DDL ELECTRONICS, INC.
7320 SW Hunziker Road #300, Tigard, Oregon 97223-2302
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 1995
TO THE STOCKHOLDERS OF DDL ELECTRONICS, INC.:
Notice is hereby given that the Annual Meeting of Stockholders of
DDL
Electronics, Inc., a Delaware corporation (the "Company") will be
held at
the Radisson Suites Hotel, 5500 North River Road, Rosemont,
Illinois 60018,
at 10:00 a.m. on Wednesday, May 31, 1995, to consider and vote on
the
following matters described in the attached Proxy Statement:
1. Election of two persons as Class II directors of the Company
to hold
office for a term of three years or until successors are elected;
and
2. Such other business as may properly come before the meeting
or at any
adjournment thereof.
Information concerning these matters, including the names of the
nominees
for the Board of Directors, is set forth in the attached Proxy
Statement,
which is a part of this notice.
The Board of Directors has fixed April 17, 1995 as the record
date for the
meeting, and only holders of Common Stock of record at the close
of business
on that date are entitled to receive notice of and vote at the
meeting or at
any adjournment thereof.
Management sincerely hopes that you will attend the meeting.
However, you are
requested to fill in, date, and sign the enclosed form of proxy
and mail it to
the Company whether or not you expect to attend the meeting in
person. The
prompt return of your proxy in the envelope enclosed for that
purpose will
save expenses involved in further communication. Your proxy is
revocable and
will not affect your right to vote in person in the event you
attend the
meeting. The proxy may be revoked at the meeting by notifying
the Secretary
of such revocation in writing prior to the voting of the proxy.
The Annual Report of DDL Electronics, Inc. for the fiscal year
ended June 30,
1994, including financial statements, was mailed to stockholders
prior to this
notice.
By Order of the Board of Directors
/s/ M. Charles Van Rossen
M. Charles Van Rossen
Chief Financial Officer, Secretary
Tigard, Oregon
April 20, 1995
<PAGE>
DDL ELECTRONICS, INC.
7320 SW Hunziker Road #300, Tigard, Oregon 97223-2302
PROXY STATEMENT
April 20, 1995
INTRODUCTION
This Proxy Statement is furnished to stockholders of DDL
Electronics, Inc.,
a Delaware corporation (the "Company"), in connection with the
solicitation
by the Board of Directors of the Company (the "Board") of proxies
to be voted
at the Annual Meeting of Stockholders (the "Annual Meeting") to
be held at
10:00 a.m. on Wednesday, May 31, 1995 at the Radisson Suites
Hotel, 5500 North
River Road, Rosemont, Illinois 60018, and at any adjournment
thereof. If a
proxy in the accompanying form is duly executed and returned, the
shares
represented by such proxy will be voted at the meeting in the
manner described
herein and in accordance with the specification in the proxy. In
the event no
specification is made, such proxy will be voted FOR the election
of the Class
II directors named herein, as nominees, and in the discretion of
the proxy
holders on such other business as may properly come before the
meeting. Any
person executing a proxy may revoke it at any time prior to its
exercise by
filing with the Secretary of the Company a written revocation of
the proxy or
a duly executed proxy bearing a later date. The proxy may be
revoked at the
meeting by notifying the Secretary of such revocation in writing
prior to the
voting of the proxy.
This Proxy Statement was first mailed to the Company's
stockholders on or
about April 20, 1995.
As of the close of business on April 17, 1995, the Company had
outstanding
15,908,504 shares of its Common Stock, par value $0.01 per share.
Each
stockholder is entitled to one vote on each proposal for each
share held on
the record date (April 17, 1995). Under the laws of the State of
Delaware
and the provisions of the Company's Certificate of Incorporation,
as amended,
all stockholders are entitled to cumulate their votes in the
election of
directors. A stockholder may cumulate votes by casting for the
election of
one nominee a number of votes equal to the number of directors to
be elected
(i.e., two) multiplied by the number of shares owned by the
stockholder, or
may distribute such votes on the same principle among as many
candidates as
the stockholder sees fit. If a proxy is marked for the election
of directors,
it may, at the discretion of the proxy holders, be voted
cumulatively in the
election of directors. Abstentions and broker non-votes are
counted for the
purpose of determining the presence or absence of a quorum for
the transaction
of business. Abstentions are counted in tabulations of the votes
cast on
proposals presented to stockholders, whereas broker non-votes are
not counted
for the purpose of determining whether a proposal has been
approved.
