-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NGGmCBQWkO8I+kajO+hO4189K7eU+PTaJmfPpA4s6Bw+GbgM446HyYwTm4TuKwEJ OrGbs0Reupp1Jq4ulUqwGA== 0000724910-02-000004.txt : 20020531 0000724910-02-000004.hdr.sgml : 20020531 20020531162347 ACCESSION NUMBER: 0000724910-02-000004 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020531 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NVE CORP /NEW/ CENTRAL INDEX KEY: 0000724910 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 411424202 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-12196 FILM NUMBER: 02668016 BUSINESS ADDRESS: STREET 1: 11409 VALLEY VIEW ROAD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 BUSINESS PHONE: 9528299217 MAIL ADDRESS: STREET 1: 11409 VALLEY VIEW ROAD CITY: EDEN PRAIRIE STATE: MN ZIP: 55344 FORMER COMPANY: FORMER CONFORMED NAME: PREMIS CORP DATE OF NAME CHANGE: 19920703 DEF 14A 1 proxy02.txt 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 [ ] [ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12 NVE CORPORATION - -------------------------------------------------------------------------------- (Name of Registrant as Specified in its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of filing Fee (Check the appropriate box): [X] No fee required [ ] Fee computed on table below per Exchange Act Rule ss. 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: --------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): --------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: --------------------------------------------------------------------------- (5) Total fee paid $___________________________________ [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: --------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: --------------------------------------------------------------------------- (3) Filing Party: --------------------------------------------------------------------------- (4) Date Filed: --------------------------------------------------------------------------- ------------------------------ NVE CORPORATION 11409 VALLEY VIEW ROAD EDEN PRAIRIE, MINNESOTA 55344 ------------------------------ NOTICE AND PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JULY 25, 2002 To the Shareholders of NVE Corporation: The Annual Meeting of Shareholders of NVE Corporation (the "Company") will be held at the Company's headquarters, 11409 Valley View Road, Eden Prairie, Minnesota 55344, on Thursday, July 25, 2002 at 3:30 p.m. Central Daylight Time, for the following purposes: 1. To elect six directors to serve until the next Annual Meeting of Shareholders. 2. To consider and act on such other business as may properly come before the meeting or any adjournment or adjournments thereof. The Company's Board of Directors has fixed the close of business on May 31, 2002 as the record date for the determination of shareholders entitled to receive notice of and to vote at the meeting and any adjournment thereof. By Order of the Board of Directors /s/ Richard George Richard George Secretary June 25, 2002 - -------------------------------------------------------------------------------- WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. - -------------------------------------------------------------------------------- ----------------------------- NVE CORPORATION 11409 VALLEY VIEW ROAD EDEN PRAIRIE, MINNESOTA 55344 ----------------------------- PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS, JULY 25, 2002 This Proxy Statement is furnished to shareholders of NVE Corporation, a Minnesota corporation ("NVE" or the "Company"), in connection with the solicitation of proxies by the Board of Directors of the Company for use at the annual meeting of shareholders to be held on Thursday, July 25, 2002 at 3:30 p.m. local time at the Company's headquarters, 11409 Valley View Road, Eden Prairie, Minnesota 55344,and at any adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. This Proxy Statement and the accompanying form of Proxy were first mailed to shareholders of the Company on or about June 25, 2002. SOLICITATION AND REVOCATION OF PROXIES The costs and expenses of solicitation of proxies will be paid by the Company. In addition to the use of the mails, proxies may be solicited by directors, officers and regular employees of the Company personally or by telephone, but such persons will not be specifically compensated for such services. Proxies in the form enclosed are solicited on behalf of the Board of Directors. Any shareholder giving a proxy in such form may revoke it either by submitting a new proxy card or by completing a ballot at the meeting at any time before it is exercised. Such proxies, if received in time for voting and not revoked, will be voted at the annual meeting in accordance with the specification indicated thereon. If no specification is indicated on a proxy, such proxy will be voted in favor of Proposal 1 described herein. VOTING SECURITIES AND RIGHTS Only shareholders of record at the close of business on May 31, 2002 are entitled to execute proxies or to vote at the annual meeting. As of said date there were outstanding 20,785,549 shares of the Company's common stock, $.01 par value per share (the "Common Stock"). Each holder of Common Stock is entitled to one vote for each share held with respect to the matters mentioned in the foregoing Notice of Annual Meeting of Shareholders and any other matters that may properly come before the meeting. A majority of the outstanding shares entitled to vote are required to constitute a quorum at the meeting. The affirmative vote of a majority of the Common Stock present, in person or by proxy, and entitled to vote at the annual meeting, is required to approve the matters mentioned in the foregoing Notice of Annual Meeting. Proxies indicating abstention from a vote and broker non-votes will be counted toward determining whether a quorum is present at the meeting, but will not be counted toward determining if a majority of the Common Stock present has voted affirmatively. OWNERSHIP OF VOTING SECURITIES BY PRINCIPAL HOLDERS AND MANAGEMENT The following table sets forth certain information as of May 15, 2002 with respect to the Company's Common Stock beneficially owned by each director, by each nominee for director, by each person known to the Company to beneficially own more than five percent of the Company's Common Stock, based solely upon filings made by such persons under Section 13 of the Securities Exchange Act of 1934 (the "Exchange Act"), by each named executive officer set forth in the compensation table and by all executive officers and directors as a group.
