SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
[Amendment No. ____]
Filed by the Registrant x
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a
(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Dencor Energy Cost Controls, Inc.
(Name of Registrant as Specified in its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1. Title of each class of securities to which transaction applies:
Not applicable
2. Aggregate number of securities to which transaction applies:
Not applicable
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):
Not applicable
4. Proposed maximum aggregate value of transaction:
Not applicable
5. Total fee paid:
Not applicable
Fee paid previously with preliminary materials.
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: Not applicable
2. Form, Schedule or Registration Statement No.: Not applicable
3. Filing Party: Not applicable
4. Date Filed: Not applicable
DENCOR ENERGY COST CONTROLS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 24, 1999
TO THE SHAREHOLDERS OF DENCOR ENERGY COST CONTROLS, INC:
Notice is hereby given that the Annual Meeting of Shareholders of
Dencor Energy Cost Controls, Inc. (the "Company") will be held at the
Corporate Offices, 1450 West Evans Avenue, Denver, Colorado 80223,
on June 24, 1999 at 4:00 o'clock p.m., local time, for the following
purposes:
1. To elect a Board of three Directors;
2. To consider and vote upon a proposal recommended by the Board of
Directors to amend the Company's Articles of Incorporation to
increase the Company's authorized Common Stock from 5,000,000 shares
to 25,000,000 shares;
3. To consider a proposal to amend the Company's Articles of
Incorporation to provide for authorized preferred stock consisting
of 5,000,000 shares of preferred stock. The rights and preferences
of the preferred stock to be authorized are to be determined by the
Board of Directors.
4. To consider a proposal to amend the Company's Articles of
Incorporation to limit the personal liability of directors in certain
circumstances.
5. To ratify the Board of Directors' selection of Gelfond Hochstadt
Pangburn & Company, Certified Public Accountants, as the Company's
independent auditors for the fiscal year ending December 31, 1999;
and
6. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on May 10, 1999 shall
be entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. A complete list of the shareholders entitled
to vote at the Annual Meeting, showing the address of each shareholder and
the number of shares registered in the name of each, as of the record date,
shall be open to examination during ordinary business hours at the
Company's offices, 1450 West Evans, Denver, Colorado 80223. The above list
will also be available at the Annual Meeting.
I invite you to attend. In any event, you are encouraged to sign,
date, and promptly return the proxy card. The giving of a proxy will
not prevent voting in person if you attend the Annual Meeting.
Please read the attached Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS,
Maynard L. Moe
President
Denver, Colorado
May 10, 1999
DENCOR ENERGY COST CONTROLS, INC.
1450 West Evans
Denver, Colorado 80223
(303) 922-1888
PROXY STATEMENT
SOLICITATION BY BOARD OF DIRECTORS
The enclosed proxy is solicited by the Board of Directors of Dencor
Energy Cost Controls, Inc. (the "Company") for use at the Annual
Meeting of Shareholders of the Company to be held at the Corporate
Offices, 1450 West Evans Avenue, Denver, Colorado 80223, on June 24,
1999 at 4:00 o'clock p.m., local time, or any adjournment thereof
(the "Annual Meeting"). The Company anticipates that the proxy
statement and the accompanying form of the proxy will be first mailed
or given to shareholders on May 13, 1999.
The cost of preparing, assembling and mailing the notice, proxy
statement and proxy and related miscellaneous costs will be paid by
the Company. The Company intends to request banks, brokerage houses
and other custodians, nominees and fiduciaries to forward copies of
the proxy material to those persons for whom they hold such shares
and to request authority for the execution of proxies. The Company
will reimburse them for the reasonable out-of-pocket expenses
incurred by them in so doing.
REVOCABILITY OF PROXY
The proxy may be revoked by the person giving it at any time prior
to the Annual Meeting by giving written notice of revocation to the
Company or at any time before it has been exercised by appearing at
the Annual Meeting and giving oral notice of revocation.
