EXHIBIT 10.02

 

FLEXTRONICS INTERNATIONAL USA, INC. 2005 SENIOR

EXECUTIVE DEFERRED COMPENSATION PLAN

 

1. Purpose.

 

The purpose of this Plan is to provide the terms of an unfunded deferred
compensation plan for a select group of executive management and highly
compensated employees of Flextronics International USA, Inc. (the “Company”) who
may agree, pursuant to the Deferral Agreements, to defer certain compensation
otherwise due to them. It is intended that the Plan constitute an unfunded “top
hat plan” for purposes of the Employee Retirement Income Security Act of 1974,
as amended. This Plan shall be construed and administered in accordance with
Section 409A of the Internal Revenue Code of 1986, as amended.

 

2. Definitions.

 

The following terms used in the Plan shall have the meanings set forth below:

 

(a) “Affiliate” means, with respect to the Company, any entity directly or
indirectly controlling, controlled by, or under common control with the Company
or any other entity designated by the Board in which the Company or an Affiliate
has an interest.

 

(b) “Beneficiary” shall mean any person, persons, trust or other entity
designated by a Participant to receive benefits, if any, under the Plan upon
such Participant’s death. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in writing by the
Committee or Plan Administrator.

 

(c) “Board” shall mean the Board of Directors of Flextronics International Ltd.

 

(d) “Change of Control” shall mean (i) a merger or consolidation of Flextronics
International Ltd. in which its voting securities immediately prior to the
merger or consolidation do not represent, or are not converted into securities
that represent, a majority of the voting power of all voting securities of the
surviving entity immediately after the merger or consolidation; (ii) the sale,
lease, conveyance or other disposition of all or substantially all of the
Flextronics International Ltd.’s assets as an entirety or substantially as an
entirety to any person, entity or group acting in concert; (iii) any transaction
or series of transactions (as a result of a tender offer, merger, consolidation
or otherwise) that results in, or that is in connection with, any person, entity
or group acting in concert becoming the “beneficial owner” (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) directly or indirectly, of more
than 50% of the aggregate voting power of all classes of shares of Flextronics
International Ltd.; or (iv) a liquidation and winding up of the business of
Flextronics International Ltd.

 

(e) “Claimant” shall have the meaning set forth in Section 9(a).

 

(f) “Code” shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations issued thereunder.

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(g) “Committee” shall mean the Compensation Committee appointed by the Board.

 

(h) “Company” shall mean Flextronics International USA, Inc., and its
successors.

 

(i) “Deferral Account” shall mean the recordkeeping account established and
maintained by the Company in the name of a Participant as provided in Section
4(b) for compensation payable to a Participant pursuant to a Deferral Agreement.

 

(j) “Deferral Agreement” shall mean an agreement executed by the Participant and
the Company, in such form as approved by the Committee or the Plan
Administrator, and as may be revised from time to time with respect to any one
or more Participants by or at the direction of the Committee or Plan
Administrator, whereby (A) the Participant (i) agrees to receive certain types
of compensation in the future pursuant to the provisions of this Plan, (ii)
elects to defer future compensation such Participant would otherwise be entitled
to receive in cash from the Company, including an amount or percentage of
compensation to be deferred, and/or (iii) makes such other elections as are
permitted and provides such other information as is required under the Plan, and
(B) the Participant specifies a schedule according to which the Participant will
receive payout of his or her compensation that is payable in the future under
this Plan. Each Deferral Agreement shall be consistent with this Plan and shall
incorporate by its terms the provisions of this Plan.

 

(k) “Deferral Day” shall mean, for each Participant, the day on which the
Company is required, by the terms of the applicable Deferral Agreement form or
any other agreement between the Participant and the Company, to credit an amount
to the Participant’s Deferral Account under this Plan.

 

(l) “Disability” shall mean that a Participant (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months; or (ii) is, by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than 3 months under an accident and health plan covering employees
of the Participant’s employer. This definition shall be construed and
administered in accordance with the requirements of Code Section 409A(a)(2)(C).

 

(m) “Fair Market Value” shall mean, on a given date of valuation, (i) with
respect to any mutual fund, the closing net asset value as reported in The Wall
Street Journal with respect to the date of valuation and (ii) with respect to a
security traded on a national securities exchange or the NASDAQ National Market,
the closing price on the date of valuation as reported in The Wall Street
Journal.

