SCHEDULE 14A INFORMATION
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:
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
BENCHMARK ELECTRONICS, INC.
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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[ ] 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
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1. Amount Previously Paid:
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4. Date Filed:
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 19, 1998
Shareholders of Benchmark Electronics, Inc.:
The 1998 Annual Meeting of Shareholders of Benchmark Electronics,
Inc. ("Company") will be held at the Doubletree Hotel at Allen Center,
400 Dallas Street, Houston, Texas, on Tuesday, May 19, 1998, beginning at
10:00 a.m. (local time), for the following purposes:
1. to elect seven directors to serve on the Board of Directors until
the 1999 annual meeting of shareholders and until their successors are
duly elected and qualified;
2. to approve an amendment to the Company's 1990 Stock Option Plan
to increase the number of shares of Common Stock of the Company subject
thereto by 1,000,000;
3. to consider and act upon a proposal to ratify the appointment of
KPMG Peat Marwick LLP as the independent auditors of the Company for the
year ending December 31, 1998; and
4. to transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on April 8, 1998, are
entitled to notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Regardless of whether you
plan to attend the meeting, you are urged to complete, date, sign and return the
enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
Lenora A. Gurton
Secretary
Angleton, Texas
April 20, 1998
YOUR VOTE IS IMPORTANT.
TO ENSURE YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE AT YOUR
EARLIEST CONVENIENCE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING. NO
ADDITIONAL POSTAGE IS NECESSARY IF THE PROXY IS MAILED IN THE UNITED STATES. THE
PROXY IS REVOCABLE AT ANY TIME BEFORE IT IS VOTED AT THE MEETING.
BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
(409) 849-6550
APRIL 20, 1998
------------------------
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 19, 1998
------------------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Benchmark Electronics, Inc.
("Company") for use at the 1998 Annual Meeting of Shareholders of the Company to
be held on Tuesday, May 19, 1998, beginning at 10:00 a.m. (local time), and any
adjournment thereof ("Meeting") for the purposes set forth in this Proxy
Statement and the accompanying Notice. This Proxy Statement, the Notice and the
enclosed form of proxy will be sent to shareholders on or about April 20, 1998.
PROXIES
If any proxy in the enclosed form is properly executed and is received by
the Company before or at the Meeting, the shares represented thereby will be
voted in accordance with the directions set forth therein. If no direction is
made, a proxy that is properly signed and received by the Company and which is
not revoked will be voted FOR the election of all nominees for director named
herein to serve on the Board of Directors until the 1999 annual meeting of
shareholders and until their successors are duly elected and qualified, FOR
approval of the proposal to amend the Company's 1990 Stock Option Plan to
increase the number of shares of Common Stock subject thereto by 1,000,000, and
FOR the ratification of the appointment of KPMG Peat Marwick LLP as the
independent auditors of the Company for the year ending December 31, 1998. If
any other matter, not known or determined at the time of the solicitation of
proxies, properly comes before the Meeting, the proxies will be voted in
accordance with the discretion of the person or persons voting the proxies.
Proxies may be revoked by written notice received by the Secretary of the
Company at any time before they are voted and will be deemed revoked by voting
in person at the Meeting.
VOTING SECURITIES
Shareholders of record at the close of business on April 8, 1998 are
entitled to notice of and to vote at the Meeting. As of April 8, 1998, there
were 11,576,768 shares of common stock, $0.10 par value per share ("Common
Stock"), issued, outstanding and entitled to vote at the Meeting. Each share of
Common Stock is entitled to one vote on all matters that may properly come
before the Meeting.
1
QUORUM AND OTHER MATTERS
The presence at the Meeting, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock is necessary to constitute a
quorum. Shares of Common Stock represented by a properly signed and returned
proxy will be counted as present at the Meeting for purposes of determining a
quorum, without regard to whether the proxy is marked as casting a vote or
abstaining. Shares of Common Stock held by nominees which are voted on at least
one matter coming before the Meeting will also be counted as present for
purposes of determining a quorum, even if the beneficial owner's discretion has
been withheld (a "non-vote") for voting on some or all other matters.
The Company's Restated Articles of Incorporation provide that directors
will be elected by, and all other matters to come before the Meeting require the
approval of, the affirmative vote of a majority of the outstanding shares of
Common Stock entitled to vote and present, in person or represented by proxy, at
the Meeting. Therefore, an abstention, a non-vote or a withholding of authority
to vote with respect to a proposal relating to the election of directors, the
proposed amendment to the Company's 1990 Stock Option Plan or other matters to
come before the meeting will have the effect of a vote against such proposal.
An Inspector of Election appointed by the Company will tabulate votes at
the Meeting.
The Board of Directors is not aware of any matters that are expected to
come before the Meeting other than those referred to in this Proxy Statement. If
any other matter properly comes before the Meeting, the proxies will be voted in
accordance with the discretion of the person or persons voting the proxies.
2
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The following table sets forth certain information with respect to each
nominee for election as a director of the Company. The information as to age,
principal occupation, shares of Common Stock beneficially owned, and
directorships has been furnished by each such nominee. Unless otherwise noted,
each nominee possesses sole voting and dispositive power with respect to the
shares of Common Stock listed, subject to community property laws.
SHARES OF
COMMON STOCK OUTSTANDING
BENEFICIALLY SHARES OF
NAME AGE PRINCIPAL OCCUPATION OWNED COMMON STOCK
- -------------- ---- ------------------------------------------ ------------ ------------
John C. Custer 67 Retired 41,960(1) (2)
Donald E. Nigbor 50 President of the Company 297,632(3) 2.6%
Steven A. Barton 49 Executive Vice President of the Company 48,770(4) (2)
Cary T. Fu 49 Executive Vice President of the Company 318,010(3) 2.7%
Peter G. Dorflinger 46 President and Chief Operating 44,000(5) (2)
Officer, Physicians Resource
Group, Inc.
Gerald W. Bodzy 46 Senior Vice President and 41,200(6) (2)
Managing Director of
Stephens Inc.
