ROBINSON NUGENT, INC. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 7, 1996 The Annual Meeting of Shareholders of Robinson Nugent, Inc. will be held at the Holiday Inn Lakeview, 505 Marriott Drive, Clarksville, Indiana, on Thursday, November 7, 1996 at 10:00 a.m. (EST) for the following purposes: 1. To elect two directors to serve for terms of three years each; 2. To ratify the selection by the Board of Directors of Coopers & Lybrand L.L.P. as certified public accountants for the Company for the fiscal year ending June 30, 1997; and 3. To transact such other business as may properly come before the meeting. Holders of Common Shares of record at the close of business on September 16, 1996 are entitled to notice of and to vote at the Annual Meeting. By Order of the Board of Directors Richard L. Mattox, Secretary October 4, 1996 New Albany, Indiana YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, OR IF YOU DO PLAN TO ATTEND BUT WISH TO VOTE BY PROXY, PLEASE DATE, SIGN, AND MAIL PROMPTLY THE ENCLOSED PROXY. A RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE. ROBINSON NUGENT, INC. PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 7, 1996 GENERAL INFORMATION This proxy statement is furnished in connection with the solicitation by the Board of Directors of Robinson Nugent, Inc. (the "Company") of proxies to be voted at the Annual Meeting of Shareholders to be held at 10:00 a.m. (EST) on November 7, 1996, and at any adjournment thereof. The meeting will be held at the Holiday Inn Lakeview, 505 Marriott Drive, Clarksville, Indiana. This proxy statement and the accompanying form of proxy were first mailed to shareholders on or about October 4, 1996. A shareholder signing and returning the enclosed proxy may revoke it at any time before it is exercised by written notice to the Secretary of the Company, by the submission of a subsequent proxy relating to the same shares or by attending the Annual Meeting and voting in person. All proxies returned prior to the meeting, and not revoked, will be voted in accordance with the instructions contained therein. Any proxy not specifying to the contrary will be voted (1) FOR the election of the nominees for director named below, and (2) FOR the proposal to ratify the selection of Coopers & Lybrand L.L.P. as certified public accountants for the Company for the fiscal year ending June 30, 1997. As of the close of business on September 16, 1996, the record date for the Annual Meeting, there were outstanding and entitled to vote 4,891,765 Common Shares of the Company. Each outstanding Common Share is entitled to one vote. The Company has no other voting securities. Shareholders do not have cumulative voting rights. The presence in person or by proxy of a majority of the Common Shares is necessary in order to constitute a quorum at the Annual Meeting. Proxies marked as abstaining will be treated as present for purposes of determining a quorum and will be treated as present and entitled to vote on any matter as to which abstention is indicated. Proxies returned by brokers as "non-votes" on behalf of shares held in street name because the beneficial owner has withheld voting instructions will be treated as present for purposes of determining a quorum but will not be counted as voting on any matter as to which a non-vote is indicated on the proxy. A copy of the Annual Report of the Company, including financial statements and a description of operations for the fiscal year ended June 30, 1996, has preceded or accompanies this proxy statement. The financial statements contained in that report are not incorporated by reference herein. All expenses in connection with solicitation of proxies will be borne by the Company. The Company will provide copies of this proxy statement, the accompanying form of proxy, and the Annual Report to brokers, dealers, banks and voting trustees, and their nominees, for mailing to beneficial owners and, upon request therefor, will reimburse such record holders for their reasonable expenses in forwarding solicitation material. The Company expects to solicit proxies primarily by mail, but directors, officers and regular employees of the Company may also solicit in person or by telephone. Shareholder proposals to be considered for presentation to the 1997 Annual Meeting of Shareholders must be submitted in writing and received by the Company on or before June 6, 1997. The mailing address of the principal offices of the Company is 800 East Eighth Street, Post Office Box 1208, New Albany, Indiana 47151-1208. 