FLEXTRONICS INTERNATIONAL
LTD.
2001 EQUITY INCENTIVE
PLAN
As Adopted August 13, 2001
and amended through July 13, 2009
1. PURPOSE . The purpose of this Plan is to provide
incentives to attract, retain and motivate eligible persons whose
present and potential contributions are important to the success of
the Company, its Parent and Subsidiaries, by offering them an
opportunity to participate in the Company’s future
performance through grants of Awards. Capitalized terms not defined
in the text are defined in Section 21.
2. SHARES
SUBJECT TO THE PLAN .
2.1 Number of Shares Available . Subject to
Sections 2.2 and 15, the total number of Shares reserved and
available for grant and issuance pursuant to this Plan will be
62,000,000 Shares, plus shares that are subject to issuance upon
exercise of an Award but cease to be subject to such Award for any
reason other than exercise of such Award. In addition, any
authorized shares not issued or subject to outstanding grants under
the Company’s 1993 Share Option Plan, 1997 Interim Option
Plan, 1998 Interim Option Plan, 1999 Interim Option Plan, ASIC
International, Inc. Non-Qualified Stock Option Plan, Wave Optics,
Inc. 1997 Share Option Plan, Wave Optics, Inc. 2000 Share Option
Plan, Chatham Technologies, Inc. Stock Option Plan, Chatham
Technologies, Inc. 1997 Stock Option Plan, IEC Holdings Limited
1997 Share Option Scheme, Palo Alto Products International Private
Ltd 1996 Share Option Plan, The DII Group, Inc. 1994 Stock
Incentive Plan, The DII Group, Inc. 1993 Stock Option Plan, Orbit
Semiconductor, Inc. 1994 Stock Incentive Plan, Telcom Global
Solutions Holdings, Inc. 2000 Equity Incentive Plan, Telcom Global
Solutions, Inc. 2000 Stock Option Plan, KMOS Semi-Customs, Inc.
1989 Stock Option Plan, and KMOS Semi-Customs, Inc. 1990
Non-Qualified Stock Option Plan, (each a “ Prior Plan
” and collectively, the “ Prior Plans ”)
and any shares subject to outstanding grants that are forfeited
and/or that are issuable upon exercise of options granted pursuant
to the Prior Plans that expire or become unexercisable for any
reason without having been exercised in full, will no longer be
available for grant and issuance under the Prior Plans, but will be
available for grant and issuance under this Plan. At all times the
Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all
outstanding Awards granted under this Plan. No more than 30,000,000
Shares shall be issued as ISOs and no more than 20,000,000 Shares
shall be issued as Stock Bonuses.
2.2 Adjustment of Shares . Should any change be made
to the Shares issuable under the Plan by reason of any stock split,
stock dividend, recapitalization, combination of shares, exchange
of shares, spin-off or other change affecting the outstanding
Shares as a class without the Company’s receipt of
consideration, then appropriate adjustments shall be made to
(i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of
securities for which any Participant may be granted Awards under
the terms of the Plan or that may be granted generally under the
terms of the Plan, (iii) the number and/or class of securities
and price per Share in effect under each Award outstanding under
Sections 5, 7, and 20, and (iv) the number and/or class
of securities for which automatic Option grants are to be
subsequently made to newly elected or continuing Outside Directors
under Section 7. Such adjustments to the outstanding Awards
are to be effected in a manner which shall preclude the enlargement
or dilution of rights and benefits under such Awards, provided,
however, that (i) fractions of a Share will not be issued but will
be replaced by a cash payment equal to the Fair Market Value of
such fraction of a Share, as determined by the Committee. The
adjustments determined by the Committee shall be final, binding and
conclusive. The repricing, replacement or regranting of any
previously granted Award, through cancellation or by lowering the
Exercise Price or Purchase Price of such Award, shall be prohibited
unless the shareholders of the Company first approve such
repricing, replacement or regranting.
