<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 (AMENDMENT NO. )
Filed by the Registrant [ ]
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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Solectron Corporation
- --------------------------------------------------------------------------------
(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):
[ ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LOGO
SOLECTRON CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 14, 1998
To the Stockholders of Solectron Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Solectron
Corporation (the "Company"), a Delaware corporation, will be held on Wednesday,
January 14, 1998, at 9:00 a.m., local time, at The Sheraton San Jose, 1801
Barber Lane, Milpitas, California 95035, for the following purposes:
1. To elect eight (8) directors to serve for the ensuing year and
until their successors are duly elected and qualified.
2. To approve an amendment in the Company's Certificate of
Incorporation to permit stockholders of the Company to take action by
written consent in lieu of a meeting.
3. To ratify the appointment of KPMG Peat Marwick LLP as independent
accountants of the Company for the fiscal year ending August 28, 1998.
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on November 18, 1997
are entitled to notice of and to vote at the meeting and any adjournment
thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign and return the enclosed proxy card as promptly as possible in the
postage-paid envelope enclosed for that purpose. Any stockholder attending the
meeting may vote in person even if he or she has already returned a proxy.
By Order of the Board of Directors,
/s/ SUSAN WANG
Susan Wang
Secretary
Milpitas, California
December 5, 1997
YOUR VOTE IS IMPORTANT
To assure your representation at the Annual Meeting, you are requested to
complete, sign and date the enclosed proxy as promptly as possible and return it
in the enclosed envelope, which requires no postage if mailed in the United
States.
<PAGE> 3
SOLECTRON CORPORATION
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
------------------------
GENERAL
The enclosed Proxy is solicited on behalf of Solectron Corporation (the
"Company"), for use at the Annual Meeting of Stockholders to be held on
Wednesday, January 14, 1998, at 9:00 a.m., local time, or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting of Stockholders. The Annual Meeting will be held at The
Sheraton San Jose, 1801 Barber Lane, Milpitas, California, 95035. The Company's
telephone number is (408) 957-8500.
These proxy solicitation materials were mailed on or about December 5, 1997
to all stockholders of record at the close of business on November 18, 1997 (the
"Record Date"). A copy of the Company's Annual Report to Stockholders for the
year ended August 29, 1997 ("Fiscal 1997"), including financial statements, was
sent to the stockholders prior to or concurrently with this Proxy Statement.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof. At the Record Date, 115,028,750 shares of the Company's Common Stock
were issued and outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to the solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing a
written notice of revocation bearing a later date than the proxy with the
Secretary of the Company (currently Susan Wang) at or before the taking of the
vote at the Annual Meeting, (ii) duly executing a later dated proxy relating to
the same shares and delivering it to the Secretary of the Company at or before
the taking of the vote at the Annual Meeting or (iii) attending the Annual
Meeting and voting in person (although attendance at the Annual Meeting will not
in and of itself constitute a revocation of a proxy). Any written notice of
revocation or subsequent proxy should be delivered to Attention: Secretary of
the Company, or hand-delivered to the Secretary of the Company at or before the
taking of the vote at the Annual Meeting.
VOTING AND SOLICITATION
On all matters other than the election of directors, each share has one
vote. See "Proposal One -- ELECTION OF DIRECTORS -- Required Vote."
The cost of soliciting proxies will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for expenses incurred in forwarding solicitation
materials to such beneficial owners. Proxies may be solicited by certain of the
Company's directors, officers and regular employees, without additional
compensation, personally or by telephone, telegraph or letter.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock issued and outstanding on the Record
<PAGE> 4
Date. Shares that are voted "FOR," "AGAINST" or "ABSTAIN" are treated as being
present at the meeting for purposes of establishing a quorum and are also
treated as shares entitled to vote at the Annual Meeting (the "Votes Cast") with
respect to such matter.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of a quorum for the transaction of business and (ii) the total number of Votes
Cast with respect to a proposal (other than the election of directors). In the
absence of a controlling precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, abstentions will have the same effect
as a vote against the proposal.