2 BENEFICIAL OWNERSHIP OF COMMON SHARES The following table sets forth certain data with respect to those persons known by the Company to be the beneficial owners of five percent or more of the outstanding Common Shares of the Company as of September 16, 1996 and also sets forth such data with respect to each director of the Company, each officer listed in the Summary Compensation Table, and all directors and executive officers of the Company as a group. Except as otherwise indicated in the notes to the table, each beneficial owner possesses sole voting and investment power with respect to the shares indicated. NUMBER OF PERCENT SHARES (1) OF CLASS --------------- ------------ PRINCIPAL SHAREHOLDERS Samuel C. Robinson 1,141,274(2) 22.4% 820 East Market Street New Albany, Indiana 47150 Lawrence Mazey 366,329(8) 7.2% 228 Santee Path Louisville, Kentucky 40207 James W. Robinson 303,404(8) 6.0% 7621 State Road 62 Lanesville, Indiana 47136 Dimensional Fund Advisors, Inc. 307,900 6.0% 1299 Ocean Avenue Santa Monica, California 90401 DIRECTORS AND EXECUTIVE OFFICERS Samuel C. Robinson 1,141,274(2) 22.4% James W. Robinson 303,404(8) 6.0% Larry W. Burke 184,646(3) 3.6% Richard L. Mattox 27,810(8) * Jerrol Z. Miles 13,280(8) * Diane T. Maynard 15,000(4)(8) * Patrick C. Duffy 31,000(8) * Richard W. Strain 10,000(8) * W. Michael Coutu 37,747(5) * William D. Gruhn 19,838(6) * J. Henk van Melsen 3,000(7) * All directors and executive officers 1,786,999(9) 35.0% as a group (11 persons) - ------------------------ *Less than 1%. (1) The table includes certain shares owned of record by the Company's 401(k) Plan and the 1993 Employee Stock Purchase Plan. The participants in these Plans, as noted in the following footnotes, have voting rights but no rights of disposition with respect to the shares allocated to their respective accounts. 3 (2) Includes 14,608 shares owned of record by Mr. Robinson's wife, as to which she possesses sole voting and investment power, and 7,443 shares owned of record by National City Bank, Southern Indiana, as trustee for the benefit of a child, as to which Mr. Robinson and the trustee share voting and investment power. Mr. Robinson disclaims any beneficial interest in these shares. (3) Includes 348 shares owned of record by Mr. Burke's wife, as to which he disclaims any beneficial interest; 124,297 shares subject to immediately exercisable options granted pursuant to the Company's Employee Stock Option Plans; and 56,529 shares allocated to Mr. Burke's account pursuant to the Company's 401(k) Plan and the 1993 Employee Stock Purchase Plan. (4) Ms. Maynard shares voting and investment power with her husband with respect to shares. (5) Represents 26,497 shares allocated to Mr. Coutu's account pursuant to the 1993 Employee Stock Purchase Plan and 11,250 shares subject to immediately exercisable options granted pursuant to the Company's 1993 Employee Stock Option Plan. (6) Represents 11,438 shares allocated to Mr. Gruhn's account pursuant to the 1993 Employee Stock Purchase Plan and the Company's 401(k) Plan, and 8,400 shares subject to immediately exercisable options granted pursuant to the Company's 1993 Employee Stock Option Plan. (7) Represents 3,000 shares subject to immediately exercisable options granted pursuant to the Company's Employee Stock Option Plans. (8) Includes 10,000 shares which each named individual may acquire upon exercise of stock options granted to non-employee members of the Board of Directors under the 1993 Employee and Non-Employee Director Stock Option Plan. (9) Includes in the aggregate 206,947 shares which may be acquired within 60 days upon the exercise of outstanding stock options held by non-employee directors and executive officers and 97,083 shares allocated to the accounts of executive officers pursuant to the Company's 401(k) Plan and the 1993 Employee Stock Purchase Plan. 1. ELECTION OF DIRECTORS NOMINEES The Bylaws of the Company provide for ten directors, divided into two classes of three persons and one class of four persons, each of whom is to be elected for a three-year term. The terms of two incumbent directors, James W. Robinson and Larry W. Burke, will expire at the Annual Meeting. Lawrence Mazey, the third director elected in 1993 for a term expiring in 1996, retired from the Board of Directors in July, 1996. The Board of Directors has nominated Messrs. Robinson and Burke for reelection to additional three-year terms. The Board of Directors does not presently intend to fill the remaining two vacancies on the Board prior to the 1997 Annual Meeting. Unless authority to vote for such nominees is withheld, the accompanying proxy will be voted FOR the election of Messrs. Robinson and Burke. However, the persons designated as proxies reserve the right to vote for another person designated by the Board of Directors in the event any nominee is unable or unwilling to serve. The Board of Directors has no reason to believe that any nominee will be unable or unwilling to serve. Proxies will not be voted for more than two nominees. Directors are elected by a plurality of the Common Shares voted in the election. 