<PAGE> 1
SCHEDULE 14A
(Rule 14A-101)
Information Required in Proxy Statement
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:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
REPTRON ELECTRONICS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than 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
[LETTERHEAD OF REPTRON ELECTRONICS, INC.]
April 23, 1998
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of Reptron
Electronics, Inc. (the "Company"), which will be held at the Company's corporate
headquarters at 14401 McCormick Drive, Tampa, Florida 33626, on May 21, 1998, at
10:00 a.m., local time.
The accompanying notice of Annual Meeting and Proxy Statement cover the
formal business of the Annual Meeting. Whether or not you expect to attend the
Annual 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.
Your continuing interest in the business of the Company is gratefully
acknowledged. We hope many of the Company's shareholders will attend the Annual
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
MAY 21, 1998
The Annual Meeting of Shareholders of Reptron Electronics, Inc. will be
held at the Reptron Electronics, Inc. corporate headquarters at 14401 McCormick
Drive, Tampa, Florida 33626, on May 21, 1998 at 10:00 a.m., local time, for the
following purposes:
1. To elect two Class II directors to hold office for a three
year term expiring in 2001.
2. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice. Only shareholders of record at the close of
business on March 31, 1998 are entitled to notice of and to vote at the Annual
Meeting.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the Annual Meeting, you are
urged to mark, date, sign and promptly return the enclosed proxy in the envelope
provided for that purpose, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL
MEETING.
By Order of the Board of Directors,
/s/ Leigh A. Adams
-------------------------------------
Leigh A. Adams
Secretary
Tampa, Florida
April 23, 1998
<PAGE> 4
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE
REQUESTED TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE
PROVIDED.
REPTRON ELECTRONICS, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1998
GENERAL
The enclosed proxy is solicited on behalf of Reptron Electronics, Inc.,
a Florida corporation (the "Company"), for use at the Annual Meeting of
Shareholders to be held on Friday, May 21, 1998 at 10:00 a.m., local time, and
at any adjournment thereof (the "Annual Meeting"), for the purposes set forth
herein and in the accompanying Notice of Annual Meeting of Shareholders. The
Annual Meeting will be held at the Company's Corporate headquarters and
executive offices located at 14401 McCormick Drive, Tampa, Florida 33626, and
its telephone number at that location is (813) 854-2351.
These proxy solicitation materials were mailed on or about April 23,
1998, together with the Company's 1998 Annual Report to Shareholders, to all
shareholders entitled to vote at the Annual Meeting.
RECORD DATE
Shareholders of record at the close of business on March 31, 1998 (the
"Record Date") are entitled to notice of and to vote at the Annual Meeting. As
of the Record Date, 6,089,619 shares of the Company's common stock were issued
and outstanding. For information regarding security ownership by management and
by the beneficial owners of more than 5% of the Company's common stock, see
"Security Ownership of Management and Certain Beneficial Owners." The closing
sales price of the Company's common stock on the Nasdaq's National Market on the
Record Date was $11.50 per share.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by taking one of the following three
actions: (i) delivering to the Secretary of the Company a written notice of
revocation, (ii) executing and delivering a proxy bearing a later date, or (iii)
attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Each shareholder is entitled to one vote for each share of common stock
on all matters presented at the Annual Meeting. Shareholders who hold their
shares through an intermediary must provide instructions on voting as requested
by their bank or broker. Shares represented by duly executed proxies in the
accompanying form received by the Company prior to the Annual Meeting will be
voted at the Annual 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 the election of the nominees for directors. The
Board of Directors knows of no other matters that may be brought before the
Annual 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.
<PAGE> 5
QUORUM; ABSTENTIONS; BROKER NON-VOTES
Approval of the election of directors will require a plurality of the
votes cast at the Annual Meeting, provided a quorum is present. Votes cast by
proxy or in person at the Annual Meeting will be tabulated by the Company's
transfer agent, First Union National Bank of North Carolina, and by one or more
inspectors of election appointed at the Annual Meeting, who will also determine
whether a quorum is present for the transaction of business.
