According to the Company’s FORM 10-K for the fiscal year ended December 31, 2002, on August 16, 2002, the United States District Court granted the Company’s Motion to Dismiss in the Consolidated Action. Plaintiff filed an appeal on December 6, 2002 to the Fifth Circuit Court of Appeals (the "Fifth Circuit") of the Court's ruling. However, in late January 2003, Plaintiff offered to withdraw the appeal and Plaintiff and Benchmark subsequently entered into an agreement wherein Benchmark agreed not to seek sanctions against Plaintiff in exchange for Plaintiff's covenant not to sue Benchmark for the subject matter made the basis of the current suit and to file with the Fifth Circuit a motion to withdraw the appeal. On January 31, 2003, Plaintiff filed the Motion to Withdraw with the Fifth Circuit and the Fifth Circuit entered a dismissal of the appeal on February 4, 2003.

The original action asserts a claim against Benchmark and certain of its officers for violations of Sections 10(b) and 20(a) of Securities Exchange Act of 1934 by reason of material misrepresentations and omissions. Specifically, the complaint alleges that on Oct. 22, 1999, the company announced third quarter earnings that were some 70% below consensus analyst estimates. The company attributed the poor earnings, in part, to component defects and delays in delivery of certain components during the third quarter. During that quarter, the company completed a $75 million private placement, and, thereafter, used some of the proceeds of the private placement as well as Benchmark stock to finance a major acquisition.