<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2
Nu Horizons Electronics Corp.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Nu Horizons Electronics Corp.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(ii), 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)3.
[ ] Fee computed on table below per Exchange Act Rules 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:
- --------------------------------------------------------------------------------
4.) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[ ] 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) Dated Filed: ____________________________________________________
<PAGE>
NU HORIZONS ELECTRONICS CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 22, 1995
To the Stockholders of
NU HORIZONS ELECTRONICS CORP.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of NU HORIZONS
ELECTRONICS CORP. will be held on Friday, September 22, 1995 at the de Seversky
Conference Center, Northern Boulevard, Old Westbury, New York at 10:30 a.m. (the
"Annual Meeting"), for the following purposes:
1.) To elect two directors comprising the Class II Directors to serve until the
1998 Annual Meeting of Stockholders or until their respective successors
have been duly elected and qualified;
2.) To consider and act upon such other business as may properly come before
the meeting or any adjournments thereof.
Only stockholders of record at the close of business on August 11, 1995 shall be
entitled to vote at the Annual Meeting.
IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY IN ORDER THAT YOUR SHARES MAY BE VOTED FOR YOU AS SPECIFIED.
By Order of the Board of Directors,
Richard S. Schuster
Secretary
Dated: Amityville, New York
August 14, 1995
<PAGE>
NU HORIZONS ELECTRONICS CORP.
6000 New Horizons Boulevard
Amityville, New York 11701
----------------------------
ANNUAL MEETING OF STOCKHOLDERS
September 22, 1995
-------------------
PROXY STATEMENT
The Annual Meeting of Stockholders of NU HORIZONS ELECTRONICS CORP. (the
"Company") will be held on Friday, September 22, 1995 at the de Seversky
Conference Center, Northern Boulevard, Old Westbury, New York at 10:30 a.m. for
the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. This statement is furnished in connection with the solicitation
by the Board of Directors of proxies to be used at the Annual Meeting and at any
and all adjournments of such meetings.
If a proxy in the accompanying form is duly executed and returned, the shares
represented by such proxy will be voted as specified. Any person executing the
proxy may revoke it prior to its exercise either by letter directed to the
Company or in person at the Annual Meeting.
This Proxy Statement has been mailed on or about August 14, 1995 to all
stockholders as of the Record Date.
VOTING RIGHTS
On August 11, 1995 (the "Record Date"), the Company had outstanding 7,738,751
shares of one class of voting securities, namely shares of Common Stock, $.0066
par value. Stockholders are entitled to one vote for each share registered in
their names at the closed of business on the Record Date. The affirmative vote
of a majority of the votes cast at the meeting is required for approval of each
matter to be submitted to a vote of the shareholders. For purposes of
determining whether proposals have received a majority vote, abstentions will
not be included in the vote totals and, in instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy (so called "broker non-votes"), those votes will not
be included in the vote totals. Therefore, abstentions and broker non-votes
will have no effect on the vote, but will be counted in the determination of a
quorum.
-1-
<PAGE>
SECURITY OWNERSHIP
The following table sets forth as of the Record Date certain information with
regard to ownership the Company's Common Stock by (i) each beneficial owner of
5% or more of the Company's Common Stock; (ii) each director and executive
officer named in the "Summary Compensation Table" below; and (iii) all executive
officers and directors of the Company as a group:
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of Beneficial Owner Percent of
of Beneficial Owner of Common Stock Class
- ------------------- -------------------- ----------
<S> <C> <C>
Paul Durando 12,293 (5)(6) -
6000 New Horizons Blvd.
Amityville, NY
Irving Lubman 192,203 (3)(4) 2.4%
6000 New Horizons Blvd.
Amityville, NY
Arthur Nadata 347,257 (2)(3)(4) 4.4%
6000 New Horizons Blvd.
Amityville, NY
Richard S. Schuster 366,175 (3)(4) 4.7%
6000 New Horizons Blvd.
Amityville, NY
Harvey R. Blau 10,408 (8) -
100 Jericho Quadrangle
Jericho, NY
Herbert M. Gardner 10,195 (8) -
26 Broadway
New York, NY
David Siegel 33,774 (7) -
2131 Newbridge Rd.
Bellmore, NY
Directors and Officers 972,305 (8) 11.5%
as a Group (8 Persons)
</TABLE>
(1) Unless otherwise indicated, no director beneficially owns more than 1% of
the Company's outstanding common stock.
(2) Includes 45,398 shares held by his children as to which Mr. Nadata disclaims
beneficial ownership.
(3) Includes options exercisable within 60 days for 61,967 shares of common
stock under the Company's Key Employees Stock Option Plan and the 1994 Stock
Option Plan.
