<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
Reg. sec. 240.14a-101
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
REPTRON ELECTRONICS, 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)(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:(1)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration No.:
(3) Filing Party:
(4) Date Filed:
- - ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
[REPTRON ELECTRONICS, INC. LETTERHEAD]
March 28, 1997
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of Reptron
Electronics, Inc. (the "Company"), which will be held at the Reptron
Electronics, Inc. corporate headquarters, 14401 McCormick Drive, Tampa, Florida
33626, on April 15, 1997, at 10:00 a.m., local time.
The notice of the meeting and proxy statement on the following pages cover
the formal business of the meeting. Whether or not you expect to attend the
meeting, please sign, date, and return your proxy promptly in the enclosed
envelope to assure your stock will be represented at the meeting. If you decide
to attend the annual meeting and vote in person, you will, of course, have that
opportunity.
The continuing interest of the shareholders in the business of the Company
is gratefully acknowledged. We hope many will attend the meeting.
Sincerely,
/S/ MICHAEL L. MUSTO
--------------------
MICHAEL L. MUSTO,
President and Chief Executive Officer
<PAGE> 3
REPTRON ELECTRONICS, INC.
14401 MCCORMICK DRIVE
TAMPA, FLORIDA 33626
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 15, 1997
The Annual Meeting of Shareholders of Reptron Electronics, Inc. will be
held at the Reptron Electronics, Inc. corporate headquarters, 14401 McCormick
Drive, Tampa, Florida 33626, on April 15, 1997 at 10:00 a.m., local time, for
the following purposes:
1. To elect one Class III director for a three-year term expiring in 2000;
2. To increase the authorized shares of Common Stock of the Company from
15,000,000 shares to 50,000,000 shares;
3. To amend the Company's Incentive Stock Option Plan (the "Plan") to
increase the number of shares available for issuance pursuant to the Plan from
500,000 shares to 1,500,000 shares; and
4. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on March 10, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting.
Shareholders are requested to vote, date, sign and promptly return the
enclosed proxy in the envelope provided for that purpose, WHETHER OR NOT THEY
INTEND TO BE PRESENT AT THE MEETING.
By Order of the Board of Directors,
/s/ LEIGH A. ADAMS
LEIGH A. ADAMS
Secretary
Tampa, Florida
March 28, 1997
<PAGE> 4
REPTRON ELECTRONICS, INC.
PROXY STATEMENT
ANNUAL MEETING AND PROXY SOLICITATION INFORMATION
This proxy statement is first being sent to shareholders on or about March
28, 1997, in connection with the solicitation of proxies by the Board of
Directors of Reptron Electronics, Inc. (the "Company"), to be voted at the
Annual Meeting of Shareholders to be held on April 15, 1997, and at any
adjournment thereof (the "Meeting"). The close of business on March 10, 1997,
has been fixed as the record date for the determination of shareholders entitled
to notice of and to vote at the Meeting. At the close of business on the record
date, the Company had outstanding 6,071,019 shares of $.01 par value common
stock, entitled to one vote per share.
Shares represented by duly executed proxies in the accompanying form
received by the Company prior to the Meeting will be voted at the Meeting. If
shareholders specify in the proxy a choice with respect to any matter to be
acted upon, the shares represented by such proxies will be voted as specified.
If a proxy card is signed and returned without specifying a vote or an
abstention on any proposal, it will be voted according to the recommendation of
the Board of Directors on that proposal. The Board of Directors recommends a
vote FOR all items listed on the proxies. The Board of Directors knows of no
other matters that may be brought before the Meeting. However, if any other
matters are properly presented for action, it is the intention of the named
proxies to vote on them according to their best judgment.
Shareholders who hold their shares through an intermediary must provide
instructions on voting as requested by their bank or broker. A shareholder who
signs and returns a proxy may revoke it at any time before it is voted by taking
one of the following three actions: (i) giving written notice of the revocation
to the Secretary of the Company; (ii) executing and delivering a proxy with a
later date; or (iii) voting in person at the Meeting.
Approval of each item to be voted upon will require a plurality of the
votes cast for each such item at the Meeting, provided a quorum is present.
