EXHIBIT 10.1


 


KEY MANAGEMENT
SEVERANCE AGREEMENT


  


This
Key Management Severance Agreement, dated as of ______ (the “Agreement”),
is hereby entered into by and between _____________ (the “Employee”) and
Benchmark Electronics, Inc., a Texas corporation (the “Company”). 


 


 


AGREEMENT


  


The
Company has employed the Employee as one of its key management employees, and
the Company and Employee desire to set forth their agreement regarding certain
terms and conditions relating to such employment and, in particular, the
termination thereof.  In consideration of the mutual covenants and conditions
contained herein, the parties hereto agree as follows:


  


Section
1.  Employment at Will.  Notwithstanding the terms of this Agreement,
each of the Employee and the Company is free to end the employment relationship
at any time, for any reason, with or without cause (as defined hereafter) and,
subject to the terms and conditions hereof, with or without notice.


  


Section
2.  Duties.  The Employee shall perform such reasonable key employee
duties as may be assigned to him/her from time to time by the Chief Executive
Officer and/or the Board of Directors of the Company (the “Board”). 
Except as otherwise provided herein, or as may otherwise be approved by the
Chief Executive Officer and/or Board of the Company, and except during vacation
periods and reasonable periods due to sickness, personal injury or other
disability, the Employee agrees to devote substantially all of his/her
available time to the performance of his/her duties to the Company hereunder, provided 
that nothing contained herein shall preclude the Employee from (i) serving on
the board of directors of any business or corporation on which he/she is
serving on the date hereof or, with the consent of the Chief Executive Officer
and/or Board, serving on the board of directors of any other business or
corporation, (ii) serving on the board of, or working for, any charitable or
community organization, and (iii) pursuing his/her personal financial and legal
affairs so long as such activities do not materially interfere with the
performance of the Employee’s duties hereunder.


  


Section
3.  Term.  Except as otherwise provided herein, the term of this
Agreement shall be for one (1)  year (the “Initial Term”),
commencing on the date of this Agreement.  This Agreement shall be
automatically renewed thereafter for successive one (1) year terms (each such
renewal term, a “Renewal Term”), unless either party gives to the other
written notice of termination no fewer than ninety (90) days prior to the
expiration of the Initial Term or any such Renewal Term, which notice shall
expressly refer to this Section 3 of the Agreement and state
that such party does not wish to extend the Agreement beyond the end of the
Initial Term or the Renewal Term then in effect.  The provisions of this
Agreement shall survive any termination hereof.






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Section
4.  Compensation and Benefits.  In consideration for the services of the
Employee, the Company shall compensate the Employee and perform its other obligations
as provided in this Section 4. 


  


(a)
Base Salary.  The Employee currently receives a base salary and shall be
entitled to continue receiving a base salary in an amount determined from time
to time by the Chief Executive Officer and/or Compensation Committee of the
Board (the “Compensation Committee”).  The annualized amount of such
base salary for each respective annual one (1) year period, including any
increases hereafter approved, is referred to as the “Base Salary” for
such respective one-year period.


  


(b)
Bonus.  The Employee is currently eligible for a bonus and shall be
entitled to continue participating in a bonus plan consistent with the
Employee’s current plan, or such other plan as may be approved from time to
time by the Chief Executive Officer and/or Compensation Committee for similarly
situated key management employees of the Company, subject to the terms and
conditions of such applicable bonus plan (the “Bonus Plan”).  All bonuses payable to the Employee under the Bonus
Plan in effect from time to time shall be determined and paid on or prior to
March 15 or such later date that bonuses are paid to other employees under the
Bonus Plan in the year following the year for which such bonus is earned and
payable.


 


(c)
Other Long-Term Incentive Compensation.  The Employee shall be entitled
to participate in all long-term incentive compensation programs (if any) as may
be approved from time to time by the Chief Executive Officer and/or
Compensation Committee for similarly situated key management employees of the
Company at a level commensurate with his/her position.


 


(d)
Other Benefits.  During the term of this Agreement, the Employee shall
be entitled to participate in and receive benefits under any and all pension,
profit-sharing, life and other insurance, medical, dental, health and other
welfare and fringe benefit plans and programs, and be provided any and all
other perquisites, that are from time to time made available to key management
employees of the Company.  The Employee’s participation in any employee benefit
plan or program will be subject to the provisions, rules, and regulations of,
or applicable to, the plan or program.  The Company provides no assurance as to
the adoption or continuation of any particular employee benefit plan or program. 
The Employee shall also be entitled to an amount of paid vacation per calendar
year, and sick leave and illness and disability benefits, in accordance with
such reasonable Company policy as may be applicable from time to time to
similarly situated key management employees of the Company.


 


(e)
Compensation Recovery Policy.  To the extent that any compensation paid
or payable pursuant to this Agreement is considered “incentive-based
compensation” within the meaning and subject to the requirements of Section 10D
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
such compensation shall be subject to potential forfeiture or recovery by the
Company in accordance with any compensation recovery policy adopted by the
Board of the Company or any committee thereof in response to the requirements
of said Section 10D and any implementing rules and regulations thereunder
adopted by the Securities and Exchange Commission or any national securities
exchange on which the Company’s common 



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stock is then
listed.  This Agreement may be unilaterally amended by the Company to comply
with any such compensation recovery policy. 


