<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Dominion Bridge Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the 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)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] 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:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
DOMINION BRIDGE CORPORATION
March 5, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Dominion Bridge Corporation (the "Company") which will be held at 10.00 a.m. on
Monday, March 30, 1998 at the offices of the Company's shipbuilding subsidiary
located at 22 Georges D. Davie, Levis, Quebec, Canada. Your Board of Directors
and management look forward to greeting personally those stockholders able to
attend.
At the meeting, stockholders will be asked to elect two directors, to
ratify the appointment of Deloitte & Touche as the Company's auditors and to
consider such other matters as may properly come before the meeting. These
matters are discussed in greater detail in the accompanying Proxy Statement.
Your Board of Directors recommends a vote FOR the election of directors and
FOR the ratification of Deloitte & Touche as the Company's independent auditors.
Regardless of the number of shares you own or whether you plan to attend,
it is important that your shares be represented and voted at the meeting. You
are requested to sign, date and mail the enclosed proxy promptly.
We wish to thank our stockholders for their participation and continued
support.
Sincerely,
MICHEL L. MARENGERE
Chairman of the Board
and Chief Executive Officer
<PAGE> 3
DOMINION BRIDGE CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MARCH 30, 1998
March 5, 1998
To the Stockholders of DOMINION BRIDGE CORPORATION:
The Annual Meeting of Stockholders (the "Meeting") of Dominion Bridge
Corporation (the "Company") will be held at the offices of the Company's
shipbuilding subsidiary located at 22 Georges D. Davie, Levis, Quebec, Canada on
Monday, March 30, 1998, at 10:00 a.m. for the following purposes:
(1) to elect two directors in accordance with the Bylaws;
(2) to ratify the appointment of Deloitte & Touche, independent auditors,
as auditors for the Company; and
(3) to transact such other business as may properly come before the Meeting
and at any postponement(s) or adjournment(s) thereof.
A copy of the Annual Report for the fiscal year ended September 30, 1997 is
enclosed for your information.
Only stockholders of record as of the close of business on February 3, 1998
will be entitled to vote at the Meeting. Stockholders are entitled to vote at
the Meeting either in person or by proxy. THOSE WHO ARE UNABLE TO ATTEND THE
MEETING ARE REQUESTED TO READ, COMPLETE, SIGN AND MAIL THE ENCLOSED FORM OF
PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
OLIVIER DESPRES
Secretary
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO SIGN, DATE AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE
<PAGE> 4
PROXY STATEMENT
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Dominion Bridge Corporation (the "Company")
to be voted at the Annual Meeting of Stockholders of the Company on March 30,
1998 and at any postponement(s) or adjournment(s) of the meeting (the
"Meeting"), for the purposes described in the foregoing Notice of Meeting.
Proxies which are validly executed by stockholders and which are received by the
Company at or prior to the Meeting will be voted in accordance with the
instructions contained thereon. If no instructions are given, a proxy will be
voted FOR the election of the two nominees proposed for election as directors,
FOR the ratification of Deloitte & Touche as auditors for the Company and in the
discretion of the persons named in the proxy, if granted, on all other matters
presented to the Meeting.
The securities entitled to vote at the Meeting consist of shares of Common
Stock of the Company. The number of outstanding shares of Common Stock at the
close of business on February 3, 1998 was 31,447,648. Each share of Common Stock
is entitled to one vote. Only holders of record at the close of business on
February 3, 1998 will be entitled to vote at the Meeting. The holders of a
majority of the outstanding shares of Common Stock must be present in person or
represented by proxy at the Meeting in order to constitute a quorum for the
transaction of business. Abstentions and broker non-votes will be counted for
the purpose of determining a quorum but neither will be counted in the election
of directors or in the voting on the ratification of Deloitte & Touche as
auditors of the Company.
Nominees receiving a plurality of the votes cast will be elected as
directors. The affirmative vote of majority of the shares present in person or
by proxy is required for ratification of the appointment of Deloitte & Touche as
the Company's auditors.
A copy of the Company's Annual Report for the fiscal year ended September
30, 1997 accompanies this Proxy Statement. No material contained in the Annual
Report is to be considered a part of the proxy solicitation material.
The mailing address of the Company's executive office is 500 Notre Dame
Street, Third Floor, Lachine, Quebec, Canada H8S 2B2. The date on which this
Proxy Statement and the form of proxy was first mailed or given to stockholders
was on or about March 6, 1998.
APPOINTMENT AND REVOCATION OF PROXIES
The persons named in the form of proxy accompanying this Proxy Statement
are officers of the Company. A stockholder of the Company has the right to
appoint a person other than the persons specified in such form of proxy, who
need not be a stockholder of the Company, to attend and act for him and on his
behalf at the Meeting. Such right may be exercised by striking out the names of
the persons specified in the form of proxy, inserting the name of the person to
be appointed in the blank space so provided, signing the form of proxy and
returning it in the reply envelope or otherwise to the Company at 500 Notre Dame
Street, Third Floor, Lachine, Quebec, Canada, H8S 2B2.
Any stockholder who executes and returns a form of proxy may revoke it:
(a) by depositing an instrument in writing executed by him or by his
attorney authorized in writing at the principal office of the Company, 500
Notre Dame Street, Third Floor, Lachine, Quebec, Canada H8S 2B2, at any
time up to and including the last business day preceding the Meeting or any
adjournment(s) or postponement(s) thereof;
(b) by depositing such instrument in writing with the Chairman of the
Meeting on the day of the Meeting; or
(c) by any other manner permitted by law.
<PAGE> 5
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three classes with one
class elected at each Annual Meeting of Stockholders. Vacancies in the Board of
Directors may be filled by the Board of Directors, and any director chosen to
fill a vacancy would hold office until the next election of the class for which
such director had been chosen. Due to recent resignations, there are currently
two vacancies on the Board of Directors one of which is the class of directors
being elected at the Meeting. At this time, the Board has not selected anyone to
fill these vacancies and proxies can not be voted for a greater number of
nominees than those named herein.
The two persons listed below have been nominated by the Board of Directors
to serve as directors until the 2001 Annual Meeting of Stockholders. It is the
intention of the persons named in the accompanying form of proxy to vote such
proxy for the election as directors of the following nominees. In the event that
any nominee is unable to serve or will not serve as a director, it is intended
that the proxies solicited hereby will be voted for such other person or persons
as may be nominated by management. It is not expected that any nominee will be
unable or will decline to serve as a director.
