SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
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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 Section 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.
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and 0-11.
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BENCHMARK ELECTRONICS, INC.
3000 TECHNOLOGY DRIVE
ANGLETON, TEXAS 77515
NOTICE OF 2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 15, 2001
Shareholders of Benchmark Electronics, Inc.:
The 2001 Annual Meeting of Shareholders of Benchmark Electronics, Inc.
("Company") will be held at the Hyatt Regency Houston, 1200 Louisiana Street,
Houston, Texas, on Tuesday, May 15, 2001, beginning at 10:00 a.m. (local time),
for the following purposes:
1. to elect six directors to serve on the Board of Directors
until the 2002 annual meeting of shareholders and until their
successors are duly elected and qualified;
2. to ratify the appointment of KPMG LLP as the independent
auditors of the Company for the year ending December 31, 2001; and
3. 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 2, 2001 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Regardless of whether
you plan to attend the meeting, you are urged to complete, date, sign and return
the enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
/s/ Lenora A. Gurton
Lenora A. Gurton
Secretary
Angleton, Texas
April 16, 2001
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
(979) 849-6550
APRIL 16, 2001
--------------------------
PROXY STATEMENT
FOR
2001 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, MAY 15, 2001
--------------------------
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 2001 Annual Meeting of Shareholders of the Company to
be held on Tuesday, May 15, 2001, beginning at 10:00 a.m. (local time), and any
adjournment thereof ("Meeting") for the purposes set forth in this Proxy
Statement and the accompanying Notice. It is anticipated that this Proxy
Statement, the Notice and the enclosed form of proxy will be sent to
shareholders on or about April 16, 2001.
PROXIES
Proxies in the enclosed form that are properly executed and received
by the Company before or at the Meeting and which are not revoked 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 2002 annual meeting of
shareholders and until their successors are duly elected and qualified, and FOR
the ratification of the appointment of KPMG LLP as the independent auditors of
the Company for the year ending December 31, 2001. If any other matter, not
known or determined at the time of the solicitation of proxies, properly comes
before the Meeting, the proxies will be voted in accordance with the discretion
of the person or persons voting the proxies. The proxy also confers on the
persons named therein discretionary authority to vote with respect to any
matters presented at the Annual Meeting for which advance notice was not
received by the Company prior to February 12, 2001. Proxies may be revoked by
written notice received by the Secretary of the Company at any time before they
are voted by delivering to the Secretary of the Company a signed notice of
revocation, or a later dated signed proxy, or by attending the Meeting and
voting in person by ballot.
VOTING SECURITIES
Shareholders of record at the close of business on April 2, 2001 are
entitled to notice of and to vote at the Meeting. As of April 2, 2000, there
were 19,601,953 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.
QUORUM AND OTHER MATTERS
The presence at the Meeting, in person or by proxy, of the holders of
a majority of the outstanding shares of Common Stock is necessary to constitute
a quorum. Shares of Common Stock represented by a properly completed, signed
and returned proxy will be counted as present at the Meeting for purposes of
determining a quorum, without regard to whether the proxy is marked as casting
a vote or abstaining. Shares of Common Stock held by nominees which are voted
on at least one matter coming before the Meeting will also be counted as
present for purposes of determining a quorum, even if the beneficial owner's
discretion has been withheld (a "non-vote") for voting on some or all other
matters.
The Company's Restated Articles of Incorporation, as amended, provide
that directors will be elected by, and all other matters specified in the
notice of the Meeting require the approval of, the affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote and
present, in person or represented by proxy, at the Meeting. Therefore, an
abstention, a broker non-vote or a withholding of authority to vote with
respect to the election of directors, or the ratification of the appointment of
the Company's independent accountants will have the effect of a vote against
such proposal.
An Inspector of Election appointed by the Company will tabulate votes
at the Meeting.
The Board of Directors is not aware of any matters that are expected
to come before the Meeting other than those referred to in this Proxy
Statement. If any other matter properly comes before the Meeting, the proxies
will be voted in accordance with the discretion of the person or persons voting
the proxies.
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 Percentage of
Common Stock Outstanding
Beneficially Shares of
Name Age Principal Occupation Owned Common Stock
- ------------------ ----- -------------------------------- ------------ --------------
John C. Custer 70 Retired - Former Chairman of 53,850(1) (2)
the Board of Mason & Hanger-
Silas Mason Co., Inc.
Donald E. Nigbor 53 President and Chief Executive 449,782(3) 2.3%
Officer of the Company
Steven A. Barton 52 Executive Vice President of 40,970(4) (2)
the Company
Cary T. Fu 52 Executive Vice President of 468,010(5) 2.4%
the Company
Peter G. Dorflinger 49 President and Chief Operating 63,000(6) (2)
Officer, GlasTech, Inc.
David H. Arnold 63 Retired - Former President of 392,803(7) 2.0%
EMD Associates, Inc.
- ------------------------
(1) Includes 2,400 shares owned by Mr. Custer's wife and 33,850 shares that
may be acquired upon the exercise of options that are currently
exercisable.
(2) Less than 1%.
