<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No._____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DENSE-PAC MICROSYSTEMS, INC.
-----------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities
to which transaction applies:
--------------------------------------
(2) Aggregate number of securities
to which transaction applies:
--------------------------------------
(3) Per unit price or other underlying
value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which
the filing fee is calculated and
state how it was determined):
--------------------------------------
(4) Proposed maximum aggregate
value of transaction:
--------------------------------------
(5) Total fee paid:
--------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
DENSE-PAC MICROSYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 15, 1997
To The Shareholders:
The Annual Meeting of Shareholders of Dense-Pac Microsystems, Inc. (the
"Company") will be held at the Company's offices located at 7321 Lincoln Way,
Garden Grove, California, on August 15, 1997, at 10:00 a.m. for the following
purposes:
1. To elect five directors to serve until the next Annual Meeting
of Shareholders or until their successors are duly elected and
qualified. The Board of Directors' nominees are Roger G. Claes,
Aaron Uri Levy, Robert Southwick, Trude C. Taylor and James G.
Turner; and
2. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business, June 20, 1997,
as the record date for determination of shareholders entitled to notice of and
to vote at the Annual Meeting.
EVEN THOUGH YOU MAY EXPECT TO BE PERSONALLY PRESENT AT THE MEETING,
PLEASE BE SURE THAT THE ENCLOSED PROXY CARD IS PROPERLY COMPLETED, DATED, SIGNED
AND RETURNED WITHOUT DELAY IN THE ACCOMPANYING ENVELOPE TO WHICH NO POSTAGE NEED
BE AFFIXED IF MAILED IN THE UNITED STATES.
WILLIAM M. STOWELL
Secretary
July 10, 1997
<PAGE> 3
DENSE-PAC MICROSYSTEMS, INC.
7321 Lincoln Way
Garden Grove, California 92641
----------------------
PROXY STATEMENT
----------------------
GENERAL INFORMATION
SOLICITATION, REVOCATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Dense-Pac Microsystems, Inc. (the
"Company"), for use at the Annual Meeting of Shareholders to be held at 10:00
a.m. on August 15, 1997, at the Company's offices located at 7321 Lincoln Way,
Garden Grove, California, and at any and all adjournments thereof. It is
anticipated that this Proxy Statement and accompanying proxy will first be
mailed to shareholders on or about July 10, 1997.
The accompanying proxy, if properly executed and returned, will be voted
as specified by the shareholder or, if no vote is indicated, the proxy will be
voted FOR the Board's nominees for director. As to any other matter of business
which may be brought before the Meeting, a vote may be cast pursuant to the
accompanying proxy in accordance with the judgment of the persons voting the
same, but management does not know of any such other matter of business. A
shareholder may revoke his proxy at any time prior to the voting of shares by
voting in person at the Meeting or by filing with the Secretary of the Company a
duly executed proxy bearing a later date or an instrument revoking the proxy.
The costs of solicitation of proxies will be paid by the Company. In
addition to soliciting proxies by mail, the Company's officers, directors and
other regular employees, without additional compensation, may solicit proxies
personally or by other appropriate means. Banks, brokers, fiduciaries and other
custodians and nominees who forward proxy soliciting material to their
principals will be reimbursed their customary and reasonable out-of-pocket
expenses.
RECORD DATE AND VOTING RIGHTS
Only shareholders of record of the Company's Common Stock as of the
close of business on June 20, 1997 will be entitled to vote at the Meeting. On
June 20, 1997, there were outstanding 17,014,181 shares of Common Stock, which
constituted all of the outstanding voting securities of the Company, each of
which is entitled to one vote per share. A majority of the shares entitled to
vote, represented in person or by proxy, constitutes a quorum at the Meeting.
Abstentions and broker non-votes are counted as present for purposes of
determining the existence of a quorum.