<TABLE>
<CAPTION>
YEAR IN WHICH
DIRECTORS WHOSE TERM EXPIRES SERVICE AS A
AT THE 1998 ANNUAL MEETING PRINCIPAL OCCUPATION DIRECTOR BEGAN
---------------------------- -------------------- --------------
<S> <C> <C>
Derek S. Tennant, 55......................... Consultant 1997
Allen S. Gerrard, 62......................... Attorney (self-employed) 1997
</TABLE>
Derek S. Tennant was appointed a Director of the Company on October 9,
1997. Mr. Tennant currently serves as a consultant to Deere Park Equities, LLC
("Deere Park"), a principal stockholder of the Company, and serves on the Board
as a nominee of Deere Park. During the past five years, Mr. Tennant has served
as President of Active Living of Elliot Lake, Inc., a retirement housing company
and also as Site Selection Manager of Q. Canada, Inc., a developer of
entertainment centers. In 1994, Mr. Tennant filed a petition for personal
bankruptcy under federal bankruptcy laws due to losses incurred on real estate
investments. Mr. Tennant was discharged from bankruptcy in February 1995.
Allen S. Gerrard was appointed a Director of the Company on November 13,
1997. Mr. Gerrard obtained a Bachelor of Arts Degree from the University of
Illinois and a Law Degree from the University of Michigan. Mr. Gerrard is a
self-employed attorney in Chicago, Illinois specializing in general civil
litigation. Since 1975 he has been a Director of the Western Golf Association,
which manages the affairs of the Evans Scholarship Foundation. He is the father
of Douglas A. Gerrard, who is a Manager of Deere Park, a principal stockholder
of the Company. Mr. Gerrard serves on the Board as a nominee of Deere Park.
<TABLE>
<CAPTION>
YEAR IN WHICH
DIRECTORS WHOSE TERM EXPIRES SERVICE AS A
AT THE 1999 ANNUAL MEETING PRINCIPAL OCCUPATION DIRECTOR BEGAN
---------------------------- -------------------- --------------
<S> <C> <C>
Reynald Lemieux, 70.......................... President, Placement R.N.S. Inc. 1995
Rene Amyot, 71............................... Attorney (self-employed) 1993
Michael E. McGinnis, 48...................... President and Chief Executive Officer 1998
of American Eco Corporation
</TABLE>
Reynald Lemieux was elected a Director of the Company in February 1995. He
graduated in commerce from Laval University and has been involved in real estate
as an owner and developer for the past forty years. He is the President and
majority shareholder of Placement R.N.S. Inc., a private company specializing in
real estate and other investments. Mr. Lemieux also serves as a director of the
Company's majority owned Australian subsidiary, McConnell Dowell Corporation
Limited ("MDC").
Rene Amyot, Q. C. was elected a Director of the Company in January 1994. Me
Amyot graduated in law from Laval University in Quebec City and received an MBA
from Harvard University. Me Amyot is a Queen's Counsel and retired in February
1996 as counsel to the Quebec City law firm of Jolin, Fournier, Morisset. Me
Amyot is a director of Rothman's Inc., a tobacco company. Me Amyot also serves
as a director of MDC.
2
<PAGE> 6
Michael E. McGinnis was appointed a Director of the Company on February 23,
1998. Mr. McGinnis has been the President and Chief Executive Officer of
American Eco Corporation ("American Eco") since 1993 and a director of American
Eco since 1994. American Eco, headquartered in Houston, Texas, is a provider of
industrial support, environmental remediation and specialty fabrication services
to various industries throughout the United States and Canada. American Eco's
shares are publicly traded on the Nasdaq National Market System and in Canada on
the Toronto Stock exchange. Mr. McGinnis was President and Chief Executive
Officer of Eco Environmental, Inc., a provider of environmental remediation
services to industrial clients, when it was acquired by American Eco in 1993.
Prior to joining the Eco Environmental, Inc. in 1992, Mr. McGinnis was employed
with The Brand Companies, Inc., one of the largest asbestos abatement
contractors in the United States. Mr. McGinnis joined The Brand Companies in
1965 and served in various operational and administrative capacities for over 27
years. Mr. McGinnis also serves as the Chairman of the Board of EIF Holdings,
Inc., a public asbestos abatement and lead removal contractor based in
California and has held this position since June 1996, having been President of
EIF from March 1996 until August 1996. Mr. McGinnis was appointed to the Board
pursuant to the terms of a Securities Purchase Agreement by and between the
Company and American Eco. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
<TABLE>
<CAPTION>
YEAR IN WHICH
DIRECTORS WHOSE TERM EXPIRES SERVICE AS A
AT THE 2000 ANNUAL MEETING PRINCIPAL OCCUPATION DIRECTOR BEGAN
---------------------------- -------------------- --------------
<S> <C> <C>
Michel L. Marengere, 50...................... Chairman and Chief Executive Officer of 1993
the Company
Louis Berlinguet, 71......................... Consultant 1995
Nicolas Matossian, 57........................ President and Chief Operating Officer 1997
of the Company
</TABLE>
Michel L. Marengere was elected Chairman of the Board of Directors and
Chief Executive Officer of the Company effective as of October 1993. During the
prior five years, Mr. Marengere was President and Chief Executive Officer of
Edinov, a former subsidiary of the Company. Mr. Marengere also serves as
Chairman of the Board of Directors of MDC.
Louis Berlinguet was elected a Director of the Company in August 1995. He
obtained a B.Sc. (Honours) from the University of Montreal in 1947 and a Ph.D.
in Chemistry from Laval University in 1950. Dr. Berlinguet is a scientific
consultant, president of the Order of Quebec, (1994-) and president of the
Quebec Advisory Committee on the Information Highway (1995-). From 1990 to
January 1997, Dr. Berlinguet was President of the "Conseil de la science et de
la technologie du Quebec."
Nicolas Matossian was appointed President and Chief Operating Officer of
the Company in April 1994 and has been a director of the Company since March 14,
1997. Dr. Matossian graduated from Harvard University with an MBA and acquired
his Ph.D. in economics from McGill University. Prior to joining the Company, Dr.
Matossian was the founding partner of ERA, an economic and management consulting
firm involved in major projects for the public and private sectors and was the
managing director of the Manitoba Development Corporation. Mr. Matossian also
serves as a director of MDC.
BOARD MEETINGS AND COMMITTEES
There are currently eight members of the Board of Directors and two
vacancies. The Board of Directors currently maintains three committees
consisting of the Audit, Corporate Governance, and Executive Committee. During
1997, the Board of Directors also maintained an Independent Committee. A brief
description of the functions of each committee is set forth below.
