As filed with the Securities and Exchange Commission on April 10, 2000.
Registration No. 333-90887
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BENCHMARK ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Texas 74-2211011
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3000 TECHNOLOGY DRIVE, ANGLETON, TEXAS 77515
TELEPHONE NO. (979) 849-6550
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
COPY TO:
CARY T. FU JOHN R. BRANTLEY
EXECUTIVE VICE PRESIDENT BRACEWELL & PATTERSON, L.L.P.
BENCHMARK ELECTRONICS, INC. SOUTH TOWER PENNZOIL PLACE
3000 TECHNOLOGY DRIVE 711 LOUISIANA STREET, SUITE 2900
ANGLETON, TEXAS 77515 HOUSTON, TEXAS 77002-2781
(979) 849-6550 (713) 221-1301
FAX: (979) 848-5269 FAX: (713) 221-1212
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to public: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
----------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
================================================================================
<PAGE>
PROSPECTUS
1,000,000 SHARES
BENCHMARK ELECTRONICS, INC.
COMMON STOCK
--------------
This prospectus is part of a registration statement that has been filed
with the Securities and Exchange Commission and that covers 1,000,000 shares of
our common stock. These shares may be offered and sold from time to time by one
of our shareholders, which we refer to as the selling shareholder.
The selling shareholder obtained its shares of our common stock in
connection with our acquisition of AVEX Electronics, Inc. and Kilbride Holdings
B.V. on August 24, 1999.
The selling shareholder may offer its shares of our common stock through
public or private transactions, on or off the United States exchanges, at
prevailing market prices, or at privately negotiated prices.
We will not receive any of the proceeds from the sale of this common
stock. We will, however, bear the costs relating to the registration of these
shares of common stock, which we estimate to be $55,000.
Our common stock is quoted on the New York Stock Exchange under the symbol
"BHE." The last reported sales price as reported in the New York Stock Exchange
composite transaction reporting system on April 7, 2000 was $________ per share.
INVESTING IN OUR COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 2.
Neither the Securities Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is April 10, 2000
<PAGE>
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. THIS PROSPECTUS MAY ONLY BE USED WHERE IT IS LEGAL TO
SELL THE SHARES OF COMMON STOCK. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN
OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER
THAN THE DATE ON THE FRONT OF THOSE DOCUMENTS. OUR BUSINESS, FINANCIAL
CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THOSE
DATES.
------------
TABLE OF CONTENTS
Where You Can Find More Information..........................................i
Cautionary Statements Regarding Forward-Looking Statements..................ii
About Benchmark..............................................................1
Risk Factors.................................................................2
Use of Proceeds..............................................................8
Selling Shareholder..........................................................8
Plan of Distribution.........................................................8
Description of Capital Stock................................................10
Legal Matters...............................................................12
Experts.....................................................................12
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference facilities in Washington,
D.C., New York, New York and Chicago, Illinois at the following addresses:
o 450 Fifth Street, N.W., Washington, D.C. 20549;
o Seven World Trade Center, 13th Floor, New York, New York 10048; and
o Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference facilities.
Reports, proxy statements and other information concerning Benchmark can
also be inspected and copied at the offices of the New York Stock Exchange at 20
Broad Street, New York, New York 10005.
We have elected to "incorporate by reference" certain information we file
with the SEC into this prospectus. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until the offering of the common stock is terminated:
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o Our Annual Report on Form 10-K for the fiscal year ended December
31, 1999;
o Our Current Report on Form 8-K dated and filed on April 7, 2000; and
o The description of our capital stock that is contained in our
Registration Statements on Form 8-A/A filed on June 25, 1990 and
December 11, 1998, as amended December 22, 1998.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address:
Corporate Secretary
Benchmark Electronics, Inc.
3000 Technology Drive
Angleton, Texas 77515
(979) 849-6550
CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements can be identified by the use of the future tense or
other forward-looking terms such as "may," "intend," "will," "expect,"
"anticipate," "objective," "projection," "forecast," "plan," "management
believes," "estimate," "continue," "should," "strategy" or "position" or the
negatives of those terms or other variations of them or by comparable
terminology. We have based these statements on our current expectations about
future events. Although we believe that our expectations reflected in or
suggested by our forward-looking statements are reasonable, we cannot assure you
that these expectations will be achieved. Our actual results may differ
materially from what we currently expect. Important factors which could cause
our actual results to differ materially from the forward-looking statements in
this prospectus or in the documents that we incorporate by reference in this
prospectus include, without limitation:
o integration of the operations of AVEX Electronics, Inc. and Kilbride
Holdings B.V. (AVEX);
o incurrence of operating losses at AVEX after our acquisition of
AVEX;
o the resolution of the pending legal proceedings discussed in this
prospectus;
o the loss of one or more of our major customers;
o changes in our customer concentration;
o the absence of long-term sales contracts with our customers;
o our dependence on the growth of the enterprise computer,
telecommunications, medical device, industrial control, testing and
instrumentation, networking/servers and high-end
video/audio/entertainment industries;
o risks associated with international operations;
o the availability and cost of customer specified components;
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<PAGE>
o our dependence on certain key executives;
o the effects of domestic and foreign environmental laws;
o fluctuations in our quarterly results of operation;
o the volatility of the price of our common stock; and
o competition from other providers of electronics manufacturing
services;
each as set forth in the "Risk Factors" section of this prospectus, elsewhere in
this prospectus and in the documents that we incorporate by reference in this
prospectus.