Under the Delaware General Corporation Law and the Company's
Certificate of
Incorporation, if a quorum is present at the meeting, the
nominees for
election as directors
<PAGE>
who receive the greatest number of votes cast for
election of directors at the meeting by shares present in person
or by proxy
and entitled to vote thereon shall be elected as directors. The
cost of
preparing, assembling, printing and mailing this Proxy Statement
and
accompanying form of proxy, and the cost of soliciting proxies
relating to the
Annual Meeting, will be borne by the Company. The Company may
request banks
and brokers to solicit their customers who beneficially own
Common Stock
listed of record in names of nominees, and will reimburse such
banks and
brokers for their reasonable out-of-pocket expenses for such
solicitations.
The solicitation of proxies by mail may be supplemented by
telephone, telegram
and personal solicitation by officers, directors and regular
employees of the
Company, but no additional compensation will be paid to such
individuals. The
Company has retained the firm of D.F. King & Company to assist,
if necessary,
in the solicitation of proxies for a fee of approximately $10,000
plus
out-of-pocket expenses.
ELECTION OF DIRECTORS
General
At the Annual Meeting, stockholders will elect two Class II
directors to serve
until the 1997 annual meeting of stockholders or until their
successors are
elected and qualified.
The Company's Certificate of Incorporation provides that the
Board of
Directors shall be divided into three classes, designated as
Class I, Class
II, and Class III. The Board of Directors currently consists of
four
directors, one in Class I, two in Class II, and one in Class III,
whose terms
of office expire with the 1996, 1994, and 1995 annual meetings,
respectively,
and who will serve until their successors are elected and
qualified. At each
annual meeting, directors are chosen for three-year terms to
succeed those in
the class whose term expires at that annual meeting.
A brief biography of the nominees for election as directors, and
each other
director whose term continues after the Annual Meeting, is
presented below.
For additional biographical information concerning these
individuals, see
"Management - Executive Officers and Directors."
Principal Occupation and Year First
Business Experience Including Elected
Service on Other Boards Age a Director
Nominees for Election to Class II for Term Expiring in 1997:
John F. Coyne President and Chief 44 1994
Operating Officer
of DDL Electronics,
Inc. and Managing
Director of DDL Europe, Ltd.
<PAGE>
Rockell N. Hankin Senior Partner, Hankin 47 1986
& Co., a business advisory
and management firm; formerly
a partner of Price Waterhouse;
Director of Alpha Microsystems,
Sparta, Inc., LaVictoria Foods, Inc.,
Kavlico, and Semtech
Class I Director to Continue in Office Until 1996:
Philip H. Alspach President, Intercon, Inc., 71 1986
a management consulting
and mergers and acquisitions
firm
Class III Director to Continue in Office Until 1995:
William E. Cook Chief Executive Officer of 46 1991
the Company and Chairman of
the Board
Meetings and Committees
The Board held 12 meetings during the fiscal year ended June 30,
1994. The
Company has standing Audit, Compensation, and Directors
Qualification
Committees of the Board.
The Audit Committee consists of Messrs. Alspach and Hankin. Its
primary
functions are to review with the independent auditors and
management the
results of the annual financial statement audit, and to review
the status of
internal accounting controls. The Audit Committee held two
meetings during
the fiscal year ended June 30, 1994. In addition, the Audit
Committee met
informally, as appropriate, in conjunction with regular meetings
of the Board.
The Compensation Committee consists of Messrs. Alspach and
Hankin. The
Compensation Committee establishes the levels of compensation of
the directors
and senior management and also administers the Company's option
and incentive
plans (except the 1993 Non-Employee Directors Stock Option Plan).
The
Compensation Committee held four meetings during the fiscal year
ended June
30, 1994. In addition, the Compensation Committee met
informally, as
appropriate, in conjunction with regular meetings of the Board.
The report of
the Compensation Committee begins at page 9.
The Directors Qualification Committee consists of Messrs. Cook,
Hankin and
Alspach. The primary functions of the Directors Qualification
Committee are
to recommend annually to the Board nominees for election as
directors at the
annual meeting of stockholders and, from time to time, to
consider and make
recommendations with respect to the appropriate size of the
Board. The
Committee will consider nominees recommended by stockholders.