The Audit Committee has primary responsibility to review accounting
procedures and methods employed in connection with audit programs and related
management policies. Its duties include (1) selecting the independent auditors
for the Company; (2) reviewing the scope of the audit to be conducted by them;
(3) meeting with the independent auditors concerning the results of their audit;
and (4) overseeing the scope and accuracy of the Company's system of internal
accounting controls. The Audit Committee is the principal liaison between the
Board of Directors and the independent auditors of the Company. The current
members of
3
<PAGE> 7
the Audit Committee are Messrs. Amyot (Interim Chairman), Berlinguet and
Lemieux. During the fiscal year ended September 30, 1997 ("Fiscal 1997"), the
Audit Committee conducted five meetings.
The Corporate Governance Committee (formerly the Compensation Committee,
the Search Committee and the Technology Committee) is responsible for
continually reviewing and assessing the Company's compensation and benefit
programs, and assessing the compensation payable to executive officers joining
the Company. The members of the committee are Messrs. Amyot (Interim Chairman),
Berlinguet, and Lemieux. During Fiscal 1997, the Compensation Committee and the
other former Committees conducted eleven meetings.
The Executive Committee is responsible for overseeing and reviewing the
strategic planning and management of the Company. The members of the committee
are Messrs. Marengere (Chairman), Amyot and McGinnis. Although the Executive
Committee did not conduct any formal meetings during Fiscal 1997, the members
engaged in frequent consultation throughout the year.
The Independent Committee was formed in June 1997 in connection with the
Company's retention of Legg Mason Wood Walker Incorporated to assist the Company
in exploring strategic alternatives to enhance stockholder value including
pursuing a sale of the Company or completing a transaction with a strategic
investment partner. The Independent Committee was charged with the
responsibility to work with and monitor the progress of Legg Mason with respect
to this process. This committee was recently dissolved after the full Board of
Directors resolved to pursue a transaction with American Eco Corporation. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." The members of the committee
were Messrs. Lemieux (Chairman), Berlinguet and Gil until his resignation from
the Board for health reasons. Prior to its dissolution, the Independent
Committee conducted fourteen meetings.
During Fiscal 1997, there were seventeen meetings of the Board and each
director attended at least 75% of the Board meetings and the meetings of
committees of which he is a member held during the time he was a director or
member, as applicable.
MANAGEMENT OF THE COMPANY
The following is a brief description of the business experience of each of
the executive officers of the Company who does not serve as a director of the
Company.
Olivier Despres was appointed Vice President, General Counsel and Corporate
Secretary of the Company in September 1996. During the five years prior to such
time, Me Despres practiced in the areas of commercial and corporate law,
computer and high technology law, civil law, and related litigation in his own
firm. A member of the Canadian Bar Association and of the Quebec Bar, Me Despres
graduated in political science (1976) and in law (1979) from Ottawa University,
and obtained an M. Sc. in political science (1983) from the University of
Montreal.
Robert Chartier was appointed Vice President and Corporate Controller of
the Company in October 1994, and Interim Chief Financial Officer in September
1996. Mr. Chartier graduated in accounting from Ecole des Hautes Etudes
Commerciales de Montreal. He holds a C.A. and prior to joining the Company,
practiced as a Chartered Accountant in his own firm since 1971.
J. Arthur Gelinas was appointed Vice President of the Company effective
October 1993 and President of Davie Industries Inc. effective upon its
acquisition by the Company in March 1996. Prior to his appointment, Mr. Gelinas
was the founding President of Administratique Inc., a management consulting
company involved in providing financial and administrative services. Mr. Gelinas
graduated from Laval University with a Masters in Commercial Sciences and is a
Chartered Administrator.
4
<PAGE> 8
EXECUTIVE COMPENSATION
The following table discloses, for the fiscal years ended September 30,
1997 ("Fiscal 1997"), September 30, 1996 ("Fiscal 1996") and September 30, 1995
("Fiscal 1995"), individual compensation information relating to the Chief
Executive Officer and the four highest compensated executive officers of the
Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------- ---------------------------------
AWARDS
---------- PAYOUTS
SECURITIES -------
RESTRICTED UNDERLYING LTIP/ ALL OTHER
SALARY BONUS OTHER ANNUAL STOCK OPTIONS/ PAYOUTS COMPENSATION
NAME AND POSITION YEAR ($) ($) COMPENSATION AWARD(S) SARS(#) ($) ($)
----------------- ---- ------- ------- ------------ ($)------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michel L. Marengere............... 1997 360,000 180,000 0 0 0 0 0
Chairman of the Board of 1996 360,000 180,000(1) 0 0 825,000(2) 0 0
Directors, Chief Executive 1995 360,000 180,000(1) 0 0 (2) 0 0
Officer and Director
Nicolas Matossian................. 1997 240,000 96,000 0 0 0 0 0
President and Chief 1996 240,000 96,000(1) 0 0 400,000(3) 0 0
Operating Officer 1995 240,000 96,000(1) 0 0 (3) 0 0
Robert Chartier................... 1997 125,000 0 0 0 0 0
Vice President, 1996 125,000 0 0 0 110,000(4) 0 0
Corporate Controller 1995 117,000 0 0 0 (4) 0 0
and Interim Chief Financial
Officer
J. Arthur Gelinas................. 1997 150,000 0 0 0 0 0
Vice President of the 1996 113,000 0 0 0 200,000(5) 0 0
Company and President 1995 90,000 0 0 0 0 0 0
of Davie Industries Inc.
Olivier Despres(6)................ 1997 148,000 0 0 0 0 0 0
Vice President, General 1996 10,500 0 0 0 175,000(5) 0 0
Counsel and Corporate Secretary
</TABLE>
- ---------------
(1) Pursuant to their service agreements, Messrs. Marengere and Matossian are
entitled to a minimum guaranteed bonus equal to, with respect to Mr.
Marengere, one-half of his base compensation and with respect to Mr.
Matossian, 40% of his base compensation. These bonuses were paid in January
1997.
(2) Consists of 175,000 options granted during Fiscal 1994, 500,000 options
granted during Fiscal 1995 and 150,000 shares of Common Stock which were to
be received upon the exercise of 75,000 unit options (exercisable for one
share of Common Stock and one Common Stock purchase warrant) granted during
Fiscal 1995 under Mr. Marengere's service agreement, all of which were
repriced on September 12, 1996. All of these options were exercised in
August 1997.
(3) Consists of 300,000 options granted during Fiscal 1995 and 100,000 shares of
Common Stock be received upon the exercise of 50,000 unit options
(exercisable for one share of Common Stock and one Common Stock purchase
warrant) granted during Fiscal 1995 under Mr. Matossian's service agreement,
all of which were repriced on September 12, 1996. All of these options were
exercised in August 1997.
(4) Consists of options granted during Fiscal 1995 which were repriced on
September 12, 1996. All of these options were exercised in August 1997.
(5) All options were exercised in August 1997.
(6) Me Despres joined the Company in September 1996.