Unless instructed to the contrary in a proxy, the proxy will be voted
for each of the persons nominated by management and named below in
the election of the Company's Board of Directors, in favor of the
proposal to amend the Company's Articles of Incorporation to increase
the Company's authorized Common Stock from 5,000,000 shares to
25,000,000 shares, in favor of the proposal to amend the Company's
Articles of Incorporation to provide for 5,000,000 shares of
authorized preferred stock, in favor of the proposal to amend the
Company's Articles of Incorporation to limit the personal liability
of directors, and for ratification of the selection of Gelfond
Hochstadt Pangburn & Company, Certified Public Accountants, to be the
Company's independent auditors, and in the discretion of the proxy
holder with respect to any other matters that may properly come
before the Annual Meeting. The persons named in the proxy will
exercise their best judgment with respect to the other matters. The
Board of Directors knows of no other matters to come before the
Annual Meeting at this time.
SHARES OUTSTANDING AND VOTING RIGHTS
Shareholders of record at the close of business on May 10, 1999 (the
"Record Date") will be entitled to vote at the Annual Meeting.
Holders of a majority of outstanding shares on the Record Date of the
Company's common stock represented in person or by proxy constitute
a quorum. The holders of these shares are entitled to one vote per
share. In the election of Directors, however, cumulative voting is
permitted. A shareholder is entitled to cast that number of votes
equal to the number of his shares multiplied by the number of
Directors to be elected. He may cast those votes for a single
nominee or distribute them among the nominees as he may determine.
There are no conditions precedent to the exercise of the right to
cumulate votes. Discretionary authority to cumulate votes is not
solicited as part of this proxy solicitation.
As of the Record Date, there were 4,803,804 shares of common stock
issued, outstanding, and entitled to vote. For details concerning
the shares of the Company held by the Directors, officers, and
certain shareholders, see "Stock Ownership of Officers, Directors,
and Principal Shareholders".
ANNUAL REPORT
The Company's Annual Report, including Form 10-KSB with financial
statements for the year ended December 31, 1998, is being mailed with
this Proxy Statement.
ELECTION OF DIRECTORS
At the Annual Meeting, the shareholders will elect a Board of
Directors of three persons to serve until the next annual meeting of
shareholders or until the election and qualification of their
respective successors. Unless authority is withheld, proxies shall
be voted for the election of the following persons as Directors,
provided that if any of such nominees shall be unavailable to serve
for any reason not now known to the Board of Directors, the proxies
will be voted for the election of a substitute nominee designated by
the Board of Directors. It is not anticipated that any nominee will
be unable or unwilling to accept nomination or election. All of the
nominees have consented to serve as Directors until the next annual
meeting, if elected. A majority of the votes cast at the Annual
Meeting by shareholders entitled to vote thereon will be required for
the election to the Board of Directors.
NOMINEES
MAYNARD L. MOE, AGE 64, CHAIRMAN OF THE BOARD OF DIRECTORS AND
PRESIDENT SINCE 1974
Dr. Moe, a founder of the Company, has served as Chairman of the
Board of Directors and President since 1974. He has spent full-time
in the management of the Company.
THEODORE A. HEDMAN, AGE 60, DIRECTOR SINCE 1988 SECRETARY SINCE 1988
Mr. Hedman has been Manager of Engineering for Dencor since 1979.
EDMUND BARBOUR, AGE 75, DIRECTOR SINCE 1997 TREASURER SINCE 1997
Since 1987 Mr. Barbour has been an economics consultant.
No Director is a director of any other public company. There are no
family relationships among Directors of the Company, and no
arrangements or understandings pursuant to which any of them are to
be elected as Directors.
