<PAGE>
SCHEDULE 14A
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 ss.240.14a-11(c) or ss.240.14a-12
DUALSTAR TECHNOLOGIES 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:
---------------------------------------
4) Date Filed:
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<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION
11-30 47th Avenue
Long Island City, New York 11101
October 27, 1998
To the Holders of Common Stock:
The annual meeting of shareholders will be held at 4:00 p.m. (New York time) at
the facilities of Centrifugal/Mechanical Associates, Inc., 141 47th Street,
Brooklyn, New York, on Wednesday, December 16, 1998. A formal Notice of the
Annual Meeting and Proxy Statement are attached hereto.
Shareholders are urged to attend the meeting but may vote by proxy in lieu
thereof. Accordingly, whether or not you plan to attend the meeting, please
complete, sign and date the accompanying proxy and return it in the enclosed
envelope.
Prompt return of your voted proxy will reduce the cost of further mailings and
contacts. You may revoke your voted proxy at any time prior to the meeting or
vote in person if you attend the meeting.
I look forward to greeting as many of you as possible at the meeting.
Gregory Cuneo
President and Chief
Executive Officer
<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION
11-30 47th Avenue
Long Island City, New York 11101
Notice of Annual Meeting
October 27, 1998
To the Holders of Common Stock:
NOTICE IS HEREBY GIVEN that the annual meeting of the shareholders of DualStar
Technologies Corporation (the "Corporation") will be held at the facilities of
Centrifugal/Mechanical Associates, Inc., 141 47th Street, Brooklyn, New York,
on Wednesday, December 16, 1998 at 4:00 p.m. (New York time), for the following
purposes:
1) To elect directors for the ensuing year;
2) To consider and act upon a proposal to amend the 1994 Stock
Option Plan for the purpose of: (i) increasing the number of
shares available for grant under the 1994 Plan, and (ii)
adding all directors of the Corporation as persons eligible
for grant of options;
3) To ratify the appointment of Grant Thornton LLP as
independent certified public accountants for the 1999 fiscal
year; and
4) To take action upon any other matters that may properly come
before the meeting.
Only shareholders of record at the close of business on October 26, 1998 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
By Order of the Board of Directors,
Stephen J. Yager
Secretary
<PAGE>
PROXY STATEMENT
The enclosed proxy is being solicited by the Board of Directors of DualStar
Technologies Corporation (the "Corporation") for use in connection with the
1998 annual meeting of shareholders to be held on December 16, 1998. This proxy
statement and enclosed proxy are first being sent to the shareholders on or
about October 27, 1998. The mailing address of the principal executive office
of the Corporation is 11-30 47th Avenue, Long Island City, New York 11101. The
cost of preparing, printing and mailing the notice of meeting, proxy statement,
proxy and annual report will be borne by the Corporation. Proxy solicitation
other than by use of the mail may be made by regular employees of the
Corporation by telephone and personal solicitation. Banks, brokerage houses,
custodians, nominees and fiduciaries are being requested to forward the
soliciting material to their principals and to obtain authorization for the
execution of proxies, and may be reimbursed for their reasonable out-of-pocket
expenses incurred in that connection. Any shareholder giving the enclosed proxy
has the right to revoke it at any time before it is voted. To revoke a proxy,
the shareholder must file with the Secretary of the Corporation either a
written revocation or a duly executed proxy bearing a later date, or must vote
in person at the meeting.
The record date for shareholders entitled to notice of, and to vote at, the
annual meeting is the close of business on October 26, 1998. At that date, the
Corporation had outstanding 9,000,000 shares of Common Stock ($.01 par value)
("Common Stock"). Each share of Common Stock is entitled to one vote. No other
class of securities is entitled to vote at this meeting.
The proxies given pursuant to this solicitation will be voted at the meeting or
any adjournment thereof. Abstentions and broker non-votes are voted neither
"for" nor "against," and have no effect on the vote, but are counted in the
determination of a quorum.
