Document:

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                                                                 EXHIBIT 10.16
                                     LEASE

      This agreement is made and entered into as of December 15, 1992, by and
between David H. Arnold and Muriel M. Arnold, husband and wife, and Daniel M.
Rukavina and Patricia A. Rukavina, husband and wife parties of the first part,
Lessors, and EMD Associates, Inc., a Minnesota corporation, party of the second
part, Lessee;

      WITNESSETH:

      That the said parties of the first part, in consideration of the rents and
covenants hereinafter mentioned, do hereby demise, lease and let unto the said
party of the second part, and the said party of the second part does hereby hire
and take from the said parties of the first part the premises situated at
Theurer Boulevard and 41st Avenue, Goodview, Minnesota, legally described as
Lots One (1), Two (2), and Three (3), Block Two (2), Goodview Industrial Park.

      TO HAVE AND TO HOLD the above rented premises unto the said Lessee, its
successors and assigns, just as they are, without any liability or obligations
on the part of said Lessors of making any alterations, improvements or repairs
of any kind on or about said premises, except as expressly provided herein, for
and during the full term of five (5) years from and after December 15, 1992, and
thereafter from year to year until terminated by either party by sixty (60) days
written notice, for the following purposes, to-wit: Offices and manufacturing or
other similar lawful uses.

      And the said Lessee agrees to and with the said Lessors to pay as rent for
the above mentioned premises the sum of Fifty Thousand Three Hundred and no/100
($50,300.00) Dollars per

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month during the full term of this lease; subject to adjustment as follows: If,
during any lease year, the Average Prime Rate, as hereinafter defined, exceeds
13%, the rent for such lease year shall be adjusted by an amount equal to the
annual rent provided herein multiplied by a fraction, the numerator of which
shall be the difference between the Average Prime Rate and 11 1/2 , and the
denominator of which shall be 11 1/2. The amount of any such adjustment shall be
determined by Lessors at the end of the lease year, and shall be due and payable
within thirty (30) days after written notice to Lessee, showing the amount and
basis for the adjustment. The Prime Rate shall be the rate of interest
established by Chase Manhattan Bank of New York as its "base" or "prime" rate,
as published from time to time. The Average Prime Rate shall be the weighted
average of the Prime Rates in effect during the lease year, calculated by
multiplying each Prime Rate in effect during the lease year by the number of
days such rate was in effect, then adding all of the products so determined, and
then dividing that sum by the number of days in the lease year.

      The Lessee, for itself, its successors and assigns, hereby covenants with
the Lessors, their heirs, executors, administrators, and assigns:

      (1) That it will promptly pay all gas, oil, electric, light, sewage, water
rates or charges which may become payable during the continuance of this lease
for gas, oil, electric, light and water used on said premises.

      (2) That it will keep all and singular the said building and premises,
including the plumbing and heating plant and all driveways, parking areas and
other appurtenances, in such repair as the same are at the commencement of the
said term or may be put in during the continuance

                                    -2-

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thereof, reasonable wear and tear and damage by fire or extended coverage perils
only excepted, and will promptly replace all glass thereof broken during the
said term by other of the same quality and size.

      (3) That it will not injure, overload or deface or suffer to be injured,
overloaded or defaced the premises or any part thereof.

      (4) That it will save harmless and indemnify the Lessors from and against
all loss, liability or expense that may be incurred by reason of any accident
with the machinery, pipes or from any damage or neglect arising from or in any
way growing out of the misuse or abuse of the city water or from the bursting of
any pipes or from any neglect in not removing snow and ice from the premises; or
from any accident or other occurrence on or about said premises.

      (5) That it will not make or suffer any unlawful, improper or offensive
use of the premises or any use or occupancy thereof contrary to any law of the
State or any ordinance of the City now or hereafter made, or which shall be
injurious to any person or property or which shall be liable to endanger or
affect any insurance on the said building or to increase the premium thereof.

      (6) That it will not make any alterations or additions in or to the
premises without the written consent of the Lessors; nor suffer any holes to be
made or drilled in the outside stone or brick work; not to suffer any signs to
be placed upon the building except such as the Lessors shall in writing approve.

      (7) Lessee shall not assign, underlet or part with the possession of the
whole or any part of the demised premises without first obtaining the written
consent of the Lessors.

                                    -3-

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      (8) Lessors at all reasonable times may enter to view the premises and to
make repairs which Lessors may see fit to make, or to show the premises to
persons who may wish to buy or lease, and that during three (3) months next
preceding the expiration of the term Lessors will be permitted to place and keep
next to the sidewalk in the front of said premises a notice 24" x 24" that the
premises are for rent or sale.

      (9) That at the expiration of said term Lessee will peaceably yield up to
Lessors or those having their estates therein the premises and all erections or
additions made upon the same in good repair in all respects, reasonable use and
wear and damage by fire and other unavoidable casualty excepted, as the same now
are or may be put in by Lessors.