David H. Arnold 60 President and Chairman of the Board of 486,364(7) 4.2%
DCM Tech, Inc.
- ------------------------
(1) Includes 7,400 shares owned by Mr. Custer's wife, and 34,560 shares that
may be acquired upon the exercise of options that are currently
exercisable.
(2) Less than 1%.
(3) Includes 136,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(4) Includes 43,600 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(5) Includes 42,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
3
(6) Includes (i) 3,200 shares of Common Stock held by Mr. Bodzy as custodian
for his children under the Uniform Gifts to Minors Act, as to which
shares of Common Stock Mr. Bodzy expressly disclaims beneficial
ownership, and (ii) 24,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(7) Includes 11,288 shares of Common Stock held by Mr. Arnold's wife, 2,726
shares held for Mr. Arnold's benefit in the Company's 401(k) Employee
Savings Plan and 12,000 shares that may be acquired upon the exercise of
options that are currently exercisable.
Mr. Custer has been Chairman of the Board of Directors of the Company since
1988 and a member of the Compensation Committee of the Board of Directors since
1990. Mr. Custer was employed by Mason & Hanger Corporation ("Mason & Hanger"),
a technical services contracting and engineering firm, from 1951 until his
retirement in February 1996. Mr. Custer became a member of the board of
directors of Mason & Hanger in 1983, serving as Chairman of the Board of Mason &
Hanger from 1994 until his retirement, and served in various other management
and operations positions prior to 1994.
Mr. Nigbor has been a director and President of the Company since 1986 and was
its General Manager from 1984 to 1990. Before joining the Company, he was
employed by Intermedics, Inc. ("Intermedics"), a medical implant manufacturer,
serving as a Manufacturing Analyst for its Pacemaker division from 1980 to 1984.
Mr. Nigbor holds B.S. and M.S. degrees in engineering from Rensselaer
Polytechnic Institute and received an M.B.A. from the Amos Tuck School of
Business at Dartmouth College.
Mr. Barton has been a director and Executive Vice President of the Company
since 1990. He served as Executive Vice President -- Marketing and Sales of the
Company from 1990 to April 1992. Since June 1, 1993 he has worked part-time for
the Company for personal reasons. He also has served the Company as Executive
Vice President from 1988 to 1990, a director and Vice President from 1986 to
1988, and President from 1979 to 1983. From 1977 to 1986, Mr. Barton was
employed by Intermedics in various management positions. Mr. Barton holds B.S.
and M.S. degrees in electrical engineering from the University of South Florida
and received an M.B.A. from the Harvard Business School.
Mr. Fu has been a director and Executive Vice President of the Company since
1990. He served as Executive Vice President -- Financial Administration of the
Company from 1990 to April 1992. He also has served the Company as Treasurer
from 1986 to January 1996, Secretary from 1990 to January 1996, a director and
Secretary from 1986 to 1988 and Assistant Secretary from 1988 to 1990. From 1983
to 1986, Mr. Fu was employed by Intermedics as Controller of the Company and
another subsidiary. Mr. Fu holds an M.S. degree in accounting from the
University of Houston and is a certified public accountant.
Mr. Dorflinger has been a director of the Company and a member of the Audit
Committee and Compensation Committee of the Board of Directors since 1990. He is
currently President and Chief Operating Officer of Physicians Resource Group,
Inc., a physicians practice management company, a position he has held since
January 1998. From January 1997 through January 1998, he served as Vice
President and General Counsel of Advanced Medical Instruments, Inc., a
manufacturer of medical monitoring equipment. From March 1987 through October
1996, he served as Vice President, General Counsel and Secretary of Intermedics.
From June 1990 through October 1996, he served as Group Vice President and
General Counsel of SULZERmedica, a division of Sulzer Limited of Switzerland,
composed of eight operating medical device companies in Europe and the United
States. Mr. Dorflinger received a J.D. degree from the University of Houston and
also is a director of Maxxim Medical, Inc., a medical products manufacturer and
supplier.
4
Mr. Bodzy has been a director of the Company since September 1994 and has been
a member of the Audit Committee since March 1995. He has been employed since
1990 by Stephens Inc., serving as Senior Vice President and Managing Director.
From 1979 to 1990, Mr. Bodzy was employed by Smith Barney, Inc., as an
investment banker, serving as Managing Director from 1986 to 1990.
Mr. Arnold became a director of the Company in 1996 pursuant to the terms of
the agreement relating to the Company's acquisition of EMD Technologies, Inc.
("EMD") in July 1996. Mr. Arnold has been a member of the Audit Committee since
1997. Mr. Arnold was a co-founder of EMD and served as a director and officer of
EMD from 1974 until its acquisition by the Company. Mr. Arnold is currently
President and Chairman of the Board of DCM Tech, Inc., a privately-held
manufacturer of machine tools. Mr. Arnold earned a B. S. degree in mechanical
engineering from Iowa State University and an M.S. degree in mechanical
engineering from the University of Michigan. He also serves as a director of
Town and Country State Bank in Winona, Minnesota. The agreement relating to the
acquisition of EMD by the Company requires the Company to include either Mr.
Arnold or Mr. Daniel M. Rukavina (or an acceptable person designated by them) on
its recommended slate of nominees for election to the Company's Board of
Directors for so long as Mr. Arnold and Mr. Rukavina own beneficially in the
aggregate at least 10% of the outstanding shares of Common Stock.
The officers of the Company are elected by, and serve at the discretion of,
the Board of Directors.
ELECTION PROCEDURES; TERM
The directors will be elected by the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock present in person or
represented by proxy at the Meeting. Unless the authority to vote for the
election of directors is withheld as to any or all of the nominees, all shares
of Common Stock represented by proxy will be voted for the election of the
nominees. If the authority to vote for the election of directors is withheld as
to any but not all of the nominees, all shares of Common Stock represented by
any such proxy will be voted for the election of the nominees as to whom such
authority is not withheld. If a nominee becomes unavailable to serve as a
director for any reason before the election, the shares represented by proxy
will be voted for such other person, if any, as may be designated by the Board
of Directors. The Board of Directors, however, has no reason to believe that any
nominee will be unavailable to serve as a director.