In the election of directors only, each shareholder has the right to
cumulate his votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares he is entitled to
vote, or to distribute his votes on the same principle among as many candidates
as he sees fit. No shareholder is entitled to cumulate votes unless the name of
the candidate or candidates for whom such votes would be cast has been placed in
nomination prior to the voting and any shareholder has given notice at the
meeting
<PAGE> 4
prior to the voting of such shareholder's intention to cumulate his votes. The
candidates receiving the highest number of affirmative votes, up to the number
of directors to be elected, will be elected directors. Broker non-votes and
votes withheld have no legal effect.
If voting for directors is conducted by cumulative voting, the persons
named on the enclosed proxy will have discretionary authority to cumulate votes
among the nominees with respect to which authority was not withheld or, if the
proxy either was not marked or was marked for all nominees, among all nominees.
In any case, the proxies may be voted for less than the entire number of
nominees if any situation arises which, in the opinion of the proxy holders,
makes such action necessary or desirable.
ELECTION OF DIRECTORS
The five directors to be elected at the Annual Meeting will hold office
until the next Annual Meeting of Shareholders and until the election of their
respective successors. All proxies received by the Board of Directors will be
voted for the nominees listed below if no direction to the contrary is given. In
the event that any nominee is unable or declines to serve, an event that is not
anticipated, the proxies will be voted for the election of any nominee who may
be designated by the Board of Directors.
Set forth below is information concerning the nominees for director:
<TABLE>
<CAPTION>
NAME AND YEAR FIRST PRINCIPAL OCCUPATION
BECAME A DIRECTOR AGE DURING THE PAST FIVE YEARS
- --------------------- --- -------------------------------------------------
<S> <C> <C>
Roger G. Claes 51 Partner and managing director of Euroventures
1989 Benelux Team B.V. which manages Euroventures
Benelux I B.V. and Euroventures Benelux II B.V.,
European venture capital funds which are
shareholders of the Company, since 1987; Managing
Director of Euroventures Benelux I B.V. since
1988.
Aaron Uri Levy 38 Chairman of the Board, Chief Executive Officer
1997 and President of the Company since January 1997;
founder of Vivid Communications (video
conferencing); President of Centennial Capital
Corp. (technology investments), a wholly owned
subsidiary of Centennial Technologies, Inc., from
August through November 1996; President and Chief
Operating Officer of Centennial Technologies,
Inc. (customized PCMCIA/PC cards) from August
1994 to August 1996; President and Chief
Operating Officer of Acom Computer, Inc. (laser
printing applications and networking) from 1989
to August 1994; founder of Cygnus Engineering
(computer aided design); project manager/senior
support project engineer at Citicorp (financial
services); B.S. with honors in Electrical
Engineering, University of California, Irvine;
M.S. in aerospace engineering from Northrup
University and recipient of "President's Most
Distinguished Graduate"; former guest lecturer at
Pepperdine University on management strategies
for the 90s.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NAME AND YEAR FIRST PRINCIPAL OCCUPATION
BECAME A DIRECTOR AGE DURING THE PAST FIVE YEARS
- --------------------- --- -------------------------------------------------
<S> <C> <C>
Robert Southwick 63 Independent consultant to the electronics
1990 industry, specializing in the areas of technology
applications, market research, product
development and manufacturing processes, for over
20 years.
Trude C. Taylor 76 Principal of TC Associates, a management
1989 consulting firm, since 1986; currently a director
of Plantronics, Inc. and Xylan Corporation, and a
Trustee of Harvey Mudd College, Claremont,
California; Chairman of the Board of Zehntel,
Inc., a manufacturer of automatic test equipment
for subsystems and printed circuit assemblies,
from 1984 to 1988 and Chief Executive Officer
from 1984 to 1986.
James G. Turner 58 Chairman of the Board and Chief Executive Officer
1987 of the Company from 1987 until January 1997, and
currently an employee of the Company; President
of Titan Severe Environmental Systems Company, a
manufacturer of computer memories and subsystems
for the worldwide aerospace industry, from 1981
to 1987.