We undertake no obligation to update or revise our forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus might not occur.
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iii
<PAGE>
ABOUT BENCHMARK
We are a leading provider of electronics manufacturing services (EMS) to
original equipment manufacturers (OEMs) in the telecommunication, enterprise
computer and peripherals, high-end video/audio/entertainment, industrial
control, testing and instrumentation, computer and medical markets. We have 14
facilities in 8 countries. We offer OEMs a turnkey EMS solution, from initial
product design to volume production and direct order fulfillment. We provide
advanced engineering services including product design, printed circuit board
(PCB) layout, quick-turn prototyping and test development. We believe that we
have developed strengths in the manufacturing process for large, complex,
high-density assemblies as well as having the ability to manufacture high and
low volume products in lower cost regions such as Latin America, Eastern Europe
and Southeast Asia. As OEM's expand internationally, they are increasingly
requiring their EMS partners to have strategic regional locations and global
procurement abilities. We believe a global manufacturing solution increases our
ability to be responsive to our customers' needs by providing accelerated
time-to-market and time-to-volume production of high quality products. These
enhanced capabilities should enable us to build stronger strategic relationships
with our customers and to become a more integral part of their operations.
Substantially all of our manufacturing services are provided on a turnkey
basis, whereby we purchase customer-specified components from our suppliers,
assemble the components on finished PCBs, perform post- production testing and
provide our customer with production process and testing documentation. We offer
our customers flexible, "just-in-time" delivery programs allowing product
shipments to be closely coordinated with our customers' inventory requirements.
In certain instances, we complete the assembly of our customers' products at our
facilities by integrating printed circuit board assemblies into other elements
of our customers' products. We also provide manufacturing services on a
consignment basis, whereby we, utilizing components provided by the customer,
provide only assembly and post-production testing services. We currently operate
a total of 49 surface mount production lines at our domestic facilities in
Angleton, Texas; Beaverton, Oregon; Hudson, New Hampshire; Huntsville, Alabama;
Pulaski, Tennessee; and Winona, Minnesota; and 32 surface mount production lines
at our international facilities in Cork and Dublin, Ireland; Campinas, Brazil;
Csongrad, Hungary; Guadalajara, Mexico; Singapore; East Kilbride, Scotland; and
Katrineholm, Sweden.
Since the beginning of 1996, we have completed four acquisitions. We
acquired AVEX Electronics, Inc. and Kilbride Holdings B.V. in August of 1999,
Lockheed Commercial Electronics Company in February of 1998, EMD Technologies,
Inc. in July of 1996, and certain assets from Stratus Computer Ireland in March
of 1999. These acquisitions have broadened our service offerings, diversified
our customer base with leading OEMs and expanded our geographic presence.
Our principal executive offices are located at 3000 Technology Drive,
Angleton, Texas 77515, and our telephone number is (979) 849-6550.
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RISK FACTORS
BEFORE YOU INVEST IN OUR COMMON STOCK (COMMON STOCK), YOU SHOULD CAREFULLY
CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION INCLUDED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
THE INTEGRATION OF AVEX AND OTHER ACQUIRED OPERATIONS MAY POSE DIFFICULTIES FOR
US.
We have made three significant acquisitions in the last two years, and a
total of four significant acquisitions since 1996. The acquisition of AVEX
Electronics, Inc. and Kilbride Holdings, B.V. (AVEX) in August of 1999
represents our fourth significant acquisition and is much larger than any of our
prior acquisitions. In addition, we may acquire the stock or assets of other
companies in the future. The integration of acquired operations requires
substantial management, financial and other resources and involves a number of
risks and challenges, including:
o Potential loss of key employees or customers of the acquired
companies;
o Diversion of management's attention;
o Increased expenses and working capital requirements; and
o Increased exposure to technology and other risks, including the
integration of different information systems.
Our future success is dependent upon our ability to integrate the AVEX
acquisition, and other acquisitions we may make in the future, with our existing
operations.
The difficulties of integrating acquired businesses may be further
complicated by size and geographic distances. The AVEX acquisition represented a
significant expansion in the size and scope of our operations. In 1998, the year
prior to the acquisition, AVEX had sales of $841.0 million compared to our 1998
sales of $524.1 million. Prior to the AVEX acquisition, our only plant outside
the United States was in Ireland, where AVEX also has operations. In addition to
its Ireland operations, AVEX has foreign manufacturing plants or design centers
in Brazil, Hungary, Mexico, Ireland, Singapore, Scotland and Sweden.
During the integration process, other parts of our business could be
disrupted and the financial performance of our business could be adversely
affected. Our success is also dependent upon our ability to integrate any future
acquisitions. Additional expansions or acquisitions would require investment of
financial resources and may require debt or equity financing which could
increase our level of debt or dilute our shareholders' interest in us. No
assurance can be given that we will consummate any acquisitions in the future,
or that any debt or equity financing required for future acquisitions will be
available on terms acceptable to us.