4 The following table sets forth information with respect to each nominee for election to the Board of Directors, and with respect to each director whose term of office will continue. SERVED AS TERM OF POSITIONS HELD DIRECTOR OFFICE NAME AGE WITH THE COMPANY SINCE EXPIRES - ------------------------- --- ------------------------- -------- -------- Samuel C. Robinson 64 Chairman of the Board of 1955 1997 Directors James W. Robinson 62 Director 1955 1996 Larry W. Burke 56 President and Chief 1990 1996 Executive Officer and Director Richard L. Mattox 62 Secretary and Director 1964 1998 Jerrol Z. Miles 56 Director 1974 1997 Diane T. Maynard 48 Director 1990 1998 Patrick C. Duffy 59 Director 1991 1998 Richard W. Strain 55 Director 1991 1997 BUSINESS EXPERIENCE OF DIRECTORS Except as described below, the principal occupations of the directors and nominees have not changed during the past five years. Samuel C. Robinson retired as Chairman of the Board and Chief Executive Officer of the Company on June 30, 1985. He was reelected to the position of Chairman of the Board on March 6, 1990. He also served as a director of National City Bank, Southern Indiana, New Albany, until February, 1994. James W. Robinson served as Executive Vice President of the Company until June 30, 1985, at which time he was elected as Chairman of the Board. He served as Chairman of the Board and Treasurer of the Company until his resignation on January 29, 1987. Mr. Robinson is active in various independent investments unrelated to the activities of the Company. He is also a director of Caldwell Tanks, Inc., Community Savings Bank FSB, Hughes Group, Inc., StemWood, Inc., CT Services, Inc., SCI Broadcasting, Inc., Community Bank Shares of Indiana, Inc., and Sunnyside Communications, all of which are located in the Louisville, Kentucky metropolitan area. Larry W. Burke has served as President and Chief Executive Officer of the Company since March 6, 1990. He served as Executive Vice President of the Company from April, 1986 to March, 1990. Commencing in 1996, Mr. Burke also served as a Director of Heritage Bank of Southern Indiana, a subsidiary of Community Bank Shares of Indiana, Inc. Richard L. Mattox, a partner in the law firm of Mattox & Mattox in New Albany, Indiana, acted as legal counsel to the Company during fiscal 1996. From 1985 until December, 1990, he was a partner in the law firm of Wyatt, Tarrant, Combs & Orbison, with offices in New Albany, Indiana, which firm was employed by the Company with respect to various legal matters. 5 Jerrol Z. Miles is a Senior Vice President of National City Bank, Kentucky, located in Louisville, Kentucky, where his primary responsibility is management of commercial loans and special credit departments. He also serves as a member of the Board of Advisors of Indiana University Southeast, New Albany, Indiana. Diane T. Maynard is a management consultant to the Commonwealth of Kentucky and various businesses as well as an owner of several small businesses in the Louisville, Kentucky area. Patrick C. Duffy has been a management consultant since 1988 to various businesses, with emphasis on the automotive market and related products. He is the former President and owner of Switches, Inc., an Indianapolis, Indiana company that produces switches for automobile applications. Mr. Duffy is also a director and chairman of Accordia of Southeast Florida, located in Clearwater, Florida. Richard W. Strain has held a variety of positions with Eli Lilly and Company. From July 1984 until 1990, he served as president of the Medical instrument Systems Division; and from 1990 to April 1992, he served as vice president for Business Development and Pricing. In May 1992, Mr. Strain was elected as president/CEO of Heart Rhythm Technologies, and in December 1993 he returned to Eli Lilly and Company headquarters. Since his retirement from Eli Lilly and Company, Mr. Strain has been president/CEO of a biotech company, participated in healthcare consulting, and served on several boards. FAMILY RELATIONSHIPS Samuel C. Robinson and James W. Robinson are brothers. There is no other family relationship among the directors and executive officers of the Company. COMPENSATION OF DIRECTORS In fiscal 1996, members of the Board of Directors who are not employees of the Company received remuneration in the amount of $8,000 per year, and in addition received $1,200 for each meeting of the Board of Directors attended. Committee members received a minimum of $400 per meeting attended plus $200 per hour for attendance beyond two hours. The Chairpersons of the Audit and Compensation Committees received $500 for their services in such capacities during fiscal 1996. Members of the Board of Directors who are employees of the Company receive no separate remuneration for their service as directors. The same compensation plan is effective