      (10) That all property of any kind that may be on the premises during the
continuance of this lease shall be at the sole risk of the Lessee, and that the
Lessors shall not be liable to the Lessee or any other persons for any injury,
loss or damage to property or to any person on the premises; and neither Lessee
nor Lessors will make any claim against the other for losses arising by reason
of fire or extended coverage perils for which full recovery has been made from
any other person, corporation, or association.

      (11) Lessee covenants and agrees to pay for the costs of procuring and
maintaining and keeping in full force during the term hereof the following
insurance which shall be procured and renewed from time to time by Lessee at
Lessee's cost and expense:

            (a)   Insurance upon all of the buildings and improvements located
                  on the demised premises against loss thereof, or damage
                  thereto, by fire and the risks included in what is commonly
                  known as an "all risk policy", for the replacement cost from
                  time to time of said buildings and improvements; and

                                    -4-

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                  any loss insured against shall be payable to Lessors and
                  Lessee as their respective interests may appear.

            (b)   Comprehensive general liability insurance insuring Lessors and
                  Lessee against liability for injury to and destruction of
                  property and for injury to or loss of life of persons, with a
                  combined single limit of at least One Million Dollars per
                  accident or occurrence.

            (c)   The policies or certificates evidencing the aforesaid
                  insurance shall be delivered to the Lessors and in turn may be
                  delivered by the Lessors to their mortgagee.

            (d)   All policies shall provide that the same shall not be
                  cancelled or altered except on ten (10) days' prior written
                  notice to Lessors and to the mortgagee.

      (12) Lessee covenants and agrees that it will not use or permit any person
to use said demised premises or any part thereof for any use or purpose in
violation of the laws of the United States of America, the State of Minnesota or
ordinances or other regulations of any municipality in which said premises are
situated, or of any other lawful authorities, or use or permit, or suffer any
person or use of said premises or any buildings thereof for the manufacture or
sale of intoxicating liquor of any kind, character or description whatsoever;
that during said term it will keep said demised premises and every part thereof
and all buildings at any time situated thereon in a clean and wholesome
condition, and generally that it will in all respects and at all times fully
comply with all lawful health, police and fire regulations, and also that it
will keep the improvements at any time situated on the demised premises and all
sidewalks and areas adjacent thereto, as well as the area thereof, safe, secure
and comfortable to the lawful and valid requirements of any municipality in
which said premises may be situated, and of all other public authorities.

                                    -5-

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      (13) That no assent, express or implied by the Lessors, to any breach of
any of the Lessee's covenants shall be deemed to be a waiver of any succeeding
breach of the same covenant.

      Provided always that these presents are upon this condition that if the
Lessee or its representatives, successors or assigns, shall neglect or fail to
perform and observe any covenant herein contained which on the Lessee's part is
to be performed, or if their leasehold estate shall be taken in execution, or if
the Lessee shall be declared bankrupt or insolvent according to law or shall
make assignment for the benefit of their creditors, then and in any case the
Lessors or those having the estate of the Lessors in the premises, lawfully may
immediately or at any time thereafter and without notice or demand, enter into
and upon the demised premises or any part thereof and repossess the same as if
of their former estate and expel the Lessee and those claiming under it and
remove Lessee's effects forcibly if necessary without being taken or deemed to
be guilty of any manner of trespass. And thereupon this demise shall absolutely
determine but without prejudice to any remedies which might otherwise be used by
the Lessors for arrears of rent or any breach of the Lessee's covenants herein
contained.

      Provided also that in case the demised premises or any part thereof shall
at any time during said term be destroyed or damaged by fire or other
unavoidable casualty so as to be unfit for occupancy and use and so the premises
cannot be rebuilt or restored by the Lessors within one (1) year thereafter,
then and in that case this demise shall terminate, but if the premises can be
rebuilt or restored within one (1) year, and if proceeds of insurance payable
for such casualty are sufficient

                                    -6-

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therefor, the Lessors will at their own expense and with due diligence so
rebuild or restore the premises and Lessee shall continue to pay the rents
hereunder without abatement.

      Provided also that in case the whole or any part of the premises hereby
demised shall be taken by the City or State or other public authority for any
use, then this demise shall terminate from the time when such possession of the
whole or any part so taken shall be required for such public use and the rents
properly apportioned shall be paid up to that time; and such taking shall not be
deemed a breach of the Lessors' covenant for quiet enjoyment hereinbefore
contained.

      (14) Lessee covenants and agrees to pay all taxes due and payable and all
assessments hereafter levied during the term or extension thereof of this lease.

      (15) Each party hereto hereby waives all claims for recovery from the
other party for any loss or damage to any of its property insured under valid
and collectible insurance policies to the extent of any recovery collectible
under such insurance, subject to the limitation that this waiver shall apply
only when the fire and extended coverage policies of both parties contain a
clause to the effect this waiver shall not affect said policies or the right of
both parties to recover thereunder. Both parties agree that such insurance
policies will include such clause as long as the same is includable without
extra cost.

      This lease shall be subject to and subordinate to the lien of any mortgage
or mortgages or deed or deeds of trust which at any time may be placed upon the
fee title to the premises above described; provided, however, that the rights of
the Lessee, its successors and assigns hereunder shall

                                    -7-

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not be cut off or affected by foreclosure of any such mortgage or mortgages or
deed or deeds of trust so long as the Lessee, its successors and assigns, shall
not be in default hereunder.