Votes cast by proxy or in person at the Meeting will be tabulated by one or more
inspectors of election appointed at the Meeting, who will also determine whether
a quorum is present for the transaction of business. Abstentions and broker
non-votes will be counted as shares present in the determination of whether
shares of the Company's common stock represented at the Meeting constitute a
quorum. With respect to matters to be acted upon at the Meeting, abstentions and
broker non-votes will not be counted for the purpose of determining whether a
proposal has been approved.
The expense of preparing, printing, and mailing proxy materials to
shareholders of the Company will be borne by the Company. In addition to
solicitations by mail, regular employees of the Company may solicit proxies on
behalf of the Board of Directors in person or by telephone. The Company will
reimburse brokerage houses and other nominees for their expenses in forwarding
proxy material to beneficial owners of the Company's stock.
The Company's executive offices are located at 14401 McCormick Drive,
Tampa, Florida 33626. The Company's telephone number is (813) 854-2351.
<PAGE> 5
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 10, 1997, information as to the
Company's Common Stock beneficially owned by: (i) each director of the Company,
(ii) each executive officer named in the Summary Compensation Table, (iii) all
directors and executive officers of the Company as a group, and (iv) any person
who is known by the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP PERCENT
--------------------------------------- ----------------- -------
<S> <C> <C>
Michael L. Musto(2).................................... 2,543,115 41.9%
Paul J. Plante(3)...................................... 701,456 11.6%
Patrick J. Flynn(4).................................... 41,250 *
Gary Bolohan(5)........................................ 22,651 *
Michael R. Nichols(6).................................. 20,518 *
Leigh A. Adams(7)...................................... 11,397 *
William L. Elson(8).................................... 12,500 *
3000 Town Center, Suite 2690
Southfield, Michigan 48075
Barry M. Alpert(9)..................................... 1,250 *
880 Carillon Parkway
St. Petersburg, Florida 33716
All directors and executive officers as a group
(9 persons).......................................... 3,017,501 49.7%
</TABLE>
- - ---------------
* Less than 1%
(1) The business address for Ms. Adams and Messrs. Musto, Plante, Flynn, Bolohan
and Nichols is 14401 McCormick Drive, Tampa, Florida 33626.
(2) Includes 2,194,479 shares held by: (i) MLM Investment Company Limited
Partnership ("MLM") of which certain trusts for the benefit of Mr. Musto and
Mr. Musto's children are the limited partners and a corporation, in which
Mr. Musto is the sole shareholder and director, and Mr. Musto's revocable
trust are the general partners (Mr. Musto has sole voting and dispositive
power over the shares held by MLM); and (ii) 348,636 shares held by Paul J.
Plante as Trustee of the Reptron Electronics, Inc. Employee Profit Sharing
Trust (the "Profit Sharing Trust"), which are attributable to Mr. Musto in
accordance with Rule 13d-3 under the Exchange Act. Excludes: (i) up to
116,212 shares which are expected to be allocated to Mr. Musto by the Profit
Sharing Trust, (ii) 1,000 shares owned by Mr. Musto's mother and (iii) 3,000
shares subject to options that are currently exercisable by Mr. Musto's
mother. Mr. Musto disclaims beneficial ownership of his mother's shares.
(3) Includes: (i) 37,500 shares subject to options that are currently
exercisable and (ii) 661,956 shares held by Mr. Plante as trustee of the
Profit Sharing Trust. The Profit Sharing Trust has been terminated and it is
expected that all such shares will be distributed among Profit Sharing Trust
participants. Except for Mr. Musto, no director or executive officer of the
Company will beneficially own more than 5% of the outstanding shares of
common stock immediately after, and as a result of, the Profit Sharing Trust
distribution.
(4) Represents shares subject to options that are currently exercisable.
2
<PAGE> 6
(5) Excludes up to 22,650 shares expected to be distributed to Mr. Bolohan from
the Profit Sharing Trust.
(6) Excludes up to 20,517 shares that are expected to be distributed to Mr.
Nichols from the Profit Sharing Trust.
(7) Includes 7,500 shares subject to options that are currently exercisable.
Excludes up to 1,299 shares expected to be distributed to Ms. Adams from
the Profit Sharing Trust.
(8) Includes 5,000 shares subject to options that are currently exercisable.