In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes should be counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for purposes of determining the number of
Votes Cast with respect to the particular proposal on which the broker has
expressly not voted. Accordingly, the Company intends to treat broker non-votes
in this manner. Thus, a broker non-vote will not have any effect on the outcome
of the voting on a proposal.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR ANNUAL MEETING FOR FISCAL YEAR
1998
Proposals of stockholders of the Company which are to be presented by such
stockholders at the Company's Annual Meeting for the year ended August 28, 1998
("Fiscal 1998") must be received by the Company no later than August 7, 1998 in
order that they may be included in the Proxy Statement and form of proxy
relating to that meeting. Such stockholder proposals should be submitted to
Solectron Corporation at 847 Gibraltar Drive, Milpitas, CA 95035.
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
The Company's Board of Directors currently consists of nine persons.
Effective upon W. Ferrell Sanders's resignation from the Board of Directors, the
number of directors on the Company's Board of Directors shall be reduced to
eight. All eight positions on the Board of Directors are to be elected at this
meeting. Unless otherwise instructed, the proxyholders will vote the proxies
received by them for the Company's nominees named below, all of whom are
presently directors of the Company. 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. In the event additional persons are
nominated for election as directors, the proxyholders intend to vote all proxies
received by them in such a manner in accordance with cumulative voting as will
ensure the election of as many of the nominees listed below as possible, and in
such event, the specific nominees to be voted for will be determined by the
proxyholders. The Company is not aware of any nominee who will be unable or will
decline to serve as a director. The term of office of each person elected as a
director will continue until the next Annual Meeting of Stockholders or until
his successor has been elected and qualified.
2
<PAGE> 5
The names of the nominees, and certain information about them, are set
forth below. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
THE NOMINEES LISTED BELOW.
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- --------------------------- --- -------------------------------------------- --------
<S> <C> <C> <C>
Dr. Koichi Nishimura 59 President, Chief Executive Officer and 1991
Chairman of the Board of the Company
Dr. Winston H. Chen(1) 56 Chairman, Paramitas Foundation 1978
Richard A. D'Amore(2) 44 General Partner, North Bridge Venture 1985
Partners
Charles A. Dickinson(1) 74 Independent Management Consultant 1984
Heinz Fridrich(2) 64 Faculty, University of Florida 1996
Dr. Kenneth E. Haughton(3) 69 Independent Consultant 1985
Dr. Paul R. Low(2) 64 President, PRL Associates 1993
Osamu Yamada(1) 68 Independent International Management 1994
Consultant
</TABLE>
- ---------------
(1) Member of the Nominating Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
Except as set forth below, each of the nominees has been engaged in his
principal occupation set forth above during the past five (5) years. There is no
family relationship between any director or executive officer of the Company.
Dr. Koichi Nishimura has served as a director of the Company since 1991,
and Chairman of the Board since September 1996. He has served as Chief Executive
Officer since 1992 and President since 1990. He was Co-Chief Executive Officer
from 1991 to 1992 and Chief Operating Officer from 1988 to 1991. From 1964 to
1988, Dr. Nishimura was employed by International Business Machines Corporation
("IBM") in various technology and management positions. He also serves as a
director of Merix Corporation.
Dr. Winston H. Chen is a founder of the Company and has served as a
director of the Company since 1978, Chairman of the Board of Directors from 1990
to March 1994, President from 1979 to 1990, Chief Executive Officer from 1984 to
1991, and as Co-Chief Executive Officer from 1991 to 1992. Since 1990, Dr. Chen
has also been Chairman of Paramitas Foundation. From 1970 to 1978, Dr. Chen
served as Process Technology and Development Manager of IBM. He also serves as a
director of Intel Corporation and Edison International.
Mr. Richard A. D'Amore has served as a director of the Company since 1985.
Mr. D'Amore has been a general partner of various venture capital funds
affiliated with Hambro International Venture Funds since 1982 and a general
partner of North Bridge Venture Partners since 1992. He also serves as a
director of MathSoft, Inc., Veeco Instruments Inc., and Xionics Document
Technologies, Inc.