During the fiscal year ended December 31, 1998, the Company had four
(4) Directors' Meetings. Each of the directors attended all
meetings. There are no audit, compensation, or nominating committees
of the Board of Directors.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers
and holders of more than 10 percent of the Company's common stock to
file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of common stock and
other equity securities of the Company. The Company believes that
during the fiscal year ended December 31, 1998, its officers,
directors, and holders of more than 10 percent of the Company's
common stock complied with all Section 16(a) filing requirements.
STOCK OWNERSHIP OF OFFICERS,
DIRECTORS, AND PRINCIPAL SHAREHOLDERS
The following table sets forth the number of shares of the Company's
Common Stock owned of record or beneficially, or both, as of May 10,
1998, by each person who owns of record, or is known by the Company
to have owned, individually or with his associates or beneficially,
more than five percent of such shares then outstanding, and the
number of shares owned beneficially on that date by each Director and
Nominee for Director, by each Executive Officer named in The Summary
Compensation Table below, and by Officers and Directors of the
Company as a group. Information as to the beneficial ownership is
based upon statements furnished to the Company by such persons.
Title of
Class Name & Address of Amount and Nature of Percent
Beneficial Owners Beneficial Ownership of Class (w)
Common Stock Maynard L. Moe (u,v) 1,203,650 (x) 25.1
2309 South Jackson
Denver, CO 80210
Theodore A. Hedman (u,v) 648,300 (y) 13.5
5445 South Camargo Road
Littleton, CO 80123
Edmund Barbour (u,v) 110,000 2.3
2765 S. Golden Way
Denver, CO 80227
Executive Officers and 1,961,950 40.8
Directors as a group
(three persons)
(u) These persons currently are Directors of the Company.
(v) These persons are Executive Officers of the Company.
(w) On May 1, 1999, there were 4,803,804 shares of common stock issued
and outstanding.
(x) Includes 409,650 shares owned of record by Carol M. Moe, wife of
Maynard L. Moe.
(y) Includes 35,800 shares owned of record by Charlotte Hedman, wife of
Theodore A. Hedman.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth in summary form the compensation received
during each of the Company's last three completed fiscal years by the Chief
Executive Officer and President of the Company. No executive officer
of the company, including the Chief Executive Officer and President, received
total salary and bonus exceeding $100,000 during any of the last three fiscal
years.
Summary Compensation Table
Annual Compensation Long Term Compensation
All
Other Restricted Other
Name and Annual Stock LTIP Compen-
Principal Fiscal Salary Bonus Compensation Awards Options Payouts sation
Position Year ($) ($) ($) # ($) (4)
(1) (2) (3) (4) (5) (6) (7)
Maynard Moe 1998 $69,700 -0- -0- -0- -0- -0- -0-
Chief Execu-
tive Officer, 1997 68,600 -0- -0- -0- -0- -0- -0-
President and
a Director 1996 54,672 -0- -0- -0- -0- -0- -0-
(1) The dollar value of base salary (cash and non-cash) received.
(2) The dollar value of bonus (cash and non-cash) received.
(3) During the periods covered by the Summary Compensation Table, the Company
did not pay any other annual compensation not properly categorized as salary
or bonus, including perquisites and other personal benefits, securities or
property.
(4) During the periods covered by the Summary Compensation Table, the Company
did not make any award of restricted stock.
(5) The Company has had no stock option plans.
(6) The Company has a Restricted Stock Bonus Plan, the purpose of which is to
attract and retain qualified personnel for responsible positions. The
Company has remaining 196,000 shares of the Company's authorized but
unissued common stock as of December 31, 1998, to be awarded as stock
bonuses to employees, not including Dr. Moe. Stock bonuses may be awarded,
as an incentive to contribute to the success of the Company, at the
discretion of a stock bonus committee, consisting of not less than two
directors, from a list of recommendations submitted periodically by the
President. The plan may be amended, modified, suspended or withdrawn at any
time by the Board of Directors. There were no shares awarded during the
periods covered by the Summary Compensation Table.
(7) No other compensation
Employment Contracts
Compensation pursuant to plans. Dr. Moe, for the year 1999, will receive an
annual salary of $69,700 payable in substantially equal monthly installments.
