<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or 240.14a-12
</TABLE>
SANMINA CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- - --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- - --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- - --------------------------------------------------------------------------------
(5) Total fee paid:
- - --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- - --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- - --------------------------------------------------------------------------------
(3) Filing Party:
- - --------------------------------------------------------------------------------
(4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
SANMINA CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 29, 1999
The Annual Meeting of Stockholders of Sanmina Corporation (the "Company")
will be held on Friday, January 29, 1999, at 11:00 a.m., local time, at the
Sheraton San Jose Hotel located at 1801 Barber Lane, Milpitas, California 95035
(telephone 408-943-0600) for the following purposes (as more fully described in
the Proxy Statement accompanying this Notice):
1. To elect directors of the Company.
2. To approve amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of Common Stock.
3. To approve adoption of the Company's 1999 Stock Plan.
4. To approve an amendment to the Company's 1993 Employee Stock
Purchase Plan to increase the number of shares of Common Stock reserved for
issuance thereunder by 600,000 shares to a new total of 2,300,000 shares.
5. To confirm the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal year ending
October 2, 1999.
6. To transact such other business as may properly come before the
meeting.
Stockholders of record at the close of business on December 18, 1998 are
entitled to vote at the Annual Meeting and are cordially invited to attend the
meeting. However, to ensure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. If you attend the meeting,
you may vote in person even if you return a proxy.
FOR THE BOARD OF DIRECTORS
LOGO
Christopher D. Mitchell
Assistant Secretary
San Jose, California
December 29, 1998
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THE MEETING,
YOU MAY VOTE IN PERSON, EVEN IF YOU RETURN A PROXY.
<PAGE> 3
SANMINA CORPORATION
------------------------
PROXY STATEMENT FOR
1999 ANNUAL MEETING OF STOCKHOLDERS
------------------------
INFORMATION CONCERNING VOTING AND PROXY SOLICITATION
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Sanmina Corporation ("Sanmina" or the "Company") for use at the Annual Meeting
of Stockholders to be held on Friday, January 29, 1999 at 11:00 a.m., local
time, or at any adjournment thereof. The Annual Meeting will be held at the
Sheraton San Jose Hotel located at 1801 Barber Lane, Milpitas, California 95035.
The telephone number at the meeting location is (408) 943-0600.
This Proxy Statement was mailed on or about December 29, 1998, to all
stockholders entitled to vote at the meeting.
RECORD DATE AND STOCK OWNERSHIP
Stockholders of record at the close of business on December 18, 1998 (the
"Record Date") are entitled to vote at the meeting. As of December 18, 1998,
55,774,739 shares of the Company's Common Stock were issued and outstanding and
held of record by approximately 1,176 stockholders.
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of September 30, 1998, as to (i)
each person who is known to the Company to beneficially own more than five
percent of the outstanding shares of its Common Stock, (ii) each director and
nominee for election, (iii) each officer named in the Summary Compensation Table
below and (iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME OWNED OWNED
---- ------------ -----------
<S> <C> <C>
AXA Assurances I.A.R.D. Mutuelle............................ 9,777,339 19.2%
1290 Avenue of the Americas
New York, New York 10104
FMR Corp.................................................... 1,846,400 3.6%
82 Devonshire Street
Boston, Massachusetts 02109
Nicholas-Applegate Capital Management....................... 1,470,758 2.9%
600 West Broadway, 29th Floor
San Diego, California 92101
Milan Manderic.............................................. 1,345,530 2.6%
14127 Capri Drive, Suite 2A
Los Gatos, California 95030
Putnam Investments, Inc..................................... 1,283,133 2.5%
One Post Office Square
Boston, Massachusetts 02109
AMVESCAP PLC................................................ 1,149,800 2.3%
11 Devonshire Square
London EC2M 4YR
Putnam Investment Management, Inc........................... 1,126,124 2.2%
One Post Office Square
Boston, Massachusetts 02109
Jure Sola(1)(2)............................................. 935,501 1.8%
Samuel Altschuler(1)(3)..................................... 908,532 1.8%
</TABLE>
1
<PAGE> 4
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME OWNED OWNED
---- ------------ -----------
<S> <C> <C>
Nancy Altschuler(1)(3)...................................... 318,291 *
Randy W. Furr(1)(4)......................................... 299,994 *
Michael Landy(1)(5)......................................... 109,204 *
Bernard V. Vonderschmitt(1)(6).............................. 45,741 *
Bernard Whitney(1)(7)....................................... 25,833 *
Mario M. Rosati(1)(6)....................................... 20,416 *
John C. Bolger(1)(6)........................................ 19,291 *
Neil R. Bonke(1)(6)......................................... 13,723 *
All Directors and executive officers as a group(1)(8)....... 2,343,990 4.7%
</TABLE>
- - ---------------
* Less than 1%.
(1) Includes stock issuable upon exercise of options within 60 days after
September 30, 1998.
(2) Includes 2,083 shares issuable upon exercise of options granted on October
5, 1998.
(3) Mr. and Mrs. Altschuler are general partners of a nominee partnership which
holds 318,291 shares, all of which are included in the shares listed as
owned by both Mr. and Mrs. Altschuler. Mr. Altschuler has sole voting rights
with respect to these shares and shares investment power with his wife. Of
the shares held of record by the nominee partnership, 105,841 shares are
held as a nominee for Mrs. Altschuler as trustee of trusts established for
the benefit of her children, as to which shares she disclaims beneficial
interest. Does not include 87,336 shares held by the Samuel Altschuler 1980
Irrevocable Trust, in which members of the Altschuler family have an
interest.
(4) Includes 1,667 shares issuable upon exercise of options granted on October
5, 1998.
(5) Includes 500 shares issuable upon exercise of options granted on October 5,
1998.
(6) Includes 208 shares issuable upon exercise of options granted on October 1,
1998.
(7) Includes 833 shares issuable upon exercise of options granted on October 5,
1998.
(8) Consists of 9 individuals.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the meeting and voting in person. Attending the Annual
Meeting in and of itself may not constitute a revocation of a proxy.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share held as of the
record date. Stockholders will not be entitled to cumulate their votes in the
election of directors.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's Transfer Agent. The Inspector will also determine whether or not a
quorum is present. Except in certain specific circumstances, the affirmative
vote of a majority of shares present in person or represented by proxy at a duly
held meeting at which a quorum is present is required under Delaware law for
approval of proposals presented to stockholders. In general, Delaware law also
provides that a quorum consists of a majority of shares entitled to vote and
present or represented by proxy at the meeting. The Inspector will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but will not be treated as votes in favor
of approving any matter submitted to the stockholders for a vote. Any proxy
which is returned using the form of proxy enclosed and which is not marked as to
a particular item will be voted for the election of directors, for approval of
the amendment to the Restated Certificate of Incorporation, for approval of the
1999 Stock Plan, for approval of the amendment to the 1993 Employee Stock
Purchase Plan, for the confirmation of the appointment of the designated
independent public
2
<PAGE> 5
accountants and, as the proxy holders deem advisable, on other matters that may
come before the meeting, as the case may be with respect to the items not
marked. If a broker indicates on the enclosed proxy or its substitute that it
does not have discretionary authority as to certain shares to vote on a
particular matter ("Broker Non-Votes"), those shares will not be considered as
present with respect to that matter. The Company believes that the tabulation
procedures to be followed by the Inspector are consistent with the general
statutory requirements in Delaware concerning voting of shares and determination
of a quorum.