for fiscal 1997. Under the provisions of the 1993 Employee and Non-Employee Director Stock Option Plan approved by the shareholders in November, 1993, non-employee directors are granted non-qualified stock options (NQSOs) annually to purchase 4,000 common shares of the Company at the then current market price. Such options were granted to seven Non-Employee Directors on September 13, 1993 with an exercise price of $8.75 per common share. Additional options to purchase 4,000 common shares were granted on September 13, 1994, September 13, 1995, and September 13, 1996 to seven Non-Employee Directors at an exercise price of $6.00, $8.625, and $4.75 per common share, respectively. Options are exercisable 50% after one year from date of grant and 100% after two years from date of grant, and expire ten years from the date of grant. During fiscal 1996, Samuel C. Robinson received for his services as Chairman of the Board of Directors $4,000 per month for the first quarter ended September 30, 1995, and thereafter received $2,000 per quarter and $1,700 per meeting, plus reimbursement of expenses. Mr. Robinson's aggregate compensation for such services for fiscal 1996 was $25,223. In fiscal year 1997, Mr. Robinson will receive remuneration in the amount of $8,000 per year for his services as Chairman of the Board, an additional $1,700 for each meeting of the Board of Directors attended and reimbursement of expenses. 6 COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS The Compensation Committee of the Board of Directors is comprised of Richard L. Mattox, James W. Robinson and Richard W. Strain. The Compensation Committee also serves as the Stock Option Committee of the Board of Directors. The responsibilities of the Compensation Committee include making recommendations to the Board of Directors with respect to: compensation arrangements for the executive officers of the Company; policies relating to salaries and job descriptions; insurance programs; and benefit programs of the Company, including its retirement plans. The Stock Option Committee administers the 1993 Employee and Non-Employee Director Stock Option Plan. Each of these committees met three times during fiscal 1996. The Audit Committee of the Board of Directors is comprised of Patrick C. Duffy, Diane T. Maynard, and Jerrol Z. Miles. The Audit Committee reviews with the auditors the scope of the audit work performed, any questions arising in the course of such work and inquiries as to other pertinent matters such as internal accounting controls, financial reporting, security and personnel staffing. The committee met six times during fiscal 1996. The Board of Directors has no Nominating Committee. The Board of Directors will consider for nomination as directors persons recommended by shareholders. Such recommendations must be in writing and delivered to the Secretary, Robinson Nugent, Inc., P. O. Box 1208, New Albany, Indiana 47151-1208. The Board of Directors met four times during fiscal 1996. No director attended fewer than 75% of the meetings of the Board of Directors and meetings of any committee of the Board of Directors of which he or she was a member. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During fiscal year 1996, the Compensation Committee was comprised of Lawrence Mazey, Richard L. Mattox, James W. Robinson and Richard W. Strain. Except for Mr. Richard L. Mattox and Mr. James W. Robinson, none of the other members of the Compensation Committee are now serving or previously have served as officers of the Company or any subsidiary, and none of the Company's executive officers serve as directors of, or in any compensation-related capacity for, companies with which members of the Compensation Committee are affiliated. Mr. Richard L. Mattox serves as Corporate Secretary of the Company and various subsidiaries, but receives no compensation for his services in such capacity. Mr. James W. Robinson held various executive officer positions with the Company until his retirement in 1987. EXECUTIVE COMPENSATION GENERAL The following Summary Compensation Table sets forth certain information with respect to the aggregate compensation paid during each of the last three years to the Company's President and Chief Executive Officer and each of the other executive officers of the Company whose salary and bonus exceeded $100,000 during fiscal 1996. 