 

(n) “Hypothetical Investments” shall have the meaning set forth in Section 4(d).

 

(o) “Manager” shall have the meaning set forth in Section 4(d).

 

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(p) “Officers” shall have the meaning set forth in Section 8(b)(ii).

 

(q) “Participant” shall mean a present or former employee or director of the
Company who participates in this Plan and any other present or former employee
or director designated from time to time by the Committee.

 

(r) “Plan” shall mean this Flextronics International USA, Inc., 2005 Senior
Executive Deferred Compensation Plan.

 

(s) “Plan Administrator” shall mean the Plan Administrator, if any, appointed
pursuant to Section 3(a).

 

(t) “Released Party” shall have the meaning set forth in Section 8(b)(iii).

 

(u) “Separation from Service” shall mean, with respect to a Participant, the
cessation of an Employee’s employment with the Employer, other than by death of
Disability. This definition shall be construed and administered in accordance
with the requirements of Code Section 409A(a)(2)(B)(i).

 

(v) “Specified Employee” shall mean a key employee (as defined in Code Section
416(i) without regard to paragraph 5 thereof) of Flextronics International Ltd.,
for so long as any of its stock is publicly traded on an established securities
market or otherwise. This definition shall be construed and administered in
accordance with the requirements of Code Section 409A(a)(2)(B)(i).

 

(w) “Trust” shall mean any trust or trusts established or designated by the
Company pursuant to Section 5(a) to hold assets in connection with the Plan.

 

(x) “Trustee” shall have the meaning set forth in Section 5(a).

 

(y) “Unforeseeable Emergency” shall mean a severe financial hardship to a
Participant resulting from an illness or accident of the Participant, the
Participant’s Spouse, or a dependent (as defined in Section 152(a) of the Code)
of the Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant. This definition shall be construed
and administered in accordance with the requirements of Code Section
409A(a)(2)(B)(ii).

 

3. Authority and Administration of the Committee and Plan Administrator.

 

(a) Authorization of Committee or Plan Administrator. The Committee shall
administer the Plan and may select one or more persons to serve as the Plan
Administrator. The Plan Administrator shall have authority to perform any act
that the Committee is entitled to perform under this Plan, except to the extent
that the Committee specifies limitations on the Plan Administrator’s authority.
The initial Plan Administrator shall be the Company’s Chief Financial Officer.
Any person selected to serve as the Plan Administrator may, but need not, be a
Committee member or an officer or employee of the Company. However, if a person
serving as Plan Administrator or a member of the Committee is a Participant,
such person may not decide or vote on a matter affecting his interest as a
Participant.

 

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(b) Administration by Committee or Plan Administrator. The Committee or Plan
Administrator shall administer the Plan in accordance with its terms, and shall
have all powers necessary to accomplish such purpose, including the power and
authority to reasonably construe and interpret the Plan, to reasonably define
the terms used herein, to reasonably prescribe, amend and rescind rules and
regulations, agreements, forms, and notices relating to the administration of
the Plan, and to make all other determinations reasonably necessary or advisable
for the administration of the Plan. The Committee or Plan Administrator may
appoint additional agents and delegate thereto powers and duties under the Plan.

 

4. Deferral Agreements and Deferral Accounts.

 

(a) Deferral Agreement. The Company and any Participant may agree to defer all
or a portion of his or her compensation, under the terms provided in any
Deferral Agreement form provided to the Participant in accordance with the Plan,
by executing a completed Deferral Agreement. An election to defer compensation
for a taxable year pursuant to a Deferral Agreement must be made not later than
the close of the preceding taxable year, or at such other time provided in
Treasury Regulations issued under Code Section 409A (or earlier date specified
in the applicable Deferral Agreement form); provided that, in the case of the
first year in which a Participant becomes eligible to participate in the Plan
within the meaning of Code Section 409A and applicable administrative guidance,
such election may be made with respect to services to be performed subsequent to
the election within 30 days after the date the Participant becomes eligible to
participate in the Plan (or earlier date specified in the applicable Deferral
Agreement form); and, in the case of any performance-based compensation based on
services performed over a period of at least 12 months, such election may be
made no later than 6 months before the end of the period (or earlier date
specified in the applicable Deferral Agreement form). The Deferral Agreement
form shall establish for each Participant the amount and type of compensation
(including bonuses and/or salary) that may or shall be deferred pursuant to the
Plan and such determination will be reflected on the relevant Deferral Agreement
form, and may establish maximum or minimum amounts of aggregate deferrals that
may be elected for a Participant. A Participant shall not be entitled to vary
any term that is set forth in the Deferral Agreement form except to the extent
that the form of Deferral Agreement itself permits variations.