AVEX HAS A HISTORY OF UNPROFITABLE OPERATIONS.
During 1997 and 1998, the two full fiscal years prior to our acquisition
of AVEX, AVEX incurred a net loss of $15.8 million and $84.2 million,
respectively. On a pro forma basis for 1999, in part due to losses incurred at
AVEX, we would have had a loss before extraordinary item of $10.1 million had we
owned AVEX for all of 1999. Prior to our acquisition of AVEX, AVEX took a number
of actions intended to reduce its fixed and other costs and reverse its history
of unprofitable operations.
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As a result of the actions taken during 1998, AVEX incurred restructuring and
related charges of $33.4 million for that year. Subsequent to our acquisition of
AVEX on August 24, 1999, we have implemented organizational changes, initiated
overhead reduction efforts and streamlined the corporate structure. We cannot
assure you that these actions will be sufficient to make AVEX's operations
profitable, and AVEX may continue to sustain losses.
WE ARE INVOLVED IN LEGAL PROCEEDINGS RELATED TO THE AVEX ACQUISITION AND IN A
CLASS ACTION LAWSUIT.
We have filed suit against J. M. Huber Corporation (the "Seller") in Texas
for breach of contract, fraud and negligent misrepresentation, seeking damages
in connection with the purchase contract related to the acquisition of AVEX.
Seller has filed suit against us in New York alleging that we failed to register
the shares of our common stock issued to Seller as partial consideration for the
acquisition of AVEX. Seller's suit has been consolidated with our suit in Texas.
Discovery has not yet commenced in this case, and we cannot predict the timing
or the outcome of this suit. We cannot assure you that the outcome of these
proceedings will not be adverse to us.
The purchase contract under which we acquired AVEX required that we and
the Seller agree to an adjustment to the purchase price to reflect the working
capital of AVEX as of the closing date. We have been unable to agree with Seller
on this amount, and the matter has been submitted to an independent accounting
firm for resolution, as contemplated by the contract. Although we cannot predict
the final decision of the accounting firm, we estimate that the net closing
working capital adjustment will be in the range of $20 million to $40 million.
We cannot predict when the accounting firm will render its decision. The amount
of the final working capital adjustment could have a significant effect on the
final purchase price and the allocation of the purchase price.
On October 18, 1999, we announced that our earnings announcement for the
third quarter of 1999 would be delayed and subsequently, on October 22, 1999, we
announced our earnings for that quarter were below the level of the same period
during 1998 and were below expectations. Several class actions lawsuits were
filed in federal district court in Houston against us and two of our officers
and directors alleging violations of the federal securities law and seeking to
recover unspecified damages. Discovery has not yet commenced in these cases, and
we cannot predict the timing or the outcome of these suits. An unfavorable
decision could have an adverse effect on us.
THE LOSS OF A MAJOR CUSTOMER WOULD ADVERSELY AFFECT US.
A substantial percentage of our sales have been to a relatively small
number of customers, and the loss of a major customer would adversely affect us.
In 1999, our four largest customers together represented 44.5% of our sales, and
our two largest customers each accounted for more than 10% of our sales.
We expect to continue to depend on the sales from our largest customers
and any material delay, cancellation or reduction of orders from these or other
significant customers would have a material adverse effect on our results of
operations. For example, our operating results were adversely affected in 1998
when a major customer reduced its orders significantly during a period of
organizational change within that company. Similarly, AVEX's largest customer in
1998 has substantially reduced its purchases from AVEX during 1999 as a result
of changed circumstances affecting this customer's products, and another large
customer is currently undergoing a period of organizational change and has
reduced its purchases as a result. In addition, we generate significant accounts
receivable in connection with
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providing manufacturing services to our customers. If one or more of our
customers were to become insolvent or otherwise unable to pay for the
manufacturing services provided by us, our operating results and financial
condition would be adversely affected.
WE ARE DEPENDENT ON THE SUCCESS OF INDUSTRIES WE SERVE.
We are dependent on the continued growth, viability and financial
stability of our customers. Our customers operate in the following industries:
o Telecommunication;
o Enterprise Computer and Peripherals;
o Industrial Controls;
o Medical;
o High-end Video/Audio/Entertainment;
o Computer; and
o Testing and Instrumentation.
These industries are, to a varying extent, subject to rapid technological
change, vigorous competition and short product life cycles. When our customers
are adversely affected by these factors, we may be similarly affected.
LONG-TERM CONTRACTS ARE UNUSUAL IN OUR BUSINESS AND CANCELLATIONS, REDUCTIONS OR
DELAYS IN CUSTOMER ORDERS WOULD AFFECT OUR PROFITABILITY.
We do not typically obtain firm long-term purchase orders or commitments
from our customers. Instead, we work closely with our customers to develop
forecasts for future orders, which are not binding. Customers may cancel their
orders, change production quantities from forecast volumes or delay production
for a number of reasons beyond our control. Cancellations, reductions or delays
by a significant customer or by a group of customers would have an adverse
effect on us. As many of our costs and operating expenses are relatively fixed,
a reduction in customer demand can disproportionately affect our gross margins
and operating income. Our customer's products have life cycles of varying
duration. In the ordinary course of business, production starts, increases,
declines and stops in accordance with a product's life cycle. Should we fail to
replace products reaching the end of their life cycles with new programs, or if
there should be a substantial time difference between the loss of a product and
the receipt of revenue from replacement production, our revenues could be
adversely affected.