Mr. Charles A. Dickinson has served as a director of the Company since
1984, and served as Chairman of the Board of Directors from 1986 to 1990 and
from 1994 to September 1996. He served as an independent management consultant
to the Company from 1991 to 1993 and from February 1996 to September 1997. He
served as President, Solectron Europe from 1993 to February 1996. From 1986 to
1990, Mr. Dickinson was Chairman of the Board of Directors, President and Chief
Executive Officer of Vermont Micro Systems, Inc. He also serves as a director of
Trident Microsystems, Inc. and Aavid Thermal Technologies, Inc.
Mr. Heinz Fridrich has served as a director of the Company since April
1996. He has been a member of the faculty of the University of Florida since
1993. From 1950 to 1993, Mr. Fridrich held a number of manufacturing and
operations management positions in Europe and the United States with
3
<PAGE> 6
IBM. He also serves as a director of Central Hudson Gas & Electric Company in
Poughkeepsie, New York.
Dr. Kenneth E. Haughton has served as a director of the Company since 1985.
Since 1991, Dr. Haughton has been an independent consultant. From 1990 to 1991,
he was Vice President of Engineering at Da Vinci Graphics. From 1989 to 1990,
Dr. Haughton was an independent consultant, and from 1982 to 1989, he served as
Dean of Engineering at Santa Clara University. He also serves as a director of
Seagate Technology.
Dr. Paul R. Low has served as a director of the Company since 1993. He is
currently President of PRL Associates, a position he has held since 1992. Dr.
Low worked for IBM from 1957 to 1992. During his tenure at IBM, Dr. Low held
senior management and executive positions with successively increasing
responsibility, including President, General Technology Division and IBM
Corporate Vice President; President of General Products Division; and General
Manager, Technology Products business line, also serving on IBM's corporate
management board. He also serves as a director of Applied Materials, Inc., Veeco
Instruments Inc., Number Nine, NCD, Xion and IPAC.
Mr. Osamu Yamada has served as a director of the Company since 1994. Mr.
Yamada has been an independent international business consultant since November
1996. From October 1991 to November 1996, Mr. Yamada served as an advisor to The
Mitsubishi Bank, Limited and the Bank of Tokyo/Mitsubishi. From 1990 to 1991, he
was Chairman and Chief Executive Officer of BankCal Tri-State Corporation, a
wholly owned subsidiary of The Mitsubishi Bank, Limited. From 1987 to 1990, he
was Senior Managing Director of The Mitsubishi Bank, Limited, and in an
overlapping period from 1985 to 1990, he was also Chairman, President and Chief
Executive Officer of Bank of California. Prior to 1985, he held a number of key
management positions with The Mitsubishi Bank, Limited organization. Mr. Yamada
currently serves on a number of boards of major universities and cultural
centers.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of six (6) regular
meetings, and five (5) telephonic meetings during Fiscal 1997.
During Fiscal 1997, each director attended more than eighty-one percent
(81%) of the meetings of the Board of Directors and meetings of committees upon
which such director served.
The Audit Committee of the Board of Directors currently consists of Richard
A. D'Amore, Heinz Fridrich and Dr. Paul R. Low. This committee oversees the
Company's internal financial control systems and procedures, reviews and
approves the Company's financial statements and coordinates and approves the
activities of the Company's auditors. The Audit Committee held two (2) meetings
during Fiscal 1997.
The Compensation Committee of the Board of Directors is currently composed
of Dr. Kenneth E. Haughton and W. Ferrell Sanders. This committee is responsible
for establishing compensation guidelines for executives of the Company,
reviewing and approving executive bonus plans and providing guidance with
respect to other compensation issues, such as incentive stock option grants. The
Compensation Committee held a total of one (1) meeting during Fiscal 1997.
The Nominating Committee of the Board of Directors currently consists of
Charles A. Dickinson, Dr. Winston H. Chen, and Osamu Yamada. This committee is
responsible for the development of general criteria regarding the qualifications
and selection of board members and recommends candidates for election to the
Board of Directors. The Nominating Committee held no meetings during Fiscal
1997.
4
<PAGE> 7
DIRECTOR COMPENSATION
Directors who are not employees of the Company ("Outside Directors")
receive annual retainers of $16,800. In addition, each Outside Director is paid
$2,200 for each meeting of the Board Directors attended, as well as $500 for
each telephonic meeting attended in Fiscal 1997. Outside Directors may also
receive consulting fees for projects completed at the request of management.