Any vacancy on the Board of Directors occurring after the election may be
filled (1) by election at any annual or special meeting of the shareholders
called for that purpose, or (2) by a majority of the remaining directors though
less than a quorum of the Board of Directors, provided that the remaining
directors may not fill more than two such director vacancies during the period
between any two successive annual meetings of shareholders. A director elected
to fill a vacancy will be elected for the unexpired portion of the term of his
predecessor in office.
All directors will be elected to serve until the 1999 annual meeting of
shareholders and until their successors are duly elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES TO THE BOARD OF DIRECTORS.
5
OPERATION OF BOARD OF DIRECTORS
The directors are elected annually by the shareholders and hold office until
their successors are elected and qualified. The Amended and Restated Bylaws of
the Company provide for a Board of Directors consisting of seven members. The
Board of Directors held eight meetings during 1997.
The Board of Directors has an Audit Committee and a Compensation Committee,
but does not have a nominating committee or any committee performing a similar
function.
The members of the Audit Committee are Messrs. Dorflinger, Bodzy and Arnold.
The functions of the Audit Committee are to recommend to the Board of Directors
the retention or discharge of the Company's independent auditors; review and
approve the engagement of the independent auditors to conduct an audit of the
Company and related matters including the scope, extent and procedures of the
audit and the fees to be paid therefor; review, in consultation with the
independent auditors, the audit results and their proposed opinion letter or
audit report and any related management letter; review and approve the audited
financial statements of the Company; consult with the independent auditors and
management of the Company, together or separately, on the adequacy of internal
accounting controls and review the results thereof; review the independence of
the independent auditors; review and approve the engagement of the independent
auditors for non-audit services; direct and supervise investigations into
matters within the scope of the Audit Committee's duties; and perform such other
functions as may be necessary or appropriate in the efficient discharge of its
duties. The Audit Committee held one meeting during 1997.
The members of the Compensation Committee are Messrs. Custer and Dorflinger.
The functions of the Compensation Committee are to recommend to the Board of
Directors the compensation of the President of the Company; determine the
compensation of the other executive officers of the Company; administer the
Company's employee benefit plans ("plans"), including, without limitation,
determining the terms and conditions of the benefits and the recipients thereof
in accordance with the plans; review the plans and advise the Board of Directors
regarding the results thereof; and perform such other functions as may be
necessary or appropriate in the efficient discharge of its duties. The
Compensation Committee held four meetings during 1997.
6
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid by the Company for the
three fiscal years ended December 31, 1997, to its Chief Executive Officer and
the other executive officers of the Company whose salary and bonus received from
the Company for services rendered during the fiscal year ended December 31,
1997, exceeded $100,000.
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION -----------
------------------------------------------------- SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($) OPTIONS (#) COMPENSATION($)(2)
------------------ ---- --------- ----------- --------------- ----------- ------------------
Donald E. Nigbor............. 1997 $ 191,500 $75,000 -0- 100,000 $ 5,008
President and Chief 1996 153,231 97,625(3) -0- 25,000 5,259
Executive Officer 1995 136,289 -0- -0- 15,000 5,843
Cary T. Fu................... 1997 191,500 75,000 -0- 100,000 5,198
Executive Vice 1996 153,231 97,625(3) -0- 25,000 5,893
President 1995 136,289 -0- -0- 15,000 5,843
- ---------------------------
(1) The amounts shown in this column reflect cash bonuses paid to Messrs.
Nigbor and Fu pursuant to the Company's incentive bonus plans discussed
below under the caption "Executive Compensation and Other Matters -- Board
Compensation Committee Report on Executive
Compensation -- Cash Bonus."
(2) For fiscal year ended December 31, 1997, the All Other Compensation Column
includes (a) $4,750 and $4,940 paid by the Company pursuant to the
Company's Qualified 401(k) Employee Savings Plan ("Savings Plan") to each
of Messrs. Nigbor and Fu, respectively, and (b) payments by the Company of
premiums of $258 for term life insurance on behalf of each of Messrs.
Nigbor and Fu. Under the Savings Plan the Company is obligated to make
matching contributions to the Savings Plan in an amount equal to 50% of
each participant's elective contributions, to the extent that such
elective contributions do not exceed 6% of such participant's
compensation. The Company also may make discretionary contributions to the
Savings Plan based on each participant's compensation compared to the
total compensation of all participants.
(3) Of this amount, $50,000 was accrued as of December 31, 1996 under the
Company's Incentive Bonus Plan in recognition of the Company's financial
performance during 1996. The remaining $47,625 was accrued and paid during
1996 under the Incentive Bonus Plan as a deferred bonus for the Company's
financial performance during 1995 and the first quarter of 1996. Because
of the decision of several customers during 1995 to extend delivery dates
into 1996, the Compensation Committee elected not to pay or accrue any
bonuses during 1995 for performance in that year. After the end of the
first quarter of 1996, the Compensation Committee determined to accrue
$47,625 in bonus for the fifteen month period ended March 31, 1996. See
"--Board Compensation Committee Report on Executive Compensation."
7
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides certain information concerning options to
purchase Common Stock granted during the fiscal year ended December 31, 1997 to
the two executive officers named in the Summary Compensation Table.