      This lease amends and supersedes a Lease Agreement between the parties
dated July 1, 1988, as previously amended.

      IN WITNESS WHEREOF, the parties hereto have executed this agreement,
effective the day and year first above written.

                                    /S/ DAVID H. ARNOLD
                                    David H. Arnold

                                    /S/ MURIEL M. ARNOLD
                                    Muriel M. Arnold

                                    /S/ DANIEL M. RUKAVINA
                                    Daniel M. Rukavina

                                    /S/ PATRICIA A. RUKAVINA
                                    Patricia A. Rukavina

                                    EMD ASSOCIATES, INC.

                                    By /S/ DANIEL M. RUKAVINA
                                    Daniel M. Rukavina, President

                                    By /S/ DAVID H. ARNOLD
                                    David H. Arnold, Secretary

                                    -8-

<PAGE>
                              AMENDMENT TO LEASE

      This agreement is made and entered into as of January 1, 1994, by and
between David H. Arnold and Muriel M. Arnold, husband and wife, and Daniel M.
Rukavina and Patricia A. Rukavina, husband and wife, Lessors, and EMD
Associates, Inc., a Minnesota corporation, Lessee.

      WHEREAS, the parties hereto entered into a Lease Agreement dated December
15, 1992, whereby Lessors demised and let unto Lessee certain premises situated
at Theurer Boulevard and 41st Avenue, Goodview, Minnesota, legally described as
Lots One (1), Two (2), and Three (3), Block Two (2), Goodview Industrial Park,
upon which was then situated a manufacturing and office building, for a term of
five (5) years from and after December 15, 1992, and thereafter from year to
year until terminated as provided therein, for a net rent of $50,300.00 per
month, subject to adjustment as provided therein; and

      WHEREAS, the said Lease remains in effect; and

      WHEREAS, at the request and direction of Lessee, Lessors acquired an
adjacent parcel of real estate, legally described in Exhibit A attached hereto,
for improvement and use by Lessee for vehicle parking (the "Parking Area");

      NOW THEREFORE, the parties hereto agree as follows:

      1.    From and after January 1, 1994, the leased premises shall include
the Parking Area.

                                    -9-

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      2. From and after January 1, 1994, Lessee shall pay to Lessors as rent for
the leased premises the sum of $50,932.00 per month during the full remaining
term of the Lease, subject to adjustment as provided therein.

      3.    Except as amended herein, the said Lease Agreement shall be and
remain in full fore and effect.

      IN WITNESS WHEREOF, the parties hereto have executed this agreement,
effective the day and year first above written.

                                    /S/ DAVID H. ARNOLD
                                    David H. Arnold

                                    /S/ MURIEL M. ARNOLD
                                    Muriel M. Arnold

                                    /S/ DANIEL M. RUKAVINA
                                    Daniel M. Rukavina

                                    /S/ PATRICIA A. RUKAVINA
                                    Patricia A. Rukavina

                                    EMD ASSOCIATES, INC.

                                    By /S/ DAVID FRADIN
                                    David Fradin, President and CEO

                                    -10-

<PAGE>
                                    EXHIBIT A

That part of the Southeast Quarter of the Southwest Quarter (SE 1/4 of SW 1/4)
of Section Seventeen (17), Township One Hundred Seven (107) North, of Range
Seven (7), West of the Fifth Principal Meridian, Winona County, Minnesota,
described as follows:

     Commencing at the Southeast corner of said SE 1/4 of the SW  1/4, thence on
an assumed bearing of North along the East line of said SE1/4 of the SW1/4, a
distance of 1.20 feet to the Northerly right of way line of the Soo Line
Railroad Company; thence North 61(degree)57'00" West way line distant 134.60
feet Southeasterly of the most Southerly corner of Lot 1, Block 2, record plat
of Goodview Industrial Park, Winona County, Minnesota, and the point of
beginning of the land to be described; thence continue North 61(degree)57'00"
West, along said right of way line, 134.60 feet to said most Southerly corner of
Lot 1; thence North 27(degree)55' East, along the Southeasterly line of said Lot
1, a distance of 240.00 feet to the most Easterly corner of said Lot 1; then
South 61(degree)57'00" East, along the Southwesterly line of Lot 3, said Block
2, a distance of 134.60 feet to the most Southerly corner of said Lot 3; thence
South 27(degree)55' West, 240.00 feet to the point of beginning.

Excepting therefrom and reserving to Lessors the metal storage building situated
thereon, and the right of ingress thereto and egreiss therefrom.

                                    -11-

<PAGE>
                               AMENDMENT TO LEASE

      This agreement is made and entered into as of December 15, 1995, by and
between David H. Arnold and Muriel M. Arnold, husband and wife, and Daniel M.
Rukavina and Patricia A. Rukavina, husband and wife, Lessors, and EMD
Associates, Inc., a Minnesota corporation, Lessee.