Employee directors are not compensated for their service on the Board of
Directors or on committees of the Board of Directors.
Options to purchase shares of the Company's common stock are granted to
Outside Directors under the Company's 1992 Stock (the "Option Plan"). As a
result of amendments to Rule 16b-3 of the Securities Exchange Act of 1934, as
amended, the Company intends to eliminate the automatic grant mechanism and to
permit all directors to participate in the Option Plan.
REQUIRED VOTE
Each stockholder voting in the election of directors is entitled to
cumulate such stockholder's votes. Each stockholder who elects to cumulate votes
shall be entitled to as many votes as equals the number of directors to be
elected multiplied by the number of shares held by such stockholder, and the
stockholder may cast all such votes for a single director or distribute them
among as many candidates as the stockholder may see fit. However, no stockholder
shall be entitled to cumulate votes unless the candidate's name has been placed
in nomination prior to the voting and the stockholder, or any other stockholder,
has given notice at the meeting prior to the voting of the intention to cumulate
the votes. The eight nominees receiving the highest number of affirmative votes
of the shares entitled to be voted for them shall be elected as directors. 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 legal effect
under Delaware law. Abstentions and shares held by brokers that are present but
not voted, because the brokers were prohibited from exercising discretionary
authority ("Broker Non-Votes"), will be counted as present for purposes of
determining the presence or absence of a quorum.
PROPOSAL TWO
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION
GENERAL
The Company's Certificate of Incorporation presently provides that
stockholders of the Company may not take action by written consent, but must
take any actions at a duly called annual or special meeting. During the
Company's 1996 Annual Meeting of Stockholders, the Company agreed with several
of its stockholders, including FMR Corporation, to use its best efforts to allow
stockholders to take action by written consent. Accordingly, the Company now
proposes to amend its Certificate of Incorporation to permit stockholders to
take action by written consent in lieu of a meeting.
ACTIONS BY WRITTEN CONSENT IN LIEU OF A MEETING
Under Section 228 of the Delaware General Corporation Law, unless a
corporation's certificate of incorporation provides otherwise, any action
required to be taken, or any action that may be taken, at any annual or special
meeting of stockholders, may be taken without a meeting, without prior notice
and without a vote if a written consent setting forth the action to be taken is
signed by the holders of outstanding stock having not less than the minimum
number of votes necessary to authorize the action at a meeting at which all the
shares entitled to vote thereon were present and voted. In addition, the
consents must be delivered by hand or certified or registered mail, return
receipt requested, to the corporation to its registered office in Delaware, to
its principal place of business, or to an officer or agent of the corporation
who has custody of the book in which proceedings of meetings of stockholders are
recorded. Every written consent must bear the date of signature of each
stockholder
5
<PAGE> 8
who signs the consent, and, in order to be effective, all consents must be
delivered within 60 days of the earliest dated written consent delivered to the
Company. Delaware law requires a corporation to give prompt notice of any
corporate action taken without a meeting by less than a unanimous consent, to
those stockholders who have not consented in writing and who would have been
entitled to receive notice of a stockholders' meeting at which the action could
have been taken.