POTENTIAL REALIZED
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PER PRICE APPRECIATION
UNDERLYING GRANTED TO SHARE FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE EXPIRATION ------------------------
NAME GRANTED(1) IN 1996 PRICE DATE 5% 10%
- ------------------------- ---------- ---------- ---------- ---------- ---------- ----------
Donald E. Nigbor ........ 40,000 24.88% $ 15.32 05/14/2007 $ 385,198 $ 976,167
60,000 24.88% $ 26.50 07/30/2007 $1,014,092 $2,569,909
Cary T. Fu .............. 40,000 24.88% $ 15.32 05/14/2007 $ 385,198 $ 976,167
60,000 24.88% $ 26.50 07/30/2007 $1,014,092 $2,569,909
- ----------------
(1) Each option granted and reported in this table vests over a five
year period, with 20% of the shares becoming exercisable at the end
of each of the second, third and fourth years following the date of
grant and the entire option becoming exercisable at the end of the
fifth year.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table provides certain information concerning exercises of
options to purchase Common Stock during the fiscal year ended December 31, 1997
by the two executive officers named in the Summary Compensation Table and the
value of such officers' unexercised options at December 31, 1997.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
ACQUIRED ON VALUE ---------------------------- -------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- -------- ----------- ------------- ----------- -------------
Donald E. Nigbor ......... 20,000 $410,000 136,000 174,000 $1,690,150 $700,775
Cary T. Fu ............... 20,000 422,500 136,000 174,000 1,690,150 700,775
- ------------------------------
COMPENSATION OF NONEMPLOYEE DIRECTORS
The Company pays its nonemployee directors an annual fee of $5,000 and a fee
of $500 for each meeting of the Board of Directors or any committee thereof
attended in person. The Company also reimburses its nonemployee directors for
their reasonable travel expenses in attending such meetings.
In December 1994, the Board of Directors of the Company adopted the Benchmark
Electronics, Inc. 1994 Stock Option Plan for Non-Employee Directors (the "1994
Plan") for the benefit of members of the Board of Directors of the Company or
its Affiliates who are not employees of the Company or its Affiliates (as
defined in the 1994 Plan). After giving effect to the Company's stock split
during 1997, the aggregate number of shares of Common Stock for which options
may be granted under the Plan is now 200,000. The purpose of the 1994 Plan is to
encourage ownership of the Company's Common Stock by eligible non-
8
employee directors of the Company, to provide increased incentive for such
directors to render services and to exert maximum effort for the business
success of the Company and to further strengthen the identification of directors
with the shareholders of the Company. The 1994 Plan terminates 10 years from the
date of its adoption and no further options may be granted thereafter pursuant
to the 1994 Plan.
Under the terms of the 1994 Plan, each member of the Board of Directors of the
Company or its Affiliates who was not an employee of the Company or any of its
Affiliates on the date of the grant (a "Non-Employee Director") will receive a
grant of an option to purchase 3,000 shares of the Company's Common Stock upon
the date of his election or re-election to the Board of Directors. Additionally,
any Non-Employee Director who was a director on the date the Board of Directors
adopted the 1994 Plan received (a) an option to purchase 6,000 shares of Common
Stock for the fiscal year in which the 1994 Plan was adopted by the Board of
Directors and (b) an option to purchase shares of Common Stock in amount equal
to (i) 6,000, multiplied by (ii) the number of consecutive fiscal years,
immediately preceding the fiscal year during which the 1994 Plan was adopted,
that the individual served as a director of the Company, provided that the
number under clause (ii) shall not exceed three (3).
Upon their election as directors in May 1997, each of Messrs. Custer,
Dorflinger, Bodzy and Arnold received a grant under the 1994 Plan of an option
to purchase 3,000 shares of Common Stock with an exercise price of $32.64, which
was the market price of the Common Stock on the date of the grant. After giving
effect to a subsequent stock split, each of these options now represents the
right to purchase 6,000 shares of Common Stock at $16.32 per share.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATIONa
The Company's executive compensation program is administered by the
Compensation Committee, a committee of the Board of Directors composed of
non-employee directors listed below this report. The Compensation Committee is
responsible for recommending to the full Board of Directors compensation of the
President of the Company, determining the compensation of the other executive
officers of the Company, and administering the Company's employee benefit plans.
None of the members of the Compensation Committee have any interlocking or other
relationships with the Company that would call into question their independence
as Compensation Committee members.
COMPENSATION POLICIES AND PROGRAMS. The Compensation Committee believes that
the goals of the executive compensation program should be to align executive
compensation with the Company's long-term business objectives and performance
and to enable the Company to attract, retain and reward executive officers who
contribute to the long-term success of the Company. The Compensation Committee
believes that the best way to achieve these goals is by aligning the financial
interests of the Company's executive officers closely to the interests of the
Company's shareholders through a combination of annual cash incentives and stock
options, while providing the executive officers with base salary compensation at
levels that are competitive with, but which do not exceed, prevailing standards.
The compensation of the Company's executive officers is reviewed and approved
annually by the Compensation Committee. The
- ---------------------
(a) Notwithstanding Securities and Exchange Commission ("SEC") filings by the
Company that have incorporated or may incorporate by reference other SEC filings
(including this proxy statement) in their entirety, the Board Compensation
Committee Report on Executive Compensation shall not be incorporated by
reference into such filings and shall not be deemed to be "filed" with the SEC
except as specifically provided otherwise or to the extent required by Item 402
of Regulation S-K.
9
Company's executive compensation program is based on three elements, each of
which is determined in part by corporate performance:
o Base salary compensation
o Annual incentive compensation
o Stock-based incentive compensation
Corporate performance is evaluated by reviewing the extent to which strategic
and business plan goals are met, including the relationship between the
Company's net income and sales. The Compensation Committee believes that total
executive compensation opportunities are competitive and at the median with
those offered by employers in the peer group of companies with which the Company
compares its performance in the Performance Graph following this report ("Peer
Group"), but with less emphasis on base salary compensation than such other
employers. The Peer Group does not include other companies (e.g., CMC
Industries, Inc., Jabil Circuit, Inc. and Plexus Corp.) whose executive
compensation structures the Compensation Committee also reviewed. Such companies
are in the electronics industry. However, either they are not direct competitors
with the Company or have been publicly traded companies for too short a period
of time for performance comparisons with them to be meaningful.