 

(b) Establishment of Deferral Accounts. The Committee or Plan Administrator
shall establish a Deferral Account for each Participant. Each Deferral Account
shall be maintained for the Participant solely as a bookkeeping entry by the
Company to evidence unfunded obligations of the Company. The Participant shall
be 100% vested in the Participant’s Deferral Account at all times, except to the
extent otherwise specified in the applicable Deferral Agreement or in any other
agreement between the Company and the Participant. The provisions with respect
to vesting in any such Deferral Agreement or other agreement shall be
incorporated in this Plan and given effect as if fully set forth herein. A
Participant’s Deferral Account shall be credited with the amounts required to be
credited to the Participant’s Deferral Account pursuant to the Participant’s
initial Deferral Agreement or pursuant to any subsequent Deferral Agreement
entered into by that Participant and the Company, in each case, less the amount
of federal, state or local tax required by law to be withheld with respect to
such amounts, unless such withholding is provided from another source, and shall
be adjusted for Hypothetical Investment results as described herein.

 

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(c) Hypothetical Investments and Managers. Subject to the provisions of Section
4(g), amounts credited to a Deferral Account shall be deemed to be invested in
one or more hypothetical investments (“Hypothetical Investments”). Each
Participant shall select an investment manager (a “Manager”) from a list
established by the Committee or Plan Administrator, and the Manager will then
select Hypothetical Investments on the Participant’s behalf. A Participant may
select a successor Manager from such list of Managers from time to time. For the
unvested portion of a Participant’s Deferral Account, a Manager may select
Hypothetical Investments from a list of investments selected from time to time
by the Committee or Plan Administrator (the “Unvested Account List”), and
subject to any limitation on permissible allocations among groups of
Hypothetical Investments that the Committee or Plan Administrator may establish.
For the vested portion of a Participant’s Deferral Account (which shall be
accounted for in a separate vested subaccount pursuant to Section 4(j)), a
Manager may select Hypothetical Investments from a list of publicly available
mutual funds, publicly traded stock and bonds selected from time to time by the
Committee or Plan Administrator (the “Vested Account List”). The Committee or
Plan Administrator shall consider requests from any Participant to add to the
list of Managers and/or to the Vested Account List, and shall satisfy such
requests if they are reasonably acceptable to the Committee or Plan
Administrator. The Committee or Plan Administrator may change or discontinue any
Hypothetical Investment or Manager if reasonably necessary to satisfy business
objectives of the Company or its Affiliates; provided that, following a Change
of Control, neither the Committee nor the Plan Administrator may change or
modify the investment options existing immediately prior to such Change of
Control in any manner that is adverse to the Participants. No Hypothetical
Investments may be made in any debt or equity issued by Flextronics
International Ltd. or its Affiliates.

 

(d) List of Hypothetical Investments and Managers. An initial list of Managers,
an initial Unvested Account List, and an initial Vested Account List shall be
established by the Board, the Committee or the Plan Administrator and each such
list shall be provided to each Participant in connection with the initial
Deferral Agreement.

 

(e) Investment of Deferral Accounts. As provided in Sections 4(d) and 5(b), each
Deferral Account shall be deemed to be invested in one or more Hypothetical
Investments as of the date of the deferral or credit, as the case may be. The
amounts of hypothetical income, appreciation and depreciation in value of the
Hypothetical Investments shall be credited and debited to, or otherwise
reflected in, such Deferral Account from time to time in accordance with
procedures established by the Committee or Plan Administrator. Unless otherwise
determined by the Committee or Plan Administrator, amounts credited to a
Deferral Account shall be deemed invested in Hypothetical Investments as of the
date so credited.