WE OPERATE IN A HIGHLY COMPETITIVE INDUSTRY.
We compete against many providers of electronics manufacturing services.
Certain of our competitors have substantially greater resources and more
geographically diversified international operations than we do. We also face
competition from the manufacturing operations of our current and future
customers. To compete effectively, we must continue to provide technologically
advanced manufacturing services, maintain strict quality standards, respond
flexibly and rapidly to customers' design and schedule changes and deliver
products globally on a reliable basis at competitive prices. Our
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inability to do so could have an adverse effect on us.
OUR INTERNATIONAL OPERATIONS MAY BE SUBJECT TO CERTAIN RISKS.
We currently operate outside the United States in Brazil, Hungary, Mexico,
Ireland, Singapore, Scotland and Sweden. After giving effect to the AVEX
acquisition, we would have derived 22% of our pro forma combined 1998 sales and
46% of our pro forma combined sales in fiscal year 1999 from our international
operations. These international operations may be subject to a number of risks,
including:
o difficulties in staffing and managing foreign operations;
o political and economic instability;
o unexpected changes in regulatory requirements and laws;
o longer customer payment cycles and difficulty collecting accounts
receivable;
o export duties, import controls and trade barriers (including
quotas);
o governmental restrictions on the transfer of funds;
o burdens of complying with a wide variety of foreign laws and labor
practices;
o fluctuations in currency exchange rates, which could affect
component costs, local payroll, utility and other expenses; and
o inability to utilize net operating losses incurred by our foreign
operations to reduce our U.S. income taxes.
Prior to our acquisition of AVEX, the scope of our foreign operations did not
require that we hedge our foreign exchange risks. However, certain significant
transactions involving our international operations may now require us to engage
in hedging transactions to attempt to mitigate our exposure to fluctuations in
foreign exchange rates.
SHORTAGES OR PRICE INCREASES OF COMPONENTS SPECIFIED BY OUR CUSTOMERS WOULD
DELAY SHIPMENTS AND ADVERSELY AFFECT OUR PROFITABILITY.
Substantially all of our sales are derived from electronics manufacturing
services in which we purchase components specified by our customers. In the
past, supply shortages have substantially curtailed production of all assemblies
using a particular component. In addition, industry-wide shortages of electronic
components, particularly of memory and logic devices, have occurred. If
shortages of these components occur or if components received are defective, we
may be forced to delay shipments, which could have an adverse effect on our
profit margins. Because of the continued increase in demand for surface mount
components, we anticipate component shortages and longer lead times for certain
components to occur from time to time. Also, we typically bear the risk of
component price increases that occur between periodic repricings during the term
of a customer contract. Accordingly, certain component price increases could
adversely affect our gross profit margins.
OUR SUCCESS WILL CONTINUE TO DEPEND TO A SIGNIFICANT EXTENT ON OUR EXECUTIVES.
We depend significantly on certain key executives, including, but not
limited to, Donald E. Nigbor, Steven A. Barton and Cary T. Fu. The unexpected
loss of the services of any one of these
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executive officers would have an adverse effect on us. We do not have employment
agreements or non- competition agreements with these executive officers, and we
do not maintain key-man insurance on our executive officers.
WE MUST MAINTAIN OUR TECHNOLOGICAL AND MANUFACTURING PROCESS EXPERTISE.
The market for our manufacturing services is characterized by rapidly
changing technology and continuing process development. We are continually
evaluating the advantages and feasibility of new manufacturing processes. We
believe that our future success will depend upon our ability to develop and
provide manufacturing services which meet our customers' changing needs. This
requires that we maintain technological leadership and successfully anticipate
or respond to technological changes in manufacturing processes on a
cost-effective and timely basis. We cannot assure you that our process
development efforts will be successful.
WE ARE SUBJECT TO A VARIETY OF ENVIRONMENTAL LAWS.
We are subject to a variety of federal, state, local and foreign
environmental regulations relating to the handling, storage, discharge and
disposal of hazardous chemicals used during our manufacturing process. If we
fail to comply with any present and future regulations, or if AVEX or companies
we acquire in the future have failed to comply with such regulations or are
otherwise liable for environmental contamination, we could be subject to
liabilities, fines or the suspension of production. In addition, such
regulations could restrict our ability to expand our facilities or could require
us to acquire costly equipment, or to incur other significant compliance
expenses.