</TABLE>
DIRECTORS' COMPENSATION
The Company pays its non-employee directors $1,000 for each Board
meeting attended and $300 for each Committee meeting attended which is not held
on the same day as a Board meeting, and reimburses out-of-pocket expenses for
attending such meetings. In addition, in fiscal year 1997, the Company awarded
stock options to certain non-employee directors as set forth below:
<TABLE>
<CAPTION>
Number of Securities Exercise Expiration
Name Underlying Options Granted Date of Grant Price/Share Date
- ---- -------------------------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Robert Southwick 20,000 12/13/96 $1.66 12/12/06
Trude C. Taylor 20,000 12/13/96 1.66 12/12/06
</TABLE>
The exercise price was equal to the fair market value of the Common
Stock on the date of grant and the options are exercisable in 25% annual
cumulative installments beginning one year after the grant date.
INFORMATION CONCERNING BOARD AND COMMITTEE MEETINGS
The Company's Board of Directors held six meetings during the fiscal
year ended February 28, 1997. The Board of Directors desires to increase the
size of the Board by adding individuals whose experience and skills will benefit
the Company. The members of the Audit Committee and the Compensation Committee
are Robert Southwick and Trude C. Taylor. The Audit Committee is responsible for
periodically reviewing the financial condition, and the results of audit
examinations, of the Company with its independent accountants. The Audit
Committee met once during the last fiscal year. The responsibilities of the
Compensation Committee include reviewing and recommending to the Board the
compensation, bonuses and employee benefits of senior management. The
Compensation Committee met once during the last fiscal year. The Company also
has a Stock Option Committee which is responsible for
3
<PAGE> 6
administering the Company's stock option plans. The members of the Committee are
Roger Claes and Trude C. Taylor. The Stock Option Committee met four times
during the last fiscal year. The Company does not have a nominating committee.
EXECUTIVE OFFICERS
The following information is provided with respect to the Company's
current executive officers.
AARON URI LEVY, age 38, was elected Chief Executive Officer, President
and Chairman of the Board in January 1997. See "Election of Directors."
WILLIAM M. STOWELL, age 41, has served as Vice President, Finance and
Chief Financial Officer of the Company since 1987. Mr. Stowell is a CPA with a
B.S. in accounting from the University of Southern California and a teaching
credential in management information systems. Prior to joining the Company, he
served as Chief Financial Officer for Hughes Enterprises and as an audit manager
at Price Waterhouse.
CHARLES A. GAMER, age 41, was elected Vice President, Sales and
Marketing in April 1997. For five years prior to joining the Company in February
1997, Mr. Gamer served as President of Scientific Dimensions USA, Inc., a
company which specializes in the commercialization of Russian technology. Mr.
Gamer also served as international marketing manager at Digital Equipment
Corporation, director of computer sales at Sanyo Business Systems, and eastern
director of sales a Compaq Computer.
RANDALL J. GREENE, age 36, joined the Company in 1993 as manager of
quality assurance. He was elected Vice President of Quality, Reliability and
Program Management in 1994. From 1990 to 1993, Mr. Greene was principal ASIC
engineer at Western Digital Corporation, a semiconductor and disk drive
manufacturer.
JOHN P. SPRINT, age 35, joined the Company in 1990 as a test manager. He
served as a production and operations manager before being elected Vice
President, Manufacturing in March 1996. From 1986 until joining the Company, Mr.
Sprint was a manager in the test, manufacturing and thick film departments at
Northrup Electronics Division.
Officers serve at the discretion of the Board of Directors.