NAME ADDRESS SHARES OWNED PERCENT ---- ------- ------------ ------- Norwest Venture Partners 3600 IDS Center 7,577,434(1) 37% Minneapolis, MN 55402 Cypress 3901 North First Street 5,434,243(2) 24% Semiconductor Corporation San Jose, CA 95134 James Daughton 18687 Melrose Chase 2,645,750(3) 12% Eden Prairie, MN 55347 Motorola, Inc. 1303 East Algonquin Rd. 1,750,000(4) 8% Schaumberg, IL 60196 Richard George 5145 Tifton Dr. 509,674 2% Edina, MN 55439 Daniel A. Baker 11409 Valley View Rd. 352,000(5) 2% Eden Prairie, MN 55344 Jay Brown 11409 Valley View Rd. 288,173(6) 1% Eden Prairie, MN 55344 John Myers 11409 Valley View Rd. 244,037(7) 1% Eden Prairie, MN 55344 Robert Irish 17910-39th Place North 206,261(8) 1% Plymouth, MN 55446-1318 Terrence Glarner 3600 IDS Center 48,000(9) * Minneapolis, MN 55402 Herbert Goronkin 8641 S. Willow Dr. 9,500(10) * Tempe, AZ 85284 Jeffrey K. Kaszubinski 3901 North First Street 0(11) * San Jose, CA 95134 All Company directors, officers, and owners of more than 5% of the stock as a group (12 entities) 19,065,072 81% ________ *Less than 1% (1) Includes shares held by Norwest Equity Partners IV, LLP, and Norwest Equity Partners V, LLP. (2) Includes 2,000,000 shares issuable upon the exercise of a warrant for shares of common stock of the Company. (3) Includes 185,750 shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. Excludes unvested options to purchase up to 102,250 shares of common stock of the Company. (4) Excludes 30,000 shares issuable upon the exercise of options that are held by Mr. Goronkin. (5) Includes 350,000 shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. Excludes unvested options to purchase up to 350,000 shares of common stock of the Company. (6) Includes 54,250 shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. Excludes unvested options to purchase up to 235,750 shares of common stock of the Company. (7) Consists entirely of shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. Excludes unvested options to purchase up to 306,750 shares of common stock of the Company. (8) Includes 24,000 shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. (9) Includes 45,000 shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. Excludes shares held by Norwest Equity Partners, for which Mr. Glarner is a consultant. (10) Includes of 7,500 shares issuable upon the exercise of options that are currently or will become exercisable within 60 days of May 1, 2002. Excludes unvested options to purchase up to 22,500 shares of common stock of the Company and shares held by Motorola, Inc., Mr. Goronkin's employer. (11) Excludes shares and warrant held by Cypress Semiconductor Corporation, Mr. Kaszubinski's employer.