Such
suggestions, together with appropriate biographical information,
should be
submitted to
<PAGE>
the Secretary of the Company. There were no formal meetings of
the Directors Qualification Committee during the fiscal year
ended June 30,
1994, but the Directors Qualification Committee actively
considered possible
new additions to the Board throughout the year.
All of the directors attended more than 75% of the Board meetings
and meetings
of committees of which they are members.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
TWO DIRECTOR
NOMINEES.
MANAGEMENT
Executive Officers and Directors
Set forth below is a list showing the names, ages, and positions
of each of
the Company's executive officers and directors.
Name Age Position
William E. Cook 46 Chief Executive Officer and Class
III
Director*
John F. Coyne 44 President, Chief Operating Officer
and
Class II Director*
M. Charles Van Rossen 39 Chief Financial Officer and
Secretary
Philip H. Alspach 71 Class I Director*
Rockell N. Hankin 47 Class II Director*
* The Company's Certificate of Incorporation provides that the
Board shall
be divided into three classes, designated as Class I, Class II,
and Class III.
The Board currently consists of four directors, one in Class I,
two in Class
II, and one in Class III, whose current terms of office expire on
the date of
the 1996, 1994, and 1995 annual meeting of stockholders,
respectively.
Mr. Cook was elected President and Chief Executive Officer and a
director of
the Company in December 1991, and currently serves as Chairman
and Chief
Executive Officer. Prior to 1991, he was a special partner with
TBM
Associates, a venture capital firm. From 1981 to 1990, he was
President,
Chief Executive Officer and a founder of Signal Technology
Corporation, a
publicly traded manufacturer of electronic engineered products.
Mr. Coyne joined the Company in November 1990 as Managing
Director of the
Company's European operations and became Executive Vice President
in June
1994. Mr. Coyne subsequently became President and Chief
Operating Officer
in August 1994. Prior to his employment by the Company, Mr.
Coyne was
Regional Vice President in Europe for SCI Inc., a publicly traded
electronic
contract manufacturer. Prior to that time, Mr. Coyne worked in
various
capacities with Western Digital Corporation, a publicly traded
entity
primarily engaged in the manufacture and sale of disk drives.
Mr. Van Rossen joined the Company as Controller in May 1992 and
became Chief
Financial Officer and Secretary in March 1994. Prior to his
employment by the
<PAGE>
Company, Mr. Van Rossen worked in various financial positions
with
Pacificorp., a publicly traded holding company for a diversified
group of
utilities.
Mr. Alspach has been a director of the Company since 1986. He
has also been
President of Intercon, Inc., a management consulting and mergers
and
acquisitions firm, since December 1985. Mr. Alspach is Chairman
of the
Compensation Committee and is a member of the Audit Committee.
Mr. Hankin has been a director of the Company since 1986. He has
also been
Senior Partner at Hankin & Co., a business advisory and
management firm, since
July 1986. Prior to that date, he was a partner of Price
Waterhouse. Mr.
Hankin is also a director of Alpha Microsystem (a publicly traded
microcomputer and peripheral equipment manufacturer), Sparta,
Inc. (a private
engineering services company), LaVictoria Foods, Inc. (a private
food
preparation and distribution company), Kavlico (a private
electronic contract
equipment manufacturer), and Semtech (a publicly traded
electronic contract
equipment manufacturing company). Mr. Hankin is Chairman of the
Audit
Committee and is a member of the Compensation Committee.
None of the Company's executive officers or directors are related
by blood or
marriage. There are no arrangements or understandings between
the listed
individuals and any other person pursuant to which those
individuals were
selected as an officer or director.
Directors who are not also officers receive $750 per month,
$1,000 for each
meeting of the Board attended, and $1,000 for attendance at each
committee
meeting not scheduled in conjunction with a meeting of the Board.
The Company reimburses each director up to $1,000 for the cost of
a periodic
physical examination. No amounts were paid during fiscal year
1994 under this
program.
