<PAGE>
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 Section240.14a-11(c) or
Section240.14a-12
ROBINSON NUGENT, 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:
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/ / 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
ROBINSON NUGENT, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 6, 1997
The Annual Meeting of Shareholders of Robinson Nugent, Inc. will be held at
the Holiday Inn Lakeview, 505 Marriott Drive, Clarksville, Indiana, on Thursday,
November 6, 1997, at 10:00 a.m. (EST) for the following purposes:
1. To elect three directors to serve for terms of three years and two
directors for terms of two years;
2. To vote upon the approval of an amendment to the 1993 Robinson Nugent,
Inc. Employee and Non-Employee Director Stock Option Plan;
3. To ratify the selection by the Board of Directors of Deloitte & Touche
LLP as certified public accountants for the Company for the fiscal year
ending June 30, 1998; and
4. To transact such other business as may properly come before the meeting.
Holders of Common Shares of record at the close of business on September 15,
1997 are entitled to notice of and to vote at the Annual Meeting.
By Order of the Board of Directors
Richard L. Mattox, Secretary
October 3, 1997
New Albany, Indiana
YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, OR IF
YOU DO PLAN TO ATTEND BUT WISH TO VOTE BY PROXY, PLEASE DATE, SIGN, AND MAIL
PROMPTLY THE ENCLOSED PROXY. A RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE.
<PAGE>
ROBINSON NUGENT, INC.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 6, 1997
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Robinson Nugent, Inc. (the "Company") of proxies to be
voted at the Annual Meeting of Shareholders to be held at 10:00 a.m. (EST) on
November 6, 1997, and at any adjournment thereof. The meeting will be held at
the Holiday Inn Lakeview, 505 Marriott Drive, Clarksville, Indiana. This proxy
statement and the accompanying form of proxy were first mailed to shareholders
on or about October 3, 1997.
A shareholder, who signs and returns the enclosed proxy, may revoke it at
any time before it is exercised. The revocation must be executed by written
notice to the Secretary of the Company, by the submission of a subsequent proxy
relating to the same shares or by attending the Annual Meeting and voting in
person. All proxies returned prior to the meeting, and not revoked, will be
voted in accordance with the instructions contained therein. Any proxy not
specifying to the contrary will be voted (1) FOR the election of the nominees
for director named below, (2) FOR the approval of an amendment to the 1993
Robinson Nugent, Inc. Employee and Non-Employee Director Stock Option Plan, and
(3) FOR the proposal to ratify the selection of Deloitte & Touche LLP as
certified public accountants for the Company for the fiscal year ending June 30,
1998.
As of the close of business on September 15, 1997, the record date for the
Annual Meeting, there were outstanding and entitled to vote 4,891,765 Common
Shares of the Company. Each outstanding Common Share is entitled to one vote.
The Company has no other voting securities. Shareholders do not have cumulative
voting rights.
The presence in person or by proxy of a majority of the Common Shares is
necessary in order to constitute a quorum at the Annual Meeting. Proxies marked
as abstaining will be treated as present for purposes of determining a quorum
and will be treated as present and entitled to vote on any matter as to which
abstention is indicated. Proxies returned by brokers as "non-votes" on behalf of
shares held in street name because the beneficial owner has withheld voting
instructions will be treated as present for purposes of determining a quorum but
will not be counted as voting on any matter as to which a non-vote is indicated
on the proxy.
A copy of the Annual Report of the Company, including financial statements
and a description of operations for the fiscal year ended June 30, 1997, has
preceded or accompanies this proxy statement. The financial statements contained
in that report are not incorporated by reference herein.
All expenses in connection with solicitation of proxies will be borne by the
Company. The Company will provide copies of this proxy statement, the
accompanying form of proxy, and the Annual Report to brokers, dealers, banks and
voting trustees, and their nominees, for mailing to beneficial owners and, upon
request therefor, will reimburse such record holders for their reasonable
expenses in forwarding solicitation material. The Company expects to solicit
proxies primarily by mail, but directors, officers and regular employees of the
Company may also solicit in person or by telephone.
Shareholder proposals to be considered for presentation to the 1998 Annual
Meeting of Shareholders must be submitted in writing and received by the Company
on or before June 5, 1998.
2
<PAGE>
The mailing address of the principal offices of the Company is 800 East
Eighth Street, Post Office Box 1208, New Albany, Indiana 47151-1208.
BENEFICIAL OWNERSHIP OF COMMON SHARES
The following table sets forth certain data with respect to those persons
known by the Company to be the beneficial owners of five percent or more of the
outstanding Common Shares of the Company as of September 15, 1997 and also sets
forth such data with respect to each director of the Company, each officer
listed in the Summary Compensation Table, and all directors and executive
officers of the Company as a group. Except as otherwise indicated in the notes
to the table, each beneficial owner possesses sole voting and investment power
with respect to the shares indicated.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
SHARES (1) OF CLASS
--------------- ------------
<S> <C> <C>
PRINCIPAL SHAREHOLDERS
Samuel C. Robinson 1,141,274(2) 21.9%
226 Lely Beach Blvd.
Bonita Springs, Florida 34134
Lawrence Mazey 360,329(8) 6.9%
228 Santee Path
Louisville, Kentucky 40207
James W. Robinson 307,404(8) 5.9%
7621 State Road 62
Lanesville, Indiana 47136
Dimensional Fund Advisors, Inc. 296,000 5.7%
1299 Ocean Avenue
Santa Monica, California 90401
DIRECTORS AND EXECUTIVE OFFICERS
Samuel C. Robinson 1,141,274(2) 21.9%
James W. Robinson 307,404(8) 5.9%
Larry W. Burke 218,669(3) 4.2%
Richard L. Mattox 31,810(8) *
Jerrol Z. Miles 17,280(8) *
Diane T. Maynard 19,000(4)(8) *
Patrick C. Duffy 35,000(8) *
Donald C. Neel -- (10) --
Ben M. Streepey 1,000(10) *
Richard W. Strain 14,000(8) *
W. Michael Coutu 43,997(5) *
David W. Pheteplace 30,842(6) *
J. Henk van Melsen 18,200(7) *
Leong Chun Kin 4,200(11) *
All directors and executive officers 1,885,376(9) 36.2%
as a group (14 persons)
</TABLE>
- ------------------------
*Less than 1%.
3
<PAGE>
(1) The table includes certain shares owned of record by the Company's 401(k)
Plan and the 1993 Employee Stock Purchase Plan. The participants in these
Plans, as noted in the following footnotes, have voting rights but no rights
of disposition with respect to the shares allocated to their respective
accounts.
(2) Includes 14,608 shares owned of record by Mr. Robinson's wife, as to which
she possesses sole voting and investment power, and 7,443 shares owned of
record by National City Bank, Southern Indiana, as trustee for the benefit
of a child, as to which Mr. Robinson and the trustee share voting and
investment power. Mr. Robinson disclaims any beneficial interest in these
shares.