THE AVEX ACQUISITION AND THE SALE OF THE 6% CONVERTIBLE SUBORDINATED NOTES DUE
2006 SIGNIFICANTLY INCREASED OUR LEVERAGE.
As a direct result of the AVEX acquisition and the sale of the 6%
Convertible Subordinated Notes due 2006 (Notes) used to partially finance it, we
incurred $226,200,000 of indebtedness ($80,200,000 from the sale of the Notes
and $146,000,000 of bank indebtedness). The Notes and the bank debt have
significantly increased our leverage ratio and decreased our interest coverage
ratio. Most of our indebtedness other than the Notes is senior debt incurred to
complete the AVEX acquisition. Also in connection with the AVEX acquisition, we
are expecting to incur a working capital adjustment which is estimated to be in
the range of $20-40 million. We may incur substantial additional indebtedness in
the future. The level of our indebtedness, among other things, could:
o make it difficult for us to obtain any necessary financing in the
future for other acquisitions, working capital, capital
expenditures, debt service requirements or other purposes;
o limit our flexibility in planning for, or reacting to changes in,
our business; and
o make us more vulnerable in the event of a downturn in our business.
There can be no assurance that we will be able to meet our debt service
obligations, including our obligations under the Notes.
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PROVISIONS IN OUR CHARTER DOCUMENTS AND STATE LAW MAY MAKE IT HARDER FOR OTHERS
TO OBTAIN CONTROL OF BENCHMARK EVEN THOUGH SOME SHAREHOLDERS MIGHT CONSIDER SUCH
A DEVELOPMENT TO BE FAVORABLE.
Our shareholder rights plan, provisions of our amended and restated
articles of incorporation and the Texas Business Corporation Act may delay,
inhibit or prevent someone from gaining control of Benchmark through a tender
offer, business combination, proxy contest or some other method. See
"Description of Capital Stock." These provisions include:
o A "poison pill" shareholder rights plan;
o A statutory restriction on the ability of shareholders to take
action by less than unanimous written consent; and
o A statutory restriction on business combinations with some types of
interested shareholders.
WE MAY EXPERIENCE FLUCTUATIONS IN QUARTERLY RESULTS.
Our quarterly results may vary significantly depending on various factors,
many of which are beyond our control. These factors include:
o The volume of customer orders relative to our capacity;
o Customer introduction and market acceptance of new products;
o Changes in demand for customer products;
o The timing of our expenditures in anticipation of future orders;
o Our effectiveness in managing manufacturing processes;
o Changes in cost and availability of labor and components;
o Changes in our product mix;
o Changes in economic conditions;
o Local factors and events that may affect our production volume (such
as local holidays); and
o Seasonality in customer product requirements.
Additionally, as is the case with many high technology companies, a significant
portion of our shipments typically occurs in the last few weeks of a quarter. As
a result, our sales may shift from one quarter to the next, having a significant
effect on reported results.
OUR STOCK PRICE IS VOLATILE.
Our Common Stock has experienced significant price volatility, and such
volatility may continue in the future. The price of our Common Stock could
fluctuate widely in response to a range of factors, including variations in our
reported financial results and changing conditions in the economy in general or
in our industry in particular. In addition, stock markets generally experience
significant price and volume volatility from time to time which may affect the
market price of our Common Stock for reasons
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unrelated to our performance.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the Common Stock by the
selling shareholder.
SELLING SHAREHOLDER
The shares offered by the selling shareholder were acquired in connection
with our acquisition of AVEX on August 24, 1999. Under the terms of the AVEX
transaction, we agreed to register the resale of the shares of Common Stock
received by the selling shareholder in the AVEX transaction. In connection with
such registration, we 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. In the past three years, the selling shareholder
has not had a material relationship with us.
The agreement requiring that we register the shares on behalf of the
selling shareholder also contains a right of first refusal requiring that the
selling shareholder provide us 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.
The following table sets forth information with respect to the beneficial
ownership of Common Stock by the selling shareholder and the number of shares of
Common Stock to be sold by the selling shareholder:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE STOCK OFFERING BEFORE STOCK OFFERING
--------------------- ---------------------
SELLING SHAREHOLDER SHARES PERCENTAGE SHARES TO BE SOLD SHARES PERCENTAGE
- ---------------------- --------- ---------- ----------------- --------- ----------
<S> <C> <C> <C> <C> <C>
J.M. Huber Corporation 1,000,000 6.1% 1,000,000 0 0%
</TABLE>
PLAN OF DISTRIBUTION
We are registering the shares on behalf of the selling shareholder. We
will bear all costs, expenses and fees in connection with the registration of
the shares. The selling shareholder will bear the brokerage commissions and
similar selling expenses, if any, attributable to the sale of its shares. All or
part of the shares may be offered by the selling shareholder from time to time
in transactions on the New York Stock Exchange, or such other exchange on which
the Common Stock may from time to time be trading, in privately negotiated
transactions, through the writing of options on the shares or a combination of
such methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The methods
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by which the shares may be sold or distributed may include, but not be limited
to, the following:
o purchases by a broker or dealer as principal and resale by such
broker or dealer for its account;
o an exchange distribution in accordance with the rules of such
exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o privately negotiated transactions;
o a cross or block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent, but may position and resale a
portion of the block as principal to facilitate the transaction;
o short sales, short sales against the box, puts and calls and other
transactions in our securities or derivatives thereof, in connection
with which the selling shareholder may sell and deliver the shares;
o short sales or borrowings, returns and reborrowings of the shares
pursuant to stock loan agreements to settle short sales;
o delivery in connection with the issuance of securities by issuers,
other than us, that are exchangeable for (whether optional or
mandatory), or payable in, such shares (whether such securities are
listed on a national securities exchange or otherwise) or pursuant
to which such shares may be distributed; and
o a combination of such methods of sale or distribution.