(4) Includes 13,592 shares of fully vested common stock owned through the
Employees Stock Ownership Plan, which include voting power. These Officers
are also Trustees of the Plan.
(5) Includes options exercisable within 60 days for 10,000 shares of common
stock under the Company's Key Employees Stock Option Plan and the 1994 Stock
Option Plan.
-2-
<PAGE>
6) Includes 2,293 shares of fully vested common stock owned through the
Employee's Stock Ownership Plan, which include voting power.
(7) Includes options exercisable within 60 days for 10,000 shares of common
stock under the Company's Outside Director Stock Option Plan and 20,381
shares held by his wife as to which Mr. Siegel disclaims beneficial
ownership.
(8) Includes options exercisable within 60 days for 10,000 shares of common
stock under the Company's Outside Director Stock Option Plan.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a Board of Directors
consisting of not less than three nor more than eleven directors, classified
into three classes as nearly equal in number as possible, whose terms of office
expire in successive years. The following table sets forth the directors of the
Company.
<TABLE>
<CAPTION>
Class I Class II Class III
(To Serve Until the (To Serve Until the (To Serve Until the
Annual Meeting of Annual Meeting of Annual Meeting of
Stockholders in 1997) Stockholders in 1995) Stockholders in 1996)
- --------------------- ---------------------- ---------------------
<S> <C> <C>
Paul Durando Harvey Blau (1) Irving Lubman
Herbert Gardner (1) Richard S. Schuster Arthur Nadata
David Siegel (1)
</TABLE>
(1) Member of Compensation and Audit Committees.
The two directors in Class II are to be elected to hold office until the
Annual Meeting of Stockholders in 1998 or until their successors are chosen and
qualified. Shares represented by executed proxies in the form enclosed will be
voted, unless otherwise indicated, for the election as directors of the
aforesaid nominees, unless any such nominee shall be unavailable, in which event
such shares my be voted for a substitute nominee designated by the Board of
Directors. The Board of Directors has no reason to believe that any of the
nominees will be unavailable or, if elected, will decline to serve.
The following information is submitted with respect to the nominees for
election at the Annual Meeting:
<TABLE>
<CAPTION>
Principal Director
Name Age Occupation Since
- ---- --- ---------- -----
<S> <C> <C> <C>
Richard S. Schuster 47 Vice President and Secretary 1982
of the Company; President of NIC
Components Corp.
Harvey R. Blau 59 Chairman of the Board 1984
of Griffon Corporation and
Aeroflex Incorporated
</TABLE>
-3-
<PAGE>
The following information is submitted with respect to the five directors who
are not nominees at the the Annual Meeting.
<TABLE>
<CAPTION>
Principal Director
Name Age Occupation Since
- ---- --- ---------- -----
<S> <C> <C> <C>
Irving Lubman 56 Chairman of the Board 1982
of the Company
Arthur Nadata 49 President of the Company 1982
Paul Durando 51 Vice President-Finance 1994
of the Company
Herbert M. Gardner 53 Senior Vice President 1984
Janney Montgomery Scott Inc.
and Chairman of the Board
of ESI Industries, Inc.
David Siegel 67 President of Quantech 1991
Electronics
</TABLE>
Present Occupations of Directors
IRVING LUBMAN has been Chief Executive Officer and Chairman of the Board
since October 1982. Mr. Lubman has been actively involved in electronic
components distribution since 1957, when he joined Milgray Electronics
Corp., holding the position of sales manager until 1968. From 1968 through
October 1982, when he joined the Company, Mr. Lubman was corporate vice
president of Diplomat Electronics Corp., also a distributor of electronic
components.
ARTHUR NADATA has been President, Treasurer and a Director since October
1982. Prior to joining the Company in October 1982, Mr. Nadata worked for
eighteen years for Diplomat Electronics Corp. in various operational and
sales positions of increasing responsibility, eventually becoming corporate
vice president of sales and marketing.
RICHARD S. SCHUSTER has been Vice President, Secretary and a Director
since October 1982. For the seven years prior to joining the Company in
November 1982, Mr. Schuster served as manager of Capar Components Corp., an
importer and distributor of passive components, and a wholly-owned
subsidiary of Diplomat Electronics Corp. For the six years prior to 1975,
Mr. Schuster was employed by International Components Corp., responsible for
production, engineering and sales of imported semiconductor and passive
components.
PAUL DURANDO has been Vice President, Finance since joining the Company in
March 1991 and has been a Director since September 1994. Prior to joining
the Company in March 1991, Mr. Durando served for six years as Executive
Vice President of Sigma Quality Foods, Inc. From 1977 to 1984, he was Vice
President, Operations of the Wechsler Coffee Corp. Mr. Durando was also
associated with Deloitte Haskins & Sells for seven years.
