SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[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 ss. 240.14a-11(c) or ss. 240.14a-12
BENCHMARK ELECTRONICS, INC.
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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>
PRELIMINARY COPY
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 20, 1997
Shareholders of Benchmark Electronics, Inc.:
The 1997 Annual Meeting of Shareholders of Benchmark Electronics, Inc.
("Company") will be held at the Doubletree Hotel at Allen Center, 400 Dallas
Street, Houston, Texas, on Tuesday, May 20, 1997, beginning at 10:00 a.m. (local
time), for the following purposes:
1. to elect seven directors to serve on the Board of Directors
until the 1998 annual meeting of shareholders and until their successors
are duly elected and qualified;
2. to consider and act upon a proposed amendment to the
Company's Restated Articles of Incorporation to increase the number of
authorized shares of common stock from 10 million to 30 million shares;
3. to consider and act upon a proposal to ratify the appointment
of KPMG Peat Marwick LLP as the independent auditors of the Company for
the year ending December 31, 1997; and
4. to transact such other business as may properly come before
the meeting or any adjournment thereof.
Shareholders of record at the close of business on April 10, 1997, are
entitled to notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Regardless of whether
you plan to attend the meeting, you are urged to complete, date, sign and return
the enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
Cary T. Fu
Executive Vice President
Angleton, Texas
April __, 1997
YOUR VOTE IS IMPORTANT.
TO ENSURE YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE AT YOUR
EARLIEST CONVENIENCE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. NO
ADDITIONAL POSTAGE IS NECESSARY IF THE PROXY IS MAILED IN THE UNITED STATES. THE
PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
<PAGE>
PRELIMINARY COPY
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
(409) 849-6550
APRIL __, 1997
------------------------
PROXY STATEMENT
FOR
1997 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 20, 1997
------------------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Benchmark Electronics, Inc.
("Company") for use at the 1997 Annual Meeting of Shareholders of the Company to
be held on Tuesday, May 20, 1997, beginning at 10:00 a.m. (local time), and any
adjournment thereof ("Meeting") for the purposes set forth in this Proxy
Statement and the accompanying Notice. This Proxy Statement, the Notice and the
enclosed form of proxy will be sent to shareholders on or about April 21, 1997.
PROXIES
If any proxy in the enclosed form is properly executed and is received
by the Company before or at the Meeting, the shares represented thereby will be
voted in accordance with the directions set forth therein. If no direction is
made, a proxy that is properly signed and received by the Company and which is
not revoked will be voted FOR the election of all nominees for director named
herein to serve on the Board of Directors until the 1998 annual meeting of
shareholders and until their successors are duly elected and qualified, FOR
approval of the proposal to amend the Company's Restated Articles of
Incorporation to increase the number of authorized shares of common stock from
10 million to 30 million shares, and FOR the ratification of the appointment of
KPMG Peat Marwick LLP as the independent auditors of the Company for the year
ending December 31, 1997. If any other matter, not known or determined at the
time of the solicitation of proxies, properly comes before the Meeting, the
proxies will be voted in accordance with the discretion of the person or persons
voting the proxies. Proxies may be revoked by written notice received by the
Secretary of the Company at any time before they are voted and will be deemed
revoked by voting in person at the Meeting.
VOTING SECURITIES
Shareholders of record at the close of business on April 10, 1997 are
entitled to notice of and to vote at the Meeting. As of April 10, 1997, there
were ______________ shares of common stock, $0.10 par value per share ("Common
Stock"), issued, outstanding and entitled to vote at the Meeting. Each share of
Common Stock is entitled to one vote on all matters that may properly come
before the Meeting.
<PAGE>
QUORUM AND OTHER MATTERS
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock is necessary to constitute a
quorum. Shares of Common Stock represented by a properly signed and returned
proxy will be counted as present at the Meeting for purposes of determining a
quorum, without regard to whether the proxy is marked as casting a vote or
abstaining. Shares of Common Stock held by nominees which are voted on at least
one matter coming before the Meeting will also be counted as present for
purposes of determining a quorum, even if the beneficial owner's discretion has
been withheld (a "non-vote") for voting on some or all other matters.
The Company's Restated Articles of Incorporation provide that directors
will be elected by the affirmative vote of a majority of the outstanding shares
of Common Stock entitled to vote and present, in person or represented by proxy,
at the Meeting. Approval of the proposed amendment to the Company's Restated
Articles of Incorporation requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock. All other matters to come
before the meeting for which the Texas Business Corporation Act does not require
the affirmative vote of the holders of a specified portion of the shares
entitled to vote require the approval of a majority of the outstanding shares of
Common Stock entitled to vote and present, in person or represented by proxy, at
the Meeting. Therefore, an abstention, a non-vote or a withholding of authority
to vote with respect to a proposal relating to the election of directors, the
proposed amendment to the Company's Restated Articles of Incorporation or other
matters to come before the meeting will have the effect of a vote against such
proposal.
Votes at the Meeting will be tabulated by an Inspector of Election
appointed by the Company.
The Board of Directors is not aware of any matters that are expected to
come before the Meeting other than those referred to in this Proxy Statement. If
any other matter properly comes before the Meeting, the proxies will be voted in
accordance with the discretion of the person or persons voting the proxies.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The following table sets forth certain information with respect to each
nominee for election as a director of the Company. The information as to age,
principal occupation, shares of Common Stock beneficially owned, and
directorships has been furnished by each such nominee.