The selling shareholder may also sell such shares in accordance with Rule 144
under the Securities Act.
In effecting sales, brokers or dealers engaged by the selling shareholder
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from the selling shareholder or from the
purchasers in amounts to be negotiated.
If underwriters are used in the sale, the shares will be acquired by the
underwriters for their own account. The underwriters may resale the shares in
one or more transactions, including negotiated transactions at a fixed public
offering price or at varying prices determined at the time of sale. Any public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time. If we are notified that underwriters
are involved, the names of underwriters, if any, with respect to any such
offering and the terms of the transactions, including any underwriting
discounts, concessions or commissions and other items constituting compensation
of the underwriters and broker-dealers, if any, will be set forth in a
supplement to this prospectus relating to such offering. Any obligation of the
underwriters to purchase the shares will be subject to certain conditions, and
the underwriters will be obligated to purchase all of the shares specified in
such supplement if any are purchased.
This prospectus may also be used by donees of the selling shareholder or
other persons acquiring shares, including brokers who borrow the shares to
settle short sales of shares of Common Stock, and who wish to offer and sell
such shares under circumstances requiring or making desirable its use. From time
to time the selling shareholder may pledge its shares pursuant to the margin
provisions of its respective customer agreements with respective brokers or
otherwise. Upon a default by the selling
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shareholder, the broker or pledgee may offer and sell the pledged shares from
time to time.
The selling shareholder and any broker-dealers who act in connection with
the sale of shares hereunder may be deemed to be "underwriters" as that term is
defined in the Securities Act, and any commissions received by them and any
profit on the resale of the shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. We have advised
the selling shareholder that because it may be deemed to be an underwriter, the
anti-manipulative provisions of Regulation M promulgated under the Exchange Act
may apply to its sales.
DESCRIPTION OF CAPITAL STOCK
The following description of the material features of our capital stock is
intended as a summary only and is qualified in its entirety by reference to our
amended and restated articles of incorporation, a copy of which has been filed
as an exhibit to our report on Form 10-K for the year ended December 31, 1998,
which is incorporated herein by reference. See "Risk Factors -- Provisions in
our charter documents and state law may make it harder for others to obtain
control of Benchmark even though some shareholders might consider such a
development to be favorable."
COMMON STOCK
Our amended and restated articles of incorporation authorize us to issue
30,000,000 shares of Common Stock. As of March 31, 2000, 16,277,426 shares of
Common Stock were outstanding. In addition, as of March 31, 2000 we had issued
and outstanding options to purchase 2,776,395 shares of Common Stock, of which
options to purchase 805,405 shares are currently exercisable.
Each share of Common Stock has an equal and ratable right to receive
dividends to be paid from our assets legally available therefor when, as and if
declared by the Board of Directors. We have never paid, and do not anticipate
that we will pay in the foreseeable future, cash dividends on the Common Stock.
In addition, the agreement relating to our credit facility with Chase Bank of
Texas, National Association restricts the amount of cash dividends that we may
pay on Common Stock. The holders of Common Stock have no preemptive or other
rights to subscribe for additional shares of Common Stock or any other
securities of Benchmark. Each share of Common Stock entitles the holder thereof
to one vote in the election of directors and on all other matters submitted to a
vote of our shareholders. The holders of Common Stock have no right to cumulate
their votes in the election of directors. In the event of our dissolution or
liquidation, the holders of Common Stock will be entitled to share equally and
ratably in our assets available for distribution after payments are made to our
creditors and the holders of any outstanding shares of preferred stock. The
outstanding shares of Common Stock, including the shares of Common Stock offered
hereby, are fully paid and non-assessable.
The Common Stock is traded on the New York Stock Exchange under the symbol
"BHE." The transfer agent and registrar for the Common Stock is Harris Trust and
Savings Bank, 88 Pine Street, New York, New York 10005.
PREFERRED STOCK
Our amended and restated articles of incorporation authorize us to issue
5,000,000 shares of preferred stock, par value $0.10 per share. We have
established and designated a series of our preferred
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stock known as Series A Cumulative Junior Participating Preferred Stock, par
value $0.10 per share, consisting of an aggregate of 30,000 shares. None of this
preferred series has been issued.
In addition, the Board of Directors has the authority, without shareholder
approval, to cause the issuance of other preferred stock in one or more series,
with such designations, preferences, limitations and rights as the Board of
Directors may determine. We have not issued, and have no plans to issue, any
shares of preferred stock. If we were to do so, however, the provisions of the
preferred stock may include, among others, extraordinary voting, dividend,
redemption, conversion or exchange rights.