HERBERT M. GARDNER has been a Director of the Company since May 1984. For
more than the past five years, Mr. Gardner has been Senior Vice President of
Janney Montgomery Scott Inc., investment bankers and Underwriter of the
Company's May 1984 public offering. Mr. Gardner is Chairman of the Board of
ESI Industries, Inc., a director of Transmedia Network, Inc., TGC Industries
Inc., Shelter Components Corp., Oneita Industries, Inc. and the Western
Transmedia Company, Inc.
-4-
<PAGE>
HARVEY R. BLAU has been a director of the Company since May 1984. Mr.
Blau has been a practicing attorney in the State of New York since 1961, and
is a member of the law firm of Blau, Kramer, Wactlar & Lieberman, P.C.,
Jericho, New York, counsel to the Company. Mr. Blau is Chairman of the
Board of Griffon Corporation and Aeroflex Incorporated.
DAVID SIEGEL has been a Director since September 1991. Mr. Siegel has
been the President and a director of Quantech Electronics for the past five
years. He is also on the boards of Kent Electronics, New England
Micronetics and Surge Components. Mr. Siegel is one of the founders of
Great American Electronics, a distribution company, and has been in the
distribution business since 1954.
MANAGEMENT
Officers of the Company
The Company's executive officers are as follows:
Name Position Held with the Company
---- ------------------------------
Irving Lubman............. Chairman of the Board
Arthur Nadata............. President and Treasurer
Richard S. Schuster....... Vice President and Secretary
Paul Durando.............. Vice President-Finance
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company to its Chief
Executive Officer and each of the three remaining executive officers for the
fiscal years ended February 28, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation (1) Compensation
----------------------- ------------
<TABLE>
<CAPTION>
Securities
Underlying
Name of Principal and Fiscal Options All Other (3)
Position Year Salary Bonus SAR's (2) Compensation
- --------------------- ------ ------ ----- --------- -------------
<S> <C> <C> <C> <C> <C>
Irving Lubman 1995 $214,022 $275,709 148,650 $11,673
CEO, Chairman 1994 210,878 316,649 - 10,069
of the Board 1993 200,000 94,486 - 8,100
Arthur Nadata 1995 $214,022 $275,709 148,650 $ 9,464
President and 1994 210,878 316,649 - 10,069
Treasurer 1993 200,000 94,486 - 9,300
Richard Schuster 1995 $214,022 $275,709 148,650 $12,249
Vice President, 1994 210,878 316,649 - 10,069
Secretary and 1993 200,000 94,486 - 8,130
President, NIC
Components Corp.
Paul Durando 1995 $115,000 $10,000 10,000 $ 850
Vice President, 1994 105,000 10,000 7,500 850
Finance 1993 95,000 10,000 8,268 850
</TABLE>
-5-
<PAGE>
SUMMARY COMPENSATION TABLE - Footnotes
(1) No Other Annual Compensation is shown because the amounts of perquisites
and other non-cash benefits provided by the Company do not exceed the
lesser of $50,000 or 10% of the total annual base salary and bonus
disclosed in this table for the respective officer.
(2) The Share quantities in this column give effect to 5% stock dividends
declared by the Company on September 16, 1992 and March 9, 1993, as well
as a 3:2 stock split declared on September 7, 1993.
(3) The amounts disclosed in this column include the Company's contributions
on behalf of the named executive officer to the Company's 401(K)
retirement plan in amounts equal to a maximum of 1% of the executive
officer's annual salary.
Employment Contracts
The Company has signed employment contracts (the "Contracts"), as amended,
with three of its senior executives for a six year period expiring February
28, 1998. The Contracts specify a base salary of $200,000 for each officer,
which shall be increased each year by the change in the consumer price
index, and also entitles each of the officers to an annual bonus equal to
3.33% (10% in the aggregate) of the Company's consolidated earnings before
income taxes. Benefits are also payable upon the occurrence of either a
change in control of the Company, as defined, or the termination of the
officer's employment, as defined. In the event the employee terminates his
employment within six months after a change in control of the Company, he
will receive a lump sum payment equal to three quarters of the remaining
compensation under his employment agreement. The contracts also provide for
certain payments of the executive's salaries, performance bonuses and other
benefits in the event of death or disability of the officer for the balance
of the period covered by the agreement.