(3) Includes (i) 1,950 shares of Common Stock held by Mr. Nigbor's children
as to which shares of Common Stock Mr. Nigbor expressly disclaims
beneficial ownership, and (ii) 286,000 shares of Common Stock that may
be acquired upon the exercise of options that are currently exercisable
or will become exercisable within 60 days of April 2, 2001.
(4) Includes 38,200 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable or will become
exercisable within 60 days of April 2, 2001.
(5) Includes (i) 2,640 shares of Common Stock held by Mr. Fu's daughter as
custodian for his children under the Uniform Gifts to Minors Act, as to
which shares of Common Stock Mr. Fu expressly disclaims beneficial
ownership, (ii) 1,320 shares of Common Stock held by Mr. Fu's daughter,
as to which shares of Common Stock Mr. Fu expressly disclaims
beneficial ownership, and (ii) 286,000 shares of Common Stock that may
be acquired upon the exercise of options that are currently exercisable
or will become exercisable within 60 days of April 2, 2001.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
3
(6) Includes 44,000 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 24,000 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, a member of the Compensation Committee of the Board of Directors
since 1990 and a member of the Audit Committee of the Board of Directors since
2000. 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 and Chief Executive
Officer 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. He also has served the Company as Executive Vice
President from 1988 to 1990, a director and Vice President from 1986 to 1988,
and President from 1979 to 1983. From 1977 to 1986, Mr. Barton was employed by
Intermedics in various management positions. Mr. Barton holds B.S. and M.S.
degrees in electrical engineering from the University of South Florida and
received an M.B.A. from the Harvard Business School.
Mr. Fu has been a director and Executive Vice President of the Company
since 1990. He served as Executive Vice President -- Financial Administration
of the Company from 1990 to April 1992. He also has served the Company as
Treasurer from 1986 to January 1996, Secretary from 1990 to January 1996, a
director and Secretary from 1986 to 1988 and Assistant Secretary from 1988 to
1990. From 1983 to 1986, Mr. Fu was employed by Intermedics as Controller of
the Company and another subsidiary. Mr. Fu holds an M.S. degree in accounting
from the University of Houston and is a certified public accountant.
Mr. Dorflinger has been a director of the Company and a member of the
Audit Committee and Compensation Committee of the Board of Directors since
1990. He is currently President and Chief Operating Officer of GlasTech, Inc.,
a dental products manufacturer, a position he has held since November 1998.
From January 1998 through October 1998, he served as President and Chief
Operating Officer of Physicians Resource Group, Inc., a physicians practice
management company. From January 1997 through January 1998, he served as Vice
President and General Counsel of Advanced Medical Instruments, Inc., a
manufacturer of medical monitoring equipment. From March 1987 through October
1996, he served as Vice President, General Counsel and Secretary of
Intermedics. From June 1990 through October 1996, he served as Group Vice
President and General Counsel of SULZERmedica, a division of Sulzer Limited of
Switzerland, composed of eight operating medical device companies in Europe and
the United States. Mr. Dorflinger received a J.D. degree from the University of
Houston and also is a director of several privately held companies.
4
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, alternated as
President with EMD's other co-founder, and served as an officer of EMD from
1974 until its acquisition by the Company. Mr. Arnold was a co-founder,
President and Chairman of the Board of DCM Tech, Inc., a privately held
manufacturer of machine tools, until he retired on December 30, 1999. Mr.
Arnold earned a B.S. degree in mechanical engineering from Iowa State
University and a M.S. degree in mechanical engineering from the University of
Michigan. He also serves as a director of Town and Country State Bank in
Winona, Minnesota.
The officers of the Company are elected by, and serve at the
discretion of, the Board of Directors.
ELECTION PROCEDURES; TERM
The directors will be elected by the affirmative vote of the holders
of a majority of the outstanding shares of Common Stock present in person or
represented by proxy at the Meeting. Unless the authority to vote for the
election of directors is withheld as to any or all of the nominees, all shares
of Common Stock represented by proxy will be voted for the election of the
nominees. If the authority to vote for the election of directors is withheld as
to any but not all of the nominees, all shares of Common Stock represented by
any such proxy will be voted for the election of the nominees as to whom such
authority is not withheld. If a nominee becomes unavailable to serve as a
director for any reason before the election, the shares represented by proxy
will be voted for such other person, if any, as may be designated by the Board
of Directors. The Board of Directors, however, has no reason to believe that
any nominee will be unavailable to serve as a director.
Any vacancy on the Board of Directors occurring after the election may
be filled (1) by election at any annual or special meeting of the shareholders
called for that purpose, or (2) by a majority of the remaining directors though
less than a quorum of the Board of Directors, provided that the remaining
directors may not fill more than two such director vacancies during the period
between any two successive annual meetings of shareholders. A director elected
to fill a vacancy will be elected for the unexpired portion of the term of his
predecessor in office.
All directors will be elected to serve until the 2002 annual meeting
of shareholders and until their successors are duly elected and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF
THE NOMINEES TO THE BOARD OF DIRECTORS.
OPERATION OF BOARD OF DIRECTORS
The directors are elected annually by the shareholders and hold office
until their successors are elected and qualified. The Amended and Restated
Bylaws of the Company provide for a Board of Directors consisting of not less
than five, nor more than seven, members, as set from time to time by resolution
of the Board of Directors. The Board of Directors presently consists of seven
members, but will consist of six members effective as of the 2001 Annual
Meeting of Shareholders as Mr. Gerald Bodzy, a current director of the Company,
has for personal reasons elected not to stand for reelection.