Executive Compensation
The following table sets forth the cash compensation paid or
accrued by the
Company to the Chief Executive Officer and other executive
officers of the
Company attributable to their services for each of the fiscal
years in the
three-year period ended June 30, 1994:
<TABLE>
Annual Compensation Long
Term
Compensation
Awards
Other Annual
Name and Principal Year Salary(1) Compensation(2)
Options(#)
Positions
<S> <C> <C> <C>
<C>
William E. Cook 1994 $166,000 $ 18,000
4,183(4)
Chairman and Chief 1993 165,000 20,000
512,586(4)
Executive Officer 1992 92,000(3) --
617,692
<PAGE>
Alan R. Steel 1994 $ 97,000(5) $ 12,000
- --
Vice President 1993 107,000 13,000
- --
- -Finance, Chief 1992 129,000 6,000
60,000
Financial Officer
and Secretary
John F. Coyne 1994 $ 74,000 $ 63,000
- --
President and 1993 78,000 67,000
- --
Chief Operating 1992 91,000 74,000
50,000
Officer
M. Charles Van 1994 $ 73,000 $ 8,000
15,000
Rossen, Chief 1993 70,000 9,000
20,000
Financial 1992 9,000 --
10,000
Officer and
Secretary
</TABLE>
(1) Amounts shown include compensation earned and received by
executive
officers as well as amounts earned but deferred at the election
of those
officers. Amounts paid in British Pound Sterling are translated
into the
Company's functional currency using the average annual
translation rate.
(2) Amounts in the "Other Annual Compensation" column include
amounts
credited to individual 401(k) accounts from a suspense account
within the
401(k) Plan, statutory pension amounts as required in Northern
Ireland, and
other non-cash benefits.
(3) Reflects compensation received by Mr. Cook in fiscal year
1992 following
his employment by the Company on December 3, 1991.
(4) Such options were granted pursuant to an anti-dilution
provision
contained in Mr. Cook's 1991 stock option agreement. The
anti-dilution
provision was triggered as a result of the conversion and
exchanges of
convertible subordinated debentures and the exercise of stock
options by
others.
(5) Mr. Steel left the Company in March 1994.
Indemnity Agreements
On August 3, 1987, as contemplated by the Company's Bylaws, the
Board
authorized the Company to enter into separate indemnity
agreements with
directors and former directors of the Company as well as
executive officers of
the Company and its subsidiaries. Such separate indemnity
agreements were
deemed necessary because, in the past, the Company had furnished
at its
expense directors and officers liability insurance protecting the
foregoing
individuals from personal liability in connection with their
services to the
Company. Such insurance is not always available to the Company
at a
reasonable cost or at desired policy limits. There was some
concern that, in
the absence of insurance, the indemnities available under the
Company's
Certificate of Incorporation and Bylaws may not be adequate to
protect such
individuals against the risk of personal liability associated
with their
services to the Company. The indemnity agreements provide that
the Company
will pay any amount that an indemnitee (i.e., a director or
former director of
the Company or an executive officer of the Company and/or its
subsidiaries) is
legally obligated to pay because of any claim or claims made
against such
indemnitee as a result of any act or omission, neglect, or breach
of duty,
including any actual or alleged error or misstatement or
misleading statement,
such indemnitee commits while acting in his capacity as a
director of the
Company or as an officer of the Company and/or its subsidiaries,
or while
serving at the request of the Company as a director or officer of
another
corporation, partnership, joint venture, trust, employee benefit
plan, or
other enterprise. No indemnification is provided in situations
involving
dishonesty or improper personal profit, among other situations.
The payments
to be made under the
<PAGE>
indemnity agreements include damages, judgments, fines,
ERISA excise taxes and penalties, settlements and costs,
including defense
costs, and costs of attachment or similar bonds.
Employment Agreements
In December 1991, William E. Cook was elected President, Chief
Executive
Officer and a director of the Company. In connection therewith,
Mr. Cook
entered into a one year employment agreement that provided for an
annual
salary of $165,000. The employment agreement also provided that
Mr. Cook
receive an option vesting over 19 months to purchase a number of
shares equal
to nine percent (9%) (596,992 shares) of the Company's then
outstanding Common
Stock at $.50 per share, which represented the lowest closing
price of the
Common Stock during the 30 days preceding December 3, 1991. The
number of
shares subject to option have been and may in the future be
increased (or
decreased) pursuant to dilution and anti-dilution provisions of
the option
agreement. For example, the anti-dilution provision was
triggered during
fiscal year 1993 as a result of the conversion and exchanges of
convertible
subordinated debentures and the exercise of certain stock options
by others,
resulting in the granting of an additional 512,586 options. Such
additional
options are, and any further option grants pursuant to such
anti-dilution
provision will be, exercisable at the same per share option price
and on the
same vesting schedule as the original option. Effective January
1, 1995, Mr.
Cook entered into a new at-will employment agreement with the
Company to serve
at its Chief Executive Officer. The employment agreement
provides for an
annual salary of $165,000 and participation in the Company's
bonus plans as
the same may be adopted from time to time.