4
<PAGE> 7
EXECUTIVE COMPENSATION
The following tables provide information concerning the compensation of
each person who served as chief executive officer during the last fiscal year
and the other executive officers whose total salary and bonus exceeded $100,000
in fiscal year 1997 (the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Annual Compensation Compensation
------------------------ Securities
Name and Fiscal Underlying All Other
Principal Position Year Salary(1) Bonus Options (#) Compensation
- ------------------ ------ --------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Aaron Uri Levy, 1997 $28,605 $17,500 500,000 $ 19,742(2)
Chief Executive Officer(2)
James G. Turner, 1997 141,829 0 70,000(6) 102,650(3)(7)
Former Chief Executive 1996 231,853 52,914 87,500(6) 2,650
Officer(3) 1995 137,519 5,375 56,250 3,100
William M. Stowell, 1997 115,000 10,000 94,200(6) 2,000(7)
Vice President, Finance 1996 136,763 38,635 55,000(6) 2,000
1995 93,481 4,121 56,250 2,000
Floyd K. Eide, 1997 131,250 0 71,900(6) 133,250(4)(7)
Chief Operating Officer(4) 1996 168,690 44,095 50,000(6) 2,000
1995 113,504 4,479 56,250 2,051
Albert Kile, 1997 112,392 0 31,000(6) 42,000(5)(7)
Vice President, Sales (5) 1996 150,290 27,027 30,000(6) 2,000
1995 119,597 2,866 68,750 2,000
</TABLE>
(1) During fiscal year 1997, the Company terminated the variable
compensation plan and reimbursed all employees (other than Mr. Turner)
the amount of salary reductions they had sustained during the fiscal
year under such plan. See also Note 3 under "Fiscal Year 1997 Option
Grants."
(2) Mr. Levy became Chief Executive Officer on January 6, 1997. The Company
agreed to pay Mr. Levy the following compensation: $175,000 annual
salary; $17,500 signing bonus; a guaranteed bonus equal to 50% of base
salary for fiscal year 1998; $700 per month car allowance; 500,000 stock
options; and relocation expenses which are included under "All Other
Compensation."
(3) Mr. Turner resigned as Chief Executive Officer effective January 6,
1997. "All Other Compensation" includes $100,000 accrued in fiscal year
1997 which is payable through December 1997 in connection with Mr.
Turner's resignation. See "Severance Arrangements."
(4) Mr. Eide resigned as Chief Operating Officer on March 28, 1997. "All
Other Compensation" includes $131,250 accrued in fiscal year 1997 which
is payable in fiscal year 1998 in connection with Mr.
Eide's resignation. See "Severance Arrangements."
(5) Mr. Kile served as Vice President, Sales from March 1996 through
February 1997. "All Other Compensation" includes $40,000 accrued in
fiscal year 1997 which is payable in fiscal year 1998 in connection with
Mr. Kile's resignation.
5
<PAGE> 8
(6) During fiscal year 1997, the Company repriced options which were
originally granted in fiscal year 1996. Pursuant to rules of the
Securities and Exchange Commission, such repriced options are included
in the number of options granted in fiscal year 1997 (the year in which
they were repriced) and in fiscal year 1996 (the year they were
originally granted). See "Fiscal Year 1997 Option Grants" and "Report of
the Stock Option Committee on Option Repricing."
(7) In fiscal year 1997, includes premiums of $650 for health insurance for
Mr. Turner and Company contributions to the 401(k) Plan for the account
of each Named Officer in the amount of $2,000.
FISCAL YEAR 1997 OPTION GRANTS
<TABLE>
<CAPTION>
% of Total
Number of Securities Options Granted Exercise
Underlying Options to Employees in Price Per Expiration
Name Granted (1) Fiscal Year Share (4) Date
------ -------------------- --------------- ---------- -----------
<S> <C> <C> <C> <C>
Aaron Uri Levy 500,000 36.2% $1.25 12/22/06
James G. Turner 70,000(2) 5.1% 2.41 11/23/05
William M. Stowell 34,200(3) 2.5% 2.03 02/23/07
25,000 1.8% 2.03 02/23/07
35,000(2) 2.5% 2.41 11/23/05
Floyd K. Eide 36,900(3) 2.7% 2.03 02/23/07
35,000(2) 2.5% 2.41 11/23/05
Albert Kile 11,000(3) .8% 2.03 02/23/07
20,000(2) 1.5% 2.41 11/23/05
</TABLE>
(1) Unless otherwise indicated, the options vest in 25% installments beginning
one year after the grant date (beginning March 1, 1997 in the case of Mr.
Levy's options) and are subject to earlier termination in the event of
termination of employment, death and certain corporate events. Under the
terms of the Company's Stock Option Plans, the Stock Option Committee may
modify the terms of outstanding options, including the exercise price and
vesting schedule. See "Report of the Stock Option Committee on Option
Repricing" and "Severance Arrangements."