SHAREHOLDER RIGHTS PLAN
On December 11, 1998, the Board of Directors adopted a shareholder rights
plan. Under this plan, a dividend of one preferred share purchase right (Right)
was declared for each outstanding share of Common Stock, payable December 21,
1998 to shareholders of record on that date. Each Right entitles shareholders to
buy one one-thousandth of a share of newly created Series A Cumulative Junior
Participating Preferred Stock at an exercise price of $155, subject to
adjustment in the event a person acquires, or makes a tender or exchange offer
for, 15% or more of the outstanding Common Stock. In such event, each Right
entitles the holder (other than the person acquiring 15% or more of the
outstanding Common Stock) to purchase shares of Common Stock with a market value
of twice the Right's exercise price. In addition, if a company acquires us in a
merger or other business combination, or if we sell more than 50% of our
consolidated assets or earning power, these rights will entitle our shareholders
(other than the acquirer) to purchase, for the exercise price, shares of the
Common Stock of the acquiring company or its parent having a market value of two
times the exercise price. At any time prior to such event, the Board of
Directors may redeem the Rights at one cent per Right. The Rights can be
transferred only with Common Stock and expire ten years after the date the
shareholder rights plan was adopted. The existence of the Rights may, under
certain circumstances, render more difficult or discourage attempts to acquire
us.
NOTES
We have $80.2 million in aggregate principal amount of our 6.00%
Convertible Subordinated Notes due 2006 (Notes) outstanding. The Notes are
convertible into Common Stock at an initial conversion price of $40.20. If all
of the Notes were converted into shares of Common Stock at the initial
conversion price, 1,995,025 shares of Common Stock would be issued. The Notes
were issued pursuant to an Indenture dated August 13, 1999. The Notes are
unsecured obligations and are subordinated in right of payment to all our
existing and future senior debt to the extent set forth in the Indenture. The
Notes are eligible for quotation in The Portal Market.
STATUTORY BUSINESS COMBINATION PROVISIONS
Our company is subject to Article 13 of the Texas Business Corporation Act
(Article 13) which, with certain exceptions, prohibits a Texas corporation from
engaging in a "business combination" (as defined in Article 13) with any
shareholder who is a beneficial owner of 20% or more of the corporation's
outstanding stock for a period of three years after such shareholder acquires
the 20% ownership position, unless: (1) the board of directors of the
corporation approves the transaction or the shareholder's acquisition of shares
prior to the acquisition or (2) two-thirds of the unaffiliated shareholders of
the corporation approve the transaction at a shareholders' meeting. Shares that
are
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issuable, but have not yet been issued, pursuant to options, conversion or
exchange rights or other agreements are not considered outstanding for purposes
of Article 13.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby is being passed
upon for us by Bracewell & Patterson, L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of Benchmark Electronics, Inc. and
subsidiaries as of December 31, 1999 and 1998 and for each of the years in the
three-year period ended December 31, 1999, have been incorporated by reference
in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. The
combined financial statements of AVEX Electronics, Inc., its subsidiaries, and
certain related companies as of December 31, 1998 and 1997 and for each of the
years in the three-year period ended December 31, 1998, have been incorporated
by reference in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses to be incurred by Benchmark
Electronics, Inc. in connection with the issuance and distribution of the common
stock being registered. All amounts except the registration fee are estimated.
Registration Fee.................................. $ 5,196
Legal Fees and Expenses........................... $ 20,000
Accounting Fees................................... $ 15,000
Printing Fees..................................... $ 10,000
Miscellaneous..................................... $ 5,000
-------
Total............................ $ 55,196
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
TEXAS BUSINESS CORPORATION ACT
Article 2.02-1.B of the Texas Business Corporation Act, as amended (the
"TBCA"), grants to a corporation the power to indemnify a person who was, is or
is threatened to be made a named defendant or respondent in a proceeding because
the person is or was a director of the corporation against judgments, penalties
(including excise and similar taxes), fines, settlements and reasonable expenses
actually incurred in connection therewith, only if it is determined that the
person (1) conducted himself in good faith; (2) reasonably believed that (a) in
the case of conduct in his official capacity as a director of the corporation,
his conduct was in the corporation's best interests, and (b) in all other cases,
his conduct was at least not opposed to the corporation's best interests; and
(3) in the case of any criminal proceeding, he had no reasonable cause to
believe that his conduct was unlawful. Article 2.02-1.C limits the allowable
indemnification by providing that, except to the extent permitted by Article
2.02-1.E, a director may not be indemnified in respect of a proceeding in which
the person was found liable (1) on the basis that he improperly received a
personal benefit, whether or not the benefit resulted from an action taken in
his official capacity, or (2) to the corporation. Article 2.02-1.E provides that
if a director is found liable to the corporation or is found liable on the basis
that he received a personal benefit, the permissible indemnification (1) is
limited to reasonable expenses actually incurred by the person in connection
with the proceeding, and (2) shall not be made in respect of any proceeding in
which the person shall have been found liable for willful or intentional
misconduct in the performance of his duty to the corporation. Finally, Article
2.02-1.H provides that a corporation shall indemnify a director against
reasonable expenses incurred by him in connection with a proceeding in which he
is a named defendant or respondent because he is or was a director if he has
been wholly successful, on the merits or otherwise, in defense of the
proceeding.
With respect to the officers of a corporation, Article 2.02-1.O of the
TBCA provides that a
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corporation may indemnify and advance expenses to an officer of the corporation
to the same extent that it may indemnify and advance expenses to directors under
Article 2.02-1. Further, Article 2.02-1.O provides that an officer of a
corporation shall be indemnified as, and to the same extent, provided by Article
2.02-1.H for a director.
