-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LFPMfM+r8wmDHpSl1p5dmMibXyEOl+j6XEGGcY1rWvAozN56tIUpXQliL5DoqBtE co2DAkmKlGeN5JfFdnpoJQ== /in/edgar/work/20000707/0000950116-00-001610/0000950116-00-001610.txt : 20000920 0000950116-00-001610.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950116-00-001610 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000728 FILED AS OF DATE: 20000707 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DECTRON INTERNATIONALE INC CENTRAL INDEX KEY: 0001066042 STANDARD INDUSTRIAL CLASSIFICATION: [3585 ] IRS NUMBER: 000000000 FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-14503 FILM NUMBER: 669174 BUSINESS ADDRESS: STREET 1: 4300 POIRIER BLVD STREET 2: MONTREAL QUEBEC CITY: H4R 2C5 BUSINESS PHONE: 5143349609 MAIL ADDRESS: STREET 1: 4300 PORIER BLVD STREET 2: MONTREAL QUEBEC CITY: H4R 2C5 DEF 14A 1 0001.txt DEFINITIVE PROXY STATEMENT SCHEDULE 14A INFORMATION ------------------------ Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12 DECTRON INTERNATIONALE INC. ----------------------------------------------- (Name of Registrant as specified in its charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement), if other than Registrant Payment of Filing Fee (Check the appropriate box): [X] No fee required [ ] $125 per Exchange Act Rules 0-11(c)(l)(ii), 14a-6(i)(l) or 14a-6(i)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: (A) -------- (4) Proposed maximum aggregate value of transaction: -------- (5) Total fee paid: ------------------------------------------------ [ ] Fee paid previously with preliminary materials. [ ] Check box if any of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ---------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------ (3) Filing Party: -------------------------------------------------- (4) Date Filed: ---------------------------------------------------- DECTRON INTERNATIONALE INC. 4300 Poirier Blvd Montreal, Quebec H4R 2C5 ----------- NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD July 28, 2000 ----------- TO THE STOCKHOLDERS OF Dectron Internationale Inc.: NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders (the "Meeting") of Dectron Internationale Inc. (the "Company") will be held at Dorval Airport Hilton Hotel, 12505 Cote de Liesse, Dorval, Quebec, Canada on July 28, 2000, at 2:00 p.m., local time for the following purposes: 1. To elect directors to hold office for a term of one year; 2. To ratify the appointment of Schwartz Levitsky Feldman, LLP as the Company's independent certified public accountants for the ensuing year; and 3. To act upon such other business as may properly come before the Meeting or any adjournment thereof. Only stockholders of record at the close of business on June 30, 2000 are entitled to notice of and to vote at the Meeting and any adjournments thereof. In order to ensure the presence of a quorum at the Meeting, it is important that Stockholders representing a majority of the voting power of all stock outstanding be present in person or represented by their proxies. Therefore, whether you expect to attend the Meeting in person or not, please vote your shares by signing, filling out, dating and promptly returning the enclosed proxy card in the enclosed self-addressed, postage-paid envelope. If you attend the Meeting and prefer to vote in person, you can revoke your proxy. In addition, please note that abstentions and broker non-votes are each included in the determination of the number of shares present and voting, for purposes of determining the presence or absence of a quorum for the transaction of business. Neither abstentions nor broker non-votes are counted as voted either for or against a proposal. Dated: July 7, 2000 By Order of the Board of Directors /s/ Ness Lakdawala ------------------------------------ Ness Lakdawala Chairman and Chief Executive Officer Dectron Internationale Inc. 4300 Poirier Blvd Montreal, Quebec H4R 2C5 --------------------------- PROXY STATEMENT --------------------------- 2000 ANNUAL MEETING OF STOCKHOLDERS To Be Held at 2:00 p.m., at Dorval Airport Hilton Hotel, 12505 Cote de Liesse, Dorval, Quebec, Canada on July 28, 2000 This Proxy Statement is furnished in connection with a solicitation of proxies by the Board of Directors of Dectron Internationale Inc. (the "Company") for use at the 2000 Annual Meeting of Stockholders of the Company (the "Meeting") to be held at 2:00 p.m. at Dorval Airport Hilton Hotel, 12505 Cote de Liesse, Dorval, Quebec, Canada on July 28, 2000, and at any adjournments thereof. Anyone