All other executive officers serve at the pleasure of the Board.
Executive Severance Arrangements
Under Mr. Cook's employment agreement of January 1995, if Mr.
Cook's
employment is terminated at any time other than for cause or
voluntary
resignation ("Involuntary Termination"), he will be entitled to
severance pay
in the form of a lump-sum cash payment equal to the sum of (a)
Mr. Cook's
highest annual base salary rate with the Company within the
three-year period
ending on the date of Mr. Cook's termination, plus (b) a bonus
increment equal
to the annualized average of all bonus and incentive compensation
payments
paid to Mr. Cook during the two-year period immediately before
the date of Mr.
Cook's termination. Mr. Cook will not be required to obtain
other employment
to mitigate the payments due him under the employment agreement,
and no
compensation received by Mr. Cook from such other employment will
be an offset
against the payments to be made by the Company.
In December 1994, John F. Coyne and M. Charles Van Rossen each
entered into a
severance agreement with the Company, which provides that if his
employment is
terminated other than for cause within one year from the date of
a change of
control of the Company, the terminated employee will be entitled
to severance
pay in the form of semi-monthly payments that in the aggregate
equal six
months of the employee's base pay and other benefits (the
"Severance Pay"),
determined as of the date of the employee's termination or
<PAGE>
immediately prior to the change of control, whichever is greater.
Regardless
of whether there is a change of control, if Mr. Coyne's or Mr.
Van Rossen's
employment is terminated other than for cause or voluntary
resignation, he
will be entitled to the Severance Pay, except that the amount
shall be
determined only as of the date of the employee's termination.
Notwithstanding
the foregoing, if the terminated employee accepts employment or
consulting
engagements during the severance period, the severance
obligations of the
Company will be reduced by the amount received by the terminated
employee for
such work.
The Board of Directors believes that these executive severance
arrangements
will help assure continued dedication, availability of objective
advice, and
counsel from the Company's executive officers.
Option Grants in Fiscal Year 1994
The following table sets forth information concerning options
granted to
each of the named executive officers during fiscal year 1994:
<TABLE>
Potential
Realizable
Value
at
Assumed Rates
% of Total of
Stock
Options
Appreciation
Granted to Exercise or for
Option Term
Options Employees in Base Price Exp.
Name Granted Fiscal Year ($/Sh) Date 5%
10%
<S> <C> <C> <C> <C> <C>
<C>
William E. 4,183(1) 0.84% $ .50 (2) $
422 $ 908
Cook
M. Charles 15,000 2.99 1.25 3/20/04
11,792 29,833
Van Rossen
</TABLE>
(1) Such options were granted pursuant to an anti-dilution
provision
contained in Mr. Cook's 1991 stock option agreement. The
anti-dilution
provision was triggered as a result of the conversion of
convertible
subordinated debentures and the exercise of stock options by
others.
(2) 50% of such options expire on December 3, 1996, 25% on June
30, 1997,
and the remaining 25% on June 30, 1998.
Aggregated Option Exercises In Fiscal Year 1994 and Fiscal Year
End Option Values
The following table sets forth information concerning options
held by each
of the named executive officers as of June 30, 1994.
<TABLE>
Value
of
Number of
Unexercised
Unexercised
in the
Shares Options
Money Options
Acquired at FY-End
at FY-End
on Value Exercisable/
Exercisable/
Name Exercise Realized Unexercisable
Unexercisable
<S> <C> <C> <C>
<C>
William E. -- -- 1,094,462/--
$1,231,270/--
Cook
John F. -- -- 73,000/100,000
37,125/19,125
Coyne
M. Charles -- -- 11,667/ 45,000
7,500/25,313
Van Rossen
Alan R. Steel* 38,850 $19,995 --/--
- --/--
</TABLE>
* Mr. Steel left the Company in March 1994.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
EXECUTIVE
COMPENSATION
The Compensation Committee of the Board (the "Committee")
administers the
Company's executive compensation programs and reviews and
approves salaries
of all elected officers, including those of the executive
officers named in
the Executive Compensation Table. The Committee is also
responsible for
administering the Company's stock option plans (except the
non-discretionary
1993 Non-Employee Directors Stock Option Plan) and making
incentive awards.