<PAGE>
ELECTION OF DIRECTORS
Seven (7) directors are to be elected by a plurality of the votes cast at the
annual meeting of shareholders by holders of shares entitled to vote. Such
directors shall hold office until the next annual meeting of shareholders or
until their successors are duly elected and qualify. The Board of Directors
proposes the following nominees, and recommends a vote in favor thereof:
<TABLE>
<CAPTION>
Principal Occupation and Business Director
Name and Age Experience for Past Five Years Since
- ------------ ------------------------------ -----
<S> <C> <C>
Elven M. Tangel Chairman of the Board of the Corporation (since August August 1994
1994); President and Director of Centrifugal Service,
72 Inc., a mechanical service firm acquired by the
Corporation in August 1994 (since September 1992);
President (from October 1964 until August 1995) and
Director (since October 1964) of Centrifugal
Associates, Inc., a mechanical contracting firm
acquired by the Corporation in August 1994; Director
(since August 1995) of Mechanical Associates, Inc., a
mechanical contracting firm acquired by the
Corporation in August 1994; Professor, State
University of New York at Farmingdale (1979- 1994).
Gregory Cuneo President and Chief Executive Officer of the August 1994
Corporation (since August 1994); Treasurer (since July
39 1995), President (from April 1989 until July 1995) and
Director (since March 1989) of Mechanical Associates,
Inc.; Director of Centrifugal Associates, Inc. (since
September 1995); Director of Centrifugal Service, Inc.
(since September 1995).
Stephen J. Yager Executive Vice President and Secretary (since August August 1994
1994), and Chief Financial Officer (from August 1994
46 until November 1996), of the Corporation; President
(since August 1995), Chief Executive Officer (from
July 1994 until August 1995) and Director (since
September 1995) of Centrifugal Associates, Inc.; Chief
Executive Officer (from September 1992 until August
1995) and Director (since September 1995) of
Centrifugal Service, Inc.; Director of Mechanical
Associates, Inc. (since September 1995).
-2-
<PAGE>
Principal Occupation and Business Director
Name and Age Experience for Past Five Years Since
Armando Spaziani Executive Vice President (since December 1996) Chief August 1994
Operating Officer (since August 1994) and Vice
67 President of the Corporation (from August 1994 until
December 1996); Executive Vice President (since July
1995), Secretary (since September 1989), Treasurer
(from September 1989 until July 1995) and Director
(since September 1989) of Mechanical Associates, Inc.;
Director of Centrifugal Associates, Inc. (since
September 1995); Director of Centrifugal Service, Inc.
(since September 1995).
Ronald Fregara Executive Vice President (since December 1996) and August 1994
Vice President of the Corporation (from August 1994
49 until December 1996); President (since July 1995),
Vice President (from September 1989 until July 1995)
and Director (since September 1989) of Mechanical
Associates, Inc.; Director of Centrifugal Associates,
Inc. (since September 1995); Director of Centrifugal
Service, Inc. (since September 1995).
Michael J. Abatemarco Practicing certified public accountant (since 1983) October 1997
and attorney (since 1982) specializing in the areas of
42 real estate, taxation and business counselling;
associate professor of taxation, accounting and law at
Long Island University/C.W. Post campus (since 1985).
Raymond L. Steele Retired. Executive Vice President of Pacholder --
Associates, Inc. (from August 1990 until September
63 1993); Executive Advisor at The Nickert Group (from
1989 through 1990); Vice President, Trust Officer and
Chief Investment Officer of the Provident Bank (from
1984 through 1988). Mr. Steele serves as a director of
Emerson Radio Corp., I.C.H. Corporation, Pharmhouse
Corp., and Video Services Corp.
</TABLE>
IT IS THE INTENTION OF THE PERSONS NAMED IN THE PROXY FORM TO VOTE SUCH PROXIES
FOR THE ELECTION AS DIRECTORS OF THE NOMINEES NAMED ABOVE. ALTHOUGH THE BOARD
OF DIRECTORS DOES NOT CONTEMPLATE THAT ANY OF THE NOMINEES WILL BE UNABLE TO
SERVE, SHOULD SUCH A SITUATION ARISE PRIOR TO THE MEETING, THE PROXIES WILL BE
VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PERSONS ACTING THEREUNDER.