PROPOSAL 1 ELECTION OF BOARD OF DIRECTORS The Board of Directors has set the number of directors at six. All six directors are to be elected at the annual meeting to serve until the 2003 annual meeting of shareholders. The Board of Directors has nominated the following persons for election: TERRENCE GLARNER, DANIEL A. BAKER, JAMES DAUGHTON, HERBERT GORONKIN, ROBERT IRISH, AND JEFFREY K. KASZUBINSKI All of the nominees for election as directors are presently directors of the Company except Mr. Kaszubinski. Mr. Kaszubinski was designated by Cypress Semiconductor Corporation ("Cypress") for nomination under their stock purchase agreement. The Board of Directors has no reason to believe that any of the nominees will be unable to serve as a director. It is the intention of the individuals named as proxies to vote for the nominees. If any nominee should be unable to serve as a director, it is the intention of the individuals named as proxies to vote for the election of such person or persons as the Board of Directors may, in its discretion, recommend. The affirmative vote of a majority of the Common Shares present, in person or by proxy, and entitled to vote at the annual meeting is required to elect each director. NOMINEES FOR ELECTION TO BOARD OF DIRECTORS Information regarding the persons nominated for election as directors is as follows:
NOMINEE AND PRINCIPAL OCCUPATION AGE DIRECTOR SINCE ------------------------------------------ ----- ---------------- Terrence Glarner 59 1999 President, West Concord Ventures, Inc. Daniel A. Baker 44 2001 President and Chief Executive Officer NVE Corporation James Daughton 65 1989 Chief Technical Officer NVE Corporation Herbert Goronkin 66 1995 Vice President Motorola Laboratories Robert Irish 62 1992 Consultant Jeffrey K. Kaszubinski 46 New CEO, Silicon Magnetic Systems, a Cypress Subsidiary Corporation
Terrence Glarner, Director and Chairman of the Board, age 59, has been a director since August, 1999, and Chairman since January, 2001. Since February, 1993, Mr. Glarner has been the President of West Concord Ventures, Inc. Mr. Glarner also consults with Norwest Venture Capital, an affiliate of Norwest Growth Fund, Inc. Prior to starting West Concord Ventures, Mr. Glarner was the President of North Star Ventures, Inc. from 1988 to February 1993, a firm which he joined in 1976. From 1968 to 1976, Mr. Glarner was a Securities Analyst and Vice President in the Research Department of Dain Bosworth, Inc. Mr. Glarner has a B.A. in English from the University of St. Thomas, a J.D. from the University of Minnesota School of Law and is a Chartered Financial Analyst. Mr. Glarner supervised investments in approximately 100 small companies during his involvement with North Star Ventures. Mr. Glarner currently serves as a director on the following publicly- held companies: Aetrium, Cima Labs, Datakey, FSI, and SpectraScience. He is also a director of Oncotech, Inc. Daniel A. Baker, President, Chief Executive Officer and Director, age 44, was elected an officer and director of the Company in January, 2001. From 1993 until joining the Company, he was President and CEO of Printware, Inc., a public company that makes high-speed laser imaging systems. Dr. Baker has 25 years of experience in high-tech industries, including executive positions with Minntech Corporation and Percom Data Corporation. Dr. Baker holds Ph.D. and M.S. degrees in engineering from the University of Minnesota, an M.B.A. in finance from the University of Minnesota, and a B.S. in engineering from Case Western Reserve University. He holds 15 patents. James Daughton, Chief Technical Officer and Director, age 65, has been a director of the Company since its inception and Chief Technical Officer since January, 2001. He served as NVE's Chairman and CEO from the company's inception to January, 2001. From 1974 to 1989, Dr. Daughton held various research and product development positions at Honeywell, Inc. including Vice President of The Solid State Development Center. From 1964 to 1974, he developed magnetic and semiconductor memory devices at IBM Corporation. Dr. Daughton holds a doctorate in electrical engineering from Iowa State University and is an adjunct professor of physics at the University of Minnesota. He has more than 20 issued or pending patents. Herbert Goronkin, Director, age 66, has been a director of the Company since 1995. From 1977 to the present, Dr. Goronkin has held various positions including the position of Vice President and Director of the Physical Research Laboratory at Motorola Laboratories in Phoenix, Arizona. Dr. Goronkin has more than 25 patents and has authored numerous papers. He received B.S., M.S. and Doctorate degrees in physics from Temple University in 1961, 1962 and 1973, respectively. He is a Fellow of the IEEE and a member of both the American Physical Society and Sigma Xi. Robert Irish, Director, age 62, has been a director of the Company since 1992. Additionally, Mr. Irish was a founding investor in NVE. Mr. Irish recently formed the RICE Group to consult in Information Technology. Since 1994, Mr. Irish has