotel, 12505 Cote de
Liesse, Dorval, Quebec, Canada on July 28, 2000, and at any adjournments
thereof. Anyone giving a proxy may revoke it at any time before it is exercised
by giving the Chairman of the Board of Directors of the Company written notice
of the revocation, by submitting a proxy bearing a later date, or by attending
the Meeting and voting. This Proxy Statement, the accompanying Notice of Meeting
and form of proxy have been first sent to the stockholders on or about July 10,
2000.
All properly executed, unrevoked proxies on the enclosed form, if
returned prior to the Meeting, will be voted in the manner specified by the
Stockholder. If no specific instruction is given, the shares represented by the
proxy will be voted in accordance with the Board of Directors' recommendations.
In addition, please note that abstentions and broker non-votes are each
included in the determination of the number of shares present and voting, for
purposes of determining the presence or absence of a quorum for the transaction
of business. Neither abstentions nor broker non-votes are counted as voted
either for or against a proposal.
OWNERSHIP OF SECURITIES
Only stockholders of record at the close of business on June 30, 2000,
the date fixed by the Board of Directors in accordance with the Company's
By-Laws, are entitled to vote at the Meeting. As of June 30, 2000, there were
issued and outstanding 2,795,000 shares of common stock, $.10 par value per
share (the "Common Stock").
Each outstanding share is entitled to one vote on all matters properly
coming before the Meeting. A majority of the shares of the outstanding Common
Stock is necessary to constitute a quorum for the Meeting.
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The following table sets forth certain information as of June 30, 2000
with respect to each beneficial owner of five percent (5%) or more of the
outstanding shares of Common Stock of the Company, each officer and director of
the Company and all officers and directors as a group.
<TABLE>
<CAPTION>
Number of Shares of Percentage
Common Stock Beneficially
Name and Address of Beneficial Owner(1) Beneficially Owned Owned
--------------------------------------- ------------------ -----
<S> <C> <C>
Ness Lakdawala(2)...................................................... 1,674,059 59.89%
Roshan Katrak(3)....................................................... 1,674,059 59.89%
Reinhold Kittler....................................................... 0 *
Mauro Parissi.......................................................... 86,800 3.1%
Leena Lakdawala(4) .................................................... 59,980 2.1%
Dave Lucas ............................................................ 67,000 2.4%
Richard Ness(5) ....................................................... 5,000 *
Peter R. Richardson (6) ............................................... 0 0
All Officers and Directors as a group(2)-(6) .......................... 1,892,839 67.72%
</TABLE>
-----------
* represents less than 1%
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
Dectron Internationale Inc.
(2) Represents (i) 43,561 shares of Common Stock directly owned, (ii) 67,395
shares of Common Stock owned by Roshan Katrak, Mr. Lakdawala's wife, (iii)
69,684 shares of Common Stock owned by Roshaness Inc., a company owned by
Mr. Lakdawala, and (iv) 1,492,879 owned by 3103-7195 Quebec Inc., a company
owned by Mr. Lakdawala's spouse and children.
(3) Represents (i) 67,395 shares of Common Stock directly owned, (ii) 43,561
shares of Common Stock owned by Ness Lakdawala, Ms. Katrak's husband, (iii)
69,684 shares of Common Stock owned by Roshaness Inc., a Company owned by
Ness Lakdawala, and (iv) 1,492,879 shares owned by 3103-7195 Quebec Inc., a
company owned by Mrs. Katrak and her children.
(4) Represents 59,980 shares of Common Stock owned by A. Useche, Ms. Lakdawala's
husband.
(5) Represents (i) 3,000 shares of Common Stock directly owned, and (ii) 2,000
shares of Common Stock owned by Silvia Pedicelli, Mr. Ness' wife.
(6) Mr. Richardson is a Director Nominee.
This Proxy Statement contains certain forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in the forward- looking statements as a result of certain
factors, including those set forth below and elsewhere in this Proxy Statement.