CASH BASE SALARY. Until August 1993, the Company had identical employment
agreements with each of its executive officers, including its chief executive
officer. The agreements provided for annual base salaries, subject to adjustment
for subsequent twelve-month periods as determined by the Compensation Committee,
based on its review of base salaries provided to executive officers of other
employers in the Company's industry and certain corporate performance factors
such as the Company's net income and sales and historical salary progression.
Since August 1993, the Company has not had employment agreements with its
executive officers. In August 1997, the Compensation Committee determined that
the Company's executive officers named in the Summary Compensation Table should
receive a salary increase from $165,000 to $230,000, based on the Company's net
income and sales during the year ended December 31, 1996.
CASH BONUS. Effective May 6, 1992, the Company adopted an Incentive Bonus Plan
("Bonus Plan") for the benefit of its employees, including executive officers.
The Bonus Plan is administered by the Compensation Committee. The total amount
of cash bonus awards to be made under the Bonus Plan for any plan year depends
primarily on the Company's sales and net income for such year.
10
For any plan year, the Company's sales and net income must meet or exceed, or
in combination with other factors satisfy, levels targeted by the Company in its
business plan, as established at the beginning of each fiscal year, for any
bonus awards to be made. Aggregate bonus awards to all participants under the
Bonus Plan may not exceed 7% of the Company's net income. Subject to the
foregoing guidelines, the Compensation Committee has the authority to determine
the total amount of bonus awards, if any, to be made to the eligible employees
for any plan year based on its evaluation of the Company's financial condition
and results of operations, the Company's business and prospects, and such other
criteria as it may determine to be relevant or appropriate. The Compensation
Committee has the authority to determine the specific amounts of bonus awards to
be made to the Company's executive officers and other key employees based on its
evaluation of each such employee's position, performance, service and such other
criteria as it may determine to be relevant or appropriate.
In 1997, the Company's sales and net income exceeded the $310 million and
$13.7 million levels targeted by the Company in its 1997 business plan.
Accordingly, the Compensation Committee in February 1998 awarded an aggregate of
$520,000 in cash bonuses under the Bonus Plan to eligible employees, including
$75,000 to each of Messrs. Nigbor and Fu.
STOCK OPTION PLAN. The Compensation Committee believes its stock options are
critical in motivating the long-term creation of shareholder value because
options focus executive attention on stock price as the primary measure of
performance. In 1990, the Company adopted and its shareholders approved a Stock
Option Plan for the benefit of its employees, including executive officers. The
Stock Option Plan is administered by the Compensation Committee. The purpose of
the Stock Option Plan is to encourage ownership of Common Stock by eligible
employees, including executive officers, to provide increased incentive for such
employees to render services and to exert maximum effort for the business
success of the Company and to strengthen identification of such employees with
the shareholders for the purpose of maximizing shareholder value. The Stock
Option Plan also utilizes vesting periods to encourage its executive officers
and eligible employees to continue in the employ of the Company. Stock option
grants made to the Chief Executive Officer and other executive officers in 1997
were made in part because of the Company's outstanding performance during 1997.
Stock option grants to the Company's Chief Executive Officer and other executive
officers are not made automatically each year and are not considered to be a
part of normal annual compensation. The amount and terms of options already held
by an executive officer generally are not significant factors in the
Compensation Committee's determination of whether and how many options should be
granted to the executive officer.
Stock option grants provide an incentive that focuses the executives'
attention on managing the Company from the perspective of an owner with an
equity stake in the business. Accordingly, these stock options are tied to the
future performance of the Company's Common Stock and provide value to the
recipient only when the price of the Company's Common Stock increases above the
option grant price.
SUBMITTED BY THE COMPENSATION COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS.
John C. Custer Peter G. Dorflinger
11
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative total
shareholder return on its Common Stock for the five-year period commencing
December 31, 1992 and ending December 31, 1997, with the cumulative total return
of the Standard & Poor's Stock Index (which does not include the Company) and a
peer group of companies, which is composed of Solectron Corporation, SCI
Systems, Inc., DII Group Inc. and IEC Electronics Corp. (the "Peer Group").
Dividend reinvestment has been assumed. The Performance Graph assumes $100
invested on December 31, 1992 in the Company's Common Stock, S&P 500 Index and
Peer Group.
COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN
BENCHMARK ELECTRONICS, S&P 500 AND A PEER GROUP INDEX
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97
------- ------- ------- ------- ------- -------
Benchmark Electronics $100.00 $145.80 $147.33 $167.94 $183.97 $272.52
Peer Group $100.00 $130.68 $125.57 $199.17 $243.94 $420.45
S&P 500 $100.00 $110.08 $111.54 $153.45 $188.69 $251.64
NOTES: Assumes $100 invested on 12/31/92 in Benchmark Electronics, Inc. stock,
in the S&P 500, and in the Industry Peer Index. Reflects month-end
dividend reinvestment, and annual reweighting of the Industry Peer Index
portfolio.
12
CERTAIN TRANSACTIONS
The Company and Mason & Hanger entered into a Registration Rights Agreement
on March 30, 1992, pursuant to which Mason & Hanger has, subject to certain
limitations, the right to require the Company one time, after June 1, 1995, but
before June 1, 2005, to register Mason & Hanger's shares of Common Stock under
the Securities Act of 1933, as amended, and the right to include its shares of
Common Stock in other registrations initiated by the Company until such time as
Mason & Hanger holds less than 5% of the outstanding shares of Common Stock.
Mason & Hanger will bear all expenses of any registration that includes its
shares of Common Stock exclusively. With respect to registrations in which
shares of Common Stock are to be sold for the Company's account, the Company
will bear all expenses except those expenses incurred solely as a result of
Mason & Hanger's participation, which will be paid by Mason & Hanger. Pursuant
to the Registration Rights Agreement, Mason & Hanger has agreed to certain
restrictions with respect to its shares of Common Stock or any other securities
of the Company held by Mason & Hanger entitled generally to vote in the election
of directors of the Company ("Voting Securities"). Mason & Hanger is required to
be present or represented by proxy at all meetings of the Company's shareholders
and is generally prohibited from depositing any Voting Securities in any voting
trust or subjecting them to a voting agreement or other similar arrangement,
acquiring any additional Voting Securities, joining any partnership or other
group for the purpose of holding or disposing of Voting Securities within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), or taking any action by a written consent in lieu of a
meeting.