<TABLE>
<CAPTION>
Percentage of
Shares of Outstanding
Common Stock Shares of Common
Name Age Principal Occupation Beneficially Owned Stock
---- --- -------------------- ------------------ ----------------
<S> <C> <C> <C> <C>
John C. Custer 66 Retired 17,980(1) (2)
Donald E. Nigbor 49 President of the Company 148,916(3) 2.6%
Steven A. Barton 48 Executive Vice President of the 22,585(4) (2)
Company
Cary T. Fu 48 Executive Vice President of the 154,005(3) 2.7%
Company
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Percentage of
Shares of Outstanding
Common Stock Shares of Common
Name Age Principal Occupation Beneficially Owned Stock
---- --- -------------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Peter G. Dorflinger 45 Vice President and General 19,000(5) (2)
Counsel of Advanced
Medical Instruments, Inc.
Gerald W. Bodzy 45 Senior Vice President and 17,600(6) (2)
Managing Director of
Stephens Inc.
David H. Arnold 59 President and Chairman of the Board 244,996(7) 4.3%
of DCM Tech, Inc.
</TABLE>
- ----------------
(1) Includes 1,200 shares owned by Mr. Custer's wife, and 16,780 shares that
may be acquired upon the exercise of options that are currently
exercisable.
(2) Less than 1%.
(3) Includes 63,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(4) Includes 21,200 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(5) Includes 18,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(6) Includes (i) 1,600 shares of Common Stock held by Mr. Bodzy as custodian
for his children under the Uniform Gifts to Minors Act, as to which
shares of Common Stock Mr. Bodzy expressly disclaims beneficial
ownership, and (ii) 9,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(7) Includes 5,644 shares of Common Stock owned of record by Mr. Arnold's
wife, 1,363 shares held for Mr. Arnold's benefit in the Company's 401(k)
Employee Savings Plan and 3,000 shares that may be acquired upon the
exercise of options that are currently exercisable.
Mr. Custer has been Chairman of the Board of Directors of the Company
since 1988 and a member of the Compensation Committee of the Board of Directors
since 1990. Mr. Custer was employed by Mason & Hanger Corporation, a technical
services contracting and engineering firm, from 1951 until his retirement in
February 1996. Mr. Custer became a member of the board of directors of Mason &
Hanger Corporation in 1983, serving as Chairman of the Board from 1994 until his
retirement, and served in various other management and operations positions
before becoming Chairman of the Board.
Mr. Nigbor has been a director and President of the Company since 1986
and was its General Manager from 1984 to 1990. Before joining the Company, he
was employed by Intermedics, Inc. ("Intermedics"), a medical implant
manufacturer, serving as a Manufacturing Analyst for its Pacemaker division from
1980 to 1984. Mr. Nigbor holds B.S. and M.S. degrees in engineering from
Rensselaer Polytechnic Institute and received an M.B.A. from the Amos Tuck
School of Business at Dartmouth College.
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<PAGE>
Mr. Barton has been a director and Executive Vice President of the
Company since 1990. He served as Executive Vice President -- Marketing and Sales
of the Company from 1990 to April 1992. Since June 1, 1993 he has worked
part-time for the Company for personal reasons. He also has served the Company
as Executive Vice President from 1988 to 1990, a director and Vice President
from 1986 to 1988, and President from 1979 to 1983. From 1977 to 1986, Mr.
Barton was employed by Intermedics in various management positions. Mr. Barton
holds B.S. and M.S. degrees in electrical engineering from the University of
South Florida and received an M.B.A. from the Harvard Business School.
Mr. Fu has been a director and Executive Vice President of the Company
since 1990. He served as Executive Vice President -- Financial Administration of
the Company from 1990 to April 1992. He also has served the Company as Treasurer
from 1986 to January 1996, Secretary from 1990 to January 1996, a director and
Secretary from 1986 to 1988 and Assistant Secretary from 1988 to 1990. From 1983
to 1986, Mr. Fu was employed by Intermedics as Controller of the Company and
another subsidiary. Mr. Fu holds an M.S. degree in accounting from the
University of Houston and is a certified public accountant.
Mr. Dorflinger has been a director of the Company and a member of the
Audit Committee and Compensation Committee of the Board of Directors since 1990.
He is currently Vice President and General Counsel of Advanced Medical
Instruments, Inc., a manufacturer of medical monitoring equipment, a position he
has held since January 1, 1997. From March 1987 through October 1996 he served
as Vice President, General Counsel and Secretary of Intermedics. From June 1990
through October 1996 he served as Group Vice President and General Counsel of
SULZERmedica, a division of Sulzer Limited of Switzerland, composed of eight
operating medical device companies in Europe and the United States. Mr.
Dorflinger received a J.D. degree from the University of Houston and also is a
director of Maxxim Medical, Inc., a medical products manufacturer and supplier.
Mr. Bodzy has been a director of the Company since September 1994 and
has been a member of the Audit Committee since March 1995. He has been employed
since 1990 by Stephens Inc., serving as Senior Vice President and Managing
Director. From 1979 to 1990, Mr. Bodzy was employed by Smith Barney, Inc., as an
investment banker, serving as Managing Director from 1986 to 1990.
Mr. Arnold became a director of the Company in 1996 pursuant to the
terms of the agreement relating to the Company's acquisition of EMD
Technologies, Inc. ("EMD") in July 1996. Mr. Arnold was a co-founder of EMD and
served as a director and officer of EMD from 1974 until its acquisition by the
Company. Mr. Arnold is currently President and Chairman of the Board of DCM
Tech, Inc., a privately-held manufacturer of machine tools. Mr. Arnold earned a
B. S. degree in mechanical engineering from Iowa State University and an M.S.
degree in mechanical engineering from the University of Michigan. He also serves
as a director of Town and Country State Bank in Winona, Minnesota. The agreement
relating to the acquisition of EMD by the Company requires the Company to
include either Mr. Arnold or Mr. Daniel M. Rukavina (or an acceptable person
designated by them) on its recommended slate of nominees for election to the
Company's Board of Directors for so long as Mr. Arnold and Mr. Rukavina
(including, in the first year after the acquisition, their spouses and
descendants) own beneficially in the aggregate at least 10% of the outstanding
shares of Common Stock.