held a number of sales, consulting and technical positions, most recently with Compuware and Prodea Software. From 1988 to 1994, Mr. Irish acted as a consultant and co-investor with Norwest Venture Capital. From 1981 to 1988, Mr. Irish was the Executive Vice President of Centron DPL, responsible for technical marketing, product marketing and research and development. Prior to that time, from 1966 to 1981, Mr. Irish worked at IBM in management, sales and systems. Mr. Irish attended Rensselaer Polytechnic Institute and received a B.S. in Physics from Syracuse University in 1965. He has three issued patents dealing with magnetic intrusion detection systems. Jeffrey K. Kaszubinski, age 46, was designated for nomination by Cypress under their stock purchase agreement. Mr. Kaszubinski is currently president and CEO of Silicon Magnetic Systems, a Cypress Subsidiary Corporation which is developing magnetic random access memory (MRAM) technology and products. He has worked in the semiconductor memory business for 24 years, the past 15 at Cypress Semiconductor in a variety of executive positions, including product line management, manufacturing, quality assurance, and engineering. Prior to joining Cypress, Mr. Kaszubinski worked at Texas Instruments, Incorporated, where he led the development of ground-breaking nonvolatile memories. Mr. Kaszubinski received a BSEE degree in 1978 from the University of New Orleans and holds five nonvolatile memory patents. COMMITTEES OF THE BOARD OF DIRECTORS There were five meetings of the Board of Directors during the year ended March 31, 2002 ("Fiscal 2002"). The Board of Directors has established Audit and Compensation Committees. Both committees consist of Messrs. Glarner, Goronkin, and Irish. Each of the members of the Audit Committee is independent of management and the Company. The Audit Committee met four times in Fiscal 2002. The Report of the Audit Committee is included as an Exhibit to this Proxy Statement. The Compensation Committee reviews and recommends to the Board of Directors the compensation guidelines for executive officers and other key personnel and the composition and levels of participation in incentive compensation and fringe benefits for all employees. In addition, the committee oversees administration of the Company's 2000 Stock Option Plan. The Compensation Committee met three times in Fiscal 2002. No member of the Compensation Committee is or has been an officer of the Company. The Company has no compensation committee interlocks--that is, no officer of the Company serves as a Director or a compensation committee member of a company that has an officer or former officer serving on the Company's Board of Directors or the Compensation Committee. Each incumbent director attended at least 75% of all of the meetings of the Board of Directors and applicable committees held while each was a director during such fiscal year, except Messrs. Goronkin and Glarner attended 60% of the Board of Directors meetings and Mr. Goronkin attended one of the three Compensation Committee meetings. REMUNERATION OF MEMBERS OF THE BOARD OF DIRECTORS Non-employee members of the Board of Directors receive no cash compensation for their service on the Board. Mr. Irish is affiliated with a consulting company which received $15,207 for services provided to the Company in Fiscal 2002. Non-employee Directors receive an option to purchase 30,000 shares upon initial election and 10,000 on each reelection to the Board of Directors. EXECUTIVE COMPENSATION The following table indicates the compensation paid in each of the past three fiscal years to the Company's Chief Executive Officer and each of the next most highly compensated executive officers whose total annual salary and bonus for Fiscal 2002 exceeded $100,000 ("Named Executive Officers"):
ANNUAL OTHER COMP- COMPENSATION ENSATION(1) FISCAL YEAR ----------------------- ----------- NAME AND TITLE ENDED 3/31 SALARY(2) BONUS(3) - -------------- ----------- --------- -------- Daniel A. Baker(4) 2002 $175,000 $25,000 $40,250 President and CEO 2001 $31,186 0 $7,173 James Daughton(5) 2002 $120,000 $80,000 $27,600 Chief Technical Officer 2001 $150,000 0 $34,500 2000 $140,000 $80,000 $32,200 John Myers 2002 $111,883 $12,500 $25,733 Vice President, 2001 $107,600 0 $24,748 Isolator Business Unit 2000 $103,040 0 $23,699 Jay Brown 2002 $102,333 $12,500 $25,733 Vice President, 2001 $94,215 0 $21,669 Sensor Business Unit 2000 $89,370 0 $20,555 (1) Representing 2% matching contributions to the Company's Employee Retirement 401(k), together with other fringe benefits such as insurance premiums. (2) As of March 1, 2002, base salaries of Messrs. Myers and Brown were increased to $115,000 and $106,000, respectively. The base salaries of Drs. Daughton and Baker remained unchanged. (3) Bonuses earned in consideration of meeting certain business unit and Company goals in Fiscal 2002; paid in Fiscal 2003. (4) Dr. Baker joined the Company as President and CEO in January, 2001. (5) Dr. Daughton was Chairman and CEO until assuming the position of Chief Technical Officer in January, 2001.