 

(f) Allocation and Reallocation of Hypothetical Investments. A Manager may
allocate and reallocate amounts credited to a Participant’s Deferral Account to
one or more of the Hypothetical Investments authorized under the Plan with such
frequency as determined by the Committee or the Plan Administrator. Subject to
the rules established by the Committee or Plan Administrator, a Manager may
reallocate amounts credited to a Participant’s Deferral Account to other
Hypothetical Investments by filing with the Committee or Plan Administrator a
notice, in such form as may be specified by the Committee or Plan Administrator.
No Participant shall have the right, at any time, to direct a Manager to enter
into specific transactions in connection with his or her Deferral Account;
provided that this provision shall not prohibit the

 

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Participant from communicating with the Manager regarding Hypothetical
Investments, including communication regarding preferred Hypothetical Investment
objectives. Each Manager shall have the power to acquire and dispose of such
Hypothetical Investments as the Manager determines necessary in connection with
its portfolio. The Committee or Plan Administrator may restrict or prohibit
reallocation of amounts deemed invested in specified Hypothetical Investments or
invested by specified Managers to comply with applicable law or regulation.

 

(g) No Actual Investment. Notwithstanding any other provision of this Plan that
may be interpreted to the contrary, the Hypothetical Investments are to be used
for measurement purposes only. A Participant’s election of any such Hypothetical
Investments, the allocation of such Hypothetical Investments to his or her
Deferral Account, the calculation of additional amounts and the crediting or
debiting of such amounts to a Participant’s Deferral Account shall not be
considered or construed in any manner as an actual investment of his or her
Deferral Account in any such Hypothetical Investments. In the event that the
Company or the Trustee, in its own discretion, decides to invest funds in any or
all of the Hypothetical Investments, no Participant shall have any rights in or
to such investments themselves. Without limiting the foregoing, a Participant’s
Deferral Account shall at all times be a bookkeeping entry only and shall not
represent any investment made on his or her behalf by the Company or the Trust.
The Participant shall at all times remain an unsecured creditor of the Company.

 

(h) Forfeiture of Unvested Portions of Deferral Accounts Upon Termination of
Employment. Upon the termination of a Participant’s employment with the Company,
any unvested portion of the Participant’s Deferral Account (excluding the
portion, if any, that vests as a result of such termination) shall be forfeited
and terminated in accordance with the applicable Deferral Agreement, except as
otherwise determined by the Committee in its sole and absolute discretion.

 

(i) Change in Law. If a future change in law would, in the judgment of the
Committee or Plan Administrator, likely accelerate taxation to a Participant of
amounts that would be credited to the Participant’s Deferral Account in the
future under the Participant’s Deferral Agreement, the Company and the
Participant will attempt to amend the Plan to satisfy the requirements of the
change in law and, unless and until such an amendment is agreed to, Company
shall cease deferrals under this Deferral Agreement on the effective date of
such change in law.

 

(j) Separate Maintenance of Vested Subaccounts. A separate vested subaccount
shall be established and maintained for each Participant who either (a) elects
to defer amounts of salary and/or cash bonus payments pursuant to a Deferral
Agreement, or (b) becomes vested in a portion of the unvested balance of the
Participant’s Deferral Account (the “Unvested Balance”). A Participant’s vested
subaccount shall constitute part of the Participant’s Deferral Account. Whenever
a portion of a Participant’s Unvested Balance becomes vested, the portion that
becomes vested shall be transferred to the Participant’s separate vested
subaccount as specified in the Deferral Agreement or other agreement entered
into between the Participant and the Company. If a Participant elects to defer
amounts of salary and cash bonus pursuant to a Deferral Agreement, the deferral
salary and cash bonus shall be accounted for in the Participant’s separate
vested subaccount. The amounts of hypothetical income, appreciation and
depreciation

 

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in value of the Hypothetical Investments of amounts in a vested subaccount shall
be credited and debited to, or otherwise reflected in, such vested subaccount
from time to time in accordance with procedures established by the Committee or
Plan Administrator. Unless otherwise determined by the Committee or Plan
Administrator, amounts credited to a vested subaccount shall be deemed invested
in Hypothetical Investments as of the date so credited.

 

5. Establishment of Trust.

 

(a) The Trust Agreement. The Company shall enter into a Trust Agreement, in
substantially the form attached hereto as Exhibit A, providing for the
establishment of a trust to be held and administered by a trustee (the
“Trustee”) designated in the Trust Agreement (the “Trust”). The Trustee shall be
the agent for purposes of such duties delegated to the Trustee by the Committee
or Plan Administrator as set forth in the Trust Agreement. The Trust shall be
irrevocable.