-3-
<PAGE>
PROPOSAL NO. 1
APPROVAL OF AMENDMENTS TO
THE CORPORATION'S 1994 STOCK OPTION PLAN
Shareholders are being asked to approve amendments to the Corporation's 1994
Stock Option Plan (the "1994 Plan") for the purpose of: (i) increasing the
number of shares available for grant under the 1994 Plan, and (ii) adding all
directors of the Corporation as persons eligible for grant of options under the
1994 Plan. The Plan provides for 2,200,000 shares of the Corporation's Common
Stock to be reserved and available for distribution as grants, of which options
for 2,072,000 shares have been granted. The amendment will increase that number
to 3,500,000 shares. Under the 1994 Plan as presently in effect, only directors
who are also officers, employees or consultants of the Corporation are eligible
to receive awards. The Board of Directors believes that it is advisable and in
the best interests of the Corporation to increase the number of shares
available for grant because the Corporation desires to continue to use stock
grants to enable the Corporation to attract and retain qualified personnel by
offering them proprietary interests in the Corporation, and to provide that all
directors of the Corporation will be eligible for the grant of awards because
the Corporation desires to use stock grants to enable the Corporation to
attract and retain qualified directors by offering them proprietary interests
in the Corporation.
The text of the proposed amendments is set forth in Appendix A attached hereto.
Approval of the proposed amendments to the 1994 Plan requires the affirmative
vote of a majority of the shares of the Corporation's Common Stock represented
at the annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE FOREGOING
AMENDMENTS TO THE 1994 STOCK OPTION PLAN.
-4-
<PAGE>
SECURITY OWNERSHIP
The following table lists as of October 26, 1998, the number of shares of the
Corporation's Common Stock beneficially owned by each of the directors,
nominees for election as directors, each executive officer listed in the table
under the caption "Executive Compensation", each person who is known by the
Corporation to own beneficially more than five percent of the Corporation's
Common Stock and by all directors and executive officers of the Corporation as
a group. The following calculations were based upon 9,000,000 shares of the
Corporation's Common Stock issued and outstanding as of October 26, 1998.
Name and Address(1) No. of Shares % of Class
- ------------------- ------------- ----------
Elven M. Tangel(2) 653,500 7.26
Gregory Cuneo 435,000 4.83
Stephen J. Yager 435,000 4.83
Armando Spaziani 156,600 1.74
Ronald Fregara 435,000 4.83
Gary DeLuca(3) - -
Michael J. Abatemarco(4) 278,400 3.09
Raymond L. Steele - -
All Officers and
Directors as a
Group (9 persons)(5) 3,329,500 33.52
- -----------
(1) The address of each shareholder listed is in care of DualStar Technologies
Corporation, 11-30 47th Avenue, Long Island City, New York 11101.
(2) Includes 1,000 shares owned by Mr. Tangel's wife, of which Mr. Tangel
disclaims beneficial ownership.
(3) Mr. DeLuca's term as a director of the Corporation will expire at the
annual meeting.
(4) Consists of 139,200 shares owned as Co-Trustee of each of the following two
trusts: (i) F/B/O Joseph T. Spaziani et al.; (ii) F/B/O Anthony T. Spaziani et
al.
(5) Includes Options to acquire 891,000 shares and warrants to purchase 42,000
shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Corporation's
officers and directors to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC").
Officers and directors are required by SEC regulations to furnish the
Corporation with copies of all Section 16(a) forms they file. Based solely on a
review of the copies of such forms furnished to the Corporation and written
representations from the Corporation's officers and directors, and without
researching or making any inquiry regarding delinquent Section 16(a) filings,
the Corporation believes that, during the fiscal year ended June 30, 1998, all
such reports were filed on a timely basis, except that Mr. Tangel filed late a
Form 4 with respect to shares acquired by his spouse.