EQUITY COMPENSATION PLAN INFORMATION The following table summarizes Common Stock that may be issued as of March 31, 2002 on the exercise of options under our 2000 Stock Option Plan as Amended July 19, 2001. The Plan as Amended was approved by our shareholders.
NUMBER OF SECURITIES REMAINING NUMBER OF AVAILABLE FOR SECURITIES TO FUTURE ISSUANCE BE ISSUED UNDER EQUITY UPON COMPENSATION EXERCISE OF WEIGHTED-AVERAGE PLANS OUTSTANDING EXERCISE PRICE OF (EXCLUDING OPTIONS, OUTSTANDING SECURITIES WARRANTS AND OPTIONS, WARRANTS REFLECTED IN RIGHTS AND RIGHTS COLUMN (A)) PLAN CATEGORY (A) (B) (C) - ------------------------------------------------------------------------------- Equity compensation plans approved by security holders 2,497,750 $ 0.65 2,245,150 Equity compensation plans not approved by security holders - ----------------------------------------------- Total at March 31, 2002 2,497,750 $ 0.65 2,245,150 ===============================================
OPTION GRANTS DURING FISCAL YEAR 2002 The following table lists all grants of stock options to Named Executive Officers during the last fiscal year:
PERCENT OF TOTAL NUMBER OF SECURITIES OPTIONS GRANTED UNDERLYING OPTIONS TO EMPLOYEES IN FISCAL EXERCISE OR EXPIRATION NAME GRANTED (#) YEAR BASE PRICE DATE - -------------- -------------------- ---------------------- ----------- ---------- James Daughton 113,000 34% $1.217 7/26/11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES The following table indicates the exercise of stock options during the last completed fiscal year by Named Executive Officers:
NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING IN-THE-MONEY OPTIONS NUMBER OF UNEXERCISED OPTIONS HELD AT SHARES HELD AT MARCH 31, MARCH 31, 2002 ACQUIRED ON VALUE 2002 (EXERCISABLE/ (EXERCISABLE/ NAME EXERCISE REALIZED(1) UNEXERCISABLE) UNEXERCISABLE)(2) - ----------------------------------------------------------------------------------------- Daniel A. Baker - - 350,000/350,000 $239,540/$239,540 James Daughton - - 177,000/124,250 $294,124/$199,757 John Myers - - 231,875/118,125 $424,007/$216,003 Jay Brown 64,750 $101,228 47,250/92,750 $86,401/$169,603 (1) Based of the market value at the date of exercise less the exercise price. (2) Based on the fair market value of the Company's Common Stock at March 31, 2002 of $2.00 per share less the exercise price of the options.
