SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by Registrant [X]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] 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)
________________________________________________________________________________
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[ ] 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
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[ ] Fee paid previously with preliminary materials.
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fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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<PAGE>
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 16, 2000
Shareholders of Benchmark Electronics, Inc.:
The 2000 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 16, 2000, 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 2001 annual meeting of shareholders and until their successors
are duly elected and qualified;
2. to approve the Benchmark Electronics, Inc. 2000 Stock Awards
Plan;
3. to ratify the appointment of KPMG LLP as the independent
auditors of the Company for the year ending December 31, 2000; 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 3, 2000, 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,
/s/ Lenora A. Gurton
Lenora A. Gurton
Secretary
Angleton, Texas
April 12, 2000
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>
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
(979) 849-6550
APRIL 12, 2000
------------------------
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 16, 2000
------------------------
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 2000 Annual Meeting of Shareholders of the Company to
be held on Tuesday, May 16, 2000, 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. It is anticipated that this Proxy
Statement, the Notice and the enclosed form of proxy will be sent to
shareholders on or about April 12, 2000.
PROXIES
Proxies in the enclosed form that are properly executed and received by
the Company before or at the Meeting 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 2001 annual meeting of shareholders and until their
successors are duly elected and qualified, FOR approval of the Benchmark
Electronics, Inc. 2000 Stock Awards Plan, and FOR the ratification of the
appointment of KPMG LLP as the independent auditors of the Company for the year
ending December 31, 2000. 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. The proxy also confers on the persons named therein
discretionary authority to vote with respect to any matters presented at the
Annual Meeting for which advance notice was not received by the Company prior to
February 13, 2000. Proxies may be revoked by written notice received by the
Secretary of the Company at any time before they are voted by delivering to the
Secretary of the Company a signed notice of revocation, or a later dated signed
proxy, or by attending the Meeting and voting in person by ballot.
VOTING SECURITIES
Shareholders of record at the close of business on April 3, 2000 are
entitled to notice of and to vote at the Meeting. As of April 3, 2000, there
were 16,277,426 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 completed, 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, as amended, provide
that directors will be elected by, and all other matters specified in the notice
of the Meeting require the approval of, 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. Therefore, an abstention, a broker
non-vote or a withholding of authority to vote with respect to the election of
directors, the adoption of the Benchmark Electronics, Inc. 2000 Stock Awards
Plan, or the ratification of the appointment of the Company's independent
accountants will have the effect of a vote against such proposal.
An Inspector of Election appointed by the Company will tabulate votes at
the Meeting.
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.
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<PAGE>
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. Unless otherwise noted,
each nominee possesses sole voting and dispositive power with respect to the
shares of Common Stock listed, subject to community property laws.
PERCENTAGE OF
SHARES OF OUTSTANDING
COMMON STOCK SHARES OF
PRINCIPAL BENEFICIALLY COMMON
NAME AGE OCCUPATION OWNED STOCK
John C. Custer 69 Retired 47,945(1) (2)
Donald E. Nigbor 52 President of the Company 351,582(3) 2.2%
Steven A. Barton 51 Executive Vice President 32,370(4) (2)
of the Company
Cary T. Fu 51 Executive Vice President 370,010(5) 2.3%
of the Company
Peter G. Dorflinger 48 President and Chief 57,000(6) (2)
Operating Officers, Glas
Tech, Inc.
Gerald W. Bodzy 48 Independent Consultant, 57,100(7) (2)
Investment Banking
David H. Arnold 62 Former President and 431,810(8) 2.7%
Chairman of the Board
of DCM Tech, Inc.
- ------------------------
(1) Includes 2,400 shares owned by Mr. Custer's wife, and 29,945 shares that
may be acquired upon the exercise of options that are currently
exercisable.
(2) Less than 1%.
(3) Includes (i) 1,950 shares of Common Stock held by Mr. Nigbor's children
as to which shares of Common Stock Mr. Nigbor expressly disclaims
beneficial ownership, and (ii) 188,000 shares of Common Stock that may
be acquired upon the exercise of options that are currently exercisable.
(4) Includes 29,600 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(5) Includes (i) 2,640 shares of Common Stock held by Mr. Fu's daughter as
custodian for his children under the Uniform Gifts to Minors Act, as to
which shares of Common Stock Mr. Fu expressly disclaims beneficial
ownership, (ii) 1,320 shares of Common Stock held by Mr. Fu's daughter,
as to which shares of Common Stock Mr. Fu expressly disclaims beneficial
ownership, and (ii) 188,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(6) Includes 48,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable. (FOOTNOTES CONTINUED
ON FOLLOWING PAGE)
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
3
<PAGE>
(7) Includes (i) 3,200 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, (ii) 4,000 shares of Common Stock held by Mr. Bodzy's
children, and (iii) 30,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(8) Includes 11,288 shares of Common Stock held by Mr. Arnold's wife, 2,726
shares held for Mr. Arnold's benefit in the Company's 401(k) Employee
Savings Plan and 18,000 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 ("Mason &
Hanger"), 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 in 1983, serving as Chairman of the Board of Mason &
Hanger from 1994 until his retirement, and served in various other management
and operations positions prior to 1994.
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.
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 President and Chief Operating Officer of GlasTech, Inc., a
dental products manufacturer, a position he has held since November 1998. From
January 1998 through October 1998, he served as President and Chief Operating
Officer of Physicians Resource Group, Inc., a physicians practice management
company. From January 1997 through January 1998, he served as Vice President and
General Counsel of Advanced Medical Instruments, Inc., a manufacturer of medical
monitoring equipment. 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.
4
<PAGE>
Mr. Bodzy has been a director of the Company since September 1994 and
has been a member of the Audit Committee since March 1995. Mr. Bodzy has been an
independent investment banking consultant since January 2000. From 1990 to 1999,
Mr. Bodzy was employed 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 has been a member of the
Audit Committee since 1997. 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 was President and Chairman of the Board of DCM Tech, Inc., a
privately-held manufacturer of machine tools, until he retired on December 30,
1999. 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 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 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 2001 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 sixteen meetings during 1999.
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.
5
<PAGE>
The members of the Audit Committee are Messrs. Dorflinger, Bodzy and
Arnold. 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 1999.
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 President of the Company; determine
the compensation of the other executive 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, such as the terms of stock option grants; review
the plans and advise the Board of Directors regarding the results thereof; and
perform such other functions as may be necessary or appropriate in the efficient
discharge of its duties. The Compensation Committee held four meetings during
1999.
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<PAGE>
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, 1999 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,
1999, exceeded $100,000.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------ ------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($) OPTIONS(#) COMPENSATION($)(2)
- ------------------ ---- -------- ---------- --------------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Nigbor........1999 $319,591 $ -0-(3) -0- 50,000 $5,360
President and Chief 1998 244,135 79,500 -0- 80,000 6,270
Executive Officer 1997 191,500 75,000 -0- 100,000 5,008
Cary T. Fu..............1999 319,591 -0-(3) -0- 50,000 5,360
Executive Vice 1998 244,135 79,500 -0- 80,000 5,270
President 1997 191,500 75,000 -0- 100,000 5,198
</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, 1999, the "All Other Compensation"
column includes (a) $5,000 paid by the Company pursuant to the Company's
Qualified 401(k) Employee Savings Plan ("Savings Plan") to each of
Messrs. Nigbor and Fu, and (b) payments by the Company of premiums of
$360 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 6% of such participant's compensation. 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. Messrs. Nigbor and Fu are each
reimbursed for financial planning services, up to $5,000, and biannual
physical examinations. However, the value of such perquisites does not
exceed the lesser of $50,000 or 10% of such officer's annual cash
compensation and are therefore not included in the table.
(3) Because the Company's sales and net income did not exceed the levels
targeted by the Company in its 1999 business plan, the Compensation
Committee elected not to pay or accrue any bonuses during 1999.
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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, 1999 to
the two executive officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATE OF STOCK
SECURITIES TOTAL OPTIONS PER PRICE APPRECIATION
UNDERLYING GRANTED TO SHARE FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION --------------------
NAME GRANTED(1) IN 1999 PRICE DATE 5% 10%
---- ---------- ------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Donald E. Nigbor..... 50,000 7.11% $29.75 05/17/09 $935,481 $2,370,691
Cary T. Fu........... 50,000 7.11% $29.75 05/17/09 $935,481 $2,370,691
- ----------------------------
</TABLE>
(1) All options were granted under the 1990 Plan at an exercise price equal
to the fair market value of the Common Stock on the date of the grant.
Each option granted and reported in this table vests over a four year
period, with 20% of the shares becoming exercisable at the end of the
second year following the date of grant, 30% becoming exercisable at the
end of the third year following the date of grant and the entire option
becoming exercisable at the end of the fourth year. The options expire
90 days after termination of employment, and are fully vested in the
event of a change of control of the Company.
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, 1999
by the two executive officers named in the Summary Compensation Table and the
value of such officers' unexercised options at December 31, 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-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- 188,000 252,000 $2,150,330 $918,095
Cary T. Fu ......... -0- -0- 188,000 252,000 2,150,330 918,095
</TABLE>
- ------------------------------
(1) These executive officers did not exercise any stock options during 1999.
COMPENSATION OF NONEMPLOYEE DIRECTORS
The Company pays its nonemployee 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 nonemployee 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). After giving effect to the Company's stock split
during 1997, the aggregate number of shares of Common Stock for which options
may be granted under the Plan is now 200,000. 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
8
<PAGE>
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
pursuant to the 1994 Plan after its termination.