giving a proxy may revoke it at any time before it is exercised by giving the Chairman of the Board of Directors of the Company written notice of the revocation, by submitting a proxy bearing a later date, or by attending the Meeting and voting. This Proxy Statement, the accompanying Notice of Meeting and form of proxy have been first sent to the stockholders on or about July 10, 2000. All properly executed, unrevoked proxies on the enclosed form, if returned prior to the Meeting, will be voted in the manner specified by the Stockholder. If no specific instruction is given, the shares represented by the proxy will be voted in accordance with the Board of Directors' recommendations. In addition, please note that abstentions and broker non-votes are each included in the determination of the number of shares present and voting, for purposes of determining the presence or absence of a quorum for the transaction of business. Neither abstentions nor broker non-votes are counted as voted either for or against a proposal. OWNERSHIP OF SECURITIES Only stockholders of record at the close of business on June 30, 2000, the date fixed by the Board of Directors in accordance with the Company's By-Laws, are entitled to vote at the Meeting. As of June 30, 2000, there were issued and outstanding 2,795,000 shares of common stock, $.10 par value per share (the "Common Stock"). Each outstanding share is entitled to one vote on all matters properly coming before the Meeting. A majority of the shares of the outstanding Common Stock is necessary to constitute a quorum for the Meeting. 1 The following table sets forth certain information as of June 30, 2000 with respect to each beneficial owner of five percent (5%) or more of the outstanding shares of Common Stock of the Company, each officer and director of the Company and all officers and directors as a group.
Number of Shares of Percentage Common Stock Beneficially Name and Address of Beneficial Owner(1) Beneficially Owned Owned - --------------------------------------- ------------------ ----- Ness Lakdawala(2)...................................................... 1,674,059 59.89% Roshan Katrak(3)....................................................... 1,674,059 59.89% Reinhold Kittler....................................................... 0 * Mauro Parissi.......................................................... 86,800 3.1% Leena Lakdawala(4) .................................................... 59,980 2.1% Dave Lucas ............................................................ 67,000 2.4% Richard Ness(5) ....................................................... 5,000 * Peter R. Richardson (6) ............................................... 0 0 All Officers and Directors as a group(2)-(6) .......................... 1,892,839 67.72%
- ----------- * represents less than 1% (1) Unless otherwise indicated, the address of each beneficial owner is c/o Dectron Internationale Inc. (2) Represents (i) 43,561 shares of Common Stock directly owned, (ii) 67,395 shares of Common Stock owned by Roshan Katrak, Mr. Lakdawala's wife, (iii) 69,684 shares of Common Stock owned by Roshaness Inc., a company owned by Mr. Lakdawala, and (iv) 1,492,879 owned by 3103-7195 Quebec Inc., a company owned by Mr. Lakdawala's spouse and children. (3) Represents (i) 67,395 shares of Common Stock directly owned, (ii) 43,561 shares of Common Stock owned by Ness Lakdawala, Ms. Katrak's husband, (iii) 69,684 shares of Common Stock owned by Roshaness Inc., a Company owned by Ness Lakdawala, and (iv) 1,492,879 shares owned by 3103-7195 Quebec Inc., a company owned by Mrs. Katrak and her children. (4) Represents 59,980 shares of Common Stock owned by A. Useche, Ms. Lakdawala's husband. (5) Represents (i) 3,000 shares of Common Stock directly owned, and (ii) 2,000 shares of Common Stock owned by Silvia Pedicelli, Mr. Ness' wife. (6) Mr. Richardson is a Director Nominee. This Proxy Statement contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward- looking statements as a result of certain factors, including those set forth below and elsewhere in this Proxy Statement. 