Broker non-votes and abstentions will be included in the number of
shareholders present at the Annual Meeting for the purpose of determining the
presence of a quorum. Abstentions and broker non-votes will not be counted
either in favor of or against the election of the nominees for director.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company that are intended to be
presented by such shareholders at the Company's 1999 Annual Meeting of
Shareholders must be received by the Company no later than December 1, 1998 in
order to be considered for possible inclusion in the proxy statement and form of
proxy relating to that meeting.
FISCAL YEAR END
The Company's fiscal year ends December 31.
-2-
<PAGE> 6
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 31, 1998, information as to
the Company's common stock beneficially owned by: (i) each director of the
Company and nominees for directors, (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>
Shares Beneficially Owned
-------------------------
Name and Address of Beneficial Owner(1) Number Percent
- --------------------------------------- ------ -------
<S> <C> <C>
Michael L. Musto(2) 1,942,552 31.9%
Paul J. Plante(3) 71,967 1.2%
Patrick J. Flynn(4) 57,500 *
Gary Bolohan 22,650 *
Michael R. Nichols 50,335 *
Leigh A. Adams 1,299 *
William L. Elson(5)
3000 Town Center, Suite 2690
Southfield, Michigan 48075 12,500 *
Barry M. Alpert(6)
880 Carillon Parkway
St. Petersburg, Florida 33716 5,000 *
John J. Mitcham(7)
2905 Northwest Boulevard
Suite 20
Plymouth, Minnesota 55441 -- --
Pecks Management Partners, Ltd.(8)
One Rockefeller Plaza
New York, New York 10020 654,299 10.7%
First Pacific Advisors, Inc.(9)
11400 West Olympic Boulevard, Suite 1200
Los Angeles, California 90064 433,333 7.1%
Dimensional Fund Advisors Inc.(10)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 324,500 5.3%
Mellon Bank, N.A.(11)
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258 588,950 9.7%
All directors and executive
officers as a group (10 persons) 2,180,803 35.8%
</TABLE>
*Less than 1% of the outstanding common stock
(1) The business address for Ms. Adams and Messrs. Musto, Plante, Flynn,
Bolohan and Nichols is 14401 McCormick Drive, Tampa, Florida 33626.
(2) Includes 1,942,552 shares held by 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).
Excludes 4,000 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 62,500 shares subject to options that are currently
exercisable and 7,467 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.
(4) Represents shares subject to options that are currently exercisable.
(5) Includes 5,000 shares subject to options that are currently
exercisable.
(6) Represents shares subject to options that are currently exercisable.
(7) Class II director nominee.
-3-
<PAGE> 7
(8) The number of shares shown is based upon a Schedule 13G filed with the
Securities and Exchange Commission dated February 17, 1998. Includes
588,950 shares held by General Motors Employees Domestic Group Pension
Trust as a client and affiliate of Pecks Management Partners, Ltd.
These shares have also been reported by Mellon Bank, N.A. (see footnote
11).
(9) The number of shares shown is based upon a Schedule 13G filed with the
Securities and Exchange Commission, dated February 12, 1998.
(10) The number of shares shown is based upon a Schedule 13G filed with the
Securities and Exchange Commission, dated February 10, 1998.
(11) The number of shares shown is based upon a Schedule 13G filed with the
Securities and Exchange Commission, dated February 24, 1998. The shares
are held by Mellon Bank, N.A. as Trustee for the General Motors
Employees Domestic Group Pension Trust. These shares have also been
reported by Pecks Management Partners, Ltd. (see footnote 8).