-5-
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
Meetings and Attendance
During the fiscal year ended June 30, 1998, there was one meeting of the Board
of Directors. The Board of Directors during such fiscal year acted by unanimous
written consent one time.
Compensation Committee
The members of the Compensation Committee are Messrs. Abatemarco and Yager. The
Committee did not take action during the last fiscal year. The Committee makes
bonus compensation determinations under the Employment Agreements described
below under the caption "Employment Agreements" for the five key executives of
the Corporation.
Stock Award Committee
The members of the Stock Award Committee are Messrs. Abatemarco, Cuneo and
Yager. The Committee did not meet during the fiscal year. The Committee
administers the Corporation's 1994 Stock Option Plan ("Plan"). Under the Plan,
the Committee has the authority to grant "Awards" (as such term is defined in
the Plan) to officers, employees and consultants of the Corporation or an
"Affiliate" (as such term is defined in the Plan), and to determine the various
terms and conditions of such Awards. The Committee also has the authority to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall, from time to time, deem advisable to interpret
the terms and provisions of the Plan and any Award issued under the Plan (and
any agreement relating thereto) and to otherwise supervise the administration
of the Plan.
Audit Committee
The members of the Audit Committee are Messrs. Abatemarco and DeLuca. The
Committee met once during the fiscal year. The Committee is responsible for
considering management's recommendation of independent certified public
accountants for each fiscal year, recommending the appointment or discharge of
independent accountants to the Board of Directors and confirming the
independence of the accountants. It is also responsible for reviewing and
approving the scope of the planned audit, the results of the audit and the
accountants' compensation for performing such audit; reviewing the
Corporation's audited financial statements; and reviewing and approving the
Corporation's internal accounting controls and discussing such controls with
the independent accountants. Mr. DeLuca's term as a director will expire at the
annual meeting.
The Corporation currently does not have a nominating committee.
Remuneration of Directors
Each member of the Board of Directors is entitled to receive reasonable
expenses incurred in attending meetings of the Board of Directors of the
Corporation. No directors' fees were paid and no fees were paid for attendance
at Committee meetings during the fiscal year ended June 30, 1998.
-6-
<PAGE>
EXECUTIVE COMPENSATION
The Summary Compensation Table set forth below for the fiscal years ended June
30, 1998, 1997 and 1996 includes compensation information with respect to the
Chief Executive Officer of the Corporation and each of the Corporation's four
most highly compensated executive officers whose salary in the last fiscal year
exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-------------------
Other
Name and Principal Position Year Salary Bonus Annual Compensation(1)
- --------------------------- ---- ------ ----- ----------------------
<S> <C> <C> <C> <C>
Elven M. Tangel, Chairman 1998 $150,000 $0 $3,165
of the Board 1997 150,000 0 15,639
1996 150,000 15,000 23,550
Gregory Cuneo, President 1998 $150,000 $0 $5,901
and Chief Executive 1997 150,000 0 7,187
Officer 1996 150,000 15,000 14,477
Stephen J. Yager, Executive 1998 $150,000 $0 $5,453
Vice President and 1997 150,000 0 8,761
Secretary 1996 150,000 15,000 25,146
Armando Spaziani, Executive Vice 1998 $150,000 $0 $51,993
President and Chief 1997 150,000 0 51,854
Operating Officer 1996 150,000 15,000 50,909
Ronald Fregara, 1998 $150,000 $0 $6,017
Executive Vice President 1997 150,000 0 7,443
1996 150,000 15,000 19,355
</TABLE>
- ---------
(1) Includes the value of personal benefits, such as life insurance,
disability insurance and automobile expenses, pursuant to each officer's
employment agreement.
-7-
<PAGE>
Employment Agreements
Effective August 1994, the Corporation entered into employment agreements
("Agreements") with Messrs. Tangel, Cuneo, Yager, Spaziani and Fregara. The
Agreements expired in August 1997 and have been renewed for an additional three
years through August 2000. Messrs. Tangel, Cuneo, Yager, Spaziani and Fregara's
current annual salaries under the Agreements are $150,000 each. The salaries
under the Agreements may be increased to reflect annual cost of living
increases and may be supplemented by discretionary merit and performance
increases as determined by the Compensation Committee of the Corporation. Each
is eligible to receive an annual bonus of up to 45% of the salary provided
under their respective Agreements as determined by the Corporation's
Compensation Committee.