(2) These options were granted in November 1995 and repriced in September 1996.
See "Report of the Stock Option Committee on Option Repricing."
(3) In connection with the termination of the variable compensation plan, the
Company granted a total of 203,900 stock options to employees (other than
Mr. Turner) who had participated in the plan (23 persons). The number of
options granted to each person was based on the amount of salary reduction
such person had experienced under the plan, and the vesting schedule was
based on the number of years of participation in the plan. Messrs. Stowell's
and Eide's options are 100% vested and Mr. Kile's options are 50% vested.
(4) Fair market value of the Common Stock on the grant date.
6
<PAGE> 9
FISCAL YEAR 1997 AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Unexercised Value of Unexercised
Acquired on Value Options Held at In-the-Money Options
Name Exercise Realized(1) Fiscal Year-End at Fiscal Year-End(2)
- ------------------- ------------ ----------- -------------------------- ---------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Aaron Uri Levy 0 0 0 500,000 $ 0 $ 670,000
James G. Turner 50,000 128,924 79,125 123,625 11,015 47,619
William M. Stowell 96,500 290,317 107,900 105,550 64,662 64,315
Floyd K. Eide 20,000 120,200 256,275 71,875 398,473 47,106
Albert Kile 5,000 26,720 81,875 44,375 50,334 21,288
</TABLE>
(1) Represents the difference between the aggregate market value on the date of
exercise and the aggregate exercise price.
(2) Represents the difference between the aggregate market value on February 28,
1997 ($2.59 per share) and the aggregate exercise price.
REPORT OF THE STOCK OPTION COMMITTEE ON OPTION REPRICING
On September 24, 1996, the Stock Option Committee approved the repricing of
a total of 230,000 stock options held by executive officers and a key employee.
The stock options were originally granted in November 1995 at an exercise price
of $5.69 per share, vested at 25% per year beginning one year after the grant
date, and expired after 10 years. The exercise price of the options was changed
to $2.41 per share, representing the fair market value of the Common Stock on
September 24, 1996. No other terms of the options were changed.
The Committee approved the option repricing because it believes that
providing an equity interest in the Company is an important factor in the
Company's ability to attract and retain key employees that are critical to the
Company's long-term success. In determining to approve the option repricing, the
Committee also considered the following factors: the market price of the Common
Stock had declined significantly since the options had been awarded; in August
1996 the Committee had approved an option repricing of a total of 121,000
options held by non-officer employees from an exercise price of $6.50 to $2.70
per share; the Company's variable compensation plan had resulted in salary
reductions of 15% to 20% for executive officers since May 1996; and executive
officers had not been awarded stock options since November 1995. Based on the
foregoing factors, the Committee decided that the option repricing was
appropriate in order to bolster officer morale, to provide additional incentives
to such officers, and to provide such officers with a meaningful equity interest
in the Company.
The Stock Option Committee: Roger Claes and Trude C. Taylor
7
<PAGE> 10
SEVERANCE ARRANGEMENTS
In connection with his resignation as Chief Executive Officer, the Company
agreed to continue to employ James G. Turner for up to one year at a salary of
$10,000 per month and to maintain his medical benefits and a $50,000 life
insurance policy for his benefit. The Company also amended Mr. Turner's options
to provide that they will become exercisable in full on the first to occur of
termination of his employment or January 3, 1998. See "Fiscal Year 1997
Aggregated Option Exercises and Fiscal Year-End Option Values."
In connection with his resignation as Chief Operating Officer, the Company
agreed to continue to employ Floyd K. Eide at the rate of $10,938 per month and
to maintain his medical benefits until the earlier of March 31, 1998 or the date
he obtains other full-time employment. The Company also amended Mr. Eide's
options to provide that they will become exercisable in full on the date he is
no longer employed by the Company. See "Fiscal Year 1997 Aggregated Option
Exercises and Fiscal Year-End Option Values."