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, after giving effect to the
Company's stock split during 1997, (a) an option to purchase 6,000 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) 6,000, 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 1999, each of Messrs. Custer,
Dorflinger, Bodzy and Arnold received a grant under the 1994 Plan of an option
to purchase 3,000 shares of Common Stock with an exercise price of $32.125,
which was the market price of the Common Stock on the date of the grant.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATIONa
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 the 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
the interests of the Company's shareholders through a combination of annual cash
incentives and stock-based incentive compensation, 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
_______________________________
(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 orto the extent
required by Item 402 of Regulation S-K.
9
<PAGE>
by employers in the peer group of companies with which the Company
compares its performance in the Performance Graph following this report, but
with less emphasis on base salary compensation than such other employers.
CASH BASE SALARY. Until August 1993, the Company had identical
employment agreements with each of its executive officers, including its
President. 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 July 1999, the Compensation Committee determined
that the Company's executive officers named in the Summary Compensation Table
should receive a salary increase from $265,000 to $400,000, based on the
Company's net income and sales during the year ended December 31, 1998 and
comparative compensation of executives of Peer Group companies.
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.
In 1999, the Company's sales and net income did not exceed the $660.0
million and $21.8 million levels, respectively, targeted by the Company in its
1999 business plan. The Compensation Committee elected not to award bonuses to
Messrs. Nigbor and Fu for 1999.
STOCK PURCHASE PLAN. In April, 1999, the Company adopted the Benchmark
Electronics, Inc. Employee Stock Purchase Plan (the "Purchase Plan"). Under the
Purchase Plan, employees meeting specific employment qualifications are eligible
to participate and can purchase shares semi-annually through payroll deductions
at the lower of 85% of the fair market value of the stock at the commencement or
end of the offering period. The Purchase Plan permits eligible employees to
purchase common stock through payroll deductions for up to the lesser of 17% of
qualified compensation or $25,000. The executive officers, including the Chief
Executive Officer, are eligible to participate in the Purchase Plan on the same
basis as all other employees.
STOCK OPTION PLAN. The Compensation Committee believes that 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 (the "1990 Plan") for the benefit of its employees, including
executive officers. The 1990 Plan is administered by the Compensation Committee.
The purpose of the 1990 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 1990 Plan utilizes vesting periods to encourage its executive officers and
10
<PAGE>
eligible employees to continue in the employ of the Company. The Compensation
Committee subjectively determines the number of shares to be covered by options
granted to its employees and executive officers, including the President. Stock
option grants made to the President and other executive officers in 1999 were
made in part because of the Company's outstanding performance during 1998. Stock
option grants to the Company's President 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.
PROPOSAL TO ADOPT 2000 STOCK AWARDS PLAN. The 1990 Plan will expire in
May 2000, and no additional grants may be made under that plan after its
termination. In addition, the 1990 Plan only provides for the use of stock
options; it does not permit the use of restricted stock awards, stock
appreciation rights or other equity-based performance awards available to other
companies. For these reasons, the Compensation Committee determined not to
recommend an amendment to the 1990 Plan to increase the number of shares
available under the plan and extend its expiration date. Rather, the
Compensation Committee recommended to the Board of Directors that a new plan be
adopted that provides for both increased availability of shares for use in
granting equity-based incentive compensation and the additional types of
incentive awards available to other companies. See the discussion of the 2000
Stock Awards Plan contained elsewhere in this Proxy Statement under the caption
"Approval of the Benchmark Electronics, Inc. 2000 Stock Awards Plan."
SUBMITTED BY THE COMPENSATION COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS.
John C. Custer Peter G. Dorflinger
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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, 1994 and ending December 31, 1999, with the cumulative total return
of the Standard & Poor's Stock Index (which does not include the Company), and
Peer Group, which is composed of Celestica Inc., EFTC Corp, Flextronics
International, Ltd., Jabil Circuit, Inc., Plexus Corp, Sanmina Corp, Solectron
Corporation, SCI Systems, Inc., and DII Group Inc. Dividend reinvestment has
been assumed. The Performance Graph assumes $100 invested on December 31, 1994
in the Company's Common Stock, S&P 500 Index and Peer Group.
COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN
BENCHMARK ELECTRONICS, S&P 500, AND PEER GROUP INDEX
----------------------------------------------------
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
DEC-94 DEC-95 DEC-96 DEC-97 DEC-98 DEC-99
------- ------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Benchmark Electronics, Inc. .. $100.00 $114.00 $124.90 $185.00 $303.60 $190.20
Peer Group ................... $100.00 $165.80 $224.50 $364.00 $658.50 $1,353.90
S & P 500 .................... $100.00 $134.10 $161.30 $211.30 $267.60 $319.90
</TABLE>
NOTES: Assumes $100 invested on 12/31/94 in Benchmark Electronics, Inc. Common
Stock, in the S&P 500, and in the Peer Group Index.
Reflects month-end dividend reinvestment, and annual reweighting of the
Peer Group Index portfolios.
12
<PAGE>
CERTAIN TRANSACTIONS
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. David H. Arnold and Daniel M. 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. During 1999,
the Company exercised the purchase option for the lease covering the parking
area for the EMD West building for $158,000 and allowed the remaining purchase
options to expire. 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 $448,062
during the year ended December 31, 1999. The Company may continue to purchase
production tooling during the current fiscal year. These purchases represented
8.51% of DCM's gross revenues for 1999.
The Company is a party to a Registration Rights Agreement with J. M.
Huber Corporation (the"Selling Shareholder") pursuant to which the Company
agreed to register the resale of the 1,000,000 shares of Common Stock issued to
the Selling Shareholder as partial consideration for the acquisition of AVEX
Electronics, Inc. on August 24, 1999. Pursuant to this agreement, the Company
has filed a registration statement covering such shares, and such registration
statement has become effective. The Company must maintain the effectiveness of
this registration statement for a period of 24 months. The Company is obligated
to pay all costs in connection with such registration statement, which it
estimates at $55,000. In connection with such registration, the Company and the
Selling Shareholder have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments that the other may be required to make in respect of such
liabilities.
The Registration Rights Agreement with the Selling Shareholder also
contains a right of first refusal requiring that the Selling Shareholder provide
the Company at least three business days prior notice of any proposed transfer
of 300,000 or more shares of Common Stock. This notice must contain information
about the proposed transfer, including the price and the identity of the
proposed transferee. We are entitled to object to the proposed transfer on
reasonable grounds based on competitive conditions during the three day notice
period. If we object, we must purchase for cash the shares proposed to
transferred on the same terms and conditions as described in the transfer
notice.
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<PAGE>
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 April 3, 2000, 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................................. 47,945(2) (3)
2355 Harrodsburg Road
Lexington, Kentucky 40504
Donald E. Nigbor............................... 351,582(4) 2.2%
3000 Technology Drive
Angleton, Texas 77515
Steven A. Barton............................... 32,370(5) (3)
3000 Technology Drive
Angleton, Texas 77515
Cary T. Fu..................................... 370,010(6) 2.3%
3000 Technology Drive
Angleton, Texas 77515
Peter G. Dorflinger............................ 57,000(7) (3)
9501 Stonebridge
Austin, Texas 78758
Gerald W. Bodzy................................ 57,100(8) (3)
3000 Technology Drive
Angleton, Texas 77515
David H. Arnold................................ 431,810(9) 2.7%
1853 Edgewood Road
Winona, Minnesota 55987
Directors and executive officers as a group
(7 persons).................................. 1,349,067(10) 8.3%
J. M. Huber Corporation........................ 1,000,000(11) 6.1%
333 Thornall Street
Edison, New Jersey 08818
D.F. Dent & Company, Inc....................... 992,390(11)(12) 6.1%
2 East Read Street, 6th Floor
Baltimore, Maryland 21202
(TABLE CONTINUED ON FOLLOWING PAGE)
14
<PAGE>
T. Rowe Price Associates, Inc.................. 918,700(11)(13) 5.6%
100 East Pratt Street
Baltimore, Maryland 21202
- ---------------------------
(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.
(2) Includes 29,945 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable and 2,400 shares
owned of record by Mr. Custer's wife.
(3) Less than 1%.
(4) Includes (i) 1,950 shares of Common Stock held by Mr. Nigbor's children
as to which shares of Common Stock Mr. Nigbor expressly disclaims
beneficial ownership, and (ii) 188,000 shares of Common Stock that may
be acquired upon the exercise of options that are currently
exercisable.
(5) Includes 29,600 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(6) Includes (i) 2,640 shares of Common Stock held by Mr. Fu's daughter as
custodian for his children under the Uniform Gifts to Minors Act, as to
which shares of Common Stock Mr. Fu expressly disclaims beneficial
ownership, (ii) 1,320 shares of Common Stock held by Mr. Fu's daughter,
as to which shares of Common Stock Mr. Fu expressly disclaims
beneficial ownership, and (ii) 188,000 shares of Common Stock that may
be acquired upon the exercise of options that are currently
exercisable.
(7) Includes 48,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(8) Includes (i) 3,200 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, (ii) 4,000 shares of Common Stock held by Mr. Bodzy's
children, and (iii) 30,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(9) Includes 11,288 shares of Common Stock held of record by Mr. Arnold's
wife, 2,726 shares held for Mr. Arnold's benefit in the Company's
401(k) Employee Savings Plan and 15,000 shares that may be acquired
upon the exercise of options that are currently exercisable.
(10) Includes 453,145 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(11) Based solely on information filed with the Securities and Exchange
Commission.
(12) D. F. Dent & Company, Inc. is an Investment Adviser registered under
Section 203 of the Investment Advisers Act of 1940.
(13) These securities are owned by various individual and institutional
investors for whom T. Rowe Price Associates, Inc. ("Price Associates")
serves as investment adviser registered under Section 203 of the
Investment Advisers Act of 1940 with power to direct investments and/or
sole power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price Associates
is deemed to be a beneficial owner of such securities; however, Price
Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities.
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<PAGE>
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 New York
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, 1999 and
ending December 31, 1999 all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than ten-percent beneficial owners
were satisfied in a timely manner.