(9) Represents shares subject to options that are currently exercisable.
3
<PAGE> 7
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information as of March 10, 1997, concerning the
Company's executive officers, continuing directors, and nominees for director.
<TABLE>
<CAPTION>
YEAR FIRST
BECAME A
NAME POSITION(S) AGE DIRECTOR
---- ----------- --- ----------
<S> <C> <C> <C>
Michael L. Musto(1).................. President, Chief Executive Officer, and 55 1973
Director (Class I -- term expiring in 1999)
Paul J. Plante....................... Chief Operating Officer, Chief Financial 39 1994
Officer, Treasurer, and Director (Class
I -- term expiring in 1999)
Patrick J. Flynn..................... President -- K-Byte Manufacturing 56 --
Gary Bolohan......................... Executive Vice President -- Reptron 42 --
Distribution
Robert M. Moore...................... Vice President -- Corporate Operations 61 --
Michael R. Nichols................... Vice President -- Sales 40 --
Leigh A. Adams(1)(2)................. Corporate Credit Manager, Secretary, and 32 1994
Director (Class III -- term expiring in 1997;
nominee for a term expiring in 2000)
William L. Elson(3).................. Director (Class II -- term expiring in 1998) 49 1994
Barry M. Alpert(3)................... Director (Class II -- term expiring in 1998) 56 1995
</TABLE>
- - ---------------
(1) Mr. Musto and Ms. Adams serve on the Company's Stock Option Committee.
(2) Ms. Adams is the daughter of Mr. Musto.
(3) Messrs. Alpert and Elson serve on the Company's Audit and Compensation
Committees.
MICHAEL L. MUSTO. Mr. Musto has been the President, Chief Executive
Officer and a director of the Company since its inception in 1973. Prior to
1973, Mr. Musto worked for nine years in electronic components distribution for
Northland Electronics and Diplomat Electronics.
PAUL J. PLANTE. Mr. Plante was appointed Chief Operating Officer of the
Company in January 1997 and has been a director since 1994. Mr. Plante has been
employed by the Company since 1986 as its Vice President of Finance, Chief
Financial Officer and Treasurer. He was Controller of K-Byte Manufacturing,
which is now a division of the Company, during the period 1983-1986. Prior to
1983, Mr. Plante worked for a regional accounting firm (1980-83). Mr. Plante is
a Certified Public Accountant and is a graduate of Michigan State University,
with a Bachelor of Arts degree in accounting. He also has an MBA degree from the
University of South Florida.
PATRICK J. FLYNN. Mr. Flynn has been employed by the Company since 1986 as
President of K-Byte Manufacturing. He has over 30 years of experience in the
electronics business. He was employed by the KTB Group (an engineering firm) in
Detroit from 1966 to 1983. During his employment with the KTB Group, Mr. Flynn
served in a number of capacities, including as Executive Vice President and
Chief Operating Officer. He purchased K-Byte Manufacturing from the KTB Group in
1983 and was the sole owner of K-Byte
4
<PAGE> 8
Manufacturing prior to its acquisition by the Company in 1986. Mr. Flynn is a
graduate of the University of Detroit with a Bachelor of Science degree in
electrical engineering.
GARY BOLOHAN. Mr. Bolohan was promoted to Executive Vice President of
Reptron Distribution in 1990. In this role, Mr. Bolohan is responsible for all
aspects of the operations of Reptron Distribution. Prior to his current
position, Mr. Bolohan held several positions, including Vice President of
Product Marketing (1989-1990), midwest regional sales manager (1985-1989),
general manager of the Detroit sales office (1983-1985), and field salesperson.
Mr. Bolohan has been employed by the Company since 1978.
ROBERT M. MOORE. Mr. Moore joined the Company in 1990 as Corporate
Director of Operations and became Vice President of Corporate Operations in
1992. His previous experience includes: President of Moore Investment Corp., a
consulting firm (1988-1990); President of Bufkor, Inc., a manufacturer of
jewelry packaging and displays (1986-1988); Senior Vice President and Chief
Financial Officer of Duro Bag Manufacturing Company (1982-1986); and Vice
President of Finance of Tresler Oil Company Division, Ashland Oil, Inc.