5
<PAGE> 9
The following table shows information regarding the exercise of stock
options during Fiscal 1997 by the named executives and officers and the number
and value of any unexercised stock options held by them as of September 30,
1997:
AGGREGATED OPTION EXERCISES IN 1997 FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES TABLE
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED
OPTIONS/SARS
SHARES VALUE AT FY-END(#)
ACQUIRED ON REALIZED EXERCISABLE/
NAME EXERCISE(#) ($)(1) UNEXERCISABLE
---- ----------- -------- -------------
<S> <C> <C> <C>
Michel L. Marengere......................................... 825,000 0 0/0
Nicolas Matossian........................................... 400,000 0 0/0
Robert Chartier............................................. 110,000 0 0/0
J. Arthur Gelinas........................................... 200,000 0 0/0
Olivier Despres............................................. 175,000 0 0/0
</TABLE>
- ---------------
(1) All options were exercised on August 20, 1997. The closing price for the
Company's Common Stock on that date was $1.844 which was lower than the
exercise price of the options.
The Company has no retirement, pension or profit-sharing plans covering its
officers and directors and does not contemplate implementing any such plans at
this time. Although the Company has no formal bonus arrangements, other than the
minimum guaranteed bonuses provided in the service agreements for Messrs.
Marengere and Matossian and certain other corporate compensation documents,
bonuses will be granted at the discretion of the Board of Directors or by the
Corporate Governance Committee. See "CORPORATE GOVERNANCE COMMITTEE REPORT ON
EXECUTIVE COMPENSATION."
DIRECTORS' COMPENSATION
During Fiscal 1997, Directors of the Company who are not employees of the
Company ("Outside Directors") were paid an annual stipend of $12,000, plus a fee
of $1,000 for each Audit Committee or Board meeting attended and $500 for each
other Committee meeting attended. The aggregate amount of fees paid to all
Outside Directors during Fiscal 1997 was $190,000. On November 25, 1996, each of
the outside directors was granted three-year options to purchase 25,000 shares
of Common Stock at a price of $2.00 per share. In addition, former Outside
Directors Ladislas O. Rice and Andrew Choa were granted three (3) year options
to purchase 25,000 shares of common stock at a price of $2.00 per share upon
their appointment to the Company's Board of Directors on March 14, 1997.
CHANGE IN CONTROL ARRANGEMENTS
SERVICE AGREEMENTS
Effective February 1, 1995, the Company entered into three year service
agreements with Michel L. Marengere as Chairman and Chief Executive Officer,
Nicolas Matossian as President and Chief Operating Officer and Robert Chartier
as Vice President and Corporate Controller. Effective April 1, 1996 and
September 1, 1996, the Company entered into a three year service agreement with
Mr. Gelinas and a three-year employment agreement with Me Despres. Mr.
Marengere's service agreement as Chairman and Chief Executive Officer was
extended for a three-year period beginning February 1997.
The service agreements with Messrs. Marengere, Matossian, Chartier, Gelinas
and Despres (individually an "executive") contain "change in control" language
which provides the executive with certain benefits, including payment to the
executive in the amount of three times his base compensation, if the executive
is terminated for "good reason," as that term is defined in the service
agreements, following a change in control of the Company. The service agreements
provide that a "change in control" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A,
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<PAGE> 10
as in effect on the date thereof, promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"); provided, however, that, without
limitation, such a change in control shall be deemed to have occurred if (A) any
"Person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
except for Michel L. Marengere, or a company controlled by him, is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's then
outstanding securities; (B) there occurs a contested proxy solicitation of the
Company's stockholders that results in the contesting party obtaining the
ability to vote securities representing 20% or more of the combined voting power
of the Company's then outstanding securities; (C) there occurs a sale, exchange,
transfer or other disposition of substantially all of the assets of the Company
to another entity, except to an entity controlled directly or indirectly by the
Company, or a merger, consolidation or other reorganization of the Company in
which the Company is not the surviving entity, or a plan of liquidation or
dissolution of the Company other than pursuant to bankruptcy or insolvency laws
is adopted; or (D) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors cease for any
reason to constitute at least a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period. Notwithstanding the
foregoing, a "change in control" shall not be deemed to have occurred for
purposes of the service agreements (i) in the event of a sale, exchange,
transfer or other disposition of substantially all of the assets of the Company,
or a merger, consolidation or other reorganization involving the Company and the
executive, alone or with other officers of the Company, or any entity in which
an executive (alone or with other officers) has, directly or indirectly, at
least a 25% equity or ownership interest or (ii) in a transaction otherwise
commonly referred to as a "management leveraged buy-out."
If a "change in control" had occurred during Fiscal 1997, Messrs.
Marengere, Matossian, Chartier, Gelinas and Despres would have been entitled to
receive $1,080,000, $720,000, $375,000, $450,000 and $450,000 respectively,
based on their base compensations pursuant to their respective service
agreements. In addition to these payments, since their service agreements are
for three year terms ending February 27, 2000, January 31, 2001, March 31, 1999
or August 31, 1999 they would also be entitled to receive their base
compensation for the balance of the terms of their respective service
agreements.
Notwithstanding anything to the contrary set forth in any of the Company's
filings under the Securities Act of 1933, as amended (the "Securities Act") or
the Securities Exchange Act of 1934 (the "Exchange Act") that might incorporate
the Company's filings, including this Proxy Statement, in whole or in part, the
following report and the Performance Graph on page 9 shall not be incorporated
by reference into any such filings, nor shall they be deemed to be soliciting
material or deemed filed with the Securities and Exchange Commission under the
Securities Act or the Exchange Act.
CORPORATE GOVERNANCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Corporate Governance Committee of the Board of Directors (the
"Committee") is responsible for developing and making recommendations to the
Board with respect to the Company's executive compensation policies. The
Committee consists of Rene Amyot (Interim Chairman), Louis Berlinguet and
Reynald Lemieux (temporary), each of whom is an outside director. No member of
the Compensation Committee has a relationship that would constitute an
interlocking relationship with executive officers or directors of another
entity. Messrs. Marengere and Matossian are sometimes referred to in this report
as "Senior Executives."
SENIOR AND OTHER EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's senior and other executive compensation program is based on
the following four objectives: (i) to link the interests of management with
those of stockholders by encouraging stock ownership in the Company; (ii) to
attract and retain superior executives by providing them with the opportunity to
earn total compensation packages that are competitive with the industry; (iii)
to reward individual results by recognizing performance through cash
compensation and incentives as well as long-term stock based incentives; and
(iv) to manage compensation based on the level of skill, knowledge, effort and
responsibility needed to perform the job successfully.