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.
APPROVAL OF THE BENCHMARK ELECTRONICS, INC.
2000 STOCK AWARDS PLAN
On February 16, 2000 the Board of Directors adopted, subject to
stockholder approval, the Benchmark Electronics, Inc. 2000 Stock Awards Plan
(the "2000 Plan"). A copy of the 2000 Plan is attached to this Proxy Statement
as Exhibit A, to which reference is made for a full statement of its terms.
Stockholders are encouraged to read the 2000 Plan in its entirety. The following
sections describe the background of the Board's decision to adopt the 2000 Plan
and its material terms.
EXISTING PLANS
In 1990, the Board of Directors and shareholders of the Company adopted
the Benchmark Electronics, Inc. 1990 Stock Option Plan its employees, including
executive officers (the "1990 Plan"). The 1990 Plan is administered by the
Compensation Committee. The purpose of the 1990 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 1990 Plan also utilizes vesting periods to encourage its
executive officers and eligible employees to continue in the employ of the
Company. However, the 1990 Plan does not provide for the use of equity-based
incentives other than stock options, such as restricted stock. The Company's
shareholders approved an amendment to the 1990 Plan at the Company's 1998 Annual
Meeting whereby an additional 1,000,000 shares of Common Stock were allocated to
the 1990 Plan. The Company currently has outstanding options with respect to
2,650,450 shares of Common Stock under the 1990 Plan and 193,700 shares are
currently available for grant under the 1990 Plan. The 1990 Plan will expire in
May of this year. For more information regarding the 1990 Plan, see "Board
Compensation Committee Report on Executive Compensation--Stock Option Plan."
In December 1994, the Board of Directors and shareholders 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. Under the 1994 Plan, each non-employee director receives 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
16
<PAGE>
Plan received (a) an option to purchase 6,000 shares of common stock for the
fiscal year in which the Plan was adopted by the Board of Directors and (b) an
option to purchase shares of common stock in amount equal to (i) 6,000,
multiplied by (ii) the number of consecutive fiscal years (immediately preceding
the fiscal year during which the 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). During 1999, 1998 and 1997, pursuant to the Plan, 12,000,
12,000 and 24,000 options, respectively, were granted to Directors to purchase
shares of common stock at an exercise price of $32.13, $21.38 and $16.32 per
share, respectively. The Company currently has outstanding options with respect
to 125,945 shares of Common Stock under the 1994 Plan and 52,600 shares are
currently available for grant under the 1994 Plan. For more information
regarding the 1994 Plan, see "Compensation of Non-Employee Directors."
In May 1999, the Board of Directors and shareholders of the Company
adopted the Benchmark Electronics, Inc. Employee Stock Purchase Plan (the "1999
Plan"). Only employees of the Company and of its subsidiaries are entitled to
participate in the 1999 Plan. The executive officers of the Company may
participate in the 1999 Plan on the same basis as all other employees of the
Company. The 1999 Plan allows employees of the Company and its subsidiaries to
use a portion of their salaries to purchase the Company's Common Stock at a
discount to the market price. The 1999 Plan is administered by the Compensation
Committee of the Board of Directors. The Company reserved 500,000 shares for
issuance under the 1999 Plan and has issued 22,193 shares to employees pursuant
to the 1999 Plan.
REASONS FOR ADOPTING THE 2000 PLAN
The Board of Directors believes that stock options and other methods of
equity-based incentive compensation are of increasing importance in attracting
and retaining employees and executives. The 1990 Plan will expire in May 2000
and does not provide for the grant of equity-based incentive compensation other
than stock options. For these reasons, the Board of Directors has adopted the
2000 Plan. If the 2000 Plan is approved by the stockholders, the Company will
have an aggregate of 2,000,000 shares currently available under the 2000 Plan,
which together with the shares available for issuance under the 1990 Plan, 1994
Plan and 1999 Plan would represent 14.9% of the Company's outstanding common
stock, assuming conversion of the Company's currently outstanding 6% Convertible
Subordinated Debentures due 2006. It is not expected, however, that options with
respect to all available shares will be granted immediately.
The 2000 Plan is intended to provide the Company with flexibility in
providing officers and employees of the Company its affiliates, and consultants
to the Company and its affiliates (the "Eligible Participants"), an opportunity
to acquire a proprietary interest in the Company and additional incentive and
reward opportunities based on the growth in the Common Stock price of the
Company. The 2000 Plan will provide for the granting of a variety of types of
awards, including stock options, restricted stock awards, stock appreciation
rights, performance awards, and phantom stock awards, or any combination
thereof. The maximum number of shares of Common Stock that may be subject to
outstanding awards determined immediately after the grant of any award, and the
maximum number of shares which may be issued under the 2000 Plan pursuant to all
awards, may not exceed 2,000,000 shares (subject to antidilutive adjustment).
Shares of Common Stock which are attributable to awards which have expired,
terminated or been canceled or forfeited are available for issuance or use in
connection with future awards. The different types of awards available under the
2000 Plan are intended to provide the Company with the means to keep its
compensation system competitive, but the inclusion of a type of award in the
2000 Plan does not require the Company to make grants utilizing it.
No grants may be made under the 2000 Plan until after it has been
approved by the Company's stockholders.
The significant provisions of the 2000 Plan are described in the
following sections.
17
<PAGE>
ADMINISTRATION
The 2000 Plan will be administered by the Compensation Committee of the
Board of Directors (the "Committee"). The 2000 Plan requires that the
Compensation Committee be (i) constituted so as to permit the plan to comply
with the applicable rules promulgated under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), and (ii) composed solely of outside directors
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). The Committee will have the power to determine which of
the Eligible Participants will receive an award; the time or times when awards
will be made; the type of awards to be made; the number of shares of Common
Stock to be issued under the award or the value of the award; and the other
terms and conditions of the awards, including the terms of any vesting
provisions (whether based on the passage of time or the occurrence of an event,
such as achieving a certain performance standard) to be included therein.
The Committee is authorized to interpret the 2000 Plan and the
agreements executed pursuant to the plan, to prescribe such rules and
regulations relating to the 2000 Plan as it may consider advisable, and to
determine the terms, restrictions and provisions of each award, including such
terms, restrictions and provisions as shall be requisite in the judgement of the
Committee to cause designated options to qualify as incentive stock options, and
to make all other determinations necessary or advisable for administering the
2000 Plan. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in any agreement relating to an award. The decisions
of the Committee relating to the 2000 Plan will be conclusive.
SHARES AVAILABLE
The aggregate number of shares of Common Stock that may be subject to
awards under the 2000 Plan is 2,000,000 shares. The number of shares is subject
to adjustment upon the occurrence of certain events, such as stock splits and
stock dividends, as provided in the 2000 Plan. Shares of Common Stock which are
attributable to awards under the 2000 Plan which expire, terminate or are
canceled or forfeited will become available for issuance or use in connection
with future awards.
PARTICIPATION AND ELIGIBILITY
Under the 2000 Plan, awards may be made only to persons who are Eligible
Participants on the date of the award. There are currently approximately 5,900
employees of the Company, including the executive officers, and no consultants
who will be eligible to participate in the 2000 Plan.
TERMS AND CONDITIONS OF AWARDS
The 2000 Plan became effective as of February 16, 2000, the date of its
adoption by the Board of Directors, subject to approval of the 2000 Plan by the
shareholders of the Company within twelve months thereafter. No awards may be
granted under the 2000 Plan after the expiration of ten years from the date of
its adoption by the Board of Directors. The 2000 Plan remains in effect as to
awards made prior to the expiration of ten years until such awards have been
satisfied or have expired.
The 2000 Plan provides for the granting of incentive stock options,
nonqualified stock options, restricted stock awards, stock appreciation rights,
performance awards, and phantom stock awards. Awards of one type may be made
separately or in conjunction with awards of another type. Each type of award is
described below. Awards may be subject to restrictions on vesting and
exercisability imposed by the Committee, such as continued service to the
Company or satisfaction of performance standards. All awards under the Plan will
fully vest, however, upon the occurrence of a change of control of the Company,
as defined in the Plan. In general, a change in control of the Company means (i)
a person or group acquires, more than 50% of the Company's voting securities,
(ii) a change in a majority of the members of the board of directors of the
Company shall occur, (iii) a merger, consolidation or similar transaction occurs
in which the
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<PAGE>
persons who were the owners of a majority of the voting securities of the
Company before such transaction cease to own a majority of the voting securities
of the Company after the transaction, or (iv) a sale of all or substantially all
of the assets of the Company.
STOCK OPTIONS. A stock option grants the holder the right to purchase
Common Stock in the future at a price fixed at the time the option is granted.
The 2000 Plan will provide for two types of options: incentive stock options and
nonqualified stock options. The Committee will designate Eligible Participants
to receive the options, the number of shares subject to the options, and the
terms and conditions of each option granted under the 2000 Plan; provided,
however, that incentive stock options may only be granted to employees of the
Company or its subsidiaries. The term of any option granted under the 2000 Plan
shall be determined by the Committee; provided, however, that the term of any
incentive stock option cannot exceed ten years from the date of the grant and
any incentive stock option granted to an employee who possesses more than 10% of
the total combined voting power of all classes of shares of the Company or of
its subsidiary within the meaning of Section 422(b)(6) of the Code must not be
exercisable after the expiration of five years from the date of grant. The
exercise price per share of Common Stock in options granted under the 2000 Plan
will be determined by the Committee; provided, however, that the exercise price
of an incentive stock option cannot be less than the fair market value of a
share of Common Stock on the date such option is granted (subject to
adjustments). Further, the exercise price of any incentive stock option granted
to an employee who possesses more than 10% of the total combined voting power of
all classes of shares of the Company or of its subsidiaries within the meaning
of Section 422(b)(6) of the Code must be at least 110% of the fair market value
of the share at the time such option is granted. The exercise price of options
granted under the 2000 Plan will be paid in full in a manner prescribed by the
Committee.