(1977-1982). Mr. Moore is a graduate of the University of Cincinnati with a
Bachelor of Science degree in management.
MICHAEL R. NICHOLS. Mr. Nichols was promoted to Vice President of Sales in
1990. He is responsible for all sales activity for Reptron Distribution and is
instrumental in generating sales opportunities for K-Byte Manufacturing. Prior
to his current role, Mr. Nichols held several positions with the Company,
including southeast regional sales manager (1985-1990), sales manager for the
Tampa sales office (1982-1985), and field salesperson. Mr. Nichols has been
employed by the Company since 1978. He is a graduate of the University of
Florida with a Bachelor of Arts degree in management and marketing.
LEIGH A. ADAMS. Ms. Adams serves as the Company's Secretary and has been a
director since 1994. Ms. Adams joined the Company in 1982 and has served in a
number of administrative posts, including Operations Manager (1989-1991) and
Corporate Credit Manager (1991-present).
WILLIAM L. ELSON. Mr. Elson has served as the Company's outside general
counsel since 1979 and has been a director since 1994. He has practiced as a
sole practitioner since 1975 and worked for Coopers & Lybrand from 1973 to 1975.
Mr. Elson is a Certified Public Accountant and is a graduate of Wayne State
University, with a J.D. degree and a Bachelor of Science degree in accounting.
BARRY M. ALPERT. Mr. Alpert currently is a Managing Director at Raymond
James & Associates, Inc. Mr. Alpert has served as Vice President and then as
Senior Vice President of Investment Banking for Robert W. Baird & Co.
Incorporated from 1991-1997. Since 1989, Mr. Alpert has served as President and
Chief Executive Officer of Alpert Financial Group, Inc. (a family investment
holding company). From 1989-1993, Mr. Alpert served as Vice Chairman of Colony
Bank. Mr. Alpert holds a graduate degree in banking from the University of
Wisconsin and a BS/BA degree from Roosevelt University. He has been a director
since 1995.
Directors are elected by the Company's shareholders and serve until their
successors are elected and qualified. Directors are divided into three classes
and serve staggered terms that expire at the 1997, 1998 and 1999 annual meeting
of shareholders. Terms of the directors expire as follows: Ms. Adams in 1997,
Messrs. Alpert and Elson in 1998 and Messrs. Musto and Plante in 1999. Directors
for each class are elected at the annual meeting of shareholders held in the
year in which the term for such class expires and serve thereafter for three
years or until their earlier resignation or removal or until their successors
are elected and qualified.
Directors who are not employees of the Company are paid $6,000 annually
plus $1,000 for each Board meeting attended, and $1,000 for each committee
meeting attended if such meeting occurs on a day other
5
<PAGE> 9
than a scheduled meeting of the Board of Directors. In addition, the Company has
reserved 50,000 shares of Common Stock for the future grant of stock options to
non-employee directors. During 1995, Barry Alpert was granted options to
purchase 5,000 shares of Common Stock at an exercise price of $14.25 per share.
These options vest 25% per year beginning one year from the option grant date.
All directors receive reimbursement for reasonable out-of-pocket expenses
incurred in connection with meetings of the Board of Directors.
All executive officers are elected annually by and serve at the discretion
of the Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
During 1996, the Company's Board of Directors held four meetings. Each
incumbent director attended at least 75% of the total number of Board meetings
and meetings of committees of which he or she is a member.
The Company's Board of Directors has a Compensation Committee, an Audit
Committee, and a Stock Option Committee. The Compensation Committee consists of
Messrs. Alpert and Elson. The Compensation Committee recommends to the Board
both base salary levels and bonuses for the Chief Executive Officer and reviews
the compensation levels of the other officers of the Company. See "Board
Compensation Committee Report on Executive Compensation." The Compensation
Committee also reviews and makes recommendations with respect to the Company's
existing and proposed compensation plans. The Compensation Committee met two
times during 1996.
The members of the Audit Committee are Messrs. Alpert and Elson. The duties
of the Audit Committee, which met two times during 1996, are to recommend to the
Board of Directors the selection of independent certified public accountants, to
meet with the Company's independent certified public accountants to review the
scope and results of the audit, and to consider various accounting and auditing
matters related to the Company, including its system of internal controls and
financial management practices.