The Board of Directors held ten meetings during 2000. Each of the
directors attended at least 75% of such meetings during the period which he was
director.
The Board of Directors has an Audit Committee and a Compensation
Committee, but does not have a nominating committee or any committee performing
a similar function.
5
The Audit Committee consisting of Messrs. Dorflinger, Bodzy, Arnold
and Custer met six times during 2000 and each member attended all of the
meetings during the period which he was a member of such committee. Effective
as of the 2001 Annual Meeting of Shareholders the Audit Committee will consist
of Messrs. Dorflinger, Arnold and Custer. 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.
Additional information regarding the functions performed by the committee is
set forth below in the "Report of the Audit Committee."
The Compensation Committee consisting of Messrs. Custer and Dorflinger
met three times during 2000 and each member attended all of the meetings during
the period which he was a member of such committee. The functions of the
Compensation Committee are to recommend to the Board of Directors the
compensation of the President of the Company; determine the compensation of the
other executive officers of the Company; administer the Company's employee
benefit plans ("plans"), including, without limitation, determining the terms
and conditions of the benefits and the recipients thereof in accordance with
the plans, such as the terms of stock option grants; review the plans and
advise the Board of Directors regarding the results thereof; and perform such
other functions as may be necessary or appropriate in the efficient discharge
of its duties.
AUDIT COMMITTEE REPORT
AUDIT COMMITTEE REPORT TO SHAREHOLDERS
The Audit Committee of the Board is responsible for providing
independent, objective oversight of the Company's accounting functions and
internal controls. The Audit Committee currently is composed of four directors,
each of whom is independent as defined by the New York Stock Exchange listing
standards. The Audit Committee operates under a written charter approved by the
Board of Directors. A copy of the charter is attached to this Proxy Statement
as Appendix A.
Management is responsible for the Company's internal controls and
financial reporting process. The independent accountants are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with generally accepted auditing standards and issuing
a report thereon. The Audit Committee's responsibility is to monitor and
oversee these processes.
In connection with these responsibilities, the Audit Committee met
with management and the independent accountants to review and discuss the
December 31, 2000 financial statements. The Audit Committee also discussed with
the independent accountants the matters required by Statement on Auditing
Standards No. 61, COMMUNICATION WITH AUDIT COMMITTEE. The Audit Committee also
received written disclosures from the independent accountants required by
Independence Standards Board Standard No. 1, INDEPENDENCE DISCUSSIONS WITH
AUDIT COMMITTEES, and the Audit Committee discussed with the independent
accountants that firm's independence.
Based upon the Audit Committee's discussions with management and the
independent accountants, and the Audit Committee's review of the
representations of management and the independent accountants,
6
the Audit Committee recommended that the Board of Directors include the audited
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 2000, to be filed with the Securities and
Exchange Commission.
Audit Fees
The aggregate fees billed for professional services rendered by KPMG
LLP for the audit of our annual financial statements for the year ended
December 31, 2000, and the reviews of the condensed financial statements
included in our quarterly reports on Forms 10-Q for the year ended December 31,
2000, were $352,625.
Financial Information Systems Design and Implementation Fees
There were no fees paid to KPMG LLP in 2000 for professional services
with respect to financial information systems design and implementation.
All Other Fees
The aggregate fees billed for all other services, exclusive of the
fees disclosed above relating to financial statement audit services, rendered
by KPMG LLP during the year ended December 31, 2000 were $836,205. These other
services consisted of Statutory Audits ($171,369), Audits of Employee Benefit
Plans ($26,000), Tax Services ($471,246) and SEC Filings ($167,590).
The Audit Committee of the Company's Board of Directors has considered
whether the services provided by KPMG LLP as they related to other non-audit
services are compatible with maintaining the auditor's independence.
SUBMITTED BY THE AUDIT COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS
Gerald W. Bodzy, Chairman Peter G. Dorflinger David H. Arnold John C. Custer
7
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, 2000 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,
2000, 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...... 2000 $400,000 $120,000 -0- 20,000 $6,025
President and Chief 1999 319,591 -0- (3) -0- 50,000 5,508
Executive Officer 1998 244,135 79,500 -0- 80,000 5,192
Cary T. Fu............ 2000 400,000 120,000 -0- 20,000 6,025
Executive Vice 1999 319,591 -0- (3) -0- 50,000 5,508
President 1998 244,135 79,500 -0- 80,000 5,192
Gayla J. Delly........ 2000 234,000 70,200 -0- 20,000 6,025
Vice President 1999 221,250 -0- (3) -0- 25,000 5,508
Finance 1998 158,077 50,000 -0- 30,000 5,192
(1) The amounts shown in this column reflect cash bonuses paid to Messrs.
Nigbor and Fu and Ms. Delly 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, 2000, the "All Other Compensation"
column includes (a) $5,250 paid by the Company pursuant to the
Company's Qualified 401(k) Employee Savings Plan ("Savings Plan") to
each of Messrs. Nigbor and Fu, and Ms. Delly, and (b) payments by the
Company of premiums of $360 for term life insurance and $415 for
medical insurance on behalf of each of Messrs. Nigbor and Fu, and Ms.