      WHEREAS, the parties hereto entered into a Lease Agreement dated December
15, 1992, whereby Lessors demised and let unto Lessee certain premises situated
at Theurer Boulevard and 41st Avenue, Goodview, Minnesota, legally described as
Lots One (1), Two (2), and Three (3), Block Two (2), Goodview Industrial Park,
upon which was then situated a manufacturing and office building, for a term of
five (5) years from and after December 15, 1992, and thereafter from year to
year until terminated as provided therein, for a net rent of $50,300.00 per
month, subject to adjustment as provided therein; and

      WHEREAS, the said Lease was amended by an Amendment to Lease dated as of
January 1, 1994, to include an adjacent parking area, and to increase the rent
for the leased premises to the sum of $50,932.00 per month for the remaining
term of the lease; and

      WHEREAS, the said Lease, as so amended, remains in effect; and WHEREAS,
      the parties have agreed to extend the said lease as provided herein; NOW
      THEREFORE, the parties hereto agree as follows:

                                    -12-

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      4. The term of the said lease shall be extended for a period of ten (10)
years from and after December 15, 1995, and shall continue until December 15,
2005, and thereafter from year to year until terminated by either party by sixty
(60) days written notice.

     5. Except as amended herein, the said Lease Agreement shall be and remain
in full force and effect. /S/ DAVID H. ARNOLD David H. Arnold

                                    /S/ MURIEL M. ARNOLD
                                    Muriel M. Arnold

                                    /S/ DANIEL M. RUKAVINA
                                    Daniel M.  Rukavina

                                    /S/ PATRICIA A. RUKAVINA
                                    Patricia A. Rukavina

                                    EMD ASSOCIATES, INC.

                                    By /S/ DAVID FRADIN
                                    David Fradin, President and CEO

                                    -13-

<PAGE>
                              AMENDMENT TO LEASE

      This Amendment to Lease (this "Amendment") is made and entered into on
this 30th day of July, 1996, by and between David H. Arnold and Muriel M.
Arnold, husband and wife, and Daniel M. Rukavina and Patricia A. Rukavina,
husband and wife (collectively, "Lessor"), and EMD Associates, Inc., a Minnesota
corporation ("Lessee").

      WHEREAS, the Lessor and Lessee entered into a Lease Agreement dated
December 15, 1992 (the "Original Lease"), whereby Lessor demised and let unto
Lessee certain premises situated at Theurer Boulevard and 41st Avenue, Goodview,
Minnesota, legally described as Lots One (1), Two (2) and Three (3), Block Two
(2), Goodview Industrial Park, upon which is situated a manufacturing and office
building, for a term of five (5) years from and after December 15, 1992, and
thereafter from year to year until terminated as provided therein, for a net
rent of $50,300 per month, subject to adjustments as provided therein; and

      WHEREAS, the Original Lease was amended by (i) an Amendment to Lease dated
as of January 1, 1994, to include an adjacent parking area within the leased
premises, and to increase the rent for the leased premises to the sum of $50,932
per month for the remaining term of the Lease, and (ii) an Amendment to Lease
dated as of December 15, 1995, to extend the term of the Lease for a period of
ten (10) years from and after December 15, 1995 and continuing until December
15, 2005, and thereafter from year to year until terminated by either party by
sixty (60) days written notice (the "Original Lease, as so amended, being herein
referred to as the "Lease"); and

      WHEREAS, the Lease remains in full force and effect; and

      WHEREAS, the parties have agreed to further modify and amend the Lease,
and to provide for a purchase option in favor of Lessee covering the leased
premises covered by the Lease (the "Leased Premises"), as more particularly
described herein;

      NOW, THEREFORE, in consideration of the premises, the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of all of which is hereby acknowledged and confessed, the parties
hereto hereby agree as follows:

      6. The term of the Lease is hereby amended such that the term of the Lease
shall continue for a period of ten (10) years from and after July 30, 1996, and
shall continue until July 31, 2006, and thereafter from year to year until
terminated by either party by providing the other party with written notice of
such party's election to terminate the Lease not less than one hundred eighty

                                    -14-

<PAGE>
(180) days prior to the expiration of the term (as the term may be extended year
to year as provided herein).

      7. From and after August 1, 1996, the rent for the Leased Premises shall
be the sum of $50,932.00 per month for the remaining term of the Lease. The rent
shall not be subject to adjustment provided in the Lease (and such adjustment
provision is hereby deleted and of no further force and effect).

      8. Lessor hereby grants to Lessee an option to purchase the Leased
Premises for a stipulated and agreed upon sum of $4,711,000.00. The term of said
purchase option shall commence on the date hereof and shall expire on July 31,
1999. In the event Lessee desires to exercise its option to purchase the Leased
Premises, Lessee shall notify Lessor in writing of Lessee's exercise of such
purchase option on or before July 31, 1999; otherwise, the purchase option shall
be null and void and of no further force or effect. In the event Lessee timely
exercises its option to purchase the Leased Premises, Lessor and Lessee agree to
cooperate with each other in good faith to close the purchase of the Leased
Premises within thirty (30) days following the date that Lessee notifies Lessor
in writing that Lessee has exercised its purchase option. The purchase option
shall cover the entire Leased Premises, including all improvements, structures
and buildings thereon, all fixtures, located therein or thereon, and all of
Lessor's right, title and interest in and to all easements and other
appurtenances thereto, and the same shall be conveyed by Lessor to Lessee by
warranty deed and bills of sale and assignments, with covenants of general
warranty, free and clear of all liens and encumbrances.