-4-
<PAGE> 8
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information as of April 24, 1998, 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 56 1973
Director (Class I - term expiring in 1999)
Paul J. Plante Chief Operating Officer and Director (Class 40 1994
I - term expiring in 1999)
Michael Branca Chief Financial Officer 38 --
Patrick J. Flynn President - K-Byte Manufacturing 57 --
Gary Bolohan President - Reptron Distribution 43 --
Robert M. Moore Vice President-Corporate Operations 62 --
Michael R. Nichols Vice President-Sales 41 --
Gregory J. Gross Treasurer 34 --
Leigh A. Adams(1)(2) Corporate Credit Manager, Secretary, and 33 1994
Director (Class III - term expiring in 2000)
William L. Elson(3) Director (Class II - term expiring in 1998; 50 1994
nominee for a term expiring in 2001)
John J. Mitcham(3) Director Nominee (Class II for a term 57 --
expiring in 2001)
</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) Mr. Elson serves on the Company's Audit and Compensation Committees. It
is expected that Mr. Mitcham will also serve on such 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, and previously served as its Vice President
of Finance, Chief Financial Officer and Treasurer (1987-1997). From 1983-1986,
he was Controller of K-Byte Manufacturing, which is now a division of the
Company. 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
-5-
<PAGE> 9
State University, with a Bachelor of Arts degree in accounting. He also has an
MBA degree from the University of South Florida.
MICHAEL BRANCA. Mr. Branca was appointed Chief Financial Officer in
July 1997. Prior to joining the Company, Mr. Branca served as Vice President of
Business Development and Financial Operations at Utility Partners, LC from 1996
to 1997 and Chief Financial Officer of IVANS, Inc.'s wholly owned subsidiary,
Pivotal, Inc., from 1995 to 1996. From 1982 to 1995, Mr. Branca held various
positions with IBM Corporation ("IBM"), including Division Controller for IBM's
Multimedia Systems Division and Controller for IBM's Enterprise Systems
Division. Mr. Branca has a Bachelor of Science degree in Business Management
from Cornell University and a MBA in Finance from the University of Scranton.
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 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 has served as President of Reptron
Distribution since May 1997. 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
Reptron Distribution (1990-1997), 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.
GREGORY J. GROSS. Mr. Gross was appointed Treasurer of the Company in
1997. Prior to such appointment, he served as Assistant Treasurer of the Company
(1996-1997). Mr. Gross was an audit manager for Grant Thornton LLP from
1991-1996. Mr. Gross is also a Certified Public Accountant.
LEIGH A. ADAMS. Ms. Adams serves as the Company's secretary and has
been a director since 1994. Ms. Adams has served in a number of administrative
positions, 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.
-6-
<PAGE> 10
JOHN J. MITCHAM. Mr. Mitcham is a nominee for a position as a Class II
director. Since 1995, Mr. Mitcham has been President and Chief Executive Officer
of Tricord Systems, Inc., and serves on that Company's Board of Directors.
Previously, Mr. Mitcham served as President of AT&T Paradyne Corporation and
President of Paradyne Corporation (1988-1995). Mr. Mitcham holds a Bachelor's
degree in business administration from the University of Texas.
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 1998, 1999 and 2000 annual
meetings of shareholders. Terms of the directors expire as follows: Messrs.
Alpert and Elson in 1998, Messrs. Musto and Plante in 1999, and Ms. Adams in
2000. If Messrs. Elson and Mitcham are approved by the shareholders, their terms
will expire in 2001. 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.
All executive officers are elected by and serve at the discretion of
the Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
The Company's Board of Directors held seven meetings during the 1997
fiscal year. 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
Board of Directors has a Compensation Committee, an Audit Committee, and a Stock
Option Committee.
The Compensation Committee, which during 1997 consisted of Messrs.
Alpert and Elson, establishes specific compensation plans, salaries, bonuses and
other benefits payable to the Company's executive officers. See "Board
Compensation Committee Report on Executive Compensation." The Compensation
Committee held two meetings during fiscal year 1997.
The members of the Audit Committee were Messrs. Alpert and Elson and it
is expected that Mr. Mitcham will serve on this Committee along with Mr. Elson
in 1998. The duties of the Audit Committee, which held two meetings during
fiscal year 1997, 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 twice during fiscal year 1997.