If Proposal Two is passed, stockholder solicitations for actions to be
taken by written consent, as with any solicitation for actions to be taken at an
annual or special meeting of stockholders, must still comply with the proxy
rules under Section 14(a) and regulations thereunder of the Securities Exchange
Act of 1934, as amended. The proxy rules require that no solicitation subject to
the regulation shall be made unless each person solicited is concurrently or
previously furnished with a publicly-filed preliminary or definitive written
proxy statement containing disclosures required under the federal securities
laws and prohibit any materials used in a solicitation from containing
intentionally false or misleading statements. In addition, the proxy rules
require that preliminary copies of the proxy statement and form of proxy shall
be filed with the Securities and Exchange Commission ("SEC") at least 10
calendar days prior to the date definitive copies of such materials are first
sent or given to stockholders, and definitive copies of the proxy statement and
copies of any soliciting materials must also be filed with the SEC not later
than the date when they are first given to stockholders.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the meeting is required
to approve the proposal to permit stockholders to take action by written consent
in lieu of a meeting. Abstentions will have the same effect as a vote against
the proposal. Broker Non-Votes will not have any effect on the outcome of the
voting on a proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" APPROVAL
OF THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected KPMG Peat Marwick LLP ("KPMG"),
independent public accountants, to audit the financial statements of the Company
for Fiscal 1998. KPMG has audited the Company's financial statements since the
Company's 1985 fiscal year. Representatives of KPMG are expected to be present
at the meeting with the opportunity to make a statement if they desire to do so,
and are expected to be available to respond to appropriate questions. The
affirmative vote of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the meeting is required to ratify
the appointment of KPMG.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF KPMG AS INDEPENDENT ACCOUNTANTS.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act and regulations of the Securities and
Exchange Commission (the "SEC") thereunder require the Company's executive
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of initial ownership and
changes in ownership with the SEC. Based solely on its review of copies of such
forms received by the Company, or on written representations from certain
reporting persons that no other reports were required for such persons, the
Company believes that, during Fiscal 1997 all of the
6
<PAGE> 9
Section 16(a) filing requirements applicable to its executive officers,
directors and 10% stockholders were complied with.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has entered into indemnification agreements with its executive
officers, directors and certain significant employees containing provisions
which are in some respects broader than the specific indemnification provisions
contained in the General Corporation Law of Delaware. These agreements provide,
among other things, for indemnification of the executive officers, directors and
certain significant employees in proceedings brought by third parties and in
stockholder derivative suits. Each agreement also provides for advancement of
expenses to the indemnified party. The agreements have been approved by the
majority vote of the disinterested stockholders of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of November 18, 1997 information relating
to the beneficial ownership of the Company's Common Stock by (i) each person
known by the Company to be the beneficial owner of more than five percent (5%)
of the outstanding shares of Common Stock, (ii) each director, (iii) each of the
executive officers named in the Summary Compensation Table, (iv) and all
directors and executive officers as a group.
<TABLE>
<CAPTION>
APPROXIMATE
AMOUNT PERCENTAGE
NAME OWNED(1) OWNED
----------------------------------------------- ---------- -----------
<S> <C> <C>
FMR Corporation................................ 17,058,096(2) 14.83%
82 Devonshire Street
Boston, MA 02109-3614
The Equitable Companies Incorporated........... 9,470,712(3) 8.23%
787 Seventh Avenue
New York, NY 10019
Montag & Caldwell.............................. 6,251,329(2) 5.43%
3343 Peachtree Road N.E.
Atlanta, GA 30326
Dr. Winston H. Chen............................ 1,112,500(4) *
Dr. Koichi Nishimura........................... 453,475(5) *
Susan Wang..................................... 391,605(6) *
Walter W. Wilson............................... 280,215(7) *
Ken Tsai....................................... 215,726(8) *
Charles A. Dickinson........................... 155,766(9) *
Dr. Saeed Zohouri.............................. 128,676(10) *
W. Ferrell Sanders............................. 78,560(11) *
Dr. Kenneth E. Haughton........................ 70,700(12) *
Richard A. D'Amore............................. 48,500(12) *
Dr. Paul R. Low................................ 42,500(13) *
Osamu Yamada................................... 20,750(14) *
Heinz Fridrich................................. 6,500(15) *
All directors and executive officers as a
group (16 persons)........................ 3,294,206(16) 2.86%
</TABLE>
- ---------------
* Less than one percent (1%).
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to the securities. In computing the number of
shares beneficially owned by a person and the percentage ownership
7
<PAGE> 10
of that person, shares of Solectron Common Stock subject to options held by
that person that will be exercisable on or before January 17, 1998, are
deemed outstanding. Such shares, however, are not deemed outstanding for
the purpose of computing the percentage ownership of any other person.
(2) Calculated as of November 18, 1997.
(3) Calculated as of November 14, 1997.
(4) Includes 30,500 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(5) Includes 201,349 shares issuable upon the exercise of stock options that
are exercisable on or before January 17, 1998.
(6) Includes 117,810 shares issuable upon the exercise of stock options that
are exercisable on or before January 17, 1998.
(7) Includes 156,562 shares issuable upon the exercise of stock options that
are exercisable on or before January 17, 1998.