(3) Includes 348 shares owned of record by Mr. Burke's wife, as to which he
disclaims any beneficial interest; 153,672 shares subject to immediately
exercisable options granted pursuant to the Company's Employee Stock Option
Plans; and 63,796 shares allocated to Mr. Burke's account pursuant to the
Company's 401(k) Plan and the 1993 Employee Stock Purchase Plan.
(4) Ms. Maynard shares voting and investment power with her husband with
respect to shares.
(5) Includes 27,500 shares subject to immediately exercisable options granted
pursuant to the Company's 1993 Employee Stock Option Plan.
(6) Includes 25,000 shares subject to immediately exercisable options granted
pursuant to the Company's 1993 Employee Stock Option Plan.
(7) Represents 18,200 shares subject to immediately exercisable options granted
pursuant to the Company's 1993 Employee Stock Option Plans.
(8) Includes 14,000 shares which each named individual may acquire upon
exercise of stock options granted to Non-Employee members of the Board of
Directors under the 1993 Employee and Non-Employee Director Stock Option
Plan.
(9) Includes in the aggregate 314,272 shares which may be acquired within 60
days upon the exercise of outstanding stock options held by Non-Employee
directors and executive officers and 63,796 shares allocated to the accounts
of executive officers pursuant to the Company's 401(k) Plan and the 1993
Employee Stock Purchase Plan.
(10) On January 23, 1997, the Board of Directors appointed Donald C. Neel and
Ben M. Streepey to the Board.
(11) Represents 4,200 shares subject to immediately exercisable options granted
pursuant to the Company's 1993 Employee Stock Option Plan.
1. ELECTION OF DIRECTORS
NOMINEES
The Bylaws of the Company provide for ten directors, divided into two
classes of three persons and one class of four persons, each of whom is to be
elected for a three-year term. On January 23, 1997, the Board of Directors
appointed Donald C. Neel and Ben M. Streepey to fill existing vacancies on the
board. Messrs. Neel and Streepey have been nominated for election at the annual
meeting for two-year terms, and Samuel C. Robinson, Jerrol Z. Miles and Richard
W. Strain, whose terms of office expire at the annual meeting, each have been
nominated for reelection to an additional three-year term.
4
<PAGE>
Unless authority to vote for such nominees is withheld, the accompanying
proxy will be voted FOR the election of Messrs. Neel, Streepey, Robinson, Miles
and Strain. However, the persons designated as proxies reserve the right to vote
for another person designated by the Board of Directors in the event any nominee
is unable or unwilling to serve. The Board of Directors has no reason to believe
that any nominee will be unable or unwilling to serve. Proxies will not be voted
for more than five nominees. Directors are elected by a plurality of the Common
Shares voted in the election.
The following table sets forth information with respect to each nominee for
election to the Board of Directors, and with respect to each director whose term
of office will continue.
<TABLE>
<CAPTION>
SERVED
AS TERM OF
POSITIONS HELD DIRECTOR OFFICE
NAME AGE WITH THE COMPANY SINCE EXPIRES
- ------------------------- --- ------------------------- -------- --------
<S> <C> <C> <C> <C>
Samuel C. Robinson 65 Chairman of the Board of 1955 1997
Directors
James W. Robinson 63 Director 1955 1999
Larry W. Burke 57 President and Chief 1990 1999
Executive Officer and
Director
Richard L. Mattox 63 Secretary and Director 1964 1998
Jerrol Z. Miles 57 Director 1974 1997
Diane T. Maynard 49 Director 1990 1998
Patrick C. Duffy 60 Director 1991 1998
Richard W. Strain 56 Director 1991 1997
Donald C. Neel 52 Director January 1997
1997
Ben M. Streepey 41 Director January 1997
1997
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS
Except as described below, the principal occupations of the directors and
nominees have not changed during the past five years.
Samuel C. Robinson retired as Chairman of the Board and Chief Executive
Officer of the Company on June 30, 1985. He was reelected to the position of
Chairman of the Board on March 6, 1990. He also served as a director of National
City Bank, Southern Indiana, New Albany, until February, 1994.
James W. Robinson served as Executive Vice President and Treasurer of the
Company until June 30, 1985, at which time he was elected as Chairman of the
Board. He served as Chairman of the Board of the Company until his resignation
on January 29, 1987. Mr. Robinson is active in various independent investments
unrelated to the activities of the Company. He is also a director of Caldwell
Tanks, Inc., Community Bank of Southern Indiana, Hughes Group, Inc., StemWood
Corp., CT Services Corp., SCI Broadcasting, Inc., Community Bank Shares of
Indiana, Inc., and Sunnyside Communications, Inc., all of which are located in
the Louisville, Kentucky metropolitan area.
5
<PAGE>
Larry W. Burke has served as President and Chief Executive Officer of the
Company since March 6, 1990. He served as Executive Vice President of the
Company from April, 1986 to March, 1990. Commencing in 1996, Mr. Burke served as
a Director of Heritage Bank of Southern Indiana, a subsidiary of Community Bank
Shares of Indiana, Inc. He also serves as a member of the Board of Advisors of
Indiana University Southeast, New Albany, Indiana.
Richard L. Mattox is a partner in the law firm of Mattox & Mattox in New
Albany, Indiana and acted as legal counsel to the Company during fiscal 1997.
Jerrol Z. Miles is a Senior Vice President of National City Bank, Kentucky,
located in Louisville, Kentucky, where his primary responsibility is management
of commercial loans and special credit departments. He also serves as a member
of the Board of Advisors of Indiana University Southeast, New Albany, Indiana.
Diane T. Maynard is the owner of several small businesses in the Louisville,
Kentucky area.
Patrick C. Duffy has been a management consultant since 1988 to various
businesses with emphasis on system management and electronics research,
development and manufacturing. Prior to 1998, Mr. Duffy was president of
Chrysler Corporation Space Division. Chrysler Corporation Space Division
designed and manufactured automotive wire harness and was involved with the
Apollo launch program. He was the President and owner of Switches, Inc., an
Indiana company that designed and manufactured electronics for the automotive
industry. Mr. Duffy is Chairman of the Board of Acordia Southeast, an insurance
brokerage firm covering Florida, Georgia and Louisiana, with headquarters in
Clearwater, Florida.
Donald C. Neel is president and CEO of Health Network International (HNI).
HNI develops software and services in the field of personal health management.
He was formerly an executive at Eli Lilly and Company holding a variety of
global positions in finance, information systems and general management. Mr.
Neel is a member of Ball State University's Advisory Board for the Center for
Information and Communication Sciences.