      9. In each instance in the Lease where consent or approval is required to
be obtained from a party to the Lease, such consent or approval shall not be
unreasonably withheld, delayed or conditioned.

      10. Concurrently with the execution of this agreement, Lessor and Lessee
agree to execute and file of record in the appropriate public records of Winona
County, Minnesota, a Memorandum of Option specifying the leased premises and the
term of the option described in Paragraph 3 above, in the form attached hereto
as EXHIBIT "A"/

     11. Except as amended herein, the said Lease shall be and remain in full
force and effect.

                                    -15-

<PAGE>
      IN WITNESS WHEREOF, the parties hereto have executed this Amendment,
effective July 30, 1996.

EMD ASSOCIATES, INC.                      /S/ DAVID H. ARNOLD
                                          David H. Arnold

By: /S/ DAVID W. FRADIN                   /S/ MURIEL M. ARNOLD
Name: DAVID W. FRADIN                     Muriel M. Arnold

Title: PRESIDENT                          /S/ DANIEL M. RUKAVINA
                                          Daniel M. Rukavina

                                          /S/ PATRICIA A. RUKAVINA
                                          Patricia A. Rukavina

                                    -16-<PAGE>
                                                                   Exhibit 10.33

                       KEY CONTRIBUTOR SEVERANCE AGREEMENT

      SEVERANCE  AGREEMENT,  dated as of  January  24,  2002,  by and  between
BENCHMARK ELECTRONICS, INC. ("Benchmark"), and GAYLA J. DELLY ("Employee").

A. The Executive Compensation Committee of the Board of Directors of Benchmark
has recommended, and the Board of Directors has approved, that Benchmark enter
into severance agreements with key employees who are from time to time
designated by the Executive Compensation Committee;

B. Should Benchmark become subject to any proposed or threatened Change of
Control (as hereinafter defined), the Board of Directors believes it imperative
that Benchmark and the Board of Directors be able to rely upon Employee to
continue in Employee's position, and that Benchmark be able to receive and rely
upon Employee's advice, if requested, as to the best interests of Benchmark and
its stockholders without concern that Employee might be distracted by the
personal uncertainties and risks created by such a proposal or threat;

C. Should Benchmark receive any such proposals, in addition to Employee's
regular duties, Employee may be called upon to assist in the assessment of such
proposals, advise management and the Board of Directors as to whether such
proposals would be in the best interests of Benchmark and its stockholders, and
to take such other actions as the Board of Directors of Directors might
determine to be appropriate;

      Accordingly, Benchmark and Employee agree as follows:

      1. SERVICES DURING CERTAIN EVENTS. In the event a third person begins a
tender or exchange offer, circulates a proxy to stockholders, or takes other
steps to effect a Change of Control, Employee agrees not to voluntarily leave
the employ of Benchmark or its subsidiaries, and to render the services
contemplated in the recitals to this Agreement, until the third person has
abandoned or terminated his efforts to effect a Change of Control until a Change
of Control has occurred.

      2. TERMINATION FOLLOWING CHANGE OF CONTROL. Except as provided in Section
4 hereof, Benchmark will provide or cause to be provided to Employee the rights
and benefits described in Section 3 hereof in the event that Employee's
employment is terminated:

            (a) at any time within two years following a Change of Control by
Benchmark or its subsidiaries for reasons other than for "cause" (as such term
is defined in Section 4 hereof) or other than as a consequence of Employee's
death, permanent disability or retirement at or after the normal retirement date
as provided under Benchmark's Retirement Plan as in effect immediately preceding
such date ("Normal Retirement Date"); or

<PAGE>

            (b) at any time within two years following a Change of Control by
      Employee following the occurrence of any of the following events without
      Employee's written consent:

                  (i) the reduction of Employee's annual salary (including any
            deferred portions thereof), annual or long-term cash or stock bonus
            opportunities, or level of benefits or supplemental compensation; or

                  (ii) the transfer of Employee to a location requiring a change
            in Employee's residence or a material increase in the amount of
            travel normally required of Employee in connection with Employee's
            employment.

      3. RIGHTS AND BENEFITS UPON TERMINATION. In the event of the termination
of Employee's employment under any of the circumstances set forth in Section 2
hereof ("Termination"), Benchmark agrees to provide or cause to be provided to
Employee the following rights and benefits:

            (A) LUMP SUM PAYMENT AT TERMINATION. Employee shall be entitled to
      receive within 30 days of Termination (i) a lump-sum payment in cash in
      the amount equal to two times Employee's Earnings (as such term is defined
      in this Section 3(a)), plus (ii) an additional amount sufficient to pay
      all excise taxes incurred by Employee in connection with such lump sum
      payment so that Employee will receive the same net after-tax amount he
      would have received if no excise tax had been imposed; PROVIDED, HOWEVER,
      that if there are fewer than 12 months remaining from the date of
      Termination to Employee's Normal Retirement Date, the amount calculated
      pursuant to this paragraph will be reduced by multiplying such amount by a
      fraction, the numerator of which is the number of months (including any
      fraction of a month) so remaining to Employee's Normal Retirement Date and
      the denominator of which is 12.