7
<PAGE> 11
The components of the Company's compensation program for its senior and
other executive officers include (i) cash compensation and minimum guaranteed
bonuses provided pursuant to certain service agreements and corporate
compensation documents; and (ii) performance-based cash bonuses. In past years,
the Company has provided incentive compensation in the form of stock options.
Cash Compensation. Cash compensation levels for the Company's senior and
other executive officers are determined, in part, through comparisons with
companies in the engineering and construction industry and other companies with
which the Company competes for personnel and general geographic market
conditions. Additionally, the Committee evaluates individual experience and
performance and the overall performance of the Company. The Committee reviews
each senior and other executive's cash compensation on an annual basis and may
increase each senior and other executive's cash compensation based on (i) the
individual's increased contribution to the Company over the preceding year; (ii)
the individual's increased responsibilities over the preceding year; or (iii)
any increase in median competitive pay levels.
Annual Cash Bonuses. The Committee recommends the payment of bonuses from
time-to-time to the Company's key employees and executive officers to provide
these persons with an incentive to be productive over the course of each fiscal
year. Certain corporate compensation documents and the service agreements for
Messrs. Marengere and Matossian provide for minimum cash bonuses equal to 50%
and 40% of their respective base compensation. Subject to the Committee's
recommendation, bonuses may be awarded to other executive officers only if the
Company achieves or exceeds certain corporate performance objectives relating to
net income, revenues and strategic acquisitions. Except as provided in the
service agreements, there is no mechanical formula or official policy regarding
the issuance of bonuses to the Company's other executive officers and key
employees.
Stock Option Plans. Historically, the Company has utilized stock options
to provide an incentive to its executive officers and employees by allowing them
to directly participate in any increase in the long-term value of the Company
and to reward, motivate and retain the services of its executive officers. The
Company's 1995 Stock Option Plan provided for the grant of 1,500,000 Incentive
Stock Options and Non-Qualified Stock Options. All of these options were granted
to the executive officers and other key employees in prior fiscal years. Since
all outstanding options were repriced to $2.00 per share at the end of fiscal
1996, the Committee did not consider presenting a new option plan for full board
and stockholder approval.
Exercise of Options. During fiscal 1997, the Company's senior and other
executive officers and certain other key employees of the Company exercised a
total of 2,380,000 options at $2.00 per share providing the Company with
approximately $4.8 million in working capital. At the time of exercise, the
Company's Common stock was trading below $2.00 per share and the Company needed
cash while it awaited the closing of a $40 million working capital facility with
a syndicate led by BNY Financial Corporation-Canada. These exercises thus
provided the Company with much needed working capital and demonstrated the
executive officers' dedication and commitment to increasing the long term value
of the Company. See "CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS."
CEO COMPENSATION
Mr. Marengere's base compensation will be adjusted from time-to-time in
accordance with the criteria for the determination of executive officer
compensation as described above in the section captioned "Cash Compensation."
Mr. Marengere was principally responsible for the acquisitions which have
resulted in the Company's substantial growth over the time period since the
Company was reorganized in 1993. Furthermore, the Company's executive staff has
remained relatively small in spite of the Company's growth, resulting in
substantially increased responsibilities for Mr. Marengere. For these reasons,
among others, in February 1997, the Committee recommended that Mr. Marengere's
service agreement be extended for an additional three (3) year term as Chairman
and Chief Executive Officer. This recommendation was unanimously approved by the
Board of Directors. In setting the compensation for Mr. Marengere for Fiscal
1998, the Committee will
8
<PAGE> 12
seek to retain this key executive officer while continuing to tie a significant
percentage of his compensation to Company financial performance.
By the Corporate Governance Committee
Rene Amyot, Interim Chairman
Louis Berlinguet
Reynald Lemieux
CORPORATE GOVERNANCE COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During Fiscal 1997, the Company paid approximately $80,000 in fees to Rene
Amyot for consulting and legal services provided to the Company. Me Amyot is
also a principal shareholder of Fidutech Technologies, Inc. which is indebted to
the Company on a subscription receivable in the aggregate amount of $1,824,000.
PERFORMANCE GRAPH
The following line graph compares (i) the cumulative total return on the
Company's Common Stock with the cumulative total returns for (ii) the Dow Jones
Equity Market Index and (iii) the Heavy Construction Index for the period
commencing September 30, 1993 and ending September 30, 1997 as prepared by Dow
Jones & Co. The graph and table assume an initial investment of $100.00 on
September 30, 1993 and the reinvestment of all dividends; the Company has never
paid dividends on its Common Stock. Historical stock performance should not be
relied upon as indicative of future stock price performance.
<TABLE>
<CAPTION>
DOMINION BRIDGE HEAVY CONSTRUCTION DOW JONES EQUITY MARKET
--------------- ------------------ -----------------------
<S> <C> <C> <C>
1993 $100.00 $100.00 $100.00
1994 $300.00 $109.54 $102.87
1995 $230.00 $118.79 $133.73
1996 $ 82.52 $127.41 $160.92
1997 $ 80.00 $131.37 $225.63
</TABLE>
9
<PAGE> 13
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 3, 1998, certain information
concerning the stock ownership of all persons known by the Company to own
beneficially more than 5% of the Company's outstanding Common Stock based upon
filings with the Securities and Exchange Commission, including a Schedule 13D
filed by Deere Park and certain executive officers and directors of the Company,
as well as the beneficial ownership of such Common Stock, as of such date, of
all executive officers and directors, individually and as a group. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS." As of March 3, 1998, there were
33,370,725 shares of Common Stock outstanding.
<TABLE>
<CAPTION>
SHARES OWNED BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER AND OF RECORD OUTSTANDING SHARES(1)
- ------------------------------------ ------------------------- ---------------------
<S> <C> <C>
Michel L. Marengere................ 7,188,260(2) 21.6%
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Nicolas Matossian.................. 7,188,260(3) 21.6%
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Rene Amyot......................... 61,000(4) *
523 Cote Ste. Anne
Ste. Anne de Beaupre
Sante-Foy
Quebec, Canada G0A 3C0
Reynald Lemieux.................... 26,000(5) *
1340 Duquet
Sillery
Quebec, Canada G1S 1A9
Louis Berlinguet................... 25,000(6) *
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Derek S. Tennant................... -- --
154 University Avenue
2nd Floor
Toronto
Ontario, Canada M5H 3Y9
Allen S. Gerrard................... --(7) --
33 North Dearborn Street
Suite 1850
Chicago, IL 60603
Robert Chartier.................... 20,000(8) *
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
J. Arthur Gelinas.................. 20,000(9) *
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Olivier Despres.................... --(10) --
500 Rue Notre Dame
Lachine
Quebec, Canada H8S 2B2
Michael E. McGinnis................ --(11) --
11011 Jones Road
Houston, TX 77070
</TABLE>
10
<PAGE> 14
<TABLE>
<CAPTION>
SHARES OWNED BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER AND OF RECORD OUTSTANDING SHARES(1)
- ------------------------------------ ------------------------- ---------------------
<S> <C> <C>
Douglas A. Gerrard................. 7,188,260(12) 21.6%
c/o Deere Park Capital Management
L.L.C.