The cost of soliciting proxies will be borne by the Company. The Company
may retain the services of its transfer agent, Norwest Bank Minnesota, N.A., or
other proxy solicitors to solicit proxies, for which the Company estimates that
it would pay fees not to exceed an aggregate of $20,000. In addition, the
Company expects to reimburse brokerage firms and other persons representing
beneficial owners of shares for their expense in forwarding solicitation
material to such beneficial owners. Proxies may be solicited by certain of the
Company's directors, officers and regular employees, without additional
compensation, in person or by telephone or facsimile.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals that are intended to be presented by stockholders of the Company
at the 2000 Annual Meeting must be received by the Company no later than
September 1, 1999 in order that they may be included in the proxy statement and
form of proxy relating to that meeting.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
A board of six directors will be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the six nominees named below. Messrs. Altschuler, Bolger, Bonke, Rosati,
Sola and Vonderschmitt are presently directors of the Company. If any nominee is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. It is not expected that any nominee will
be unable or will decline to serve as a director. If stockholders nominate
additional persons for election as directors, the proxy holders will vote all
proxies received by them in accordance to assure the election of as many of the
Board's nominees as possible, with the proxy holder making any required
selection of specific nominees to be voted for. The term of office of each
person elected as a director will continue until the next annual meeting of
stockholders or until that person's successor has been elected.
The Board of Directors recommends a vote FOR the nominees listed below:
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
--------------- --- -------------------- --------------
<S> <C> <C> <C>
Jure Sola...................... 47 Chairman and Chief Executive Officer of 1989
Sanmina Corporation
Bernard V. Vonderschmitt....... 75 Chairman of the Board of Xilinx, Inc. 1990
John C. Bolger................. 52 Independent Consultant 1994
Neil R. Bonke.................. 57 Chairman of Electroglas, Inc. (Retired), Private 1995
Investor
Mario M. Rosati................ 52 Member, Wilson Sonsini Goodrich & Rosati 1997
Samuel Altschuler.............. 71 Executive Vice President of Sanmina Corporation 1998
</TABLE>
Mr. Sola co-founded Sanmina in 1980 and initially held the position of Vice
President of Sales and was responsible for the development and growth of the
Company's sales organization. He became Vice President and General Manager in
October 1987 with responsibility for all manufacturing operations as well as
sales and marketing. Mr. Sola has been a director of the Company since July
1989, was elected President in October 1989 and has served as Chairman of the
Board and Chief Executive Officer since April 1991.
Mr. Vonderschmitt has been a director of the Company since October 1990. He
co-founded Xilinx, Inc., a manufacturer of field programmable gate array
semiconductor products and related system software, served
3
<PAGE> 6
as its Chief Executive Officer and as a director from its inception in February
1984 through February 1996, and has served as the Chairman of its Board of
Directors since February, 1996. He is also a director of International
Microelectronic Products, Inc., and Credence Systems Corporation.
Mr. Bolger has been a director of the Company since 1994. From June 1989
through April 1992, he served as Vice President of Finance and Administration of
Cisco Systems, Inc., a manufacturer of computer networking systems. Mr. Bolger
is currently an independent business consultant and serves as a director of
Integrated Device Technology, Inc., Integrated Systems, Inc., TCSI, Inc. and
Mission West Properties, Inc.
Mr. Bonke has been a director of the Company since 1995. He also serves on
the Board of Directors of Electroglas, Inc., FSI International and SpeedFam
International, all semiconductor equipment companies. Mr. Bonke previously
served as the Chairman of the Board of Electroglas, Inc. From April 1993 to
April 1996, he served as Chief Executive Officer of Electroglas. From September
1990 to April 1993, Mr. Bonke was a Group V.P. and President of Semiconductor
Operations of General Signal Corp.
Mr. Rosati has been a member of the law firm Wilson Sonsini Goodrich &
Rosati, Professional Corporation since 1971. Mr. Rosati is a director of Aehr
Test Systems, a manufacturer of computer hardware testing systems, Genus, Inc.,
a semiconductor equipment manufacturer, Ross Systems, Inc., a software company,
and C-ATS Software, Inc., a financial database software company; he has been a
director of the Company since 1997.
Mr. Altschuler was president and a director of Altron Incorporated, an
electronic manufacturing services company, since Altron's founding in 1970 and
Chairman of the Board of Directors of that company since 1983. Mr. Altschuler
became a director of the Company in November 1998, upon the consummation of the
merger between Altron Incorporated and the Company. Following the merger, Mr.
Altschuler became an Executive Vice President of Sanmina. Mr. Altschuler is also
a director of Massbank Corp., a bank holding company.
There are no family relationships among directors or executive officers of
the Company.
BOARD MEETINGS, COMMITTEES AND DIRECTOR COMPENSATION
The Board of Directors of the Company held five meetings and acted by
unanimous written consent twice during the fiscal year ended September 30, 1998.
No nominee who was a director during the entire fiscal year attended fewer than
75 percent of the meetings of the Board of Directors or of committees on which
such person served.
The Board of Directors has an Officer Stock Committee, an Audit Committee
and a Compensation Committee. It does not have a nominating committee or a
committee performing the functions of a nominating committee. From time to time,
the Board has created various ad hoc committees for special purposes. No such
committee is currently functioning.
The Officer Stock Committee consists of directors Bonke and Vonderschmitt.
The Officer Stock Committee reviews and makes recommendations to the Board
concerning option grants to executive officers of the Company. The Officer Stock
Committee held one meeting during the last fiscal year.
The Audit Committee consists of directors Bonke and Bolger. The Audit
Committee is responsible for reviewing the results and scope of the audit and
other services provided by the Company's independent public accountants. The
Audit Committee held five meetings in the last fiscal year.
The Compensation Committee consists of directors Bonke, Sola and
Vonderschmitt. The Compensation Committee reviews and makes recommendations to
the Board concerning salaries and incentive compensation for executive officers
and certain employees of the Company. The Compensation Committee held two
meetings during the last fiscal year. Mr. Sola, Chairman and Chief Executive
Officer of the Company, participates fully with all other committee members in
recommending salaries and incentive compensation to the board of directors,
except that he does not participate in committee proceedings relating to his
salary and compensation.
4
<PAGE> 7
Directors who are not employees of the Company ("Outside Directors") are
paid an annual retainer of $10,000, a fee of $2,000 for attending each board
meeting and a fee of $1,000 for attending each committee meeting. The directors
are reimbursed for travel and related expenses incurred by them in attending
board and committee meetings. Prior to the adoption of the Company's 1995
Director Option Plan (the "Director Option Plan"), Outside Directors received
initial and annual grants of options to purchase shares of the Company's Common
Stock under the Company's Amended 1990 Incentive Stock Plan (the "Stock Plan").
Since the adoption of the Director Option Plan in January 1996, Outside
Directors have received the same initial and annual grants only under the
Director Option Plan under substantially similar terms as under the Stock Plan.
Under the Director Option Plan, upon first becoming a director, each new
Outside Director will receive an automatic grant of an option to purchase up to
20,000 shares of Common Stock and each continuing Outside Director will receive
(provided that such Outside Director has been a director for at least four
months prior to such grant), on October 1 of each year, an automatic grant of an
option to purchase up to 10,000 shares of Common Stock.
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS.