The officers of the Company are elected by, and serve at the discretion
of, the Board of Directors.
ELECTION PROCEDURES; TERM
The directors will be elected by the affirmative vote of the holders of
a majority of the outstanding shares of Common Stock present in person or
represented by proxy at the Meeting. Unless the authority to vote
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<PAGE>
for the election of directors is withheld as to any or all of the nominees, all
shares of Common Stock represented by proxy will be voted for the election of
the nominees. If the authority to vote for the election of directors is withheld
as to any but not all of the nominees, all shares of Common Stock represented by
any such proxy will be voted for the election of the nominees as to whom such
authority is not withheld. If a nominee becomes unavailable to serve as a
director for any reason before the election, the shares represented by proxy
will be voted for such other person, if any, as may be designated by the Board
of Directors. The Board of Directors, however, has no reason to believe that any
nominee will be unavailable to serve as a director.
Any vacancy on the Board of Directors occurring after the election may
be filled (1) by election at any annual or special meeting of the shareholders
called for that purpose, or (2) by a majority of the remaining directors though
less than a quorum of the Board of Directors, provided that the remaining
directors may not fill more than two such director vacancies during the period
between any two successive annual meetings of shareholders. A director elected
to fill a vacancy will be elected for the unexpired portion of the term of his
predecessor in office.
All directors will be elected to serve until the 1998 annual meeting of
shareholders and until their successors are duly elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES TO THE BOARD OF DIRECTORS.
OPERATION OF BOARD OF DIRECTORS
The directors are elected annually by the shareholders and hold office
until their successors are elected and qualified. The Amended and Restated
Bylaws of the Company provide for a Board of Directors consisting of seven
members. The Board of Directors held eleven meetings during 1996.
The Board of Directors has an Audit Committee and a Compensation
Committee, but does not have a nominating committee or any committee performing
a similar function.
The members of the Audit Committee are Messrs. Dorflinger and Bodzy. The
functions of the Audit Committee are to recommend to the Board of Directors the
retention or discharge of the Company's independent auditors; review and approve
the engagement of the independent auditors to conduct an audit of the Company
and related matters including the scope, extent and procedures of the audit and
the fees to be paid therefor; review, in consultation with the independent
auditors, the audit results and their proposed opinion letter or audit report
and any related management letter; review and approve the audited financial
statements of the Company; consult with the independent auditors and management
of the Company, together or separately, on the adequacy of internal accounting
controls and review the results thereof; review the independence of the
independent auditors; review and approve the engagement of the independent
auditors for non-audit services; direct and supervise investigations into
matters within the scope of the Audit Committee's duties; and perform such other
functions as may be necessary or appropriate in the efficient discharge of its
duties. The Audit Committee held one meeting during 1996.
The members of the Compensation Committee are Messrs. Custer and
Dorflinger. The functions of the Compensation Committee are to recommend to the
Board of Directors the compensation of the chief executive officer of the
Company; determine the compensation of the other officers of the Company;
administer the Company's employee benefit plans ("plans"), including, without
limitation, determining the terms and conditions of the benefits and the
recipients thereof in accordance with the plans; review the plans and advise the
Board of Directors regarding the results thereof; and perform such other
functions as may be necessary or
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<PAGE>
appropriate in the efficient discharge of its duties. The Compensation Committee
held four meetings during 1996.
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company for
the three fiscal years ended December 31, 1996, to its Chief Executive Officer
and the other executive officers of the Company whose salary and bonus received
from the Company for services rendered during the fiscal year ended December 31,
1996, exceeded $100,000.
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
Annual Compensation -----------
----------------------------------------- Securities
Name and Other Annual Underlying All Other
Principal Position Year Salary($) Bonus($)(1) Compensation($) Options (#) Compensation($)(2)
------------------ ---- ---------- ----------- --------------- ------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Nigbor 1996 $ 153,231 $97,625(3) -0- 25,000 $5,259
President and Chief 1995 136,289 -0- -0- 15,000 5,843
Executive Officer 1994 127,115 70,000 -0- 20,000 5,421
Cary T. Fu 1996 153,231 97,625(3) -0- 25,000 5,893
Executive Vice 1995 136,289 -0- -0- 15,000 5,843
President 1994 127,115 70,000 -0- 20,000 5,421
</TABLE>
- ---------------------------
(1) The amounts shown in this column reflect cash bonuses paid to Messrs.
Nigbor and Fu pursuant to the Company's incentive bonus plans discussed
below under the caption "Executive Compensation and Other Matters --
Board Compensation Committee Report on Executive Compensation -- Cash
Bonus."
(2) For fiscal year ended December 31, 1996 the All Other Compensation
Column includes (a) $5,175 and $5,809 paid by the Company pursuant to
the Company's Qualified 401(k) Employee Savings Plan ("Savings Plan")
Messrs. Nigbor and Fu, respectively, and (b) payments by the Company of
premiums of $84 for term life insurance on behalf of each of Messrs.
Nigbor and Fu. Under the Savings Plan the Company is obligated to make
matching contributions to the Savings Plan in an amount equal to 50% of
each participant's elective contributions, to the extent that such
elective contributions do not exceed 4% of such participant's
compensation. The Company also is obligated to make additional
contributions to the Savings Plan in an amount equal to 1% of each
participant's compensation, regardless of whether the participant makes
an elective contribution. The Company also may make discretionary
contributions to the Savings Plan based on each participant's
compensation compared to the total compensation of all participants.