Ben M. Streepey is Vice President-Business Printers and General
Manager-Laser Printers for Lexmark International located in Lexington, Kentucky.
He is responsible for worldwide research, development and manufacturing for
business printers and related supplies.
Richard W. Strain has held a variety of positions with Eli Lilly and
Company. From July 1984 until 1990, he served as president of the Medical
Instrument Systems Division; and from 1990 to April 1992, he served as vice
president for Business Development and Pricing. In May 1992, Mr. Strain was
elected as president/CEO of Heart Rhythm Technologies, and in December 1993 he
returned to Eli Lilly and Company headquarters. Since his retirement from Eli
Lilly and Company, Mr. Strain has been president/ CEO of a biotech company,
participated in healthcare consulting, and served on several boards.
FAMILY RELATIONSHIPS
Samuel C. Robinson and James W. Robinson are brothers. There is no other
family relationship among the directors and executive officers of the Company.
6
<PAGE>
COMPENSATION OF DIRECTORS
In fiscal 1997, members of the Board of Directors who are not employees of
the Company received remuneration in the amount of $8,000 per year, and in
addition received $1,200 for each meeting of the Board of Directors attended.
Committee members received a minimum of $400 per meeting attended plus $200 per
hour for attendance beyond two hours. During fiscal 1997, Samuel C. Robinson
received for his services, as Chairman of the Board of Directors, $2,000 per
quarter and $1,700 per meeting, plus reimbursement of expenses. The Chairpersons
of the Audit and Compensation Committees received $500 for their services in
such capacities during fiscal 1997. Members of the Board of Directors who are
employees of the Company receive no separate remuneration for their service as
directors. The same compensation plan is effective for fiscal 1998.
Under the provisions of the 1993 Employee and Non-Employee Director Stock
Option Plan approved by the shareholders in November, 1993, Non-Employee
directors are granted non-qualified stock options (NQSOs) annually to purchase
4,000 Common Shares of the Company at the then current market price. Such
options were granted to seven Non-Employee Directors on September 13, 1993,
September 13, 1994, September 13, 1995 and September 13, 1996, at an exercise
price of $8.75, $6.00, $8.625, and $4.75 per Common Share, respectively.
Additional options to purchase 4,000 Common Shares were granted on September 13,
1997 to eight Non-Employee Directors with an exercise price of $7.375 per Common
Share. Options are exercisable 50% after one year from date of grant and 100%
after two years from date of grant, and expire ten years from the date of grant.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is comprised of Richard
L. Mattox, Diane T. Maynard, Ben M. Streepey, and Richard W. Strain. The
Compensation Committee also serves as the Stock Option Committee of the Board of
Directors. The responsibilities of the Compensation Committee include making
recommendations to the Board of Directors with respect to: compensation
arrangements for the executive officers of the Company; policies relating to
salaries and job descriptions; insurance programs; and benefit programs of the
Company, including its retirement plans. The Stock Option Committee administers
the 1993 Employee and Non-Employee Director Stock Option Plan. Each of these
committees met two times during fiscal 1997.
The Audit Committee of the Board of Directors is comprised of Patrick C.
Duffy, Donald C. Neel, James W. Robinson, and Jerrol Z. Miles. The Audit
Committee reviews with the auditors the scope of the audit work performed, any
questions arising in the course of such work and inquiries as to other pertinent
matters such as internal accounting controls, financial reporting, security and
personnel staffing. The committee met six times during fiscal 1997.
The Board of Directors has no Nominating Committee. The Board of Directors
will consider for nomination as directors persons recommended by shareholders.
Such recommendations must be in writing and delivered to the Secretary, Robinson
Nugent, Inc., P. O. Box 1208, New Albany, Indiana 47151-1208.
The Board of Directors met five times during fiscal 1997. No director
attended fewer than 75% of the meetings of the Board of Directors and meetings
of any committee of the Board of Directors of which he or she was a member.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 1997, the Compensation Committee was comprised of Richard
L. Mattox, Diane T. Maynard, Ben M. Streepey, and Richard W. Strain. Except for
Mr. Richard L. Mattox and Mr. James W. Robinson, none of the other members of
the Compensation Committee are now serving or previously have served as officers
of the Company or any subsidiary, and none of the Company's executive officers
serve as directors of, or in any compensation-related capacity for, companies
with which members of the Compensation Committee are affiliated. Mr. Richard L.
Mattox serves as Corporate Secretary of the Company and various subsidiaries,
but receives no compensation for his services in such capacity. Mr. James W.
Robinson held various executive officer positions with the Company until his
retirement in 1987.
EXECUTIVE COMPENSATION
GENERAL
The following Summary Compensation Table sets forth certain information with
respect to the aggregate compensation paid during each of the last three years
to the Company's President and Chief Executive Officer and each of the other
executive officers of the Company whose salary and bonus exceeded $100,000
during fiscal 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ------------------------
------------------------------------- RESTRICTED
OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
SALARY BONUS COMPENSATION AWARD(S) SAR'S COMPENSATION
YEAR ($) ($) ($)(1) ($) #(2) ($)(3)
--------- --------- --------- --------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Larry W. Burke, President 1997 216,491 21,000 5,505 -- 15,750 62,208
and Chief Executive 1996 206,250 -- 6,997 -- 15,000 66,506
Officer 1995 201,049 17,500 8,840 -- 13,000 63,098
W. Michael Coutu, 1997 180,479 11,900 2,408 -- 8,600 9,498
Vice President of 1996 130,000 -- 3,986 -- 8,200 10,261
Operations 1995 113,529 6,400 5,036 -- 7,500 7,892
David W. Pheteplace, (4) 1997 293,708 19,000 -- -- 50,000 697
Vice President and General 1996 -- -- -- -- -- --
Manager of North 1995 -- -- -- -- -- --
American Operations
Leong Chun Kin, (5) 1997 214,625 -- -- -- 8,400 --
Managing Director, 1996 216,020 -- -- -- -- --
Asia Pacific Operation 1995 40,426 -- -- -- -- --
J. Henk van Melsen, (6) 1997 158,114 -- -- -- 8,400 36,434
Managing Director, 1996 198,106 -- -- 8,000 39,207
European Operations 1995 200,904 4,018 -- -- 6,000 35,233
</TABLE>
- ------------------------
(1) Represents imputed interest for 1997 attributable to interest-free loans
authorized by the Board of Directors in connection with the purchase of
Common Shares of the Company under the 1993 Employee Stock Purchase Plan.
8
<PAGE>
(2) Represents options granted in 1997 under the 1993 Employee and Non-Employee
Director Stock Option Plan.