Dr. Moe also will receive additional compensation equal to two percent of
the Company's first $100,000 pre-tax net profits, plus four percent of pre-
tax profits from $100,000 to $200,000 plus six percent of the pre-tax profits
in excess of $200,000.
Compensation of Directors
The Company pays its non-employee director $100 per Directors' Meeting
attended. It is anticipated that no more than twelve meetings will occur
each year. The Company has no other compensation arrangements with
Directors.
2. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The Board has unanimously approved and proposed for shareholder
approval an amendment to the Company's Articles of Incorporation to increase
the Company's authorized Common Stock from 5,000,000 to 25,000,000 shares.
The Company's Articles of Incorporation currently authorize the issuance of
5,000,000 shares of Common Stock and no shares of preferred stock. As of May
10, 1999, 4,803,804 shares of the Company's Common Stock were issued and
outstanding. Without amending the Articles of Incorporation, the
Company would be able to issue 196,196 additional shares of Common Stock.
If the proposed change in authorized capital is approved by shareholders, the
Company will have 20,196,196 shares of unissued and unreserved shares of
Common Stock available for issuance in the future.
The Board believes that the additional shares of Common Stock
resulting from the amendment of the Articles of Incorporation should be
available for issuance from time to time as may be required for various
purposes, including the issuance of Common Stock in connection with financing
or acquisition transactions and the issuance or reservation of Common Stock
for employee stock options. The Company anticipates that in the future it
will consider a number of possible financing and acquisition transactions
that may involve the issuance of additional equity, debt or convertible
securities. If the proposed increase in authorized capital is approved, the
Board would be able to authorize the issuance of shares for these purposes
without the necessity, and related costs and delays, of either calling a
special shareholders' meeting or of waiting for the regularly scheduled
annual meeting of shareholders in order to increase the authorized capital.
If in a particular instance shareholder approval were required by law or
otherwise deemed advisable by the Board, then the matter would be referred
to the shareholders for their approval regardless of whether a sufficient
number of shares previously had been authorized. For example, the Colorado
Business Corporation Act requires approval by the Company's shareholders if
the number of shares of Common Stock to be issued equaled or exceeded
20 percent of the shares of Common Stock outstanding immediately prior to
that issuance. The shareholders of the Company are not entitled to pre-
emptive rights with respect to the issuance of any authorized but
unissued shares.
The proposed change in capital is not intended to have any anti-
takeover effect and is not part of any series of anti-takeover measures
contained in any debt instruments or the Articles of Incorporation or the
Bylaws of the Company in effect on the date of this Proxy Statement. However,
shareholders should note that the availability of additional authorized and
unissued shares of Common Stock could make any attempt to gain control of the
Company or the Board more difficult or time consuming and that the avail-
ability of additional authorized and unissued shares might make it more
difficult to remove current management. Although the Board currently has no
intention of doing so, shares of Common Stock could be issued by the Board to
dilute the percentage of Common Stock owned by a significant shareholder and
increase the cost of, or the number of, voting shares necessary to acquire
control of the Board or to meet the voting requirements imposed by Colorado
law with respect to a merger or other business combination involving the
Company. The Company is not aware of any proposed attempt to take over the
Company or of any attempt to acquire a large block of the Company's Common
Stock. The Company has no present intention to use the increased authorized
Common Stock for anti-takeover purposes.
Required Vote; Board Recommendation
The affirmative vote of a majority of the outstanding shares of Common
Stock is required to approve the proposed amendment to the Articles of
Incorporation. The Board of Directors unanimously recommends that the share-
holders vote in favor of the proposal concerning the increase in authorized
capital.
3. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO PROVIDE FOR AUTHORIZED PREFERRED STOCK
The Board of Directors has unanimously approved and proposes for share-
holder approval an amendment to the Company's Articles of Incorporation to
authorize a new class of capital stock consisting of 5,000,000 shares of pre-
ferred stock, no par value (the "Preferred Stock"), with such relative
rights, preferences and designations as may be determined by the Board in its
sole discretion upon the issuance of any shares of the Preferred Stock. The
proposal to authorize a new class of Preferred Stock is intended to provide
shares of Preferred Stock for issuance from time to time as may be required
for various purposes. The shares of Preferred Stock could be issued from
time to time by the Board in its sole discretion without further approval
or authorization by the shareholders, in one or more series, each of which
series could have any particular distinctive designations as well as relative
rights and preferences as determined by the Board. The relative rights and
preferences that may be determined by the Board in its discretion from time
to time, include but are not limited to the following:
1. the rate of dividend and whether the dividends are to be cumulative
and the priority, if any, of dividend payments relative to other
series in the class;
2. whether the shares of any such series may be redeemed, and if so, the
redemption price and the terms and conditions of redemption;
3. the amount payable with respect to such series in the event of
voluntary or involuntary liquidation and the priority, if any, of each
series relative to other series in the class with respect to amounts
payable upon liquidation and sinking fund provision, if any, for the
redemption or purchase of the shares of that series;
4. the terms and conditions, if any, on which the shares of a series may
be converted into or exchanged for shares of any class, whether common
or preferred, or into shares of any series of the same class, and if
provision is made for conversion or exchange, the times, prices, rates,
adjustments and other terms.
The existence of authorized but unissued shares of Preferred Stock could
have anti-takeover effects because the Company could issue Preferred Stock
with special dividend or voting rights that could discourage potential
bidders.
The authorization of the Preferred Stock will give the Company's Board
of Directors the ability, without shareholder approval, to issue shares of
Preferred Stock with rights and preferences determined by the Board
of Directors in the future. As a result, the Company may issue shares of
Preferred Stock that have dividend, voting and other rights superior to those
of the Common Stock, or that convert into shares of Common Stock,
without the approval of the holders of Common Stock. This could result in
the dilution of the voting rights, ownership and liquidation value of current
shareholders.
Required Vote; Board Recommendation
The affirmative vote of a majority of the outstanding shares of Common
Stock is required to approve the authorization of the Preferred Stock. The
Board of Directors unanimously recommends that the shareholders vote in favor
of the proposal to approve the authorization of the Preferred Stock.
4. PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO LIMIT DIRECTORS' PERSONAL LIABILITY
The Board of Directors has unanimously approved and proposes for share-
holder approval an amendment to the Company's Articles of Incorporation to
limit certain monetary liabilities of the directors of the Company to
the Company or its shareholders. The proposed amendment would implement
provisions of the Colorado Business Corporation Act permitting a Colorado
corporation such as the Company to include in its Articles of Incorporation
a provision limiting the personal liability of a director to the Company or
its shareholders for monetary damages.
The Colorado law concerning limitation of liability for directors also may
be viewed as a response to the perceived difficulty of attracting and
retaining well-qualified directors and officers of Colorado corporations in
view of the increased risks of personal liability resulting from judicial
decisions. During the past several years, courts have increasingly scrutinized
business decisions made by the directors of corporations and have held
directors personally liable to a corporation or its shareholders for damages
arising from breach of their fiduciary duty as directors, including the duty
of care. Liability for the breach of the duty of care may arise when directors
have unintentionally failed to exercise sufficient care in reaching decisions
or otherwise attending to their responsibilities as directors.