7 SUMMARY COMPENSATION TABLE LONG-TERM COMPENSATION ANNUAL COMPENSATION ------------------------ ------------------------------------- RESTRICTED OTHER ANNUAL STOCK OPTIONS/ ALL OTHER SALARY BONUS COMPENSATION AWARD(S) SAR'S COMPENSATION YEAR ($) ($) ($)(1) ($) #(2) ($)(3) --------- --------- --------- --------------- ----------- ----------- ------------- Larry W. Burke, President 1996 206,250 -- 6,997 -- 15,000 66,506 and Chief Executive 1995 201,049 17,500 8,840 -- 13,000 63,098 Officer 1994 184,632 10,000 9,632 -- 12,400 64,948 W. Michael Coutu, 1996 130,000 -- 3,986 -- 8,200 10,261 Vice President of 1995 113,529 6,400 5,036 -- 7,500 7,892 Operations 1994 110,692 11,750 5,488 -- 7,500 10,989 William D. Gruhn, 1996 112,972 -- 3,821 -- 6,400 8,966 Vice President 1995 114,090 5,000 4,827 -- 5,800 7,402 North America Sales 1994 99,036 3,200 5,481 -- 5,500 8,749 Leong Chun Kin, (4) 1996 216,020 -- -- -- -- -- Managing Director, 1995 40,426 -- -- -- -- -- Asia Pacific Operation 1994 -- -- -- -- -- -- J. Henk van Melsen, 1996 198,106 -- -- -- 8,000 39,207 Managing Director, 1995 200,904 4,018 -- -- 6,000 35,233 European Operations(5) 1994 94,714 -- -- -- -- 16,965 - ------------------------ (1) Represents imputed interest for 1996 attributable to interest-free loans authorized by the Board of Directors in connection with the purchase of Common Shares of the Company under the 1993 Employee Stock Purchase Plan. (2) Represents options granted in 1996 under the 1993 Employee and Non-Employee Director Stock Option Plan. (3) Includes contributions by the Company on behalf of the named persons and the group to the Company's Retirement Plan and 401(k) Plan, and pursuant to deferred compensation agreements. Effective May 10, 1990, the Company entered into a deferred compensation agreement with Mr. Burke. The deferred compensation agreement provides for payments of $50,000 per year to a trust administered by PNC Bank, Kentucky, Inc., Louisville, Kentucky, as supplemental retirement income benefits to Mr. Burke. The Company also entered into a deferred compensation agreement with Mr. van Melsen on January 1, 1994, requiring the Company to contribute to a fund administered by Swiss Life Insurance for supplemental retirement benefits in addition to the Netherland's government pension plan. The 1996 fiscal contribution to this fund was $39,207. These agreements continue until termination of the respective employment relationships. (4) Mr. Leon Chun Kin was appointed Managing Director, Asia Operations, as of March 29, 1995. (5) Mr. J. Henk van Melsen was appointed Managing Director, European Operations as of January 1, 1994. Each of the officers listed in the Summary Compensation Table serves for a term of one year. 8 STOCK OPTIONS The following table shows the options granted to the named executive officers of the Company in fiscal 1996. These options are incentive stock options exercisable as to one-half the shares after the first anniversary of the date of grant and as to all the shares after the second anniversary of the date of grant and expire ten years (July 24, 2006) after date of grant. The dollar amounts under these columns are the result of calculations at 5% and 10% annual appreciation rates set by the Securities and Exchange Commission for illustrative purposes, and therefore, are not intended to forecast future financial performance or possible future appreciation, if any, in the market prices of the Company's Common Shares. Actual gains, if any, on stock option exercise will depend on the future performance of the Common Shares and the date on which options are exercised. POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL INDIVIDUAL GRANTS RATES OF SHARE APPRECIATION ------------------------------------------------------ FOR OPTION TERM % OF TOTAL -------------------------------- OPTIONS OPTIONS 5% YIELDING 10% YIELDING GRANTED GRANTED TO EXERCISE A SHARE PRICE A SHARE PRICE # OF EMPLOYEES IN PRICE EXPIRATION OF $15.07 IN OF $23.99 IN NAME SHARES(1) FISCAL YEAR $/SHARE DATE YEAR 2005 YEAR 2005 - ---------------------------- ----------- --------------- ----------- ----------- --------------- --------------- Larry W. Burke 15,000 20.2 9.250 7/25/05 87,300 221,100 W. Michael Coutu 8,200 11.0 9.250 7/25/05 47,724 120,868 William D. Gruhn 6,400 8.6 9.250 7/25/05 37,248 94,336 Leong Chun Kin -- -- -- -- -- -- J. Henk van Melsen 8,000 7.8 9.250 7/25/05 46,560 117,920 All employee optionees 74,250 100.0 9.250 7/25/05 432,135 1,094,445 All shareholders -- -- 7/25/05 28,470,072(1) 72,104,616(1) % of all shareholder gain 1.5% 1.5% - ------------------------ (1) Calculated by applying share exercise prices assumed at 5% and 10% appreciation through the year 2005, less value of outstanding shares at June 30, 1996, with assumed market price of $9.25. There were no stock options exercised by the executive officers named in the Summary Compensation Table in fiscal 1996. The following table sets forth the number of unexercised options held at June 30, 1996 by each of the Company's executive officers named in the Summary Compensation Table, and the related values of such options at June 30, 1996. The value of unexercised options at June 30, 1996 is based upon a market value at June 30, 1996 of $6.00 per Common Share. 