(8) Includes 178,829 shares issuable upon the exercise of stock options that
are exercisable on or before January 17, 1998.
(9) Includes 71,490 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(10) Includes 91,664 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(11) Includes 12,500 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(12) Includes 48,500 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(13) Includes 42,500 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(14) Includes 20,750 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(15) Includes 5,500 shares issuable upon the exercise of stock options that are
exercisable on or before January 17, 1998.
(16) Includes 1,213,469 shares issuable upon the exercise of stock options that
are exercisable on or before January 17, 1998.
8
<PAGE> 11
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows, as to the Chief Executive Officer and each of
the four other most highly compensated executive officers, information
concerning compensation for services to the Company in all capacities.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION(2)
COMPENSATION(1) --------------- ALL OTHER
--------------------- OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (#)(2) ($)(3)
- ---------------------------------------- ---- -------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Koichi Nishimura 1997 $475,020 $446,999 70,000 $5,695
President, Chief Executive Officer and 1996 464,483 360,000 80,000 5,410
Chairman of the Board of Directors 1995 375,000 412,500 40,000 1,744
Saeed Zohouri 1997 249,890 348,364 60,000 3,145
Senior Vice President, Chief 1996 177,694 269,917 60,000 2,477
Technology Officer and President, 1995 115,397 199,533 30,000 648
Solectron California Corporation
Walter W. Wilson 1997 268,268 314,609 20,000 3,110
Senior Vice President and President, 1996 256,913 265,391 30,000 3,053
Solectron Americas 1995 177,323 308,668 20,000 880
Ken Tsai 1997 224,978 339,119 30,000 863
Senior Vice President and President, 1996 155,767 303,224 30,000 755
Solectron Asia 1995 140,203 263,528 30,000 985
Susan Wang 1997 249,990 276,841 24,000 2,832
Senior Vice President, Chief 1996 207,691 227,071 30,000 2,795
Financial Officer and Secretary 1995 169,243 231,757 20,000 665
</TABLE>
- ---------------
(1) Perquisites are not included since the aggregate amount is less than the
lesser of $50,000 or 10% of salary and bonus, in accordance with regulations
promulgated by the Securities and Exchange Commission (the "SEC");
therefore, the Other Annual Compensation has not been included in this
table.
(2) Adjusted to reflect two-for-one stock split effective August 4, 1997. The
Company has not granted any stock appreciation rights or restricted stock
awards and does not have any Long-Term Incentive Plans as that term is
defined in regulations promulgated by the SEC.
(3) Amounts represent the Company's contributions to a 401(k) plan and the
taxable benefit of premium payments under split dollar life insurance
policies.
9
<PAGE> 12
STOCK OPTION GRANTS AND EXERCISES
The following tables set forth, for the executive officers named in the
Summary Compensation Table, the stock options granted under the Company's stock
option plans and the options exercised by such executive officers during Fiscal
1997.
STOCK OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT OF VALUE AT
TOTAL ASSUMED ANNUAL RATES OF
OPTIONS STOCK PRICE
GRANTED TO APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OR OPTION TERM(2)
GRANTED IN FISCAL BASE PRICE EXPIRATION -----------------------
NAME (#)(1) YEAR ($/SHARE) DATE 5%($) 10%($)
- ----------------------------- ------ ----------- ------------ ----------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Koichi Nishimura............. 70,000 2.07% $23.94 9/25/03 $682,148 $1,589,694
Saeed Zohouri................ 60,000 1.77% 23.94 9/25/03 584,698 1,362,595
Walter W. Wilson............. 20,000 .59% 23.94 9/25/03 194,899 454,198
Ken Tsai..................... 30,000 .89% 23.94 9/25/03 292,349 681,297
Susan Wang................... 24,000 .71% 23.94 9/25/03 233,879 545,038
</TABLE>
- ---------------
(1) These options become exercisable as to one forty-eighth of the shares after
each month from the date of grant.