2 PROPOSAL NO. 1 ELECTION OF DIRECTORS Seven directors are proposed to be elected at the Meeting, each to hold office for a period of one year, or until such director's successor shall be elected and shall qualify, subject, however to prior death, resignation, retirement, disqualification or removal from office. Unless such authority is withheld, it is intended that the accompanying proxy will be voted in favor of the seven persons named below, each of whom is now serving as a director, unless the stockholder indicates to the contrary on the proxy. We expect that each of the nominees will be available for election, but if either of them is not a candidate at the time the election occurs, it is intended that such proxy will be voted for the election of another nominee to be designated by the Board of Directors to fill any such vacancy or the number of directors to be elected at this time may be reduced by the Board of Directors. Director Nominees - Term Expiring 2001. NESS LAKDAWALA has served as the President, Chief Executive Officer and Chairman of Dectron since our inception, and has also served as the President and Chief Executive Officer of Dectron Inc. since 1994. Prior to joining Dectron Inc., Mr. Lakdawala was President of Blanchard Ness Limited, a company which he founded in 1976. From 1987 to present, Mr. Lakdawala has served as the President of Thermoplus. In January 1996, Thermoplus filed a proposal under the provisions of the Bankruptcy Act which gave full payment to secured creditors who filed a proof of claim. From 1987-1988, Mr. Lakdawala was Chairman of the Heating Refrigeration Air Conditioning Institute of Canada. Mr. Lakdawala has also served as the Governor of the American Society of Heating, Refrigeration and Air Conditioning Engineers, Inc. ("ASHRAE"), the organization that sets ventilation standards in Canada and the United States. Mr. Lakdawala is currently a member of ASHRAE and the Refrigeration Service Engineers Society. Ness Lakdawala is the husband of Roshan Katrak and the father of Leena Lakdawala. REINHOLD KITTLER has served as Executive Vice President and a Director of Dectron since our inception, and has also served as the Chairman of Dectron Inc. since 1994. From 1985 to 1993, Mr. Kittler was President of Dectron Inc. He currently teaches refrigeration engineering at Vanier College in Montreal, Quebec. Mr. Kittler has contributed extensively to the ASHRAE Handbook. Mr. Kittler is a member of numerous industry related societies, including the Order of Engineers of Quebec (since 1973), the International Institute of Ammonia Refrigeration (since 1992), the Air Conditioning and Refrigeration Institute (since 1996), the Refrigeration Services Engineers Society (since 1979) and ASHRAE (since 1974). Mr. Kittler is frequently a guest speaker at industry related symposiums. ROSHAN KATRAK has served as Vice President of Human Relations of Dectron since our inception, and has served in the same capacity with Dectron Inc. since 1994. She has also served as a Director of Dectron since 1998. From 1976 to 1994, she was a Director of Blanchard Ness Limited, and from 1987 to present has been Vice President of Human Relations for Thermoplus. In January 1996, Thermoplus filed a proposal under the provisions of the Bankruptcy Act which gave full payment to 3 secured creditors who filed a proof of claim. Mrs. Katrak received her Honors Degree in Psychology in 1964. Roshan Katrak is the wife of Ness Lakdawala and the mother of Leena Lakdawala. MAURO PARISSI, C.A. has served as the Chief Financial Officer, Secretary and a Director of Dectron since our inception, and has also served as the Controller of Dectron Inc. from 1996-1998. From 1995-1996, Mr. Parissi was an auditor with the firm of Mizgala & Cie. From 1990-1995, Mr. Parissi was an auditor with the firm of Hart, David Lloyd, F.C.A., C.I.P. Mr. Parissi is currently a member of The Canadian Institute of Chartered Accountants and The Order of Chartered Accountants of Quebec. Mr. Parissi received his graduate diploma in Public Accountancy from McGill University in 1995. LEENA LAKDAWALA has served as Executive Vice President and a Director of Dectron since our inception, and has also served as Vice President of Production and Administration for Dectron Inc. since 1994. She is currently a member of the Heating Refrigeration and Air Conditioning Institute. Mrs. Lakdawala received her B.A from Concordia University in 1993. Leena Lakdawala is the daughter of Ness Lakdawala and Roshan Katrak. RICHARD NESS has served as a Director of Dectron since 1998. Mr. Ness is president and chief operating officer of ECE Electronic Clearing, Inc., a firm offering technical and operational services to investment dealers in Canada. Previously, he was vice president client services and member seat holder of the Toronto Stock Exchange with Le Groupe Option Retraite, Inc. and investment dealer with memberships on the Montreal and Toronto stock exchanges. Prior