The following table sets forth certain information with respect to stock
options granted to the officers named in the Summary Compensation Table
during the fiscal year ended February 28, 1995.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable Value
% of at Assumed
Total Annual Rates
Options Exercise of Stock Price
Options Granted to Price Expiration Appreciation for
Granted(1) Employees ($ per share) Date Entire Term (2) (3)
---------- ---------- ------------- ---------- --------------------
5% 10%
-- ---
<S> <C> <C> <C> <C> <C> <C>
I. Lubman 148,650 27.3% 7.454 5/27/99 $305,773 $697,168
A. Nadata 148,650 27.3% 7.454 5/27/99 305,773 697,168
R. Schuster 148,650 27.3% 7.454 5/27/99 305,773 697,168
P. Durando 10,000 1.8% 7.875 5/27/99 21,750 49,530
- ---------------------
</TABLE>
<TABLE>
<S> <C> <C>
Increase in market value of the Company's 5%(to $9.57/share) 10%(to $12.21/share)
Common Stock for all stockholders at
assumed annual rates of stock price
appreciation over five-year period
used in the table above (4) $16,001,100 $36,408,300
- ---------------------
</TABLE>
-6-
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR - Footnotes
(1) Options were granted for a term of five years, subject to earlier
termination in certain events of termination of employment. Options
become exercisable in four equal annual installments commencing one year
from the date of grant.
(2) These amounts represent assumed rates of appreciation which may not
necessarily be achieved. The actual gains, if any, are dependent on the
market value of the Company's stock at a future date as well as the
option holder's continued employment throughout the vesting period.
Appreciation reported is net of exercise price.
(3) Potential Realizable Value is based on the assumed annual growth rates
for the five-year option term. Annual growth of 5% results in a stock
price of $9.51 per share and 10% results in a price of $12.14, per share
for Messrs. Lubman, Nadata and Schuster and $10.05 and $12.83
respectively, for Mr. Durando. Actual gains, if any, on stock option
exercises are dependent on the future performance of the stock as well
as the option holder's continued employment throughout the vesting
period. There can be no assurance that the amounts reflected in this
table will be achieved. Appreciation reported is net of exercise price.
(4) These amounts represent the increase in the market value of the
Company's outstanding shares (approximately 7.73 million) as of February
28, 1995, that would result from the same stock price assumptions used
to show the Potential Realizable Value for the named executive.
- ---------------------------
The following table sets forth certain information as to each exercise of
stock options during the fiscal year ended February 28, 1995 by the persons
named in the Summary Compensation Table and the fiscal year end value of
unexercised options:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR-END
OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at FY End (2) at FY End
Shares -------------- -------------
Acquired on Value Exercisable/ Exercisable/
Exercise Realized (1) Unexercisable Unexercisable
----------- ------------ -------------- -------------
<S> <C> <C> <C> <C>
Irving Lubman - $ - 24,805 $163,713
148,650 25,000
Arthur Nadata - - 24,805 161,480
148,650 25,000
Richard Schuster - - 24,805 161,480
148,650 25,000
Paul Durando - - 7,500 15,675
10,000 0
</TABLE>
-7-
<PAGE>
(1) Market value less exercise price, before payment of applicable federal or
state taxes
(2) The share quantities in this column give effect to 5% stock dividends
declared by the Company on September 16, 1992 and March 6, 1993 and a 3
for 2 stock split declared by the Company on September 7, 1993
Directors who are not employees of the Company receive a fee of $500 for
each Board of Directors or Committee meeting attended. There were four
meetings of the Board of Directors during the fiscal year ended February 28,
1995. Each director attended or participated in at least 75% of the
meetings of the Board of Directors and the committees thereof on which he
served.
For the fiscal year ended February 28, 1995, there was one meeting of the
Audit Committee. The Company's Audit Committee is involved in discussions
with the Company's independent public accountants with respect to the scope
and results of the Company's year-end audit, the Company's internal
accounting controls and the professional services furnished by the
independent auditors to the Company. During fiscal 1995, the Company had no
standing Nominating Committee or any committee performing similar functions.
Key Employees Stock Incentive Plan:
The Company has a Key Employees Stock Incentive Plan ("Plan"), approved by
the stockholders in 1984, as amended in September, 1987 which presently
covers 712,765 shares of Common Stock. Options are currently outstanding
for 377,392 shares and 426 shares are currently available for grant. The
Plan is intended to provide an additional means of inducing executives and
other "key salaried employees" of the Company (which is defined under
Section 422 of the Internal Revenue Code) to join and remain with the
Company by offering them a greater share of the Company's stock and a
greater identification with the Company.
