Mr. Michael Clarke
President FlexInfastructure
Flextronics International USA, Inc.
2090 Fortune Drive
San Jose, CA 95131
Award Agreement for Michael
Clarke Deferred Compensation Plan
I am pleased to
confirm that Flextronics International USA, Inc. (the
“Company”) has agreed to provide you with a deferred
long term incentive bonus in return for services to be rendered in
the future as an employee of the Company (the “Deferred
Bonus”). The Deferred Bonus will equal an amount up to thirty
percent (30%) of your annual base salary in effect on July 1,
2008, and on July 1 st of each subsequent year. Thus, on July 1,
2008, subject to the limitations below, and on each subsequent July
1 st
on which you are eligible to earn
the Deferred Bonus, you will earn a Deferred Bonus up to 30% of
your annual base salary in effect on that day.
Before each July
1 st
, the Company will make a
determination, in its sole and absolute discretion , of your
eligibility to earn all or any portion of the Deferred Bonus for
that July 1 st .
From time to time, the Company may, in its sole and absolute
discretion, make additional contributions to your Deferred Bonus.
The Company will make an initial discretionary contribution to your
Deferred Bonus of $366,355 as soon as practical after July 31,
2007. The Company reserves the right to amend or terminate the
Deferred Bonus at any time for all amounts of the Deferred Bonus
that have not been earned on the date of the amendment or
termination. If your employment with the Company is terminated for
any reason, you will no longer be eligible to earn the Deferred
Bonus.
The Deferred Bonus
will not be paid currently to you. Instead, the amount of the
Deferred Bonus will be credited to the account (the “Deferral
Account”) established on your behalf under the Flextronics
International USA, Inc. Amended and Restated 2005 Senior Management
Deferred Compensation Plan (the “Deferred Compensation
Plan”). (This agreement will constitute the Award Agreement
referred to in Section 3 of your Deferral Agreement entered
into pursuant to the Deferred Compensation Plan.)
The Deferred
Account will vest as follows: One-third of the unvested balance of
the Deferral Account will vest on the first July 1
st that occurs at least one year after the day that
(i) the sum of your age and your years of service with the
Company equals or exceeds 60 and (ii) you have fulfilled at least
five years of service with the Company (the “First Vesting
Day”). One-half of the remaining unvested balance of the
Deferral Account will vest one year after the First Vesting Day
(the “Second Vesting Day”). Accordingly, 2/3
rds of the Deferral Account will be vested on the
Second Vesting Day (assuming no accelerated vesting has occurred as
a result
Mr. Michael Clarke
July 31, 2007
Page 2
of a Change of
Control, as addressed below). The remaining unvested portion of the
Deferral Account will vest one year after the Second Vesting Day
(the “Third Vesting Day”). Thus, the Deferred Account
will be 100% vested on the Third Vesting Day.
In particular, we
understand that, on July 1, 2007 you will be 52 years old
and will have 1 year of service with the Company, so that the sum
of your age and years of service will be 53. Therefore, if you
remain continuously employed with the Company until July 1,
2012, that day will be the first July 1 st that occurs at least one year after the day on
which your years of service plus your age will equal or exceed 60.
Accordingly, that day will be the First Vesting Day, and 1/3
rd of the unvested balance of your Deferral Account
will vest on that day. One-half of the remaining unvested balance
of your Deferral Account will vest on July 1, 2013,
i.e., the Second Vesting Day; and the remaining unvested
portion of your Deferral Account will vest on July 1, 2014,
i.e. , the Third Vesting Day.
Any amounts of the
Deferred Bonus that are earned when any portion of your Deferral
Account has already vested will vest as if they had been earned
before any portion was vested. That is, the percentage of any such
Deferred Bonus that equals the vested percentage of your Deferral
Account on the earning day will be credited to the vested portion
of the Deferral Account, and the remainder will be
credited
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