The Company's Stock Option Committee consists of Michael L. Musto and Leigh
A. Adams. The Stock Option Committee is responsible for administering the
Company's Incentive Stock Option Plan and Non-Employee Director Stock Option
Plan. The Stock Option Committee met one time in 1996.
The Company does not have a nominating committee. This function is
performed by the Board of Directors.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid $6,000 annually
plus $1,000 for each Board meeting attended, and $1,000 for each committee
meeting attended if such meeting occurs on a day other than a scheduled meeting
of the Board of Directors. In addition, the Company reserved 50,000 shares of
Common Stock for future issuance upon the exercise of stock options that may be
granted to such non-employee directors. All directors receive reimbursement of
reasonable out-of-pocket expenses incurred in connection with meetings of the
Board of Directors. No director who is an employee of the Company receives
separate compensation for services rendered as a director.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of
the common stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors, and
6
<PAGE> 10
ten percent shareholders are required by the SEC regulations to furnish the
Company with copies of all Section 16(a) reports they file.
Based solely on its review of the copies of such reports received by it,
and written representations from certain reporting persons that no SEC Forms 3,
4, or 5 were required to be filed by those persons, the Company believes that
during 1996, its officers, directors and ten percent beneficial owners timely
complied with all applicable filing requirements.
EXECUTIVE COMPENSATION
Summary Compensation Table. The table below sets forth certain information
concerning the compensation earned during 1996 by the Company's Chief Executive
Officer and its four other most highly compensated executive officers
(collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------- ALL OTHER
SALARY BONUS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(2) ($) ($)(3)
--------------------------- ---- ------- ------- ------------
<S> <C> <C> <C> <C>
Michael L. Musto............................. 1996 400,000 -- 41
President and Chief Executive Officer 1995 381,000 -- 41
1994 350,000 37,250 40
Paul J. Plante............................... 1996 200,000 -- 941
Chief Operating Officer and 1995 150,000 -- 941
Chief Financial Officer 1994 130,000 20,000 940
Patrick J. Flynn............................. 1996 225,000 -- 941
President -- K-Byte Manufacturing 1995 225,000 -- 941
1994 120,000 105,000 940
Gary Bolohan................................. 1996 225,000 -- 41
Executive Vice President -- Reptron
Distribution 1995 225,000 -- 41
1994 120,000 105,000 940
Michael R. Nichols........................... 1996 200,000 -- 41
Vice President -- Sales 1995 189,000 -- 941
1994 156,000 19,000 490
</TABLE>
- - ---------------
(1) The aggregate amount of perquisites and other personal benefits, if any, did
not exceed the lesser of $50,000 or 10% of the total annual salary and
bonus reported for each Named Executive Officer and has therefore been
omitted.
(2) Includes any amount deferred by the Named Executive Officer pursuant to the
Company's 401(k) plan.
(3) Includes $41 annual premium paid by the Company for a $10,000 life insurance
policy for each of the Named Executive Officers. Also includes the amount
contributed by the Company to the account of each Named Executive Officer
under the Company's 401(k) plan.
Option Grants in 1996. No stock options were granted during 1996 to the
Named Executive Officers.
7
<PAGE> 11
Aggregated Options Table. The following table sets forth information
concerning options held by the Named Executive Officers at the end of 1996. No
stock options were exercised during 1996.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT FISCAL FISCAL YEAR-
YEAR-END(#) END($)(1)
EXERCISABLE(E)/ EXERCISABLE(E)/
NAME UNEXERCISABLE(U) UNEXERCISABLE(U)
---- ------------------- ----------------------
<S> <C> <C>
Michael L. Musto............................... -- --
Paul J. Plante................................. 37,500(E)/12,500(U) $585,938(E)/195,313(U)
Patrick J. Flynn............................... 41,250(E)/13,750(U) $644,531(E)/214,844(U)
Gary Bolohan................................... -- --
Michael R. Nichols............................. -- --
</TABLE>
- - ---------------
(1) Represents the dollar value of the difference between the value at December
31, 1996 and the option exercise price of unexercised options at December
31, 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Compensation Committee consisted of Messrs. Alpert and
Elson. Mr. Alpert and Mr. Elson are outside directors. Set forth below is a
description of certain transactions and relationships between a Compensation
Committee member and the Company.