(3) Includes contributions by the Company on behalf of the named persons and the
group to the Company's Retirement Plan and 401(k) Plan, and pursuant to
deferred compensation agreements. Effective May 10, 1990, the Company
entered into a deferred compensation agreement with Mr. Burke. The deferred
compensation agreement provides for payments of $50,000 per year to a trust
administered by PNC Bank, Kentucky, Inc., Louisville, Kentucky, as
supplemental retirement income benefits to Mr. Burke. The Company also
entered into a deferred compensation agreement with Mr. van Melsen on
January 1, 1994, requiring the Company to contribute to a fund administered
by Swiss Life Insurance for supplemental retirement benefits in addition to
the Netherland's government pension plan. The 1997 fiscal contribution to
this fund was $36,434. These agreements continue until termination of the
respective employment relationships.
(4) Mr. David W. Pheteplace was appointed Vice President and General Manager of
North American Operations as of September 10, 1996. His salary for fiscal
1997 includes a $15,000 signing bonus, a $27,750 stock award (5,842 shares),
and $99,911 of reimbursement for moving and relocation expenses.
(5) Mr. Leon Chun Kin was appointed Managing Director, Asia Operations, as of
March 29, 1995.
(6) Mr. J. Henk van Melsen was appointed Managing Director, European Operations
as of January 1, 1994.
Each of the officers listed in the Summary Compensation Table serves for a
term of one year.
STOCK OPTIONS
The following table shows the options granted to the named executive
officers of the Company in fiscal 1997. These options are incentive stock
options exercisable as to one-half the shares after the first anniversary of the
date of grant and as to all the shares after the second anniversary of the date
of grant and expire ten years after date of grant.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED ANNUAL
OPTIONS OPTIONS RATES OF SHARE APPRECIATION
GRANTED GRANTED TO EXERCISE FOR OPTION TERM
# OF EMPLOYEES IN PRICE EXPIRATION --------------------------------
NAME SHARES(1) FISCAL YEAR $/SHARE DATE 5%($) 10%($)
- ---------------------------- ------------ --------------- ----------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Larry W. Burke 15,750 10.8 5.375 7/26/06 53,235 134,899
W. Michael Coutu 8,600 5.9 5.375 7/26/06 29,068 73,659
David W. Pheteplace 50,000(2) 34.4 4.750 9/11/06 149,000 378,500
Leong Chun Kin 8,400 5.8 5.375 7/26/06 28,392 71,946
J. Henk van Melsen 8,400 5.8 5.375 7/26/06 28,392 71,946
All optionees 145,550 100.0 -- -- 471,484 1,195,666
All shareholders -- -- -- 16,534,166(3) 41,897,967(3)
% of all shareholder gain 2.9% 2.9%
</TABLE>
9
<PAGE>
- ------------------------
(1) Potential realizable value is calculated based on an assumption that the
price of the Company's Common Stock appreciates at the annual rate shown (5%
and 10%), compounded annually, from the date of grant of the option until
the end of the option term (10 years). The value is net of the exercise
price but is not adjusted for the taxes that would be due upon exercise. The
5% and 10% assumed rates of appreciation are mandated by the rules of the
Securities and Exchange Commission and do not in any way represent the
Company's estimate or projection of future stock prices. Actual gains, if
any, upon future exercise of any of these options will depend on the actual
performance of the Company's Common Stock, the continued employment of the
Named Executive Officer holding the option through its vesting period and
the subsequent exercise of the option by the Named Executive Officer.
(2) Mr. Pheteplace was awarded incentive stock options in conjunction with his
appointment to the position of Vice President and General Manager of North
America. This grant was priced at 100% of the fair market value on the date
of grant.
(3) Calculated by applying assumed 5% and 10% appreciation through the year
2006, less the value of outstanding shares at June 30, 1997, with assumed
market price of $5.375.
There were no stock options exercised by the executive officers named in the
Summary Compensation Table in fiscal 1997.
The following table sets forth the number of unexercised options held at
June 30, 1997 by each of the Company's executive officers named in the Summary
Compensation Table, and the related values of such options at June 30, 1997. The
value of unexercised options at June 30, 1997 is based upon a market value at
June 30, 1997 of $5.875 per Common Share.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT JUNE 30, 1997 (#) AT JUNE 30, 1997 ($)(1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Larry W. Burke 138,297 23,250 150,000 7,875
W. Michael Coutu 23,400 8,400 -- 4,300
David W. Pheteplace -- 50,000 -- 56,250
Leong Chun Kin -- 8,400 -- 4,200
J. Henk van Melsen 10,000 12,400 -- 4,200
</TABLE>
- ------------------------
(1) Value is calculated by (i) subtracting the exercise price per share from the
fiscal year-end market value of $5.875 per share and (ii) multiplying by the
number of shares subject to the option. Options that have an exercise price
equal to or greater than the fiscal year-end market value are not included
in the value calculation.
10
<PAGE>
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
The Compensation Committee and Stock Option Committee of the Board of
Directors has responsibility for the Company's executive compensation program.
The Committee is currently comprised solely of Non-Employee directors. The
Committee is chaired by Mr. Richard W. Strain. The other Committee members are
Mr. Richard L. Mattox, Mr. Ben M. Streepey and Ms. Diane T. Maynard. The
following report is submitted by the members of the Compensation Committee and
the Stock Option Committee.
* * *
The Company's executive compensation program is designed to align executive
compensation with financial performance, business strategies and Company values
and objectives. The Company's compensation philosophy is to ensure that the
delivery of compensation, both in the short- and long-term, is consistent with
the sustained progress, growth and profitability of the Company and acts as an
inducement to attract and retain qualified individuals. This program seeks to
enhance the profitability of the Company, and thereby enhance shareholder value,
by linking the financial interests of the Company's executives with those of its
long-term shareholders. Under the guidance of the Company's Compensation
Committee of the Board of Directors, the Company has developed and implemented
an executive compensation program to achieve these objectives while providing
executives with compensation opportunities that are competitive with companies
of comparable size in related industries.
The Company's executive compensation program has been designed to implement
the objectives described above and is comprised of the following fundamental
three elements:
- a base salary that is determined by individual contributions and sustained
performance within an established competitive salary range. Pay for
performance recognizes the achievement of financial goals, accomplishment
of corporate and functional objectives, and performance of individual
business units of the Company.
- an annual incentive cash bonus that is directly tied to corporate and
business unit performance measures.
- a long-term incentive program that rewards executives when shareholder
value is created through increase in the market value of the Company's
Common Shares. Stock option grants focus executives on managing the
Company from the perspective of an owner with an equity position in the
business.
BASE SALARY. The salary, and any periodic increase thereof, of the
President and Chief Executive Officer was and is determined by the Board of
Directors of the Company based on recommendations made by the Compensation
Committee. The salaries, and any periodic increases thereof, of the Vice
President, Treasurer and Chief Financial Officer, the Vice President of
Operations, and the Vice President and General Manager of North America, were
and are determined by the Board of Directors based on recommendations made by
the President and Chief Executive Officer and approved by the Committee.