3. ELIGIBILITY . All Awards may be granted to
employees, officers and directors of the Company or any Parent or
Subsidiary of the Company. No person will be eligible to receive
more than 6,000,000 Shares in any calendar year under this Plan
pursuant to the grant of Awards hereunder; provided, however, that
no Outside
Director will
be eligible to receive more than 100,000 Shares, in the aggregate,
in any calendar year under this Plan pursuant to the grant of
Awards hereunder. A person may be granted more than one Award under
this Plan.
4.1 Committee Authority . This Plan will be
administered by the Committee or by the Board acting as the
Committee. Except for automatic grants to Outside Directors
pursuant to Section 7 hereof, and subject to the general purposes,
terms and conditions of this Plan, and to the direction of the
Board, the Committee will have full power to implement and carry
out this Plan. Except for automatic grants to Outside Directors
pursuant to Section 7 hereof, the Committee will have the
authority to:
(a) construe and
interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;
(b) prescribe,
amend and rescind rules and regulations relating to this Plan or
any Award;
(c) select persons
to receive Awards;
(d) determine the
form and terms of Awards;
(e) determine the
number of Shares or other consideration subject to
Awards;
(f) determine
whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards
under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;
(g) grant waivers
of Plan or Award conditions;
(h) determine the
vesting, exercisability and payment of Awards;
(i) correct any
defect, supply any omission or reconcile any inconsistency in this
Plan, any Award or any Award Agreement;
(j) determine
whether an Award has been earned; and
(k) make all other
determinations necessary or advisable for the administration of
this Plan.
4.2 Committee Discretion . Except for automatic
grants to Outside Directors pursuant to Section 7 hereof, any
determination made by the Committee with respect to any Award will
be made in its sole discretion at the time of grant of the Award
or, unless in contravention of any express term of this Plan or
Award, at any later time, and such determination will be final and
binding on the Company and on all persons having an interest in any
Award under this Plan. The Committee may delegate to one or more
officers of the Company the authority to grant an Award under this
Plan to Participants who are not Insiders of the
Company.
5. OPTIONS . The Committee may grant Options to
eligible persons and will determine whether such Options will be
Incentive Stock Options within the meaning of the Code (“
ISOs ”) or Nonqualified Stock Options (“
NQSOs ”), the number of Shares subject to the Option,
the Exercise Price of the Option, the period during which the
Option may be exercised, and all other terms and conditions of the
Option, subject to the following:
5.1 Form of Option Grant . Each Option granted under
this Plan will be evidenced by an Award Agreement which will
expressly identify the Option as an ISO or an NQSO (“
Stock Option Agreement ”), and, except as otherwise
required by the terms of Section 7 hereof, will be in such
form and contain such provisions
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(which need not
be the same for each Participant) as the Committee may from time to
time approve, and which will comply with and be subject to the
terms and conditions of this Plan.
5.2 Date of Grant . The date of grant of an Option
will be the date on which the Committee makes the determination to
grant such Option, unless otherwise specified by the Committee. The
Stock Option Agreement and a copy of this Plan will be delivered to
the Participant within a reasonable time after the granting of the
Option.
5.3 Exercise Period . Options may be exercisable
within the times or upon the events determined by the Committee as
set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the
expiration of ten (10) years from the date the Option is
granted; and provided further that (i) no ISO granted to a
person who directly or by attribution owns more than ten percent
(10%) of the total combined voting power of all classes of shares
or stock of the Company or of any Parent or Subsidiary of the
Company (“ Ten Percent Shareholder ”) will be
exercisable after the expiration of five (5) years from the
date the ISO is granted and (ii) no Option granted to a person
who is not an employee of the Company or any Parent or Subsidiary
of the Company on the date of grant of that Option will be
exercisable after the expiration of five (5) years from the
date the Option is granted. The Committee also may provide for
Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number of Shares or percentage
of Shares as the Committee determines.