The Company leased one of its sales offices (located in Tampa, Florida)
from the brother-in-law of a member of the Board of Directors, Barry M. Alpert.
This lease was entered into in 1994 for a term of two years. In 1994, 1995 and
1996, rent expense on this facility totaled $59,289, $65,781 and $59,752,
respectively, which management believes to be comparable to the rent that would
have been paid to an unrelated party. This lease has now been terminated.
William L. Elson received $178,000, $234,850 and $184,600 in fees for legal
services rendered to the Company during 1994, 1995 and 1996, respectively.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Securities Exchange Act
of 1934 that might incorporate future filings, including this Proxy Statement,
in whole or in part, the following Board Compensation Committee Report on
Executive Compensation and the Performance Graph shall not be incorporated by
reference into any such filings.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation programs are intended to enable it to
attract and retain talented executives and to reward them appropriately. The
Compensation Committee (the "Committee") attempts to determine the appropriate
total levels of compensation, as well as the appropriate mix of base salary,
annual incentives and long-term incentives. In determining compensation,
consideration is given both to overall Company performance and to individual
performance, taking into account the contributions made by the executive toward
improving Company performance. Consideration is also given to the executive's
position, location, and level of responsibility in the structure of the Company
and the job performance of the executive in planning, providing direction for,
and implementing the Company's strategy. The Committee's primary
8
<PAGE> 12
objective in establishing compensation programs is to support the Company's goal
of maximizing the value of shareholders' investment in the Company.
The Company's program for executive compensation consists of three
components: base salary, an annual incentive (bonus) payment, and long-term
incentives. An executive's base salary is determined through a combination of
several factors: an evaluation of the sustained performance of the executive,
prevailing levels of pay for positions of comparable responsibility in the
industry, level of responsibility, and prior experience. Payments under the
Company's annual incentive plans are tied to the Company's level of
profitability. An individual executive's annual incentive opportunity is a
percentage of his base salary. Actual incentive payments are determined by
applying a formula based on Company performance to each executive's annual
incentive opportunity. Applying this formula results in payments at the targeted
incentive opportunity level when budgeted earnings are achieved, and payments
below the target level when earnings are below those set by the budget. The
formula provides for payments above the targeted level only when earnings exceed
those set in the budget.
The Company's long term incentives are in the form of stock option awards.
The objective of these awards is to advance the longer term interests of the
Company and its shareholders and complement incentives tied to annual
performance. These awards provide rewards to executives upon the creation of
incremental shareholder value and attainment of long term earnings goals. Stock
options only produce value to executives if the price of the Company's stock
appreciates, thereby directly linking the interests of executives with those of
the shareholders. The executive's right to the stock options vests over a period
prescribed by the Company's Stock Option Committee and each option is
exercisable, but only to the extent it has vested, over a four-year period
following its grant.
Mr. Musto's compensation results from his participation in the same
compensation program as the other executives of the Company. Mr. Musto's 1996
compensation was reviewed by the Committee applying the principles outlined
above in the same manner as they were applied to the other executives of the
Company. In addition, the Committee reviews the compensation paid to chief
executive officers of comparable companies and considers those compensation
levels in determining Mr. Musto's compensation.
The Committee believes that the program it has adopted serves to focus the
efforts of the Company's executives on the attainment of a sustained high rate
of Company growth and profitability for the benefit of the Company and its
shareholders.
Compensation Committee
Barry M. Alpert
William L. Elson
9
<PAGE> 13
CERTAIN TRANSACTIONS
The Company leases an aircraft from a corporation controlled by Mr. Musto.
The Company is responsible for all costs associated with the operation of the
aircraft, including fuel, maintenance, storage and crew salary and expenses. To
the extent that Mr. Musto uses the aircraft for personal purposes, he reimburses
the Company for the costs associated with such personal use. The Company
believes that the rent paid for the aircraft is comparable to the rent that
would be paid to an unrelated third party. Rent paid for the use of the aircraft
totaled approximately $156,000 in 1994, $74,000 in 1995 and $240,000 in 1996.