Delly. Under the Savings Plan the Company is obligated to make matching
contributions to the Savings Plan in an amount equal to 50% of each
participant's elective contributions, to the extent that such elective
contributions do not exceed 6% of such participant's compensation. The
Company also may make discretionary contributions to the Savings Plan
based on each participant's compensation compared to the total
compensation of all participants. Messrs. Nigbor and Fu are each
reimbursed for financial planning services, up to $5,000, and biannual
physical examinations. However, the value of such perquisites does not
exceed the lesser of $50,000 or 10% of such officer's annual cash
compensation and are therefore not included in the table.
(3) Because the Company's sales and net income did not exceed the levels
targeted by the Company in its 1999 business plan, the Compensation
Committee elected not to pay or accrue any bonuses during 1999.
8
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, 2000 to
the three 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 2000 Price Date 5% 10%
---- ------------- ------- ------------ ------ ------------ ----------
Donald E. Nigbor......... 20,000 4.74% $17.8125 01/11/10 $224,044 $567,771
Cary T. Fu............... 20,000 4.74% $17.8125 01/11/10 $224,044 $567,771
Gayla J. Delly........... 20,000 4.74% $17.8125 01/11/10 $224,044 $567,771
- ----------------------------
(1) All options were granted under the 1990 Plan at an exercise price equal
to the fair market value of the Common Stock on the date of the grant.
Each option granted and reported in this table vests over a four year
period, with 20% of the shares becoming exercisable at the end of the
second year following the date of grant, 30% becoming exercisable at
the end of the third year following the date of grant and the entire
option becoming exercisable at the end of the fourth year. The options
expire 90 days after termination of employment, and are fully vested in
the event of a change of control of the Company.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table provides certain information concerning exercises
of options to purchase Common Stock during the fiscal year ended December 31,
2000 by the three executive officers named in the Summary Compensation Table and
the value of such officers' unexercised options at December 31, 2000.
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.... -0-(1) -0- 256,000 204,000 $2,435,278 $509,400
Cary T. Fu........... -0-(1) -0- 256,000 204,000 2,435,278 509,400
Gayla J. Delly....... 4,000 $102,630 47,600 88,400 357,006 255,706
- --------------------------
(1) These executive officers did not exercise any stock options during 2000.
COMPENSATION OF NONEMPLOYEE DIRECTORS
The Company pays its nonemployee directors an annual fee of $5,000 and
a fee of $500 for each meeting of the Board of Directors or any committee
thereof attended in person. The Company also reimburses its nonemployee
directors for their reasonable travel expenses in attending such meetings.
In December 1994, the Board of Directors of the Company adopted the
Benchmark Electronics, Inc. 1994 Stock Option Plan for Non-Employee Directors
(the "1994 Plan") for the benefit of members of the Board of Directors of the
Company or its Affiliates who are not employees of the Company or its
Affiliates (as defined in the 1994 Plan). After giving effect to the Company's
stock split during 1997, the aggregate number of shares of Common Stock for
which options may be granted under the Plan is now 200,000. The purpose of the
1994 Plan is to encourage ownership of the Company's Common Stock by eligible
non-employee directors of the Company, to provide increased incentive for such
directors to render services and
9
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 pursuant to the 1994 Plan after its termination.
Under the terms of the 1994 Plan, each member of the Board of
Directors of the Company or its Affiliates who was not an employee of the
Company or any of its Affiliates on the date of the grant (a "Non-Employee
Director") will receive a grant of an option to purchase 6,000 shares of the
Company's Common Stock upon the date of his election or re-election to the
Board of Directors. Additionally, any Non-Employee Director who was a director
on the date the Board of Directors adopted the 1994 Plan received, after giving
effect to the Company's stock split during 1997, (a) an option to purchase
6,000 shares of Common Stock for the fiscal year in which the 1994 Plan was
adopted by the Board of Directors and (b) an option to purchase shares of
Common Stock in amount equal to (i) 6,000, multiplied by (ii) the number of
consecutive fiscal years, immediately preceding the fiscal year during which
the 1994 Plan was adopted, that the individual served as a director of the
Company, provided that the number under clause (ii) shall not exceed three (3).
Upon their election as directors in May 2000, each of Messrs. Custer,
Dorflinger, Bodzy and Arnold received a grant under the 1994 Plan of an option
to purchase 6,000 shares of Common Stock with an exercise price of $36.875,
which was the market price of the Common Stock on the date of the grant.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee, a committee of the Board of Directors composed of
non-employee directors listed below this report. The Compensation Committee is
responsible for recommending to the full Board of Directors the compensation of
the President of the Company, determining the compensation of the other
executive officers of the Company, and administering the Company's employee
benefit plans. None of the members of the Compensation Committee have any
interlocking or other relationships with the Company that would call into
question their independence as Compensation Committee members.