The proposed amendment to the Articles of Incorporation is designed to avoid
or reduce the undesirable consequences described above that may result from
increased risk for personal financial liability to the Company's directors by
limiting the liability of directors to the extent permitted by Colorado law
as currently in effect or as the law may be changed in the future. The primary
effect of the proposed amendment would be to eliminate the liability of the
director, but not that of a director while acting in another capacity, to the
Company or its shareholders for monetary damages for violations of that
director's fiduciary duty of care or loyalty that arise after the amendment
is adopted. There are a number of limitations on the protection afforded
directors by the proposed amendment. The amendment would limit the liability
of a director only to the Company and its shareholders. Directors would still
remain potentially liable for damages and suits brought by third parties,
including governmental and regulatory agencies, or for violations of laws,
such as the federal securities laws. In addition, the amendment would not
eliminate or limit liability of a director for breaching his duty of loyalty,
failing to act in good faith, engaging in intentional misconduct or knowingly
violating a law, paying a dividend or approving a stock repurchase that is
illegal under Colorado law, or obtaining improper personal benefits. The
availability of equitable remedies, such as injunctions or rescission, for
breach of fiduciary duty would remain.
The proposed amendment provides that no amendment, modification or repeal
of the proposed amendment will adversely affect any right or protection of a
director that exists at the time of the amendment, modification or repeal.
This is intended to assure directors that the protection of the amendment
will not be retroactively withdrawn. In addition, if the law applicable to
the proposed amendment to the Articles of Incorporation is modified, then the
scope of the amendment will be correspondingly modified without further
action by the Company's shareholders. The Company is not aware of any
proposed changes to applicable law on the limitation of directors' liability.
The Board of Directors believes that the amendment is in the best interests of
the Company and its shareholders because it will allow the Company's
directors to make business decisions on the basis of the best interests of
the Company and its share-holders without undue concern about personal lia-
bility and will enhance the Company's ability in the future to attract and
retain highly qualified directors. Directors' and officers' liability
insurance coverage may become more costly and less comprehensive. The Board
believes that the proposed amendment should lessen the impact of changes in
the cost and scope of directors liability insurance.
Although the limitation of monetary damages could conceivably have a
negative effect on the level of diligence and care used by directors, the
Board of Directors believes that the diligence and care used by the Company's
directors extends primarily from their desire to act in the best interests of
the Company and not from a fear of monetary damage awards. Therefore, the
Board of Directors believes that the level of diligence and care exercised
by directors and officers will not be lessened by adoption of the amendment.
However, it should be recognized that the directors and officers could
benefit from the amendment, and thus have a personal interest in having the
amendment approved because it would limit certain liabilities of directors.
The text of the proposed amendment to the Company's Articles of
Incorporation is as follows:
Proposed Article Seventh:
"Seventh. The personal liability of each director of the Company shall
be eliminated and limited to the full extent permitted by the laws of the
State of Colorado, including without limitation as permitted by the
provisions of Section 7-108-402 of the Colorado Business Corporation Act
and any successor provision, as amended from time to time. No amendment
of this Articles of Incorporation or repeal of any of its provisions
shall limit or eliminate the benefits provided to directors under this
provision with respect to any act or omission that occurred prior to that
amendment or repeal."
Under the Company's current Bylaws, the Company is required to indemnify
its directors to the full extent permitted by Colorado law. Colorado law
permits indemnification of a director except in connection with a proceeding
by or on behalf of the Company or a proceeding in which the director was
found to have derived a personal benefit from the transaction. A director
may be indemnified against liability in a civil (as contrasted with a
criminal) action if he conducted himself in good faith and he reasonably
believed that, with respect to conduct in his official capacity, his conduct
was in the Company's best interests or, in other cases, his conduct
was not opposed to the Company's best interests. Therefore, under the
Company's current indemnification provisions, the Company could not indemnify
a director for liability for breach of his duty of care in connection
with an action brought by the Company or its shareholders.
Required Vote; Board Recommendation
The affirmative vote of a majority of the outstanding shares is required
to adopt this amendment. If this amendment is not approved by the share-
holders, the Board will consider other appropriate action. The Board of
Directors unanimously recommends that the shareholders vote in favor of the
proposal to amend the Articles of Incorporation to limit directors' liability
in certain circumstances.