 

(b) Funding the Trust. On the relevant Deferral Day, the Company shall deposit
into the Trust cash or other assets, as specified in the applicable Deferral
Agreement, equal to the aggregate amount required to be credited to the
Participant’s Deferral Account for that Deferral Day, less applicable taxes
required to be withheld, if any. The assets of the Trust shall remain subject to
the claims of the general creditors of the Company in the event of an insolvency
of the Company. Assets of the Trust shall at all times be located within the
United States.

 

(c) Taxes and Expenses of the Trust. The Committee and the Plan Administrator
shall make all investment decisions for the Trust, and no Participant shall be
entitled to direct any investments of the Trust. All taxes on any gains and
losses from the investment of the assets of the Trust shall be recognized by the
Company and the taxes thereon shall be paid by the Company and shall not be
recovered from the Deferral Accounts or the Trust. The third-party
administrative expenses of the Plan and the Trust, including expenses charged by
the Trustee to establish the Trust and the Trustee’s annual fee per Deferral
Account, shall be paid by the Company, and shall neither be payable by Trustee
from the Trust nor reduce any Deferral Accounts; provided that any Managers’
fees or other expenses incurred with respect to particular Hypothetical
Investment or any asset of the Trust which corresponds to a particular
Hypothetical Investment shall be charged to the Deferral Account that is deemed
invested in such Hypothetical Investment. No part of the Company’s internal
expenses to administer the Plan, including overhead expenses, shall be charged
to the Trust or the Deferral Accounts.

 

6. Settlement of Deferral Accounts.

 

The Company shall pay or direct the Trustee to pay the net amount credited to a
Deferral Account as elected by the Participant in the Participant’s Deferral
Agreement in accordance with the provisions of this Plan. A Participant shall be
required to select one of the payout alternatives set forth in the form of
Deferral Agreement provided to the Participant by the Plan Administrator. Except
for payouts due to the death, Disability, Unforeseeable Emergency or Separation
from Service of the Participant, no payout of amounts credited to a
Participant’s Deferral Account shall occur prior to the first anniversary of the
Deferral Agreement. The Committee or Plan administer may, in its sole
discretion, allow a Participant may redefer the

 

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payout of his Deferral Account one or more times; provided, that (i) such
redeferral may not take effect until at least 12 months after the date on which
such election is made; (ii) in the case of an election related to any payment
other than a payment that would be made upon the Participant’s death,
Disability, or the occurrence of an Unforeseeable Emergency, the first payment
with respect to which such election is made must be deferred for a period of not
less than 5 years from the date such payment would otherwise have been made; and
(iii) any election that would affect a scheduled payout may be made not less
than 12 months prior to the date of the first scheduled payout date. The
preceding restrictions on redeferrals shall be construed and administered in
accordance with the requirements of Code Section 409A(a)(4)(C). No Participant
shall be entitled to accelerate the time or schedule of any payment under the
Plan, except as may be permitted by Treasury Regulations promulgated under Code
Section 409A.

 

(a) Payment in Cash or Securities. The Company shall settle a Participant’s
Deferral Account, and discharge all of its obligations to pay deferred
compensation under the Plan with respect to such Deferral Account, by payment of
cash in an amount equal to or, at the option of the Committee or Plan
Administrator, in marketable securities selected by the Committee or Plan
Administrator with a Fair Market Value equal to the net amount credited to the
applicable Deferral Account. Any such distributions to a Participant shall
reduce the Company’s obligations under the Plan to such Participant. The
Company’s obligation under the Plan may be satisfied by distributions from the
Trust.

 

(b) Timing of Payments.

 

(i) Payments in settlement of a Participant’s Deferral Account may be
distributed no earlier than the Participant’s Separation from Service,
Disability, death, a specified time (or pursuant to a fixed schedule) specified
in the applicable Deferral Agreement, or the occurrence of an Unforeseeable
Emergency. In the case of a Participant who is a Specified Employee, a payment
on account of Separation from Service may not be made before the date which is 6
months after the date of Separation from Service (or, if earlier, the date of
the Participant’s death).