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<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Seven directors are proposed to be elected at the Meeting, each to hold
office for a period of one year, or until such director's successor shall be
elected and shall qualify, subject, however to prior death, resignation,
retirement, disqualification or removal from office. Unless such authority is
withheld, it is intended that the accompanying proxy will be voted in favor of
the seven persons named below, each of whom is now serving as a director, unless
the stockholder indicates to the contrary on the proxy. We expect that each of
the nominees will be available for election, but if either of them is not a
candidate at the time the election occurs, it is intended that such proxy will
be voted for the election of another nominee to be designated by the Board of
Directors to fill any such vacancy or the number of directors to be elected at
this time may be reduced by the Board of Directors.
Director Nominees - Term Expiring 2001.
NESS LAKDAWALA has served as the President, Chief Executive Officer and Chairman
of Dectron since our inception, and has also served as the President and Chief
Executive Officer of Dectron Inc. since 1994. Prior to joining Dectron Inc., Mr.
Lakdawala was President of Blanchard Ness Limited, a company which he founded in
1976. From 1987 to present, Mr. Lakdawala has served as the President of
Thermoplus. In January 1996, Thermoplus filed a proposal under the provisions of
the Bankruptcy Act which gave full payment to secured creditors who filed a
proof of claim. From 1987-1988, Mr. Lakdawala was Chairman of the Heating
Refrigeration Air Conditioning Institute of Canada. Mr. Lakdawala has also
served as the Governor of the American Society of Heating, Refrigeration and Air
Conditioning Engineers, Inc. ("ASHRAE"), the organization that sets ventilation
standards in Canada and the United States. Mr. Lakdawala is currently a member
of ASHRAE and the Refrigeration Service Engineers Society. Ness Lakdawala is the
husband of Roshan Katrak and the father of Leena Lakdawala.
REINHOLD KITTLER has served as Executive Vice President and a Director of
Dectron since our inception, and has also served as the Chairman of Dectron Inc.
since 1994. From 1985 to 1993, Mr. Kittler was President of Dectron Inc. He
currently teaches refrigeration engineering at Vanier College in Montreal,
Quebec. Mr. Kittler has contributed extensively to the ASHRAE Handbook. Mr.
Kittler is a member of numerous industry related societies, including the Order
of Engineers of Quebec (since 1973), the International Institute of Ammonia
Refrigeration (since 1992), the Air Conditioning and Refrigeration Institute
(since 1996), the Refrigeration Services Engineers Society (since 1979) and
ASHRAE (since 1974). Mr. Kittler is frequently a guest speaker at industry
related symposiums.
ROSHAN KATRAK has served as Vice President of Human Relations of Dectron since
our inception, and has served in the same capacity with Dectron Inc. since 1994.
She has also served as a Director of Dectron since 1998. From 1976 to 1994, she
was a Director of Blanchard Ness Limited, and from 1987 to present has been Vice
President of Human Relations for Thermoplus. In January 1996, Thermoplus filed a
proposal under the provisions of the Bankruptcy Act which gave full payment to
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<PAGE>
secured creditors who filed a proof of claim. Mrs. Katrak received her Honors
Degree in Psychology in 1964. Roshan Katrak is the wife of Ness Lakdawala and
the mother of Leena Lakdawala.
MAURO PARISSI, C.A. has served as the Chief Financial Officer, Secretary and a
Director of Dectron since our inception, and has also served as the Controller
of Dectron Inc. from 1996-1998. From 1995-1996, Mr. Parissi was an auditor with
the firm of Mizgala & Cie. From 1990-1995, Mr. Parissi was an auditor with the
firm of Hart, David Lloyd, F.C.A., C.I.P. Mr. Parissi is currently a member of
The Canadian Institute of Chartered Accountants and The Order of Chartered
Accountants of Quebec. Mr. Parissi received his graduate diploma in Public
Accountancy from McGill University in 1995.