The Company's executive compensation programs are designed to:
- - provide competitive levels of base compensation in order to
attract, retain
and motivate high quality employees;
- - tie individual total compensation to individual performance
and the success
of the Company; and
- - align the interests of the Company's executive officers with
those of its
stockholders.
Base Salary
Base salary is targeted to be moderate yet competitive in
relation to salaries
commanded by those in similar positions in comparable companies.
Additional
consideration is to be made in the form of bonuses or stock
options, the
latter through potential increases in the price of the Company's
stock. The
Committee reviews management recommendations for executives'
salaries and
examines survey data for executives with similar responsibilities
in
comparable companies to the extent such data is available.
Individual salary
determinations are based on experience, sustained performance and
comparison
to peers inside and outside the Company. Because of such cash
constraints,
none of the executive officers named in the Executive
Compensation Table
received salary increases during fiscal year 1994, with the
exception of Mr.
Van Rossen when he was promoted to Chief Financial Officer.
Incentive Compensation Program
The Company maintains an incentive compensation program for
substantially all
officers and executives designed to reward such individuals for
their
contributions to corporate and individual objectives. In the
past, the
programs have provided additional compensation based on
performance and
profits of those operations for which the various executives have
responsibility. During fiscal year 1994, no amounts were paid to
the
Company's officers or executives under the plans due to cash
constraints.
Stock Options
The Committee administers the Company's 1993 Stock Incentive
Plan, which is
designed to align the interests of management with those of the
Company's
stockholders. The
number of stock options granted is related to the recipient's
base
compensation and level of responsibility. Except with respect to
options
granted to William E. Cook as discussed below, all options have
been granted
with an option exercise price equal to the fair market value of
the Company's
Common Stock on the date of the grant. The tables above set
forth information
concerning options granted to named executive officers during
fiscal year
1994.
Because of the Company's financial condition and the importance
of conserving
cash, the Company has tended to limit the level of cash
remuneration paid to
executive officers and increase the level of stock option grants.
Particularly
during a period focused on operational and financial turnaround,
the Committee
believes that stock options closely align the objectives of
management and the
stockholders and provide a balance given the limits placed on
cash
remuneration. In the future, the Committee will continue to
evaluate cash and
stock incentive compensation alternatives to best achieve the
objectives of
the Company's executive compensation program.
Compensation of Chief Executive Officer
On December 3, 1991, William E. Cook was elected President, Chief
Executive
Officer and a director of the Company, and he currently serves as
Chief
Executive Officer and Chairman of the Company. Mr. Cook's
compensation
package was designed to provide Mr. Cook with a significant
incentive to
increase stockholder value through a successful turnaround
effort. During
fiscal year 1994, Mr. Cook focused his efforts toward the
objectives of paying
off all of the Company's secured debt, seeking additional
financing, and
developing and implementing a growth strategy for the Company
through internal
operations and acquisition alternatives. Despite his substantial
progress
toward the achievement of these objectives, Mr. Cook's annual
salary of
$165,000 was not increased due to cash constraints. Under the
terms of his
1991 stock option agreement, Mr. Cook received an option vesting
over 19
months to purchase a number of shares equal to 9% of the
Company's then
outstanding Common Stock (596,992 shares) at $.50 per share,
which represented
the lowest closing price of the Common Stock during the 30 days
preceding
December 3, 1991. The number of shares subject to this option
are
automatically increased or decreased pursuant to certain dilution
and
anti-dilution provisions of the option agreement.
Compensation Committee
Philip H. Alspach
Rockell N. Hankin
Compensation Committee Interlocks and Insider Participation
No Compensation Committee member was an officer or employee of
the Company
in fiscal year 1994 or before. There are no interlocks between
the Company
and other entities involving the Company's executive officers and
Board
members who serve as executive officers or board members of other
entities.
<PAGE>
Stockholder Return Performance Graph
The following performance table compares the cumulative total
return assuming
the reinvestment of dividends for the period from June 30, 1989
through June
30, 1994, from an investment of $100 in (i) the Company's Common
Stock, (ii)
the Dow Jones Industrials as a group, and (iii) the Dow Jones
Computer Index
group of companies.