5.4 Exercise Price . The Exercise Price of an Option
will be determined by the Committee when the Option is granted;
provided that: (i) the Exercise Price will be not less than
100% of the Fair Market Value of the Shares on the date of grant;
and (ii) the Exercise Price of any ISO granted to a Ten
Percent Shareholder will not be less than 110% of the Fair Market
Value of the Shares on the date of grant. Payment for the Shares
purchased may be made in accordance with Section 6 of this
Plan.
(a) Options may be
exercised only by delivery to the Company (or as the Company may
direct) of a written stock option exercise agreement (the “
Exercise Agreement ”) (in the case of a written
Exercise Agreement, in the form approved by the Board or the
Committee, which need not be the same for each Participant), in
each case stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise
Agreement, if any, and such representations and agreements
regarding Participant’s investment intent and access to
information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws,
together with payment in full of the Exercise Price for the number
of Shares being purchased.
(b) A written
Exercise Agreement may be communicated electronically through the
use of such security device (including, without limitation, any
logon identifier, password, personal identification number,
smartcard, digital certificate, digital signature, encryption
device, electronic key, and/or other code or any access procedure
incorporating any one or more of the foregoing) as may be
designated by the Board or the Committee for use in conjunction
with the Plan from time to time (“ Security Device
”), or via an electronic page, site, or environment
designated by the Company which is accessible only through the use
of such Security Device, and such written Exercise Agreement shall
thereby be deemed to have been sent by the designated holder of
such Security Device. The Company (or its agent) may accept and act
upon any written Exercise Agreement issued and/or transmitted
through the use of the Participant’s Security Device (whether
actually authorized by the Participant or not) as his authentic and
duly authorized Exercise Agreement and the Company (or its agent)
may treat such Exercise Agreement as valid and binding on the
Participant notwithstanding any error, fraud, forgery, lack of
clarity or misunderstanding in the terms of such Exercise
Agreement. All written Exercise Agreements issued and/or
transmitted through the use of the Participant’s Security
Device (whether actually authorized by the Participant or not) are
irrevocable and binding on the Participant upon transmission to the
Company (or as the Company may direct) and the Company (or its
agent) shall be entitled to effect, perform or process such
Exercise Agreement without the Participant’s further consent
and without further reference to the Participant.
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(c) The
Company’s records of the Exercise Agreements (whether
delivered or communicated electronically or in printed form), and
its record of any transactions maintained by any relevant person
authorized by the Company relating to or connected with the Plan,
whether stored in audio, electronic, printed or other form, shall
be binding and conclusive on the Participant and shall be
conclusive evidence of such Exercise Agreements and/or
transactions. All such records shall be admissible in evidence and,
in the case of a written Exercise Agreement which has been
communicated electronically, the Participant shall not challenge or
dispute the admissibility, reliability, accuracy or the
authenticity of the contents of such records merely on the basis
that such records were incorporated and/or set out in electronic
form or were produced by or are the output of a computer system,
and the Participant waives any of his rights (if any) to so
object.
5.6 Termination . Notwithstanding the exercise
periods set forth in the Stock Option Agreement, exercise of an
Option will always be subject to the following:
(a) If the
Participant is Terminated for any reason except death or
Disability, then the Participant may exercise such
Participant’s Options only to the extent that such Options
would have been exercisable upon the Termination Date no later than
three (3) months after the Termination Date (or such shorter
or longer time period not exceeding five (5) years as may be
determined by the Committee, provided, that any Option which is
exercised beyond three (3) months after the Termination Date
shall be deemed to be an NQSO), but in any event no later than the
expiration date of the Options.
(b) If the
Participant is Terminated because of the Participant’s death
or Disability (or the Participant dies within three (3) months
after a Termination other than for Cause or because of the
Participant’s Disability), then the Participant’s
Options may be exercised only to the extent that such Options would
have been exercisable by the Participant on the Termination Date
and must be exercised by the Participant (or the
Participant’s legal representative or authorized assignee) no
later than twelve (12) months after the Termination Date (or
such shorter or longer time period not exceeding five
(5) years as may be determined by the Committee, provided,
that any Option which is exercised beyond twelve (12) months
after the Termination Date when the Termination is for
Participant’s Disability, shall be deemed to be an NQSO), but
in any event no later than the expiration date of the
Options.