(2) Potential realizable value is based on an assumption that the stock price
of the Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the seven (7) year option
term. Potential realizable value is shown net of exercise price. These
amounts are calculated based on the regulations promulgated by the SEC and
do not reflect the Company's estimate of future stock price growth.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND YEAR-END VALUES
<TABLE>
<CAPTION>
TOTAL NUMBER OF VALUE OF UNEXERCISED,
SHARES UNEXERCISED OPTIONS HELD AT IN-THE-MONEY OPTIONS HELD AT
ACQUIRED FISCAL YEAR END(#) FISCAL YEAR END($)(2)
ON VALUE ----------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Koichi
Nishimura....... 160,000 $3,334,992 277,701 112,299 $ 7,907,320 $ 2,395,796
Saeed Zohouri..... 42,988 723,462 84,251 92,761 2,086,733 1,888,096
Walter W. Wilson.. 40,000 1,012,500 139,375 50,625 3,696,325 1,168,673
Ken Tsai.......... 20,000 288,750 159,984 70,016 4,185,536 1,615,088
Susan Wang........ 0 0 180,289 53,711 5,020,200 1,224,048
</TABLE>
- ---------------
(1) Fair market value of underlying securities at exercise minus the exercise
price.
(2) Calculated based upon the August 29, 1997 fair market value share price of
$41.88 less the share price to be paid upon exercise. There is no guarantee
that if and when these options are exercised they will have this value.
10
<PAGE> 13
COMPENSATION COMMITTEE REPORT
INTRODUCTION
The Compensation Committee (the "Committee") of the Board of Directors is
charged with the responsibility of reviewing all aspects of the Company's
executive compensation programs and administering the Company's stock option
plans. In Fiscal 1997, the members of the Committee were Messrs. Haughton and
Sanders, both of whom are non-employee directors of the Company. The Committee
meets at the beginning of each fiscal year to establish target base compensation
levels for the Company's executive officers for the following fiscal year and to
finalize bonuses for the previous fiscal year.
COMPENSATION PHILOSOPHY
The Company's executive compensation policies are designed to attract and
retain qualified executives who will contribute to the Company's long-term
success, to reward executives for achieving the Company's financial goals, and
to link executive compensation and stockholder interests through bonuses and
equity-based plans. The Committee believes that strong financial performance, on
a sustained basis, is the most certain avenue through which the Company can
positively affect long-term stockholder return. Furthermore, the Company
believes that, in order to attract and retain the most qualified executives in
the industry, its compensation policies must be competitive with other companies
of comparable size and in similar industries and must reinforce strategic
performance objectives through the use of incentive compensation programs. In
order to provide incentive to executive officers, a large percentage of their
annual compensation is paid as a bonus. The amount of the bonus for each person
is determined on the basis of several indicators of corporate performance as
outlined below.
COMPENSATION PLANS
The following are the key components of the Company's executive officer
compensation:
Base Compensation. The Committee establishes base salaries for executive
officers based on its review of base salaries of executive officers in companies
of comparable size and in similar industries. A majority of the companies used
by the Committee in its review of salaries of other companies are a part of the
H&Q Technology Index used in the "Performance Graph" below.
Bonuses. The Company's executive bonus plan provides for incentive
compensation to the Company's executive officers and other key employees and is
determined cumulatively on a quarterly basis based principally on certain
performance measures. The performance measures include worldwide corporate
performance, site performance and individual performance. Worldwide and site
performance are measured based on targets with respect to the Company's profit
before taxes, inventory turns, days sales outstanding and return on assets. The
Committee believes that these factors are indicative of overall corporate
performance and stockholder value. Individual performance is measured based on
goals related to each person's function within the organization. Employees
accrue bonuses each quarter based on performance against year-to-date profit and
asset utilization targets. However, only approximately 26% of such accrued
bonuses vest and are payable quarterly. The remaining accrued bonus balances
vest at the fiscal year end and are payable upon final determination of earned
bonuses.
Long-Term Incentive Compensation. The Company's Option Plan provides for
long-term incentive compensation for employees of the Company, including
executive officers. A significant portion of the total compensation package for
the Company's executive officers is in the form of stock option awards. These
awards give employees an equity interest in the Company, thereby aligning the
interests of executive officers and stockholders and providing incentive to
maximize stockholder value.