COMPENSATION POLICIES AND PROGRAMS. The Compensation Committee
believes that the goals of the executive compensation program should be to
align executive compensation with the Company's long-term business objectives
and performance and to enable the Company to attract, retain and reward
executive officers who contribute to the long-term success of the Company. The
Compensation Committee believes that the best way to achieve these goals is by
aligning the financial interests of the Company's executive officers closely to
the interests of the Company's shareholders through a combination of annual
cash incentives and stock-based incentive compensation, while providing the
executive officers with base salary compensation at levels that are competitive
with, but which do not exceed, prevailing standards. The compensation of the
Company's executive officers is reviewed and approved annually by the
Compensation Committee. The Company's executive compensation program is based
on three elements, each of which is determined in part by corporate performance:
- Base salary compensation
- Annual incentive compensation
- 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, but with less emphasis on base salary compensation than such other
employers.
10
CASH BASE SALARY. Until August 1993, the Company had identical
employment agreements with each of its executive officers, including its
President. The agreements provided for annual base salaries, subject to
adjustment for subsequent twelve-month periods as determined by the
Compensation Committee, based on its review of base salaries provided to
executive officers of other employers in the Company's industry and certain
corporate performance factors such as the Company's net income and sales and
historical salary progression. Since August 1993, the Company has not had
employment agreements with its executive officers. In July 1999, the
Compensation Committee determined that Messrs. Nigbor and Fu should receive a
salary increase from $265,000 to $400,000, based on the Company's net income
and sales during the year ended December 31, 1998 and comparative compensation
of executives of Peer Group companies.
CASH BONUS. The Company has incentive bonus plans for the benefit of
its employees, including executive officers. These incentive bonus plans
replaced the Company's Incentive Bonus Plan, which was adopted in 1992. The
total amount of cash bonus awards to be made under these incentive bonus plans
for any period depends primarily on the Company's earnings before income tax
for that period.
For any plan period, the earnings before income tax 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. The Compensation Committee has the
authority to determine the total amount of bonus awards, if any, to be made to
the Company's corporate 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 2000, the Company's income before tax exceeded the levels targeted
by the Company in its 2000 business plan. Accordingly, the Compensation
Committee in February 2001 elected to award bonuses totaling $601,015 to
eligible corporate employees, including $120,000 each to Messrs. Nigbor and Fu,
and $70,200 to Ms. Delly.
STOCK PURCHASE PLAN. In April, 1999, the Company adopted the Benchmark
Electronics, Inc. Employee Stock Purchase Plan (the "Purchase Plan"). Under the
Purchase Plan, employees meeting specific employment qualifications are
eligible to participate and can purchase shares semi-annually through payroll
deductions at the lower of 85% of the fair market value of the stock at the
commencement or end of the offering period. The Purchase Plan permits eligible
employees to purchase common stock through payroll deductions for up to the
lesser of 17% of qualified compensation or $25,000. The executive officers,
including the Chief Executive Officer, are eligible to participate in the
Purchase Plan on the same basis as all other employees.
STOCK AWARDS PLAN. The Compensation Committee believes that stock
options and other methods of equity-based incentive compensation are of
increasing importance in attracting and retaining employees and executives and
are critical in motivating the long-term creation of shareholder value because
methods of equity-based incentive compensation focus executive attention on
stock price as the primary measure of performance. In 2000, the Company adopted
and its shareholders approved the Benchmark Electronics, Inc. 2000 Stock Awards
Plan (the "2000 Plan") for the benefit of its officers and employees, its
affiliates, and consultants to the Company and its affiliates (the "Eligible
Participants"). The 2000 Plan replaces the 1990 Stock Option Plan that expired
in May 2000. The 2000 Plan is administered by the Compensation Committee. The
purpose of the 2000 Plan is to encourage ownership of Common Stock by the
Eligible Participants to provide increased incentive for such Eligible
Participants to render services and to exert maximum effort for the business
success of the Company and to strengthen identification of such Eligible
Participants with the shareholders for the purpose of maximizing shareholder
value. The 2000 Plan utilizes vesting periods to encourage its executive
officers and eligible employees to continue in the employ of the
11
Company. The Compensation Committee subjectively determines the number of
shares to be covered by options granted to its employees and executive
officers, including the President. Stock option grants to the Company's
President and other executive officers are not made automatically each year and
are not considered to be a part of normal annual compensation. The amount and
terms of options already held by an executive officer generally are not
significant factors in the Compensation Committee's determination of whether
and how many options should be granted to the executive officer.
Stock option grants provide an incentive that focuses the executives'
attention on managing the Company from the perspective of an owner with an
equity stake in the business. Accordingly, these stock options are tied to the
future performance of the Company's Common Stock and provide value to the
recipient only when the price of the Company's Common Stock increases above the
option grant price.
SUBMITTED BY THE COMPENSATION COMMITTEE OF
THE COMPANY'S BOARD OF DIRECTORS.
John C. Custer David H. Arnold Peter G. Dorflinger
PERFORMANCE GRAPH
The following Performance Graph compares the Company's cumulative
total shareholder return on its Common Stock for the five-year period
commencing December 31, 1995 and ending December 31, 2000, with the cumulative
total return of the Standard & Poor's Stock Index (which does not include the
Company), and Peer Group, which is composed of Celestica Inc., EFTC Corp,
Flextronics International, Ltd., Jabil Circuit, Inc., Plexus Corp, Sanmina
Corp, Solectron Corporation, SCI Systems, Inc., and DII Group Inc. Dividend
reinvestment has been assumed.