(3) Of this amount, $50,000 was accrued as of December 31, 1996 under the
Company's Incentive Bonus Plan in recognition of the Company's financial
performance during 1996. The remaining $47,625 was accrued and paid
during 1996 under the Incentive Bonus Plan as a deferred bonus for the
Company's financial performance during 1995 and the first quarter of
1996. Because of the decision of several customers during 1995 to extend
delivery dates into 1996, the Compensation Committee elected not to pay
or accrue any bonuses during 1995 for performance in that year. After
the end of the first quarter of 1996, the Compensation Committee
determined to accrue $47,625 in bonus for the fifteen month period ended
March 31, 1996. See "--Board Compensation Committee Report on Executive
Compensation."
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<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information concerning options to
purchase Common Stock granted during the fiscal year ended December 31, 1996 to
the two executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Potential Realized
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Per Price Appreciation
Underlying Granted to Share for Option Term
Options Employees Exercise Expiration -------------------------
Name Granted(1) in 1996 Price Date 5% 10%
---- ---------- ------------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Nigbor.... 25,000 8.03% $27.88 11/04/2006 $ 438,339 $1,110,838
Cary T. Fu.......... 25,000 8.03% 27.88 11/04/2006 438,339 1,110,838
</TABLE>
- ----------------------------
(1) Each option granted and reported in this table vests over a five year
period, with 20% of the shares becoming exercisable at the end of each
of the second, third and fourth years following the date of grant and
the entire option becoming exercisable at the end of the fifth year.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table provides certain information concerning exercises of
options to purchase Common Stock during the fiscal year ended December 31, 1996
by the two executive officers named in the Summary Compensation Table and the
value of such officers' unexercised options at December 31, 1996.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year- In-the-Money Options
Shares End at Fiscal Year-End
Acquired on Value ----------------------------- --------------------------------
Name Exercise(1) Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Nigbor.. -0- -0- 63,000 52,000 $826,400 $227,700
Cary T. Fu........ -0- -0- 63,000 52,000 826,400 227,700
</TABLE>
- -------------------------------
(1) None of the Company's executive officers has exercised options granted
under the Stock Option Plan.
COMPENSATION OF INDEPENDENT DIRECTORS
The Company pays its independent directors an annual fee of $5,000 and a
fee of $500 for each meeting of the Board of Directors or any committee thereof
attended in person. The Company also reimburses its independent directors for
their reasonable travel expenses in attending such meetings.
In December 1994, the Board of Directors of the Company adopted the
Benchmark Electronics, Inc. 1994 Stock Option Plan for Non-Employee Directors
(the "1994 Plan") for the benefit of members of the Board of Directors of the
Company or its Affiliates who are not employees of the Company or its Affiliates
(as defined in the 1994 Plan). The aggregate number of shares of Common Stock
for which options may be granted under
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the Plan is 100,000. The purpose of the 1994 Plan is to encourage ownership of
the Company's Common Stock by eligible non-employee directors of the Company, to
provide increased incentive for such directors to render services and to exert
maximum effort for the business success of the Company and to further strengthen
the identification of directors with the shareholders of the Company. The 1994
Plan terminates 10 years from the date of its adoption and no further options
may be granted thereafter pursuant to the 1994 Plan.
Under the terms of the 1994 Plan, each member of the Board of Directors
of the Company or its Affiliates who was not an employee of the Company or any
of its Affiliates on the date of the grant (a "Non-Employee Director") will
receive a grant of an option to purchase 3,000 shares of the Company's Common
Stock upon the date of his election or re-election to the Board of Directors.
Additionally, any Non-Employee Director who was a director on the date the Board
of Directors adopted the 1994 Plan received (a) an option to purchase 3,000
shares of Common Stock for the fiscal year in which the 1994 Plan was adopted by
the Board of Directors and (b) an option to purchase shares of Common Stock in
amount equal to (i) 3,000, multiplied by (ii) the number of consecutive fiscal
years, immediately preceding the fiscal year during which the 1994 Plan was
adopted, that the individual served as a director of the Company, provided that
the number under clause (ii) shall not exceed three (3).
Upon their election as directors in May 1996, each of Messrs. Custer,
Dorflinger and Bodzy received a grant under the 1994 Plan of an option to
purchase 3,000 shares of Common Stock with an exercise price of $29.38, which
was the market price of the Common Stock on the date of the grant. An option to
purchase 3,000 shares of Common Stock with an exercise price of $29.38 per
share, the market price of the Common Stock on the date of the grant, were also
granted in May 1996 to Richard M. Loghry, who was at that time a director of the
Company. Mr. Loghry resigned from the Board of Directors effective September 16,
1996. An option to purchase 3,000 shares of Common Stock with an exercise price
of $30.75, the market price of the Common Stock on the date of the grant, were
granted to Mr. Arnold at the time of his election to the Board of Directors in
September 1996.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION(a)
The Company's executive compensation program is administered by the
Compensation Committee, a committee of the Board of Directors composed of
non-employee directors listed below this report. The Compensation Committee is
responsible for recommending to the full Board of Directors compensation of the
President of the Company, determining the compensation of the other executive
officers of the Company, and administering the Company's employee benefit plans.
None of the members of the Compensation Committee have any interlocking or other
relationships with the Company that would call into question their independence
as Compensation Committee members.