The Agreement and Plan of Merger dated March 27, 1996 relating to the
acquisition of EMD (the "Merger Agreement") contains certain restrictions on the
ability of David H. Arnold and Daniel M. Rukavina, the "Founding Shareholders"
of EMD, to vote and transfer shares of Common Stock received by them in the
Acquisition for a period of three years after the closing date of the
Acquisition (the "Closing Date"). Until the first anniversary of the Closing
Date, the Founding Shareholders may not transfer any shares of Common Stock
except by will or the laws of descent and distribution or otherwise by operation
of law. During the second and third years after the Closing Date, the Founding
Shareholders may make certain transfers that are expressly permitted by the
Merger Agreement, but may not make any other transfers unless they have complied
with procedures set forth in the Merger Agreement providing for a right of first
refusal for the Company with respect to the shares of Common Stock to be
transferred by the Founding Shareholders.
Until the third anniversary of the Closing Date, the Merger Agreement
requires the Founding Shareholders to be present, in person or by proxy, at all
meetings of shareholders of the Company and to vote all shares of Common Stock
held by them, however acquired, in the manner recommended to shareholders by the
Company's Board of Directors, except that the Founding Shareholders may vote
their shares in their sole discretion with respect to any proposal involving a
merger, consolidation, statutory share exchange, reorganization,
reclassification or other extraordinary corporate transaction that has been
approved by the Company's Board of Directors. Additionally, until the third
anniversary of the Closing Date, the Founding Shareholders are prohibited from
(i) soliciting proxies in opposition to the recommendation of the Company's
Board of Directors, (ii) depositing any shares of Common Stock in a voting trust
or subjecting them to a voting agreement, (iii) acquiring or offering to acquire
any shares of Common Stock except from other persons receiving such shares in
the Acquisition or as a result of a stock split or dividend or similar
transaction, (iv) joining any group for the purpose of acquiring, holding or
disposing of Common Stock within the meaning of Section 13(d) of the Exchange
Act, (v) initiating, proposing or soliciting shareholders for a shareholder
proposal or tender or exchange offer for Common Stock or any change of control
of the Company or for the purpose of convening a shareholders' meeting, (vi)
acquiring more than 5% of any class of equity security of any entity that has
publicly disclosed that it owns or intends to become the owner of, or
13
that the Founding Shareholder otherwise knows owns or intends to become the
owner of, 5% of the outstanding shares of Common Stock, and (vi) taking any
action by written consent in lieu of a meeting.
In connection with the consummation of the acquisition of EMD on July 30,
1996, the Company entered into three leases with the co-founders of EMD, Messrs.
Arnold and Rukavina, and their respective spouses. The leases cover the real
estate and buildings where EMD's operations were conducted and where the Company
has continued to operate after the closing and an adjacent parking area. The
lease covering the EMD Central building is for a term of 10 years commencing
September 1, 1996 at a net rent of $17,150 per month. The lease covering the EMD
East building and the adjacent parking lot is for a term of 10 years commencing
July 30, 1996 at a net rent of $50,932 per month. The lease covering the parking
area for the EMD West building is for a term of 10 years commencing July 30,
1996 at a net rent of $1,150 per month. All of such leases (i) are subject to
purchase options in favor of the Company exercisable during the first three
years of the lease term and (ii) may be renewed at the option of the Company at
fair market rental rates. The Company negotiated the terms of the leases,
including purchase options, on an arms-length basis, and obtained appraisals of
the real estate and rental values to help establish such terms. The Company
believes the terms of such leases are no less favorable to the Company than
could have been obtained from unaffiliated third parties.
Subsequent to closing the acquisition of EMD, the Company has purchased
production tooling from DCM Tech, Inc. ("DCM"), a privately held manufacturer of
machine tools controlled by Mr. Arnold. Such purchases aggregated $463,717
during the year ended December 31, 1997. The Company may continue to purchase
production tooling during the current fiscal year. These purchases were 8.8% of
DCM's gross revenues for 1997.
14
COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership, as defined in Rule 13d-3 under the Exchange Act, of Common
Stock as of April 8, 1998, by each person known to the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock, each
director and nominee for director of the Company, each executive officer of the
Company and all directors and executive officers of the Company as a group.
SHARES OF PERCENTAGE OF
COMMON STOCK OUTSTANDING
BENEFICIALLY OWNED SHARES OF
BENEFICIAL OWNERS OWNED(1) COMMON STOCK
- ----------------- ------------------ -----------------
John C. Custer.............................................. 41,960(2) (3)
2355 Harrodsburg Road
Lexington, Kentucky 40504
Donald E. Nigbor............................................ 297,632(4) 2.6%
3000 Technology Drive
Angleton, Texas 77515
Steven A. Barton............................................ 48,770(5) (3)
3000 Technology Drive
Angleton, Texas 77515
Cary T. Fu.................................................. 318,010(4) 2.7%
3000 Technology Drive
Angleton, Texas 77515
Peter G. Dorflinger......................................... 44,000(6) (3)
4000 Technology Drive
Angleton, Texas 77515
Gerald W. Bodzy............................................. 41,200(7) (3)
333 Clay Street, Suite 3030
Houston, Texas 77002
David H. Arnold............................................. 486,364(8) 4.2%
1853 Edgewood Road
Winona, Minnesota 55987
Directors and executive officers as a group (7 persons)..... 1,277,936(9) 11.0%
Mason & Hanger Corporation.................................. 1,100,656(10) 9.5%
2355 Harrodsburg Road
Lexington, Kentucky 40504
- -----------------------------
15
(1) Unless otherwise noted, each person identified possesses sole voting and
dispositive power with respect to the shares of Common Stock listed,
subject to community property laws.