X-axis of graph represents five year period of return. Y-axis
represents
return on investment in dollars. Investment returns charted
include the Dow
Jones Industrial Average, the Dow Jones Computer Index (the
Company's peer
group) and DDL (formerly Data-Design Laboratories, Inc.). For
each group an
initial investment of $100 is assumed on July 1, 1989. Five year
return on
$100 invested is reflected in the following table (assumes
dividend
reinvestment):
<TABLE>
Dow Jones Dow Jones
Date Industrial Ave. Computer Index DDL
<S> <C> <C> <C>
07/01/89 $100.00 $100.00 $100.00
06/30/90 115.03 106.74 60.42
06/30/91 123.88 91.20 16.66
06/30/92 142.87 95.66 22.92
06/30/93 162.47 75.43 37.10
06/30/94 170.06 85.72 18.90
</TABLE>
<PAGE>
PRINCIPAL STOCKHOLDERS
Except as otherwise indicated, the following table sets forth as
of April 3,
1995 the number of shares and percentage of outstanding Common
Stock of the
Company beneficially owned by (i) each person who is known by the
Company to
own beneficially more than 5% of the Company's outstanding Common
Stock, (ii)
each of the Company's directors, (iii) each officer listed in the
Executive
Compensation Table, and (iv) all executive officers and directors
of the
Company as a group:
<TABLE>
Shares of Common Stock
Beneficially Owned(1)
Name and Address of Number Beneficial
Owner*
<S> <C> <C>
Karen Beth Brenner 16,400(2)(3) **
P.O. Box 9109
Newport Beach, CA 92658
Karen Beth Brenner 1,441,444(2)(4) 9.4%
(Sole Proprietorship)
1300 Bristol St., Ste. 100
Newport Beach, CA 92660
Richard Fechtor 443,050(2)(5) 2.9%
17 Emily Road
Framington, MA 01701
Fortuna Investment Partners, L.P. 956,660(2)(6) 6.3%
100 Wilshire Blvd., 15th Floor
Santa Monica, CA 90401
Don A. Raig 519,975 (2)(7) 3.4%
555 Saturn Blvd., Ste. B-444
San Diego, CA 92154
Ronald J. Vannuki 573,427(2)(8) 3.8%
100 Wilshire Blvd., 15th Floor
Santa Monica, CA 90401
Philip H. Alspach 101,635(9) **
William E. Cook 1,094,462(10) 7.2%
Rockell N. Hankin 96,000(11) **
Alan R. Steel 100(12) **
2067 Commerce Drive
Medford, OR 97054
<PAGE>
John F. Coyne 162,500(13) 1.1%
M. Charles Van Rossen 25,833(14) **
Directors and Executive
Officers as a Group (5 persons) 1,643,030(15) 10.8%
* Unless otherwise noted, all directors and officers listed above
can be
contacted at DDL Electronics, Inc., 7320 SW Hunziker Road #300,
Tigard,
Oregon 97223-2302.
** Represents less than 1% of the outstanding shares.
(1) Unless otherwise noted, shares are held with sole voting and
investment
power. Stockholdings include, where applicable, shares held by
the spouses
and minor children, including shares held in trust.
(2) This information is based upon a Schedule 13D dated February
23, 1995, as
amended by a Schedule 13D dated April 1, 1995, filed with the
Securities and
Exchange Commission. Such schedules state that the beneficial
owner is a
member of a "group," as that term is used in Section 13(d)(3) of
the
Securities Exchange Act of 1934, as amended, comprised of Karen
Beth Brenner,
Karen Beth Brenner (Sole Proprietorship), Richard Fechtor,
Fortuna Investment
Partners, Ltd., Don A. Raig, and Ronald I. Vannuki. The members
of this group
are beneficial owners of 3,950,956 shares of the Company (25.9%)
in the
aggregate.
(3) The Schedule 13D filed by the beneficial owner indicates
that the
beneficial owner has sole voting and dispositive power as to all
16,400
shares.
(4) The Schedule 13D filed by the beneficial owner indicates
that the
beneficial owner has no voting power but sole dispositive power
as to all
1,441,444 shares.
(5) The Schedule 13D filed by the beneficial owner indicates
that the
beneficial owner has sole voting and dispositive power as to all
443,050
shares.
(6) The Schedule 13D filed by the beneficial owner indicates
that the
beneficial owner has sole voting and dispositive power as to all
890,660
shares. Mr. Vannuki is the managing director of the general
partner of this
limited partnership.
(7) The Schedule 13D filed by the beneficial owner indicates
that the
beneficial owner has sole voting and dispositive power as to all
469,975
shares.
(8) The Schedule 13D filed by the beneficial owner indicates
that the
beneficial owner has sole voting power over 3,500 of the shares
and sole
dispositive power over 569,927 of the shares.