 


Section
5.  Expenses and Other Employment-Related Matters.  It is acknowledged
by the parties that the Employee, in connection with his/her employment, will
be required to make payments for travel, entertainment and similar expenses. 
The Company shall reimburse the Employee for all reasonable expenses incurred
by the Employee in connection with his/her employment or otherwise on behalf of
the Company.


  


Section
6.  Termination.  The Employee’s employment may terminate at any time as
provided in this Section 6.  The date upon which the Employee’s
termination of employment with the Company occurs is the “Termination Date”. 
For purposes of Sections 6(c) and 6(d)  of this Agreement only,
with respect to the timing of any payments thereunder, the Termination Date
shall mean the date on which a “separation from service” has occurred for
purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”),
and the regulations and guidance thereunder.


  


(a)
Death or Disability.  The Employee’s employment will terminate (i)
immediately upon the death of the Employee or (ii) at the option of the
Company, upon thirty (30) days’ prior written notice to the Employee, in the
event of the Employee’s disability.  The Employee shall not be deemed disabled
unless, as a result of the Employee’s incapacity due to physical or mental
illness (as determined by a physician selected by the Employer or its insurers
and reasonably acceptable to the Employee or his/her representative), the
Employee shall have been absent from and unable to perform his/her duties with
the Company on a full-time basis for one hundred twenty (120) consecutive business
days.  In the event of termination of the Employee’s employment pursuant to
this Section 6(a): 


  


(1) The Company shall immediately pay the Employee (or
his/her estate) (i) any portion of the Employee’s Base Salary accrued but
unpaid through the Termination Date and (ii) all payments and reimbursements
under Section 5 hereof for expenses incurred prior to such termination.


 


(2)
All equity awards that are not “performance-based”, including any restricted
stock, restricted stock units and stock options, shall immediately vest in
full.  “Performance-based” awards are those awards whose vesting is predicated
on the achievement of one or more performance metrics rather than the passage
of time.


 


(3) 
The Company shall immediately pay to Employee (or his/her estate) (a) any bonus
earned under the Bonus Plan for the year prior to termination if such bonus has
not yet been paid, and (b) an annual bonus for the year of termination equal to
the target amount to which the Employee would have been entitled under the Bonus
Plan, calculated in accordance with the terms of the Bonus Plan assuming the
achievement (but not exceedance) of all targets, corporate performance, etc.,
as applicable under the Bonus Plan, as if the Employee had remained employed
through the date of payment of bonuses under the Bonus Plan, which bonus shall
be prorated by dividing the number of days the 



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Employee
was employed during the year by 365, and multiplying the result by the amount 
to which the Employee would have been entitled under the Bonus Plan.


 
 


(4) The Employee (or his/her estate) shall be entitled to
receive all vested benefits under the Company’s otherwise applicable plans and
programs.


  


(b)
For Cause.  The Company may terminate the Employee’s employment for
Cause (as defined below) upon written notice by the Company to the Employee,
such Termination to be determined in accordance with the last paragraph of this
Section 6(b) below.  In the event of termination of the Employee’s
employment for Cause pursuant to this Section 6(b), then the Company
shall immediately pay the Employee (i) any portion of the Employee’s Base
Salary accrued but unpaid through the Termination Date and (ii) all payments
and reimbursement under Section 5 hereof for expenses incurred prior to
such termination.  The Employee shall be entitled to receive all vested
benefits under the Company’s otherwise applicable plans and programs.


 
 


For
purposes of this Agreement, the term “Cause” shall mean the Employee’s
(i) gross negligence in the performance of his/her duties with the Company,
which gross negligence results in a material adverse effect on the Company, provided 
that no such gross negligence will constitute “Cause” if it relates to an
action taken or omitted by the Employee in the good faith, reasonable belief
that such action or omission was in or not opposed to the best interests of the
Company; (ii) habitual neglect or disregard of his/her duties with the Company
that is materially and demonstrably injurious to the Company, after written
notice from the Company stating the duties the Employee has failed to perform;
(iii) engaging in conduct or misconduct that materially
harms the reputation or financial position of the Company; (iv) obstruction,
impedance, or failure to materially cooperate with an investigation authorized
by the Board, a self-regulatory organization empowered with self-regulatory
responsibilities under federal or state laws, or a governmental department or
agency; or (v) conviction of a felony, provided  that no such conviction
will constitute “Cause” if it relates to an action determined by the Board, in
its sole discretion, to have been taken or omitted by the Employee in the good
faith, reasonable belief that such action or omission was in or not opposed to
the best interest of the Company. The Employee’s employment may not and shall
not be terminated for Cause unless the (1) Board provides the Employee with
written notice stating the conduct alleged to give rise to such Cause, (2) the
Employee has been given an opportunity to be heard by the Board, (3) in the
case of clause (i) or (ii) of the definition of Cause, the Employee has been
given a reasonable time to cure, and the Employee has not cured such negligence
or failure to the reasonable satisfaction of the Board, and (4) the Board has
approved such termination by majority vote of the members of the Board,
excluding the Employee.