to joining Option Retraite, he was vice president of operations at Marleau Lemire Securities and chief financial officer of Marleau Lemire U.S.A., an N.A.S.D. member firm. PETER R. RICHARDSON has been a Professor at Queen's University in Ontario from 1987 to present. Mr. Richardson also acts as a consultant to major corporations and to agencies of the Canadian Government. Mr. Richardson has worked as a consultant for corporations and governmental agencies such as 3M Corporation, Xerox Corporation, Atlas Van Lines (Canada), Occupational and Environmental Health Services, Government of Canada and the Department of National Defense, Government of Canada, among others. Mr. Richardson earned his PhD. in Business Administration from the University of Western Ontario in 1975 and earned a B.Sc. in Electrical Engineering from Leeds University in England in 1968. Ness Lakdawala and Roshan Katrak are husband and wife and their daughter is Leena Lakdawala. Stockholder Vote Required Election of each director requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person or represented by proxy at the Annual Meeting of Stockholders. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE BOARD OF DIRECTORS OF THE COMPANY OF EACH OF THE NOMINEES. 4 Executive Compensation Summary Compensation Table The following table sets forth certain information regarding compensation paid by Dectron during each of the last three fiscal years to our Chief Executive Officer and to each of our executive officers who earned in excess of $100,000 during the year ended January 31, 2000.
Restricted All Other Name and Principal Stock Compen- Position Year Salary(1) Bonus Awards Options/SARs sation - ---------------------------------------------------------------------------------------------------------- Ness Lakdawala 2000 $140,647 -0- -0- -0- -0- Chairman, ----------------- President and 1999 $140,647 -0- -0- -0- -0- CEO 1998 $140,647 -0- -0- -0- -0-
- ------ (1) This reflects the aggregate salaries paid to Mr. Lakdawala during the fiscal years presented by Dectron, Refplus and Thermoplus. Employment Agreements We entered into an employment agreement with Mr. Ness Lakdawala, our Chief Executive Officer on October 5, 1998, the effective date of our initial public offering. The employment agreement is for a term of two years, renewable for additional one-year periods. The employment agreement entitled Mr. Lakdawala to an annual salary of $200,000, adjusted annually for increases in the Consumer Price Index. In the event that we are subject to a takeover or a change of control event, Mr. Lakdawala is entitled to a bonus equal, on an after tax basis, to five times his then current annual base salary. Mr. Lakdawala's employment agreement contains a non-competition provision which forbids him from engaging in a competitive business during his employment and for a period of one year thereafter. We do not currently have employment agreements with any of our other officers or directors. Options and Stock Appreciation Rights to Named Executive Officers No stock options were granted during the fiscal year ending January 31, 2000 to the Mr. Lakdawala. 5 Board Compensation Report Executive Compensation Policy Dectron's executive compensation policy is designed to attract, motivate, reward and retain the key executive talent necessary to achieve our business objectives and contribute to our long-term success. In order to meet these goals, Dectron's compensation policy for our executive officers focuses primarily on determining appropriate salary levels and providing long-term stock-based incentives. To a lesser extent, the Dectron's compensation policy also contemplates performance-based cash bonuses. Dectron's compensation principles for the Chief Executive Officer are identical to those of Dectron's other executive officers. CASH COMPENSATION. In determining its recommendations for adjustments to officers' base salaries for fiscal 2000, we focused primarily on the scope of each officer's responsibilities, each officer's contributions to Dectron's success in moving toward its long-term goals during the fiscal year, the accomplishment of goals set by the officer and approved by the Board for that year, our assessment of the quality of services rendered by the officer, comparison with compensation for officers of comparable companies and an appraisal of our financial position. In certain situations, relating primarily to the completion of important transactions or developments, we may also pay cash bonuses, the amount of