(9) Shares beneficially owned by Mr. Alspach include options for
90,000
shares that are exercisable or will be exercisable within 60 days
of April
17, 1995.
(10) Shares beneficially owned by Mr. Cook represent options for
1,094,462
shares that are exercisable or will be exercisable within 60 days
of April 17,
1995.
(11) Shares beneficially owned by Mr. Hankin include options for
90,000 shares
that are exercisable or will be exercisable within 60 days of
April 17, 1995.
(12) Mr. Steel was Vice President-Finance, Chief Financial
Officer and
Secretary of the Company until he left the Company in March 1994.
(13) Shares beneficially owned by Mr. Coyne represent options for
162,500
shares that are exercisable or will be exercisable within 60 days
of April 17,
1995.
(14) Shares beneficially owned by Mr. Van Rossen represent
options for 25,833
shares that are or will be exercisable within 60 days of April
17, 1995.
(15) Includes options for 1,625,395 shares that are or will be
exercisable
within 60 days of April 17, 1995.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Under the securities laws of the United States, the directors and
executive
officers of the Company and persons who own more than 10% of the
Company's
Common Stock are required to report their ownership of the
Company's Common
Stock and any
<PAGE>
subsequent changes in that ownership to the Securities and
Exchange
Commission. The Company is required to disclose in this proxy
statement any
late filings during the 1994 fiscal year. To the Company's
knowledge, based
solely upon its review of the copies of such reports required to
be furnished
to the Company during the fiscal year ended June 30, 1994, during
the fiscal
year ended June 30, 1994, all Section 16(a) filing requirements
applicable to
its officers, directors and greater than 10% owners were complied
with except
two reports covering one stock option grant to Mr. Van Rossen and
one initial
statement of beneficial ownership of securities of Mr. Coyne were
filed late.
INDEPENDENT PUBLIC ACCOUNTANT
Price Waterhouse was the Company's independent public accountant
from 1981 to
1994. The Company formally engaged KPMG Peat Marwick as its
independent
public accountants for the 1994 fiscal year end audit.
Representatives of
KPMG Peat Marwick are expected to be present at the Annual
Meeting, and they
will have an opportunity to make a statement if they so desire.
They will
also be available to respond to appropriate questions from
stockholders.
STOCKHOLDER PROPOSALS
Stockholders who wish to include proposals for action at the
Company's 1995
annual meeting of stockholders in next year's proxy statement
must cause their
proposals to be received in writing at the Company's principal
executive
office no later than December 22, 1995. Such proposals should be
addressed to
the Company's Secretary and may be included in next year's proxy
statement if
they comply with certain rules and regulations promulgated by the
Securities
and Exchange Commission.
MISCELLANEOUS
The Board of Directors is unaware of any other business to be
presented for
consideration at the meeting. If, however, such other business
should
properly come before the meeting, the proxies will be voted in
accordance with
the best judgment of the proxy holders.
By Order of the Board of Directors
/S/ M. Charles Van Rossen
Tigard, Oregon M. Charles Van Rossen
April 20, 1995 Chief Financial Officer, Secretary
<PAGE>
Appendix
PROXY CARD
DDL Electronics, Inc.
Proxy for Annual Meeting of Stockholders
May 31, 1995
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF
DIRECTORS OF DDL
ELECTRONICS, INC.
The undersigned hereby appoints William E. Cook and Philip H.
Alspach as
Proxies (each of them with full power to act without the other),
each with the
power to appoint his substitute, and hereby authorizes them to
represent and
to vote, as designated on the reverse, all the shares of common
stock of DDL
Electronics, Inc. (the "Company") held of record by the
undersigned on April
17, 1995 at the annual meeting of Stockholders to be held on May
31, 1995 or
at any adjournment thereof.
This proxy, when properly executed, will be voted in the manner
directed
herein by the undersigned stockholder. If no direction is made,,
this proxy
will be voted FOR the nominees to the Board of Directors and in
their
discretion such other matters as may come before the meeting.
1. Election of Class II Director to continue in office until
1997:
For ______ Withhold ________
Nominees: John F. Coyne, Rockell N. Hankin
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY USING THE
ENCLOSED
ENVELOPE.
Signature: /s/ Date:
Please sign exactly as name appears herein. Joint owners should
each sign.
When signing as attorney, executor, administrator, trustee or
guardian, please
give full title as such.
</TABLE>