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
-7-
<PAGE> 11
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 (collectively, "Reporting Persons"),
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC"). Reporting Persons 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 fiscal year 1997, all Reporting Persons have complied with all Section
16(a) filing requirements except for the following: Messrs. Gross and Branca
failed to timely file a Form 3; Messrs. Plante and Flynn failed to timely file
a Form 5 with respect to two transactions relating to the grant of 10,000 stock
options each in January 1997 and the grant of 40,000 stock options each in
April 1997; and Messrs. Nichols and Bolohan failed to timely file a Form 5 with
respect to one transaction relating to the grant of 40,000 stock options each
in April 1997.
-8-
<PAGE> 12
EXECUTIVE COMPENSATION
Summary Compensation Table. The table below sets forth certain
information concerning the compensation earned during fiscal year 1997 by the
Company's Chief Executive Officer and its four other most highly compensated
executive officers (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation(1) All Other
Salary Bonus Compensation
Name and Principal Position Year ($)(2) ($) ($)(3)
- --------------------------- ---- ------ ---- ------------
<S> <C> <C> <C> <C>
Michael L. Musto ................ 1997 400,000 -- 41
President and Chief 1996 400,000 -- 41
Executive Officer 1995 381,000 -- 41
Paul J. Plante .................. 1997 250,000 -- 941
Chief Operating Officer 1996 200,000 -- 941
1995 150,000 -- 941
Patrick J. Flynn ................ 1997 225,000 -- 941
President, K-Byte Manufacturing 1996 225,000 -- 941
1995 225,000 -- 941
Gary Bolohan .................... 1997 225,000 -- 41
President- 1996 225,000 -- 41
Reptron Distribution 1995 225,000 -- 41
Michael R. Nichols .............. 1997 200,000 -- 41
Vice President - Sales 1996 200,000 -- 41
1995 189,000 -- 941
</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 executive 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 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 1997. The Company granted stock options to Messrs.
Plante, Flynn, Bolohan, and Nichols in the amounts of 50,000, 50,000, 40,000 and
40,000, respectively, in 1997. The exercise prices of the options are $18.00 per
share. The options vest at 25% per year beginning on January 10, 1998 for
Messrs. Plante and Flynn (as to 10,000 shares) and on April 16, 1998 for Messrs.
Flynn (as to 40,000 shares), Bolohan and Nichols.
-9-
<PAGE> 13
Aggregated Options Table. The table below sets forth information
concerning options exercised during 1997 and options held by the Named Executive
Officers.
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal Fiscal Year-
Number of Year-End(#) End($)(2)
Shares Acquired Exercisable(E)/ Exercisable(E)/
Name on Exercise(#) Value Realized($)(1) Unexercisable(U) Unexercisable(U)
- ---- -------------- -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Michael L. Musto ............ -- -- -- --
Paul J. Plante .............. -- -- 50,000(E)/0(U) $268,750(E)
12,500(E)/37,500(U) --
Patrick J. Flynn ............ -- -- 55,000(E)/0(U) $295,625(E)
2,500(E)/47,500(U) --
Gary Bolohan ................ -- -- 0(E)/40,000(U) --
Michael R. Nichols .......... -- -- 0(E)/40,000(U) --
</TABLE>
- ---------
(1) Represents the dollar value of the difference between the value
(measured on the date exercised) and the option exercise price.
(2) Represents the dollar value of the difference between the value at
December 31, 1997 and the option exercise price of unexercised options
at December 31, 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, 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.
Mr. Elson serves as general counsel of the Company and received
approximately $205,000 for services rendered during 1997.
-10-
<PAGE> 14
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 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. Because the Company did not meet its budget objectives
in 1997, no performance bonuses were paid to the Company's executive officers.
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 1997
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.
-11-
<PAGE> 15
Compensation Committee
Barry M. Alpert
William L. Elson
CERTAIN TRANSACTIONS
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 prior to 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 totalled $68,000 in 1997, which
management believes to be comparable to the rent that would be paid to an
unrelated party. The lease expires in November 1998.