(2) Mr. Custer does not own of record any shares of Common Stock. Includes
34,560 shares of Common Stock that may be acquired upon the exercise of
options that are currently exercisable and 7,400 shares owned of record
by Mr. Custer's wife.
(3) Less than 1%.
(4) Includes 136,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(5) Includes 46,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(6) Includes 42,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(7) Includes (i) 3,200 shares of Common Stock held by Mr. Bodzy as custodian
for his children under the Uniform Gifts to Minors Act, as to which
shares of Common Stock Mr. Bodzy expressly disclaims beneficial
ownership, and (ii) 24,000 shares of Common Stock that may be acquired
upon the exercise of options that are currently exercisable.
(8) Includes 11,288 shares of Common Stock held of record by Mr. Arnold's
wife, 2,726 shares held for Mr. Arnold's benefit in the Company's 401(k)
Employee Savings Plan and 12,000 shares that may be acquired upon the
exercise of options that are currently exercisable.
(9) Includes 430,560 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(10) Mason & Hanger Corporation is a wholly-owned subsidiary of The Mason
Company ("TMC"), a private holding company.
(11) Sole dispositive power only.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC and the New York
Stock Exchange initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater than ten-percent shareholders are required by regulation to furnish
the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and certain written representations provided to
the Company by such persons, for the fiscal year beginning January 1, 1997 and
ending December 31, 1997 all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than ten-percent beneficial owners
were complied with except that Mr. Arnold filed a late report with respect to
one transaction.
16
EXECUTIVE OFFICERS
The executive officers of the Company are Donald E. Nigbor, Steven A. Barton
and Cary T. Fu. See "Election of Directors -- Nominees for Election" for certain
information with respect to the age, positions and length of service with the
Company, and business experience of each executive officer.
APPROVAL OF AN AMENDMENT TO THE COMPANY'S 1990 STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES SUBJECT THERETO
BACKGROUND
In 1990, the Company adopted, and the shareholders approved, the Benchmark
Electronics, Inc. Stock Option Plan (the "1990 Plan") for the benefit of its
employees, including executive officers. The 1990 Plan is administered by the
Compensation Committee of the Board of Directors. As a result of an amendment to
the 1990 Plan approved by the shareholders in 1996 and the 1997 stock split, the
1990 Plan currently authorizes the Company, upon recommendation of the
Compensation Committee, to grant options to purchase a total of 2,200,000 shares
of Common Stock to selected employees of the Company. The 1990 Plan provides for
the discretionary granting of "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, as well as
non-qualified stock options that do not comply with Section 422. As of March 27,
1998, options to purchase a total of 2,137,000 shares of Common Stock had been
granted under the 1990 Plan and options to purchase a total of 289,400 shares of
Common Stock had been cancelled. Consequently, 352,400 shares of Common Stock
remained available under the 1990 Plan. The purchase price of each share of
Common Stock subject to an option may not be less than the par value of the
Common Stock, and in the case of an incentive stock option may not be less than
the fair market value of the Common Stock on the date on which the option is
granted. The Compensation Committee may provide that the options will vest
immediately or in increments over a period of time. No option may be transferred
by a participant other than upon death. Upon the termination of employment,
death or disability of a participant, any unvested options will expire, but the
vested options may be exercised during the next succeeding three months. Upon
receiving approval from the Compensation Committee, a participant may relinquish
all or a portion of his option for an amount equal to the difference between the
fair market value of the Common Stock covered by the option being relinquished
on the day of relinquishment and the total exercise price for such shares. The
1990 Plan will terminate ten years after its adoption; however, any option
outstanding upon termination of the 1990 Plan will remain in effect until
exercised or terminated pursuant to the agreement under which it was granted.
PURPOSES OF THE 1990 PLAN
The 1990 Plan is intended to encourage ownership of Common Stock by eligible
employees, to provide increase incentive for such employees to render services
and to exert maximum effort for the business success of the Company and to
strengthen identification of such employees with the shareholders.
17
ELIGIBILITY
All employees of the Company or its affiliates at the time an option is
granted are eligible to participate in the 1990 Plan.
TERM OF OPTION
Each option granted terminates with respect to any portion not previously
exercised by the optionee upon the expiration of ten years from the date of
grant of the option or such earlier date as may be set forth in the stock option
agreement signed by such optionee with respect to such optionee's options.
AMENDMENT AND TERMINATION
The Board of Directors may amend or terminate the 1990 Plan at any time,
provided that no amendment may impair the rights of any optionee under the 1990
Plan without his consent and provided further that no amendment or alteration
may be made which, without the approval of the shareholders, would (a) increase
the total number of shares reserved for issuance under the 1990 Plan (except for
antidilutive adjustments), (b) extend the duration of options, (c) materially
increase the benefits accruing to optionees under the 1990 Plan, (d) decrease
the option price (except for antidilutive adjustments), (e) change the class of
persons eligible to participate in the 1990 Plan, (f) extend the expiration date
of the 1990 Plan, or (g) withdraw the administration of the 1990 Plan from the
Compensation Committee.
PROPOSED AMENDMENT
On March 30, 1998, the Board of Directors adopted an amendment to the 1990
Plan to increase the total number of shares of Common Stock that may be awarded
under the 1990 Plan by 1,000,000 from 2,200,000 to 3,200,000. The amendment will
become effective only upon the approval of the shareholders of the Company. The
total number of shares that can currently be issued pursuant to options awarded
under the 1990 Plan is 2,200,000, and options with respect to only 352,400 of
such shares remained available under the 1990 Plan as of March 27, 1998. The
Board of Directors believes that the 1990 Plan is accomplishing its purposes and
adopted this proposed amendment to the 1990 Plan in order that option awards may
continue to be made as the Compensation Committee may determine.
An important consideration to the Board of Directors in proposing the
amendment to the 1990 Plan was the Company's acquisition of Lockheed Commercial
Electronics Company ("LCEC"), a company headquartered in Hudson, New Hampshire.