CERTAIN TRANSACTIONS
The Company has outstanding loans in the principal amount of $1.8 million
payable to Euroventures Benelux II B.V., a Netherlands corporation
("Euroventures"), and $100,000 payable to Trude C. Taylor, a director of the
Company. The principal amount of the loans is due in October/November 1999 and
bears interest at the rate of 5% per annum with respect to $1.8 million and 8%
per annum with respect to $100,000, interest payable quarterly. The loans are
secured by all of the Company's assets, but Euroventures has agreed to
subordinate its security interest in accounts receivable in order to permit the
Company to obtain conventional bank financing for accounts receivable.
In connection with certain amendments to the terms of its loan in October
1995, the Company issued Euroventures four year warrants to purchase 375,000
shares of Common Stock at $7.00 per share. The warrants are redeemable by the
Company if the Company's stock price reaches $9.00 per share for 20 consecutive
trading days. The warrant exercise price will be subject to downward adjustment
if the Company sells Common Stock at a price which is less than $7.00 per share,
excluding issuances pursuant to warrants outstanding at April 1, 1996 and any
issuances pursuant to the Company's stock option plans. In addition,
Euroventures has the right to require the Company to register the shares
underlying the warrants under the Securities Act of 1933, as amended.
Euroventures is a major shareholder of the Company. See "Ownership of Common
Stock." Roger Claes, a director of the Company, is a partner and managing
director of Euroventures Benelux Team B.V., which manages Euroventures.
8
<PAGE> 11
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of May 31, 1997, with
respect to ownership of the Company's Common Stock by (i) each person who is
known by the Company to own beneficially 5% or more of the Common Stock, (ii)
each Named Officer, (iii) each director of the Company and (iv) all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Shares Beneficially Percentage
Name* Owned Ownership
- ---------------------------------------- -------------------- ----------
<S> <C> <C>
EBTB II B.V. 4,796,657(1)(2) 27.6%
Euroventures Benelux Team B.V.
Julianaplein 10
NL-5211 BC's Hertogenbosch
The Netherlands
Euroventures Benelux I B.V. 2,498,879 14.7%
Julianaplein 10
NL-5211 BC's Hertogenbosch
The Netherlands
Euroventures Benelux II B.V. 2,297,778(2) 13.2%
Julianaplein 10
NL-5211 BC's Hertogenbosch
The Netherlands
BeneVenture Founders 1,136,613(3) 6.7%
Risicokapitaalfonds II N.V.
Regentlaan 54 Bus 2
1000 Brussels, Belgium
Floyd Eide 258,775(4) 1.5%
Albert Kile 71,375(5) **
Current Directors and Executive Officers:
Roger Claes 8,500(6) **
Aaron Uri Levy 130,000(7) **
William M. Stowell 217,150(8) 1.3%
Robert Southwick 9,000(9) **
Trude C. Taylor 260,667(10) 1.5%
James G. Turner 313,000(11) 1.8%
All executive officers and 998,167(12) 5.7%
directors as a group (9 persons)
</TABLE>
- ----------
* Includes addresses of 5% or more shareholders.
** Less than 1%.
9
<PAGE> 12
(1) Includes the shares owned by Euroventures Benelux I B.V. and
Euroventures Benelux II B.V., which are widely held venture capital
funds. According to filings made with the Securities and Exchange
Commission pursuant to Section 13(d) of the Securities Exchange Act of
1934, Euroventures Benelux Team B.V. is the investment manager of both
such funds and has voting and dispositive power over their shares of the
Company's Common Stock, and EBTB II B.V. is an indirect beneficial owner
of such shares. See Notes (2) and (6).
(2) Includes 375,000 shares subject to currently exercisable warrants. See
Notes (1) and (6).
(3) As reported in a Schedule 13D dated May 9, 1996, filed with the
Securities and Exchange Commission.
(4) Represents 258,775 shares subject to options which are exercisable
within 60 days.
(5) Represents 71,375 shares subject to options which are exercisable within
60 days.
(6) Mr. Claes is managing director of Euroventures Benelux I B.V. and a
partner and managing director of Euroventures Benelux Team B.V. and EBTB
II B.V. See Note (1).