The Board of Directors or a Committee which may be appointed and
maintained by the Board shall have the power to administer the Plan. The
Board or Committee shall have full power and authority: (i) to designate
participants; (ii) to designate options or any portion thereof as Incentive
Stock Options ("ISO"); (iii) to determine the terms and provisions of
respective option agreements (which need not be identical) including, but
not limited to, provisions concerning the time or times when and the extent
to which the stock options ("Options") and Stock Appreciation Rights
("SARs") may be exercised and the nature and duration of restrictions as to
transferability or constituting substantial risk forfeiture; (iv) to
accelerate the right to an optionee to exercise in whole or in part any
previously granted ISO including any options modified to qualify as ISO's;
and (v) to interpret the provisions and supervise the administration of the
Plan.
The purchase price of each share subject to an Option or any portion
thereof which has been designated by the Board or the Committee as an ISO
shall not be less than 100% (or 110%, if at the time of grant the optionee
owns more than 10% of the voting stock of the Company) in the case of
options designated as ISO's or 85% in case of options not designated as
incentive stock options, of the fair market value of such shares on the date
the option is granted. In no event shall the option price be less than the
par value of the stock.
-8-
<PAGE>
1994 Stock Option Plan:
In September 1994, the Company's stockholders approved the 1994 Stock
Option plan (the "Plan"), under which key employees and officers of the
company, its subsidiaries and affiliates may be granted options to purchase
an aggregate of 600,000 shares of the Company's Common Stock. The plan is
administered by the Compensation Committee, consisting of at least three
members of the Board of Directors. The committee, subject to provisions in
the Plan, will designate, in its discretion, which persons are to be granted
options, the number of shares subject to each option, and the period of each
option. Each recipient must be an employee of the Company at the time of
grant and throughout the period ending on the day three months before the
date of exercise. Under the terms of the Plan, the exercise price of the
shares subject to each option granted will be not less than 85% nor more
than 100% of the fair market value at the date of grant, or 110% of such
fair market value for options granted to any employee or director who owns
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company. Adjustments will be made to
the purchase price in the event of stock dividends, corporate
reorganizations, or similar events. During fiscal 1995, 310,000 options
were granted under the Plan at exercise prices of $7.25 and $8.13. As of
May, 18, 1995, no options to purchase shares under the 1994 Plan were
exercisable and no options to purchase shares granted under the 1994 Plan
have been exercised.
Outside Director Stock Option Plan:
In September 1994, the Company's stockholders approved the Outside
Directors Stock Option Plan (the "Director Plan") which covers 150,000
shares of the Company's Common Stock. The primary purposes of the Director
Plan are to attract and retain well-qualified persons for service as
directors of the Company and to provide such outside directors with the
opportunity to increase their proprietary interest in the Company's
continued success and further align their interests with the interests of
the stockholders of the Company through the grant of options to purchase
shares of the Company's Common Stock. All directors of the Company who are
not employees of the Company, of which there are presently three, are
eligible to participate in the Director Plan. None of the non-employee
directors are eligible to participate in any of the other compensation plans
of the Company.
Under the Director Plan, each non-employee Director ("Outside Director")
received options to purchase 10,000 shares of Common Stock at a price of
$8.25 per share (the price of shares of Common Stock on June 1, 1994) and
henceforth, on the June 1 of each subsequent year, each non-employee
director will be granted options to purchase 10,000 shares of Common Stock
at a price equal to the closing price of the Common Stock on a national
securities exchange upon which the Company's stock is listed or the average
of the mean between the last reported "bid" and "asked" prices if the Common
Stock is not so listed for the five business days immediately preceding the
date of grant. Options awarded to each outside director shall vest in three
equal installments over a period of two years, subject to forfeiture under
certain conditions and shall be exercisable by the Outside Director upon
vesting.
-9-
<PAGE>
Summary of Fiscal 1995 Stock Option Grants and Exercises:
During fiscal 1995, the Company granted options to purchase 580,950 shares
at prices ranging from $7.25 to $8.13 per share. Messrs. Lubman, Nadata and
Schuster each received options to purchase 148,650 shares at prices ranging
from $7.25 to $7.875 per share. Mr. Durando received options to purchase
10,000 shares at an exercise price of $7.875. Options to purchase 18,417
shares were exercised at prices ranging from $.90 to $2.11.
Employee Stock Ownership Plan:
In January 1987, the Company adopted an Employee Stock Ownership Plan
("ESOP" or "Plan"), which covers substantially all of the Company's
employees. The ESOP is managed by three Trustees, Messrs. Lubman, Nadata
and Schuster (the "Trustees"), who vote the securities held by the Plan
(other than securities of the Company which have been allocated to
employees' accounts).