LEENA LAKDAWALA has served as Executive Vice President and a Director of Dectron
since our inception, and has also served as Vice President of Production and
Administration for Dectron Inc. since 1994. She is currently a member of the
Heating Refrigeration and Air Conditioning Institute. Mrs. Lakdawala received
her B.A from Concordia University in 1993. Leena Lakdawala is the daughter of
Ness Lakdawala and Roshan Katrak.
RICHARD NESS has served as a Director of Dectron since 1998. Mr. Ness is
president and chief operating officer of ECE Electronic Clearing, Inc., a firm
offering technical and operational services to investment dealers in Canada.
Previously, he was vice president client services and member seat holder of the
Toronto Stock Exchange with Le Groupe Option Retraite, Inc. and investment
dealer with memberships on the Montreal and Toronto stock exchanges. Prior to
joining Option Retraite, he was vice president of operations at Marleau Lemire
Securities and chief financial officer of Marleau Lemire U.S.A., an N.A.S.D.
member firm.
PETER R. RICHARDSON has been a Professor at Queen's University in Ontario from
1987 to present. Mr. Richardson also acts as a consultant to major corporations
and to agencies of the Canadian Government. Mr. Richardson has worked as a
consultant for corporations and governmental agencies such as 3M Corporation,
Xerox Corporation, Atlas Van Lines (Canada), Occupational and Environmental
Health Services, Government of Canada and the Department of National Defense,
Government of Canada, among others. Mr. Richardson earned his PhD. in Business
Administration from the University of Western Ontario in 1975 and earned a B.Sc.
in Electrical Engineering from Leeds University in England in 1968.
Ness Lakdawala and Roshan Katrak are husband and wife and their daughter is
Leena Lakdawala.
Stockholder Vote Required
Election of each director requires the affirmative vote of the holders
of a majority of the shares of Common Stock present in person or represented by
proxy at the Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE
BOARD OF DIRECTORS OF THE COMPANY OF EACH OF THE NOMINEES.
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<PAGE>
Executive Compensation
Summary Compensation Table
The following table sets forth certain information regarding
compensation paid by Dectron during each of the last three fiscal years to our
Chief Executive Officer and to each of our executive officers who earned in
excess of $100,000 during the year ended January 31, 2000.
<TABLE>
<CAPTION>
Restricted All Other
Name and Principal Stock Compen-
Position Year Salary(1) Bonus Awards Options/SARs sation
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ness Lakdawala 2000 $140,647 -0- -0- -0- -0-
Chairman, -----------------
President and 1999 $140,647 -0- -0- -0- -0-
CEO 1998 $140,647 -0- -0- -0- -0-
</TABLE>
------
(1) This reflects the aggregate salaries paid to Mr. Lakdawala during the fiscal
years presented by Dectron, Refplus and Thermoplus.
Employment Agreements
We entered into an employment agreement with Mr. Ness Lakdawala, our
Chief Executive Officer on October 5, 1998, the effective date of our initial
public offering. The employment agreement is for a term of two years, renewable
for additional one-year periods. The employment agreement entitled Mr. Lakdawala
to an annual salary of $200,000, adjusted annually for increases in the Consumer
Price Index. In the event that we are subject to a takeover or a change of
control event, Mr. Lakdawala is entitled to a bonus equal, on an after tax
basis, to five times his then current annual base salary. Mr. Lakdawala's
employment agreement contains a non-competition provision which forbids him from
engaging in a competitive business during his employment and for a period of one
year thereafter.
We do not currently have employment agreements with any of our other
officers or directors.
Options and Stock Appreciation Rights to Named Executive Officers
No stock options were granted during the fiscal year ending January 31,
2000 to the Mr. Lakdawala.
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Board Compensation Report
Executive Compensation Policy
Dectron's executive compensation policy is designed to attract,
motivate, reward and retain the key executive talent necessary to achieve our
business objectives and contribute to our long-term success. In order to meet
these goals, Dectron's compensation policy for our executive officers focuses
primarily on determining appropriate salary levels and providing long-term
stock-based incentives. To a lesser extent, the Dectron's compensation policy
also contemplates performance-based cash bonuses. Dectron's compensation
principles for the Chief Executive Officer are identical to those of Dectron's
other executive officers.