9 FISCAL YEAR END OPTION VALUES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT JUNE 30, 1996 (#) AT JUNE 30, 1996 ($) -------------------------- -------------------------- NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---------------------- ----------- ------------- ----------- ------------- Larry W. Burke 124,297 21,500 89,216 -- W. Michael Coutu 11,250 11,950 -- -- William D. Gruhn 8,400 9,300 -- -- Leong Chun Kin -- -- -- -- J. Henk van Melsen 3,000 11,000 -- -- REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES The Compensation Committee and Stock Option Committee of the Board of Directors has responsibility for the Company's executive compensation program. The Committee is currently comprised solely of non-employee directors. The Committee is chaired by Mr. Richard W. Strain. The other Committee members are Mr. Richard L. Mattox and Mr. James W. Robinson. The following report is submitted by the members of the Compensation Committee and the Stock Option Committee. * * * The Company's executive compensation program is designed to align executive compensation with financial performance, business strategies and Company values and objectives. The Company's compensation philosophy is to ensure that the delivery of compensation, both in the short- and long-term, is consistent with the sustained progress, growth and profitability of the Company and acts as an inducement to attract and retain qualified individuals. This program seeks to enhance the profitability of the Company, and thereby enhance shareholder value, by linking the financial interests of the Company's executives with those of its long-term shareholders. Under the guidance of the Company's Compensation Committee of the Board of Directors, the Company has developed and implemented an executive compensation program to achieve these objectives while providing executives with compensation opportunities that are competitive with companies of comparable size in related industries. The Company's executive compensation program has been designed to implement the objectives described above and is comprised of the following fundamental three elements: - a base salary that is determined by individual contributions and sustained performance within an established competitive salary range. Pay for performance recognizes the achievement of financial goals, accomplishment of corporate and functional objectives, and performance of individual business units of the Company, - an annual cash bonus that is directly tied to corporate and business unit performance measures, - a long-term incentive program that rewards executives when shareholder value is created through an increase in the market value of the Company's Common Shares. Stock option grants focus executives on managing the Company from the perspective of an owner with an equity position in the business. 10 BASE SALARY. The salary, and any periodic increase thereof, of the President and Chief Executive Officer was and is determined by the Board of Directors of the Company based on recommendations made by the Compensation Committee. The salaries, and any periodic increases thereof, of the Vice President, Treasurer and Chief Financial Officer, the Vice President of Operations, and the Vice President of Marketing, were and are determined by the Board of Directors based on recommendations made by the President and Chief Executive Officer and approved by the Committee. The Company, in establishing base salaries, levels of incidental and/or supplemental compensation, and incentive compensation programs for its officers and key executives, assesses periodic compensation surveys and published data covering the electrical/electronics industry and industry in general. The level of base salary compensation for officers and key executives is determined by both their scope and responsibility and the established salary ranges for officers and key executives of the Company. Periodic increases in base salary are dependent on the executive's proficiency of performance in the individual's position for a given period, and on the executive's competency, skill and experience. BONUS PAYMENTS. The bonus compensation program for the Company's officers is subject to annual review by the Compensation Committee and requires annual approval of the Board of Directors. Under the bonus plan for executive officers and key employees for fiscal year 1996, executive officers were eligible for a first tier bonus award provided the consolidated pretax income of the Company and subsidiaries for fiscal year 1996 exceeded the reported pretax income for fiscal year 1995. A second tier, or added bonus, was payable to executive officers provided the consolidated pretax income for fiscal year 1996 exceeded the pretax income objectives outlined in the fiscal year 1996 annual financial plan. The bonus awards under both tiers were