The annual contributions to the Plan are to be in such amounts as the
Board of Directors in its sole discretion shall determine. Each employee
who participates in the Plan has a separate account and the annual
contribution by the Company to an employee's account is not permitted to
exceed the lesser of $30,000 (or such other limit as may be the maximum
permissible pursuant to the provisions of Section 415 of the Internal
Revenue Code and Regulations issued hereunder) or 25% of such employee's
annual compensation, as defined under the Plan. No contributions are
required of, nor shall any be accepted from, any employee.
All contributions to the Plan are invested in the Company's securities
(except for temporary investments), the Trustees having the right to
purchase the Company's securities on behalf of employees. The Trustees are
considered the stockholder for the purpose of exercising all owners' and
stockholders' rights, with respect to the Company's securities held in the
Plan, except for voting rights which insure to the benefit of each employee
who can vote all shares held in his account, even if said shares are not
vested. Vesting is based upon an employee's years of service, employees
generally becoming fully vested after six years.
Benefits are payable to employees at retirement or upon death, disability
or termination of employment, with payments commencing no later than sixty
days following the last day of the Plan year in which such event occurred.
Subject to the right of the employee to demand payment in the form of the
Company's Common Stock, all benefits are payable in cash or in Common Stock,
at the discretion of the Trustees.
The Trustees are empowered to borrow funds for the purpose of purchasing
the Company's securities. The securities so purchased are required to be
held in an acquisition indebtedness account, to be released and made
available for reallocation as principal is repaid. In May, 1988 the
Company, on behalf of the ESOP, entered into a revolving credit agreement
with its bank which provides for a $2,000,000 revolving line of credit at a
percentage of the bank's prime rate until May 1, 1997. Direct borrowings
under this line of credit are payable in forty-eight equal monthly
installments commencing with the fiscal period subsequent to such
borrowings. At February 28, 1995 the ESOP owned 295,818 shares at an
average price of approximately $1.21 per share.
-10-
<PAGE>
401(k) Savings Plan
The Company sponsors a retirement plan intended to be qualified under
Section 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code"). All non-union employees over age 21 who have been employed by the
Company for at least six months are eligible to participate in the plan.
Employees may contribute to the plan on a tax deferred basis up to 15% of
their total annual salary, but in no event more than the maximum permitted
by the Code ($9,240 in calendar 1994). Company contributions are
discretionary. For the plan year ended February 28, 1994, the Company has
elected to make matching contributions at the rate of $.25 per dollar
contributed by each employee up to a maximum of 1% of an employee's salary
vesting at the cumulative rate of 20% per year of service starting one year
after commencement of service and, accordingly, after five years of any
employee's service with Company, matching contributions by the Company are
fully vested. As of February 28, 1995 approximately 152 employees had
elected to participate in the plan. For the fiscal year ended February 28,
1995, the Company contributed approximately $61,500 to the plan, of which
$1,500 was a matching contribution for each of Mr. Lubman, Mr. Nadata and
Mr. Schuster and $850 for Mr. Durando.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee consisted during fiscal 1995 of Messrs.
Gardner (Chairman), Blau and Siegel. Mr. Gardner is Senior Vice President
of Janney Montgomery Scott, Inc., investment bankers, which acted as
placement agent in connection with the Company's $15 million private
placement of convertible subordinated notes in August 1994. Mr. Blau is a
partner in the law firm of Blau, Kramer, Wactlar & Lieberman, P.C. The
Company has utilized, and anticipates that it will continue to utilize, the
services of Blau, Kramer, Wactlar & Lieberman, P.C. as its general counsel.
In accordance with rules promulgated by the Securities and Exchange
Commission, the information included under the captions "Compensation
Committee Report on Executive Compensation" and "Company Stock
Performance" will not be deemed to be filed or to be proxy soliciting
material or incorporated by reference in any prior or future filings by
the Company under the Securities Act of 1933 or the Securities Exchange
Act of 1934.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation of the Company's executive officers generally is determined
by the Compensation Committee of the Board of Directors. Each member of the
Compensation Committee is a Director who is not an employee of the Company
or any of its affiliates. The following report with respect to certain
compensation paid or awarded to the Company's executive officers during
fiscal 1994 is furnished by the Compensation Committee.
General Policies
The Company's compensation programs are intended to enable the Company to
attract, motivate, reward and retain management talent required to achieve
aggressive corporate objectives in a rapidly changing industry, and thereby
increase stockholder value. It is the Company's policy to provide
incentives to its senior management to achieve both short-term and long-term
objectives and to reward exceptional performance and contributions to the
development of the Company's business. To attain these objectives, the
Company's executive compensation program includes a competitive base salary,
coupled with, with respect to certain executives, a substantial cash bonus
which is "at risk" based on the Company's earnings.