650 Dundee Road, Suite 640
Northbrook, IL 60062
Leonard Feldman.................... 7,188,260(13) 21.6%
c/o Deere Park Capital Management
L.L.C.
650 Dundee Road, Suite 640
Northbrook, IL 60062
Dominion Park Equities, L.L.C...... 7,188,260(14) 21.6%
c/o Deere Park Equities, L.L.C.
650 Dundee Road, Suite 640
Northbrook, IL 60062
Deere Park Equities, L.L.C......... 7,188,260(15) 21.6%
650 Dundee Road, Suite 640
Northbrook, IL 60062
Wellgate International Ltd......... 7,188,260(16) 21.6%
c/o Dominion Bridge Corporation
500 Notre Dame
Lachine
Quebec, Canada H8S 2B2
American Eco Corporation........... 2,116,385(17) 6.3%
1111 Jones Road
Houston, TX 77070
All Directors and Executive Officers
as a group (11 persons).......... 7,300,260 21.8%
</TABLE>
- ---------------
* Less than 1%.
(1) Except as otherwise indicated, percentages are presented after rounding to
the nearest tenth and include the total number of shares outstanding and the
number of shares which each person has the right to acquire, within 60 days
through the exercise of options, pursuant to Item 403 of Regulation S-K and
Rule 13d-3(d)(1), promulgated under the Exchange Act. Percentages for the
total of all persons and the total of all officers and directors include all
outstanding shares and all shares which such persons have the right to
acquire within 60 days.
(2) As a manager of Dominion Park Equities, L.L.C. ("Dominion Park") which is
the record owner of 4,490,100 shares of Common Stock and holds a proxy with
respect to an additional 2,698,160 shares, Mr. Marengere has shared voting
power with respect to all of these shares, shared investment power with
respect to 4,490,100 of these shares and is deemed to beneficially own all
such shares. Also includes 1,359,792 shares held of record by Fidutech
Technologies, Inc. as to which Mr. Marengere has shared investment power.
Mr. Marengere is the sole stockholder of Gestion Edinov Inc. and Services
M.L. Marengere, Inc. which own, in the aggregate, 75% of Fidutech. Also
includes 500,000 shares held of record by Wellgate International Ltd.
("Wellgate") over which Mr. Marengere has shared investment power. Mr.
Marengere is an executive officer, director and shareholder of Wellgate.
(3) As a manager of Dominion Park which is the record owner of 4,490,100 shares
of Common stock and holds a proxy with respect to an additional 2,698,160
shares, Mr. Matossian has shared voting power with respect to all of these
shares, shared investment power with respect to 4,490,100 of these shares
and is deemed to beneficially own all such shares. Also includes 50,000
shares over which Mr. Matossian has sole investment power, 4,000 of which
held of record by Greyhorse Resources (Canada) Ltd. Mr. Matossian is the
sole director, officer and shareholder of Greyhorse. Also includes 500,000
shares held of record by Wellgate over which Mr. Matossian has shared
investment power. Mr. Matossian is an executive officer, director and
shareholder of Wellgate.
11
<PAGE> 15
(4) Includes 25,000 shares of Common Stock that may be issued pursuant to stock
options exerciseable at $2.00 per share. Although not deemed to be
beneficially owned for the purposes of applicable SEC rules and
regulations, Mr. Amyot has an economic interest in an additional 100,000
shares of Common Stock which are deemed to be beneficially owned by
Dominion Park and others.
(5) Includes 25,000 shares of Common Stock which may be issued pursuant to
stock options exercisable at $2.00 per share.
(6) Consists of shares of Common Stock which may be issued pursuant to stock
options exercisable at $2.00.
(7) Mr. Gerrard is identified in the Schedule 13D filed by Deere Park and
others as a member of a 13D Group which beneficially owns 7,188,260 shares
of Common Stock. See note 13 below.
(8) Represents shares of Common Stock held of record by Mr. Chartier over which
he has sole investment power. These shares are subject to a proxy which
vests Dominion Park with sole voting power. Although not deemed to be
beneficially owned for the purposes of applicable SEC rules and
regulations, Mr. Chartier has an economic interest in an additional 110,000
shares of Common Stock which are deemed to be beneficially owned by
Dominion Park and others.
(9) Represents shares of Common Stock held of record by Mr. Gelinas over which
he has sole investment power. These shares are subject to a proxy which
vests Dominion Park with sole voting power. Although not deemed to be
beneficially owned for the purposes of applicable SEC rules and
regulations, Mr. Gelinas has an economic interest in an additional 200,000
shares of Common Stock which are deemed to be beneficially owned by
Dominion Park and others.
(10) Although not deemed to be beneficially owned for the purposes of applicable
SEC rules and regulations, Me Despres has an economic interest in 175,000
shares of Common Stock which are deemed to be beneficially owned by
Dominion Park and others.
(11) Mr. McGinnis is the President, Chief Executive Officer and a Director of
American Eco. On February 20, 1998, American Eco purchased 1,923,077 shares
of Common Stock of the Company and warrants to purchase an additional
192,308 shares. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
(12) As a manager of Dominion Park, which is the record owner of 4,490,100
shares of Common Stock and holds a proxy with respect to an additional
2,698,160 shares, Mr. Gerrard has shared voting power with respect to all
of these shares, shared investment power with respect to 4,490,100 of these
shares and is deemed to beneficially own all such shares. Mr. Gerrard is
the sole director and shareholder of Deere Park Capital Management, Inc.
which is the record owner of 630,700 shares which are subject to a proxy
vesting Dominion Park with sole voting power and over which Mr. Gerrard has
sole investment power.
(13) As a manager of Dominion Park, which is the record owner of 4,490,100
shares of Common Stock and holds a proxy with respect to an additional
2,698,160 shares, Mr. Feldman has shared voting power with respect to all
of these shares, shared investment power with respect to 4,490,100 of these
shares and is deemed to beneficially own all such shares
(14) Dominion Park is the record owner of 4,490,000 shares of Common Stock and
holds a proxy with respect to an additional 2,698,160 shares. Dominion Park
is deemed to beneficially own all of these shares.
(15) Consists of shares of Common Stock beneficially owned by Dominion Park.