 


(c)
By Company Without Cause.  The Company may terminate the Employee’s
employment at any time for any reason without Cause.  In the event of any
termination of the Employee’s employment by the Company without Cause pursuant
to this Section 6(c): 


 


(1) The Company shall immediately pay the Employee (i) any
portion of the Employee’s Base Salary accrued but unpaid through the
Termination Date and (ii) all payments and reimbursement under Section 5
hereof for expenses incurred prior to such termination.






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(2) The Employee shall be entitled to receive all vested
benefits under the Company’s otherwise applicable plans and programs.


 


(3) Subject to the Employee satisfying the conditions in Section
6(g) and subject to Section 6(c)(6), the Company shall pay the Employee
severance pay for the Severance Period (as defined below) at the per annum rate
which shall equal one hundred percent (100%) of his/her Base Salary at the date
of such termination.  The Company shall pay such severance pay during the
Severance Period in accordance with the Company’s regular pay practices, which
in any case shall be no less frequent than bi-weekly; provided, however,
that if the severance pay relates to a termination within the twelve (12)
months preceding or the twenty-four (24) months following a Change in Control
(as defined in Section 7 below) (a “CIC Period”), then the
payment shall be made in a single, lump-sum payment in an amount equal to the
amount that would have been payable throughout the Severance Period as soon as
practicable following the Termination Date, but in no event later than the day
that is thirty (30) days following the Termination Date, in each case, subject
to Section 11(l).  The Company’s obligation to make such payments shall be
absolute and unconditional, except as to the Employee’s compliance with the
conditions in Section 6(g).  Without limiting the foregoing, such
payments shall not be subject to any right of offset or similar right, and the
Employee shall have no obligation of mitigation or similar obligation with
respect thereto.


 


For
purposes of this Agreement, the term “Severance Period” means a period
equal to one (1) full year beginning on the Termination Date; provided,
however, that if the termination of the Employee’s employment occurs within
a CIC Period, “Severance Period” means a period equal to two (2) full
years beginning on the Termination Date.


  


(4) Subject to the Employee satisfying the conditions in Section
6(g) and subject to Section 6(c)(6), (a) the Employee shall be entitled to
receive (when otherwise payable) any bonus earned under the Bonus Plan for the
year prior to termination if such bonus has not yet been paid, and (b) an
annual bonus for the year of termination equal to the target amount to which
the Employee would have been entitled under the Bonus Plan, calculated in
accordance with the terms of the Bonus Plan assuming the achievement (but not
exceedance) of all targets, corporate performance, etc., as applicable under
the Bonus Plan, as if the Employee had remained employed through the date of
payment of bonuses under the Bonus Plan.  Such bonus shall be payable at the
time bonuses are otherwise paid under the Bonus Plan in the year following
termination.  Notwithstanding the foregoing, if the annual bonus referred to in
the preceding sentence relates to a termination within a CIC Period, then the
bonus amount to be paid shall be equal to two (2) times the bonus otherwise
payable, and shall be paid in a single, lump-sum payment as soon as practicable
following the Termination Date, but in no event later than the day that is
thirty (30) days following the Termination Date, in each case, subject to
Section 11(l).


 


(5) Subject to the Employee satisfying the conditions in Section
6(g), if Employee is eligible for and properly elects to continue
Employee’s (or his/her dependents’) group 



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health
insurance coverage, as in place immediately prior to the Termination Date, the
Company shall pay for the portion of the premium costs for such coverage that
the Company would pay if Employee remained employed by the Company, at the same
level of coverage that was in effect as of the Termination Date for twelve (12)
months following the Termination Date, provided, however, that if the
Termination Date occurs within a CIC Period, such period shall be extended to
eighteen (18) months, and, provided further that such benefits continuation
will cease if and to the extent the Employee becomes eligible for similar
benefits by reason of new employment or the Employee otherwise is no longer
eligible for continuation coverage pursuant to applicable laws and plans.  


 
 


(6)  If Employee
secures other employment following termination, the payments to be made
pursuant to Sections 6(c)(3) and (4) shall be reduced to an amount equal to
fifty percent (50%) of the balance of the amounts otherwise payable but not yet
paid under such sections at the time of the commencement of such other
employment; provided, however, that this clause (6) shall not apply to
terminations occurring during a CIC Period.


 


(d) By
Employee for Good Reason.  The Employee may terminate his/her employment at
any time for Good Reason (as defined below).  In the event of any termination
of the Employee’s employment by the Employee for Good Reason pursuant to this Section
6(d): 


  


(1) The Company shall immediately pay the Employee (i) any
portion of the Employee’s Base Salary accrued but unpaid through the
Termination Date and (ii) all payments and reimbursement under Section 5
hereof for expenses incurred prior to such termination.


  


(2) The Employee shall be entitled to receive all vested
benefits under the Company’s otherwise applicable plans and programs.