The Agreements provide, among other things, for participation in an equitable
manner in any profit-sharing or retirement plan for employees or executives and
for participation in other employee benefits applicable to employees and
executives of the Corporation. The Agreements provide that the Corporation will
establish a performance incentive bonus plan providing each executive the
opportunity to earn an annual bonus of up to five percent of the increase, if
any, in the Corporation's pretax income, based upon the attainment of
performance goals to be established by the Compensation Committee of the
Corporation. The Agreements further provide for the use of an automobile and
other fringe benefits commensurate with their duties and responsibilities. The
Agreements also provide for benefits in the event of disability.
Pursuant to the Agreements, employment may be terminated by the Corporation
with cause or by the executive with or without good reason. Termination by the
Corporation without cause, or by the executive for good reason, would subject
the Corporation to liability for liquidated damages in an amount equal to the
terminated executive's current salary ($150,000) for the remainder of the
scheduled term of employment and bonuses for the remainder of the scheduled
term of employment based upon the prior year's annual bonus and the maximum
incentive bonus payable. Such amounts shall be payable in equal monthly
installments, without any set-off for compensation received from any new
employment. In addition, the terminated executive would be entitled to continue
to participate in and accrue benefits under all employee benefit plans and to
receive supplemental retirement benefits to replace benefits under any
qualified plan for the remaining term of the Agreements to the extent permitted
by law.
The Agreements provide for the purchase by the Corporation of insurance
policies in the amount of $1,000,000 on the lives of each of Messrs. Tangel,
Cuneo, Yager, Spaziani and Fregara, respectively. The Corporation will pay the
premiums under these policies, and a portion of the payment will be treated as
taxable income to the insured executive. Upon the death of any of the insureds,
the Corporation would be paid from the insurance proceeds an amount equal to
the total premiums it paid under the policy, with the remaining proceeds to be
paid to the deceased executive's designated beneficiary. To date, Messrs.
Tangel, Cuneo, Yager and Fregara, respectively, have declined to have the
Corporation purchase such insurance. The Corporation has purchased such
insurance on the life of Mr. Spaziani.
The 1994 Stock Option Plan
On October 17, 1994, the Board of Directors adopted, and the shareholders
subsequently approved, the 1994 Stock Option Plan (the "1994 Plan") pursuant to
which officers, employees and consultants of the Corporation and its affiliates
are eligible to be granted stock option awards ("Awards"). The 1994 Plan is
currently being administered by the Stock Award Committee which has the
authority to grant awards including Stock Options, Stock Appreciation Rights,
Restricted Stock, or any combination of the foregoing, and to determine the
terms and conditions of the Awards.
-8-
<PAGE>
Options under the 1994 Plan generally shall be exercisable for a term fixed by
the Committee, not to exceed 10 years from date of grant, unless any such
options are terminated earlier pursuant to the terms of the 1994 Plan. The
total number of shares of Common Stock presently reserved for such Awards and
available for distribution under the 1994 Plan is 2,200,000. Under the 1994
Plan, 2,072,000 options have been granted to date at exercise prices ranging
from $0.75 to $3.00 per share. No stock options were granted to or exercised by
any executive officer named under "Executive Compensation" during fiscal 1998.
Moreover, no named executive officer currently holds any outstanding options.
If Proposal No. 1 is adopted by the shareholders, the total number of shares of
Common Stock available for distribution as Awards under the 1994 Plan will be
3,500,000, and all directors of the Corporation will also be eligible to
receive Awards under the 1994 Plan.
Compensation Committee Interlocks
No Compensation Committee interlock relationships existed during the fiscal
year ended June 30, 1998.