Deere Park is a member of Dominion Park and may also be deemed to
beneficially own such shares.
(16) Includes shares of Common Stock beneficially owned by Dominion Park.
Wellgate is a member of Dominion Park and may also be deemed to
beneficially own such shares. Also includes 500,000 shares held of record
by Wellgate over which Wellgate has sole investment power. These shares are
subject to a proxy which vests Dominion Park with sole voting power.
12
<PAGE> 16
(17) Include 192,308 shares issuable upon exercise of warrants. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
LEGAL PROCEEDINGS
On or about November 18, 1996 (but not served on the Company until December
9, 1996), James B. Smith commenced a purported class action securities lawsuit
in the United States District Court for the Eastern District of Pennsylvania
against the Company and Messrs. Marengere and Matossian, individually. The
complaint seeks unspecified damages for the persons who traded in the Company's
common stock during the period commencing on April 20, 1995 and ending on May
18, 1996. The action alleges that during the class period the Company issued
misleading press releases and reports to the Securities and Exchange Commission
in that the Company failed to disclose allegations made by a former disgruntled
employee regarding DBI's accounting practices, bonding capability and contracts
in connection with his action against the Company for constructive dismissal. On
December 12, 1996, the Company filed an answer denying the allegations and
strongly affirming that the allegations, both by Smith and the former employee,
are entirely without merit. The Plaintiffs have filed a motion to certify their
proposed class which is pending before the court and no discovery has been
conducted.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of September 30, 1997, a subscription receivable (the "Subscription
Receivable") in the aggregate amount of $1,824,000 was owed to the Company by
Mr. Marengere or his affiliates including Me Amyot.
During Fiscal 1997, the Company paid approximately $80,000 in fees to Rene
Amyot, a director, for consulting and legal services provided to the Company.
In connection with the settlement of a stockholder derivative action
brought against the Company and Messrs. Marengere and Amyot, a company
affiliated with Mr. Marengere guaranteed up to $1,155,000 of the value of the
preferred stock issued to the Company in connection with the sale of Edinov (the
"Guarantee").
Exercise of Options. On August 19, 1997, (i) Deere Park; (ii) the
Company's Executive Officers identified herein, outside director Rene Amyot and
certain current and former employees of the Company (collectively, the
"Management Members"); and (iii) certain principals of Deere Park, including
principal stockholders Douglas A. Gerrard and Leonard Feldman, and outside
director Allen S. Gerrard, (collectively, the "Group"), filed a Schedule 13D
(the "13D") with the Commission which was subsequently amended on September 16,
1997. The 13D describes a series of transactions pursuant to which Deere Park
purchased 2,110,000 shares of Company Common Stock and made a loan of
approximately $4.8 million to the Management Members which was utilized to
exercise 2,380,000 options. Thereafter, Deere Park contributed its 2,110,000
shares and the Management Members contributed their 2,380,000 shares to Dominion
Park, a newly formed limited liability company jointly owned by Deere Park and
Messrs. Marengere and Matossian. The Management Members also delivered a proxy
to Dominion Park vesting it with sole voting power with respect to an additional
2,067,460 shares owned of record by the Management Members. The transaction
documents provide for any gain on the 2,380,000 option shares to be distributed
30% to Deere Park and 70% to the Management Members.
Although the Company was not a party to these transactions, the proceeds of
the approximate $4.8 million loan from Deere Park were paid to the Company by
the Management Members to exercise outstanding options. The transactions were
also subject to prior approval by the Company's Board of Directors in order to
exempt the Group from the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law. In addition, the Board determined that the
transactions did not trigger the exercise of rights issued under the Company's
Shareholder Rights Plan and agreed to the appointment of Derek Tennant and Allen
S. Gerrard to the Company's Board as nominees of Deere Park.
The 13D states that certain members of the Group are in the process of
formulating a proposal with a third party regarding a business combination with
the Company and that the Group or its members may also explore the possibility
of entering into a business combination with other third parties in the future.
Deere
13
<PAGE> 17
Park is an investor in American Eco, which has entered into a Letter of Intent
with the Company regarding the pursuit of a business combination with the
Company.
Transactions with American Eco. On February 20, 1998, the Company entered
into a Securities Purchase Agreement (the "Agreement") with American Eco, a
corporation organized under the laws of Ontario, Canada. The Agreement provided
for the sale of 1,923,077 Units at $2.60 per Unit for an aggregate purchase
price of $5,000,000. Each Unit consists of one (1) share of common stock, $.001
par value per share, of the Company and one tenth (1/10) of a Common Stock
Purchase Warrant. Each full Warrant entitles American Eco to purchase one (1)
additional share of Company common stock at $3.00 per share during the next
three (3) years. The Agreement also provided for the appointment of Michael E.
McGinnis, the President and Chief Executive Officer of American Eco, to the
Company's Board of Directors and Executive Committee.
The Company entered into the Agreement with American Eco in connection with
a letter of intent, also dated February 20, 1998 (the "Letter of Intent"). The
Letter of Intent provides for (i) the Placement described above; (ii) a
$25,000,000 line of credit to be provided by American Eco to the Company (the
"Line of Credit") not later than March 23 , 1998; (iii) a management services
agreement pursuant to which American Eco will provide executive management
services to the Company; and (iv) American Eco's purchase of all of the issued
and outstanding shares of Common Stock of the Company in exchange for
convertible promissory notes of American Eco in the principal amount of $3.00
per share of the Company which are convertible into American Eco common stock at
$15.00 per share. The Letter of Intent provides that the parties shall negotiate
and execute definitive agreements regarding the acquisition transaction by no
later than April 6, 1998.
The Letter of Intent also provides for American Eco to make certain
payments to Messrs. Marengere, Matossian and Amyot as conditions concurrent to
the closing of the acquisition transaction contemplated thereby. Specifically,
American Eco has agreed to pay $2.7 million and issue 250,000 shares of American
Eco Common Stock to Mr. Marengere in connection with his termination of Chief
Executive Officer of the Company and agreement not to compete with the post
acquisition entity. American Eco will also enter into a three year agreement
with Mr. Marengere to serve as Co-Chairman of the post acquisition entity at an
annual salary of $250,000. American Eco has agreed to pay Mr. Matossian $2.1
million in connection with his termination as Chief Operating Officer of the
Company and to enter into a three year consulting agreement providing for the
payment of $150,000 per year. With respect to Me Amyot, American Eco has agreed
to pay him $250,000 and enter into a three year consulting agreement providing
for the payment of $120,000 per year. Finally, American Eco has agreed to
indemnify each of Messrs. Marengere, Matossian and Amyot for any and all
personal liability related to the Company's outstanding fiduciary deductions and
to cancel the Subscription Receivable and Guarantee.