 


(3) Subject to the Employee satisfying the conditions in Section
6(g) and subject to Section 6(d)(6), the Company shall pay the Employee
severance pay for the Severance Period (as defined above) at the per annum rate
which shall equal one hundred percent (100%) of his/her Base Salary at the date
of such termination.  The Company shall pay such severance pay during the
Severance Period in accordance with the Company’s regular pay practices, which
in any case shall be no less frequent than bi-weekly; provided, however,
that if the severance pay relates to a termination within a CIC Period, then
the payment shall be made in a single, lump-sum payment as soon as practicable
following the Termination Date but in no event later than the day that is
thirty (30) days following the Termination Date, in each case, subject to
Section 11(l).  The Company’s obligation to make such payments shall be
absolute and unconditional, except as to the Employee’s compliance with the
conditions in Section 6(g).  Without limiting the foregoing, such
payments shall not be subject to any right of offset or similar right, and the
Employee shall have no obligation of mitigation or similar obligation with
respect thereto.


  






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(4) Subject to the Employee
satisfying the conditions in Section 6(g) and subject to Section 6(d)(6),
(a) the Employee shall be entitled to receive (when otherwise payable) any
bonus earned under the Bonus Plan for the year prior to termination if such
bonus has not yet been paid, and (b) an annual bonus for the year of
termination equal to the target amount to which the Employee would have been
entitled under the Bonus Plan, calculated in accordance with the terms of the
Bonus Plan assuming the achievement (but not exceedance) of all targets,
corporate performance, etc., as applicable under the Bonus Plan, as if the
Employee had remained employed through the date of payment of bonuses under the
Bonus Plan in the year following termination.  Such bonus shall be payable at
the time bonuses are otherwise paid under the Bonus Plan in the year following
termination. Notwithstanding the foregoing, if the annual bonus referred to in
the preceding sentence relates to a termination within a CIC Period, then the
bonus amount to be paid shall be equal to two (2) times the bonus otherwise
payable, and shall be paid in a single, lump-sum payment as soon as practicable
following the Termination Date, but in no event later than the day that is
thirty (30) days following the Termination Date, in each case, subject to
Section 11(l).


 


(5) Subject to the Employee satisfying the conditions in Section
6(g), if Employee is eligible for and properly elects to continue Employee’s
(or his/her dependents’) group health insurance coverage, as in place
immediately prior to the Termination Date, the Company shall pay for the
portion of the premium costs for such coverage that the Company would pay if
Employee remained employed by the Company, at the same level of coverage that
was in effect as of the Termination Date for twelve (12) months following the
Termination Date, provided, however, that if the Termination Date occurs
within a CIC Period, such period shall be extended to eighteen (18) months,
and, provided further that such benefits continuation will cease if and
to the extent the Employee becomes eligible for similar benefits by reason of
new employment or the Employee otherwise is no longer eligible for continuation
coverage pursuant to applicable laws and plans.  


  


(6)  If Employee
secures other employment following termination, the payments to be made
pursuant to Sections 6(d)(3) and (4) shall be reduced to an amount equal to
fifty percent (50%) of the balance of the amounts otherwise payable but not yet
paid under such sections at the time of the commencement of such other
employment; provided, however, that this clause (6) shall not apply to
terminations occurring during a CIC Period.


 


For
purposes of this Agreement, “Good Reason” means the occurrence of any of
the following events without the Employee’s consent: (A) a material diminution
of the Employee’s duties or responsibilities, (B) a reduction in the Employee’s
targeted compensation opportunity of greater than ten percent (10%), (C) the
requirement that Employee move to a principal office location that is more than
50 miles from the Company’s current headquarters location in Scottsdale,
Arizona without Employee's consent; (D) termination of this Agreement by the
Company as provided in Section 3 above or (E) a material breach by the
Company of any provision of this Agreement; provided, however, that the
occurrence of any of the events described in clauses (A) through (D) above will not constitute Good Reason unless (i) the




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Employee gives the Company written notice within sixty
(60) days after the initial occurrence of any of
such event that the Employee believes that such event constitutes Good Reason
and, (ii) the Company thereafter fails to cure any such event within ninety
(90) days after receipt of such notice, and (iii) the Employee’s Termination
Date as a result of such event occurs within 180 days after the initial occurrence of such event.  


  


(e)
By Employee Without Good Reason.  The Employee may terminate his/her
employment at any time without Good Reason upon thirty (30) days’ prior written
notice to the Company.  In the event of any such termination of the Employee’s
employment by the Employee without Good Reason pursuant to this Section 6(e): 


  


(1)  The Company shall immediately pay the Employee (i) any
portion of the Employee’s Base Salary accrued but unpaid through the
Termination Date and (ii) all payments and reimbursements under Section 5
hereof for expenses incurred prior to such termination.


  


(2) The Employee shall be entitled to receive all vested
benefits under the Company’s otherwise applicable plans and programs.


  


(f)  Retirement. 
The Employee may elect to retire at any time after reaching age 55 if the
Employee has completed at least 10 full years of service with the Company,
which years need not be consecutive.  In the event of any such retirement
pursuant to this Section 6(f): 


  


(1) 
The Company shall immediately pay the Employee (i) any portion of the
Employee’s Base Salary accrued but unpaid through the Termination Date and (ii)
all payments and reimbursements under Section 5 hereof for expenses
incurred prior to such termination.