STOCK APPRECIATION RIGHTS. A stock appreciation right permits the holder
thereof to receive an amount (in cash, Common Stock, or a combination thereof)
equal to the number of stock appreciation rights exercised by the holder
multiplied by the excess of the fair market value of Common Stock on the
exercise date over the exercise price of the stock appreciation right. Stock
appreciation rights may or may not be granted in connection with the grant of a
stock option. A stock appreciation right may be exercised in whole or in such
installments and at such time as determined by the Committee.
RESTRICTED STOCK AWARDS. A restricted stock award is the issuance or
delivery of Common Stock to the Eligible Participant without any cash payment to
the Company, except to the extent otherwise provided by the Committee or
required by law, subject to certain restrictions on the disposition thereof and
certain obligations to forfeit such shares to the Company as may be determined
in the discretion of the Committee. The restrictions on disposition may lapse
based upon (a) the Company's attainment of specific performance targets
established by the Committee that are based on (i) the price of a Common Stock,
(ii) the Company's earnings per share, (iii) the revenue of the Company or an
affiliate designated by the Committee, (iv) the revenue of a business unit of
the Company or an affiliate designated by the Committee, (v) the return on
stockholders' equity achieved by the Company or an affiliate designated by the
Committee, or (vi) the pre-tax cash flow from operations of the Company or an
affiliate designated by the Committee, (b) the grantee's continued service or
employment with the Company or an affiliate for a specified period of time, or
(c) a combination of factors. The Company will retain custody of the Common
Stock issued pursuant to a restricted stock award until the disposition
restrictions lapse. An employee may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of such shares until the expiration of the
restriction period. However, upon the issuance to the Eligible Participant of
Common Stock pursuant to a restricted stock award, except for the foregoing
restrictions, such participant will have all the rights of a shareholder of the
Company with respect to such shares, including the right to vote such shares and
to receive all dividends and other distributions paid with respect to such
shares.
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<PAGE>
PERFORMANCE STOCK AWARDS. A performance award is an award of the right
to receive a payment in cash or in securities at a future date if certain
performance standards are satisfied over a measurement period. Performance
awards may be paid in cash, Common Stock, or a combination thereof as determined
by the Committee. Performance awards granted under the 2000 Plan will have a
maximum value established by the Committee at the time of the grant. A grantee's
receipt of such amount will be contingent upon satisfaction by the Company, or
any affiliate, division or department thereof, of future performance conditions
established by the Committee prior to the beginning of the performance period. A
performance award will terminate if the grantee's employment with the Company
terminates during the applicable performance period except as otherwise provided
by the Committee at the time of grant.
PHANTOM STOCK AWARDS. A phantom stock award is an award of the right to
receive amounts equal to the appreciation of the Company's Common Stock over a
specific period of time. Such awards vest over a period of time or upon the
occurrence of a specific event established by the Committee, without payment of
any amounts by the holder thereof (except to the extent required by law) or
satisfaction of any performance criteria or objectives. A phantom stock award
will terminate if the grantee's employment with the Company terminates during
the applicable vesting period or, if applicable, the occurrence of a specific
event(s), except as otherwise provided by the Committee at the time of grant. In
determining the value of performance awards or phantom stock awards, the
Committee must take into account the grantee's responsibility level,
performance, potential, other awards under the 2000 Plan, and other such
consideration as it deems appropriate. Such payment may be made in a lump sum or
in installments as prescribed by the Committee. Any payment made in Common Stock
will based upon the fair market value of the Common Stock on the payment date.
FEDERAL INCOME TAX CONSEQUENCES
NONQUALIFIED STOCK OPTIONS. Under the Internal Revenue Code, a
participant receiving a nonqualified option ordinarily does not realize taxable
income upon the grant of the option. A participant does, however, realize
ordinary income upon the exercise of a nonqualified option to the extent that
the fair market value of the Common Stock on the date of exercise exceeds the
option price. The Company is entitled to a federal income tax deduction for
compensation in an amount equal to the ordinary income so realized by the
participant, provided that the Company withholds federal income tax with respect
to the amount of such compensation. Upon the subsequent sale of the shares
acquired pursuant to a nonqualified option, any gain or loss will be capital
gain or loss, assuming the shares represent a capital asset in the hands of the
participant, although there will be no tax consequences for the Company.
INCENTIVE STOCK OPTIONS. The grant of an incentive stock option does not
result in taxable income to a participant. The exercise of an incentive stock
option also does not result in taxable income, provided that the employment
requirements specified in the Internal Revenue Code are satisfied, although such
exercise may give rise to alternative minimum tax liability for the participant.
In addition, if the participant does not dispose of the Common Stock acquired
upon exercise of an incentive stock option during the statutory holding period,
then any gain or loss upon subsequent sale of the Common Stock will be a
long-term capital gain or loss, assuming the shares represent a capital asset in
the participant's hands.
STOCK APPRECIATION RIGHTS. Generally, a recipient does not realize
taxable income upon the grant of a stock appreciation right but realizes
ordinary income upon its exercise in an amount equal to the cash received and/or
the fair market value of any Common Stock received. The Company is entitled to a
federal income tax deduction in an amount equal to the ordinary income realized
by the participant, provided that the Company withholds federal income tax with
respect to the amount of such compensation. Upon the subsequent sale of shares
acquired pursuant to a stock appreciation right, any gain or loss will be
capital gain or loss, assuming the shares represent a capital asset in the hands
of the participant.
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PERFORMANCE AWARDS AND PHANTOM STOCK. A participant will realize
ordinary income when a performance award or phantom stock award is paid in an
amount equal to the cash or the fair market value of the common stock the
participant receives. The Company is entitled to a federal income tax deduction
in an amount equal to the ordinary income realized by the participant, provided
that the Company withholds federal income tax with respect to the amount of such
compensation. Cash dividend equivalents paid to the participant with respect to
phantom stock are ordinary compensation income to the participant and deductible
as such by the Company.
RESTRICTED STOCK. In general, a participant receiving restricted stock
does not realize taxable income upon the grant of restricted stock. A
participant will, however, realize ordinary income when the restricted stock
becomes vested to the extent that the fair market value of the Common Stock on
that date exceeds the price, if any, paid for the restricted stock or, if no
price was paid, to the extent of the fair market value of the Common Stock on
that date. However, the participant may elect (within 30 days after the grant of
restricted stock) to realize ordinary income on the date of the grant to the
extent of the fair market value of the restricted stock (determined without
regard to restrictions on transferability and any substantial risk of
forfeiture). If such election is made, the participant will not realize ordinary
income when the restricted stock becomes vested. In addition, if such an
election is made and the restricted stock is subsequently forfeited, the
participant is not entitled to a deduction but will be allowed a capital loss
equal to the excess of the amount paid, if any, for such shares over the amount
realized if any, on such forfeiture. Upon a subsequent sale of vested restricted
stock, any gain or loss will be capital gain or loss, assuming the shares
represent a capital asset in the hands of the participant. The Company is
entitled to a federal income tax deduction in an amount equal to the ordinary
income realized by the recipient of the restricted stock, provided that the
Company withholds federal income tax with respect to the amount of such
compensation. Dividends paid to the participant on restricted stock during the
restricted period are ordinary compensation income to the participant and
deductible as such by the Company.
SECTION 162(M). Code Section 162(m) generally disallows a public
company's tax deduction for compensation to the chief executive officer and the
four other most highly compensated executive officers in excess of $1.0 million
in any calendar year. Compensation that qualifies as "performance-based
compensation" is excluded from the $1.0 million deductibility cap, and therefore
remains fully deductible by the company that pays it. Assuming the 2000 Plan is
approved by the shareholders of the Company, the Company believes that options
granted with an exercise price at least equal to 100% of the fair market value
of the underlying Common Stock at the date of grant, and other awards, the
settlement of which is conditioned upon achievement of performance goals (based
on criteria described above), will qualify as such "performance-based
compensation," although other awards under the awards plan may not so qualify.
TERMINATION; AMENDMENT
The Board may terminate or amend the 2000 Plan at any time, but no such
termination or amendment may impair the rights of a holder of an award under the
2000 Plan without the consent of the holder. Without stockholder approval,
however, the Board may not amend the 2000 Plan to (i) increase the maximum
number of shares which may be issued under the 2000 Plan, or on exercise or
surrender of an award, except as provided in Paragraph XII of the 2000 Plan,
(ii) change the option price, (iii) change the classes persons eligible to
receive awards or materially increase the benefits accruing Eligible
Participants under the 2000 Plan, (iv) extend the maximum period during which
awards may be granted under the 2000 Plan, or (v) modify materially the
requirements as to eligibility for participation in the 2000 Plan.
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REQUIRED VOTE
The affirmative vote of the stockholders holding a majority of the
outstanding shares of Common Stock present, in person or by proxy, and entitled
to vote at the Annual Meeting, is required to approve the adoption of the 2000
Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
BENCHMARK ELECTRONICS, INC. 2000 STOCK AWARDS PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG LLP as the independent
auditors of the Company for the year ending December 31, 2000. The shareholders
will be asked to ratify the appointment of KPMG LLP at the Meeting. The
ratification of such appointment will require the affirmative vote 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 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
In order for proposals submitted to by the shareholders of the Company
pursuant to Rule 14a-8 of the General Rules and Regulations under the Exchange
Act to be included in the Company's proxy statement and form of proxy relating
to the 2001 Annual Meeting of the Shareholders, such proposals must be received
at the Company's principal executive offices no later than December 13, 2000. A
shareholder choosing not to use the procedures established in Rule 14a-8 must
deliver the proposal at the Company's principal executive offices no later than
February 12, 2001.