In connection with the acquisition of Altron by Sanmina, in November 1998,
the Company entered into an employment agreement with Samuel Altschuler (the
"Employment Agreement"). Under the Employment Agreement, Mr. Altschuler will
receive a base salary of $275,000 per year and current benefits, respectively,
for a period of three years commencing on the effective date of the Altron
merger. In the event that Mr. Altschuler is terminated other than "for cause"
or, after eight months of employment, resigns voluntarily, he will be entitled
to receive salary and benefits at his then current rate until the end of the
three year period under the Employment Agreement. In the event Mr. Altschuler
resigns other than "for cause," any unvested stock options shall either, at the
sole discretion of Sanmina, be immediately vested upon resignation or
termination or continue to vest on existing option terms and continue to be
exercisable over a five year period beginning on the date of resignation or
termination. In the event of any such resignation or termination, Mr. Altschuler
agrees to be available to provide consulting services to Sanmina for the
remainder of the effective term under the Employment Agreement.
In January 1998, the Company's Board of Directors approved change of
control arrangements with each of Jure Sola, the Company's Chairman and Chief
Executive Officer; Randy Furr, the Company's President and Chief Operating
Officer; Michael Landy, the Company's Vice President of Sales and Marketing; and
Bernard Whitney, the Company's Executive Vice President and Chief Financial
Officer. Under these arrangements, all unvested stock options held by such
individuals under any of the Company's stock option plans would become fully
vested and exercisable upon the occurrence of a change of control of the
Company. A change of control is defined to include certain mergers, asset sales,
or consolidations, the acquisition of more than fifty percent (50%) of the
Company by any person or certain changes in the composition of the Board of
Directors.
5
<PAGE> 8
EXECUTIVE COMPENSATION
COMPENSATION TABLES
Summary Compensation Table. The following table sets forth the compensation
paid by the Company for each of the three years in the period ended September
30, 1998 to the Chief Executive Officer and all other executive officers of the
Company:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS ALL OTHER
FISCAL -------------------- OF OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) (# OF SHARES)(2) ($)(1)
--------------------------- ------ --------- -------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Jure Sola................................ 1998 $375,000 $470,000 200,000 $49,684
Chief Executive Officer 1997 310,000 385,000 203,000 48,237
and Chairman of the Board 1996 250,000 210,000 300,000 48,163
Randy Furr............................... 1998 $290,000 $365,000 140,000 $26,711
President, Chief Operating Officer 1997 240,000 295,000 110,000 25,266
1996 175,000 225,000 120,000 25,190
Bernard J. Whitney....................... 1998 $185,000 $100,000 -- $10,021
Executive Vice President and 1997 27,750 10,000 100,000 1,110
Chief Financial Officer(3)
Michael Landy............................ 1998 $190,000 $ 90,000 40,000 $ 7,426
Executive Vice President, Sales and 1997 140,000 75,000 33,000 7,200
Marketing(4)
</TABLE>
- - ---------------
(1) Includes car allowance and premium payments for executive life, medical and
dental insurance.
(2) All share amounts reported reflect the 2 for 1 stock splits of the Company's
Common Stock effected in March 1996 and June 1998.
(3) Mr. Whitney joined the Company as Vice President and Chief Financial Officer
in August 1997. He became Executive Vice President and Chief Financial
Officer in October 1998.
(4) Mr. Landy was promoted to Vice President, Sales and Marketing in October
1997 and to Executive Vice President, Sales and Marketing in October 1998.
Option Grants in Last Fiscal Year. The following table sets forth each
grant of stock options made during the fiscal year ended September 30, 1998 to
each executive officer named in the Summary Compensation Table above:
<TABLE>
<CAPTION>
% OF TOTAL
OPTIONS STOCK PRICE APPRECIATION FOR
GRANTED TO EXERCISE OR OPTION TERM (2)
OPTIONS EMPLOYEES BASE PRICE(1) EXPIRATION ----------------------------
NAME GRANTED(1)(#) IN FY98 ($/SH) DATE 5%($) 10%($)
---- ------------- ----------- ------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Jure Sola................ 200,000 11.1 $32.32 10/27/07 $4,065,175 $10,301,951
Randy Furr............... 140,000 7.8 $32.32 10/27/07 $2,845,622 $ 7,211,366
Michael Landy............ 40,000 2.2 $32.32 10/27/07 $ 813,035 $ 2,060,390
</TABLE>
- - ---------------
(1) The exercise price and tax withholding obligations related to exercise may
in some cases, be paid by delivery of other shares or by offset of the
shares subject to the options.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the Company's stock price. The
Company did not use an alternative formula for a grant date valuation, as
the Company does not believe that any formula will determine with reasonable
accuracy a present value based on future unknown or volatile factors.
(3) All share amounts reported reflect the 2 for 1 splits of the Company's
Common Stock effected in March 1996 and June 1998.
6
<PAGE> 9
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values. The following table sets forth, for each of the executive officers named
in the Summary Compensation Table above, each exercise of stock options during
the fiscal year ended September 30, 1998 and the year-end value of unexercised
options:
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-THE-
SHARES VALUE AT YEAR-END MONEY OPTIONS AT YEAR-END
ACQUIRED ON REALIZED EXERCISABLE/ (2) EXERCISABLE/
NAME EXERCISE(#) (1)($) UNEXERCISABLE (#) UNEXERCISABLE ($)
---- ----------- ---------- ------------------- ----------------------------
<S> <C> <C> <C> <C>
Jure Sola....................... 100,904 $3,059,409 559,083/483,013 $9,435,265/$4,364,007
Randy Furr...................... 16,166 $ 635,323 233,666/254,434 $3,709,438/$1,823,173
Bernard Whitney................. 0 -- 21,667/78,333 $0/$0
Michael Landy................... 0 -- 94,243/80,757 $1,646,924/$675,496
</TABLE>
- - ---------------
(1) Based on the last reported sale price of the Company's Common Stock on the
date of exercise.
(2) Based on a fair market value of $28.13, which was the last reported sale
price of the Company's Stock on September 30, 1998.
COMPENSATION COMMITTEE AND OFFICER STOCK COMMITTEE REPORTS
The following reports are provided to stockholders by the members of the
Compensation Committee and the Officer Stock Committee of the Board of
Directors.
Compensation Committee Report
Compensation Philosophy. The goals of the Company's executive compensation
program are to attract and retain executive officers who will strive for
excellence, and to motivate those individuals to achieve superior performance by
providing them with rewards for assisting the Company in meeting revenue and
profitability targets.
Compensation for the Company's executive officers consists of base salary
and potential cash bonus, as well as potential long-term incentive compensation
through stock options. The Compensation Committee considers the total current
and potential long-term compensation of each executive officer in establishing
each element of compensation.
Cash-Based Compensation. Each fiscal year, the Compensation Committee
reviews with the Chief Executive Officer and approves, with appropriate
modifications, an annual base salary plan for the Company's executive officers.
This base salary plan is based on industry and peer group surveys and
performance judgements as to the past and expected future contributions of the
individual executive officers. The Compensation Committee reviews and fixes the
base salary of the Chief Executive Officer based on similar competitive
compensation data and the Committee's assessment of his past performance and its
expectation as to his future contributions in leading the Company.
Each officer who served in an executive capacity throughout the last fiscal
year, including the Chief Executive Officer, received a cash bonus for such
service. These bonuses ranged in amount from approximately 50% annualized to
approximately 125% of base salary. In determining the bonus paid to each officer
(other than the Chief Executive Officer), the Compensation Committee reviewed
with the Chief Executive Officer the performance of each of the officers in
their respective areas of accountability as compared to the Company's operating
plan, and each officer's respective contribution to the Company's operating
performance in its electronics manufacturing services, backplane assembly and
subassembly and printed circuit board fabrication businesses. The members of the
Compensation Committee (other than the Chief Executive Officer) reviewed these
same factors in determining the bonus paid to the Chief Executive Officer.