COMPENSATION POLICIES AND PROGRAMS. The Compensation Committee believes
that the goals of the executive compensation program should be to align
executive compensation with the Company's long-term business objectives and
performance and to enable the Company to attract, retain and reward executive
officers who contribute to the long-term success of the Company. The
Compensation Committee believes that the best way to achieve these goals is by
aligning the financial interests of the Company's executive officers closely to
- -----------------
(a) Notwithstanding Securities and Exchange Commission ("SEC") filings
by the Company that have incorporated or may incorporate by reference other SEC
filings (including this proxy statement) in their entirety, the Board
Compensation Committee Report on Executive Compensation shall not be
incorporated by reference into such filings and shall not be deemed to be
"filed" with the SEC except as specifically provided otherwise or to the extent
required by Item 402 of Regulation S-K.
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the interests of the Company's shareholders through a combination of annual cash
incentives and stock options, while providing the executive officers with base
salary compensation at levels that are competitive with, but which do not
exceed, prevailing standards. The compensation of the Company's executive
officers is reviewed and approved annually by the Compensation Committee. The
Company's executive compensation program is based on three elements, each of
which is determined in part by corporate performance:
o Base salary compensation
o Annual incentive compensation
o Stock-based incentive compensation
Corporate performance is evaluated by reviewing the extent to which strategic
and business plan goals are met, including the relationship between the
Company's net income and sales. The Compensation Committee believes that total
executive compensation opportunities are competitive and at the median with
those offered by employers in the peer group of companies with which the Company
compares its performance in the Performance Graph following this report ("Peer
Group"), but with less emphasis on base salary compensation than such other
employers. The Peer Group does not include other companies (e.g., CMC
Industries, Inc., Jabil Circuit, Inc. and Plexus Corp.) whose executive
compensation structures the Compensation Committee also reviewed. Such companies
are in the electronics industry. However, either they are not direct competitors
with the Company or have been publicly traded companies for too short a period
of time for performance comparisons with them to be meaningful.
CASH BASE SALARY. Until August 1993, the Company had identical
employment agreements with each of its executive officers, including its chief
executive officer. The agreements provided for annual base salaries, subject to
adjustment for subsequent twelve-month periods as determined by the Compensation
Committee, based on its review of base salaries provided to executive officers
of other employers in the Company's industry and certain corporate performance
factors such as the Company's net income and sales and historical salary
progression. Since August 1993, the Company has not had employment agreements
with its executive officers. In August 1996, the Compensation Committee
determined that the Company's executive officers named in the Summary
Compensation Table should receive a salary increase from $145,000 to $165,000,
based on the Company's net income and sales during the fifteen month period
ended March 31, 1996. The Compensation Committee used the fifteen month period,
rather than 1995, to measure the Company's performance because of the decision
of several of the Company's customers during 1995 to extend delivery dates into
1996.
CASH BONUS. Effective May 6, 1992, the Company adopted an Incentive
Bonus Plan ("Bonus Plan") for the benefit of its employees, including executive
officers. The Bonus Plan is administered by the Compensation Committee. The
total amount of cash bonus awards to be made under the Bonus Plan for any plan
year depends primarily on the Company's sales and net income for such year.
For any plan year, the Company's sales and net income must meet or
exceed, or in combination with other factors satisfy, levels targeted by the
Company in its business plan, as established at the beginning of each fiscal
year, for any bonus awards to be made. Aggregate bonus awards to all
participants under the Bonus Plan may not exceed 7% of the Company's net income.
Subject to the foregoing guidelines, the Compensation Committee has the
authority to determine the total amount of bonus awards, if any, to be made to
the eligible employees for any plan year based on its evaluation of the
Company's financial condition and results of operations, the Company's business
and prospects, and such other criteria as it may determine to be relevant or
appropriate. The Compensation Committee has the authority to determine the
specific amounts of bonus awards to be made to the Company's executive officers
and other key employees based on its evaluation of each such employee's
position, performance, service and such other criteria as it may determine to be
relevant or appropriate.
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In 1996, the Company's sales and net income exceeded the $135 million
and $8.7 million levels targeted by the Company in its 1996 business plan.
Additionally, the Company successfully completed the acquisition of EMD.
Accordingly, the Compensation Committee in February 1997 awarded an aggregate of
$330,000 in cash bonuses under the Bonus Plan to eligible employees, including
$50,000 to each of Messrs. Nigbor and Fu. In the second quarter of 1996, the
Compensation Committee awarded aggregate bonuses under the Bonus Plan of
$300,000, including $47,625 to each of Messrs. Nigbor and Fu, based on the
Company's financial performance during the fifteen months ended March 31, 1996.
Because of the decision of several of the Company's customers during 1995 to
extend delivery dates into 1996, the Compensation Committee had elected to defer
awarding any bonuses for 1995 until after the end of the first quarter of 1996.
STOCK OPTION PLAN. The Compensation Committee believes its stock options
are critical in motivating the long-term creation of shareholder value because
options focus executive attention on stock price as the primary measure of
performance. In 1990, the Company adopted and its shareholders approved a Stock
Option Plan for the benefit of its employees, including executive officers. The
Stock Option Plan is administered by the Compensation Committee. The purpose of
the Stock Option Plan is to encourage ownership of Common Stock by eligible
employees, including executive officers, to provide increased incentive for such
employees to render services and to exert maximum effort for the business
success of the Company and to strengthen identification of such employees with
the shareholders for the purpose of maximizing shareholder value. The Stock
Option Plan also utilizes vesting periods to encourage its executive officers
and eligible employees to continue in the employ of the Company. Stock option
grants made to the Chief Executive Officer and other executive officers in 1996
were made in part because of the Company's success in acquiring EMD. Stock
option grants to the Company's Chief Executive Officer and other executive
officers are not made automatically each year and are not considered to be a
part of normal annual compensation. The amount and terms of options already held
by an executive officer generally are not significant factors in the
Compensation Committee's determination of whether and how many options should be
granted to the executive officer.