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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,
/s/ Lenora A. Gurton
Lenora A. Gurton
Secretary
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EXHIBIT A
BENCHMARK ELECTRONICS, INC.
2000 STOCK AWARDS PLAN
I. PURPOSE
The purpose of Benchmark Electronics, Inc. 2000 Stock Awards Plan (the
"PLAN") is to provide a means through which Benchmark Electronics, Inc., a Texas
corporation (the "COMPANY"), and its subsidiaries may (i) attract and retain in
the service of the Company persons of training, experience and ability, (ii)
encourage a sense of proprietorship in such persons through stock ownership, and
(iii) stimulate such persons to exert their maximum efforts for the welfare of
the Company through the additional incentive and reward opportunities provided
by the Plan. Accordingly, the Plan provides for granting Incentive Stock
Options, options which do not constitute Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Awards, Phantom Stock
Awards, or any combination of the foregoing, as is best suited to the
circumstances of the particular Eligible Participant, as provided herein.
II. DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:
(a) "AFFILIATE" means any "parent corporation" of the Company and any
"subsidiary" of the Company within the meaning of Code Sections 424(e) and (f),
respectively, and any entity which directly or indirectly through one or more
intermediaries controls, is controlled by, or is under common control with the
Company.
(b) "AWARD" means, individually or collectively, any Option, Restricted
Stock Award, Phantom Stock Award, Performance Award or Stock Appreciation Right.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CHANGE OF CONTROL" means the occurrence of any of the following
events: (i) the acquisition by any person or group of persons (as such terms are
defined and used in Sections 3(a)(9) and 14(d)(2), respectively, of the 1934
Act) of beneficial ownership (as defined in Rule 13d-3 issued under the 1934
Act), directly or indirectly, of securities representing more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors ("VOTING
SECURITIES"), or (ii) individuals who constitute the Board of the Company on the
date of this Plan ("INCUMBENT BOARD") cease for any reason to constitute at
least a majority of that Board, provided that any person becoming a director
subsequent to the date of this Plan whose election or whose nomination for
election by the Company's shareholders was approved by a majority vote of the
directors comprising the Incumbent Board shall be, for purposes of this Plan,
considered as though he or she were a member of the Incumbent Board; or (iii) a
recapitalization, reorganization, merger, or consolidation with respect to which
those persons (as defined above) who were beneficial owners of the Voting
Securities of the Company immediately prior to such recapitalization,
reorganization, merger, or consolidation do not, following such
recapitalization, reorganization, merger, or consolidation, beneficially own,
directly or indirectly, shares representing more than fifty percent (50%) of the
combined voting power of the Voting Securities of the Company resulting from
such recapitalization, reorganization, merger, or consolidation; or (iv) a sale
of all or substantially all the assets of the Company.
(e) "CHANGE OF CONTROL VALUE" shall mean (i) the highest price per share
paid by any person or group of persons who acquires beneficial ownership of
securities representing more than fifty percent (50%) of the Voting
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Securities, (ii) the per share price offered to shareholders of the Company in
any merger, consolidation, recapitalization, reorganization, sale of assets or
dissolution transaction resulting in a Change of Control, (iii) the price per
share offered to shareholders of the Company in any tender offer or exchange
offer resulting in a Change of Control, or (iv) if a Change of Control occurs
other than in (i)-(iii) above, the Fair Market Value per share of the shares
into which Awards are exercisable, as determined by the Committee, whichever is
applicable. In the event that the consideration offered to shareholders of the
Company consists of anything other than cash, the Committee shall determine the
equivalent fair value in cash of the portion of the consideration offered which
is other than cash.
(f) "CODE" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to any section and any regulations under such section.
(g) "COMMITTEE" means the Compensation Committee of the Board, or another
committee of the Board designated by the Board after the date of adoption of the
Plan, which in either case shall be constituted solely of (i) "non-employee
directors" within the meaning of Rule 16b-3 and applicable interpretive
authority thereunder, and (ii) "outside directors" within the meaning of Section
162(m) of the Code and applicable interpretive authority thereunder.
(h) "COMPANY" means Benchmark Electronics, Inc. and any of its Affiliates.
(i) A "CONSULTANT" means an individual who performs services for the
Company or its Affiliates as an independent contractor.
(j) "DIRECTOR" means an individual elected to the Board by the
shareholders of the Company or by the Board under applicable corporate law who
is serving on the Board on the date the Plan is adopted by the Board or is
elected to the Board after such date.
(k) An "EMPLOYEE" means any person (including an officer or a Director) in
an employment relationship with the Company or any parent or subsidiary
corporation (as defined in section 424 of the Code).
(l) An "ELIGIBLE PARTICIPANT" means any (i) officer or employee of the
Company or any Affiliate of the Company, including a Director of the Company, or
a director of any Affiliate of the Company, who is also an employee, and (ii)
consultant to the Company or any Affiliate of the Company.
(m) "1934 ACT" means the Securities Exchange Act of 1934, as amended.
(n) "FAIR MARKET VALUE" means, as of any specified date, the closing sale
price of the Stock (i) reported by any interdealer quotation system on which the
Stock is quoted on that date, or (ii) if the Stock is listed on a national
securities exchange, reported on the national securities exchange composite tape
on that date; or, in either case, if no prices are reported on that date, on the
last preceding date on which such prices of the Stock are so reported. If the
Stock is traded in the over the counter market at the time a determination of
its fair market value is required to be made hereunder, its fair market value
shall be deemed to be equal to (i) the closing sale price of the Stock on that
date, if such price is available, or (ii) if such price is not available, the
average between the reported high and low bid prices of Stock on the most recent
date for which such information is available. In the event Stock is not publicly
traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the
Committee in such manner as it deems appropriate.
(o) "FORFEITURE RESTRICTIONS" has the meaning ascribed to it in Paragraph
IX(b) hereof.
(p) "HOLDER" means an Eligible Participant who has been granted an Award.
(q) "INCENTIVE STOCK OPTION" means an option that is designated as an
incentive stock option within the meaning of section 422(b) of the Code.
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(r) "INCUMBENT BOARD" has the meaning ascribed to it in Paragraph II(d)
hereof.
(s) "NONQUALIFIED STOCK OPTION" means an option granted under Paragraph
VII of the Plan to purchase Stock which does not constitute an Incentive Stock
Option.
(t) "OPTION" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Stock and Nonqualified Stock
Options to purchase Stock.
(u) "OPTION AGREEMENT" means a written agreement between the Company and a
Holder with respect to an Option.
(v) "PERFORMANCE AWARD" means an Award granted under Paragraph X of the
Plan.
(w) "PERFORMANCE AWARD AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Performance Award.
(x) "PERFORMANCE MEASURES" has the meaning ascribed to it in Paragraph
IX(b) of the Plan.
(y) "PHANTOM STOCK AWARD" means an Award granted under Paragraph XI of the
Plan.
(z) "PHANTOM STOCK AWARD AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Phantom Stock Award.
(aa) "PLAN" means the Benchmark Electronics, Inc. 2000 Stock Awards Plan,
as it may be amended from time to time.
(bb) "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.
(cc) "RESTRICTED STOCK AWARD" means an Award granted under Paragraph IX of
the Plan.
(dd) "RULE 16B-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the 1934 Act as in effect on the date the Plan is
adopted by the Board, as such rule may thereafter be amended from time to time,
and any successor rule, regulation or statute fulfilling the same or a similar
function.
(ee) "SPREAD" means, in the case of a Stock Appreciation Right, an amount
equal to the excess, if any, of the Fair Market Value of a share of Stock on the
date such right is exercised over the exercise price of such Stock Appreciation
Right.
(ff) "STOCK" means the common stock, $.10 par value of the Company, as
constituted on the date of the adoption of the Plan and any capital stock into
which such common stock may thereafter be changed.
(gg) "STOCK APPRECIATION RIGHT" means an Award granted under Paragraph
VIII of the Plan.
(hh) "STOCK APPRECIATION RIGHTS AGREEMENT" means a written agreement
between the Company and a Holder with respect to an Award of Stock Appreciation
Rights.
(ii) "VOTING SECURITIES" has the meaning ascribed to it in Paragraph II(d)
hereof.
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III. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided that the Plan is approved by the shareholders of the Company within
twelve months thereafter. No further Awards may be granted under the Plan after
the expiration of ten years from the date of its adoption by the Board. The Plan
shall remain in effect until all Awards granted under the Plan have been
satisfied or expired.
IV. ADMINISTRATION
(a) COMMITTEE. The Plan shall be administered by the Committee.
(b) POWERS. Subject to the provisions of the Plan, the Committee shall
have sole authority, in its discretion, to determine which Eligible Participants
shall receive an Award; the time or times when such Award shall be made; whether
an Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right,
Restricted Stock Award, Performance Award or Phantom Stock Award shall be
granted; the number of shares of Stock which may be issued under each Option,
Stock Appreciation Right or Restricted Stock Award; and the value of each
Performance Award and Phantom Stock Award. In making such determinations the
Committee may take into account the nature of the services rendered by the
respective Eligible Participants, their present and potential contributions to
the Company's success and such other factors as the Committee in its discretion
shall deem relevant.
(c) ADDITIONAL POWERS. The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective agreements executed thereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the Plan,
and to determine the terms, restrictions and provisions of each Award, including
such terms, restrictions and provisions as shall be requisite in the judgment of
the Committee to cause designated Options to qualify as Incentive Stock Options,
and to make all other determinations necessary or advisable for administering
the Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in any agreement relating to an Award in the manner
and to the extent it shall deem expedient to carry it into effect. The
determinations of the Committee on the matters referred to in this Paragraph IV
shall be conclusive.
V. GRANT OF AWARDS; SHARES SUBJECT TO THE PLAN
(a) GRANT OF AWARDS. The Committee may from time to time grant Awards to
one or more Eligible Participants determined by it to be eligible for
participation in the Plan in accordance with the provisions of Paragraph VI.