  


(2) All equity
awards that are not “performance-based”, including any restricted stock,
restricted stock units and stock options, shall continue vesting until fully
vested as though the Employee remained employed by the Company. 
Notwithstanding the foregoing, all other conditions of the awards shall
continue to apply.


 


(3) The Employee
shall be entitled to receive all vested benefits under the Company’s otherwise
applicable plans and programs.


 


(g)
Conditions For Severance and Benefits Continuation Payments.
Notwithstanding anything above to the contrary, any obligation of the Company
to provide the severance or benefits continuation payments under Sections
6(c)(3) through 6(c)(5)  or under Sections 6(d)(3) through 6(d)(5) 
above shall be contingent upon (i) the Employee executing and not rescinding a
general release in a form prepared by the Company, and (ii) the Employee
strictly complying with the terms of this Agreement, and any other written
agreements between the Company and the Employee,
including without limitation the Employee’s compliance with the obligations
under Sections 8 and 9 below that survive the termination of the
Employee’s employment.  The Employee acknowledges and agrees that his/her
breach of the obligations set forth in Sections 8 



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and
9 shall entitle the Company to rescind the payments otherwise required
under this Section 6, and to seek reimbursement from the Employee of any
amounts already paid under this Section.


 


(h)
Parachute Payment Restrictions.  If any payment or benefit to be paid or
provided to the Employee under this Agreement, taken together with any payments
or benefits otherwise paid or provided to the Employee by the Company or any
corporation that is a member of an “affiliated group” (as defined in Section
1504 of the Code without regard to Section 1504(b) of the Code) of which the
Company is a member (the “other arrangements”), would collectively constitute a
“parachute payment” (as defined in Section 280G(b)(2) of the Code), and if the
net after-tax amount of such parachute payment to the Employee is less than
what the net after-tax amount to the Employee would be if the aggregate
payments and benefits otherwise constituting the parachute payment were limited
to three times the Employee’s “base amount” (as defined in Section 280G(b)(3)
of the Code) less $1.00, then the aggregate payments and benefits otherwise
constituting the parachute payment shall be reduced to an amount that shall
equal three times the Employee’s base amount, less $1.00.  Should such a
reduction in payments and benefits be required, the Employee shall be entitled,
subject to the following sentence, to designate those payments and benefits
under this Agreement or the other arrangements that will be reduced or
eliminated so as to achieve the specified reduction in aggregate payments and
benefits to the Employee and avoid characterization of such aggregate payments
and benefits as a parachute payment.  The Company will provide the Employee
with all information reasonably requested by the Employee to permit the
Employee to make such designation.  To the extent that the Employee’s ability
to make such a designation would cause any of the payments and benefits to
become subject to any additional tax under Code Section 409A, or if the
Employee fails to make such a designation within ten (10) business days of
receiving the requested information from the Company, then the Company shall
achieve the necessary reduction in such payments and benefits by first reducing
or eliminating the portion of the payments and benefits that are payable in
cash and then by reducing or eliminating the non-cash portion of the payments
and benefits, in each case in reverse order beginning with payments and
benefits that are to be paid or provided the furthest in time from the date of
the Company’s determination.  For purposes of this Section 6(h), a net
after-tax amount shall be determined by taking into account all applicable
income, excise and employment taxes, whether imposed at the federal, state or
local level, including the excise tax imposed under Section 4999 of the Code.    


 


Section
7.  Change in Control.  For purposes of this Agreement, (1) the term “Person”
means any individual, corporation, partnership, trust, company, business, firm,
association, organization, governmental instrumentality, other entity,
syndicate or group, (2) the term “Voting Securities” shall mean, as to
any Person, the then outstanding securities of or other interests in such
Person entitled to vote generally in the election of directors, trustees or
similar managers of such Person, (3) the term “Affiliate” means any
entity that, directly or indirectly, is controlled by, controls or is under
common control with, the Company or any entity in which the Company has a
significant equity interest, and (4) the term “Change in Control” shall
mean the occurrence of any of the following events:


  


(a) 
during any period of 24 consecutive calendar months, individuals who were
Directors of the Company on the first day of such period (the “Incumbent
Directors”) cease for any reason to constitute a majority of the Company’s
Board; provided, however, that any individual 



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becoming
a Director subsequent to the first day of such period whose election, or
nomination for election, by the Company’s shareholders was approved by a vote
of at least a majority of the Incumbent Directors shall be considered as though
such individual were an Incumbent Director, but excluding, for purposes of this
proviso, any such individual whose initial assumption of office occurs as a
result of an actual or threatened proxy contest with respect to election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person, in each case, other than the management
of the Company or the Board;


  