CASH COMPENSATION. In determining its recommendations for adjustments
to officers' base salaries for fiscal 2000, we focused primarily on the scope of
each officer's responsibilities, each officer's contributions to Dectron's
success in moving toward its long-term goals during the fiscal year, the
accomplishment of goals set by the officer and approved by the Board for that
year, our assessment of the quality of services rendered by the officer,
comparison with compensation for officers of comparable companies and an
appraisal of our financial position. In certain situations, relating primarily
to the completion of important transactions or developments, we may also pay
cash bonuses, the amount of which will be determined based on the contribution
of the officer and the benefit to Dectron of the transaction or development.
EQUITY COMPENSATION. The grant of stock options to executive officers
constitutes an important element of long-term compensation for the executive
officers. The grant of stock options increases management's equity ownership in
us with the goal of ensuring that the interests of management remain closely
aligned with those of our stockholders. The Board believes that stock options in
Dectron provide a direct link between executive compensation and stockholder
value. By attaching vesting requirements, stock options also create an incentive
for executive officers to remain with us for the long term.
Chief Executive Officer Compensation
As indicated above, the factors and criteria upon which the
compensation of Ness Lakdawala, our Chief Executive Officer, is based are
identical to the criteria used in evaluating the compensation packages of the
other executive officers of Dectron. The Chief Executive Officer's individual
contributions to Dectron include his leadership role in establishing and
retaining a strong management team, developing and implementing our business
plans and attracting investment capital to Dectron. In addition, we have
reviewed compensation levels of chief executive officers at comparable companies
within our industry.
Respectfully submitted,
Ness Lakdawala, Chairman
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Other Compensation
Outside directors may be paid an honorarium for attending meetings of
the Board of Directors of Dectron, in an amount that management anticipates will
not exceed $500 per meeting.
Stock Option Plan
We have adopted a Stock Option Plan (the "Plan") pursuant to which
650,000 shares of Common Stock are reserved for issuance, 349,000 options are
currently issued and outstanding.
On September 2, 1999, the Board granted options under our Stock Option
Plan to certain members of our Board and certain employees. Leena Lakdawala,
Roshan Katrak, Mauro Parissi, and Richard Ness were granted 60,000, 60,000,
18,000 and 8,000 options, respectively. Subject to certain limitations, the
options granted are exercisable one year after issuance. Subsequent to the
one-year anniversary date of the grant, the option holders may exercise the
option up to 25% per year of the total options granted for the following four
years. Each of the options will be fully exercisable on November 4, 2003, and
expire on November 4, 2004. The exercise price of the options is $3.00.
The Plan is administered by the Board of Directors, who will determine,
among other things, those individuals who shall receive options, the time period
during which the options may be partially or fully exercised, the number of
shares of Common Stock issuable upon the exercise of the options and the option
exercise price.
The Plan is effective for a period of five years, expiring in 2003.
Options may be granted to officers, directors, consultants, key employees,
advisors and similar parties who provide us with their skills and expertise. The
Plan is designed to enable management to attract and retain qualified and
competent directors, employees, consultants and independent contractors. Options
granted under the Plan may be exercisable for up to five years, and shall be at
an exercise price all as determined by the Board. Options are non-transferable
except by the laws of descent and distribution or a change in control of
Dectron, as defined in the Plan, and are exercisable only by the participant
during his or her lifetime. Change in control includes (i) the sale of
substantially all of the assets of Dectron and merger or consolidation with
another company, or (ii) a majority of the Board changes other than by election
by the stockholders pursuant to Board solicitation or by vacancies filled by the
Board caused by death or resignation of such person.
If a participant ceases affiliation with Dectron by reason of death,
permanent disability or retirement at or after age 70, the option remains
exercisable for one year from such occurrence but not beyond the option's
expiration date. Other types of termination allow the participant three months
to exercise, except for termination for cause, which results in immediate
termination of the option.