The Company leases one of its Reptron Distribution sales offices (located
in Detroit, Michigan) from Michael L. Musto. This facility was the headquarters
of the Company before the relocation to Tampa in 1986. The building includes
office and warehouse space and totals approximately 10,000 square feet. Rent
expense on this facility totaled $69,000 in 1994 and $68,000 in each of 1995 and
1996, which management believes to be comparable to the rent that would have
been paid to an unrelated party. The lease expires in November 1998.
10
<PAGE> 14
PERFORMANCE GRAPH
The following graph is a comparison of the cumulative total returns for the
Company's common stock as compared with the cumulative total return for the
NASDAQ Stock Market (U.S.) Index and the average performance of a group
consisting of the Company's peer corporations on a line-of-business basis. The
corporations making up the peer companies group are Bell Microproducts,
Benchmark Electronics, DII Group, Inc., IEC Electronics, Jaco Electronics, Kent
Electronics, Milgray Electronics, Nu Horizons Electronics, Sanmina, and Sterling
Electronics. The cumulative return of the Company was computed by dividing the
difference between the price of the Company's common stock at the end and the
beginning of the measurement period (March 28, 1994 to December 31, 1996) by the
price of the Company's common stock at the beginning of the measurement period.
The total return calculations are based upon an assumed $100 investment on March
28, 1994, the date of the Company's initial public offering, including
reinvestment of dividends.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD REPTRON PEER GROUP NASDAQ STOCK
(FISCAL YEAR COVERED) ELECTRONICS, INC. MARKET-US
<S> <C> <C> <C>
3/28/94 100 100 100
3/94 98 93 96
6/94 88 88 92
9/94 70 104 99
12/94 68 103 98
3/95 97 103 107
6/95 122 125 122
9/95 138 155 137
12/95 117 169 139
3/96 127 181 145
6/96 136 161 157
9/96 137 155 163
12/96 159 189 171
</TABLE>
11
<PAGE> 15
PROPOSAL 1 -- ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes of
directors. The Company's Articles of Incorporation provide that at each annual
election, directors shall be chosen by class for a term of three years, to
preserve, as evenly as practicable, the division of directors into classes. The
current terms of the three classes of directors expire in 1997 (Class III
directors), 1998 (Class II directors) and 1999 (Class I directors). One director
is being elected at the Meeting for a term ending in 2000, or until her
respective successor has been elected and qualified.
The Board of Directors has nominated Leigh A. Adams to stand for election
at the Meeting for the Class III director seat. See "Management -- Directors and
Executive Officers" for information on this nominee. The nominee's current term
will expire on the date of the Meeting. Unless otherwise indicated, votes will
be cast pursuant to the accompanying proxy FOR the election of this nominee.
Should the nominee become unable or unwilling to accept nomination or election
for any reason, it is intended that votes will be cast for a substitute nominee
designated by the Board of Directors, which has no reason to believe the nominee
named will be unable or unwilling to serve if elected.
PROPOSAL 2 -- AMENDMENT OF THE ARTICLES OF INCORPORATION
The Board of Directors proposes to amend the Articles of Incorporation to
increase the number of authorized shares of Common Stock from 15,000,000 to
50,000,000.
PROPOSAL 3 -- AMENDMENT OF INCENTIVE STOCK OPTION PLAN
The Board of Directors proposes to amend the Company's Incentive Stock
Option Plan (the "Plan") to increase the number of shares available for issuance
pursuant to the Plan from 500,000 to 1,500,000.
INFORMATION CONCERNING INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company's Board of Directors has appointed Grant Thornton LLP as
independent accountants to audit the consolidated financial statements of the
Company for the year ending December 31, 1997. Representatives of Grant Thornton
LLP are expected to be present at the Meeting with the opportunity to make a
statement if they desire to do so and to respond to appropriate questions posed
by shareholders.
PROPOSALS OF SHAREHOLDERS FOR THE NEXT ANNUAL MEETING
Proposals of shareholders intended for presentation at the 1998 annual
meeting must be received by the Company on or before November 28, 1997, in order
to be included in the Company's proxy statement and form of proxy for that
meeting.