The Company, in establishing base salaries, levels of incidental and/or
supplemental compensation, and incentive compensation programs for its officers
and key executives, assesses periodic compensation surveys and published data
covering the electrical/electronics industry and industry in general. The level
of base salary compensation for officers and key executives is determined by
both their scope and responsibility and the established salary ranges for
officers and key executives of the Company. Periodic increases in base salary
are dependent on the executive's proficiency of performance in the individual's
position for a given period, and on the executive's competency, skill and
experience.
11
<PAGE>
BONUS PAYMENTS. The bonus compensation program for the Company's officers
is subject to annual review by the Compensation Committee and requires annual
approval of the Board of Directors.
Under the bonus plan for executive officers and key employees for fiscal
year 1997, executive officers were eligible for a first tier bonus award
provided the consolidated pretax income of the Company and subsidiaries for
fiscal year 1997 exceeded the reported pretax income for fiscal year 1996. A
second tier, or added bonus, was payable to executive officers provided the
consolidated pretax income for fiscal year 1997 exceeded the pretax income
objectives outlined in the fiscal year 1997 annual financial plan. The bonus
awards under both tiers were predicated upon a formula whereby bonuses increased
in proportion to the level of pretax income over fiscal year 1996 and the
financial plan objectives for fiscal year 1996, respectively. Bonus awards for
first tier financial performance were made to executive officers up to 10% of
base compensation in fiscal year 1997.
The bonus plan for fiscal year 1998 will be similar to the fiscal year 1997
plan with updated financial performance measurements.
LONG-TERM INCENTIVE PLANS. The Company's long-term incentive compensation
program is intended to align executive interest with the long-term interests of
shareholders by linking executive compensation with enhancement of shareholder
value. In addition, the program motivates executives to improve long-term stock
market performance by allowing them to develop and maintain a significant
long-term equity ownership position in the Company's Common Shares.
Currently, the Company's Long-Term Incentive Plan is comprised of the 1993
Employee and Non-Employee Director Stock Option Plan. This plan was adopted by
the Board of Directors on September 13, 1993, and approved by the shareholders
of the Company at the 1993 annual meeting of the shareholders held on November
4, 1993. Pursuant to this plan 500,000 Common Shares were made available for the
grant of stock options to Non-Employee Directors of the Company and key
employees of the Company and its subsidiaries as determined by the Stock Option
Committee. An amendment authorizing an additional 500,000 Common Shares to be
made available for grants of stock options under the 1993 Employee and
Non-Employee Director Stock Option Plan was adopted by the Board of Directors on
July 31, 1997, subject to shareholder approval.
On May 28, 1992, the Board of Directors adopted the 1993 Employee Stock
Purchase Plan to provide executive officers and other key employees with the
opportunity to purchase Common Shares and thereby establish or increase their
equity position in the Company. As an added incentive to participants in this
plan, the Company awarded a matching number of Common Shares in proportion (not
more than 50%) to the Common Shares purchased and provided interest-free loans
to the participants, subject to the discretion of the Board of Directors. The
Company's matching shares vest with the participants who remain in the
employment of the Company in three equal annual installments starting in
September, 1994. Loans to employees are payable over periods not to exceed ten
years. Participation in the Plan was completed in fiscal 1993 and the Plan
expired with respect to new participation on November 10, 1993.
SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEES
Mr. Richard W. Strain
Mr. Richard L. Mattox
Ms. Diane T. Maynard
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STOCK PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the cumulative
total shareholder return on the Company's Common Shares with the cumulative
total return of the NASDAQ market composite (U.S. Companies) and the Peer Group
Index for the five years ending June 30, 1997. The Peer Group consists of AMP
Inc., Methode Electronics, Inc., Molex Incorporated and Thomas & Betts
Corporation. The Peer Group consists of publicly-held companies, all of which
participate in the electronic connector industry in varying degrees with respect
to their total sales volume. All of these companies are significantly larger
than Robinson Nugent, Inc. in terms of sales and assets. The comparison assumes
that $100 was invested on June 30, 1992, in the Company's Common Shares and in
each of the foregoing indices and assumes reinvestment of dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG ROBINSON NUGENT, INC., THE NASDAQ STOCK
MARKET (U.S.) INDEX AND A PEER GROUP
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ROBINSON NUGENT, INC. PEER GROUP NASDAQ STOCK MARKETUS
<S> <C> <C> <C>
6/92 100 100 100
6/93 211 118 126
6/94 183 137 127
6/95 299 170 169
6/96 185 172 218
6/97 198 206 265
</TABLE>
* $100 invested on 6/30/92 in stock or index -- including reinvestment of
dividends. Fiscal year ending June 30.
13
<PAGE>
CERTAIN TRANSACTIONS
Richard L. Mattox, Secretary, Corporate Counsel and a member of the Board of
Directors of the Company, is a partner in the law firm of Mattox & Mattox, with
offices in New Albany, Indiana. That firm was retained by the Company as legal
counsel during fiscal 1997, and it is anticipated that such relationship will
continue in the current fiscal year.
Jerrol Z. Miles, a director of the Company, is a Senior Vice President of
National City Bank, Kentucky, with which the Company maintains a commercial
banking relationship including a $9,000,000 credit facility. The Company
utilized this loan facility during fiscal 1997 and incurred interest charges of
$436,150 on borrowed funds. In fiscal 1997, the Company made periodic
investments in short-term securities administered by National City Bank,
Kentucky, and the Company received interest payments of approximately $26,905
thereon.
The Board of Directors believes that the transactions described above were
on terms no less favorable to the Company than would have been available in the
absence of the relationships described.
In September 1992, pursuant to the terms of the Company's Employee Stock
Purchase Plan, Messrs. Burke, and Coutu borrowed $165,000 and $94,000,
respectively, from the Company to purchase Common Shares of the Company. These
loans are non-interest bearing and are payable over a period not to exceed ten
years. At June 30, 1997, the principal balance of the loan to Mr. Burke was
$64,660. Mr. Coutu paid off his loan in January 1997.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the officers
and directors of the Company to file initial reports of ownership and reports of
changes in ownership of the Common Shares of the Company. The officers and
directors are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms filed by them.
To the Company's 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 reports required by Section 16(a) of the Securities
Exchange Act of 1934 related to market transactions in the Common Shares of the
Company were timely filed.
2. RATIFICATION OF AMENDMENT OF THE 1993 EMPLOYEE
AND NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
In 1993, the Board of Directors adopted, and the shareholders approved, the
Company's 1993 Employee and Non-Employee Director Stock Option Plan (the "Stock
Option Plan") to purchase up to an aggregate of 500,000 of the Company's Common
Shares. Under the terms of the Stock Option Plan, the Company was authorized to
grant to key employees incentive stock options ("ISOs") qualified under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), and to grant
non-qualified stock options ("NQSOs") to directors of the Company who are not
employees of the Company or its subsidiaries ("Non-Employee Directors"). On July
31, 1997, the Board adopted an amendment to the Stock Option Plan, subject to
shareholder approval, that will authorize an additional 500,000 Common Shares to
be made available for grants of stock options under the Stock Option Plan.