EMPLOYMENT AGREEMENT Daniel A. Baker has an employment agreement with the Company which set his initial salary and contains non-competition, confidentiality and assignment of invention provisions benefiting the Company. The agreement may be terminated by either the Company or the employee upon thirty days written notice. In addition, the Company may terminate Dr. Baker's employment for cause and upon his death or incapacity. BONUS PROGRAM In Fiscal 2002 the Company implemented incentive compensation plans to provide an opportunity for executive officers and senior management to receive cash bonuses based on individual and Company performance. Bonuses (if any) will be given at the discretion of the Board of Directors. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires the Company's directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission ("SEC") initial reports of ownership and changes in ownership of Common Shares and other equity securities of the Company. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with all Section 16(a) forms they file. To our knowledge, based solely on review of the copies of such reports furnished to the Company and written representations that no other reports were required, all required Section 16(a) filings applicable to officers, directors and greater than ten percent shareholders in Fiscal 2002 were timely filed. PROPOSALS OF SHAREHOLDERS Proposals of shareholders intended to be presented at our next annual meeting of shareholders must be received by the Secretary of NVE Corporation at our executive offices in Eden Prairie, Minnesota, no later than February 15, 2003 for inclusion in our proxy statement and proxy relating to that meeting. Upon receipt of any such proposal, we will determine whether or not to include such proposal in our proxy statement and proxy in accordance with regulations governing the solicitation of proxies. MISCELLANEOUS The Board of Directors is not aware that any matter other than those described in the Notice of Annual Meeting of Shareholders to which this Proxy Statement is appended will be presented for action at the meeting. If, however, other matters do properly come before the meeting, it is the intention of the persons named in the proxy to vote the proxied shares in accordance with their best judgment on said matters. It is important that proxies be returned promptly with instructions as to voting. Shareholders who do not expect to attend the meeting in person are urged to mark, sign, date and send in the proxies by return mail. By Order of the Board of Directors June 25, 2002 EXHIBIT AUDIT COMMITTEE REPORT May 31, 2002 The Audit Committee reviews the Company's financial reporting process on behalf of the Board of Directors, and acts under a written charter first adopted and approved by the Board of Directors on March 20, 2001. Management has the primary responsibility for the financial statements and the reporting process. The Company's independent auditors are responsible for expressing an opinion on the conformity of our audited financial statements to generally accepted accounting principles. In this context, the Audit Committee has reviewed and discussed with management and the independent auditors the audited financial statements. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 90 (Audit Committee Communications). In addition, the Audit Committee has received from the independent auditors the written disclosures required by Independence Standards Board No. 1 (independence discussions with Audit Committees) and discussed with them their independence from the Company and its management. The Audit Committee has also considered whether the independent auditors provision of other non-audit services to the Company is compatible with the auditors' independence. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company's Annual Report on SEC Form 10-KSB for the year ended March 31, 2002, for filing with the Securities and Exchange Commission. FEES BILLED TO COMPANY BY ERNST & YOUNG, LLP DURING FISCAL 2002: Audit Fees Total fees of $29,500 were incurred by the Company relating to the audit of the March 31, 2002 financial statements, review of the financial statements included in the Company's Fiscal 2002 quarterly reports on Form 10-QSB and other matters directly relating to the March 31, 2002 audit and filing of the March 31, 2002 Form 10-KSB. All Other Fees Fees billed to the Company by Ernst & Young, LLP and associated entities during Fiscal 2002 for all other non-audit services rendered to the Company, primarily related to tax services, totaled $16,866. AUDIT COMMITTEE MEMBERS - ----------------------- Terrence Glarner Herbert Goronkin Robert Irish [NVE CORPORATION LOGO] PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned hereby appoints Richard George and Daniel A. Baker, or either of them, the attorneys and proxies of the undersigned, with full power of substitution, to attend the annual meeting of shareholders of NVE Corporation, a Minnesota corporation (hereinafter called the "Company"), to be held on Thursday, July 25, 2002 at 3:30 p.m., local time, at the Company's headquarters, 11409 Valley View Road, Eden Prairie, Minnesota 55344, and any adjournment thereof, and thereat to vote the undersigned's shares in the Company. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. SEE REVERSE FOR VOTING INSTRUCTIONS. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1. 1. Election of directors: To elect the management slate of directors. 01 Terrence Glarner 03 James Daughton 05 Robert Irish 02 Daniel A. Baker 04 Herbert Goronkin 06 Jeffrey K. Kaszubinski [ ] Vote FOR all nominees (except as marked) [ ] Vote WITHHELD from all nominees Instructions: To withhold authority to vote for any nominee, strike a line through the name(s). 2. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. The undersigned hereby acknowledges receipt of Notice of said Annual Meeting and the accompanying Proxy Statement, each dated June 25, 2002. Date __________________________________ Signature(s) in Box ___________________________________________ | | | | |___________________________________________| Please sign exactly as name appears on the label. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. -----END PRIVACY-ENHANCED MESSAGE-----