            For purposes of this Agreement, "Earnings" shall mean the sum of (1)
      Employee's Annual Base Pay (as defined below), and (2) Employee's Recent
      Cash Bonus (as defined below).

            "Annual Base Pay" shall mean the greater of (1) the annualized
      amount of Employee's rate of base pay (as shown in Benchmark's payroll
      records) immediately before the Change of Control, and (2) the annualized
      amount of Employee's rate of base pay (as shown in Benchmark's payroll
      records) immediately before the date of Termination.

            "Recent Cash Bonus" shall mean the highest bonus received by the
      Employee in the year in which a Change of Control occurs or during either
      of the proceeding two years, calculated as a percentage of Annual Base Pay
      as of the time of such payment. To

                                       2
<PAGE>

      calculate this amount, Benchmark will divide (a) the sum of the bonuses
      paid to Employee during the first calendar quarter of each of those three
      years, by (b) the annualized amount of Employee's rate of base pay (as
      shown in Benchmark's payroll records) at the time of such payment.

            (B) OTHER BONUSES. Employee shall be entitled to any individual
      bonuses or individual incentive compensation not yet paid but payable
      under Benchmark's plans for years prior to the year of Employee's
      termination of employment. Such amounts shall be paid to Employee in a
      single lump sum cash payment along with the payment of the lump sum
      severance payment described in 3(a).

            (C) DUTY TO MITIGATE. Employee's entitlement to benefits hereunder
      shall not be governed by any duty to mitigate damages by seeking further
      employment nor offset by any compensation which Employee may receive from
      future employment.

            (D) PAYMENT OBLIGATIONS ABSOLUTE. Benchmark's obligation to pay or
      cause to be paid to Employee the benefits and to make the arrangements
      provided in this Section 3 shall be absolute and unconditional and shall
      not be affected by any circumstances, including, without limitation, any
      setoff, counterclaim, recoupment, defense or other right, which Benchmark
      may have against Employee or anyone else. All amounts payable by or on
      behalf of Benchmark hereunder shall be paid without notice or demand. Each
      and every payment made hereunder by or on behalf of Benchmark shall be
      final and Benchmark and its subsidiaries shall not, for any reason
      whatsoever, seek to recover all or any part of such payment from Employee
      or from whomever shall be entitled thereto.

      4. CONDITIONS TO THE OBLIGATIONS OF BENCHMARK. Benchmark shall have no
obligation to provide or cause to be provided to Employee the rights and
benefits described in Section 3 hereof if either of the following events shall
occur:

            (A) TERMINATION FOR CAUSE. Benchmark or its subsidiaries shall
      terminate Employee's employment for "cause." For purposes of this
      Agreement, the parties agree that the phrase "for cause" should be
      interpreted in the context of an employment arrangement for an executive
      with unique responsibilities to participate in the execution of the
      business plan adopted by Benchmark's Board of Directors. Accordingly, the
      term "for cause" includes (i) acts of dishonesty; (ii) knowing violations
      of any written policy of Company or applicable to Benchmark's operations;
      (iii) violations of applicable laws, rules or regulations that expose
      Company to damages or liability; (iv) breach of fiduciary duty; and (v)
      failure to fulfill assigned responsibilities to achieve the earnings,
      revenue or profitability targets established by the Board of Directors.

                                       3
<PAGE>

            (B) RESIGNATION AS DIRECTOR. Employee shall, promptly after
      Termination and upon receiving a written request to do so, resign as a
      director and/or officer of each subsidiary and affiliate of Benchmark of
      which Employee is then serving as a director and/or officer.

      5.    CONFIDENTIALITY; NON-SOLICITATION; COOPERATION.

            (A) CONFIDENTIALITY. Employee agrees that at all times following
      Termination, Employee will not, without the prior written consent of
      Benchmark, disclose to any person, firm or corporation any confidential
      information of Benchmark or its subsidiaries which is now known to
      Employee or which hereafter may become known to Employee as a result of
      Employee's employment or association with Benchmark and which could be
      helpful to a competitor, unless such disclosure is required under the
      terms of a valid and effective subpoena or order issued by a court or
      governmental body; PROVIDED, HOWEVER, that the foregoing shall not apply
      to confidential information which becomes publicly disseminated by means
      other than a breach of this Agreement.

            (B) NON-SOLICITATION. Employee agrees that for a period of three
      years following the date of Termination (or until Employee's Normal
      Retirement Date, whichever is sooner) Employee will not induce, either
      directly or indirectly, any employee of senior to manager level of
      Benchmark or any of its subsidiaries to terminate his or her employment.