Respectfully submitted,
Neil Bonke, Jure Sola and Bernard
Vonderschmitt
7
<PAGE> 10
Officer Stock Committee Report
Stock Options. During each fiscal year, the Officer Stock Committee
considers the desirability of granting to executive officers awards under the
Company's Amended 1990 Incentive Stock Plan, which allows for the grant of
longer-term incentives in the form of stock options. In fixing the grants of
stock options to executive officers (other than the Chief Executive Officer) in
the last fiscal year, the Committee reviewed with the Chief Executive Officer
the recommended individual award, taking into account the officer's scope of
responsibility and specific assignments, strategic and operational goals
applicable to the officer, anticipated performance requirements and
contributions of the officer, and the number of options previously granted to
the officer. All stock options granted to executive officers in the last fiscal
year provide for vesting over a five-year period. During the fiscal year ended
September 30, 1998, an option award exercisable for up to 200,000 shares of the
Company's Common Stock was made to the Chief Executive Officer and options
exercisable for up to 500,000 shares were granted to all executive officers as a
group. In addition, in October 1998, in part in recognition of their performance
during fiscal 1998, the Officer Stock Committee approved grants of options in
the amount of 125,000 and 100,000 to the Chief Executive Officer and Chief
Operating Officer, respectively.
Respectfully submitted,
Neil Bonke and Bernard Vonderschmitt
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
returns for the Company's Common Stock, the Nasdaq Stock Market Index, and an
index based on companies in a peer group (Standard Industrial Classification
3670 -- Electronic Components). The graph assumes the investment of $100 on
September 30, 1993. The performance shown is not necessarily indicative of
future performance.
COMPARISON OF 60 MONTH CUMULATIVE TOTAL RETURN*
AMONG SANMINA CORPORATION, THE NASDAQ STOCK MARKET
(U.S.) INDEX AND A PEER GROUP
<TABLE>
<CAPTION>
NASDAQ STOCK MARKET
SANMINA CORPORATION (U.S.) PEER GROUP
------------------- ------------------- ----------
<S> <C> <C> <C>
Sep-93 100.00 100.00 100.00
Sep-94 95.10 100.83 125.98
Sep-95 187.25 139.28 242.43
Sep-96 315.69 165.24 186.73
Sep-97 678.92 226.81 280.42
Sep-98 441.18 231.84 138.07
</TABLE>
* $100 INVESTED ON 9/30/93 IN STOCK OR INDEX -- INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING SEPTEMBER 30.
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<PAGE> 12
PROPOSAL NO. 2:
APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The Company's Restated Certificate of Incorporation (the "Certificate"), as
currently in effect, provides that authorized capital stock shall consist of
75,000,000 shares of Common Stock, $0.01 par value (the "Common Stock"), and
5,000,000 shares of Preferred Stock, $0.01 par value (the "Preferred Stock"). On
December 11, 1998, the Company's Board of Directors approved an amendment to the
Certificate (the "Amendment") to increase the number of shares of Common Stock
authorized for issuance under the Certificate by 125,000,000 to a total of
200,000,000 shares. As more fully described below, the proposed Amendment is
intended to provide the Company flexibility to meet future needs for unreserved
Common Stock. The affirmative vote of holders of a majority of shares of Common
Stock represented at the meeting is necessary to approve the Amendment. The
Board of Directors recommends that stockholders vote FOR approval of the
Amendment. The reasons for and the possible effects of the amendment to the
Certificate and certain information regarding the Certificate are set forth
below.
Reasons for Amendment. The Company's number of authorized shares of Common
Stock has remained at 75,000,000 since the last increase in the authorized
number of shares which was approved by the stockholders and effected in 1996.
Since that time, the Company's market capitalization has increased from
approximately $680,000,000 to approximately $1,357,000,000 as of September 30,
1998.
As of September 30, 1998, 48,265,295 shares of Common Stock, par value
$0.01 per share, were issued and outstanding and 7,161,138 were reserved for
issuance under the Company's stock option and stock purchase plans, leaving only
19,573,567 shares of Common Stock available for future issuance. In particular,
since November 1997, the number of outstanding shares of Common Stock of the
Company has increased significantly due to the acquisitions Elexsys
International, Inc. and Altron, Incorporated, a redemption call made by the
Company with respect to $86,250,000 of convertible subordinated notes (which
resulted in the conversion of all such notes into Common Stock) and a
two-for-one stock split (in the form of a stock dividend) effected in June 1998.
The number of shares remaining available is not considered adequate for the
Company's future possible requirements.
Although the Company has no firm plans to use the additional authorized
shares of Common Stock, the Company's Board of Directors believes that it is
prudent to increase the number of authorized shares of Common Stock to the
proposed level in order to provide a reserve of shares available for issuances
in connection with possible future actions. In particular, the Company's Board
of Directors believes that the current number of authorized shares needs to be
increased to provide the flexibility to effect other possible actions such as
financings, corporate mergers, acquisitions of property, establishing strategic
relationships with corporate partners, employee benefit plans and for other
general corporate purposes. Currently there are no plans, agreements or
arrangements in place requiring the utilization of these additional shares for
financing, corporate mergers, acquisitions of property, establishment of
strategic relationships with corporate partners, employee benefit plans or other
general corporate purposes. Having such additional authorized Common Stock
available for issuance in the future would allow the Board of Directors to issue
shares of Common Stock without the delay and expense associated with seeking
stockholder approval. Elimination of such delays and expense occasioned by the
necessity of obtaining stockholder approval will better enable the Company,
among other things, to engage in financing transactions and acquisitions as well
as to take advantage of changing market and financial conditions on a more
competitive basis as determined by the Board of Directors.
The additional Common Stock to be authorized by adoption of the Amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed Amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common Stock
of the Company. If the Amendment is adopted, it will become effective upon
filing of the Amendment with the Secretary of the State of Delaware. Stockholder
approval may be required if it is proposed that any such shares, other than
those shares provided for by the terms of 1999 Stock Plan, are to be added to
the number of shares reserved for issuance under the Company's option plans, in
compliance with applicable rules and laws.
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<PAGE> 13
Possible Effects of the Amendment. If the proposed Amendment is approved,
the Board of Directors may cause the issuance of additional shares of Common
Stock without further vote of stockholders of the Company, except as provided
under the Delaware corporate law or under the rules of any national securities
exchange on which shares of Common Stock of the Company are then listed. Current
holders of Common Stock have no preemptive or like rights, which means that
current stockholders do not have a prior right to purchase any new issue of
capital stock of the Company in order to maintain their proportionate ownership
thereof. The effects of the authorization of additional shares of Common Stock
may also include dilution of the voting power of currently outstanding shares
and reduction of the portion of dividends and of liquidation proceeds payable to
the holders of currently outstanding Common Stock.
In addition, the Board of Directors could use authorized but unissued
shares to create impediments to a takeover or a transfer of control of the
Company. Accordingly, the increase in the number of authorized shares of Common
Stock may deter a future takeover attempt which holders of Common Stock may deem
to be in their best interest or in which holders of Common Stock may be offered
a premium for their shares over the market price.
The Board of Directors is not currently aware of any attempt to take over
or acquire the Company. While it may be deemed to have potential anti-takeover
effects, the proposed Amendment to increase the authorized Common Stock is not
prompted by any specific effort or takeover threat currently perceived by
management. Moreover, management does not currently intend to propose additional
anti-takeover measures in the foreseeable future.