COMPARISON OF CUMULATIVE TOTAL SHAREHOLDER RETURN
BENCHMARK ELECTRONICS, S&P 500, AND PEER GROUP INDEX
[GRAPH]
95 96 97 98 99 00
Benchmark 100 109.6 162.3 266.4 166.8 164.1
S&P 5000 100 120.3 157.6 199.6 238.5 214.4
Peer Group 100 137.7 213.5 408.8 832.4 762.4
NOTES: Assumes $100 invested on 12/31/95 in Benchmark Electronics, Inc. Common
Stock, in the S&P 500, and in the Peer Group Index. Reflects month-end
dividend reinvestment, and annual reweighting of the Peer Group Index
portfolios.
12
CERTAIN TRANSACTIONS
The Company leases from David H. Arnold, a director of the Company,
his spouse and certain other persons the real estate and buildings in Winona,
Minnesota where operations are conducted. The leases were entered into in 1996
in connection with the Company's acquisition of EMD. 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. Both of such leases 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.
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 2, 2001, 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......................... 53,850(2) (3)
2355 Harrodsburg Road
Lexington, Kentucky 40504
Donald E. Nigbor....................... 449,782(4) 2.3%
3000 Technology Drive
Angleton, Texas 77515
Steven A. Barton....................... 40,970(5) (3)
3000 Technology Drive
Angleton, Texas 77515
Cary T. Fu............................. 468,010(6) 2.4%
3000 Technology Drive
Angleton, Texas 77515
Gayla J. Delly......................... 61,695(7) (3)
3000 Technology Drive
Angleton, Texas 77515
Peter G. Dorflinger.................... 63,000(8) (3)
9501 Stonebridge
Austin, Texas 78758
Gerald W. Bodzy........................ 63,100(9) (3)
3000 Technology Drive
Angleton, Texas 77515
(TABLE CONTINUED ON FOLLOWING PAGE)
13
David H. Arnold........................ 392,803(10) 2.0%
1853 Edgewood Road
Winona, Minnesota 55987
Directors and executive officers as
a group (8 persons)................... 1,593,210(11) 8.1%
West Highland Capital, Inc............. 1,804,900(12) 9.2%
300 Drake's Landing Road, Suite 290
Greenbrae, CA 94904
D.F. Dent & Company, Inc............... 992,390(12)(13) 5.1%
2 East Read Street, 6th Floor
Baltimore, Maryland 21202
- ------------------------------
(1) Unless otherwise noted, each person identified possesses sole voting
and dispositive power with respect to the shares of Common Stock
listed, subject to community property laws.
(2) Includes 33,850 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable and 2,400 shares
owned of record by Mr. Custer's wife.
(3) Less than 1%.
(4) Includes (i) 1,950 shares of Common Stock held by Mr. Nigbor's
children as to which shares of Common Stock Mr. Nigbor expressly
disclaims beneficial ownership, and (ii) 286,000 shares of Common
Stock that may be acquired upon the exercise of options that are
currently exercisable or will become exercisable within 60 days of
April 2, 2001.
(5) Includes 40,970 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable or will become
exercisable within 60 days of April 2, 2001.
(6) Includes (i) 2,640 shares of Common Stock held by Mr. Fu's daughter
as custodian for his children under the Uniform Gifts to Minors Act,
as to which shares of Common Stock Mr. Fu expressly disclaims
beneficial ownership, (ii) 1,320 shares of Common Stock held by Mr.
Fu's daughter, as to which shares of Common Stock Mr. Fu expressly
disclaims beneficial ownership, and (ii) 286,000 shares of Common
Stock that may be acquired upon the exercise of options that are
currently exercisable or will become exercisable within 60 days of
April 2, 2001.
(7) Includes 60,100 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable or will become
exercisable within 60 days of April 2, 2001.
(8) Includes 44,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(9) Includes (i) 3,200 shares of Common Stock held by Mr. Bodzy as
custodian for his children under the Uniform Gifts to Minors Act,
(ii) 4,000 shares of Common Stock held by Mr. Bodzy's children, and
(iii) 36,000 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(10) 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 24,000 shares that may be acquired
upon the exercise of options that are currently exercisable.
(11) Includes 732,050 shares of Common Stock that may be acquired upon the
exercise of options that are currently exercisable.
(12) Based solely on information filed with the Securities and Exchange
Commission.
14
(13) D. F. Dent & Company, Inc. is an Investment Adviser registered under
Section 203 of the Investment Advisers Act of 1940.
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 beneficial ownership and reports of changes in
beneficial 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, 2000 and ending December 31, 2000 all Section 16(a) filing requirements
applicable to the Company's officers, directors and greater than ten-percent
beneficial owners were satisfied in a timely manner.
EXECUTIVE OFFICERS
The executive officers of the Company are Donald E. Nigbor, Steven A.
Barton, Cary T. Fu and Gayla J. Delly. 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 Messrs. Nigbor,
Barton and Fu.