-11-
<PAGE>
Many of the Company's employees, including its executive officers, also are
eligible to be granted stock options periodically in order to more directly
align their interests with the long-term financial interests of the
Company's stockholders.
Relationship of Compensation to Performance
The Compensation Committee annually establishes, subject to any applicable
employment agreements, the salaries which will be paid to the Company's
executive officers during the coming year. In setting salaries, the Board
of Directors takes into account several factors, including competitive
compensation data, the extent to which an individual may participate in the
stock option plan maintained by the Company and its affiliates, and
qualitative factors bearing on an individuals's experience,
responsibilities, management and leadership abilities, and job performance.
Stock options are granted to key employees, including the Company's
executive officers, by the Compensation Committee of the Board of Directors
under the Plans. Among the Company's executive officers, the number of
shares subject to to options granted to each individual generally depends
upon his or her base salary and the level of that officer's management
responsibility.
During fiscal 1995, options to purchase 148,650 shares each were granted to
Messrs. Lubman, Nadata and Schuster and options to purchase 10,000 shares
were granted to Mr. Durando under the Company's Stock Option Plan. Bonuses
were paid to three executive officers, as set forth in the Summary
Compensation Table, pursuant to the terms of their employment agreements
with the Company and on a discretionary basis to the Paul Durando, the
Company's Vice President, Finance and Director. This latter bonus was
determined to be appropriate by the Compensation Committee in light of Mr.
Durando's contributions to the Company's performance, his base salary level
and the level of his management responsibilities.
Compensation of Chief Executive Officer
The Company has entered into an employment agreement with Irving Lubman, the
Company's Chairman of the Board and Chief Executive Officer, pursuant to
which Mr. Lubman receives a base salary of $200,000 and an incentive bonus
equal to three and thirty-three one-hundreths percent (3.33%) of the
Company's consolidated pre-tax earnings. In this way, Mr. Lubman's cash
compensation is tied directly to the Company's profitability. In light of
this employment agreement, the Compensation Committee was not required to
make any decision regarding the cash compensation of Mr. Lubman. In fiscal
1995, the Company granted Mr. Lubman options to purchase 148,500 shares of
Common Stock at an exercise price of $7.45 per share, which represented the
market price of the Common Stock on the date of grant. In this way, Mr.
Lubman's interest are directly aligned with the interests of the Company's
stockholders. The Compensation Committee believes that these options are
appropriate in light of Mr. Lubman's contribution to the Company and provide
an incentive for Mr. Lubman to maximize long-term stockholder value.
Herbert Gardner - Chairman
Harvey Blau
David Siegel
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<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Exchange Act requires the Company's executive officers,
directors and persons who own more than ten percent of a registered class of
the Company's equity securities ("Reporting Persons") to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission (the "SEC") and the National Association of
Securities Dealers (the "NASD"). These Reporting Persons are required by
SEC regulation to furnish the Company with copies of all Forms 3, 4 and 5
they file with the SEC and NASD.
Based solely on the Company's review of the copies of the forms it has
received, the Company believes that all Reporting Persons compiled on a
timely basis with all filing requirements applicable to them with respect to
transactions during fiscal year 1995, except that Irving Lubman, Chairman of
the Board; Arthur Nadata, President, Treasurer and Director; Richard
Schuster, Vice President, Secretary and Director and Paul Durando, Vice
President, Finance and Director, each failed to timely file one Form 4
relating to the vesting of shares of Common Stock under the Company's
Employee Stock Ownership Plan.
COMPANY STOCK PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
stockholder return on its Common Stock for a five year period (February 28,
1990 to February 28, 1995) with the cumulative total return of the NASDAQ
Market Index (which includes the Company) and a peer group of companies
selected by the Company for purposes of the comparison. Dividend
reinvestment has been assumed and, with respect to companies in the Peer
Group, the returns of each such company have been weighted to reflect
relative stock market capitalization.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG NU HORIZONS ELECTRONICS CORP., NASDAQ MARKET INDEX AND PEER GROUP **
<TABLE>
<CAPTION>
Nu Horizons NASDAQ
Measurement Period Electronics Market
(Fiscal Year Covered) Corp. Index Peer Group
- --------------------- ----------- ------ ----------
<S> <C> <C> <C>
Measurement Pt.