The exercise price of an option may not be less than the fair market value per
share of Common Stock on the date that the option is granted in order to receive
certain tax benefits under the Income Tax Act of Canada (the "ITA"). The ITA
requires that the exercise price of all future options will be at least 85% of
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the fair market value of the Common Stock on the date of grant of the options. A
benefit equal to the amount by which the fair market value of the shares at the
time the employee acquires them exceeds the total of the amount paid for the
shares or the amount paid for the right to acquire the shares shall be deemed to
be received by the employee in the year the shares are acquired pursuant to
paragraph 7(1) of the ITA. Where the exercise price of the option is equal to
the fair market value of the shares at the time the option is granted, paragraph
110(1)(d) of the ITA allows a deduction from income equal to one quarter of the
benefit as calculated above. If the exercise price of the option is less than
the fair market value at the time it is granted, no deduction under paragraph
110(1)(d) is permitted. Options granted to any non-employees, whether directors
or consultants or otherwise will confer a tax benefit in contemplation of the
person becoming a stockholder pursuant to subsection 15(1) of the ITA.
Options under the Plan must be issued within five years from the
effective date of the Plan.
Any unexercised options that expire or that terminate upon an
employee's ceasing to be employed by Dectron become available again for issuance
under the Plan.
The Plan may be terminated or amended at any time by the Board of
Directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the Plan may not be
increased without the consent of our stockholders.
SECTION 16(a) REPORTING
As under the securities laws of the United States, Dectron's directors,
its executive (and certain other) officers, and any persons holding ten percent
or more of Dectron's Common Stock must report on their ownership of Dectron's
Common Stock and any changes in that ownership to the Securities and Exchange
Commission and to the National Association of Securities Dealers, Inc.'s
Automated Quotation System. Specific due dates for these reports have been
established. During the year ended January 31, 2000 we believe that all reports
on behalf of our executive officers and directors for all transactions were
filed on a timely basis.
MEETINGS OF THE BOARD OF DIRECTORS
There were no meetings of our Board of Directors during fiscal 2000.
8
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We lease our St. Hubert, Quebec manufacturing facility from Roshan
Katrak, our Vice President of Human Relations and the wife of Ness Lakdawala,
our President, Chairman and CEO, for a monthly rent of $3,094 per month. We
believe that the lease was made on terms no less favorable than could be
obtained from unaffiliated third parties.
We lease our Montreal, Quebec manufacturing facilities from Roshaness
Inc., a company owned by Ness Lakdawala, for a monthly rent of $3,220 per month.
We believe that the lease was made on terms no less favorable than could be
obtained from unaffiliated third parties.
We lease one commercial truck from Investiness Inc., a company owned
equally by Ness Lakdawala's children, for an aggregate monthly lease payment of
Cdn$590.97 Upon expiration of the lease in 2001, ownership of the truck will
transfer from Investiness Inc. to Refplus. We believe that these leases were
made on terms no less favorable than could be obtained from unaffiliated third
parties.
Immediately prior to the effective date of the Registration Statement
for our initial public offering (the "Offering"), we restructured our corporate
structure ("Restructuring"). In order to complete the Restructuring, (i) Dectron
Inc., which prior to the Restructuring owned a majority interest in Refplus,
acquired the minority interests in Refplus, which included both common stock and
preferred stock (and assumed Refplus' loan payables of approximately
Cdn$125,000) which is included in the Cdn$1,149,050 number mentioned below) in
exchange for 62,500 shares of Dectron's Common Stock and Cdn$102,503; (ii)