LCEC is one of New England's largest electronics manufacturing services
companies, providing a broad range of services including printed circuit board
assembly and test, system assembly and test, prototyping, depot repair,
materials procurement, and engineering support services. The expansion of the
Company's business as a result of the acquisition will be accompanied by an
increase in the number of employees eligible for options under the 1990 Plan.
The Board of Directors believes it will be important for the Company to have the
flexibility to provide incentive-based compensation packages to key members of
the management of LCEC. The proposed amendment to the 1990 Plan will increase
the Company's flexibility in structuring its compensation packages for key
employees of LCEC, while allowing the Company to continue historical practices
in this area.
Approval of this proposal requires the favorable vote of a majority of the
outstanding shares of Common Stock entitled to vote and present, in person or
represented by proxy, at the Meeting.
18
INTEREST OF CERTAIN PERSONS
In the past Donald E. Nigbor, Cary T. Fu and Steven A. Barton, all of whom
are directors and executive officers of the Company, have been awarded options
to purchase an aggregate of 718,000 share of Common Stock under the 1990 Plan.
Such persons may benefit from approval of the amendment to increase the number
of shares of Common Stock subject to the 1990 Plan if the Compensation Committee
determines to award additional options under the 1990 Plan to such persons.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO APPROVE THE
AMENDMENT TO THE 1990 PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
SUBJECT TO THE PLAN BY 1,000,000.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG Peat Marwick LLP as the independent
auditors of the Company for the year ending December 31, 1998. The shareholders
will be asked to ratify the appointment of KPMG Peat Marwick LLP at the Meeting.
The ratification of such appointment will require the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
and present, in person or represented by proxy, at the Meeting. Representatives
of KPMG Peat Marwick LLP will be present at the Meeting, will be given an
opportunity to make a statement (if they desire to do so) and will be available
to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF THE INDEPENDENT AUDITORS.
EXPENSES OF SOLICITATION
The cost of soliciting proxies on behalf of the Board of Directors will be
borne by the Company. Solicitations of proxies are being made by the Company
through the mail and may also be made in person or by telephone. Directors and
employees of the Company may be utilized in connection with such solicitations.
The Company also will request brokers and nominees to forward soliciting
materials to the beneficial owners of the Common Stock held of record by such
persons and will reimburse them for their reasonable forwarding expenses.
DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS
For shareholder proposals to be included in the Company's proxy statement and
proxy relating to the Company's 1999 annual meeting of shareholders, such
proposals must be received by the Company at its principal executive offices not
later than December 21, 1998.
19
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before the
Meeting and has not been informed that any other matter is to be presented by
others. If any other matter properly comes before the Meeting, the proxies will
be voted in accordance with the discretion of the person or persons voting the
proxies.
You are cordially invited to attend the Meeting. Regardless of whether you
plan to attend the Meeting, you are urged to complete, date, sign and return the
enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
Lenora A. Gurton
Secretary
20
PROXY BENCHMARK ELECTRONICS, INC. PROXY
1998 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 19, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The 1998 Annual Meeting of Shareholders of Benchmark Electronics, Inc.
("Company") will be held at the Doubletree Hotel at Allen Center, 400 Dallas
Street, Houston, Texas, on Tuesday, May 19, 1998, beginning at 10:00 a.m. (local
time). The undersigned hereby acknowledges receipt of the related Notice and
Proxy Statement dated April 20, 1998, accompanying this proxy.
The undersigned hereby appoints Donald E. Nigbor, Steven A. Barton, and Cary
T. Fu, and each of them, attorneys and agents, with full power of substitution,
to vote as proxy all shares of Common Stock, par value $0.10 per share, of the
Company owned of record by the undersigned and otherwise to act on behalf of the
undersigned at the 1998 Annual Meeting of Shareholders and any adjournment
thereof in accordance with the directions set forth herein and with
discretionary authority with respect to such other matters, not known or
determined at the time of the solicitation of this proxy, as may properly come
before such meeting or any adjournment thereof.
This proxy is solicited on behalf of the Board of Directors of the Company
and will be voted FOR the following proposals unless otherwise indicated.
1. ELECTION OF DIRECTORS to serve until the 1999 annual meeting of
shareholders and until their successors are duly elected and qualified:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY for all
(except as otherwise indicated below) nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY OF THE NOMINEES LISTED
BELOW, DRAW A LINE THROUGH SUCH NOMINEE'S NAME.
NOMINEES: JOHN C. CUSTER, DONALD E. NIGBOR, STEVEN A. BARTON, CARY T. FU,
PETER G. DORFLINGER, GERALD W. BODZY, AND DAVID H. ARNOLD.
2. APPROVAL OF THE AMENDMENT OF THE COMPANY'S 1990 STOCK OPTION PLAN to
increase the number of shares of Common Stock of the Company subject thereto by
1,000,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE.)
(CONTINUED FROM OTHER SIDE.)
3. RATIFICATION OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP as the
independent auditors of the Company for the year ending December 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy is solicited by the Board of Directors and will be voted in
accordance with the undersigned's directions set forth herein. If no direction
is made, this proxy will be voted FOR the election of all nominees for director
named herein to serve on the Board of Directors until the 1999 annual meeting of
shareholders and until their successors are duly elected and qualified, FOR
approval of the amendment of the Company's 1990 Stock Option Plan to increase
the number of shares of Common Stock of the Company subject thereto by
1,000,000,and FOR the ratification of the appointment of KPMG Peat Marwick LLP
as the independent auditors of the Company for the year ending December 31,
1998.
Please sign your name exactly as it appears below. If shares are held
jointly, all joint owners should sign. If shares are held by a corporation,
please sign the full corporate name by the president or any other authorized
corporate officer. If shares are held by a partnership, please sign the full
partnership name by an authorized person. If you are signing as attorney,
executor, administrator, trustee or guardian, please set forthyour full title as
such.
________________________________________
Signature(s) of Shareholder(s)
Date: __,1998