Stock option grants provide an incentive that focuses the executives'
attention on managing the Company from the perspective of an owner with an
equity stake in the business. Accordingly, these stock options are tied to the
future performance of the Company's Common Stock and provide value to the
recipient only when the price of the Company's Common Stock increases above the
option grant price.
SUBMITTED BY THE COMPENSATION COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS.
John C. Custer Peter G. Dorflinger
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
shareholder return on its Common Stock for the five-year period commencing
December 31, 1991 and ending December 31, 1996, with the cumulative total return
of the Standard & Poor's Stock Index (which does not include the Company) and a
peer group of companies, which includes Solectron Corporation, SCI Systems,
Inc., DII Group Inc. and IEC Electronics Corp. (the "Peer Group"). Dividend
reinvestment has been assumed. The Performance Graph assumes $100 invested on
December 31, 1991 in the Company's Common Stock, S&P 500 Index and Peer Group.
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COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN
BENCHMARK ELECTRONICS, S&P 500 AND A PEER GROUP INDEX
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
Dec 91 Dec 92 Dec 93 Dec 94 Dec 95 Dec 96
------- ------- ------- ------- ------- -------
Benchmark .......... $100.00 $136.46 $198.96 $201.04 $229.17 $251.04
Peer Group ......... $100.00 $236.53 $308.53 $296.41 $469.99 $575.57
S&P 500 ............ $100.00 $107.64 $118.50 $120.06 $165.18 $203.11
CERTAIN TRANSACTIONS
The Company and Mason & Hanger entered into a Registration Rights
Agreement on March 30, 1992, pursuant to which Mason & Hanger has, subject to
certain limitations, the right to require the Company one time, after June 1,
1995, but before June 1, 2005, to register Mason & Hanger's shares of Common
Stock under the Securities Act of 1933, as amended, and the right to include its
shares of Common Stock in other registrations initiated by the Company until
such time as Mason & Hanger holds less than 5% of the outstanding shares of
Common Stock. Mason & Hanger will bear all expenses of any registration that
includes its shares of Common Stock exclusively. With respect to registrations
in which shares of Common Stock are to be sold for the Company's account, the
Company will bear all expenses except those expenses incurred solely as a result
of Mason & Hanger's participation, which will be paid by Mason & Hanger.
Pursuant to the Registration Rights Agreement, Mason & Hanger has agreed to
certain restrictions with respect to its shares of Common Stock or any other
securities of the Company held by Mason & Hanger entitled generally to vote in
the election of directors of the Company ("Voting Securities"). Mason & Hanger
is required to be present or represented by proxy at all meetings of the
Company's shareholders and is generally prohibited from depositing any Voting
Securities in any voting trust or subjecting them to a voting agreement or other
similar arrangement, acquiring any additional Voting Securities, joining any
partnership or other group for the purpose of holding or disposing of Voting
Securities within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended ("Exchange Act"), or taking any action by a written consent in
lieu of a meeting.
The Agreement and Plan of Merger dated March 27, 1996 relating to the
acquisition of EMD (the "Merger Agreement") contains certain restrictions on the
ability of David H. Arnold and Daniel M. Rukavina, the "Founding Shareholders"
of EMD, to vote and transfer shares of Common Stock received by them in the
Acquisition for a period of three years after the closing date of the
Acquisition (the "Closing Date"). Until the first anniversary of the Closing
Date, the Founding Shareholders may not transfer any shares of Common Stock
except by will or the laws of descent and distribution or otherwise by operation
of law. During the second and third years after the Closing Date, the Founding
Shareholders may make certain transfers that are expressly permitted by the
Merger Agreement, but may not make any other transfers unless they have complied
with procedures set forth in the Merger Agreement providing for a right of first
refusal for the Company with respect to the shares of Common Stock to be
transferred by the Founding Shareholders.
Until the third anniversary of the Closing Date, the Merger Agreement
requires the Founding Shareholders to be present, in person or by proxy, at all
meetings of shareholders of the Company and to vote
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all shares of Common Stock held by them, however acquired, in the manner
recommended to shareholders by the Company's Board of Directors, except that the
Founding Shareholders may vote their shares in their sole discretion with
respect to any proposal involving a merger, consolidation, statutory share
exchange, reorganization, reclassification or other extraordinary corporate
transaction that has been approved by the Company's Board of Directors.
Additionally, until the third anniversary of the Closing Date, the Founding
Shareholders are prohibited from (i) soliciting proxies in opposition to the
recommendation of the Company's Board of Directors, (ii) depositing any shares
of Common Stock in a voting trust or subjecting them to a voting agreement,
(iii) acquiring or offering to acquire any shares of Common Stock except from
other persons receiving such shares in the Acquisition or as a result of a stock
split or dividend or similar transaction, (iv) joining any group for the purpose
of acquiring, holding or disposing of Common Stock within the meaning of Section
13(d) of the Exchange Act, (v) initiating, proposing or soliciting shareholders
for a shareholder proposal or tender or exchange offer for Common Stock or any
change of control of the Company or for the purpose of convening a shareholders'
meeting, (vi) acquiring more than 5% of any class of equity security of any
entity that has publicly disclosed that it owns or intends to become the owner
of, or that the Founding Shareholder otherwise knows owns or intends to become
the owner of, 5% of the outstanding shares of Common Stock, and (vi) taking any
action by written consent in lieu of a meeting.