which will be determined based on the contribution of the officer and the benefit to Dectron of the transaction or development. EQUITY COMPENSATION. The grant of stock options to executive officers constitutes an important element of long-term compensation for the executive officers. The grant of stock options increases management's equity ownership in us with the goal of ensuring that the interests of management remain closely aligned with those of our stockholders. The Board believes that stock options in Dectron provide a direct link between executive compensation and stockholder value. By attaching vesting requirements, stock options also create an incentive for executive officers to remain with us for the long term. Chief Executive Officer Compensation As indicated above, the factors and criteria upon which the compensation of Ness Lakdawala, our Chief Executive Officer, is based are identical to the criteria used in evaluating the compensation packages of the other executive officers of Dectron. The Chief Executive Officer's individual contributions to Dectron include his leadership role in establishing and retaining a strong management team, developing and implementing our business plans and attracting investment capital to Dectron. In addition, we have reviewed compensation levels of chief executive officers at comparable companies within our industry. Respectfully submitted, Ness Lakdawala, Chairman 6 Other Compensation Outside directors may be paid an honorarium for attending meetings of the Board of Directors of Dectron, in an amount that management anticipates will not exceed $500 per meeting. Stock Option Plan We have adopted a Stock Option Plan (the "Plan") pursuant to which 650,000 shares of Common Stock are reserved for issuance, 349,000 options are currently issued and outstanding. On September 2, 1999, the Board granted options under our Stock Option Plan to certain members of our Board and certain employees. Leena Lakdawala, Roshan Katrak, Mauro Parissi, and Richard Ness were granted 60,000, 60,000, 18,000 and 8,000 options, respectively. Subject to certain limitations, the options granted are exercisable one year after issuance. Subsequent to the one-year anniversary date of the grant, the option holders may exercise the option up to 25% per year of the total options granted for the following four years. Each of the options will be fully exercisable on November 4, 2003, and expire on November 4, 2004. The exercise price of the options is $3.00. The Plan is administered by the Board of Directors, who will determine, among other things, those individuals who shall receive options, the time period during which the options may be partially or fully exercised, the number of shares of Common Stock issuable upon the exercise of the options and the option exercise price. The Plan is effective for a period of five years, expiring in 2003. Options may be granted to officers, directors, consultants, key employees, advisors and similar parties who provide us with their skills and expertise. The Plan is designed to enable management to attract and retain qualified and competent directors, employees, consultants and independent contractors. Options granted under the Plan may be exercisable for up to five years, and shall be at an exercise price all as determined by the Board. Options are non-transferable except by the laws of descent and distribution or a change in control of Dectron, as defined in the Plan, and are exercisable only by the participant during his or her lifetime. Change in control includes (i) the sale of substantially all of the assets of Dectron and merger or consolidation with another company, or (ii) a majority of the Board changes other than by election by the stockholders pursuant to Board solicitation or by vacancies filled by the Board caused by death or resignation of such person. If a participant ceases affiliation with Dectron by reason of death, permanent disability or retirement at or after age 70, the option remains exercisable for one year from such occurrence but not beyond the option's expiration date. Other types of termination allow the participant three months to exercise, except for termination for cause, which results in immediate termination of the option. The exercise price of an option may not be less than the fair market value per share of Common Stock on the date that the option is granted in order to receive certain tax benefits under the Income Tax Act of Canada (the "ITA"). The ITA requires that the exercise price of all future