5. PROPOSAL TO RATIFY REAPPOINTMENT OF INDEPENDENT AUDITORS
The following resolution will be offered by the Board of Directors at the
meeting:
"RESOLVED, that the selection by the Board of Directors of Gelfond
Hochstadt Pangburn & Company, Certified Public Accountants, to audit
the accounts of the Company for the year ended December 31, 1999,
is hereby ratified".
Gelfond Hochstadt Pangburn & Company will serve as the Company's independent
auditors for the year ended December 31, 1999. Neither Gelfond Hochstadt
Pangburn & Company, nor any member of its staff, has any financial interest
in or any connection (other than as independent auditors) with the Company.
The services performed by Gelfond Hochstadt Pangburn & Company during the
last fiscal year were limited to the preparation of the audit and related
matters. There were no non-audit services performed by the auditors
during the fiscal year ended December 31, 1998.
There is no legal requirement for submitting this proposal to the shareholders;
however, it is submitted by the Board of Directors in order to give the share-
holders an opportunity to express their views on the Company's auditors.
Whether the proposal is approved or defeated, the Board may reconsider its
selection of Gelfond Hochstadt Pangburn & Company.
If the resolution is not approved by the shareholders, the Board of Directors
will reconsider its selection of Gelfond Hochstadt Pangburn & Company and con-
sider retaining another firm of auditors.
It is not anticipated that any representative of Gelfond Hochstadt Pangburn &
Company will attend the Annual Meeting.
Required Vote; Board Recommendation
An affirmative vote of the majority of shares represented at the meeting is
necessary to ratify the selection of auditors. The Board recommends that the
shareholders vote in favor of ratifying the selection of Gelfond Hochstadt
Pangburn & Company as the Company's auditors for the fiscal year ending
December 31, 1999 or until the Board of Directors, in its discretion, replaces
them.
PROPOSALS OF SECURITY HOLDERS FOR
COMPANY'S ANNUAL MEETING JUNE 15, 2000;
DISCRETIONARY AUTHORITY TO VOTE PROXIES
All proposals of security holders intended to be presented at the Company's
next Annual Meeting tentatively scheduled for June 15, 2000, must be received
by the Company on or before January 9, 2000, unless the date of the annual
meeting is subsequently changed by more than 30 days, in order to be included
in the proxy statement which the Company will prepare and distribute in con-
nection with that meeting.
Pursuant to Rule 14a-4(c) under the Securities Exchange Act of 1934, as
amended, the Company hereby notifies its shareholders that the proxies
solicited by the Company in connection with the Company's annual meeting to
be held in 2000 will confer discretionary authority to vote on matters raised
by shareholders for which the Company did not have notice on or before March
15, 2000. In addition, if the Company receives notice on or before
March 15, 2000 of a matter that a stockholder intends to raise at the annual
meeting of shareholders to be held in 2000, the proxies solicited by the
Company may exercise discretion to vote on each such matter if the Company
includes in its proxy statement advice on the nature of the matter raised and
how the Company intends to exercise its discretion to vote on each such
matter. However, the Company may not exercise discretionary voting authority
on a particular proposal if the proponent of that proposal provides the
Company with a written statement, on or before March 15, 2000, that the pro-
ponent intends to deliver a proxy statement and form of proxy to holders of
at least the percentage of the Company's voting shares required under appli-
cable law to carry the proposal (the "Required Percentage"), which would be
a majority of the Company's outstanding Common Stock or a majority of the
shares of Common Stock represented at the meeting, depending on the nature of
the proposal, if the proponent includes the same statement in its proxy
materials filed under Rule 14a-6, and if the proponent, immediately after
soliciting the holders of the Required Percentage, provides the Company with
a statement from any solicitor or any other person with knowledge that
the necessary steps have been taken to deliver a proxy statement and form of
proxy to the holders of the Required Percentage.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the Company's last fiscal year, there were no transactions between the
Company and any Director, Executive Officer, Nominee for Director or 5 per-
cent shareholder or any of their respective families, and none are currently
proposed, in which the amount involved exceeded $60,000.