(b) SHARES SUBJECT TO PLAN. Subject to Paragraph XII, the aggregate number
of shares of Stock that may be issued under the Plan upon the exercise or
satisfaction of an Award shall not exceed 2,000,000 shares. The 2,000,000 shares
of Stock subject to the Plan may be apportioned by the Committee among the
various types of Awards as the Committee shall determine in its sole discretion.
While an Award of one type is outstanding, the number of shares of Stock subject
to such Award shall not be available for grant under another Award of the same
or any other type. Shares of Stock shall be deemed to have been issued under the
Plan only to the extent actually issued and delivered pursuant to an Award. To
the extent that an Award lapses or the rights of its Holder terminate or the
Award is paid in cash, any shares of Stock subject to such Award shall again be
available for the grant of an Award. Separate stock certificates shall be issued
by the Company for those shares acquired pursuant the exercise of an Incentive
Stock Option and for those shares acquired pursuant to the exercise of a
Nonqualified Stock Option.
(c) STOCK OFFERED. The shares of Stock to be offered pursuant to the grant
of an Award may be authorized and unissued shares of Stock, or Stock previously
issued which has been acquired by the Company.
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VI. ELIGIBILITY
Awards may be granted only to persons who, at the time of grant, are
Eligible Participants. An Award may be granted on more than one occasion to the
same person, and, subject to the limitations set forth in the Plan, such Award
may include an Incentive Stock Option or a Nonqualified Stock Option, a Stock
Appreciation Right, a Restricted Stock Award, a Performance Award, a Phantom
Stock Award or any combination thereof.
VII. STOCK OPTIONS
(a) OPTION PERIOD. Subject to the limitations contained in Paragraph
VII(c), the term of each Option shall be as specified by the Committee at the
date of grant.
(b) LIMITATIONS ON EXERCISE OF OPTION. An Option shall be exercisable in
whole or in such installments and at such times as may be determined by the
Committee.
(c) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. No more than 2,000,000
shares of Stock may be subject to Incentive Stock Options. Incentive Stock
Options may only be granted to employees of the Company and its Affiliates, and
the term of an Incentive Stock Option cannot exceed ten years from the date of
grant. To the extent that the aggregate Fair Market Value (determined at the
time the respective Incentive Stock Option is granted) of Stock with respect to
which Incentive Stock Options are exercisable for the first time by an
individual during any calendar year under all incentive stock option plans of
the Company and its parent and subsidiary corporations exceeds $100,000, such
Incentive Stock Options shall be treated as Nonqualified Stock Options as
determined by the Committee. The Committee shall determine, in accordance with
applicable provisions of the Code, Treasury Regulations and other administrative
pronouncements, which of an optionee's Incentive Stock Options will not
constitute Incentive Stock Options because of such limitation and shall notify
the optionee of such determination as soon as practicable after such
determination. No Incentive Stock Option shall be granted to an individual if,
at the time the Option is granted, such individual owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of its parent or subsidiary corporations, within the
meaning of section 422(b)(6) of the Code, unless (i) at the time such Option is
granted the option price is at least one hundred ten percent (110%) of the Fair
Market Value of the Stock subject to the Option and (ii) such Option by its
terms is not exercisable after the expiration of five years from the date of
grant.
(d) OPTION AGREEMENT. Each Option shall be evidenced by a written Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. No individual may be granted in any calendar year
an Option to purchase more than 2,000,000 shares of Stock. An Option Agreement
may provide for the payment of the option price, in whole or in part, by the
delivery of a number of shares of Stock (plus cash if necessary) having a Fair
Market Value equal to such option price. Payment in full or in part may also be
made by a reduction in the number of shares of Stock issuable upon the exercise
of an Option, based on the Fair Market Value of the shares of Stock on the date
the Option is exercised. Each Option Agreement shall specify the effect of
termination of employment, or the cessation of performing services as a
consultant to the Company, on the exercisability of the Option, as the case may
be. Moreover, an Option Agreement may provide for a "cashless exercise" of the
Option by establishing procedures whereby the Holder, by a properly executed
written notice, directs (i) an immediate market sale or margin loan respecting
all or a part of the shares of Stock to which he is entitled upon exercise
pursuant to an extension of credit by the Company to the Holder of the option
price, (ii) the delivery of the shares of Stock from the Company directly to a
brokerage firm and (iii) the delivery of the option price from the sale or
margin loan proceeds from the brokerage firm directly to the Company. Such
Option Agreement may also include, without limitation, provisions relating to
(i) vesting of Options, subject to the provisions hereof accelerating such
vesting on a Change of Control, (ii) tax matters (including provisions (y)
permitting the delivery of additional shares of Stock or the withholding of
shares of Stock from those acquired upon exercise to satisfy federal or state
income tax withholding requirements and (z) dealing with any other applicable
employee wage withholding requirements), and
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(iii) any other matters not inconsistent with the terms and provisions of this
Plan that the Committee shall in its sole discretion determine. The terms and
conditions of the respective Option Agreements need not be identical.
(e) OPTION PRICE AND PAYMENT. The price at which a share of Stock may be
purchased upon exercise of an Option shall be determined by the Committee, but
(i) such purchase price shall not be less than the Fair Market Value of Stock
subject to an Option on the date the Option is granted and (ii) such purchase
price shall be subject to adjustment as provided herein. The Option or portion
thereof may be exercised by delivery of an irrevocable notice of exercise to the
Company. The purchase price of the Option or portion thereof shall be paid in
full in the manner prescribed by the Committee.
(f) SHAREHOLDER RIGHTS AND PRIVILEGES. The Holder shall be entitled to all
the privileges and rights of a shareholder only with respect to such shares of
Stock as have been purchased under the Option and for which certificates of
stock have been registered in the Holder's name.
(g) OPTIONS AND RIGHTS IN SUBSTITUTION FOR STOCK OPTIONS GRANTED BY OTHER
ENTITIES. Options and Stock Appreciation Rights may be granted under the Plan
from time to time in substitution for stock options held by individuals employed
by other entities who become employees as a result of a merger or consolidation
of the employing entity with the Company or any subsidiary, or the acquisition
by the Company or a subsidiary of the assets of the employing entity, or the
acquisition by the Company or a subsidiary of stock or other equity interests of
the employing entity with the result that such employing entity becomes a
subsidiary of the Company.
VIII. STOCK APPRECIATION RIGHTS
(a) STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is the right to
receive an amount equal to the Spread with respect to a share of Stock upon the
exercise of such Stock Appreciation Right. Stock Appreciation Rights may be
granted in connection with the grant of an Option, in which case the Option
Agreement will provide that exercise of Stock Appreciation Rights will result in
the surrender of the right to purchase the shares under the Option as to which
the Stock Appreciation Rights were exercised. Alternatively, Stock Appreciation
Rights may be granted independently of Options, in which case each Award of
Stock Appreciation Rights shall be evidenced by a Stock Appreciation Rights
Agreement which shall contain such terms and conditions as may be approved by
the Committee. No individual may be granted in any calendar year Stock
Appreciation Rights with respect to more than 2,000,000 shares of Stock. The
Spread with respect to a Stock Appreciation Right may be payable either in cash,
shares of Stock with a Fair Market Value equal to the Spread or in a combination
of cash and shares of Stock. Each Stock Appreciation Rights Agreement shall
specify the effect of termination of employment, the cessation of serving on the
Board or the cessation of performing services as a consultant to the Company on
the exercisability of the Stock Appreciation Rights.
(b) OTHER TERMS AND CONDITIONS. At the time of such Award, the Committee
may in its sole discretion prescribe additional terms, conditions or
restrictions relating to Stock Appreciation Rights, including, but not limited
to rules pertaining to termination of employment or the cessation of performing
services as a consultant to the Company (by retirement, disability, death or
otherwise) of a Holder prior to the expiration of such Stock Appreciation
Rights. Such additional terms, conditions or restrictions shall be set forth in
the Stock Appreciation Rights Agreement made in conjunction with the Award. Such
Stock Appreciation Rights Agreements may also include, without limitation,
provisions relating to (i) vesting of Awards, subject to the provisions hereof
accelerating vesting on a Change of Control, (ii) tax matters (includinG
provisions covering applicable wage withholding requirements), and (iii) any
other matters not inconsistent with the terms and provisions of this Plan that
the Committee shall in its sole discretion determine. The terms and conditions
of the respective Stock Appreciation Rights Agreements need not be identical.
(c) EXERCISE PRICE. The exercise price of each Stock Appreciation Right
shall be determined by the Committee, but such exercise price (i) shall not be
less than the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is granted (or such greater exercise price as may be required
if such Stock Appreciation Right is granted in connection with an Incentive
Stock Option that must have an exercise price equal to one hundred ten
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percent (110%) of the Fair Market Value of the Stock on the date of grant
pursuant to Paragraph VII(c)), and (ii) shall be subject to adjustment as
provided in Paragraph XII.
(d) EXERCISE PERIOD. The term of each Stock Appreciation Right shall be as
specified by the Committee at the date of grant.
(e) LIMITATIONS ON EXERCISE OF STOCK APPRECIATION RIGHT. A Stock
Appreciation Right shall be exercisable in whole or in such installments and at
such times as determined by the Committee.