(b)  
the consummation of a merger, consolidation, statutory share exchange or
similar form of corporate transaction involving (x) the Company or (y) any of
its subsidiaries, but in the case of this clause (y) only if Company Voting
Securities are issued or issuable, or the sale or other disposition of all or
substantially all the assets of the Company to a Person that is not an
Affiliate (each of the foregoing events being hereinafter referred to as a “Reorganization”),
in each case, unless, immediately following such Reorganization, (i) all or
substantially all the Persons who were the “beneficial owners” (as such term is
defined in Rule 13d-3 under the Exchange Act (or a successor rule thereto)) of
the Company Voting Securities outstanding immediately prior to the consummation
of such Reorganization continue to beneficially own, directly or indirectly,
more than 50% of the combined voting power of the then outstanding Voting
Securities of the corporation or other entity resulting from such
Reorganization (including, without limitation, a corporation that, as a result
of such transaction, owns the Company or all or substantially all the Company’s
assets either directly or through one or more subsidiaries) (the “Continuing
Company”) in substantially the same proportions as their ownership,
immediately prior to the consummation of such Reorganization, of the
outstanding Company Voting Securities (excluding, for purposes of determining
such proportions, any outstanding voting securities of the Continuing Company
that such beneficial owners hold immediately following the consummation of the
Reorganization as a result of their ownership prior to such consummation of
voting securities of any corporation or other entity involved in or forming
part of such Reorganization other than the Company), (ii) no Person (excluding
any employee benefit plan (or related trust) sponsored or maintained by the
Continuing Company or any corporation controlled by the Continuing Company)
beneficially owns, directly or indirectly, 50% or more of the combined voting
power of the then outstanding voting securities of the Continuing Company and
(iii) at least a majority of the members of the board of directors of the
Continuing Company (or equivalent body) were Incumbent Directors at the time of
the execution of the definitive agreement providing for such Reorganization or,
in the absence of such an agreement, at the time at which approval of the Board
was obtained for such Reorganization;


  


(c) 
the shareholders of the Company approve a plan of complete liquidation or
dissolution of the Company unless such liquidation or dissolution is part of a
transaction or series of transactions described in paragraph (b) above that
does not otherwise constitute a Change in Control; or


  


(d) 
any Person (other than (A) the Company, (B) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or an
Affiliate or (C) any company owned, directly or indirectly, by the shareholders
of the Company in substantially the same proportions as their ownership of the
voting power of the Company Voting Securities) becomes the beneficial owner,
directly or indirectly, of securities of the Company representing 50% or 



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more of the combined voting power of the Company Voting
Securities; provided, however, that for purposes of this paragraph (d),
the following acquisitions shall not constitute a Change in Control:  (i) any
acquisition directly from the Company, (ii) any acquisition by an underwriter
temporarily holding such Company Voting Securities pursuant to an offering of
such securities or (iii) any acquisition pursuant to a Reorganization that does
not constitute a Change in Control for purposes of paragraph (b) above.


 


Section
8.  Confidential Information.  The Employee recognizes and acknowledges
that certain proprietary, non-public information owned by the Company and its
affiliates, including without limitation proprietary, non-public information
regarding customers, pricing policies, methods of operation, proprietary
computer programs, sales products, profits, costs, markets, key personnel,
technical processes, and trade secrets (hereinafter called “Confidential
Information”), are valuable, special and unique assets of the Company and
its affiliates.  The Employee will not, during or after his/her term of
employment, without the prior written consent of a member of the Board believed
by the Employee to have been authorized by the Board for such purpose,
knowingly and intentionally disclose any of the Confidential Information
obtained by him/her while in the employ of the Company to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever,
directly or indirectly (other than to an employee of the Company of its
affiliates, a director of the Company or its affiliates, or a person to whom
disclosure is necessary or appropriate in the Employee’s good faith judgment in
connection with the performance of his/her duties hereunder or otherwise on
behalf of the Company), unless and until such Confidential Information becomes
publicly available (other than as a consequence of the breach by the Employee
of his/her confidentiality obligations under this Section 8), and except
as may be required (or as the Employee may be advised by counsel is required)
in connection with any judicial, administrative or other governmental
proceeding or inquiry.  In the event of the termination of his/her employment,
whether voluntary or involuntary and whether by the Company or the Employee,
the Employee will deliver to the Company and will not take with him/her any
documents, or any other reproductions (in whole or in part) of any items,
comprising Confidential Information (except that the Employee may retain
his/her personal address, telephone and other contact lists and information and
any other documents or reproductions retained upon the advice of counsel). 
Notwithstanding any other provision hereof, the term “Confidential Information”
does not include any information that (a) is or becomes publicly available
other than as the result of the breach by the Employee of his/her
confidentiality obligations under this Section 8, (b) became, is or becomes
available to the Employee on a non-confidential basis from a source, other than
the Company, that to the Employee’s knowledge is not prohibited from disclosing
such information to the Employee by a confidentiality obligation
owed to the Company or (c) was known to the Employee prior to becoming an
officer of the Company.  The provisions of this Section 8 shall expire
and be of no further force and effect on the third (3rd) anniversary
of the Termination Date of the Employee’s employment with the Company.