VOTING PROCEDURES
Votes at the Annual Meeting of Shareholders are counted by the Inspector of
Election appointed by the Chairman of the meeting. If a quorum is present,
an affirmative vote of a majority of the votes entitled to be cast by those
present in person or by proxy is required for the approval of items submitted
to shareholders for their consideration unless a different number of votes is
required by statute or the Company's Article of Incorporation. Colorado law
requires that the proposed amendments to the Articles of Incorporation be
approved by the affirmative vote of a majority of all outstanding shares
entitled to vote at the Annual Meeting. Abstentions by those present at the
meeting are tabulated separately from affirmative and negative votes and
do not constitute affirmative votes. If a shareholder returns his or her
proxy card and withholds authority to vote for any or all of the nominees,
the votes represented by the proxy card will be deemed to be present at the
meeting for the purposes of determining the presence of a quorum but will not
be counted as affirmative votes. Shares in the name of brokers that are not
voted are treated as not present.
INCORPORATION BY REFERENCE
The Company incorporates by reference into this proxy statement the fol-
lowing information included in reports filed by the Company with the
Securities And Exchange Commission:
1. Items 6 (Management's Discussion And Analysis Of Financial Con-
dition And Results Of Operations) and 7 (Financial Statements)
included in the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1998.
A copy of that report is being mailed to each shareholder with this
proxy statement.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
MAYNARD L. MOE
President
Denver, Colorado
May 10, 1999
APPENDIX - PROXY CARD
PROXY PROXY
For the Annual Meeting Of Shareholders of
DENCOR ENERGY COST CONTROLS, INC.
Proxy Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Maynard L. Moe and Theodore Hedman, or either
of them, as proxies with full power of substitution to vote all the shares of
the undersigned with all of the powers which the undersigned would possess if
personally present at the Annual Meeting of Shareholders of Dencor Energy Cost
Controls, Inc. (the "Corporation"), to be held at 4:00 p.m. on June 24, 1999 at
the Corporation's offices at 1450 West Evans Avenue, Denver, Colorado 80223, or
any adjournments thereof, on the following matters set forth on the reverse
side:
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- - -------------------------------------------------------------------------------
X Please mark
votes as in
this example.
Unless contrary instructions are given, the shares represented by this proxy
will be voted in favor of Items 1, 2, 3, 4 and 5. This proxy is solicited on
behalf of the Board of Directors of Dencor Energy Cost Controls, Inc.
1. ELECTION OF DIRECTORS
Nominees: Maynard L. Moe, Theodore A. Hedman, and Edmund Barbour.
FOR ALL NOMINEES ( ) WITHHELD FROM ALL NOMINEES ( )
FOR ALL NOMINEES EXCEPT AS NOTED ABOVE ( )
2. Proposal to amend the Articles of Incorporation to provide for an increase
to 25,000,000 authorize shares of Common Stock.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. Proposal to amend the Articles of Incorporation to provide for the
authorization of 5,000,000 shares of Preferred Stock.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. Proposal to amend the Articles of Incorporation to limit the personal
liability of directors in certain circumstances.
( ) FOR ( ) AGAINST ( ) ABSTAIN
5. Proposal to ratify the selection of Gelfond Hochstadt Pangburn & Company
as the Company's certified independent accountants.
( ) FOR ( ) AGAINST ( ) ABSTAIN
6. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW ( )
EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE, SIGN AND RETURN
THIS PROXY IN THE ACCOMPANYING ENVELOPE.
(Please sign exactly as shown on your stock certificate and on the envelope in
which this proxy was mailed. When signing as partner, corporate officer,
attorney, executor, administrator, trustee, guardian, etc., give full title as
such and sign your own name as well. If stock is held jointly, each joint owner
should sign.)
Signature: Date:
Signature: Date:
