PROXY STATEMENT
IN OPPOSITION TO
MANAGEMENT AND THE CURRENT BOARD OF DIRECTORS
OF
DDL ELECTRONICS, INC.
ANNUAL MEETING OF SHAREHOLDERS
SCHEDULED FOR MAY 31, 1995
Dear Fellow Shareholders in DDL ELECTRONICS, INC.:
This Proxy Statement is being sent to you by a group of your fellow
stockholders, SCRMM ("Shareholders' Committee to Remove a Moribund
Management"), in connection with our solicitation of proxies to
be used at the Annual Meeting of Shareholders of DDL Electronics,
Inc. ("DDL"), now set for Wednesday, May 31, 1995, at 10:00 AM local time
in Rosemont, Illinois. Shareholders of DDL as of April 17, 1995, are
entitled to vote at the forthcoming Annual Meeting. We seek your proxy to:
1. TAKE CONTROL OF DDL BY THE ONLY METHOD AVAILABLE -
EXPANDING THE BOARD OF DIRECTORS AND ELECTING A NEW
MAJORITY - TO BRING AN END TO THE DISAPPOINTING RESULTS THAT
THE CURRENT BOARD HAS OBTAINED FOR YOU SINCE THEY HIRED
CURRENT MANAGEMENT 3.5 YEARS AGO, AND
2. ELECT A NEW MAJORITY OF THE BOARD OF DIRECTORS, WHICH WILL
HAVE AS ITS SOLE OBJECTIVE TO INCREASE THE SALES, EARNINGS,
BOOK VALUE, CASH FLOW, SHARE TRADING VOLUME AND SHARE
PRICE OF DDL.
IF YOU OWN YOUR SHARES IN DDL IN THE NAME OF A BROKERAGE FIRM, YOU
MUST TELL YOUR BROKER HOW TO VOTE YOUR SHARES. YOUR BROKERS CAN
NOT VOTE AS YOU WISH UNLESS YOU GIVE THEM SPECIFIC INSTRUCTIONS TO
DO SO. THESE INSTRUCTIONS CAN BE CONVEYED BY SIGNING, DATING AND
MAILING YOUR GREEN PROXY CARD TODAY.
PLEASE DO NOT RETURN THE PROXY CARD SENT TO YOU BY DDL MANAGEMENT.
IF YOU HAVE ALREADY RETURNED DDL'S PROXY, YOU HAVE THE RIGHT TO
REVOKE THIS AUTHORIZATION BY RETURNING OUR LATER PROXY. ONLY YOUR
LATEST DATED, PROPERLY EXECUTED PROXY WILL COUNT AT THE ANNUAL MEETING.
THE ONLY WAY YOU CAN VOTE FOR OUR NOMINEES IS TO COMPLETE AND RETURN THE
ENCLOSED GREEN PROXY CARD.
We urge you to join us, by giving SCRMM your proxy, to put
a new team in control of the Board of Directors of DDL. VOTE FOR an
end to the performance of the past three and a half years. VOTE FOR
placing control of DDL in the hands of your fellow shareholders who
have the same desires as you to see the sales, earnings, book value,
and stock price of DDL increase. We have no doubt that our proposed
slate of Directors will accomplish considerably better results for DDL
shareholders than we have seen under the current Board of Directors.
VOTE FOR THE FOLLOWING PROPOSALS:
PROPOSAL 1: NOMINEES FOR ELECTION AS CLASS II DIRECTORS
The DDL's Board of Directors is presently composed of four
Directors, divided into three classes of Directors who serve for
three-year terms: one in Class I (whose term of office expires in
1996), two in Class II (whose term of office expired in 1994), and
one in Class III (whose term of office expires in 1995). The two
Class II Directors to be elected at the Annual Meeting scheduled for
May 31 will serve until the 1997 Annual Meeting of Shareholders, and
thereafter until their successors shall have been elected and
qualified.
In opposition to the two incumbent Class II Directors put
forward for re-election by DDL, SCRMM proposes two experienced and
exceptionally well-qualified nominees. If elected, these two nominees
would hold two of the four seats on the Board of Directors as presently
constituted.
Each nominee has consented to serve as a director of DDL if
elected. SCRMM does not expect that either of the nominees will be
unable to stand for election but, in the event that a vacancy in the
slate of nominees should occur unexpectedly, the Shares represented by
the enclosed GREEN Proxy Card will be voted for a substitute candidate
selected by SCRMM.
The following information concerning business address, age, and
principal occupation has been furnished by SCRMM's nominees.
Bernee D. L. Strom
332 S. Michigan Avenue, #605
Chicago, Illinois 60604<PAGE>
Ms. Strom is currently President of USA Digital Radio, a
joint venture partnership of Gannett Corporation, Westinghouse, and
CBS. Since 1994, she has chaired the Board of Directors of Quantum
Development Corporation, a business analysis and optimization consulting
and technology company. She is also a director of Software Publishing
Corporation, a NASDAQ traded company, and a member of the Board of
Advisors of J.L. Kellogg Graduate School of Management at Northwestern
University. From 1990-1995, Ms. Strom headed her own consulting
company. During that time, she also served as a founding shareholder,
consultant and Vice President of Gemstar Development Corporation,
which is the developer, manufacturer and distributor of the "VCR+"
product. Other clients of Ms. Strom's consulting company from 1990-95
included the Chicago Sun-Times and Microware Systems. Prior to starting
her own consulting company in 1990, Ms. Strom was a senior executive of
the Los Angeles Herald Examiner; and former senior management
consultant with Deloitte, Haskins & Sells. Ms. Strom holds a Masters in
Mathematics from New York University, and an M.B.A. from UCLA. Ms.
Strom is 47 years old.
<PAGE>
Erven Tallman
72420 Beverly Way
Rancho Mirage, California
92260<PAGE>
Mr. Tallman has over 45 years of business experience as a founder,
owner, director and operator of a variety of businesses. Since 1964,
Mr. Tallman has served as a founder, and current General Managing
Partner, of Inland Empire Properties, Ltd., a large privately-held
commercial and industrial real estate development company. Since 1990,
Mr. Tallman has served as founder and President of Phone Alert
Corporation, a telephone-based security company, and Pactall Corporation,
a software development company for automated wireless integrated systems.
He is also Chief Executive Officer of E.B. Tall, Inc., a company
which he founded in 1979. Prior to 1990, Mr. Tallman served as founder,
director, or president of the following companies: Norco Industries,
a privately held industrial distribution company; Tallman Construction,
a company ultimately acquired by Imasco, a publicly traded corporation
in Canada; and Tallman Industries, an electronic royalty company which
was purchased by DDL in 1979. Mr. Tallman is 67 years old, and a
shareholder in DDL.<PAGE>
None of the nominees has ever been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
None of the nominees has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining further violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of
such laws. Additional information concerning nominees who own stock in
DDL is provided in Appendix A hereto.
Two of DDL's executives have entered into severance agreements
with the Company which call for payments to be made if their employment
is terminated other than for cause within one year from the date of a
change of control of the Company. If SCRMM's nominees for Class II
Director are elected, and Proposals No. 2 and No. 3 herein are not
adopted, the resulting Board of Directors will consist of two old members
and two new members. Under these circumstances, we believe that no
change of control will occur and that these two severance agreements,
if valid, will not be invoked.
SCRMM urges you to sign, date and return the enclosed GREEN proxy
card to vote for the election of SCRMM's nominees as Class II Directors.
PROPOSAL NO. 2: AMENDMENT OF THE BYLAWS TO SET THE NUMBER
OF DIRECTORS AT NOT LESS THAN SEVEN
Section 3.02 of DDL's Bylaws deals with the number and
term of office of members of the Board of Directors. According to
identical copies of the Bylaws provided by DDL's Chief Executive Officer
in June 1994, and in January 1995 by Disclosure Information Services, Inc.,
Section 3.02 provides:
"SECTION 3.02 Number and Term of Office.
The number of directors shall be seven (7). Directors
need not be stockholders. Each of the directors of the
Corporation shall hold office until his successor
shall have been duly elected and shall qualify or until
he shall resign or shall have been removed in the manner
hereinafter provided." (Emphasis supplied)
This notwithstanding, DDL has set the size of the current Board
of Directors at four. The October 28, 1993, proxy statement of DDL,
relating to the last Annual Meeting of Shareholders held in December
1993, says that the Board of Directors "in accordance with DDL's Bylaws,
reduced the size of the Board of Directors to three. . . ." A
Company press release subsequently announced that the size of the Board
of Directors had been increased to four with the addition of Mr. Coyne,
an employee of DDL.
In view of the foregoing, it is apparent that the size
of the Board has been shrinking and growing more inbred. In recent
years, with each available vacancy the current Board of Directors has
reduced the overall size of the Board so that no new member was elected.
We believe that this has deprived DDL of new ideas and expertise on the
Board of Directors, qualities which DDL desperately needs.
Accordingly, pursuant to DDL Bylaw Section 8.03, SCRMM proposes
that the shareholders adopt the following Proposal to amend Bylaw Section
3.02:
"PROPOSAL NO. 2:
Effectively immediately upon adoption by the Shareholders,
Section 3.02 of DDL's Bylaws are amended as follows:
Text of Amendment
SECTION 3.02 Number and Term of Office.
The number of directors shall be not less than seven (7).
Directors need not be stockholders. Each of the
directors of the Corporation shall hold office until
his successor shall have been duly elected and shall
qualify or until he shall resign or shall have been
removed in the manner hereinafter provided.'
(New language shown in italics)
Immediately following adoption of this amendment to the
Bylaws, there shall be an election of the number of new
Directors required to comply with the Bylaw provision that
there be no less than the seven (7) members of the Board.
In accordance with Article Six of the Company's Certificate
of Incorporation, two (2) persons shall be elected to serve as
Class I Directors, with terms expiring at the annual meeting
of shareholders in 1996; and one person shall be elected to
serve as a Class III Director, with a term expiring at the
annual meeting of shareholders in 1995."
Pursuant to Section 8.03 of the Company's Bylaws, stockholders
may alter, amend or repeal, or make new bylaws, at any annual meeting,
without previous notice. Under Delaware law, such amendments to the
Bylaws are effective immediately. Further, absent a Bylaw provision to
the contrary, Delaware law accords stockholders the inherent power
to fill newly-created directorships. The Company's Bylaws do not contain
any provision which divests the stockholders of this power. Moreover,
Section 3.03 of the Bylaws provides that the Company's Directors shall
be elected annually. Therefore, under the laws of the State of Delaware
and under DDL's Bylaws, the stockholders can both amend Section 3.02 of
the Bylaws and fill the new directorships to be created by amendment at
the Annual Meeting.
Article Six of the Company's Certificate of Incorporation
creates three classes of Directors -- Class I, Class II, and Class III --
and further provides that such classes shall be as nearly equal in
number as possible. Currently, there is one Class I Director (whose
term expires in 1996); two Class II Directors (both of whose terms
expired in 1994); and one Class III Director (whose term expires in 1995).
The addition of two Class I Directors and one Class III Director will
make the classes as nearly equal in number of Directors as possible,
i.e. three, two, and two, respectively.
The affirmative vote of a majority of the shares of DDL's
Common Stock issued and outstanding is required in order for
Proposal No. 2 to be adopted. Because amendment of the Bylaws by
the stockholders requires an affirmative vote by a majority of the
outstanding shares of Common Stock, any vote to ABSTAIN, and any broker
non-votes, on Proposal No. 2 will have the effect of a vote AGAINST
the proposal.
PROPOSAL 3: NOMINEES FOR ELECTION AS NEW CLASS III AND CLASS I
DIRECTORS ON THE SEVEN MEMBER BOARD
Assuming that the Shareholders adopt Proposal No. 2
setting the number of Directors at seven, effective immediately upon
adoption, it will then be necessary for the Annual Meeting to elect
three new Board members.
The election will be conducted in accordance with the
provisions of DDL's Certificate of Incorporation and Bylaws governing
the election of Directors. Specifically, Stockholders are entitled to
cumulate their votes in the election of each Class of Directors by
casting for the election of one nominee a number of votes equal to the
number of Directors to be elected in each Class 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.
For Class III Directors, a Stockholder will be entitled to multiply the
number of shares owned by two (2), and to distribute such votes between
the two nominees as the Stockholder sees fit. For Class I Director,
cumulative voting will have no practical effect since there is only one
Director to be elected. 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.
If a quorum is present at the meeting, i.e. if a majority of
the outstanding shares of Common Stock are present or represented by
valid proxy, the nominees for election as Directors who receive the
greatest number of votes cast at the meeting by shares present in
person or by proxy and entitled to vote thereon, shall be elected
as Directors.
SCRMM has a slate of experienced and highly qualified
nominees for the two Class III Directors and the Class I Director
to be elected to the Board.
Each nominee named below has consented to serve as a
director of DDL if elected. In the event that a vacancy in the slate
of nominees should occur unexpectedly, the Shares voted for that
nominee as represented by the enclosed GREEN Proxy Card will be voted
for a substitute candidate selected by SCRMM.
The nominees have provided the following information
concerning business address, age, and principal occupation.
Name and Business Address<PAGE>
Principal Occupation for Past Five Years<PAGE>
Melvin Foster
Melvin Foster & Associates
15 Court Square
Boston, Massachusetts 02108<PAGE>
Attorney and Investor. Mr. Foster has been a practicing attorney in
Boston, Massachusetts since 1971. Between 1951 and 1968, he served
as an operations executive of Robert Hall Clothes, a subsidiary of
United Merchant Manufacturers. He received his M.B.A. from Boston
University in 1951, and his J.D. from Boston University in 1971.
Mr. Foster is 68 years old, and a shareholder in DDL.<PAGE>
Don A. Raig
555 Saturn Boulevard
Suite B-444
San Diego, California 92154<PAGE>
Attorney, Trustee, and Investor. Mr. Raig has been a practicing
attorney since 1967, and established his practice in San Diego,
California, in 1975. In addition to the oversight of personal
investments and as a fiduciary, Mr. Raig has served as a member of
the board of directors of a number of private companies. Mr. Raig is
53 years old, and a shareholder in DDL.<PAGE>
Robert G. Wilson
1620-1185 West Georgia Street
Vancouver, British Columbia
V6E 4E6 CANADA<PAGE>
Mr. Wilson has been engaged since 1990 in a private business
consulting practice, which advises companies experiencing financial
and organizational difficulties. His consulting practice focuses
on planning, budget-setting, and general troubleshooting. Previously,
Mr. Wilson was with the House of Seagrams, a publicly-held company in
Montreal, Quebec, as Assistant to the Vice President for Finance
(1968-70); from 1970 to 1979, Mr. Wilson built up a series of four
General Motors dealerships, five automobile leasing and rental
companies, a heavy equipment leasing company, and a major tire
wholesaler and retailer; during this same period, he held interests
in an oil drilling company, an oil field equipment company, and
other businesses; in 1987, Mr. Wilson was a principal in the
start-up of Brandover Enterprises, Ltd., a Seattle-based public
company which produces and distributes beer in the United States
and other countries, and is listed on the Toronto Stock Exchange.
Mr. Wilson has served as a director of Malibu Grand Prix Corp.
(1984-91), Pioneer Food Corp. (1990-91), Brandover Enterprises,
Ltd. (1989-present), Amusements International, Ltd. (1992-present),
Bonkers Indoor Playgrounds, Inc. (1993-present), Interactive
Telesis, Inc. (1993-95). Mr. Wilson is 53 years old, and a shareholder
in DDL.
<PAGE>
None of the nominees has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors)
during the past ten years. None of the nominees has been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining further violations of, or
prohibiting activities subject to, federal or state securities laws
or finding any violation of such laws. Additional information concerning
those nominees who own stock in DDL is set forth in Appendix A hereto.
Five months ago, in January 1995, the chief executive officer
of DDL entered into an employment agreement with the Company which
provides for substantial payments to be made in the event of
involuntary termination. In brief, the agreement calls for a lump sum
payment equal to one year's base salary, determined on the basis of
his highest salary within three years of termination, plus a bonus
equal to the average of all bonus and incentive compensation for the
two years immediately preceding termination. In the event that
SCRMM's nominees are elected as Class I and Class III Directors,
and in the event that they determine in their capacity as Directors
to fire the present chief executive officer, and if this portion of
his employment agreement is valid, then the Company may incur
substantial costs pursuant to this severance agreement. Similarly,
if the chief operating officer or the chief financial officer were
fired, and the severance provisions of their respective employment
agreements are valid and applicable, the Company may also incur
substantial additional costs pursuant to these agreements.
Provided that a quorum is present, any vote to ABSTAIN,
and any broker non-votes, on Proposal No. 3 will have no effect on
the election of nominees as Directors. Those Directors receiving
the greatest number of votes present or represented by valid proxy,
and giving effect to cumulative voting procedures, will be elected.
SCRMM urges you to sign, date and return the enclosed
GREEN proxy card to vote for the election of SCRMM's nominees as
Directors.
VOTING OF PROXIES
Unless otherwise indicated, the persons named in the
accompanying GREEN Proxy Card will vote properly executed, dated,
and duly returned proxies (1) FOR the election of Bernee D.L.
Strom and Erven Tallman as Class II Directors, (2) FOR the
amendment of Bylaw 3.02 to set the membership of the Board of
Directors at not less than seven, effective immediately upon
adoption, and to require the immediate election of two new
Class I members and one new Class III member of the Board of
Directors following adoption of the Bylaw amendment, (3) FOR the
election of Melvin Foster and Robert G. Wilson as Class I members,
and the election of Dan A. Raig as a Class III member, of the Board
of Directors, and (4) in accordance with their judgment on such
other business as may be properly presented to the meeting and any
adjournment or postponement thereof.
The Company's Bylaws provide for the election of directors
by cumulative voting. Under cumulative voting, each shareholder
is entitled to (a) cast a number of votes equal to the number of his
or her shares multiplied by the number of directors in each class,
and (b) to distribute such votes among the nominees in that class
or to vote for a lesser number, or a single nominee, as he
or she sees fit. If a shareholder wishes to distribute his or
her votes in a specific manner, the proxy card should be marked to
indicate how the votes are to be distributed among the nominees.
If a shareholder strikes out the name of a Class I or Class II
nominee, all the cumulative votes of such shareholder will be voted
FOR the remaining nominee. If no specific instructions are given
regarding the distribution of proxies, SCRMM's proxy holders will
distribute the shares which they are entitled to vote in favor of
its nominees, in their discretion.
By virtue of stock ownership, including beneficial ownership,
SCRMM holds sufficient proxies to elect one Class I and one Class II
Director (For further information, see Appendix A). However, at the
present time, SCRMM has not considered any allocation by which it
intends to distribute votes among its nominees.
GREEN Proxy Cards should be signed, dated and returned
in the postage-paid envelope provided. Execution of the enclosed
GREEN Proxy Card will not affect a shareholder's right to attend
the Annual Meeting and vote in person. A shareholder who has given
a proxy may revoke it at any time before such proxy is voted either by
a later dated proxy or by voting in person at the Annual Meeting.
Attendance at the Annual Meeting will not in and of itself constitute
a revocation. If you were a shareholder on the April 17, 1995,
Record Date, you will retain your voting rights in connection with
the Annual Meeting even if you sell or sold such Shares after the
Record Date. Accordingly, it is important that you vote the Shares
held by you on the Record Date or grant a proxy to vote such Shares
whether or not you still own the stock.
Shareholders cannot select Directors from among those
proposed by DDL and SCRMM. Therefore, if you wish to support
SCRMM's nominees, your last dated, properly executed proxy must be
a GREEN Proxy Card.
YOUR INVESTMENT IS AT THE BOTTOM OF THE BARREL.
WHO IS RESPONSIBLE?
Your DDL investment has hit the bottom of the barrel and
stayed there. The majority of the present Board of Directors and
management team has been in control at DDL since January 1992
(approximately 3.5 years or 1,200 days). The stock's performance
during this period speaks for itself no matter what criteria you
would like to choose.
SCRMM has prepared an array of statistical and graphical
data in order to assist you in making an informed judgment regarding
the stewardship of your company. The data is drawn either from DDL's
financial statements or from the financial database of Bridge Information
Systems. This data forms the basis for the tables and charts which
follow; the actual tables and charts were prepared by SCRMM, with verbal
authorization from Bridge Information Systems for the use of their data.
The data is presented in two forms and requires some explanation:
1. DDL SPECIFIC DATA: Because DDL has had a negative net worth,
large write-offs, significant asset sales, bond-to-stock conversions,
and other non-recurring transactions, many of the standard measures
of financial performance are not relevant. Consequently, we have
focused on incontestable numbers such as revenues, operating income,
book value per share and, course, stock price:
Table 1: Eight Standard Measurements of DDL's Performance
While Under Current Management
Year (Fiscal Year Ends June 30)
1992
1993
1994
1995
(9 mo)
Sales
58.5
57.9
48.5
22.7
Sales per Share
8.73
5.73
3.21
1.44
Operating Income ( 000,000)
(8.9)
(5.1)
(6.9)
(3.3)
Total Shares Outstanding ( 000)
6635
11973
14469
15909
Book Value per Share
(.92)
(.08)
(.34)
(.12)
Cash Flow per Share
(2.18)
(.12)
(.18)
N/A
Average Stock Price
1.3125
1.6875
1.4675
1.375
Average Daily Share Volume
15,900
42,000
31,800
15,800
_______________
Calendar year
The picture this data paints is one of a rapidly shrinking
company but with an increasing number of shares outstanding. Its
survival for the last three years has depended on the conversion of
$12 million of bonds into common stock and the exercise of $3,500,000
of warrants rather than any operating successes.
2. DDL COMPARED TO PEER GROUPS: Because DDL
does not exist in a vacuum, we feel it is important to compare the
performance of DDL to its peers. Bridge Information Systems classifies
companies into industry segments. DDL is classified in industry 255
(Electrical Components and Parts). Its peer group consists of
approximately 30 firms that are listed on the New York Stock Exchange and
approximately 50 that are traded on NASDAQ's National Market System.
The peer groups appear to have done pretty well over the
past three and one-half years.
Not so for DDL.
The graph below depicts the 10 year price movement of
DDL stock compared to the DDL peer groups. (Current outside members
of the Board of Directors have served on this Board since 1986.)
Notice the dramatic percentage rise in the industry stock prices
since 1991. DDL's percentage stock price change has not kept pace.
The gap between DDL and its peers has widened as DDL continues to
underperform its industry peer group even with a management change
at the end of 1991. This is not a record for DDL's management to be
proud of -- and it certainly does not reflect a turnaround during the
period that Mr. Cook has been Chief Executive Officer.
Next, consider the graph of Quarterly Sales Growth Compared to
Prior Year. Again, we see this alarming trend - the NYSE industry
peer group shows a substantial and regular percentage increase since
1992, while DDL's sales growth, after a positive trend in 1993, has
dropped and dropped and dropped dramatically since the beginning of
1994.
Finally, review the ranking of your company, DDL, with its
peer group:
Measure
DDL
Ranking in Peer
Group
Median - 50% of
the Peer Group is
Above this Value
5 Year
Compounded
Revenue Growth
(Decline)Rate
- -17%
Bottom 4%
14.1%
Gross Profit
Margin
3.5%
Bottom 1%
24.5%
Average Daily
Trading Value -
Last 30 days
$189,750
Bottom 9%
$2,736,125
Absolute Stock
Price 4/21/95
1.375
Bottom 1%
13
Market
Capitalization
$22 million
Bottom 20%
$82 million
52-Week Stock
Price Change
22.2%
Top 45%
17.1%
26 Week Stock
Price Change
- -26.7%
Bottom 7%
6.8%
Who is responsible for keeping DDL out of the bottom of the
barrel? Who is responsible for maintaining revenues and stock
indices at least similar to the industry? The Board of Directors
and management are responsible. It is the Board of Directors'
responsibility to ensure that management performs.
WHAT DO YOU THINK OF THE JOB THEY HAVE DONE SO FAR?
The current Board of Directors and management (as a team)
have watched over the continuing abysmal performance of DDL for at
least 3.5 years. They have had almost 1200 days to turn around DDL's
performance and increase the value of your investment. Instead, they
have watched the average daily trading volume decline to 15,800,
from 42,000 in 1993, while the number of outstanding shares more than
doubled.
These pictures speak volumes.
While past results are never a certain indicator of future
results, they are used by educated men and women in their decision
making process. The past results of the current Board of Directors
and their management team speak for themselves.
WHAT DOES THE MARKET THINK?
In addition to these statistics, there is another indicator of
the performance of the current Board of Directors and their management
team: the market itself. On a daily basis, buyers and sellers come
together to determine the value of assets such as your investment in
DDL -- using hard, cold cash, they vote on the prospects for the
company. Over the past three and one-half years, the market has voted
on the prospects for DDL. Their vote places DDL's average share price
in the lowest one percent of its New York Stock Exchange peer group.
We believe that the market has voted thumbs down on the current Board of
Directors and their management team's likelihood of success with our
company.
We all should be concerned with the force of this thumbs
down vote, echoed by the average daily trading value of shares traded
over the last thirty days which ranks us in the bottom ten percent of
peer group stocks traded. If the value of our DDL shares is to
increase, there have to be interested buyers in sufficient numbers
to drive up the share price. We suggest that this low share trading
volume reflects investor's lack of interest in and a lack of confidence
in the current Board of Directors and their management team. If
investors had any confidence in the potential success of the present
Board of Directors and their management team, then the stock we all own
would not be trading at its present levels.
We agree with the market. After working with this current
management team, we have lost confidence in their ability either
to formulate or to implement a sound strategic plan. We have lost
confidence that the current Board of Directors or its management team
can either identify the most promising and attractive candidates or
follow through with the consummation of a merger, acquisition or
consolidation which will be beneficial to the shareholders of DDL.
Take this opportunity, VOTE THIS PROXY and remove the current
Board who is responsible for the results depicted above.
WHAT IS SCRMM?
WHAT WILL SCRMM DO FOR YOU AND AT WHAT COST?
SCRMM is a group of your fellow shareholders who have banded
together under the name of the Shareholders' Committee to Remove a Moribund
Management ("SCRMM"). Collectively, the members of SCRMM own, or
beneficially own, 3,950,956 shares of Common Stock in DDL Electronics,
Inc., constituting 25.9 percent of the shares entitled to vote at the
forthcoming Annual Meeting scheduled for May 31. Of these, members of
SCRMM, collectively, have sole or shared voting power with respect to
1,939,585 shares, and sole or shared dispositive power over 3,931,056
shares. For further information, see Appendix A.
The members of SCRMM are not corporate gadflies. We are responsible
business people and investors with a unity of interests with you and most
of the other shareholders in DDL. We want DDL to be a successful
company. We want the stock price to go up.
SCRMM is offering the shareholders the opportunity to elect
a slate of Directors that will be able to lead DDL in a new direction --
upward. We believe that the urgency of a change is painfully obvious.
First ask, "What has SCRMM done for DDL to date?" The answer
is enlightening - members have helped keep DDL alive by providing
cash and converting millions of dollars in corporate bonds into stock.
The impact of this group's involvement is telling. Look at the following
chart showing the price action of DDL, annotated with SCRMM member's
actions on behalf of DDL:
CHART
x-axis is stock price
y-axis is a time line
It is more than fair for you to ask "What exactly will SCRMM do
for me, a shareholder, if it is successful in its efforts to remove
those responsible for the mediocre and altogether unimpressive
performance of DDL over the past three and one-half years?" Our
agenda is as follows:
1. We have put forward a slate of Directors with substantial
business, corporate management, legal and accounting experience,
both domestic and international, four of whom are substantial
shareholders in DDL. We believe that we all share a common interest
- -- an increase in the value of DDL's stock.
2. Our slate of Directors will conduct an assessment of DDL's
assets, liabilities and operating position, seeking to generate an
immediate increase in corporate sales revenues and the elimination of
any non-productive corporate expenses.
3. Our slate of Directors will put in place a management team
which will aggressively manage DDL so that you have a chance to
receive higher returns on your investment in DDL.
4. Our slate of Directors will work to restore credibility and
develop a following for our company among institutional investors,
money managers and other professional investors so that the price of
your shares has a better opportunity to appreciate in value.
5. Our slate of Directors will reevaluate the lucrative stock
option and restricted stock award benefit plans put in place by the
current Board of Directors and their management team and, if they so
determine, propose to stockholders that these plans be significantly
modified or terminated.
6. Our slate of Directors will employ their skills and the skills
of other experts to utilize fully our company's assets in a series of
one or more business combinations which improve the performance of DDL
and the value of your shares of stock.
7. As they develop and implement a new strategic plan, our slate of
Directors will always place your interests as shareholders first.
WHAT SPECIFIC STEPS ARE NECESSARY TO CHANGE CONTROL
OF DDL?
Preliminarily, you need to know that the Certificate of
Incorporation and Bylaws of DDL provide for cumulative voting and
staggered terms for its Directors. The cumulative voting provision
permits each stockholder to multiply the number of Directors standing
for election in each Class by the number of shares of stock that he
owns, and cast some or all of his votes for any one or more of the
Directors standing for election in that Class. The staggered terms for
Directors, sometimes referred to as a "classified" board, means that
only a portion of the Directors stand for election at any one time;
in the case of DDL, there are three classes of Directors with members
of each class serving a three-year term.
Staggered terms for Directors is a protective measure designed to
insulate corporate management from the voting power of the shareholders.
A classified Board is intended to make it very difficult to effect a
change in corporate control, i.e. to change a majority of the Board of
Directors. This may be true even in situations in which the
stockholders represent a clear majority of the outstanding stock of DDL.
In this instance, since there are four members on the present
Board, and only two Directors are standing for election this year,
it is necessary for your fellow stockholders at SCRMM not only to put
forth its own slate of two Directors in opposition to the re-election
of management's two candidates but also to amend the Bylaws to expand
the Board to seven members. If our nominees are also elected to the
three new seats on the expanded Board, five of the seven members of
the Board of Directors will be new members. A majority of the Board
of Directors should have the power to set corporate policy and to guide
corporate management, including any necessary changes in the current
management team.
PROXY SOLICITATION; EXPENSES
Proxies may be solicited by members of SCRMM and their nominees
by mail, telephone, telecopier and personal solicitation. Regular
employees of Fortuna and Karen Brenner Investment Advisor may be used to
solicit proxies and, if used, will not receive additional compensation
for this work. Banks, broker houses and other custodians, nominees and
fiduciaries will be requested to forward the soliciting matter of
SCRMM to their customers for whom they hold shares, and SCRMM will
reimburse them for their reasonable out-of-pocket expenses.
SCRMM has retained Beacon Hill Partners, Inc., 90 Broad Street,
New York, New York, 10004, to assist in the solicitation of proxies.
SCRMM has agreed to pay Beacon Hill Partners, Inc., a fee of up to
$14,000, and to reimburse it for its reasonable out-of-pocket expenses.
Approximately 15 people will be used by Beacon Hill Partners, Inc. in
its solicitation efforts.
The entire expense of preparing, assembling, printing and
mailing this Proxy Statement and related materials, and the cost of
soliciting proxies for the proposals and nominees endorsed by SCRMM,
will be borne by SCRMM. SCRMM estimates that its total expenditures
relating to the solicitation will be approximately $75,000 (including
professional fees and expenses, but excluding any costs represented
by salaries and wages of regular employees of Fortuna and Karen Brenner
Investment Advisor); total expenditures to date have been approximately
$25,000. There is no written agreement or understanding regarding the
sharing of expenses by the members of SCRMM. Most of the cost of this
solicitation is being borne by Fortuna Investment Partners and Richard
Fechtor, because of their longstanding commitment of money and
professional reputation to DDL. The other members of SCRMM have shared
in the expenses on a more modest basis, by contributing overhead and
personal professional time. If successful in this proxy contest, SCRMM
will seek reimbursement from DDL for its actual, documented expenses.
SCRMM does not intend to seek shareholder approval for such reimbursement
unless such approval is required under Delaware law.
OTHER MATTERS ON THE ANNUAL MEETING AGENDA
SCRMM is not aware of any other matters scheduled to be
presented at the Annual Meeting. If any other matters properly come
before the meeting, the persons named in the enclosed GREEN Proxy Card
will have discretionary authority to vote all proxies with respect to
such matters in accordance with their judgment.
WHAT SHOULD YOU DO NEXT?
IT SHOULD BE OBVIOUS . . . JOIN US!
We strongly urge you to join us by (1) NOT returning the proxy
cards sent to you by the current Board of Directors of DDL and, more
importantly, by (2) voting FOR the Shareholders' slate of Director
nominees by signing, dating, and mailing the enclosed GREEN Proxy Card
today. It is clearly time for a change.
We welcome you aboard and should you have any questions on when
or how to vote your shares, you should feel free to call our proxy
solicitors at 1-800-755-5001.
Sincerely,
Your Fellow Shareholders at SCRMM
May 1, 1995
<PAGE>
APPENDIX A
The members of SCRMM are Karen Beth Brenner, Richard Fechtor,
Don R. Raig, Ronald J. Vannuki, and Fortuna Investment Partners, L.P.
The discussion below presents the ownership, including beneficial
ownership as defined in Rule 13d-3 promulgated by the Securities and
Exchange Commission, of DDL stock by members of SCRMM, as well as
nominees for election to DDL's Board of Directors.
As of the date of this Proxy Statement, and consistent with
the Rule 13d-3 definition of "beneficial owner", members of SCRMM
and nominees for the Board of Directors have the following interests
in the stock of DDL Electronics, Inc.:
1. Karen Beth Brenner is a registered investment advisor at 1300
Bristol Street, Suite 100, Newport Beach, California 92660, with
limited discretionary authority over some clients' accounts. Karen Beth
Brenner has acquired a total of 16,400 shares of the Common Stock
in transactions in four of her retirement plans. Clients of Brenner
Investment Adviser purchased a total of 301,605 shares of the Common
Stock in a series of purchases for a total price of $549,232.
In addition, clients of Brenner Investment Adviser acquired
1,139,839 shares of the Common Stock through bond conversion of DDL's
convertible debt securities in December, 1992 and through exercise on
July 29, 1993 of stock warrants, which had been received in the
conversion. The total cost of acquiring these convertible securities
and warrants (which were converted and exercised) was $1,300,024. The
sources of the funds for these purchases were other funds in the
respective client's accounts, some of which may have been derived from
then recent sales of other securities.
Included in the above client group are immediate family members of
Karen Brenner who have acquired 309,053 shares of the Common Stock for
a total purchase price of $371,580. The source of the funds for these
purchases of the Common Stock were each family member's private funds.
In summary, Brenner has sole voting power over 16,400 shares, and
sole dispositive power over 1,441,444 shares.
2. Richard Fechtor is a registered representative and director of
Fechtor, Detwiler & Co, Inc., 155 Federal Street, Boston, Massachusetts
02110, a securities brokerage firm. Richard Fechtor acquired a total
of 443,050 shares (jointly held with spouse Pauline Fechtor) in
transactions to his own account for which he paid a total purchase price
for these shares of $450,000. The source of the funds for these purchases
of the Common Stock were his private funds.
In addition, immediate family members of Richard Fechtor, but neither
dependents nor living in his household, acquired 132,500 shares of the
Common Stock for a total purchase price of $181,000. The source of the
funds for these purchases of the Common Stock were each family member's
private funds. Fechtor has no power over the voting or disposition of
these shares.
Clients of Richard Fechtor have acquired a total of 1,889,883
shares of the Common Stock in a series of purchases for a total price
of $3,307,295. Mr. Fechtor does not have voting or disposition authority
with respect to DDL shares in these accounts; accordingly, this stock is
not included among the shares for which Mr. Fechtor is considered to have
beneficial ownership.
Accordingly, Richard Fechtor has shared voting and shared dispositive
power over 443,050 shares.
3. Don A. Raig is an attorney-at-law who practices at 555 Saturn
Boulevard, Suite B-444, San Diego, California 92154. Don A. Raig, as an
individual, acquired a total of 46,965 shares of the Common Stock
(21,000 as a joint tenant with Colleen Buskirk) in transactions to his
own account for a total price of $85,110. The source of the funds for
these purchases of the Common Stock were his private funds.
Don A. Raig, as the trustee of four private trusts, has also
acquired with funds from said trusts a total of 473,010 shares of
Common Stock for an aggregate purchase price of $742,628.
Accordingly, Raig has sole voting and sole dispositive power
over 519,975 shares.
4. Ronald J. Vannuki is a registered representative at Strome Susskind
Securities, L.P., 100 Wilshire Boulevard, Fifteenth Floor, Santa Monica,
California 90401. Mr. Vannuki is also president of Fortuna Capital
Management, Inc., a California corporation located at the same address,
and general partner of Fortuna Investment Partners, L.P. ("Fortuna").
Fortuna, in the course of its business, used a total of $1,414,775 of
its working capital to acquire 956,660 shares of the Common Stock in
several separate transactions.
Ronald J. Vannuki acquired a total of 3,500 (1,500 as custodian
for his minor son Randon Vannuki) shares of the Common Stock for which
he paid $5,244. The source of the funds for Mr. Vannuki's purchases of
the Common Stock were funds in his IRA and private funds. Mr. Vannuki
has discretionary dispositive authority with respect to a client's
account which owns 566,427 shares, purchased for an aggregate price of
$509,784. The client's stock was purchased with the clients personal funds.
In addition, an immediate family member of Ronald J. Vannuki
acquired 15,150 shares of the Common Stock for a total purchase price
of $18,938. The source of the funds for this purchase was the private
funds of the family member, who does not reside in the same household.
Mr. Vannuki has no voting or dispositive power over these shares.
Clients of Mr. Vannuki's former brokerage firm, Drake Capital
Securities, Inc., own 1,241,227 shares of the Common Stock which were
purchased for the aggregate sum of $1,696,866. Mr. Vannuki has no
voting or disposition authority over these shares and none of these
shares is included among those for which Mr. Vannuki is considered to
have beneficial ownership.
Accordingly, Fortuna Investment Partners has sole voting and
dispositive power over 956,660 shares. Mr. Vannuki has sole voting power
over 3,500 shares and sole dispositive power over 569,927 shares.
5. Melvin Foster is a lawyer in Boston, Massachusetts. Mr. Foster
owns 113,000 shares of Common Stock, acquired in a series of purchases
totalling $169,500. Additionally, Mr. Foster owns 51,500 shares
in a profit-sharing plan, and 10,000 shares in a Keough Plan, purchased
for an aggregate price of $92,250. Mr. Foster, as custodian for his
minor son, is the beneficial owner of 13,000 shares purchased for
$19,500.
Mr. Foster has sole voting and sole dispositive power over
187,500 shares.
6. Erven Tallman is a businessman of diverse interests living
in Rancho Mirage, California. Mr. Tallman owns 152,732 shares of stock,
acquired in a series of purchases totalling $229,098. Accordingly, Mr.
Tallman has sole voting and sole dispositive power over 152,732 shares.
7. Robert G. Wilson is a businessman of diverse interests living
in Vancouver, British Columbia. Mr. Wilson owns 566,427 shares of
stock in a discretionary brokerage account, acquired in a series of
purchases totalling $849,641. Mr. Wilson has sole voting and shared
dispositive power over 566,427 shares.
<PAGE>
The table below sets forth all Shares purchased or sold by members
of SCRMM or nominees for the Board of Directors within the past two
years, the dates on which such purchases were made, and the amount of
such purchases.
Purchases and Sales of DDL Electronics, Inc. During the Last Two Years.
Date Purchased Number of Shares Total Cost
Fortuna Investment Partners, L. P.
20-Apr-93
175,000
$245,875
20-Apr-93
189,580
$351,745
20-May-93
1,000
$2,040
20-May-93
500
$988
21-May-93
500
$963
21-May-93
800
$1,565
25-May-93
2,000
$3,875
16-Jul-93
20,040
$54,593
01-Sep-93
6,200
$11,960
03-Sep-93
200
$435
03-Sep-93
9,100
$17,452
08-Sep-93
100
$248
09-Sep-93
600
$1,180
10-Sep-93
20,000
$40,625
21-Sep-93
1,000
$1,810
22-Sep-93
9,000
$16,045
30-Sep-93
6,400
$11,417
18-Oct-93
20,000
$33,125
20-Oct-93
200
$360
22-Oct-93
900
$1,402
22-Oct-93
16,740
$25,637
03-Nov-93
3,000
$4,615
04-Nov-93
2,900
$4,462
04-Nov-93
3,000
$4,615
09-Nov-93
8,600
$12,108
17-Nov-93
5,000
$7,050
18-Nov-93
1,000
$1,430
19-Nov-93
3,600
$4,633
30-Nov-93
46,400
$59,417
14-Dec-93
5,000
$6,425
22-Dec-93
5,400
$6,262
29-Dec-93
23,500
$33,043
30-Dec-93
6,500
$9,158
31-Dec-93
500
$790
31-Dec-93
1,500
$2,133
31-Dec-93
2,200
$3,116
29-Apr-94
5,000
$6,400
29-Apr-94
5,000
$5,775
13-May-94
25,000
$21,063
13-May-94
65,000
$58,825
18-May-94
13,000
$12,578
18-May-94
5,000
$5,150
19-May-94
20,000
$20,600
20-May-94
5,000
$5,150
23-May-94
10,000
$10,300
26-May-94
1,500
$1,451
27-May-94
1,000
$968
27-May-94
5,000
$5,775
27-May-94
14,000
$14,420
24-Jun-94
2,000
$2,310
24-Jun-94
6,000
$6,180
24-Jun-94
10,000
$9,675
03-Jan-95
27,800
$42,534
12-Jan-95
20,000
$33,100
17-Jan-95
2,400
$3,372
19-Jan-95
15,000
$21,950
19-Jan-95
35,000
$53,550
28-Mar-95
15,000
$19,200
29-Mar-95
10,000
$14,050
30-Mar-95
21,600
$30,348
31-Mar-95
20,000
$28,100
Vannuki, Clients
30-Jul-93
113,133
$254,549
Fechtor Family
19-Apr-93
45,000
$59,061
23-Apr-93
75,000
$131,250
21-May-93
11,000
$5,500
18-Jul-93
3,000
$2,280
21-Jul-93
1,000
$625
29-Dec-93
2,000
$3,030
31-Dec-93
10,000
$13,834
31-Mar-94
14,500
$18,926
31-May-94
1,000
$1,030
Raig
08-Aug-94
249,375
$374,063
18-Aug-94
7,000
$10,500
02-Oct-94
5,000
$10,625
17-Oct-94
9,000
$17,750
20-Oct-94
32,500
$68,563
21-Oct-94
3,000
$6,375
26-Oct-94
8,000
$16,625
01-Nov-94
32,700
$68,525
02-Nov-94
28,800
$61,200
18-Nov-94
5,000
$8,750
20-Nov-94
13,000
$27,625
21-Nov-94
13,500
$23,188
22-Nov-94
5,000
$8,125
23-Nov-94
5,000
$8,125
25-Nov-94
5,000
$7,500
28-Nov-94
10,000
$14,375
29-Nov-94
5,000
$6,875
16-Dec-94
10,000
$1,250
19-Dec-94
5,000
$6,250
29-Dec-94
8,100
$10,988
30-Dec-94
10,000
$13,750
21-Mar-95
30,500
$34,313
22-Mar-95
4,200
$4,988
24-Mar-95
15,300
$17,413
Brenner, Clients
21-Apr-93
800
$1,050
21-Apr-93
400
$537
06-May-93
16,670
$25,005
07-May-93
34,080
$25,500
28-May-93
40,440
$75,827
23-Jun-93
20,000
$45,000
23-Jun-93
12,800
$24,000
30-Jun-93
2,000
$4,502
30-Jun-93
2,000
$4,502
30-Jun-93
2,000
$4,502
30-Jun-93
10,000
$22,502
27-Jul-93
3,000
$3,060
29-Jul-93
33,340
$50,001
29-Jul-93
50,010
$75,015
11-Aug-93
16,670
$25,005
11-Aug-93
2,500
$5,940
11-Aug-93
2,500
$5,940
11-Aug-93
19,233
$28,850
11-Aug-93
60,012
$90,018
11-Aug-93
3,334
$5,001
30-Aug-93
30,000
$67,502
31-Aug-93
5,000
$11,252
01-Sep-93
1,500
$2,888
03-Sep-93
500
$1,063
10-Sep-93
2,500
$5,002
13-Sep-93
2,500
$5,002
29-Sep-93
10,000
$18,752
30-Sep-93
95,000
$178,125
01-Oct-93
26,700
$50,332
07-Oct-93
5,000
$9,035
07-Oct-93
5,000
$9,035
26-Oct-93
5,000
$7,702
29-Oct-93
52,000
$84,502
01-Nov-93
25,000
$41,877
29-Nov-93
60,000
$75,602
03-Dec-93
26,000
$36,012
21-Dec-93
58,000
$80,332
29-Dec-93
9,000
$9,565
26-Apr-94
2,000
$2,252
26-Apr-94
2,000
$2,252
07-Jul-94
27,000
$40,652
25-Aug-94
4,500
$6,240
25-Aug-94
4,500
$6,240
22-Nov-94
55,000
$87,658
Dates Sold Number of Shares Total Proceeds
Vannuki, Clients
20-Apr-93
185,000
$235,373
28-Apr-93
30,000
$56,248
23-Jun-93
120,000
$266,248
14-Jul-93
15,000
$31,873
08-Sep-93
20,000
$39,598
09-Sep-93
30,000
$60,000
14-Sep-93
20,000
$39,080
17-Sep-93
10,000
$18,748
23-Sep-93
2,000
$3,748
22-Sep-93
10,000
$18,123
29-Sep-93
45,300
$83,685
04-Oct-93
12,200
$22,804
20-Oct-93
1,800
$3,694
25-Oct-93
16,000
$26,000
Fechtor Family
05-Aug-94
5,000
$7,456
09-Aug-94
1,000
$1,469
Brenner, Clients
19-Apr-94
4,000
$3,998
14-Jul-94
27,000
$40,347
18-Aug-94
4,000
$5,477
18-Aug-94
5,000
$6,846
13-Sep-94
500
$840
13-Sep-94
2,000
$3,359
13-Sep-94
1,500
$2,519
25-Oct-94
12,800
$23,001
25-Oct-94
9,000
$16,173
25-Oct-94
1,000
$1,797
28-Oct-94
25,000
$49,998
04-Nov-94
25,000
$49,998
06-Jan-95
55,000
$89,373
As of the date of this Proxy Statement, May 1, 1995, no
shares have been purchased after the Record Date.
Except as otherwise set forth in this Appendix A, neither
SCRMM nor any of its members nor any "associate" of any of the
foregoing persons or any other person who may be deemed a "participant"
in the Proxy Solicitation is the beneficial or record owner of any
Shares. Except as otherwise set forth in this Appendix A, neither
SCRMM nor any of its members nor any "associate" of any of the
foregoing persons or any other person who may be deemed a "participant"
in the Proxy Solicitation has purchased or sold any Shares within the
past two years, borrowed any funds for the purpose of acquiring or
holding any Shares or is or was within the past year a party to any
contract or arrangement or understanding with any person with respect
to any Shares. There has not been any transaction since the beginning
of DDL's last fiscal year, and there is not currently any proposed
transaction to which DDL is a party, in which SCRMM or any of its
members or any "associate" or immediate family member of any of the
foregoing persons or any other person who may be deemed a
"participant" in the Proxy Solicitation had or will have a direct
material interest including, without limitation, any understanding
with respect to future employment or any future transaction to which the
registrant or any of its affiliates is a party.<PAGE>
[ Back Page ]
IMPORTANT
Your vote is important. No matter how many or how few DDL
shares you own, please vote FOR the Committee's nominees by signing,
dating and mailing the enclosed GREEN Proxy Card today. SCRMM urges
you NOT to return any proxy cards sent to you by the Board of Directors
of DDL.
If you have already returned a Board of Directors' proxy
card before receiving this Proxy Statement, you have every right to
change your vote by signing and returning the enclosed GREEN Proxy Card.
Only your latest dated, properly executed proxy will count at the
Annual Meeting.
If you own your DDL Shares in the name of a brokerage
firm, your broker cannot vote such Shares unless he receives your
specific instructions. Please sign, date and return the enclosed
GREEN Proxy Card in the postage-paid envelope that has been provided.
If you have any questions about how to vote your DDL
shares, please call our proxy solicitor:
Beacon Hill Partners
90 Broad Street
New York, NY 10004
Telephone: 1-800-755-5001
<PAGE>
APPENDIX B
PROXY CARD
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE SHAREHOLDER
COMMITTEE TO REMOVE A MORIBUND MANAGEMENT
DDL ELECTRONICS, INC.
ANNUAL MEETING OF SHAREHOLDERS, MAY 31, 1995
The undersigned, revoking all proxies heretofore given, hereby
appoints Karen Beth Brenner, Richard Fechtor and Ronald J. Vannuki
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 below, the proposals which
are more fully set forth in the Proxy Statement of the DDL Shareholders
Committee to Remove A Moribund Management (receipt of which is hereby
acknowledged) all shares of Common Stock of DDL Electronics, Inc. (the
"Company") held of record by the undersigned on April 17 at the
Annual Meeting of Shareholders to be held on May 31, 1995, or at any
adjournment or postponement thereof.
DDL SHAREHOLDERS COMMITTEE TO REMOVE A MORIBUND MANAGEMENT ("SCRMM")
RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS LISTED BELOW
1. Election of Class II Directors to continue in office until 1997
_____ FOR electing the nominees listed below, subject to the
right of the Proxies, in their discretion, to cumulate votes
(except as marked to the contrary below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
SCRMM Class II Nominees: Bernee D. L. Strom and Erven Tallman.
(Instruction -- to withhold authority to vote for any individual
nominee, write that nominee's name on the line below)
____________________________________________
2. Amendment of Section 3.02 of the Bylaws to set the membership of
the Board of Directors at not less than seven (7), effective
immediately upon adoption:
_____ FOR _____ AGAINST _____ ABSTAIN
3. Assuming the adoption of Proposal No. 2, the election of two
new Class I Directors to continue in office until 1996, and one new
Class III Director to continue in office until 1995.
_____ FOR electing the nominees listed below, subject to the
right of the Proxies, in their discretion, to cumulate votes
(except as marked to the contrary below).
_____ WITHHOLD AUTHORITY to vote for all nominees listed below.
SCRMM Class I Nominees: Melvin Foster and Robert G. Wilson
SCRMM Class III Nominee: Don A. Raig.
(Instruction -- to withhold authority to vote for any individual
nominee, write that nominee's name on the line below)
____________________________________________
This proxy, when properly executed, will be voted in the manner
directed by the undersigned shareholder(s). If no direction is made,
this proxy will be voted FOR each of the listed proposals and nominees.
In their discretion, the Proxies are authorized to vote upon such other
matters as may come before the meeting or any adjournment thereof.
Date:____________________, 1995
X_________________________
X_________________________
Signature of Shareholder(s)
Please sign exactly as your name appears. For shares in the
name of more than one person, each holder should sign. When
signing as attorney, administrator, executor, guardian, trustee,
or custodian, please write in your full title as such. If signing
as a corporation, please indicate the signer's title.