predicated upon a formula whereby bonuses increased in proportion to the level of pretax income over fiscal year 1995 and the financial plan objectives for fiscal year 1996, respectively. There were no bonus payments relating to financial performance for fiscal 1996. The bonus plan for fiscal year 1997 will be similar to the fiscal year 1996 plan with updated financial performance measurements. LONG-TERM INCENTIVE PLANS. The Company's long-term incentive compensation program is intended to align executive interest with the long-term interests of shareholders by linking executive compensation with enhancement of shareholder value. In addition, the program motivates executives to improve long-term stock market performance by allowing them to develop and maintain a significant long-term equity ownership position in the Company's Common Shares. The 1993 Employee and Non-Employee Director Stock Option Plan was adopted by the Board of Directors on September 13, 1993, and approved by the shareholders of the Company at the 1993 annual meeting of the shareholders held on November 4, 1993. Pursuant to this plan 500,000 Common Shares were made available for the grant of stock options to Non-Employee Directors of the Company and key employees of the Company and its subsidiaries as determined by the Stock Option Committee. 11 On May 28, 1992, the Board of Directors adopted the 1993 Employee Stock Purchase Plan to provide executive officers and other key employees with the opportunity to purchase Common Shares and thereby establish or increase their equity position in the Company. As an added incentive to participants in this plan, the Company awarded a matching number of Common Shares in proportion (not more than 50%) to the Common Shares purchased and provided interest-free loans to the participants, subject to the discretion of the Board of Directors. The Company's matching shares vest with the participants who remain in the employment of the Company in three equal annual installments starting in September, 1994. Loans to employees are payable over periods not to exceed ten years. Participation in the Plan was completed in fiscal 1993 and the Plan expired with respect to new participation on November 10, 1993. SUBMITTED BY THE COMPENSATION AND STOCK OPTION COMMITTEES Mr. Richard W. Strain Mr. Richard L. Mattox Mr. James W. Robinson 12 STOCK PERFORMANCE GRAPH The following chart compares the yearly percentage change in the cumulative total shareholder return on the Company's Common Shares with the cumulative total return of the NASDAQ market composite (U.S. Companies) and the Peer Group Index for the five years ending June 30, 1996. The Peer Group consists of AMP Inc., Augat Inc., Methode Electronics, Inc., Molex Incorporated and Thomas & Betts Corporation. The Peer Group consists of publicly-held companies, all of which participate in the electronic connector industry in varying degrees with respect to their total sales volume. All such companies are significantly larger than Robinson Nugent, Inc. in terms of sales and assets. The comparison assumes that $100 was invested on June 30, 1991, in the Company's Common Shares and in each of the foregoing indices and assumes reinvestment of dividends. COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG ROBINSON NUGENT, INC., THE NASDAQ STOCK MARKET-U.S. COMPANIES INDEX AND A PEER GROUP EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC ROBINSON NUGENT, INC. PEER GROUP NASDAQ STOCK MARKETUS 1991 100 100 100 1992 133 112 120 1993 282 133 151 1994 244 153 153 1995 398 188 204 1996 263 190 261 * $100 invested on 06/30/91 in stock or index -- including reinvestment of dividends. Fiscal year ending June 30. 13 CERTAIN TRANSACTIONS Richard L. Mattox, Secretary, Corporate Counsel and a member of the Board of Directors of the Company, is a partner in the law firm of Mattox & Mattox, with offices in New Albany, Indiana. That firm was retained by the Company as legal counsel during fiscal 1996, and it is anticipated that such relationship will continue in the current fiscal year. Jerrol Z. Miles, a director of the Company, is a Senior Vice President of National City Bank, Kentucky, with which the Company maintains a commercial banking relationship including a $7,000,000 line of credit. The Company utilized this loan facility during fiscal 1996 and incurred interest charges of $148,261 on borrowed funds. In fiscal 1996, the Company made periodic investments in short-term securities administered by National City Bank, Kentucky, and the Company received interest payments of approximately $11,991 thereon. The Board of Directors believes that the transactions described above were on terms no less favorable to the Company than would have been available in the absence of the relationships described. Pursuant to the terms of the Company's Employee