PROPOSAL NO. 3
ADOPTION OF 1999 STOCK PLAN
As of the date of this Proxy Statement, there remain available for grant
under the Company's Amended 1990 Incentive Stock Plan options to purchase
618,884 shares of the Company's Common Stock. In December 1998, the Board of
Directors approved, and recommended that the Company's stockholders approve, a
new 1999 Stock Plan (the "1999 Plan"), and reserved 2,700,000 shares of the
Company's Common Stock for issuance under the 1999 Plan. In addition, an annual
increase will be made to the 1999 Plan on each anniversary date of the adoption
of the 1999 Plan, in an amount equal to the lesser of (i) 3,000,000 shares, (ii)
4.5% of the Company's outstanding shares on such date, or (iii) a lesser amount
determined by the Board of Directors; provided, however, that at no time shall
the total number of shares reserved for issuance under the 1999 Plan exceed 15%
of the Company's outstanding shares; provided, further, that over the term of
the 1999 Plan, a maximum of 15,000,000 shares may be issued under the 1999 Plan.
As of the date of this Proxy Statement, no options, stock, or rights to purchase
stock have been granted pursuant to the 1999 Plan.
In 1993, Section 162(m) was added to the Internal Revenue Code of 1986, as
amended. Section 162(m) may limit the Company's ability to deduct for federal
income tax purposes compensation in excess of $1,000,000 paid to the Company's
Chief Executive Officer and its four other highest paid executive officers in
any one fiscal year. Grants under the 1999 Plan will not be subject to the
deduction limitation if the stockholders approve the 1999 Plan, including the
option grant limitations described below.
A description of the principal terms of the 1999 Plan and its purpose are
set forth below. This description is qualified in its entirety by the terms of
the 1999 Plan, which is attached to this Proxy Statement as EXHIBIT A and is
incorporated in this Proxy Statement by this reference.
SUMMARY OF THE 1999 PLAN
General. The purpose of the 1999 Plan is to attract and retain the best
available persons for positions of substantial responsibility with the Company,
to provide additional incentive to the employees, directors and consultants of
the Company and to promote the success of the Company's business. Options
granted under the 1999 Plan may be either "incentive stock options," as defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or
nonstatutory stock options. In addition, awards of or rights to purchase shares
of the Company's Common Stock ("Stock Rights") may be granted under the 1999
Plan.
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<PAGE> 14
Administration. The 1999 Plan is administered by the board of directors or
a committee thereof (the "Administrator"). Subject to the other provisions of
the 1999 Plan, the Board has the authority (i) to select the persons to whom
options and Stock Rights are to be granted; (ii) to determine the number of
shares of Common Stock to be covered by each option and Stock Right granted;
(iii) to approve forms of agreement for use under the 1999 Plan; (iv) to
determine the terms and conditions, not inconsistent with the terms of the 1999
Plan, of any option or Stock Right granted; (v) to reduce the exercise price of
any option or Stock Right to the then current fair market value if the fair
market value of the Common Stock covered by such Option or Stock Right shall
have declined since the date the option or Stock Right was granted; (vi) to
institute an option exchange program; (vii) to construe and interpret the terms
of the 1999 Plan and awards granted pursuant to the 1999 Plan; (viii) to
prescribe, amend and rescind rules and regulations relating to the 1999 Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax laws; (ix)
to modify or amend each option or Stock Right, subject to certain restrictions
of the 1999 Plan, including the discretionary authority to extend the
post-termination exercisability period of options longer than is otherwise
provided for in the 1999 Plan; (x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the shares to be
issued upon exercise of an option or Stock Right that number of shares having a
fair market value equal to the amount required to be withheld; (xi) to authorize
any person to execute on behalf of the Company any instrument required to effect
the grant of an option or Stock Right previously granted by the Administrator;
and (xii) to make all other determinations deemed necessary or advisable for
administering the 1999 Plan. All decisions, interpretations and other actions of
the Administrator shall be final and binding on all holders of options and Stock
Rights and on all persons deriving their rights therefrom.
Eligibility; Limitations. Nonstatutory stock options and Stock Rights may
be granted under the 1999 Plan to employees, directors and consultants of the
Company or any parent or subsidiary of the Company. Incentive stock options may
be granted only to employees.
As discussed above, Section 162(m) of the Code places limits on the
deductibility for federal income tax purposes of compensation paid to certain
executive officers of the Company. In order to preserve the Company's ability to
deduct the compensation income associated with options granted to such persons,
the 1999 Plan provides that no employee may be granted, in any fiscal year of
the Company, options to purchase more than 1,000,000 shares of Common Stock plus
options to purchase up to an additional 1,000,000 shares of Common Stock in
connection with such employee's initial commencement of service to the Company.
Terms and Conditions of Options. Each option granted under the 1999 Plan is
evidenced by a written stock option agreement between the Company and the
optionee, and is subject to the following additional terms and conditions:
(a) Exercise Price. The Administrator determines the exercise price of
options at the time the options are granted. The exercise of an incentive
stock option may not be less than 100% of the fair market value of the
Common Stock on the date such option is granted; provided, however, the
exercise of an incentive stock option granted to a 10% stockholder may not
be less than 110% of the fair market value of the Common Stock on the date
such option is granted. The fair market value of the Common Stock is
generally determined with reference to the closing sale price for the
Common Stock (or the closing bid if no sales were reported) on the last
market trading day prior to the date the option is granted. The exercise
price of a nonstatutory stock option may be determined by the
Administrator, provided however, the exercise price of a nonstatutory stock
option intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Code may not be less than 100% of the fair
market value of the Common Stock on the date of grant.
(b) Exercise of Option. The Administrator determines when options
become exercisable, and may in its discretion, accelerate the vesting of
any outstanding option.
(c) Form of Consideration. The means of payment for shares issued upon
exercise of an option is specified in each option agreement. The 1999 Plan
permits payment to be made by cash, check, promissory note, other shares of
Common Stock of the Company (with some restrictions), cashless
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<PAGE> 15
exercise, a reduction in the amount of any Company liability to the
optionee, any other form of consideration permitted by applicable law, or
any combination thereof.
(d) Term of Option. The term of an incentive stock option may be no
more than ten years from the date of grant; provided that in the case of an
incentive stock option granted to a 10% stockholder, the term of the option
may be no more than five years from the date of grant. No option may be
exercised after the expiration of its term.
(e) Termination of Employment. If an optionee's employment,
directorship or consulting relationship terminates for any reason (other
than death or disability), then all options held by the optionee under the
1999 Plan expire on the earlier of (i) the date set forth in his or her
notice of grant or stock option agreement or (ii) the expiration date of
such option. To the extent the option is exercisable at the time of such
termination, the optionee may exercise all or part of his or her option at
any time before its termination.
(f) Permanent Disability; Death. If an optionee's employment,
directorship or consulting relationship terminates as a result of permanent
and total disability (as defined in the Code) or death, then all options
held by such optionee under the 1999 Plan will generally expire on the
earlier of (i) twelve months from the date of termination of optionee's
employment or (ii) the expiration date of the option. The optionee or, if
applicable, the executor or other legal representative of the optionee's
estate may exercise all or part of the optionee's option at any time before
such expiration to the extent that such option was exercisable at the time
of termination of employment.
(g) Nontransferability of Options. Options granted under the 1999 Plan
generally are not transferable other than by will or the laws of descent
and distribution, and may be exercised during the optionee's lifetime only
by the optionee.