Board of Directors Report on Executive Compensation
Except as noted below, the Corporation's compensation policies are determined
by its Board of Directors. The Corporation's executive compensation practices
are designed to support its business goals of fostering profitable growth and
increasing shareholder value. The Corporation seeks to align the interests of
its executives and its stockholders through the use of stock-based compensation
plans. To this end, the Corporation has adopted the 1994 Stock Option Plan.
In August 1994, the Corporation entered into the Agreements with Messrs.
Tangel, Cuneo, Yager, Spaziani and Fregara described above under the subcaption
"Employment Agreements". The Agreements were subsequently renewed in August
1997. Therefore, executive compensation at this time is governed by the
Agreements. The Board of Directors' determination as to the level of
compensation under the Agreements was based upon the prior levels of
compensation of the key executives and the Board's judgment that creating
parity among the key executives would best serve the Corporation's business
goals of fostering profitable growth and increasing stockholder value.
Under the Agreements, determination as to the amounts of bonus compensation to
be awarded to the key executives has been delegated to the Compensation
Committee of the Board of Directors. The Agreements provide that each of the
key executives may receive an annual bonus of up to 45% of his annual salary
(currently $150,000 in each case) or $67,500, as determined by the Compensation
Committee. Based on management's efforts to use capital to expand into new
lines of business and increase shareholder value, no annual bonuses were
awarded by the Compensation Committee to such executives for fiscal year 1998.
Consistent with the Board of Director's philosophy that achievement of the
Corporation's business goals will be enhanced by maintaining compensation
parity among the Corporation's key executives, no special award was made to Mr.
Cuneo, the Corporation's Chief Executive Officer.
-9-
<PAGE>
The Agreements also provide that the Corporation will establish a performance
incentive bonus plan which will provide each executive the opportunity to earn
an annual bonus of up to five percent of the increase in the Corporation's
pretax income, if any, based upon the attainment of performance goals to be
established by the Compensation Committee. Such an incentive bonus plan has not
yet been adopted by the Board of Directors.
Elven M. Tangel
Gregory Cuneo
Stephen J. Yager
Armando Spaziani
Ronald Fregara
Gary DeLuca
Michael J. Abatemarco
-10-
<PAGE>
PERFORMANCE GRAPH
The line graph set forth below provides a comparison of the Corporation's
cumulative total shareholder return on its Common Stock with the Russell 2000
Index and with the Nasdaq Non-Financial Index. Such shareholder return is the
sum of any dividends paid and the change in the market price of the stock.
COMPARISON OF 40 MONTH CUMULATIVE TOTAL RETURN*
AMONG DUALSTAR TECHNOLOGIES CORPORATION,
THE RUSSELL 2000 INDEX AND THE NASDAQ NON-FINANCIAL INDEX
[GRAPHIC OF CHART]
* $100 INVESTED ON 2/14/95 IN STOCK OR ON 1/31/95
IN INDEX INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
-11-
<PAGE>
CERTAIN TRANSACTIONS
A subsidiary of the Corporation leases shop and office space on a
month-to-month basis from a company in which Messrs. Spaziani, Fregara and
Cuneo each own a 20 percent interest. Rent expense for the year ended June 30,
1998 was $25,000.
In October 1997, Elven M. Tangel loaned a subsidiary of the Corporation
$185,000. The loan is due on demand.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Grant Thornton LLP ("Grant
Thornton") as independent certified public accountants for the 1999 fiscal year
and recommends to shareholders ratification of such appointment. Grant Thornton
served as principal accountant for the fiscal year most recently completed.
The appointment of the independent public accountants is approved annually by
the Board of Directors, which reviews the qualifications of independent
accountants and which reviews the audit scope, reasonableness of fees and also
the types of nonaudit services for the coming year.
Although not required to do so, the Board of Directors is submitting the
appointment of Grant Thornton for ratification by the shareholders. If this
action is not ratified, the Board of Directors will reconsider its appointment.
The affirmative vote of a majority of the shares of the Corporation's Common
Stock represented at the annual meeting is required to ratify this appointment.
Representatives of Grant Thornton will be present at the annual meeting of
shareholders and will have an opportunity to make a statement if they desire to
do so. They will be available to respond to appropriate questions.