(7) Includes 125,000 shares subject to options which are exercisable within
60 days.
(8) Includes 119,150 shares subject to options which are exercisable within
60 days.
(9) Represents 9,000 shares subject to options which are exercisable within
60 days.
(10) Includes 15,000 shares subject to options which are exercisable within
60 days.
(11) Includes 83,500 shares subject to options which are exercisable within
60 days.
(12) See Notes (6) through (11) above. Also includes 6,250 shares owned and
53,600 shares subject to options which are exercisable within 60 days
held by executive officers not named in the foregoing table.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During fiscal year 1997, the following persons filed late reports under
Section 16(a) of the Securities Exchange Act of 1934: Roger Claes (one
transaction); William M. Stowell (option grant and option exercise); Albert Kile
(option grant); EBTB II B.V. (one transaction reported one day late) and
Euroventures Benelux I B.V. (one transaction reported one day late). William
Stowell had filed his forms with the Company on time, but the forms were
misdirected in the mail and were subsequently filed again after the deadline. In
making these disclosures, the Company has relied solely on written
representations of its directors, executive officers and 10% shareholders and
copies of the reports that they have filed with the Securities and Exchange
Commission.
10
<PAGE> 13
AUDITORS OF THE COMPANY
The Company's independent certified public accountants for the fiscal year
ended February 28, 1997 were Deloitte & Touche LLP, which firm the Company
intends to appoint for the current fiscal year. A representative of Deloitte &
Touche LLP is expected to be present at the Meeting with the opportunity to make
a statement if he so desires and to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any shareholder intending to submit to the Company a proposal for inclusion
in the Company's Proxy Statement and proxy for the 1998 Annual Meeting must
submit such proposal so that it is received by the Company no later than March
3, 1998.
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Shareholders calls for the transaction
of such other business as may properly come before the meeting, the Board of
Directors has no knowledge of any matters to be presented for action by the
shareholders other than as set forth above. The enclosed proxy gives
discretionary authority, however, in the event any additional matters should be
presented.
WILLIAM M. STOWELL
Secretary
July 10, 1997
11
<PAGE> 14
DENSE-PAC MICROSYSTEMS, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
AUGUST 15, 1997
KNOW ALL MEN BY THESE PRESENTS that the undersigned hereby constitutes and
appoints AARON URI LEVY and WILLIAM M. STOWELL, and each of them, the attorneys
and proxies of the undersigned with full power of substitution to appear and to
vote all of the shares of Common Stock of Dense-Pac Microsystems, Inc. held of
record by the undersigned on June 20, 1997 at the Annual Meeting of Shareholders
to be held on August 15, 1997, or any adjournment thereof, as designated below.
<TABLE>
<S> <C> <C>
(1) ELECTION OF DIRECTORS: [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as indicated to the contrary to vote for all nominees listed
below). below.
</TABLE>
Roger Claes, Aaron Uri Levy, Robert Southwick, Trude C. Taylor, James G. Turner
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
(2) IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF.
(Continued and to be signed on the other side)
<PAGE> 15
(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DENSE-PAC
MICROSYSTEMS, INC. IF NO VOTE IS INDICATED, THIS PROXY WILL BE VOTED WITH
AUTHORITY FOR THE ELECTION OF DIRECTORS.
YOU ARE URGED TO DATE, SIGN AND RETURN PROMPTLY THIS PROXY IN THE ENVELOPE
PROVIDED. IT IS IMPORTANT FOR YOU TO BE REPRESENTED AT THE MEETING. THE
EXECUTION OF YOUR PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ARE
PRESENT AT THE MEETING.
Date:______________, 1997
-------------------------
SIGNATURE
-------------------------
SIGNATURE
IMPORTANT: Please sign
exactly as your name or
names appear on the share
certificates, and when
signing as an attorney,
executor, administrator,
trustee or guardian, give
your full title as such.
If the signatory is a
corporation, sign the
full corporate name by
duly authorized officer,
or if a partnership, sign
in partnership name by
authorized person.