Dectron Inc. acquired all of the outstanding securities of Thermoplus, which
included both Common Stock and preferred stock, and assumed Thermoplus' parent
company's loan payables (approximately Cdn$497,000, which amount is included in
the Cdn$1,149,050 number mentioned below) in exchange for 194,621 shares of
Dectron's Common Stock and Cdn$423,738, and (iii) Dectron acquired all of the
issued and outstanding securities of Dectron Inc. in exchange for 1,492,879
shares of the Dectron's Common Stock. The shares of Dectron Inc. were owned by
159653 Canada, Inc. which was a holding company beneficially owned by Mr.
Lakdawala. The Refplus and Thermoplus' parent company loans payable represent
the repayment of loans made to such companies. In connection with the
Restructuring, we issued 1,750,000 shares of Common Stock and promissory notes
in the aggregate amount of Cdn$1,149,050. Of this amount, Cdn$557,050 (or
approximately U.S.$400,000) were repaid out of the proceeds of the Offering. Of
these amounts, an aggregate amount of 1,674,059 shares of Common Stock and
promissory notes in the aggregate amount of Cdn$592,000 were issued to Ness
Lakdawala, and his affiliates. The Cdn$592,000 was repaid out of Dectron's cash
flow, without interest, in 12 equal monthly installments which repayment
commenced three months after the Offering.
Mr. Lakdawala and his affiliates received their 1,674,059 shares of
Dectron for contributing their interest in Dectron's subsidiaries. Specifically,
Mr. Lakdawala's affiliate received 1,492,879 shares in exchange for 100% of
159653 Canada Inc., which owned 100% of Dectron Inc. prior to the Restructuring;
156,808 shares for a portion of their shares of KeepKool which represented 86%
of KeepKool (KeepKool owned 94% of Thermoplus prior to the Restructuring); and
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24,372 share for his shares of 3294242 Canada Inc. which represented 61% of
3294242 (3294242 owned 49.99% of Refplus, Inc. prior to the Restructuring).
Dectron Inc. owned 50.01% of Refplus Inc. prior to the Restructuring. The two
promissory notes totaling Cdn$592,000 were issued to Mr. Lakdawala and his
affiliates in exchange for Cdn$222,000 of debt owed to Mr. Lakdalawa by KeepKool
and Cdn$370,000 for a portion of his shares of KeepKool.
The terms of the Restructuring were negotiated between Mr. Lakdawala
and the other owners of the minority interest in Refplus and Thermoplus. Mr.
Lakdawala and his affiliates held a majority interest in Thermoplus prior to the
Restructuring. Dectron owned a majority interest in Refplus prior to the
Restructuring and Mr. Lakdawala owned a majority of the 49.99% interest in
Refplus purchased by Dectron in the Restructuring. The value was arrived at
based on negotiations between Dectron and the sellers (other than Mr. Lakdawala
and his affiliates). Dectron did not have two independent disinterested
directors to ratify the transactions. There can be no assurance that such
transaction was on terms no less favorable than Dectron could have obtained from
other third parties, although management believes that they were as favorable.
Between March 1999 and June 2000, we made loans of $248,017 to Mauro
Parissi, our Chief Financial Officer, $188,405 to Dave Lucas, our Vice President
and $162,109 to Aurelio Useche, the husband of Leena Lakdawala a Director. The
loans were used to finance purchase of the Dectron's stock and bore interest at
the Canadian prescribed interest rate of five percent (5%). The borrowers plan
to repay the loan through credit facilities they expect to take from the
National Bank of Canada.
All future material transactions, including any loans, between Dectron
and its officers, directors, principal stockholders or affiliates of any of them
have been and will be on terms no less favorable to Dectron than those that can
be obtained from unaffiliated third parties, and will be approved in advance by
a majority of the independent and disinterested directors who had access, at
Dectron's expense, to Dectron's or independent legal counsel.
10
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PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF SCHWARTZ LEVITSKY FELDMAN, LLP,
CHARTERED ACCOUNTANTS AS THE COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
The Board of Directors of Dectron has adopted resolutions appointing
Schwartz Levitsky Feldman, LLP, Chartered Accountants as Dectron's independent
certified public accountants for the ensuing year. Schwartz Levitsky Feldman,
which has served as Dectron's independent certified public accountants since
1998, is familiar with Dectron's operations, accounting policies and procedures
and is, in Dectron's opinion, well-qualified to act in this capacity. A member
of Schwartz Levitsky Feldman will be available to answer questions and will have
the opportunity to make a statement if he or she so desires at the Annual
Meeting of Stockholders.