In connection with the consummation of the acquisition of EMD on July
30, 1996, the Company entered into three leases with the co-founders of EMD,
Messrs. Arnold and Rukavina, and their respective spouses. The leases cover the
real estate and buildings where EMD's operations were conducted and where the
Company has continued to operate after the closing and an adjacent parking area.
The lease covering the EMD Central building is for a term of 10 years commencing
September 1, 1996 at a net rent of $17,150 per month. The lease covering the EMD
East building and the adjacent parking lot is for a term of 10 years commencing
July 30, 1996 at a net rent of $50,932 per month. The lease covering the parking
area for the EMD West building is for a term of 10 years commencing July 30,
1996 at a net rent of $1,150 per month. All of such leases (i) are subject to
purchase options in favor of the Company exercisable during the first three
years of the lease term and (ii) may be renewed at the option of the Company at
fair market rental rates. The Company negotiated the terms of the leases,
including purchase options, on an arms-length basis, and obtained appraisals of
the real estate and rental values to help establish such terms. The Company
believes the terms of such leases are no less favorable to the Company than
could have been obtained from unaffiliated third parties.
Subsequent to closing the acquisition of EMD, the Company has purchased
production tooling from DCM Tech, Inc. ("DCM"), a privately held manufacturer of
machine tools controlled by Mr. Arnold. Such purchases aggregated $112,263
during the period from the date of closing the acquisition of EMD through
December 31, 1996. The Company may continue to purchase production tooling
during the current fiscal year. If the Company continued such purchases during
1997 at the same rate as the last six months of 1996, the value of such
purchases could exceed five percent of DCM's gross revenues for such year.
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COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership, as defined in Rule 13d-3 under the Exchange Act, of Common
Stock as of March 20, 1997, by each person known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock, each
director and nominee for director of the Company, each executive officer of the
Company and all directors and executive officers of the Company as a group.
Shares of Percentage of
Common Stock Outstanding
Beneficially Owned Shares of
Beneficial Owners Owned(1) Common Stock
----------------- ------------------ -------------
John C. Custer .................... 17,980(2) (3)
2355 Harrodsburg Road
Lexington, Kentucky 40504
Donald E. Nigbor .................. 148,916(4) 2.6%
3000 Technology Drive
Angleton, Texas 77515
Steven A. Barton .................. 22,585(5) (3)
3000 Technology Drive
Angleton, Texas 77515
Cary T. Fu ........................ 154,005(4) 2.7%
3000 Technology Drive
Angleton, Texas 77515
Peter G. Dorflinger ............... 19,000(6) (3)
4000 Technology Drive
Angleton, Texas 77515
Gerald W. Bodzy ................... 17,600(7) (3)
333 Clay Street, Suite 3030
Houston, Texas 77002
David H. Arnold ................... 244,996(8) 4.3%
1853 Edgewood Road
Winona, Minnesota 55987
Directors and executive officers
as a group (7 persons) .......... 625,082(9) 10.5%
Mason & Hanger Corporation ........ 600,328(10) 10.5%
2355 Harrodsburg Road
Lexington, Kentucky 40504
Kalmar Investments Inc. ........... 312,425(11) 5.4%
Barley Mill House
3701 Kennet Pike
Greenville, Delaware 19807
- -----------------------------
(1) Unless otherwise noted, each person identified possesses sole voting
and dispositive power with respect to the shares of Common Stock
listed, subject to community property laws.
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(2) Mr. Custer does not own of record any shares of Common Stock. Includes
16,780 shares of Common Stock that may be acquired upon the exercise of
options that are currently exercisable and 1,200 shares owned of record
by Mr. Custer's wife.
(3) Less than 1%.
(4) Includes 63,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(5) Includes 21,200 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(6) Includes 18,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(7) Includes (i) 1,600 shares of Common Stock held by Mr. Bodzy as
custodian for his children under the Uniform Gifts to Minors Act, as to
which shares of Common Stock Mr. Bodzy expressly disclaims beneficial
ownership, and (ii) 9,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(8) Includes 5,644 shares of Common Stock held of record by Mr. Arnold's
wife, 1363 shares held for Mr. Arnold's benefit in the Company's 401(k)
Employee Savings Plan and 3,000 shares that may be acquired upon the
exercise of options that are currently exercisable.
(9) Includes 193,980 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(10) Mason & Hanger Corporation is a wholly-owned subsidiary of The Mason
Company ("TMC"), a private holding company.
(11) Sole dispositive power only.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC and the American
Stock Exchange initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater than ten-percent shareholders are required by regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and certain written representations provided to
the Company by such persons, for the fiscal year beginning January 1, 1996 and
ending December 31, 1996 all Section 16(a) filing requirements applicable to the
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Company's officers, directors and greater than ten-percent beneficial owners
were complied with except that Mason & Hanger Corporation filed a late report
relating to two transactions, each of The Mason Company and Richard M. Loghry
filed a late report with respect to the same two transactions by Mason & Hanger
Corporation, and Richard M. Loghry filed a late report with respect to one
additional transaction.
EXECUTIVE OFFICERS
The executive officers of the Company are Donald E. Nigbor, Steven A.
Barton and Cary T. Fu. See "Election of Directors -- Nominees for Election" for
certain information with respect to the age, positions and length of service
with the Company, and business experience of each executive officer.
AMENDMENT TO THE COMPANY'S
RESTATED ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has proposed an amendment to the Company's
Restated Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 10 million to 30 million shares.