FYE 2/28/90 $100.00 $100.00 $100.00
FYE 2/28/91 $ 76.47 $104.75 $113.58
FYE 2/29/92 $152.93 $115.76 $126.24
FYE 2/28/93 $315.12 $115.95 $170.65
FYE 2/28/94 $690.98 $147.74 $189.46
FYE 2/28/95 $583.93 $141.05 $181.92
</TABLE>
Assumes $100 Invested on February 28, 1990 in Nu Horizons Electronics Common
Stock, NASDAQ market Index and Peer Group. Peer group includes All American
Semiconductor, Anthem Electronics Inc., Arrow Electronics Inc., Avnet Inc.,
Bell Industries Inc., Jaco Electronics Inc., Kent Electronics Corp.,
Marshall Industries, Milgray Electronics Inc., Pioneer Standard Electronics,
Premier Industrial Corp., Sterling Electronics Corp., Western
Microtechnology and Wyle Laboratories Inc.
* Total Return Assumes Reinvestment of Dividends
**Fiscal Year Ending February 28
-13-
<PAGE>
INDEPENDENT AUDITORS
Lazar, Levine & Company LLP acted as the Company's independent auditors for
the fiscal year ended February 28, 1995 and has been selected by the Board of
Directors, upon the recommendation of the Audit Committee, to continue to act as
the Company's independent auditors in the Company's 1996 fiscal year.
A representative of Lazar, Levine & Company LLP plans to be present at the
Annual Meeting with the opportunity to make a statement if he desires to do so,
and will be available to respond to appropriate questions.
FINANCIAL STATEMENTS
A copy of the Company's Annual Report of Stockholders for the fiscal year
ended February 28, 1995 has been provided to all stockholders as of the Record
Date. Stockholders are referred to the report for financial and other
information about the Company, but such report is not incorporated in this proxy
statement and is not a part of the proxy soliciting material.
ADDITIONAL INFORMATION
The Board of Directors does not have a standing nominating committee. The
Board of Directors does not intend to present to the meeting any matters not
referred to in the form of proxy. If any proposal not set forth in this Proxy
Statement should be presented for action at the meeting, and is a matter which
should come before the meeting, it is intended that the shares represented by
proxies will be voted with respect to such matters in accordance with the
judgment of the persons voting them.
The cost of soliciting proxies in the accompanying form has been or will be
paid by the Company. In addition to solicitations by mail, arrangements may be
made with brokerage houses and other custodians, nominees and fiduciaries to
send proxy material to their principals, and the Company may reimburse them for
their expenses in so doing. To the extent necessary in order to assure
sufficient representation, officers and regular employees of the Company may
request the return of proxies personally, by telephone or telegram. The extent
to which this will be necessary depends entirely upon how promptly proxies are
received, and stockholders are urged to send in their proxies without delay.
Stockholder proposals with respect to the Company's next Annual Meeting of
Stockholders must be received by the Company no later than June 1, 1996 to be
considered for inclusion in the Company's next Proxy Statement.
A copy of the Annual Report has been mailed to every stockholder of record.
The Annual Report is not considered proxy soliciting material.
By Order of the Board of Directors,
Richard S. Schuster
Secretary
Dated: Amityville, New York
August 14, 1994
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<PAGE>
NU HORIZONS ELECTRONICS CORP.
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS PROXY FOR ANNUAL MEETING
September 22, 1995
The undersigned hereby appoints Arthur Nadata and Richard S. Schuster or
either of them, attorneys and Proxies with full power of substitution in each of
them, in the name and stead of the undersigned to vote as Proxy all the stock of
the undersigned in NU HORIZONS ELECTRONICS CORP., a Delaware corporation, at the
Annual Meeting of Stockholders scheduled to be held September 22, 1995 and any
adjournments thereof.
The Board of Directors recommends a vote FOR the following proposals:
1. Election of the following nominees, as set forth in the proxy statement:
[ ] FOR all nominees listed below (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below
HARVEY BLAU RICHARD S. SCHUSTER
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name on the line provided below.)
------------------------------------------------
2. To consider and act upon such other business as may properly come before the
meeting or any adjournment thereof.
(Continued and to be signed on reverse side)
<PAGE>
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY PROXIES, AND EACH OF THEM,
AS SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY
PROPERLY COME BEFORE THE MEETING, SHAREHOLDERS MAY WITHHOLD THE VOTE FOR ONE
OR MORE NOMINEE(S) BY WRITING THE NOMINEE(S) NAME(S) IN THE BLANK SPACE
PROVIDED ON THE REVERSE HEREOF. IF NO SPECIFICATION IS MADE, THE SHARES
WILL BE VOTED FOR THE PROPOSALS SET FORTH ON THE REVERSE HEREOF.
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE
Dated: , 1995
_______________________________[L.S.]
_______________________________[L.S.]
(Note: Please sign exactly as your
name appears hereon. Executors,
administrators, trustees, etc. should
so indicate when signing, giving full
title as such. If signer is a
corporation, execute in full
corporate name by authorizing
officer. If shares are held in the
name of two or more persons, all
should sign.)