IX. RESTRICTED STOCK AWARDS
(a) RESTRICTED STOCK AWARDS. A Restricted Stock Award shall be represented
by a certificate of Stock registered in the name of the Holder of such
Restricted Stock Award and the related Restricted Stock Agreement. The Holder
shall have the right to receive dividends with respect to Stock subject to a
Restricted Stock Award, to vote the shares of Stock subject thereto and to enjoy
all other shareholder rights, except that (i) the Holder shall not be entitled
to delivery of the certificate representing the shares of Stock until the
Forfeiture Restrictions shall have expired, (ii) the Company shall retain
custody of the certificate representing the Stock until the Forfeiture
Restrictions shall have expired, (iii) the Holder may not sell, transfer,
pledge, exchange, hypothecate or otherwise dispose of the Stock until the
Forfeiture Restrictions have expired, and (iv) a breach of the terms and
conditions established by the Committee pursuant to the Restricted Stock
Agreement shall cause a forfeiture of the Restricted Stock Award.
(b) FORFEITURE RESTRICTIONS TO BE ESTABLISHED BY THE COMMITTEE. Shares of
Stock that are the subject of a Restricted Stock Award shall be subject to
restrictions on disposition by the Holder and an obligation of the Holder to
forfeit and surrender the shares to the Company under certain circumstances (the
"FORFEITURE RESTRICTIONS"). The Forfeiture Restrictions shall be determined by
the Committee in its sole discretion, and the Committee may provide that the
Forfeiture Restrictions shall lapse upon (i) the attainment of targets
established by the Committee that are based on (1) the price of a share of
Stock, (2) the Company's earnings per share, (3) the revenue of the Company or
an Affiliate designated by the Committee, (4) the revenue of a business unit of
the Company or an Affiliate designated by the Committee, (5) the return on
shareholders' equity achieved by the Company or an Affiliate designated by the
Committee, or (6) the pre-tax cash flow from operations of the Company or an
Affiliate designated by the Committee (the matters listed in the preceding items
(1) through (6) shall hereinafter be referred to as "PERFORMANCE MEASURES"),
(ii) the Holder's continued service or employment with the Company or an
Affiliate for a specified period of time, or (iii) a combination of any two or
more of the factors listed in clauses (i) and (ii) of this sentence. Each
Restricted Stock Award may have different Forfeiture Restrictions, in the
discretion of the Committee. The Forfeiture Restrictions applicable to a
particular Restricted Stock Award shall not be changed except as permitted by
Paragraph XII.
(c) OTHER TERMS AND CONDITIONS. No individual may be awarded more than
2,000,000 shares of Stock that are subject to a Restricted Stock Award in any
calendar year. Stock awarded pursuant to a Restricted Stock Award shall be
represented by a stock certificate registered in the name of the Holder of such
Restricted Stock Award. The Holder shall have the right to receive dividends
with respect to Stock subject to a Restricted Stock Award, to vote Stock subject
thereto and to enjoy all other shareholder rights, except that (i) the Holder
shall not be entitled to delivery of the stock certificate until the Forfeiture
Restrictions shall have expired, (ii) the Company shall retain custody of the
Stock until the Forfeiture Restrictions shall have expired, (iii) the Holder may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the
Stock until the Forfeiture Restrictions shall have expired, and (iv) a breach of
the terms and conditions established by the Committee pursuant to the Restricted
Stock Agreement, shall cause a forfeiture of the Restricted Stock Award. At the
time of such Award, the Committee may in its sole discretion, prescribe
additional terms, conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the termination of
employment or the cessation of performing services as a consultant to the
Company (by retirement, disability, death or otherwise) of a Holder prior to
expiration of the Forfeiture Restrictions. Such additional terms, conditions or
restrictions shall be set forth in a Restricted Stock Agreement made in
conjunction with the Award. Such Restricted Stock Agreement may also include,
without limitation, provisions relating to (i) subject to the provisions hereof
accelerating vesting on a Change of Control, vesting of Awards, (ii) tax matters
(including provisions
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(y) covering any applicable employee wage withholding requirements and (z)
prohibiting an election by the Holder under section 83(b) of the Code), and
(iii) any other matters not inconsistent with the terms and provisions of this
Plan that the Committee shall in its sole discretion determine.
(d) PAYMENT FOR RESTRICTED STOCK. The Committee shall determine the amount
and form of any payment for Stock received pursuant to a Restricted Stock Award,
provided that in the absence of such a determination, a Holder shall not be
required to make any payment for Stock received pursuant to a Restricted Stock
Award, except to the extent otherwise required by law.
(e) AGREEMENTS. At the time any Award is made under this Paragraph IX, the
Company and the Holder shall enter into a Restricted Stock Agreement setting
forth each of the matters as the Committee may determine to be appropriate. The
terms and provisions of the respective Restricted Stock Agreements need not be
identical.
X. PERFORMANCE AWARDS
(a) PERFORMANCE PERIOD. The Committee shall establish, with respect to and
at the time of each Performance Award, a performance period over which the
performance of the Holder shall be measured.
(b) PERFORMANCE AWARDS. Each Performance Award shall have a maximum value
established by the Committee at the time of such Award, provided that no
individual may be granted a Performance Award in any calendar year where the
value of such award exceeds the Fair Market Value of 2,000,000 shares of Stock.
(c) PERFORMANCE MEASURES. A Performance Award shall be awarded to an
Eligible Participant contingent upon future performance of the Eligible
Participant, the Company, any Affiliate of the Company, or any subsidiary,
division, department or business unit thereof by or in which the Eligible
Participant is employed or for which the Eligible Participant performs services
during the performance period. The Committee shall establish the Performance
Measures applicable to such performance prior to the beginning of the
performance period but subject to such later revisions as the Committee shall
deem appropriate to reflect significant, unforeseen events or changes.
(d) AWARDS CRITERIA. In determining the value of Performance Awards, the
Committee shall take into account an Eligible Participant's responsibility
level, performance, potential, other Awards and such other considerations as it
deems appropriate.
(e) PAYMENT. Following the end of the performance period, the Holder of a
Performance Award shall be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Award, based on the achievement
of the Performance Measures for such performance period, as determined by the
Committee. Payment of a Performance Award may be made in cash, Stock or a
combination thereof, as determined by the Committee. Payment shall be made in a
lump sum or in installments as prescribed by the Committee. Any payment to be
made in Stock shall be based on the Fair Market Value of the Stock on the
payment date. If a payment of cash is to be made on a deferred basis, the
Committee shall establish whether interest shall be credited, the rate thereof
and any other terms and conditions applicable thereto.
(f) TERMINATION OR CESSATION OF EMPLOYMENT OR OTHER SERVICE. A
Performance Award shall terminate if the Holder does not remain continuously in
the employ or other service of the Company at all times during the applicable
performance period, except as may be determined by the Committee or as may
otherwise be provided in the Award at the time granted.
(g) AGREEMENTS. At the time any Award is made under this Paragraph X, the
Company and the Holder shall enter into a Performance Award Agreement setting
forth each of the matters contemplated hereby, and, in addition such Performance
Measures as the Committee may determine to be appropriate. The terms and
provisions of the respective agreements need not be identical.
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XI. PHANTOM STOCK AWARDS
(a) PHANTOM STOCK AWARDS. Phantom Stock Awards are rights to receive
shares of Stock (or cash in an amount equal to the Fair Market Value thereof),
or rights to receive an amount equal to any appreciation in the Fair Market
Value of Stock (or portion thereof) over a specified period of time, which vest
over a period of time or upon the occurrence of an event as established by the
Committee, without payment of any amounts by the Holder thereof (except to the
extent otherwise required by law) or satisfaction of any Performance Measure.
Each Phantom Stock Award shall have a maximum value established by the Committee
at the time of such Award, provided that no individual may be granted a Phantom
Stock Award in any calendar year for more than 2,000,000 shares of Stock.
(b) AWARD PERIOD. Subject to the provisions hereof accelerating vesting on
a Change of Control, the Committee shall establish, with respect to and at the
time of each Phantom Stock Award, a period over which or the event upon which
the Award shall vest with respect to the Holder.
(c) AWARDS CRITERIA. In determining the value of Phantom Stock Awards, the
Committee shall take into account an Eligible Participant's responsibility
level, performance, potential, other Awards and such other considerations as it
deems appropriate.
(d) PAYMENT. Following the end of the vesting period for a Phantom Stock
Award, the Holder of a Phantom Stock Award shall be entitled to receive payment
of an amount, not exceeding the maximum value of the Phantom Stock Award, based
on the then vested value of the Award. Payment of a Phantom Stock Award may be
made in cash, Stock or a combination thereof as determine by the Committee.
Payment shall be made in a lump sum or in installments as prescribed by the
Committee in its sole discretion. Any payment to be made in Stock shall be based
on the Fair Market Value of the Stock on the payment date. Cash dividend
equivalents may be paid during or after the vesting period with respect to a
Phantom Stock Award, as determined by the Committee. If a payment of cash is to
be made on a deferred basis, the Committee shall establish whether interest
shall be credited, the rate thereof and any other terms and conditions
applicable thereto.
(e) TERMINATION OR CESSATION OF EMPLOYMENT OR OTHER SERVICE. A Phantom
Stock Award shall terminate if the Holder does not remain continuously in the
employ of the Company or fails to perform services for the Company at all times
during the applicable vesting period, except as may be otherwise determined by
the Committee or as set forth in the Award at the time of grant.
(f) AGREEMENTS. At the time any Award is made under this Paragraph XI, the
Company and the Holder shall enter into a Phantom Stock Award Agreement setting
forth each of the matters contemplated hereby and, in addition such Performance
Measures as the Committee may determine to be appropriate. The terms and
provisions of the respective agreements need not be identical.
XII. RECAPITALIZATION OR REORGANIZATION
(a) SUBDIVISION OR COMBINATION OF SHARES. The shares with respect to which
Awards may be granted are shares of Stock as constituted on the effective date
of the Plan, but if, and whenever, prior to the expiration of an Award
theretofore granted, the Company shall effect a subdivision or combination of
its Stock, the number of shares of Stock with respect to which such Award may
thereafter be exercised or satisfied, as applicable, (i) in the event of an
increase in the number of outstanding shares shall be proportionately increased,
and the purchase price per share shall be proportionately reduced, and (ii) in
the event of a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall be
proportionately increased.