11
<PAGE> 14
COMPANY PERFORMANCE AND CEO COMPENSATION
The compensation for the Company's CEO for Fiscal 1997 was comprised of a
base salary component and a bonus component. The Committee met at the beginning
of Fiscal 1997 and reviewed CEO compensation for companies of comparable size
and similar industries in order to establish a base salary for the Company's
CEO. The Committee established a close tie between Company performance and CEO
compensation by designating a large portion of total annual compensation as
bonus. The Committee established corporate performance goals including profit
before taxes, inventory turns, days sales outstanding and return on assets. At
the beginning of Fiscal 1998, the Committee evaluated the Company's Fiscal 1997
performance in light of the goals established in the previous year. The
Committee found that these corporate performance target levels had been met or
exceeded and that in addition, the Company's CEO had exceeded his personal
performance goals for strategic leadership, growth, increase in stockholder
value and organizational and human resource development thereby entitling him to
his full bonus payment.
MEMBERS OF THE COMPENSATION COMMITTEE
Dr. Kenneth E. Haughton
W. Ferrell Sanders
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neither Kenneth E. Haughton nor W. Ferrell Sanders, the members of the
Compensation Committee, is an executive officer of any entity for which any
executive officer of the Company serves as a director or a member of the
Compensation Committee.
12
<PAGE> 15
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return on the S&P 500 Index and
the H&Q Technology Index for the five fiscal years commencing August 31, 1992
and ending August 29, 1997, assuming an investment of $100 and the reinvestment
of any dividends.
The comparisons in the graph below are based upon historical data and are
not indicative of, nor intended to forecast, future performance of the Company's
Common Stock.
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SOLECTRON H&Q TECHNOLOGY
(FISCAL YEAR COVERED) CORPORATION S&P 500 INDEX INDEX
<S> <C> <C> <C>
8/92 100.00 100.00 100.00
8/93 169.50 115.19 135.30
8/94 244.00 121.54 157.77
8/95 284.00 147.58 269.28
8/96 299.00 175.17 271.29
8/97 670.00 246.51 433.48
</TABLE>
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent as
the Company may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
Susan Wang
Secretary
Dated: December 5, 1997
13
<PAGE> 16
PROXY SOLECTRON CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Koichi Nishimura and Susan Wang, and each of
them, with full power of substitution, to represent the undersigned and to vote
all of the shares of stock in Solectron Corporation (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of the Stockholders of the
Company to be held at The Sheraton San Jose, 1801 Barber Lane, Milpitas,
California 95035 on Wednesday, January 14, 1998 at 9:00 a.m. Pacific Time, and
at any adjournment thereof (1) as hereinafter specified upon the proposals
listed on the reverse side and as more particularly described in the Proxy
Statement of the Company dated December 5, 1997 (the "Proxy Statement"), receipt
of which is hereby acknowledged, and (2) in their discretion, upon such other
matters as may properly come before the meeting. The undersigned hereby
acknowledges receipt of the Company's Annual Report for the year ended August
29, 1997.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, SUCH SHARES SHALL BE VOTED FOR PROPOSALS 1 THROUGH 3.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE.
[X] Please mark
votes as in
this example
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD [ ]
(EXCEPT AS MARKED TO THE CONTRARY BELOW AUTHORITY TO VOTE FOR ALL
NOMINEES LISTED BELOW
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below)
- --------------------------------------------------------------------------------
Koichi Nishimura, Ph.D., Winston H. Chen, Ph.D., Richard A. D'Amore, Charles A.
Dickinson, Heinz Fridrich, Kenneth E. Haughton, Ph.D., Paul R. Low, Ph.D. and
Osamu Yamada
<TABLE>
<S> <C> <C> <C>
2. PROPOSAL TO APPROVE AN AMENDMENT IN THE COMPANY'S CERTIFICATE OF INCORPORATION FOR AGAINST ABSTAIN
TO PERMIT STOCKHOLDERS OF THE COMPANY TO TAKE ACTION BY WRITTEN CONSENT
IN LIEU OF A MEETING. [ ] [ ] [ ]
3. PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS FOR AGAINST ABSTAIN
THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR
ENDING AUGUST 28, 1998. [ ] [ ] [ ]
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE Signature: ________________Date ____________
URGED TO SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE SO
THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING. Signature: _______________ Date ____________
</TABLE>