Stock Purchase Plan, Messrs. Burke, Coutu and Gruhn have borrowed $165,000, $94,000 and $90,100, respectively, from the Company to purchase Common Shares of the Company. These loans are non-interest bearing and are payable over a period not to exceed ten years. At June 30, 1996, the principal balances of these loans to Messrs. Burke, Coutu and Gruhn were $86,741, $49,416 and $809, respectively. COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 requires the officers and directors of the Company to file initial reports of ownership and reports of changes in ownership of the Common Shares of the Company. The officers and directors are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms filed by them. To the Company's knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all reports required by Section 16(a) of the Securities Exchange Act of 1934 related to market transactions in the Common Shares of the Company were timely filed; however, each of the Company's officers and directors (Larry W. Burke, W. Michael Coutu, James W. Robinson, Richard L. Mattox, Jerrol Z. Miles, Diane T. Maynard, Patrick C. Duffy, Richard W. Strain) failed to timely file one report required as a result of the grant to such persons of options pursuant to the Company's Stock Option Plan. 2. RATIFICATION OF SELECTION OF CERTIFIED PUBLIC ACCOUNTANTS Subject to ratification by the shareholders, the Board of Directors has selected Coopers & Lybrand L.L.P. as certified public accountants for the Company for the fiscal year ending June 30, 1997. The Company has been advised by such firm that neither it nor any of its associates has any direct or material indirect financial interest in the Company. In order for Coopers & Lybrand L.L.P. to be ratified as the certified public accountants for the Company for the fiscal year ending June 30, 1997, a majority of the Common Shares represented and entitled to vote at the Annual Meeting must be affirmatively voted FOR approval of this proposal. 14 Coopers & Lybrand L.L.P. acted as certified public accountants for the Company since fiscal 1993. Representatives of Coopers & Lybrand L.L.P. are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions concerning their audits. 3. OTHER MATTERS As of the date of this proxy statement, the Board of Directors of the Company has no knowledge of any matters to be presented for consideration at the meeting other than those referred to above. If (a) any matters not within the knowledge of the Board of Directors as of the date of this proxy statement should properly come before the meeting; (b) a person not named herein is nominated at the meeting for election as a director because a nominee named herein is unable to serve or for good cause will not serve; (c) any proposals properly omitted from this proxy statement and the form of proxy should come before the meeting; or (d) any matters should arise incident to the conduct of the meeting; then the proxies will be voted in accordance with the recommendations of the Board of Directors of the Company. By Order of the Board of Directors Richard L. Mattox, Secretary October 4, 1996 15 PROXY ROBINSON NUGENT, INC. ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 7, 1996 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY. The undersigned hereby appoints Samuel C. Robinson and Larry W. Burke, and each of them, the proxies of the undersigned, with full power of substitution, to vote all Common Shares of Robinson Nugent, Inc. which the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Company to be held November 7, 1996, or any adjournment thereof. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE (CONTINUED AND TO BE SIGNED ON REVERSE SIDE) PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/ FOR all nominees listed below (except as marked to the contrary below). / / WITHHOLD AUTHORITY to vote for all nominees listed below. / / 1. ELECTION OF DIRECTORS: Larry W. Burke and James W. Robinson (INSTRUCTION: To WITHHOLD authority to vote for any individual nominee, write that nominee's name on the space provided below.) - --------------------------------------------- 2. Proposal to ratify the selection of Coopers & Lybrand L.L.P.as certified public accountants for the fiscal year ending June 30,1997. For Against Abstain / / / / / / 3. The proxies are authorized to vote in their discretion on any other matters which may properly come before the Annual Meeting to the extent set forth in the proxy statement. Dated: , 1996 ---------------------------- ---------------------------------------- (Signature) ---------------------------------------- (Signature) Please date this proxy. If shares are held jointly, both joint owners should sign. If signing as attorney, executor, administrator, guardian or in any other representative capacity, please give your full title as such.