DEADLINE FOR SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999 annual meeting
to be included in the proxy material relating to that meeting must be received
by the Corporation by June 27, 1999.
ANNUAL REPORT TO THE SEC; FORM 10-K
Shareholders may obtain, without charge, a copy of the Corporation's annual
report on Form 10-K, filed with the Securities and Exchange Commission, by
writing to DualStar Technologies Corporation, 11-30 47th Avenue, Long Island
City, NY 11101, Attn: Investor Relations, or by visiting the Corporation's Web
site (http://www.dualstar.com). Copies of exhibits to such annual report may be
obtained upon payment.
-12-
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any matters to be brought before the
meeting other than those referred to in the notice hereof. If any other matters
properly come before the meeting, it is the intention of the persons named in
the form of proxy to vote such proxy in their discretion in accordance with
their judgment on such matters.
By Order of the Board of Directors,
Stephen J. Yager
Secretary
October 27, 1998
-13-
<PAGE>
APPENDIX A
PROPOSAL NO. 1
The 1994 Stock Option Plan is proposed to be amended as follows:
(1) by deleting the first paragraph of Section 4, and substituting the
following:
The total number of shares of Stock reserved and available
for distribution pursuant to Awards under the Plan shall be
3,500,000 shares of Common Stock. Such shares may consist, in
whole or in part, of unauthorized and unissued shares or
treasury shares.
(2) by deleting the first sentence of Section 6, and substituting the
following:
Officers, directors, employees and consultants of the Company
and its Affiliates who are responsible for or contribute to
the management, growth and profitability of the business of
the Company and its Affiliates are eligible to be granted
Awards under the Plan.
<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION
PROXY FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Elven M. Tangel, Gregory Cuneo and
Stephen J. Yager as Proxies, each with full power of substitution, and hereby
authorizes each of them to represent and vote, as designated on the reverse
hereof, all shares of Common Stock of DualStar Technologies Corporation (the
"Company") held of record by the undersigned on October 26, 1998, at the Annual
Meeting of Shareholders to be held on December 16, 1998, or any adjournment
thereof, upon all such matters as may properly come before the Meeting.
(THE PROXY CONTINUES AND MUST BE SIGNED ON THE REVERSE SIDE.)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
DUALSTAR TECHNOLOGIES CORPORATION
DECEMBER 16, 1998
[Please Detach and Mail in the Envelope Provided]
A [X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR ALL NOMINEES WITHHOLD AUTHORITY
LISTED AT RIGHT (EXCEPT TO VOTE FOR ALL
AS MARKED TO THE NOMINEES LISTED
CONTRARY BELOW) AT RIGHT
1. ELECTION [ ] [ ] NOMINEES:
OF Michael J. Abatemarco
DIRECTORS Gregory Cuneo
Ronald Fregara
Armando Spaziani
Raymond L. Steele
INSTRUCTION: To withhold authority to vote for Elven M. Tangel
any individual nominee, write that nominee's name Stephen J. Yager
in the space provided below.
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FOR AGAINST ABSTAIN
2. Proposal to amend the Company's 1994 Stock [ ] [ ] [ ]
Option Plan as described in the Notice of
Meeting and Proxy Statement dated
October 27, 1998. (The Board of Directors
recommends a vote "FOR" ratification.)
3. Ratification of appointment of Grant Thornton [ ] [ ] [ ]
LLP to serve as the Company's independent
accountants for the fiscal year ending
June 30, 1999. (The Board of Directors
recommends a vote "FOR" ratification.)
4. In their discretion upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED "FOR"
ITEMS 1, 2 AND 3.
SHAREHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN
THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED
STATES.
If you plan to attend
the Annual Meeting,
place an X in this box [ ]
SIGNATURE DATE SIGNATURE DATE
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NOTE: Please sign exactly as name or names appear on stock certificate as
indicated hereon. Joint owners should each sign. When signing as
attorney, executor, administrator or guardian, please give full title
as such.