Ms. Delly is 41 years old and has been Vice President Finance of the
Company since November 2000. She served as Treasurer and Controller of the
Company from January 1996 to May 2000. From 1984 to 1995, Ms. Delly was employed
by KPMG LLP and was a Senior Audit Manager when she left the Firm. Ms. Delly
holds a B.S. degree in accounting from Samford University and is a certified
public accountant.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed KPMG LLP as the independent
auditors of the Company for the year ending December 31, 2001. The shareholders
will be asked to ratify the appointment of KPMG LLP at the Meeting. The
ratification of such appointment will require the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock entitled to
vote and present, in person or represented by proxy, at the Meeting.
Representatives of KPMG LLP will be present at the Meeting, will be given an
opportunity to make a statement (if they desire to do so) and will be available
to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
APPOINTMENT OF THE INDEPENDENT AUDITORS.
EXPENSES OF SOLICITATION
The cost of soliciting proxies on behalf of the Board of Directors will
be borne by the Company. Solicitations of proxies are being made by the Company
through the mail and may also be made in person or by telephone. Directors and
employees of the Company may be utilized in connection with such solicitations.
The Company also will request brokers and nominees to forward soliciting
materials to the
15
beneficial owners of the Common Stock held of record by such persons and will
reimburse them for their reasonable forwarding expenses.
DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS
In order for proposals submitted to by the shareholders of the Company
pursuant to Rule 14a-8 of the General Rules and Regulations under the Exchange
Act to be included in the Company's proxy statement and form of proxy relating
to the 2002 Annual Meeting of the Shareholders, such proposals must be received
at the Company's principal executive offices no later than December 22, 2001. A
shareholder choosing not to use the procedures established in Rule 14a-8 must
deliver the proposal at the Company's principal executive offices no later than
March 1, 2002.
FORM 10-K
A copy of our 2000 Annual Report to Shareholders, which includes our
financial statements for fiscal year 2000, is enclosed with this Proxy
Statement. The Company's Annual Report on Form 10-K, including all exhibits, has
been filed with the Securities and Exchange Commission. Upon payment of the
Company's reasonable expenses, the Company will furnish a copy of any exhibit to
the Form 10-K to any shareholder who makes a written request therefore to the
Corporate Secretary, Benchmark Electronics, Inc., 3000 Technology Drive,
Angleton, Texas 77515.
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before
the Meeting and has not been informed that any other matter is to be presented
by others. If any other matter properly comes before the Meeting, the proxies
will be voted in accordance with the discretion of the person or persons voting
the proxies.
You are cordially invited to attend the Meeting. Regardless of whether
you plan to attend the Meeting, you are urged to complete, date, sign and return
the enclosed proxy in the accompanying envelope at your earliest convenience.
By order of the Board of Directors,
/s/ Lenora A. Gurton
Lenora A. Gurton
Secretary
16
BENCHMARK ELECTRONICS, INC.
PROXY STATEMENT
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist the
Board in fulfilling its oversight responsibilities. The Audit Committee's
primary duties and responsibilities are to:
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
- Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
- Provide an avenue of communication among the independent auditors,
management, the internal auditing department, legal counsel and the Board
of Directors.
- Encourage adherence to, and continuous improvement of, the Company's
policies, procedures, and practices at all levels.
- Review areas of potential significant financial risk to the Company.
- Report to the Board of Directors concerning the foregoing matters.
The Audit Committee has the authority, upon notification of the Chairman
of the Board, to conduct any investigation appropriate to fulfilling its
responsibilities, and it has direct access to the independent auditors as
well as anyone in the organization. The Audit Committee has the authority
to retain, at the Company's expense, special legal, accounting, or other
consultants or experts it deems necessary in the performance of its
duties. The Audit Committee may request any officer or employee of the
Company or the Company's outside counsel or independent auditor to attend
any meeting the of the Committee or to meet with any members of, or
consultants to, the Committee.
II. Audit Committee Composition and Meetings
The Audit Committee members shall meet the requirements of the New York
Stock Exchange. The Audit Committee shall be comprised of three or more
directors as determined by the Board, each of whom shall be independent
nonexecutive directors, free from any relationship that would interfere
with the exercise of his or her independent judgment. All members of the
Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements, and at
least one member of the Committee shall have accounting or related
financial management expertise.
Audit Committee members shall be appointed by the Board. If the Board
shall have established a Nominating Committee, Audit Committee members
shall be appointed by the Board on recommendation of the Nominating
Committee. The members of the Committee shall designate a Chair by
majority vote of the Committee membership, and the Chair shall preside at
all meetings of the Committee.
The Committee shall meet at least three times annually, or more frequently
as circumstances dictate. The Audit Committee Chair shall prepare and/or
approve an agenda and circulate it to the other members of the Committee
in advance of each meeting. In developing the agenda, the Chair may
consult with management, legal counsel, other committee members, and
independent auditors. The agenda shall be consistent with this charter.
The Committee shall meet privately in executive session at least annually
with management, the director of the internal auditing department, the
independent
A-1
auditors, and as a committee to discuss any matters that the Committee or
each of these groups believes should be discussed. In addition, the
Committee, or at least its Chair, shall communicate with management and
the independent auditors quarterly to review the Company's financial
statements and significant findings based upon the auditors limited review
procedures.
III. Audit Committee Responsibilities and Duties
REVIEW PROCEDURES
The Audit Committee shall:
1. Review and reassess the adequacy of the Charter at least annually.
Submit the Charter to the Board of Directors for approval and have the
document published periodically in accordance with SEC regulations.