(h) Value Limitation. If the aggregate fair market value of all shares
of Common Stock subject to an optionee's incentive stock option which are
exercisable for the first time during any calendar year exceeds $100,000,
the excess portion of such option will be treated as a nonstatutory stock
option.
(i) Other Provisions. The stock option agreement may contain other
terms, provisions and conditions not inconsistent with the 1999 Plan as may
be determined by the Administrator.
Stock Rights. A Stock Right may award the recipient Common Stock or may
give the recipient the right to purchase Common Stock. Shares received or
purchased pursuant to a Stock Right are subject to a restricted stock agreement
between the Company and the recipient. Unless the Administrator determines
otherwise, the restricted stock agreement shall give the Company a reacquisition
option exercisable upon the voluntary or involuntary termination of the
recipient's employment or consulting relationship with the Company for any
reason (including death and disability). The acquisition price for any shares
reacquired by the Company shall be the original price paid by the recipient, if
any. The reacquisition option lapses at a rate determined by the Administrator.
A Stock Right and the stock acquired pursuant thereto (while restricted) is
generally nontransferable other than by will or the laws of descent and
distribution.
Adjustments Upon Changes in Capitalization. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar changes in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments will be made in the number and class of shares of stock
subject to the 1999 Plan, the number and class of shares of stock subject to any
option or Stock Right outstanding under the 1999 Plan, and the exercise price of
any such award. In the event of a liquidation or dissolution, any unexercised
options will terminate. The Administrator may, in its discretion, provide that
each optionee will fully vest in and have the right to exercise the optionee's
option or Stock Right as to all of the optioned stock, and shall release all
restrictions on any restricted stock prior to the consummation of the
liquidation or dissolution.
In connection with any merger, consolidation, acquisition of assets or like
occurrence involving the Company, including any of the foregoing transactions
that results in a change of control, unless otherwise provided for in an
agreement between an optionee and the Company, each outstanding option or Stock
Right
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<PAGE> 16
shall be assumed or an equivalent option or right substituted by the successor
corporation. If the successor corporation refuses to assume the options or Stock
Rights or to substitute substantially equivalent options or rights, the optionee
shall fully vest in and have the right to exercise the option or Stock Right as
to all of the optioned stock and any restrictions shall lapse with respect to
restricted stock. In such event, the Administrator shall notify the optionee
that the option or Stock Right is fully vested and exercisable for fifteen (15)
days from the date of such notice, that the option or Stock Right shall
terminate upon expiration of such period, and that all restrictions have lapsed
with respect to his or her restricted shares.
Amendment and Termination of the 1999 Plan. The Board may amend, alter,
suspend or terminate the 1999 Plan, or any part thereof, at any time and for any
reason. No such action by the Board or stockholders may alter or impair any
option or Stock Right previously granted under the 1999 Plan without the written
consent of the optionee/recipient. Unless terminated earlier, the 1999 Plan will
terminate ten years from the date of its approval by the stockholders or the
Board, whichever is earlier.
FEDERAL INCOME TAX CONSEQUENCES
Incentive Stock Options. An optionee who is granted an incentive stock
option does not generally recognize taxable income at the time the option is
granted or upon its exercise, although the exercise may subject the optionee to
the alternative minimum tax. Upon a disposition of the shares more than two
years after grant of the option and one year after exercise of the option, any
gain or loss is treated as long-term capital gain or loss. If these holding
periods are not satisfied, the optionee recognizes ordinary income at the time
of disposition equal to the difference between the exercise price and the lower
of (i) the fair market value of the shares at the date of the option exercise or
(ii) the sale price of the shares. Any gain or loss recognized on such a
premature disposition of the shares in excess of the amount treated as ordinary
income is treated as long-term or short-term capital gain or loss, depending on
the holding period. A different rule for measuring ordinary income upon such a
premature disposition may apply if the optionee is an officer, director, or 10%
stockholder of the Company. The Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally by the excess of the
then fair market value of the shares over the exercise price. Any taxable income
recognized in connection with an option exercise by an employee of the Company
is subject to tax withholding by the Company. The Company is entitled to a
deduction in the same amount as the ordinary income recognized by the optionee.
Upon a disposition of such shares by the optionee, any difference between the
sale price and the optionee's exercise price, to the extent not recognized as
taxable income as provided above, is treated as long-term or short-term capital
gain or loss, depending on the holding period.
Stock Rights. Restricted stock is generally acquired pursuant to Stock
Rights. At the time of acquisition, restricted stock is subject to a
"substantial risk of forfeiture" within the meaning of Section 83 of the Code.
As a result, the recipient will not generally recognize ordinary income at the
time of acquisition. Instead, the recipient will recognize ordinary income on
the dates when the stock ceases to be subject to a substantial risk of
forfeiture. The stock will generally cease to be subject to a substantial risk
of forfeiture when it is no longer subject to the Company's right to reacquire
the stock upon the recipient's termination of employment with the Company. At
such times, the recipient will recognize ordinary income measured as the
difference between the purchase price (if any) and the fair market value of the
stock on the date the stock is no longer subject to a substantial risk of
forfeiture.
The purchaser may accelerate to the date of acquisition his or her
recognition of ordinary income, if any, and the beginning of any capital gain
holding period, by timely filing an election pursuant to Section 83(b) of the
Code. In such event, the ordinary income recognized, if any, is measured as the
difference between the purchase price and the fair market value of the stock on
the date of purchase and the capital gain holding period commences on such date.
The ordinary income recognized by a purchaser who is an employee will be subject
to tax withholding by the Company. Different rules may apply if the purchaser is
also an officer, director, or 10% stockholder of the Company.
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<PAGE> 17
The foregoing is only a summary of the effect of federal income taxation
upon optionees and the Company with respect to the grant and exercise of
options, and upon recipients of Stock Rights, under the 1999 Plan. It does not
purport to be complete, and does not discuss the tax consequences of the
employee's, director's or consultant's death or the provisions of the income tax
laws of any municipality, state or foreign country in which the employee,
director or consultant may reside.
VOTE REQUIRED
The approval of the adoption of the 1999 Plan requires the affirmative vote
of a majority of the shares of the Company's Common Stock present and voting at
the Annual Meeting.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
APPROVAL OF THE 1999 STOCK PLAN SET FORTH HEREIN.
PROPOSAL NO. 4:
APPROVAL OF AMENDMENTS TO 1993 EMPLOYEE STOCK PURCHASE PLAN
The Company's 1993 Employee Stock Purchase Plan (the "Purchase Plan")
provides employees of the Company with an opportunity to purchase Common Stock
of the Company through accumulated payroll deductions. The Board of Directors of
the Company amended the Purchase Plan in December 1998 to increase the number of
shares of Common Stock available for sale by 600,000 from 1,700,000 to
2,300,000. The Board of Directors approved the amendment to the Purchase Plan to
establish a sufficient number of shares of Common Stock as a reserve under the
Purchase Plan for sale to the Company's employees. The affirmative vote of
holders of a majority of the shares of Common Stock represented at the meeting
is necessary to approve the amendment to the Purchase Plan. The Board of
Directors recommends that stockholders vote FOR approval of the amendment to the
Purchase Plan. The essential features of the Purchase Plan and certain
information regarding the Purchase Plan are set forth below.
Status of Shares. As of September 30, 1998, 1,374,498 shares had been
issued under the Purchase Plan, and assuming the approval of the amendment of
the Purchase Plan, 325,502 shares remained available for future issuance as of
such date.