Common Shares issued under the Stock Option Plan may be either authorized
and unissued shares or previously issued shares acquired by the Company as
treasury stock. Common Shares subject to options
14
<PAGE>
returned to the Company shall be available for future awards under the Stock
Option Plan. The Stock Option Plan is intended to ensure that the Company will
continue to attract and retain key employees and directors who can be expected
to contribute to the Company's growth and success.
Because option grants under the Stock Option Plan to other than Non-employee
Directors will be within the discretion of the Stock Option Committee of the
Board of Directors, as described herein, the Company cannot now determine the
number of options to be received by any particular current executive officer, by
all current executive officers as a group or by non-executive officer employees
as a group. The Stock Option Plan provides for the grant as of the Effective
Date of the Stock Option Plan as defined therein, and on each anniversary of the
Effective Date, to each Non-Employee Director of options to purchase 4,000
Common Shares, subject to the terms of the Stock Option Plan. All options
granted to Non-Employee Directors will have an option price equal to the fair
market value of the Common Shares on the date of the grant of the option.
Pursuant to these provisions, options to purchase Common Shares were granted to
the seven Non-Employee Directors of the Company in September 1996. For
information concerning former stock option plans, see the discussion on Long
Term Incentive Plans under "Report of the Compensation and Stock Option
Committees" above.
The following summary of the Stock Option Plan is qualified in its entirety
by the full text of the Stock Option Plan, a copy of which may be obtained by
shareholders of the Company upon request directed to the Company's Treasurer at
800 East Eighth Street, New Albany, Indiana 47150.
ADMINISTRATION OF THE PLAN
The Stock Option Plan will be administered by a Stock Option Committee of
the Board of Directors of the Company (the "Committee") consisting of two or
more directors of the Company, each of whom shall be a "disinterested person"
with respect to the Stock Option Plan within the meaning of Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The
Compensation Committee of the Company initially will also serve as the Stock
Option Committee. Mr. Mattox, Secretary and a member of the Board of Directors
of the Company, will be treated as a Non-Employee Director under the Stock
Option Plan. The Committee has the full power, in its discretion and subject to
any restrictions on such power established by the Board of Directors, to
interpret the provisions of the Stock Option Plan and to take such action as the
Committee deems necessary or advisable for the administration of the Stock
Option Plan, pursuant to the terms of the Stock Option Plan. Decisions by the
Committee are, in all respect, final, conclusive and binding on the Company and
the participants under the Stock Option Plan.
ELIGIBILITY
Those persons determined from time to time by the Committee to be "key
employees" of the Company and its subsidiaries are eligible to receive options
under the Stock Option Plan. As of the date of this Proxy statement, there were
approximately 35 employees eligible to receive options as key employees. There
are also eight Non-Employee Directors eligible to receive options. Only NQSOs
will be granted to Non-Employee Directors.
TERM OF THE STOCK OPTION PLAN
The Stock Option Plan became effective as of September 13, 1993, the date
upon which the Board of Directors of the Company adopted the Stock Option Plan
(the "Effective Date"), and shall terminate ten years after the Effective Date.
15
<PAGE>
STOCK OPTIONS
The Committee may grant ISOs and/or NQSOs to participants (the "Stock
Options").
ISOs may only be granted to "employees" of the Company and its subsidiaries
within the meaning of that term under Section 3401(c) of the Code. No ISO may be
granted to an officer or employee who owns stock representing more than 10% of
the total voting power of all classes of stock of the Company (a "10%
shareholder") unless the option price for such ISO is at least 110% of the fair
market value of the Common Shares on the date of grant and such ISO is not
exercisable after the expiration of five years from the date such option is
granted. In addition, in the event the total fair market value of an ISO grant
or grants exercisable for the first time by a Participant in a given year
exceeds $100,000, valued as of the date of the grant of the ISOs, then any such
options in excess of $100,000 shall be treated as NQSOs.
NQSOs are not qualified for special tax treatment nor do they need to
conform to special limitations of the Code associated with ISOs.
Except with respect to the NQSOs granted to Non-Employee Directors as
previously described herein, the Committee will determine the number of shares
to be covered by each option. The purchase price of each Common Share subject to
an option shall be fixed by the Committee at an amount per Common Share not less
than the fair market value per Common Share on the date of grant of the option;
provided, however that the purchase price of each Common Share subject to an
option granted to a Non-Employee Director shall be the fair market value per
Common Share on the date of the option. The fair market value of the Common
Shares subject to an option shall be the closing price per Common Share on the
date of grant as reported by NASDAQ or any securities exchange. The option
agreement will state the purchase price of the Common Shares subject to the
option.
All options granted under the Stock Option Plan shall be exercisable as to
one-half of the Common Shares subject to the option from and after the first
anniversary of the date of grant, and as to all of the Common Shares subject to
the option from and after the second anniversary of the date of grant.
Exercisable options may be exercised during the term thereof in whole or in part
at any time and from time to time; provided, however, that no optionee shall
exercise any option to purchase less than 100 Common Shares at one time (unless
a lessee number represents the total number of Common Shares which may be
exercised under the particular option).
Under the terms of the Stock Option Plan, options granted to an employee who
ceases to be employed by the Company or one of its subsidiaries shall terminate
immediately as to any unexercised portion thereof; provided however, that the
Committee, in its discretion, may permit a terminated optionee to exercise
certain unexercised options at any time within three months after the effective
date of the cessation of the optionee's employment. If any cessation of
employment is due to retirement with the consent of the Company or permanent and
total disability, the optionee shall have the right to exercise the option with
respect to the shares for which it could have been exercised on the effective
date of cessation of employment, at any time within three months after such
cessation of employment due to retirement and with the consent of the Company or
at any time within twelve months after such cessation of employment due to
permanent and total disability. In the event of the death of a person while in
the employ of the Company or any of its subsidiaries or within the period
following termination of employment during which an option remains exercisable
pursuant to the terms of the Stock Option Plan, the optionee's heir(s) or
personal representative, as the case may be, shall have the right to exercise
the option with respect to the Common Shares for which it could have been
exercised on the date of death, at any time within twelve months from the date
of death, subject to the terms of the Stock Option Plan.