Stockholder Vote Required
Ratification of the appointment of Schwartz Levitsky Feldman as
independent certified public accountants requires the affirmative vote of the
holders of a majority of the shares of Common Stock present in person or
represented by proxy at the Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF SCHWARTZ LEVITSKY FELDMAN, LLP, CHARTERED
ACCOUNTANTS AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS.
OTHER MATTERS
The Board of Directors does not know of any matters other than those
referred to in the notice of meeting that will be presented for consideration at
the Meeting. However, it is possible that certain proposals may be raised at the
Meeting by one or more stockholders. In such case, or if any other matter should
properly come before the Meeting, it is the intention of the person named in the
accompanying proxy to vote such proxy in accordance with his best judgment.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by Dectron. Solicitations
may be made by mail, personal interview, telephone, and telegram by directors,
officers and employees of Dectron. Dectron will reimburse banks, brokerage
firms, other custodians, nominees and fiduciaries for reasonable expenses
incurred in sending proxy material to beneficial owners of Dectron's capital
stock.
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STOCKHOLDER PROPOSALS
Proposals of stockholders of Dectron that are intended to be presented
by such stockholders at Dectron's 2001 Annual Meeting of Stockholders must be
received by Dectron no later than January 5, 2001 in order that they may be
considered for inclusion in the Proxy Statement and form of proxy relating to
that Meeting.
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
Copies of the annual report (Form 10-K) of Dectron for the year ended
January 31, 2000, as filed with the Securities and Exchange Commission (without
exhibits), and any amendments thereto, are available to stockholders free of
charge by writing to Dectron Internationale Inc., 4300 Poirier Blvd., Montreal,
Quebec H4R 2C5.
By Order of the Board of
Directors of Dectron Internationale Inc.
/s/ Ness Lakdawala
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Ness Lakdawala
Chairman and Chief Executive Officer
July 7, 2000
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GENERAL PROXY - ANNUAL MEETING OF STOCKHOLDERS
OF DECTRON INTERNATIONALE INC.
The undersigned hereby appoints Ness Lakdawala, with full power of
substitution, proxy to vote all of the shares of Common Stock of the undersigned
and with all of the powers the undersigned would possess if personally present,
at the Annual Meeting of Stockholders of Dectron Internationale Inc., to be held
at Hilton Montreal Airport, 12505 Cote de Liesse, Dorval, Quebec, Canada on July
28, 2000 at 2:00 p.m. local time and at all adjournments thereof, upon the
matters specified below, all as more fully described in the Proxy Statement
dated July 7, 2000 and with the discretionary powers upon all other matters
which come before the meeting or any adjournment thereof.
This Proxy is solicited on behalf of Dectron Internationale Inc.'s Board of
Directors.
1. To elect directors to hold office for the ensuing year.
- Ness Lakdawala - Reinhold Kittler - Roshan Katrak - Mauro Parissi
- Leena Lakdawala - Richard Ness - Peter R. Richardson
/ / FOR ALL NOMINEES / /WITHHELD FOR ALL NOMINEES
INSTRUCTION: To withhold authority to vote for any individual, write that
nominee's name in the space provided below:
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2. To ratify the appointment of Schwartz, Levitsky, Feldman, LLP, Chartered
Accountants, as the Company's independent certified public accountants for
the ensuing year.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, upon such other matter or matters that may properly come
before the meeting, or any adjournments thereof.
(Continued and to be signed on the other side)
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(Continued from other side)
Every properly signed proxy will be voted in accordance with the specifications
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2 and 3.
The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Meeting and Proxy Statement and hereby revokes any proxy or proxies
heretofore given.
Please mark, date, sign and mail your proxy promptly in the envelope provided.
Date: , 2000
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(Print name of Stockholder)
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(Print name of Stockholder)
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Signature
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Signature
Number of Shares
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Note: Please sign exactly as name appears
in the Company's records. Joint
owners should each sign. When signing
as attorney, executor or trustee,
please give title as such.