options will be at least 85% of 7 the fair market value of the Common Stock on the date of grant of the options. A benefit equal to the amount by which the fair market value of the shares at the time the employee acquires them exceeds the total of the amount paid for the shares or the amount paid for the right to acquire the shares shall be deemed to be received by the employee in the year the shares are acquired pursuant to paragraph 7(1) of the ITA. Where the exercise price of the option is equal to the fair market value of the shares at the time the option is granted, paragraph 110(1)(d) of the ITA allows a deduction from income equal to one quarter of the benefit as calculated above. If the exercise price of the option is less than the fair market value at the time it is granted, no deduction under paragraph 110(1)(d) is permitted. Options granted to any non-employees, whether directors or consultants or otherwise will confer a tax benefit in contemplation of the person becoming a stockholder pursuant to subsection 15(1) of the ITA. Options under the Plan must be issued within five years from the effective date of the Plan. Any unexercised options that expire or that terminate upon an employee's ceasing to be employed by Dectron become available again for issuance under the Plan. The Plan may be terminated or amended at any time by the Board of Directors, except that the number of shares of Common Stock reserved for issuance upon the exercise of options granted under the Plan may not be increased without the consent of our stockholders. SECTION 16(a) REPORTING As under the securities laws of the United States, Dectron's directors, its executive (and certain other) officers, and any persons holding ten percent or more of Dectron's Common Stock must report on their ownership of Dectron's Common Stock and any changes in that ownership to the Securities and Exchange Commission and to the National Association of Securities Dealers, Inc.'s Automated Quotation System. Specific due dates for these reports have been established. During the year ended January 31, 2000 we believe that all reports on behalf of our executive officers and directors for all transactions were filed on a timely basis. MEETINGS OF THE BOARD OF DIRECTORS There were no meetings of our Board of Directors during fiscal 2000. 8 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS We lease our St. Hubert, Quebec manufacturing facility from Roshan Katrak, our Vice President of Human Relations and the wife of Ness Lakdawala, our President, Chairman and CEO, for a monthly rent of $3,094 per month. We believe that the lease was made on terms no less favorable than could be obtained from unaffiliated third parties. We lease our Montreal, Quebec manufacturing facilities from Roshaness Inc., a company owned by Ness Lakdawala, for a monthly rent of $3,220 per month. We believe that the lease was made on terms no less favorable than could be obtained from unaffiliated third parties. We lease one commercial truck from Investiness Inc., a company owned equally by Ness Lakdawala's children, for an aggregate monthly lease payment of Cdn$590.97 Upon expiration of the lease in 2001, ownership of the truck will transfer from Investiness Inc. to Refplus. We believe that these leases were made on terms no less favorable than could be obtained from unaffiliated third parties. Immediately prior to the effective date of the Registration Statement for our initial public offering (the "Offering"), we restructured our corporate structure ("Restructuring"). In order to complete the Restructuring, (i) Dectron Inc., which prior to the Restructuring owned a majority interest in Refplus, acquired the minority interests in Refplus, which included both common stock and preferred stock (and assumed Refplus' loan payables of approximately Cdn$125,000) which is included in the Cdn$1,149,050 number mentioned below) in exchange for 62,500 shares of Dectron's Common Stock and Cdn$102,503; (ii) Dectron Inc. acquired all of the outstanding securities of Thermoplus, which included both Common Stock and preferred stock, and assumed Thermoplus' parent company's loan payables (approximately Cdn$497,000, which amount is included in the Cdn$1,149,050 number mentioned below) in exchange for 194,621 shares of Dectron's Common Stock and Cdn$423,738, and (iii) Dectron acquired all of the issued and outstanding securities of Dectron Inc. in exchange for 1,492,879 shares of the Dectron's Common Stock. The shares of Dectron Inc. were owned by 159653 Canada, Inc. which was a holding company beneficially owned by Mr. Lakdawala. The Refplus and Thermoplus' parent company loans payable represent the repayment of loans made to such companies. In connection with the Restructuring, we issued 1,750,000 shares of Common Stock and promissory notes in the aggregate amount of Cdn$1,149,050. Of this amount, Cdn$557,050 (or approximately U.S.