16
<PAGE>
Options granted to a Non-Employee Director who ceases to serve as a director
of the Company for any reason other than death, and which such options are
exercisable or become exercisable during the three month period following the
cessation of the person as a director of the Company, shall be exercisable at
any time within three months after such person ceases to be a director of the
Company, subject to the terms of the Stock Option Plan. In the event of the
death of a Non-Employee Director, such Non-Employee Director's heir(s) or
personal representative, as the case may be, shall have the right to exercise
any unexercised option which could have been exercised on the date of death, at
any time within twelve months from the date of death, subject to the terms of
the Stock Option Plan.
Stock options may be exercised by the Participant in accordance with the
terms of the related option agreement. The exercise price may be paid in cash,
Common Shares (whether by delivery of previously owned Common Shares or by
having the Company withhold a portion of the Common Shares to be received)
having a fair market value at the time of exercise equal to the option price, or
in a combination thereof. Promptly after the exercise of an option and the
payment in full of the purchase price for the Common Shares subject to the
option, the individual exercising the option shall be entitled to the issuance
of a certificate or certificates evidencing ownership of such Common Shares.
During the life of a Participant, options granted under the Stock Option
Plan will be exercisable only by such person or, if disabled, by such person's
guardian or legal representative. In the event of a participant's death, the
Participant's heirs or legal representative may exercise the option within
twelve months from the date of death.
Each option granted under the Stock Option Plan shall expire within the
period prescribed in the option agreement relating to the option, which shall
not be more than ten years from the date the option is granted if the optionee
is not a 10% Shareholder. The option agreement shall state the date of the grant
of the option.
CHANGE OF CONTROL, DISSOLUTION, AND LIQUIDATION
Upon the occurrence of a change of control event, as defined in the Stock
Option Plan, or in the event the Company adopts all necessary resolutions
approving a plan to dissolve or liquidate the Company, the Company shall provide
written notice to the optionees (the "Notice"). All unvested options shall vest
immediately upon delivery of this Notice to the optionees. Upon the occurrence
of a change of control event, the Company shall have the right, but not the
obligation, to terminate all outstanding options as of the 30th day immediately
following the date of the sending of the Notice by including a statement to such
effect in the Notice; further, upon delivery of the Notice and regardless of
whether the Company elects to terminate the outstanding options, the optionees
shall have the right to immediately exercise all outstanding options in full
during the 30-day period immediately following the date of the sending of the
Notice. With respect to dissolution or liquidation, all exercised options
outstanding as of the 30th day immediately following the date of the sending of
the Notice shall terminate.
AMENDMENT AND TERMINATION OF THE PLAN
The Board may at any time amend or modify the terms of the Stock Option Plan
in any respect except that, without the approval of the shareholders of the
Company, the Board may not increase the number of shares as to which options may
be granted under the Stock Option Plan, change the class of shares for which
options may be granted under the Stock Option Plan, change the designation of
the employees or class of employees eligible to receive options under the Stock
Option Plan, change the provisions
17
<PAGE>
concerning the option price, increase the maximum period during which options
may be exercised, or extend the term of the Stock Option Plan; and provided
further that the provisions with respect to the grant of options to Non-Employee
Directors shall not be subject to amendment more than one time in any period of
six consecutive months other than to comport with changes in the Code, the
Employee Retirement Income Security Act, or the rules thereunder.
WITHHOLDING TAXES AND NET EXERCISE OPTIONS
The Committee shall have the right to require optionees or their agents to
remit to the Company amounts sufficient to satisfy any federal, state or local
income, employment, or other tax withholding requirements (or make other
arrangements satisfactory to the Company with regard to such taxes) at such
times as the Company deems necessary or appropriate for the compliance with such
laws.
FEDERAL INCOME TAX CONSEQUENCES
The Stock Option Plan provides for the issuance of both options qualified as
ISOs within the meaning of Section 422 of the Code and NQSOs which are not so
qualified. The federal income tax consequences to the Company and its
subsidiaries and to the optionee arising out of the grant and exercise of these
options and out of the subsequent sale of the Common Shares are similar in
certain respects and significantly different in other respects.
INCENTIVE STOCK OPTIONS. Pursuant to Section 422 of the Code, the grant of
an ISO under the Stock Option Plan will have no federal income tax consequences
to the Company or to the optionee. Except for alternative minimum tax purpose,
the exercise of an ISO pursuant to the Stock Option Plan will have no federal
income tax consequences to the Company or to the optionee provided the holding
periods set forth below are met, and provided further, that the ISO is exercised
by an optionee who was an employee of the Company or subsidiary until (a) the
date of exercise; (b) a date within one year of the date of exercise if (i) the
optionee's employment is terminated because of permanent and total disability
(within the meaning of Section 22(e)(3) of the Code), or (ii) the option is
exercised after the optionee's death by the estate of the optionee or by the
person who acquired the right to exercise such option by bequest or inheritance;
or (c) a date within three months of the date of exercise if the optionee
retires with the consent of his or her employer or the Committee otherwise
permits the terminated optionee to exercise options. For purposes of computing
the optionee's alternative minimum tax, the option will be treated as if the
option was a NQSO. See "Non-Qualified Stock Options."
If the optionee exercises an ISO pursuant to the Stock Option Plan for cash
or cash equivalents within the required exercise period, the optionee's basis in
the Common Shares acquired will equal the exercise price. If the optionee uses
Common Shares of the Company as payment for Common Shares acquired in the
exercise of an ISO pursuant to the Stock Option Plan, the optionee's basis in
the Common Shares acquired generally will equal the optionee's basis in the
Common Shares surrendered plus any gain recognized on the exchange, plus any
cash or cash equivalents paid at the time of exercise. In addition, any gain or
loss on the difference between the basis in the Common Shares surrendered and
the fair market value of such Common Shares at the time of the exchange
generally will not be recognized for federal income tax purposes under Section
1036 of the Code, provided the Common Shares surrendered, if acquired pursuant
to the exercise of an ISO or an option granted under certain other plans
prescribed in the Code, were held until a date two years after the grant of such
option and one year after its exercise.
18
<PAGE>
An optionee generally will recognize capital gain or loss upon the sale of
Common Shares acquired by the optionee by an exercise of an ISO, provided the
Common Shares are sold at least two years after the grant of the option and at
least one year after the optionee received the Common Shares and provided the
optionee is not a dealer in securities. Any such capital gain may increase the
amount of capital losses, if any, deductible by the optionee in the year of such
gain under Section 1211 of the Code.