Operation of the Purchase Plan. Under the Purchase Plan, the Company
withholds a percentage of each salary payment to participating employees over
certain offering periods. The Purchase Plan is currently implemented by
overlapping twenty-four month offering periods which commence April 1 and
October 1 of each year. Each such offering period is divided into four six month
purchase periods. The Board of Directors has the power to alter the duration of
the offering periods or purchase periods without stockholder approval, if such
change is announced at least 15 days prior to the scheduled beginning of the
first offering period or purchase period, as the case may be, to be effected. On
the last business day of each purchase period, the funds withheld are applied to
the purchase of shares of Common Stock unless such participating employee
withdraws from the offering period prior to such purchase date. To the extent
permitted by Rule 16b-3 of the Securities Exchange Act, if the fair market value
of the Common Stock on the last day of the purchase period is lower than the
fair market value of the Common Stock on the first day of the offering period,
then all participating employees in such offering period shall be automatically
withdrawn from such offering period immediately after the stock purchase on the
last day of the purchase period and automatically re-enrolled in the immediately
following offering period. Employees may end their participation in the offering
at any time during the offering period, and participation ends automatically on
termination of employment with the Company.
Eligibility; Administration. Employees are eligible to participate in the
Purchase Plan, as amended, if they have been employed by the Company for at
least six consecutive months. As of September 30, 1998, approximately 1,480
employees were eligible to participate in the Purchase Plan. Payroll deductions
may not exceed 10% of an employee's compensation, which under the Purchase Plan,
as amended, is defined as base straight time gross earnings plus overtime and
commissions. No employee may purchase more than
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<PAGE> 18
$12,500 worth of stock in any purchase period. The Purchase Plan is currently
administered by the Board of Directors.
Purchase Price; Market Value. The price at which stock is purchased under
the Purchase Plan is equal to 85% of the fair market value of the Common Stock
on the first day of the applicable offering period or the last day of each
purchase period, whichever is lower. On September 30, 1998, the closing price of
the Company's Common Stock as reported on the NASDAQ National Market System was
$28.125.
Amendment and Termination. The Board of Directors may amend the Purchase
Plan from time to time or may terminate it or any purchase period or offering
period under it, without approval of the stockholders. However, to the extent
necessary and desirable to comply with Rule 16b-3 under the Securities Exchange
Act (or any other applicable law or regulation), the Company shall obtain
approval of the stockholders with respect to plan amendments to the extent and
in the manner required by such law or regulation. In the event of a merger or
sale of substantially all of the assets of the Company, the Board may shorten
the offering period or permit the assumption of outstanding rights to purchase
Common Stock. The Purchase Plan will terminate in March 2003 unless earlier
terminated by the Board.
Tax Consequences of Purchase Plan Transactions. The Purchase Plan, and the
right of participants to make purchases thereunder, is intended to qualify under
the provisions of Section 423 of the Code. Under these provisions, no income is
taxable to a participant until the shares purchased under the Plan are sold or
otherwise disposed of. Upon sale or other disposition of the shares, the
participant will generally be subject to tax, depending in part on how long the
shares are held by the participant. If the shares are sold or otherwise disposed
of more than two years from the first day of the offering period, the
participant will recognize ordinary income measured as the lesser of (a) the
excess of the fair market value of the shares at the time of such sale or
disposition over the purchase price, or (b) an amount equal to 15% of the fair
market value of the shares as of the first day of the offering period. Any
additional gain will be treated as long-term capital gain. If the shares are
sold or otherwise disposed of before the expiration of this holding period, the
participant will recognize ordinary income generally measured as the excess of
the fair market value of the shares on the date the shares were purchased by the
participant over the participant's purchase price. Any additional gain or loss
on the sale or disposition will be capital gain or loss. The Company is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant except to the extent of ordinary income recognized by participants
upon a sale or disposition of shares prior to the expiration of the holding
period described above.
PROPOSAL NO. 5:
CONFIRMATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP, independent public
accountants, to audit the financial statements of the Company for the year
ending October 2, 1999. Arthur Andersen LLP has audited the financial statements
of the Company for each fiscal year since the fiscal year ending September 30,
1992. The affirmative vote of holders of a majority of the shares of Common
Stock represented at the meeting is necessary to appoint Arthur Andersen LLP as
the Company's independent public accountants and the Board of Directors
recommends that the stockholders vote FOR confirmation of such selection. In the
event of a negative vote, the Board of Directors will reconsider its selection.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting with the opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.
CERTAIN TRANSACTIONS
The Company's Certificate of Incorporation, as amended, provides that the
personal liability of its directors for monetary damages arising from a breach
of their fiduciary duties in certain circumstances shall be eliminated to the
fullest extent permitted by Delaware law. The Certificate of Incorporation, as
amended, also authorizes the Company to indemnify its directors and officers to
the fullest extent permitted by Delaware law. The Company has entered into
indemnification agreements with its officers and directors providing such
indemnification. The indemnification agreements may require the Company, among
other things, to indemnify
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<PAGE> 19
such officers and directors against certain liabilities that may arise by reason
of their status or service as directors or officers (other than liabilities
arising from willful misconduct of a culpable nature), to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified, and to obtain directors' and officers' insurance.
During fiscal 1998, Mario M. Rosati, a nominee for election to the Board of
Directors of the Company, and Christopher D. Mitchell, Assistant Secretary of
the Compay, were also members of the law firm of Wilson Sonsini Goodrich &
Rosati, Professional Corporation, Palo Alto, California ("WSGR"). The Company
retained WSGR as its legal counsel during the fiscal year. The Company plans to
retain WSGR as its legal counsel again during fiscal 1999. The amounts paid by
the Company to WSGR were less than 5% of WSGR's total gross revenues for its
last completed fiscal year.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
persons named in the accompanying form of proxy to vote the shares they
represent as the Board of Directors may recommend.
THE COMPANY WILL MAIL WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN
REQUEST A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS, SCHEDULES AND A LIST OF EXHIBITS. REQUESTS SHOULD BE SENT
TO INVESTOR RELATIONS, SANMINA CORPORATION, 355 EAST TRIMBLE ROAD, SAN JOSE,
CALIFORNIA 95131.
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SANMINA CORPORATION
1999 STOCK PLAN
1. Purposes of the Plan. The purposes of this 1999 Stock Plan are:
- to attract and retain the best available personnel for positions of
substantial responsibility,
- to provide additional incentive to Employees, Directors and Consultants,
and
- to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or any of its Committees as shall be
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the administration
of stock option plans under U. S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any foreign country
or jurisdiction where Options or Stock Purchase Rights are, or will be, granted
under the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means a committee of Directors appointed by the Board in
accordance with Section 4 of the Plan.
(f) "Common Stock" means the common stock of the Company.
(g) "Company" means Sanmina Corporation, a Delaware corporation.
(h) "Consultant" means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in Section
22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors, employed
by the Company or any Parent or Subsidiary of the Company. A Service Provider
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. For purposes
of Incentive Stock Options, no such leave may exceed ninety days, unless
reemployment upon expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the 181st day of such leave any Incentive Stock Option
held by the Optionee shall cease to be treated as an Incentive Stock Option and
shall be treated for tax purposes as a Nonstatutory Stock Option. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:
(i) If the Common Stock is listed on any established stock exchange or
a national market system, including without limitation the Nasdaq National
Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair
Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or
system for the last market trading day prior
<PAGE> 21
to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid and
low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the
Administrator.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.