            (C) COOPERATION. Employee agrees that, at all times following
      Termination, Employee will furnish such information and render such
      assistance and cooperation as may reasonably be requested in connection
      with any litigation or legal proceedings concerning Benchmark or any of
      its subsidiaries (other than any legal proceedings concerning Employee's
      employment). In connection with such cooperation, Benchmark will pay or
      reimburse Employee for reasonable expenses.

            (D) REMEDIES FOR BREACH. It is recognized that damages in the event
      of breach of this Section 5 by Employee would be difficult, if not
      impossible, to ascertain, and it is therefore agreed that Benchmark, in
      addition to and without limiting any other remedy or right it may have,
      shall have the right to an injunction or other equitable relief in any
      court of competent jurisdiction, enjoining any such breach, and Employee
      hereby waives any and all defenses Employee may have on the ground of lack
      of jurisdiction or competence of the court to grant such an injunction or
      other equitable relief. The existence of this right shall not preclude
      Benchmark from pursuing any other rights and remedies at law or in equity
      which Benchmark may have.

      6. TERM OF AGREEMENT. This Agreement shall terminate on December 31, 2002;
PROVIDED, HOWEVER, that this Agreement shall automatically renew for successive
one-year terms

                                       4
<PAGE>

unless Benchmark notifies Employee in writing at least 30 days prior to an
expiration date that it does not desire to renew the Agreement for an additional
term. This Agreement shall also terminate if and when the management of
Benchmark determines that Employee is no longer a key employee for purposes of
being a party to a severance agreement with Benchmark and so notifies Employee
in writing. The preceding provisions of this Section 6 to the contrary
notwithstanding, this Agreement shall not terminate (i) within three years after
a Change of Control or (ii) during any period of time when Benchmark has reason
to believe that any third person has begun a tender or exchange offer,
circulated a proxy to stockholders, or taken other steps or formulated plans to
effect a Change of Control, such period of time to end when, in the opinion of
the Executive Compensation Committee, the third person has abandoned or
terminated his efforts or plans to effect a Change of Control.

      7. ARBITRATION. It is the mutual intention of the parties to have any
dispute concerning this Agreement resolved out of court. Accordingly, the
parties agree that any claim or controversy of whatever nature arising from or
relating in any way to this Agreement or the employment of the Employee by the
Company, and any continuing obligations under this Agreement, including disputes
arising under the common law or federal or state statutes, laws or regulations
and disputes with respect to the arbitrability of any claim or controversy,
shall be resolved exclusively by final and binding arbitration before a single
experienced employment arbitrator selected in accordance with the Employment
Dispute Resolution ("EDR") Rules of the American Arbitration Association
("AAA"). The arbitration will be conducted pursuant to the EDR Rules of the AAA,
and the arbitrator shall have full authority to award or grant all remedies
provided by law. The judgment upon the award may be enforced by any court having
jurisdiction thereof. Benchmark shall pay for the fees of the arbitrator and the
administrative and filing fees charged by the AAA.

      8. EXPENSES. Benchmark shall pay or reimburse Employee for all costs and
expenses, including, without limitation, attorneys' fees, incurred by Employee
as a result of any arbitration proceeding (including an arbitration claim or
proceeding by Employee against Benchmark) arising out of, or challenging the
validity or enforceability of, this Agreement or any provision hereof.

      9. MISCELLANEOUS.

            (A) ASSIGNMENT. No right, benefit or interest hereunder shall be
      subject to assignment, anticipation, alienation, sale, encumbrance,
      charge, pledge, hypothecation or set-off in respect of any claim, debt or
      obligation, or to execution, attachment, levy or similar process;
      PROVIDED, HOWEVER, that Employee may assign any right, benefit or interest
      hereunder if such assignment is permitted under the terms of any plan or
      policy of insurance or annuity contract governing such right, benefit or
      interest.

                                       5
<PAGE>

            (B) CONSTRUCTION OF AGREEMENT. Nothing in this Agreement shall be
      construed to amend any provision of any plan or policy of Benchmark and
      its subsidiaries. This Agreement is not, and nothing herein shall be
      deemed to create, a commitment of continued employment of Employee by
      Benchmark or any of its subsidiaries.

            (C) AMENDMENT. This Agreement may not be amended, modified or
      canceled except by written agreement of the parties.

            (D) WAIVER. No provision of this Agreement may be waived except by a
      writing signed by the party to be bound thereby.

                  Employee may at any time or from time to time waive any or all
      of the rights and benefits provided for herein which have not been
      received by Employee at the time of such waiver. In addition, prior to the
      last day of the calendar year in which Employee's Termination occurs,
      Employee may waive any or all rights and benefits provided for herein
      which have been received by Employee; provided that prior to the end of
      such year Employee repays to Benchmark (or, if the benefit was received
      from an employee benefit plan trust, to such trust) the amount of the
      benefit received together with interest thereon at the minimum rate
      required to avoid imputed income. Any waiver of benefits pursuant to this
      paragraph shall be irrevocable. If Employee waives a right or benefit
      provided for herein and such waiver is determined by the Internal Revenue
      Service not to be effective, Benchmark shall indemnify Employee for any
      federal income and excise taxes Employee incurs as a result of that
      determination, so as to put Employee in the position Employee would have
      been in had the waiver been given effect.