The Company's Articles of Incorporation also require advance notice to the
Company of any shareholder proposal and of any nominations by shareholders of
persons to stand for election as directors at a shareholders' meeting. Notice of
shareholder proposals and of director nominations must be timely given in
writing to the Secretary of the Company prior to the meeting at which the
directors are to be elected. To be timely, notice must be received at the
principal executive office of the Company not less than 60 days prior to the
meeting of shareholders; provided, however, that in the event that less than 70
days' notice prior to public disclosure of the date of the meeting is given or
made to the shareholders, notice by the shareholder, in order to be timely,
12
<PAGE> 16
must be so delivered or received not later than the close of business on the
tenth day following the day on which such notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual meeting was
made, whichever first occurs.
In addition to the matters required to be set forth by the rules of the
Securities and Exchange Commission, a shareholder's notice with respect to a
proposal to be brought before the annual meeting must set forth (a) a brief
description of the proposal and the reasons for conducting such business at the
annual meeting, (b) the name and address, as they appear on the Company's books,
of the shareholder proposing such business and any other shareholders known by
such shareholder to be supporting such proposal, (c) the class and number of
shares of the Company that are beneficially owned by such shareholder on the
date of such shareholder notice and by other shareholders known to such
shareholder to be supporting such proposal on the date of such shareholder
notice, and (d) any financial interest of the shareholder in such proposal.
A shareholder's notice with respect to a director nomination must set forth
(a) as to each nominee (i) the name, age, business address, and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of the Company that are
beneficially owned by such person, (iv) all information that would be required
to be included in the proxy statement soliciting proxies for the election of the
nominee director (including such person's written consent to serve as a director
if so elected), and (b) as to the shareholder providing such notice (i) the name
and address, as they appear on the Company's books, of the shareholder, and (ii)
the class and number of shares of the Company that are beneficially owned by
such shareholder on the date of such shareholder notice.
The complete Articles of Incorporation provisions governing these
requirements are available to any shareholder without charge upon request from
the Secretary of the Company.
OTHER MATTERS
THE COMPANY WILL PROVIDE TO ANY SHAREHOLDER, UPON THE WRITTEN REQUEST OF
ANY SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING
THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, FOR ITS FISCAL YEAR ENDED
DECEMBER 31, 1996, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934. ALL SUCH REQUESTS
SHOULD BE DIRECTED TO LEIGH A. ADAMS, SECRETARY, REPTRON ELECTRONICS, INC.,
14401 MCCORMICK DRIVE, TAMPA, FLORIDA 33626. NO CHARGE WILL BE MADE FOR COPIES
OF SUCH ANNUAL REPORT; HOWEVER, A REASONABLE CHARGE FOR THE EXHIBITS WILL BE
MADE.
By Order of the Board of Directors,
/s/ Leigh A. Adams
LEIGH A. ADAMS
Secretary
Tampa, Florida
March 28, 1997
13
<PAGE> 17
APPENDIX
REPTRON ELECTRONICS, INC.
11401 MCCORMICK DRIVE
TAMPA, FLORIDA 33626
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul J. Plante and William L. Elson, or
either of them, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them or their substitutes to represent and to vote, as
designated below, all the shares of common stock of Reptron Electronics, Inc.
held of record by the undersigned on March 10, 1997, at the annual meeting of
shareholders to be held on April 15, 1997 or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF CLASS III DIRECTORS [ ] FOR [ ] WITHHOLD AUTHORITY
the nominee listed below to vote for the nominee listed
below
</TABLE>
Leigh A. Adams
2. PROPOSAL TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK OF THE COMPANY
FROM 15,000,000 SHARES TO 50,000,000 SHARES
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO AMEND THE COMPANY'S INCENTIVE STOCK OPTION PLAN (THE "PLAN") TO
INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE PURSUANT TO THE PLAN
FROM 500,000 SHARES TO 1,500,000 SHARES.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL 1, PROPOSAL 2 AND PROPOSAL 3.
DATED: 1997
---------------------,
----------------------------------
Signature
----------------------------------
Signature if held jointly
Please sign exactly as name
appears below. When shares are
held by joint tenants, both should
sign. When signing as attorney, as
executor, administrator, trustee
or guardian, please give full
title as such. If a corporation,
please sign in full corporate name
by President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