Except for the placement of the Units and the provisions of the Letter of
Intent relating to confidentiality, non-solicitation of competing offers and
fees which are payable to American Eco in the event the Company is acquired by
someone other than American Eco, the Letter of Intent is non-binding. The
transactions, other than the placement of the Units, are also subject to a
number of conditions, including required regulatory and stockholder approvals.
There can, therefore, be no assurance that the Company will be able to
consummate the transactions with American Eco.
VOTE REQUIRED
A plurality of the votes cast by the shares present in person or by proxy
is required to elect a nominee as a director.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE TWO
NOMINEES TO THE BOARD OF DIRECTORS.
14
<PAGE> 18
PROPOSAL 2
RATIFICATION OF DELOITTE & TOUCHE, INDEPENDENT AUDITORS, AS AUDITORS FOR THE
COMPANY
Deloitte & Touche has been selected by the Board of Directors as
independent auditors for the Company for the fiscal year ending September 30,
1998. This election is being presented to the stockholders for ratification. The
Board of Directors recommends ratification of the election of Deloitte & Touche
as the Company's auditors. If the stockholders do not ratify this election, the
appointment of other auditors will be considered by the Board of Directors. A
representative of Deloitte & Touche is expected to be present at the Meeting to
make a statement if desired and to be available to respond to appropriate
questions.
On April 3, 1996, the Company engaged Deloitte & Touche as the Company's
principal independent accountant. Prior to Deloitte & Touche's engagement, Ernst
& Young, independent certified public accountants, had served as the principal
accountant for the Company. The recommendation to change accountants was made by
management of the Company and was approved by the Audit Committee and the Board
of Directors.
In the two most recent fiscal years and the interim period preceding the
Board's actions, there were no disagreements with Ernst & Young on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements if not resolved to Ernst & Young's
satisfaction would have caused them to make reference in connection with their
opinion on the subject matter of disagreement. Ernst & Young's reports on the
Company's financial statements for the most recent fiscal years did not contain
any adverse opinion or disclaimer of opinion, nor were such reports qualified in
any respect.
VOTE REQUIRED
The affirmative vote of a majority of the shares present in person or by
proxy is required for ratification of the appointment of Deloitte & Touche as
independent auditors for the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF DELOITTE &
TOUCHE AS INDEPENDENT AUDITORS FOR THE COMPANY.
OTHER MATTERS
The Board of Directors does not know of any other matter which is intended
to be brought before the Meeting, but if such matter is presented, the persons
named in the enclosed proxy intend to vote the same according to their best
judgment.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
To the knowledge of the Company, based solely on a review of Forms 3, 4 and
5, and any amendments thereto, furnished to the Company, each of the Company's
directors, executive officers and 10% beneficial owners has complied with the
requirements of Section 16(a) of the Exchange Act, except that Messrs. Choa,
Rice and Gerrard each failed to timely file a Form 3 upon their appointment to
the Company's Board of Directors and Mr. Matossian failed to timely file a Form
4 with respect to his purchase of 25,000 shares of Common Stock in March, 1997.
EXPENSES OF SOLICITATION
The cost of this proxy solicitation will be borne by the Company. In
addition to the use of mail, proxies may be solicited in person or by telephone
by employees of the Company without additional compensation. The Company has
also retained the firm of Morrow & Co., Inc. to solicit proxies on behalf of the
Company. In consideration for such services, the Company has agreed to pay
Morrow & Co., Inc. a fee of $10,000 plus expenses incurred. The Company will
reimburse brokers and other persons holding stock in their names or in the names
of nominees for their expenses incurred in sending proxy material to principals
and obtaining their proxies.
15
<PAGE> 19
1999 STOCKHOLDER PROPOSALS AND
CERTAIN PROVISIONS OF THE BY-LAWS
In order for stockholder proposals for the 1999 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's proxy statement, they
must be received by the Company at its principal office in Lachine, Quebec, on
or before November 5, 1998. The Company's Bylaws provide that a stockholder may
nominate a person for election as a director if written notice of the
stockholder's intent to nominate a person for election as a director at a
meeting is received by the Secretary of the Company not less than 50 days nor
more than 75 days prior to the date of the meeting; provided, however, that if
less than 60 days notice or public disclosure of the meeting is given to
stockholders, such written notice must be received not later than 10 days
following the day on which notice of the meeting was first mailed or disclosed
to stockholders. The written notice must contain specified information about the
stockholder and the nominee, including such information as would be required to
be included in a proxy statement pursuant to the rules and regulations
established by the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
By Order of the Board of Directors
OLIVIER DESPRES
Secretary
Dated: March 5, 1998
16
<PAGE> 20
DOMINION BRIDGE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
------------------------------------------------------------------------
The undersigned hereby appoints Michel L. Marengere and Nicolas
Matossian and each of them, or _______________________, Proxies with
power to appoint a substitute and hereby authorizes them to represent
and to vote all shares of Common Stock of Dominion Bridge Corporation
held of record by the undersigned on February 3, 1998 at the Annual
Meeting of Stockholders of Dominion Bridge Corporation to be held on
March 30, 1998 and at any postponement(s) or adjournment(s) thereof, and
to vote as directed on the reverse side of this form and, in their
P discretion, upon such other matters not specified as may come before
R said meeting.
O Change of Address and Comments
X
Y -------------------------------
-------------------------------
-------------------------------
-------------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse side of this form.)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX
(SEE REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE
ELECTION OF DIRECTORS AND FOR APPROVAL OF THE RATIFICATION OF DELOITTE &
TOUCHE AS INDEPENDENT AUDITORS FOR DOMINION BRIDGE CORPORATION.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
<PAGE> 21
Change of Address [ ]
Comments on
Reverse Side
<TABLE>
<CAPTION>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1 FOR PROPOSAL 2
FOR WITHHELD FOR AGAINST ABSTAIN
2. Proposal 2 -
1. Proposal 1 - / / / / Ratification of / / / / / /
Election Deloitte & Touche
of as independent
Directors auditors for
Dominion Bridge Corporation for fiscal
year ending September 30, 1998.
Nominees: Derek Tennant and Allen S. Gerrard
For, except vote withheld from the following nominee(s):
-----------------------------------------
</TABLE>
The undersigned hereby
acknowledges receipt of the
notice of Annual Meeting and
Proxy Statement
PLEASE SIGN, DATE AND RETURN
YOUR PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE
REQUIRED IF MAILED IN THE
UNITED STATES.
SIGNATURE(S)_______________
DATE ________________, 1998
NOTE: PLEASE SIGN NAME(S)
EXACTLY AS PRINTED HEREON.
JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH.