            (E) SEVERABILITY. In the event that any provision or portion of this
      Agreement shall be determined to be invalid or unenforceable for any
      reason, the remaining provisions of this Agreement shall remain in full
      force and effect to the fullest extent permitted by law.

            (F) SUCCESSORS. This Agreement shall be binding upon and inure to
      the benefit of Employee and Employee's personal representative and heirs,
      and Benchmark and any successor organization or organizations which shall
      succeed to substantially all of the business and property of Benchmark,
      whether by means of merger, consolidation, acquisition of substantially
      all of the assets of Benchmark or otherwise, including by operation of
      law.

            (G) TAXES. Any payment or delivery required under this Agreement
      shall be subject to all requirements of the law with regard to withholding
      of taxes, filing, making of reports and the like, and Benchmark shall use
      its best efforts to satisfy promptly all such requirements.

                                       6
<PAGE>

            (H) DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement,
      "Change of Control" shall mean:

                  1. The acquisition by any individual, entity or group of 20%
      or more of either (i) the then outstanding shares of common stock of
      Benchmark (the "Outstanding Common Stock") or (ii) the combined voting
      power of the then outstanding voting securities of Benchmark entitled to
      vote generally in the election of directors (the "Outstanding Voting
      Securities"); provided, however, that for purposes of this subsection A,
      the following acquisitions shall not constitute a Change of Control: (i)
      any acquisition directly from Benchmark, (ii) any acquisition by
      Benchmark, (iii) any acquisition by any employee benefit plan (or related
      trust) sponsored or maintained by Benchmark or any corporation controlled
      by Benchmark or (iv) any acquisition by any corporation pursuant to a
      transaction which complies with clauses (i), (ii) and (iii) of subsection
      (h)(3); or

                  2. Individuals who, as of the date hereof, constitute the
      Board of Directors (the "Incumbent Board") cease for any reason to
      constitute at least a majority of the Board of Directors; provided,
      however that any individual becoming a director subsequent to the date
      hereof whose election, or nomination for election by Benchmark's
      shareholders, was approved by a vote of at least majority of the directors
      then comprising the Incumbent Board shall be considered as though such
      individual were a member of the Incumbent Board, but excluding, for this
      purpose, any such individual whose initial assumption of office occurs as
      a result of an actual or threatened election contest with respect to the
      election or removal of directors or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the Board of Directors; or

                  3. Consummation of a reorganization, merger or consolidation
      or sale or other disposition of all or substantially all of the assets of
      Benchmark (a "Business Combination"), in each case, unless, following such
      Business Combination, (i) all or substantially all of the individuals and
      entities who were the beneficial owners, respectively, of the Outstanding
      Common Stock and Outstanding Voting Securities immediately prior to such
      Business Combination beneficially own, directly or indirectly, more than
      50% of, respectively, the then outstanding voting shares of common stock
      and the combined voting power of the then outstanding voting securities
      entitled to vote generally in the election of directors, as the case may
      be, of the corporation resulting from such Business Combination
      (including, without limitation, a corporation which as a result of such
      transaction owns Benchmark or all or substantially all of Benchmark's
      assets either directly or through one or more subsidiaries) in
      substantially the same proportions as their ownership, immediately prior
      to such Business Combination, or the Outstanding Common Stock and
      Outstanding Voting Securities, as the case may be, (ii) no Person
      (excluding any corporation resulting from such Business Combination or any
      employee benefit plan (or related trust) of Benchmark or such corporation
      resulting from such Business Combination) beneficially owns, directly or
      indirectly, 20% or more of, respectively, the then outstanding shares of
      common stock of the corporation resulting from

                                       7
<PAGE>

      such Business Combination or the combined voting power of the then
      outstanding voting securities of such corporation except to the extent
      that such ownership existed prior to the Business Combination and (iii) at
      least a majority of the members of the board of directors of the
      corporation resulting from such Business Combination were members of the
      Incumbent Board at the time of the execution of the initial agreement, or
      of the action of the Board of Directors, providing for such Business
      Combination.

            4. Sections (h)(1-3) shall be interpreted in accordance with the
      provisions of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
      of 1934, as amended (the "Exchange Act") and in accordance with the
      meaning of Rule 13(d)-3 promulgated under the Exchange Act.

            (I) GOVERNING LAW. Except to the extent that federal law controls,
      this Agreement shall be governed and construed in accordance with the laws
      of the State of Texas.

            (J) ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
      and understanding of the parties hereto with respect to the matters
      covered hereby, and incorporates into one document any previous severance
      agreement executed by the parties and all amendments thereto as of the
      date hereof.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of January
24, 2002.

                                          BENCHMARK ELECTRONICS, INC

                                    By:   /s/ CARY T. FU
                                          ------------------------------------
                                          Cary T. Fu
                                          President and Chief Operating Officer

                                          /s/ GAYLA J. DELLY
                                          ------------------------------------
                                          Signature of Employee

                                          GAYLA J. DELLY
                                          ------------------------------------
                                          Chief Financial Officer

                                       8

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