AMENDED AND RESTATED BYLAWS
The Amended and Restated Bylaws of the Company make mandatory the
indemnification of and advancement of expenses to its directors who become
involved in indemnifiable legal proceedings, subject to their compliance with
certain requirements imposed by Texas law.
INDEMNITY AGREEMENTS
The Company has entered into Indemnity Agreements with its directors and
officers pursuant to which the Company generally is obligated to indemnify its
directors and officers to the full extent permitted by Texas law.
REGISTRATION RIGHTS AGREEMENT
The Registration Rights Agreement by and between the Company and J.M.
Huber Corporation, pursuant to which shares held by J.M. Huber Corporation are
included in the shares covered by this Registration Statement, provides for the
indemnification of the officers and directors of the Company by J.M. Huber
Corporation under certain circumstances.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
2(1) Amended and Restated Stock Purchase Agreement dated as of August 12,
1999 by and between Benchmark Electronics, Inc. and J.M. Huber
Corporation.
4.1(2) Restated Articles of Incorporation of the Company.
4.2(3) Amended and Restated Bylaws of the Company.
4.3(4) Amendment to Amended and Restated Articles of Incorporation of the
Company adopted by the shareholders of the Company on May 20, 1997.
4.4(5) Statement of Resolution Establishing Series A Cumulative Junior
Participating Preferred Stock of Benchmark Electronics, Inc.
5(6) Opinion of Bracewell & Patterson, L.L.P. as to the legality of the
common stock being offered.
23.1(6) Consent of Bracewell & Patterson, L.L.P. (included in its opinion
filed as Exhibit 5 thereto).
23.2(7) Consent of KPMG LLP.
24(6) Powers of Attorney
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- ------------------
(1) Incorporated herein by reference from Exhibit 2 to Benchmark Electronics,
Inc.'s Form 8-K dated August 24, 1999 (File No. 001-10560).
(2) Incorporated herein by reference to Exhibit 3.1 to Benchmark Electronics,
Inc.'s Registration Statement on Form S-1 (Registration No. 33-46316).
(3) Incorporated herein by reference to Exhibit 3.2 of Benchmark Electronics,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998
(File No. 001-10560).
(4) Incorporated herein by reference to Exhibit 3.3 of Benchmark Electronics,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998
(File No. 001-10560).
(5) Incorporated herein by reference to Exhibit B of the Rights Agreement
dated December 11, 1998 between the Company and Harris Trust Savings Bank,
as Rights Agent, included as Exhibit 1 to Benchmark Electronics, Inc.'s
Form 8A12B filed December 11, 1998.
(6) Previously filed.
(7) Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post- effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in value of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof.
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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Angleton, State of Texas,
on April 10, 2000.
BENCHMARK ELECTRONICS, INC.
By: /S/ DONALD E. NIGBOR
---------------------
Donald E. Nigbor
President
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
2(1) Amended and Restated Stock Purchase Agreement dated as
of August 12, 1999 by and between Benchmark Electronics,
Inc. and J.M. Huber Corporation.
4.1(2) Restated Articles of Incorporation of the Company.
4.2(3) Amended and Restated Bylaws of the Company.
4.3(4) Amendment to Amended and Restated Articles of
Incorporation of the Company adopted by the shareholders
of the Company on May 20, 1997.
4.4(5) Statement of Resolution Establishing Series A Cumulative
Junior Participating Preferred Stock of Benchmark
Electronics, Inc.
5(6) Opinion of Bracewell & Patterson, L.L.P. as to the
legality of the common stock being offered.
23.1(6) Consent of Bracewell & Patterson, L.L.P. (included in
its opinion filed as Exhibit 5 thereto).
23.2(7) Consent of KPMG LLP.
24(6) Powers of Attorney
- ------------------
(1) Incorporated herein by reference from Exhibit 2 to Benchmark
Electronics, Inc.'s Form 8-K dated August 24, 1999
(File No. 001-10560).
(2) Incorporated herein by reference to Exhibit 3.1 to Benchmark
Electronics, Inc.'s Registration Statement on Form S-1 (Registration
No. 33-46316).
(3) Incorporated herein by reference to Exhibit 3.2 of Benchmark
Electronics, Inc.'s Annual Report on Form 10-K for 1998 (File No.
001-10560).
(4) Incorporated herein by reference to Exhibit 3.3 of Benchmark
Electronics, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1998 (File No. 001-10560).
(5) Incorporated herein by reference to Exhibit B of the Rights Agreement
dated December 11, 1998 between the Company and Harris Trust Savings
Bank, as Rights Agent, included as Exhibit 1 to Benchmark Electronics,
Inc.'s Form 8A12B filed December 11, 1998.
(6) Previously filed.
(7) Filed herewith.
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EXHIBIT 23.2
The Board of Directors
Benchmark Electronics, Inc.
We consent to the use of our reports incorporated herein by reference
and to the references to our firm under the heading "Experts" in the prospectus.
KPMG LLP
Houston, Texas
April 7, 2000