(p) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.
(q) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
(s) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.
(t) "Option Exchange Program" means a program whereby outstanding Options
are surrendered in exchange for Options with a lower exercise price.
(u) "Optioned Stock" means the Common Stock subject to an Option or Stock
Purchase Right.
(v) "Optionee" means the holder of an outstanding Option or Stock Purchase
Right granted under the Plan.
(w) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(x) "Plan" means this 1999 Stock Plan.
(y) "Restricted Stock" means shares of Common Stock acquired pursuant to a
grant of Stock Purchase Rights under Section 11 of the Plan.
(z) "Restricted Stock Purchase Agreement" means a written agreement between
the Company and the Optionee evidencing the terms and restrictions applying to
stock purchased under a Stock Purchase Right. The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the Notice of
Grant.
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
(bb) "Section 16(b)" means Section 16(b) of the Exchange Act.
(cc) "Service Provider" means an Employee, Director or Consultant.
(dd) "Share" means a share of the Common Stock, as adjusted in accordance
with Section 13 of the Plan.
(ee) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.
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<PAGE> 22
(ff) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 2,700,000 Shares, plus an annual increase to be added on the
first day of the Company's fiscal year (beginning in 1999) equal to the lesser
of (i) 3,000,000 Shares, (ii) 4.5% of the outstanding Shares on such date or
(iii) a lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. The Plan may be administered by
different Committees with respect to different groups of Service Providers.
(ii) Section 162(m). To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of
the Code, the Plan shall be administered by a Committee of two or more
"outside directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption
under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;
(iii) to determine the number of shares of Common Stock to be covered
by each Option and Stock Purchase Right granted hereunder;
(iv) to approve forms of agreement for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option or Stock Purchase Right granted hereunder.
Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
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<PAGE> 23
(vi) to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;
(vii) to institute an Option Exchange Program;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and regulations relating to
the Plan, including rules and regulations relating to sub-plans established
for the purpose of qualifying for preferred tax treatment under foreign tax
laws;
(x) to modify or amend each Option or Stock Purchase Right (subject to
Section 15(c) of the Plan), including the discretionary authority to extend
the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;
(xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having
a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All elections by
an Optionee to have Shares withheld for this purpose shall be made in such
form and under such conditions as the Administrator may deem necessary or
advisable;
(xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase
Right previously granted by the Administrator;
(xiii) to make all other determinations deemed necessary or advisable
for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.
5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be
granted to Service Providers. Incentive Stock Options may be granted only to
Employees.
6. Limitations.
(a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be determined as of the
time the Option with respect to such Shares is granted.
(b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options:
(i) No Service Provider shall be granted, in any fiscal year of the
Company, Options to purchase more than 1,000,000 Shares.
(ii) In connection with his or her initial service, a Service Provider
may be granted Options to purchase up to an additional 1,000,000 Shares
which shall not count against the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as described in
Section 13.
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<PAGE> 24
(iv) If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if
the exercise price of an Option is reduced, the transaction will be treated
as a cancellation of the Option and the grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%)
of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in
paragraph (A) immediately above, the per Share exercise price shall be
no less than 100% of the Fair Market Value per Share on the date of
grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per
Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.
(iii) Notwithstanding the foregoing, Options may be granted with a per
Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised.
(c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (B) have a Fair Market
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<PAGE> 25
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised;
(v) consideration received by the Company under a cashless exercise
program implemented by the Company in connection with the Plan;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.
(c) Disability of Optionee. If an Optionee ceases to be a Service Provider
as a result of the Optionee's Disability, the Optionee may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the
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<PAGE> 26
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) Death of Optionee. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(e) Buyout Provisions. The Administrator may at any time offer to buy out
for a payment in cash or Shares an Option previously granted based on such terms
and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with other awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of Shares
that the offeree shall be entitled to purchase, the price to be paid, and the
time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Company a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
service with the Company for any reason (including death or Disability). The
purchase price for Shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option shall lapse at a rate determined by the Administrator.
(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain
such other terms, provisions and conditions not inconsistent with the Plan as
may be determined by the Administrator in its sole discretion.
(d) Rights as a Shareholder. Once the Stock Purchase Right is exercised,
the purchaser shall have the rights equivalent to those of a shareholder, and
shall be a shareholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 13 of the Plan.
12. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which
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<PAGE> 27
no Options or Stock Purchase Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Optionee as soon
as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to
exercise his or her Option until ten (10) days prior to such transaction as to
all of the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any Shares purchased
upon exercise of an Option or Stock Purchase Right shall lapse as to all such
Shares, provided the proposed dissolution or liquidation takes place at the time
and in the manner contemplated. To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior to
the consummation of such proposed action.
(c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option or Stock Purchase
Right, the Optionee shall fully vest in and have the right to exercise the
Option or Stock Purchase Right as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption
or substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase or receive, for each Share of Optioned Stock subject to the Option or
Stock Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received
in the merger or sale of assets is not solely common stock of the successor
corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
14. Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.
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15. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.
16. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of an Option or Stock Purchase Right unless the exercise of such Option or Stock
Purchase Right and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an Option
or Stock Purchase Right, the Company may require the person exercising such
Option or Stock Purchase Right to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.
17. Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
18. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
19. Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.
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PROXY SANMINA CORPORATION PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
1999 ANNUAL MEETING OF STOCKHOLDERS -- JANUARY 29, 1999
The undersigned stockholder of SANMINA CORPORATION, a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated December 29, 1998, and 1998 Annual Report to
Stockholders and hereby appoints Jure Sola, Randy W. Furr, or either of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
1999 Annual Meeting of Stockholders of SANMINA CORPORATION to be held on January
29, 1999 at 11:00 a.m., local time, at the Sheraton San Jose Hotel located at
1801 Barber Lane, Milpitas, California 95035, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth below.
1. ELECTION OF DIRECTORS: FOR ALL NOMINEES LISTED BELOW (EXCEPT AS
INDICATED.) [ ] WITHHOLD [ ]
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
John Bolger; Neil Bonke; Jure Sola; Bernard Vonderschmitt; Mario Rosati; Samuel
Altschuler
2. Proposal to approve the amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of Common
Stock: [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the 1999 Stock Plan: [ ] FOR [ ] AGAINST [
] ABSTAIN
4. Proposal to approve the amendment to the 1993 Employee Stock Purchase Plan
to increase the number of shares reserved for issuance thereunder from
1,700,000 to 2,300,000 shares: [ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on other side)
<PAGE> 30
(Continued from other side)
5. Proposal to ratify the appointment of Arthur Andersen LLP as the
independent public accountants of the Company for its fiscal year ending
October 2, 1999: [ ] FOR [ ] AGAINST [ ] ABSTAIN
and, in their discretion, upon such other matter or matters which may
properly come before the meeting or any adjournment or adjournments thereof.
This Proxy will be voted as
directed or, if no contrary
direction is indicated, will be
voted for the election of
directors, for the ratification of
the appointment of Arthur Andersen
LLP as independent public
accountants, and as said proxies
deem advisable on such other
matters as may properly come before
the meeting.
Dated:
----------------------------------- ,
1999
-----------------------------------
(Signature)
-----------------------------------
(Signature)
(This Proxy should be marked, dated
and signed by the stockholder(s)
exactly as his, her or its name
appears hereon, and returned
promptly in the enclosed envelope.
Persons signing in a fiduciary
capacity should so indicate. If
shares are held by joint tenants or
as community property, both should
sign.)