The Company leases an aircraft from a corporation controlled by Mr.
Musto. Rent paid for the use of the aircraft totaled approximately $200,000 in
1997. The Company believes the rent paid for the aircraft is comparable to the
rent that would be paid to an unrelated third party. 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 is required to reimburse the Company
for the costs associated with such personal use. Mr. Musto reimbursed the
Company $1,000,000, reflected in the Company's 1997 third quarter, for personal
use of the aircraft and for personal travel and entertainment expenses, for the
present and past years.
-12-
<PAGE> 16
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, 1997) 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.
COMPARISON OF 45 MONTH CUMULATIVE TOTAL RETURN*
AMONG REPTRON ELECTRONICS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND A PEER GROUP
<TABLE>
<CAPTION>
Reptron Electronics Inc (REPT)
Cumulative Total Return
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/28/94 3/31/94 6/30/94 9/30/94 12/31/94 3/31/95 6/30/95 9/30/95 12/31/95
Reptron Electronics Inc REPT 100.00 98.08 87.50 69.71 68.27 97.12 122.12 137.50 117.31
PEER GROUP 100.00 92.94 87.53 104.55 103.63 104.47 124.40 154.58 170.95
NASDAQ STOCK MARKET (U.S.) 100.00 96.26 91.76 99.36 98.22 107.08 122.49 137.24 138.91
</TABLE>
<TABLE>
<CAPTION>
Reptron Electronics Inc (REPT)
Cumulative Total Return
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
3/31/96 6/30/96 9/30/96 12/31/96 3/31/97 6/30/97 9/30/97 12/31/97
Reptron Electronics Inc REPT 126.92 135.58 136.54 158.65 156.73 184.62 140.87 79.81
PEER GROUP 183.59 161.30 156.85 191.18 171.68 251.62 324.24 244.01
NASDAQ STOCK MARKET (U.S.) 145.39 157.26 162.85 170.86 161.60 190.01 223.56 209.66
</TABLE>
* $100 INVESTED ON 3/28/94 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
-13-
<PAGE> 17
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 1998 (Class II
directors), 1999 (Class I directors) and 2000 (Class III directors). Two
directors are being elected at the Annual Meeting for a term ending in 2001, or
until their respective successors have been elected and qualified.
NOMINEES
The Board of Directors has nominated William L. Elson and John J.
Mitcham to stand for election at the Annual Meeting for Class II director seats.
See "Management - Directors and Executive Officers" for information regarding
these nominees. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's two nominees. In the event that any
nominee of the Company is unable or declines to serve as a director at the time
of the Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. The Company is
not aware of any nominee who will be unable or will decline to serve as a
director.
REQUIRED VOTE
If a quorum is present and voting, the two nominees for director
receiving the highest number of votes of the Shares present or represented and
entitled to be voted for them shall be elected as directors. Abstentions and
broker non-votes will not be counted either in favor of or against the election
of the nominees for director. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but have no other legal effect under Florida law.
PROPOSALS OF SHAREHOLDERS FOR THE NEXT ANNUAL MEETING
Proposals of shareholders intended for presentation at the 1999 annual
meeting must be received by the Company on or before December 1, 1998, 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, 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
SEC, 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
-14-
<PAGE> 18
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, 1997, 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
April 23, 1998
-15-
<PAGE> 19
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 Michael L. Musto and Paul J. Plante, 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 31, 1998, at the Annual Meeting of
Shareholders to be held on May 21, 1998 or any adjournment thereof.
<TABLE>
<S> <C> <C>
1. ELECTION OF CLASS II DIRECTORS FOR the nominee listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) / / to vote for the nominee listed below / /
</TABLE>
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
William L. Elson
John J. Mitcham
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE> 20
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.
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.
DATED: ___________________ 1998
_______________________________________ ___________________________________
PLEASE MARK, SIGN, DATE, AND RETURN THE Signature
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
_______________________________________
___________________________________
Signature if held jointly