  


Section
9.  Non-Competition, Non-Solicitation, Non-Disparagement.  During the period of Employee’s employment with the
Company and during the Severance Period, the Employee will not knowingly and
intentionally (i) engage, directly or indirectly, alone or as a partner,
officer, director, employee, or consultant of any other business organization,
in any business activities that are substantially and directly competitive with
the business activities then 



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conducted by the Company
anywhere in the world (the “Designated Industry”); (ii) divert to any
competitor of the Company in the Designated Industry any customer of the
Company; (iii) solicit or encourage any officer, employee
or consultant of the Company to leave its employ for employment by or with any competitor
of the Company in the Designated Industry or, on behalf of himself/herself or
any other Person, hire, employ or engage any such person; or (iv) engage at any time in any form of
conduct or make any statements, or direct any other person or entity to engage in any conduct or make any statements,
that disparage, criticize or otherwise impair the reputation of the Company,
its subsidiaries, their products and services, or their past and present
officers, directors, employees and consultants.  The parties hereto acknowledge that (A) the Employee’s
non-competition obligations hereunder will not preclude the Employee from (x)
owning less than 5% of the common stock of any publicly traded corporation or
other Person conducting business activities in the Designated Industry or (y)
serving as a director of a corporation or other Person engaged in the
manufacturing or electronics industry whose business operations are not
substantially and directly competitive with those of the Company; and (B) the
restrictions set forth in clause (iv) of the preceding sentence shall not apply
to any statements by the Employee that are made truthfully in response to a
subpoena or as otherwise required by applicable law or other compulsory legal
process.  Upon the termination of Employee’s employment with the Company for
any reason, the Company agrees to direct the then current members of its Board
and key management team not to engage in any conduct or to make any statements,
or direct any other person to engage in any conduct or to make any statements,
that disparage, criticize or otherwise impair the reputation of Employee.  


  


Section 10.  Arbitration. 


  


(a) Subject
Claims; Initiation of Binding Arbitration. The Company and the Employee agree that all (i)
disputes and claims of any nature that the employee may have against the
Company and any subsidiaries or affiliates and their officers and employees,
including all federal or state statutory, contractual, and common law claims
(including all employment discrimination claims) arising from, concerning, or
relating in any way to our employment relationship, (ii) all disputes and
claims of any nature that the Company may have against the Employee, or (iii)
any dispute among us about the arbitrability of any claims or controversy will
be resolved out of court.  Any such claims will be submitted exclusively first
to mandatory mediation and, if mediation is unsuccessful, to mandatory
arbitration.


 


(b)
Arbitration
Procedure.  Unless otherwise agreed in writing by the Company and
the Employee, any arbitration proceeding will be held in Houston, Texas.  The
arbitration will be conducted under the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association (“AAA” Rules).  The claim
will be submitted to a single experienced, neutral employment arbitrator
selected in accordance with the AAA Rules.  The arbitrator shall have full
authority to award or grant all remedies provided by law.  The arbitrator shall
have full authority to permit adequate discovery.  At the conclusion of the
arbitration proceeding, the arbitrator shall issue a written, reasoned award. 
The award of the arbitration shall be final and binding.  A judgment upon the
award may be entered and enforced by any court having jurisdiction.  Each party
shall pay the fees of their respective attorneys, the expenses of their
witnesses, and any other expenses incurred by such party in connection with the
arbitration, 



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provided, however, that the Company
shall pay for the fees of the arbitrator and the administrative and filing fees
charged by the AAA.


  


(c)
Confidentiality;
Nonjoinder. All information regarding the dispute or claim or
mediation or arbitration proceedings, including the mediation settlement or
arbitration award, will not be disclosed by the Employee or by the Company or
any mediator or arbitrator to any third party without the written consent of
the Employee and the Company.  In no event may an arbitrator allow any party to
join claims of any other employee in a single arbitration proceeding without
consent of the Employee and the Company.  In the event that the dispute or
claim involves a written agreement between the Employee and the Company
(including this Agreement) or a compensation plan, the arbitrator will have no
authority to add to, detract from, or otherwise modify the agreement or plan
provisions other than as expressly set forth in that agreement or plan.  Should
this arbitration agreement conflict with the arbitration provisions of any
other agreement that the Employee has with the Company, the terms of this
Agreement will govern.


  


(d)
Equitable Relief.  In the event that
irreparable injury could occur during the pendency of a mediation or
arbitration proceeding, to restore or maintain the status quo until the dispute
has been resolved by mediation or arbitration a party may apply to a court of
competent jurisdiction to obtain a temporary or preliminary injunction in aid
of mediation and arbitration.


  


(e)
Binding Agreement.  Notwithstanding
any policy of the Company permitting it to alter its policies, procedures, and
the terms and conditions of employment, this agreement to arbitrate is binding
and cannot be modified or superseded except by a written agreement signed by an
authorized representative of the Company and the Employee.


  


 Section 11.  General. 


  


(a) Notices.  All notices and other
communications hereunder will be in writing, and will be deemed to have been
duly given if delivered personally, or three (3) business days after being
mailed by certified mail, return receipt requested, or upon receipt if sent by
written telecommunications, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication will have
specified to the other party hereto in accordance with this Section 11(a): 


  


If to Company, to:


  


Benchmark Electronics, Inc.