$400,000) were repaid out of the proceeds of the Offering. Of these amounts, an aggregate amount of 1,674,059 shares of Common Stock and promissory notes in the aggregate amount of Cdn$592,000 were issued to Ness Lakdawala, and his affiliates. The Cdn$592,000 was repaid out of Dectron's cash flow, without interest, in 12 equal monthly installments which repayment commenced three months after the Offering. Mr. Lakdawala and his affiliates received their 1,674,059 shares of Dectron for contributing their interest in Dectron's subsidiaries. Specifically, Mr. Lakdawala's affiliate received 1,492,879 shares in exchange for 100% of 159653 Canada Inc., which owned 100% of Dectron Inc. prior to the Restructuring; 156,808 shares for a portion of their shares of KeepKool which represented 86% of KeepKool (KeepKool owned 94% of Thermoplus prior to the Restructuring); and 9 24,372 share for his shares of 3294242 Canada Inc. which represented 61% of 3294242 (3294242 owned 49.99% of Refplus, Inc. prior to the Restructuring). Dectron Inc. owned 50.01% of Refplus Inc. prior to the Restructuring. The two promissory notes totaling Cdn$592,000 were issued to Mr. Lakdawala and his affiliates in exchange for Cdn$222,000 of debt owed to Mr. Lakdalawa by KeepKool and Cdn$370,000 for a portion of his shares of KeepKool. The terms of the Restructuring were negotiated between Mr. Lakdawala and the other owners of the minority interest in Refplus and Thermoplus. Mr. Lakdawala and his affiliates held a majority interest in Thermoplus prior to the Restructuring. Dectron owned a majority interest in Refplus prior to the Restructuring and Mr. Lakdawala owned a majority of the 49.99% interest in Refplus purchased by Dectron in the Restructuring. The value was arrived at based on negotiations between Dectron and the sellers (other than Mr. Lakdawala and his affiliates). Dectron did not have two independent disinterested directors to ratify the transactions. There can be no assurance that such transaction was on terms no less favorable than Dectron could have obtained from other third parties, although management believes that they were as favorable. Between March 1999 and June 2000, we made loans of $248,017 to Mauro Parissi, our Chief Financial Officer, $188,405 to Dave Lucas, our Vice President and $162,109 to Aurelio Useche, the husband of Leena Lakdawala a Director. The loans were used to finance purchase of the Dectron's stock and bore interest at the Canadian prescribed interest rate of five percent (5%). The borrowers plan to repay the loan through credit facilities they expect to take from the National Bank of Canada. All future material transactions, including any loans, between Dectron and its officers, directors, principal stockholders or affiliates of any of them have been and will be on terms no less favorable to Dectron than those that can be obtained from unaffiliated third parties, and will be approved in advance by a majority of the independent and disinterested directors who had access, at Dectron's expense, to Dectron's or independent legal counsel. 10 PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF SCHWARTZ LEVITSKY FELDMAN, LLP, CHARTERED ACCOUNTANTS AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS The Board of Directors of Dectron has adopted resolutions appointing Schwartz Levitsky Feldman, LLP, Chartered Accountants as Dectron's independent certified public accountants for the ensuing year. Schwartz Levitsky Feldman, which has served as Dectron's independent certified public accountants since 1998, is familiar with Dectron's operations, accounting policies and procedures and is, in Dectron's opinion, well-qualified to act in this capacity. A member of Schwartz Levitsky Feldman will be available to answer questions and will have the opportunity to make a statement if he or she so desires at the Annual Meeting of Stockholders. Stockholder Vote Required Ratification of the appointment of Schwartz Levitsky Feldman as independent certified public accountants requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person or represented by proxy at the Annual Meeting of Stockholders. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF SCHWARTZ LEVITSKY FELDMAN, LLP, CHARTERED ACCOUNTANTS AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. OTHER MATTERS The Board of Directors does not know of any matters other than those referred to in the notice of meeting that will be presented for consideration at the Meeting. However, it is possible that certain proposals may be raised at the Meeting by one or more stockholders. In such case, or if any other matter should properly come before the Meeting, it is the intention of the person named in the accompanying proxy to vote such proxy in accordance with his best judgment. SOLICITATION OF PROXIES The cost of soliciting proxies will be borne by Dectron. Solicitations may be made by mail, personal interview, telephone, and telegram by directors, officers and employees of Dectron. Dectron will reimburse banks, brokerage firms, other custodians, nominees and fiduciaries for reasonable expenses incurred in sending proxy material to beneficial owners of Dectron's capital stock. 11 STOCKHOLDER PROPOSALS Proposals of stockholders of Dectron that are intended to be presented by such stockholders at Dectron's 2001 Annual Meeting of Stockholders must be received by Dectron no later than January 5, 2001 in order that they may be considered for inclusion in the Proxy Statement and form of proxy relating to that Meeting. ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION Copies of the annual report (Form 10-K) of Dectron for the year ended January 31, 2000, as filed with the Securities and Exchange Commission (without exhibits), and any amendments thereto, are available to stockholders free of charge by writing to Dectron Internationale Inc., 4300 Poirier Blvd., Montreal, Quebec H4R 2C5. By Order of the Board of Directors of Dectron Internationale Inc. /s/ Ness Lakdawala ---------------------------------------- Ness Lakdawala Chairman and Chief Executive Officer July 7, 2000 12 GENERAL PROXY - ANNUAL MEETING OF STOCKHOLDERS OF DECTRON INTERNATIONALE INC. The undersigned hereby appoints Ness Lakdawala, with full power of substitution, proxy to vote all of the shares of Common Stock of the undersigned and with all of the powers the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Dectron Internationale Inc., to be held at Hilton Montreal Airport, 12505 Cote de Liesse, Dorval, Quebec, Canada on July 28, 2000 at 2:00 p.m. local time and at all adjournments thereof, upon the matters specified below, all as more fully described in the Proxy Statement dated July 7, 2000 and with the discretionary powers upon all other matters which come before the meeting or any adjournment thereof. This Proxy is solicited on behalf of Dectron Internationale Inc.'s Board of Directors. 1. To elect directors to hold office for the ensuing year. - Ness Lakdawala - Reinhold Kittler - Roshan Katrak - Mauro Parissi - Leena Lakdawala - Richard Ness - Peter R. Richardson / / FOR ALL NOMINEES / /WITHHELD FOR ALL NOMINEES INSTRUCTION: To withhold authority to vote for any individual, write that nominee's name in the space provided below: ----------------------------------------------------------------------------- 2. To ratify the appointment of Schwartz, Levitsky, Feldman, LLP, Chartered Accountants, as the Company's independent certified public accountants for the ensuing year. / / FOR / / AGAINST / / ABSTAIN 3. In their discretion, upon such other matter or matters that may properly come before the meeting, or any adjournments thereof. (Continued and to be signed on the other side) - -------------------------------------------------------------------------------- (Continued from other side) Every properly signed proxy will be voted in accordance with the specifications made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 and 3. The undersigned hereby acknowledges receipt of a copy of the accompanying Notice of Meeting and Proxy Statement and hereby revokes any proxy or proxies heretofore given. Please mark, date, sign and mail your proxy promptly in the envelope provided. Date: , 2000 -------------------------- ------------------------------------- (Print name of Stockholder) ------------------------------------- (Print name of Stockholder) ------------------------------------- Signature ------------------------------------- Signature Number of Shares --------------------- Note: Please sign exactly as name appears in the Company's records. Joint owners should each sign. When signing as attorney, executor or trustee, please give title as such. -----END PRIVACY-ENHANCED MESSAGE-----