2. Review the Company's annual audited financial statements prior to
issuance by the auditors of their report thereon, filing with the SEC
and distribution to third parties. Review shall include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices, and judgments.
3. In consultation with the management, the independent auditors, and the
internal auditors, consider the integrity of the Company's financial
reporting processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control, and
report such exposures. Review significant findings prepared by the
independent auditors and the internal auditing department together with
management's responses.
4. Review with management responsible for the financial statements and the
independent auditors the company's quarterly financial results prior to
the release of earnings and/or the Company's quarterly financial
statements prior to filing or distribution. Discuss any significant
changes to the Company's accounting principles and any items required to
be communicated by the independent auditors in accordance with SAS 61
(see item 9). The Chair of the committee may represent the entire Audit
Committee for purposes of this review.
INDEPENDENT AUDITORS
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall review
the independence and performance of the auditors and annually recommend
to the Board of Directors the appointment of the independent auditors or
approve any discharge of auditors when circumstances warrant.
6. The Audit Committee shall approve the fees and other significant
compensation to be paid to the independent auditors.
7. On an annual basis, the committee shall (i) obtain a written statement
from the independent auditor delineating all relationships between the
auditor and the Company, (ii) review and discuss with the independent
auditors all significant relationships they have with the Company that
could impair the auditors' independence, and (iii) recommend to the
Board that it take appropriate action in response to the independent
auditors' report to satisfy the Committee of the independence of the
auditors.
8. The Audit Committee shall review the independent auditors' audit plan -
discuss scope, staffing, locations, reliance upon management, and
internal audit and general audit approach.
9. Prior to releasing the year-end earnings, the Audit Committee shall
discuss the results of the audit with the independent auditors. The
Audit Committee shall discuss certain matters required to be
communicated to audit committees in accordance with AICPA SAS 61.
10. The Audit Committee shall consider the independent auditors' judgments
about the quality and appropriateness of the Company's accounting
principles as applied in its financial reporting.
A-2
INTERNAL AUDIT DEPARTMENT AND LEGAL COMPLIANCE
The Audit Committee shall:
11. Review the budget, plan, changes in plan, activities, organizational
structure, and qualifications of the internal audit department, as
needed.
12. Review the appointment, performance, and replacement of the senior
internal audit executive.
13. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
14. On at least an annual basis, review with the Company's legal counsel,
any legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from regulators
or governmental agencies.
OTHER AUDIT COMMITTEE RESPONSIBILITIES
The Audit Committee shall:
15. The Audit Committee shall prepare, or shall cause to be prepared and
shall review, the Audit Committee Report to be included in the proxy
statement for use in connection with the annual shareholders' meeting.
The contents of the report will comply with the requirements of the SEC.
16. Perform any other activities consistent with this Charter, the Company's
by-laws, and governing law, as the Committee or the Board deems
necessary or appropriate.
17. Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditor. Nor is it the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and the
independent auditor or to assure compliance with laws.
A-3
BENCHMARK ELECTRONICS, INC.
2001 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON TUESDAY, MAY 15, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The 2001 Annual Meeting os Shareholders of Benchmark Electronics,
Inc. (the "Company") will be held at the Hyatt Regency Houston, 1200
Louisiana Street, Houston, Texas, on Tuesday, May 15, 2001, beginning at
10:00 a.m. (local time). The undersigned hereby acknowledges receipt of the
related Notice and Proxy Statement, dated April 12, 2001, 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 the Common Stock, par value
$0.10 per share, of the Company owned record by the undersigned and otherwise
to act on behalf of the undersigned at the 2001 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 property come before such meeting or any adjournemnt thereof.
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 2002
ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED
AND QUALIFIED AND FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE
INDEPENDENT AUDITORS OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 2001.
PLEASE COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE PROXY CARD USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON REVERSE SIDE
1. ELECTION OF DIRECTORS TO SERVE UNTIL THE 2002 FOR WITHHOLD FOR ALL
ANNUAL MEETING OF SHAREHOLDERS AND UNTIL THEIR ALL AUTHORITY EXCEPT NOMINEE(S) WRITTEN BELOW
SUCCESSORS ARE DULY ELECTED AND QUALIFIED: / / / / / /
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ---------------------
ANY OF THE NOMINEES LISTED BELOW, DRAW A LINE
THROUGH SUCH NOMINEE'S NAME.
NOMINEES: (1) JOHN C. CUSTER, (2) DONALD E. NIGBOR,
(3) STEVEN A. BARTON, (4) CARY T. FU,
(5) PETER G. DORFLINGER AND (6) DAVID H. ARNOLD. 2. RATIFICATION OF THE FOR AGAINST ABSTAIN
APPOINTMENT OF KPMG LLP / / / / / /
AS THE INDEPENDENT
AUDITORS OF THE COMPANY
FOR THE YEAR ENDING
DECEMBER 31, 2001.
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 PARTNER. IF
YOU ARE SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE SET FORTH YOUR FULL TITLE
AS SUCH.
----------------------------------------
SIGNATURE(S) OF SHAREHOLDER(S)
DATE:
---------------------------, 2001
/ / CHECK IF CHANGE OF ADDRESS
FOLD AND DETACH HERE