4141 N. Scottsdale Rd., Ste. 301


Scottsdale, AZ 85251


Attn: Corporate Secretary


 


  






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If to Employee, to:


  


__________________


__________________


__________________


 


  


(b)
Withholding; No Offset.  All payments required to be made by the Company
under this Agreement to the Employee will be subject to the withholding of such
amounts, if any, relating to federal, state and local taxes as may be required
by law.  No payment under this Agreement will be subject to offset or reduction
attributable to any amount of obligation the Employee may owe or be liable for
to the Company or any other Person.


  


(c)
Equitable Remedies.  Each of the parties hereto acknowledges and agrees
that upon any breach by the Employee of his/her obligations under any of Sections
8 and 9 hereof, the Company will have no adequate remedy at law, and
accordingly will be entitled to specific performance and other appropriate
injunctive and equitable relief.


  


(d)
Severability.  If any provision of this Agreement is held to be illegal,
invalid or unenforceable, such provision will be fully severable and this
Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof will remain in full force and effect and will not be affected
by the illegal, invalid, or unenforceable provision or by its severance
herefrom.  Furthermore, in lieu of such illegal, invalid, or unenforceable provision,
there will be added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid, or unenforceable provision as
may be possible and be legal, valid, and enforceable.


 


 (e)
Waivers.  No delay or omission by either party hereto in exercising any
right, power or privilege hereunder will impair such right, power or privilege,
nor will any single or partial exercise of any such right, power or privilege
preclude any further exercise of any other right, power or privilege.


  


(f)
Counterparts.  This Agreement may be executed in multiple counterparts,
each of which will be deemed an original, and all of which together will
constitute one and the same instrument


  


(g)
Captions.  The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.


  


(h)
Reference to Agreement.  Use of the words “herein”, “hereof”, and
“hereto” and the like in this Agreement refer to this Agreement only as a whole
and not to any particular Section, subsection or provision of this Agreement,
unless otherwise noted.  Any reference to a “Section” or “subsection” shall
refer to a Section or subsection of this Agreement, unless otherwise noted.


  


(i)
Successors and Binding Agreement.  The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to 



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all or substantially
all of the business or assets of the Company, by agreement in form and
substance satisfactory to the Employee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken place.  This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any Persons acquiring
directly or indirectly all or substantially all of the business or assets of
the Company whether by purchase, merger, consolidation, reorganization, or
otherwise (and such successor shall thereafter be deemed the “Company” for the
purposes of this Agreement), but shall not otherwise be assignable,
transferable, or delegable by the Company.  Without limiting the foregoing, the
surviving or transferee corporation or other person in any such transaction
(whether by merger, consolidation, reorganization, transfer of business or
assets, or otherwise) shall be subject to the provisions of Section 7
hereof and shall be deemed to be the Company for purposes of such provisions,
regardless of whether such transaction itself constituted a Change of Control
of the Company.


  


 (j)
Entire Agreement; Amendments and Waivers.  This Agreement contains the
entire understanding of the parties, and supersedes all prior agreements and
understandings between them, relating to the subject matter hereof.  This
Agreement may not be amended or modified except by a written instrument
hereafter signed by each of the parties hereto, and may not be waived except by
a written instrument hereafter signed by the party granting such waiver.  The
Company has not made any promise or entered into any agreement that is not
expressed in this Agreement, and the Employee is not relying upon any statement
or representation of any agent of the Company.  In executing this Agreement,
the Employee is relying solely on his/her judgment and has been represented by
the legal counsel of his/her choice in connection with this Agreement who has
read and explained to the Employee the entire contents of this Agreement, as
well as explained the legal consequences.  No agreements or representation,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement.


  


(k)
Governing Law.  This Agreement and the performance hereof shall be
governed and construed in all respects, including but not limited to validity,
interpretation and effect, by the laws of the State of Arizona, without regard
to the principles or rules of conflict of laws thereof.


 





 





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(l) Section 409A.  This Agreement is intended to
satisfy, or be exempt from, the requirements of Section 409A of the Code,
including current and future guidance and regulations interpreting such
provisions (collectively, “Code Section 409A”), and should be
interpreted accordingly.  Notwithstanding anything to the contrary in this
Agreement, if any amount payable pursuant to this Agreement constitutes a
deferral of compensation subject to Code Section 409A, and if such amount is
payable as a result of the Employee’s “separation from service” at such time as
the Employee is a “specified employee” (within the meaning of those terms as
defined in Code Section 409A), then no payment shall be made, except as
permitted under Code Section 409A, prior to the first business day after the
date that is six (6) months after the Employee’s separation from service.  
Except for any tax amounts withheld by the Company from the payments or other
consideration hereunder and any employment taxes required to be paid by the
Company, Employee shall be responsible for payment of any and all taxes owed in
connection with the consideration provided for in this Agreement.


  


Executed as of
the date and year first above written.


  


	
   

  	
  Benchmark Electronics,
  Inc.

   

  
	
    

  	
    

  
	
    

  	
    

  
	
   

  	
  By:

  	
    

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
    

  	 

	
   

  	 

	
   

  	
  Employee:

  
	
    

  	
    

   

   

  
	
    

  	
   

  
	
   

  	
  /

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	 	 	 	 	 






 







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