An optionee generally will recognize ordinary income upon the sale of common
Shares acquired by the optionee by the exercise of an ISO if such sale is made
within two years of the date of grant of such option or within one year of the
date such Common Shares were transferred to the optionee. The amount of such
ordinary income recognized will equal the lesser of (a) the excess of the fair
market value of the Common Shares acquired on the date of exercise over the
exercise price, and (b) the gain realized upon the disposition of the Common
Shares. Officers, directors and beneficial owners subject to Section 16(b) of
the Exchange Act may have additional tax consequences in connection with the
exercise of options and the sale of Common Shares acquired thereby. In the event
that an optionee recognizes ordinary income as described in this paragraph, and
certain conditions are met, the Company may be entitled to an income tax
deduction in the amount of the ordinary income recognized by the optionee. If
the excess of the fair market value of the Common Shares over the exercise price
is the basis for determining the amount of ordinary income recognized by the
optionee, any additional gain recognized by the optionee on the disposition of
the Common Shares generally will be capital gin if the optionee is not a dealer
in securities.
NON-QUALIFIED STOCK OPTIONS. Options which do not qualify as ISOs within
the meaning of Section 422 of the Code are referred to as NQSOs. The grant of a
NQSO pursuant to the Stock Option Plan generally will have no federal income tax
consequences to the Company or to the optionee. However, upon exercise of a NQSO
granted pursuant to the Stock Option Plan, an optionee with the exception, under
certain circumstances, of an optionee who is an officer, director or 10%
Shareholder of the Company (collectively, "Insiders") is deemed to have received
ordinary income in an amount equal to the excess of the fair market value of the
Common Shares acquired on the date of exercise over the exercise price, and, if
appropriate withholdings are made and other conditions are met, that amount is
deductible by the Company. As indicated, under certain circumstances, an
optionee who is an Insider may be subject to the restrictions on transfer of
shares imposed by Section 16(b) of the Exchange Act. In that case, optionees who
are Insiders will be deemed to have received ordinary income in an amount equal
to the excess of the fair market value of the acquired shares on the date the
Section 16(b) restrictions lapse over the exercise price. Pursuant to Section
83(b) of the Code and the Treasury Regulations thereunder, Insiders may elect in
the alternative to include in income the excess of the fair market value of the
Common Shares on the date of exercise over the exercise price. An election
pursuant to Section 83(b) of the Code may not be revoked without the consent of
the Commissioner of the IRS and must be made in writing within thirty days of
the transfer to the optionee of Common Shares acquired pursuant to the exercise
of an option.
The optionee's basis in the Common Shares acquired pursuant to the exercise
of an NQSO is equal to the fair market value of the Common Shares at the date
used to determine the amount to be included in the optionee's income as ordinary
income. Upon the disposition of Common Shares acquired upon the exercise of an
NQSO granted pursuant to the Stock Option Plan, the optionee generally will
recognize capital gain or capital loss, as the case may be, to the extent of the
difference between the optionee's basis in the Common Shares and the sale price,
provided the optionee is not a dealer in securities.
THE FOREGOING INFORMATION WITH RESPECT TO FEDERAL INCOME TAX CONSEQUENCES
SHALL NOT IN ANY CASE BE INTERPRETED AS TAX ADVICE.
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<PAGE>
In order for the amendment to the Stock Option Plan to receive shareholder
approval, a majority of the Common Shares represented and entitled to vote at
the Annual Meeting must be affirmatively voted FOR approval of this proposal.
The Board of Directors recommends that shareholders vote FOR approval of this
proposal.
3. RATIFICATION OF SELECTION OF
CERTIFIED PUBLIC ACCOUNTANTS
Subject to ratification by the shareholders, the Board of Directors has
selected Deloitte & Touche LLP as certified public accountants for the Company
for the fiscal year ending June 30, 1998. The Company has been advised by such
firm that neither it nor any of its associates has any direct or material
indirect financial interest in the Company. In order for Deloitte & Touche LLP
to be ratified as the certified public accountants for the Company for the
fiscal year ending June 30, 1998, a majority of the Common Shares represented
and entitled to vote at the Annual Meeting must be affirmatively voted FOR
approval of this proposal.
The Board of Directors determined not to continue the engagement of Coopers
& Lybrand L.L.P., which acted as certified public accountants for the Company
for fiscal 1997, based on the recommendation of the Audit Committee of the Board
of Directors.
Coopers & Lybrand L.L.P. reports for the fiscal years ended June 30, 1997
and 1996 contained no adverse opinion or disclaimer of opinion and were not
qualified or modified in any respect. There were no disagreements with that firm
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting and to have the opportunity to make statements if they so desire,
and the representatives of Coopers & Lybrand L.L.P. will be available to respond
to appropriate questions concerning the fiscal 1997 audit.
3. OTHER MATTERS
As of the date of this proxy statement, the Board of Directors of the
Company has no knowledge of any matters to be presented for consideration at the
meeting other than those referred to above. If (a) any matters not within the
knowledge of the Board of Directors as of the date of this proxy statement
should properly come before the meeting; (b) a person not named herein is
nominated at the meeting for election as a director because a nominee named
herein is unable to serve or for good cause will not serve; (c) any proposals
properly omitted from this proxy statement and the form of proxy should come
before the meeting; or (d) any matters should arise incident to the conduct of
the meeting; then the proxies will be voted in accordance with the
recommendations of the Board of Directors of the Company.
By Order of the Board of Directors
Richard L. Mattox, Secretary
October 3, 1997
20
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PROXY
ROBINSON NUGENT, INC.
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 6, 1997
The undersigned hereby appoints SAMUEL C. ROBINSON and LARRY W. BURKE, and each
of them, the proxies of the undersigned, with full power of substitution, to
vote all Common Shares of Robinson Nugent, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Shareholders of the Company to be held
NOVEMBER 6, 1997, or any adjournment thereof, as follows:
1. ELECTION OF DIRECTORS:
<TABLE>
<S> <C>
/ / FOR all nominees listed below (except / / WITHHOLD AUTHORITY to vote for all
as nominees listed below.
marked to the contrary below).
</TABLE>
Samuel C. Robinson, Jerrol Z. Miles, Richard W. Strain, Donald C. Neel and Ben
M. Streepey
(INSTRUCTION: To WITHHOLD authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
________________________________________________________________________________
2. Proposal to amend the 1993 Robinson Nugent, Inc. Employee and Non-Employee
Director Stock Option Plan.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP AS CERTIFIED PUBLIC
ACCOUNTANTS FOR THE COMPANY FOR THE FISCAL YEAR ENDING JUNE 30, 1998.
/ / FOR / / AGAINST / / ABSTAIN
4. The proxies are authorized to vote in their discretion on any other matters
which may properly come before the Annual Meeting to the extent set forth in
the proxy statement.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2, AND 3.
Your vote is important. If you do not expect to attend the Annual Meeting, or if
you do plan to attend but wish to vote by proxy, please date, sign and mail this
proxy. A return envelope is provided for this purpose.
Dated: _________________________ , 1997
_______________________________________
(Signature)
_______________________________________
(Signature)
Please date this proxy. If shares are
held jointly, both joint owners should
sign. If signing as attorney, executor,
administrator, guardian or in any other
representative capacity, please give
your full title as such.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