(c) If the
Participant is terminated for Cause, then the Participant’s
Options shall expire on such Participant’s Termination Date,
or at such later time and on such conditions as are determined by
the Committee (but in any event, no later than the expiration date
of the Options).
5.7 Limitations on Exercise . The Committee may
specify a reasonable minimum number of Shares that may be purchased
on any exercise of an Option, provided that such minimum number
will not prevent Participant from exercising the Option for the
full number of Shares for which it is then exercisable.
5.8 Limitations on ISO . The aggregate Fair Market
Value (determined as of the date of grant) of Shares with respect
to which ISO are exercisable for the first time by a Participant
during any calendar year (under this Plan or under any other
incentive stock option plan of the Company, Parent or Subsidiary of
the Company) will not exceed US$100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISO are
exercisable for the first time by a Participant during any calendar
year exceeds US$100,000, then the Options for the first US$100,000
worth of Shares to become exercisable in such calendar year will be
ISO and the Options for the amount in excess of US$100,000 that
become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are
amended after the Effective Date of this Plan to provide for a
different limit on the Fair Market Value of Shares permitted to be
subject to ISO, such different limit will be automatically
incorporated herein and will apply to any Options granted after the
effective date of such amendment.
5.9 Modification, Extension or Renewal . The
Committee may modify, extend or renew outstanding Options and
authorize the grant of new Options in substitution therefor,
provided that any such action may not, without the written consent
of a Participant, impair any of such Participant’s rights
under any Option
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previously
granted, and provided further that the exercise period of any
Option may not in any event be extended beyond the periods
specified in Section 5.3. Any outstanding ISO that is
modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code.
5.10 No Disqualification . Notwithstanding any other
provision in this Plan, no term of this Plan relating to ISO will
be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify
this Plan under Section 422 of the Code or, without the
consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.
6. PAYMENT FOR SHARE PURCHASES .
6.1 Payment . Payment for Shares purchased pursuant
to this Plan may be made in cash (by check) or, where expressly
approved for the Participant by the Committee and where permitted
by law:
(a) by
cancellation of indebtedness of the Company to the
Participant;
(b) by waiver of
compensation due or accrued to the Participant for services
rendered;
(c) with respect
only to purchases upon exercise of an Option, and provided that a
public market for the Company’s Shares exists:
(i) through a “same day sale” commitment
from the Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an “ NASD
Dealer ”) whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so
purchased to pay for the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward
the Exercise Price directly to the Company; or
(ii) through a “margin” commitment from
the Participant and a NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for
a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the
Company;
(d) conversion of
a convertible note issued by the Company, the terms of which
provide that it is convertible into Shares issuable pursuant to the
Plan (with the principal amount and any accrued interest being
converted and credited dollar for dollar to the payment of the
Exercise Price); or
(e) by any
combination of the foregoing.
7. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS .
7.1 Types of Options and Shares . Options granted
under this Plan and subject to this Section 7 shall be
NQSOs.
7.2 Eligibility . Options subject to this
Section 7 shall be granted only to Outside Directors. In no
event, however, may any Outside Director be granted any Options
under this Section 7 if such grant is (a) prohibited, or
(b) restricted (either absolutely or subject to various
securities requirements, whether legal or administrative, being
complied with), in the jurisdiction in which such Outside Director
is resident under the relevant securities laws of that
jurisdiction.
7.3 Initial Grant . Each Outside Director who first
becomes a member of the Board after the Effective Date will
automatically be granted an Option for 25,000 Shares (an “
Initial Grant ”) on the date such Outside Director
first becomes a member of the Board. Each Outside Director who
became a member of the Board
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on or prior to
the Effective Date and who did not receive a prior option grant
(under this Plan or otherwise and from the Company or any of its
corporate predecessors) will rece
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