During 1996, the Company issued 674,964 and 1,016,500 shares of Common
Stock in the acquisition of EMD and in an offering of shares to the public,
respectively. As of April 10, 1997, there were in excess of 5.7 million shares
of Common Stock issued and outstanding, and more than 1,000,000 reserved for
issuance pursuant to the Company's Stock Option Plan adopted in 1990 and amended
at the 1994 and 1996 annual meetings of shareholders. Accordingly, there are
less than four million shares of common Stock available for issuance by the
Company from time to time. In order to enhance the Company's financing
flexibility, the Board of Directors believes that it would be desirable to have
additional authorized shares available for use by the Company. The availability
of the additional authorized shares will enhance the Company's ability to meet
advantageous market conditions for the sale of additional Common Stock, for the
acquisition of desirable assets or companies and for other corporate purposes,
such as attracting and retaining qualified employees.
Although the Company monitors the various financial markets and other
business opportunities available to it in an effort to be prepared to take
advantage of relatively attractive market conditions and acquisition
opportunities, the Company currently has no understandings or agreements for the
issuance of securities. No shareholder of the Company has, or will have, any
preemptive or other right to acquire additional shares. Depending on the amount
of, or purpose for which, additional shares are issued, shareholder approval may
or may not be required. Issuance of additional shares might, under certain
circumstances, dilute either shareholder equity or voting rights or both.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 30 MILLION SHARES.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP as the
independent auditors of the Company for the year ending December 31, 1997. The
shareholders will be asked to ratify the appointment of KPMG Peat Marwick LLP at
the Meeting. The ratification of such appointment will require the affirmative
vote
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of the holders of a majority of the outstanding shares of Common Stock entitled
to vote and present, in person or represented by proxy, at the Meeting.
Representatives of KPMG Peat Marwick LLP will be present at the Meeting, will be
given an opportunity to make a statement (if they desire to do so) and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF THE INDEPENDENT AUDITORS.
EXPENSES OF SOLICITATION
The cost of soliciting proxies on behalf of the Board of Directors will
be borne by the Company. Solicitations of proxies are being made by the Company
through the mail and may also be made in person or by telephone. Directors and
employees of the Company may be utilized in connection with such solicitations.
The Company also will request brokers and nominees to forward soliciting
materials to the beneficial owners of the Common Stock held of record by such
persons and will reimburse them for their reasonable forwarding expenses.
DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS
For shareholder proposals to be included in the Company's proxy
statement and proxy relating to the Company's 1998 annual meeting of
shareholders, such proposals must be received by the Company at its principal
executive offices not later than December __, 1997.
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before
the Meeting and has not been informed that any other matter is to be presented
by others. If any other matter properly comes before the Meeting, the proxies
will be voted in accordance with the discretion of the person or persons voting
the proxies.
You are cordially invited to attend the Meeting. Regardless of whether
you plan to attend the Meeting, you are urged to complete, date, sign and return
the enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
Cary T. Fu
Executive Vice President
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Preliminary Copy
[Front of Card]
PROXY BENCHMARK ELECTRONICS, INC. PROXY
1997 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 20, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The 1997 Annual Meeting of Shareholders of Benchmark Electronics, Inc.
("Company") will be held at the Doubletree Hotel at Allen Center, 400 Dallas
Street, Houston, Texas, on Tuesday, May 20, 1997, beginning at 10:00 a.m. (local
time). The undersigned hereby acknowledges receipt of the related Notice and
Proxy Statement dated April __, 1997, accompanying this proxy.
The undersigned hereby appoints Donald E. Nigbor, Steven A. Barton, and
Cary T. Fu, and each of them, attorneys and agents, with full power of
substitution, to vote as proxy all shares of Common Stock, par value $0.10 per
share, of the Company owned of record by the undersigned and otherwise to act on
behalf of the undersigned at the 1997 Annual Meeting of Shareholders and any
adjournment thereof in accordance with the directions set forth herein and with
discretionary authority with respect to such other matters, not known or
determined at the time of the solicitation of this proxy, as may properly come
before such meeting or any adjournment thereof.
This proxy is solicited on behalf of the Board of Directors of the
Company and will be voted FOR the following proposals unless otherwise
indicated.
1. ELECTION OF DIRECTORS to serve until the 1998 annual meeting of
shareholders and until their successors are duly elected and qualified.
[ ] FOR all nominees listed below (except as otherwise indicated*)
[ ] WITHHOLD AUTHORITY for all nominees listed below
* Instruction: To withhold authority to vote for any nominee, draw
a line through the name of the nominee in the list below.
John C. Custer, Donald E. Nigbor, Steven A. Barton, Cary T. Fu,
Peter G. Dorflinger, Gerald W. Bodzy, and David H. Arnold
2. APPROVAL OF THE AMENDMENT OF THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION to increase the number of authorized shares of the Company's
Common Stock to 30 million shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP as the
independent auditors of the Company for the year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE.)
<PAGE>
[Reverse of Card]
(CONTINUED FROM OTHER SIDE.)
This proxy is solicited by the Board of Directors and will be voted in
accordance with the undersigned's directions set forth herein. If no direction
is made, this proxy will be voted FOR the election of all nominees for director
named herein to serve on the Board of Directors until the 1998 annual meeting of
shareholders and until their successors are duly elected and qualified, FOR
approval of the amendment of the Company's Restated Articles of Incorporation to
increase the number of authorized shares of Common Stock, and FOR the
ratification of the appointment of KPMG Peat Marwick LLP as the independent
auditors of the Company for the year ending December 31, 1997.
Please sign your name exactly as it appears below. If shares are held
jointly, all joint owners should sign. If shares are held by a corporation,
please sign the full corporate name by the president or any other authorized
corporate officer. If shares are held by a partnership, please sign the full
partnership name by an authorized person. If you are signing as attorney,
executor, administrator, trustee or guardian, please set forth your full title
as such.
Signature(s) of Shareholder(s)
Date: , 1997