(b) RECAPITALIZATION. If the Company recapitalizes or otherwise changes
its capital structure, thereafter upon any exercise or satisfaction, as
applicable, of an Award theretofore granted the Holder shall be entitled to (or
shall be entitled to receive, as applicable) under such Award, in lieu of the
number of shares of Stock then covered by such Award, the number and class of
shares of capital stock and securities to which the Holder would have been
entitled
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pursuant to the terms of the recapitalization if, immediately prior to such
recapitalization, the Holder had been the holder of record of the number of
shares of Stock then covered by such Award.
(c) CHANGE OF CONTROL. Upon the occurrence of a Change of Control, all
outstanding Awards shall immediately vest and become exercisable or satisfiable,
as applicable. The Committee, in its discretion, may determine that upon the
occurrence of a Change of Control, each Award other than an Option outstanding
hereunder shall terminate within a specified number of days after notice to the
Holder, and such Holder shall receive, with respect to each share of Stock
subject to such Award, cash in an amount equal to the excess, if any, of the
Change of Control Value over the exercise price of the Award. Further, in the
event of a Change of Control, the Committee, in its discretion shall act to
effect one or more of the following alternatives with respect to outstanding
Options, which may vary among individual Holders and which may vary among
Options held by any individual Holder: (1) determine a limited period of time
for the exercise of such Options on or before a specified date (before or after
such Change of Control) after which specified date all unexercised Options and
all rights of Holders thereunder shall terminate, (2) require the mandatory
surrender to the Company by selected Holders of some or all of the outstanding
Options held by such Holders (irrespective of whether such Options are then
exercisable under the provisions of the Plan) as of a date, before or after such
Change of Control, specified by the Committee, in which event the Committee
shall thereupon cancel such Options and the Company shall pay to each Holder an
amount of cash per share equal to the excess, if any, of the Change of Control
Value of the shares subject to such Option over the exercise price(s) under such
Options for such shares, (3) make such adjustments to Options then outstanding
as the Committee deems appropriate to reflect such Change of Control (provided,
however, that the Committee may determine in its sole discretion that no
adjustment is necessary to Options then outstanding), or (4) provide that
thereafter upon any exercise of an Option theretofore granted the Holder shall
be entitled to purchase under such Option, in lieu of the number of shares of
Stock then covered by such Option, the number and class of shares of stock or
other securities or property (including, without limitation, cash) to which the
Holder would have been entitled pursuant to the terms of the agreement of
merger, consolidation or sale of assets and dissolution if, immediately prior to
such merger, consolidation or sale of assets and dissolution the Holder had been
the holder of record of the number of shares of Stock then covered by such
Option. The provisions contained in this paragraph shall not alter any rights or
terminate any rights of the Holder to further payments pursuant to any other
agreement with the Company following a Change of Control.
(d) OTHER EVENTS. In the event of changes in the outstanding Stock by
reason of recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges or other relevant changes in capitalization occurring
after the date of the grant of any Award and not otherwise provided for by this
Paragraph XII, any outstanding Awards and any agreements evidencing such Awards
shall be subject to adjustment by the Committee at its discretion as to the
number and price of shares of Stock or other consideration subject to such
Awards. In the event of any such change in the outstanding Stock, the aggregate
number of shares available under the Plan may be appropriately adjusted by the
Committee, whose determination shall be conclusive.
(e) CORPORATE POWER. The existence of the Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities ranking prior to or affecting Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.
(f) SHAREHOLDER APPROVAL. Any adjustment provided for in Subparagraphs
(a), (b), (c) or (d) above shall be subject to any required shareholder action.
(g) ISSUANCE OF SECURITIES. Except as hereinbefore expressly provided, the
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares of obligations of the Company convertible
into such shares or other securities, and in any case whether or not for fair
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value, shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to Awards theretofore granted
or the purchase price per share, if applicable.
XIII. AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Awards have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided that no change in any Award theretofore granted may be
made which would impair the rights of the Holder without the consent of the
Holder (unless such change is required in order to cause the benefits under the
Plan to qualify as performance-based compensation within the meaning of Section
162(m) of the Code and applicable interpretive authority thereunder), and
provided further, that the Board may not, without approval of the shareholders,
amend the Plan:
(a) to increase the maximum number of shares which may be issued under the
Plan, or on exercise or surrender of an Award, except as provided in Paragraph
XII;
(b) to change the Option price;
(c) to change the class of Eligible Participants to whom Awards may be
made under the Plan, or to materially increase the benefits accruing to Eligible
Participants under the Plan;
(d) to extend the maximum period during which Awards may be granted under
the Plan; or
(e) to modify materially the requirements as to eligibility for
participation in the Plan.
XIV. MISCELLANEOUS
(a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan by the Company
nor any action of the Board or the Committee shall be deemed to give an Eligible
Participant any right to be granted an Option, a Stock Appreciation Right, a
Restricted Stock Award, a Performance Award or a Phantom Stock Award or any of
the rights hereunder except as may be evidenced by an Option Agreement, Stock
Appreciation Rights Agreement, Restricted Stock Agreement, Performance Award
Agreement or Phantom Stock Award Agreement executed on behalf of the Company by
an authorized representative thereof, and then only to the extent and on the
terms and conditions expressly set forth therein. The Plan shall be unfunded.
The Company shall not be required to establish any special or separate fund or
to make any other segregation of funds or assets to assure the payment of any
Award.
(b) NO EMPLOYMENT OR SERVICE RIGHTS CONFERRED. Nothing contained in the
Plan shall (i) confer upon any employee any right with respect to continuation
of employment or service with the Company or any Affiliate or (ii) interfere in
any way with the right of the Company or any Affiliate to terminate his or her
employment or service at any time.
(c) OTHER LAWS; WITHHOLDING. The Company shall not be obligated to issue
any Stock pursuant to any Award granted under the Plan at any time when the
shares covered by such Award have not been registered under the Securities Act
of 1933, as amended, and such other state and federal laws, rules or regulations
as the Company or the Committee deems applicable and, in the opinion of legal
counsel for the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares. No fractional shares of Stock shall be delivered, nor shall
any cash in lieu of fractional shares be paid. The Company shall have the right
to deduct in connection with all Awards any taxes required by law to be withheld
and to require any payments required to enable it to satisfy its withholding
obligations.
(d) NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any Affiliate from taking any
corporate action which is deemed by the Company or such Affiliate to be
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appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No employee,
beneficiary or other person shall have any claim against the Company or any
subsidiary as a result of any such action.
(e) RESTRICTIONS ON TRANSFER. An Award shall not be transferable otherwise
than by will or the laws of descent and distribution or pursuant to a "qualified
domestic relations order" as defined by the Code or Title I of the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder, and
shall be exercisable during the Holder's lifetime only by such Holder or the
Holder's guardian or legal representative.
(f) SECTION 162(M). If the Company is subject to Section 162(m) of the
Code, it is intended that the Plan comply fully with and meet all the
requirements of Section 162(m) of the Code so that Options and Stock
Appreciation Rights granted hereunder and, if determined by the Committee,
Restricted Stock Awards, shall constitute "performance- based" compensation
within the meaning of such section. If any provision of the Plan would
disqualify the Plan or would not otherwise permit the Plan to comply with
Section 162(m) of the Code as so intended, such provision shall be construed or
deemed amended to conform to the requirements or provisions of Section 162(m) of
the Code; provided that no such construction or amendment shall have an adverse
effect on the economic value to a Holder of any Award previously granted
hereunder. With respect to any Award granted to a "covered employee" (as defined
in Section 162(m)(3) of the Code), if the payment of such Award is contingent on
the satisfaction of performance goals, the Committee shall certify in writing
prior to payment of such Award that such performance goals have been satisfied.
(g) GOVERNING LAW. This Plan shall be construed in accordance with the
laws of the State of Texas.
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PROXY BENCHMARK ELECTRONICS, INC. PROXY
2000 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 16, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The 2000 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 16, 2000, beginning at 10:00 a.m. (local
time). The undersigned hereby acknowledges receipt of the related Notice and
Proxy Statement dated April 12, 2000, 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 2000 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 by the Board of Directors and will be voted in
accordance with the undersigneds 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 2001 ANNUAL MEETING OF
SHAREHOLDERS AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED, FOR
APPROVAL OF THE BENCHMARK ELECTRONICS, INC. 2000 STOCK AWARDS PLAN AND FOR THE
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS OF THE
COMPANY FOR THE YEAR ENDING DECEMBER 31, 2000.
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE
PROXY CARD USING THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
IMPORTANT--This Proxy must be signed and dated on the reverse side.
<PAGE>
BENCHMARK ELECTRONICS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
1. ELECTION OF DIRECTORS to serve until the 2001 annual meeting of
shareholders and until their successors are duly elected and qualified:
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY OF THE NOMINEES LISTED
BELOW, DRAW A LINE THROUGH SUCH NOMINEES NAME. Nominees: (1) John C.
Custer, (2) Donald E. Nigbor, (3) Steven A. Barton, (4)Cary T. Fu, (5)
Peter G. Dorflinger, (6) Gerald W. Bodzy and (7) David H. Arnold.
For Withheld For All
All Authority Except Nominee(s) written below
[ ] [ ] [ ] ______________________________
2. APPROVAL OF THE BENCHMARK ELECTRONICS, INC. 2000 STOCK AWARDS PLAN
For Against Abstain
[ ] [ ] [ ]
3. RATIFICATION OF THE APPOINTMENT OF KPMG LLP as the independent auditors of
the Company for the year ending December 31, 2000.
For Against Abstain
[ ] [ ] [ ]
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: _____________________________________, 2000
[ ] Check if Change of Address
FOLD AND DETACH HERE