 

(ii) Payments in settlement of a Deferral Account shall be made as soon as
practicable after the date or dates (including upon the occurrence of specified
events), and in such number of installments, as directed by the Participant in
the Participant’s Deferral Agreement, unless otherwise provided in this Section
6. All amounts needed for a payment shall be deemed withdrawn from the
Hypothetical Investments as close in time as is practicable to the requested
payment date. If a Participant has elected to receive installment payments, the
amount of the distribution payable is based upon the value of the Deferral
Account at the time of the installment payment date and shall act to reduce
Hypothetical Investments in the following order: (A) cash and money market
accounts, and (B) each other Hypothetical Investment on a pro rata basis, based
on the value of the Participant’s Deferral Account. If a Participant has elected
to receive partial payments of the amount in his or her Deferral Account, unpaid
balances shall continue to be deemed to be invested in the Hypothetical
Investments that such Participant has designated pursuant to Section 4(d) or
4(f).

 

(iii) In the event of a Participant’s death prior to the payment of all net
amounts credited to his or her Deferral Account, such amounts shall be paid to
the Participant’s

 

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designated Beneficiary in a single lump sum as soon as practicable after the
Participant’s death. If a Participant fails to designate a Beneficiary or if all
designated Beneficiaries predecease the Participant or die prior to complete
distribution of the Participant’s benefits, the Participant’s designated
Beneficiary shall be the executor or personal representative of the
Participant’s estate, if a probate proceeding is open at the time for the
distribution(s), and otherwise shall be the person(s) who would be entitled to
the distribution(s) under the Participant’s last will and /or revocable trust
(if such will distributes the residuary estate to such trust) and otherwise to
the person(s) who would inherit the Participant’s property under the law of the
Participant’s last domicile. If the Committee or Plan Administrator has any
doubt as to the proper Beneficiary to receive payments pursuant to this Plan,
the Committee or Plan Administrator shall have the right, exercisable in its
discretion, to withhold such payments until this matter is resolved to the
Committee’s or Plan Administrator’s satisfaction. The payment of benefits under
the Plan to a Beneficiary shall fully and completely discharge the Company from
all further obligations under this Plan with respect to the Participant, and
such Participant’s interest in the Plan shall terminate upon such full payment
of benefits.

 

(iv) Irrespective of any elections made by a Participant, the Committee or Plan
Administrator may provide that the net vested amount credited to a Participant’s
Deferral Account may be paid out in a single lump sum to the Participant in the
event of the Participant’s Disability.

 

(c) Unforeseeable Emergency. Other provisions of the Plan notwithstanding, if
the Committee or Plan Administrator determines that the Participant has an
Unforeseeable Emergency, the Committee or Plan Administrator may direct the
immediate lump sum payment to the Participant of vested amounts that the
Committee or Plan Administrator determines to be necessary to satisfy such
Unforeseeable Emergency plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the
extent to which such Unforeseeable Emergency is or may be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant’s assets (to the extent the liquidation of such assets would not
itself cause severe financial hardship). The preceding sentence shall be
construed and administered in accordance with the requirements of Code Section
409A(a)(2)(B)(ii). If a Participant has suffered an Unforeseeable Emergency, the
Plan Administrator may, in its sole discretion, authorize the cessation of
deferrals by such Participant under the Plan.

 

(d) Effect on Deferral Account. A Participant’s Deferral Account shall be
debited to the extent of any distributions to the Participant pursuant to this
Section 6.

 

7. Amendment/Termination.

 

(a) The Committee, Plan Administrator or the Board may, with prospective or
retroactive effect, amend, alter, suspend, discontinue, or terminate the Plan
(i) if there is a change in law or regulatory authority that reasonably would be
expected to result in an increase in the cost to the Company of at least
$200,000 to maintain the Plan (other than an increase resulting from taxes on
any gains from investment of the assets of the Trust), (ii) if the Internal
Revenue Service determines that any amounts deferred under the Plan are
includible in the Participant’s gross income prior to being paid out to the
Participant, (iii) any time during the calendar year

 

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2005 if determined to be necessary, appropriate or advisable in response to
administrative guidance issued under Code Section 409A or to comply with the
provisions of Code Section 409A, or (iv) if no Participant is materially
adversely affected by such action with respect to amounts required to be
credited to the Participant’s Deferral Account under any previously executed
Deferral Agreement; provided that, the Company may accelerate distributions
under this Plan only where doing so is consistent with Treasury Regulations and
other guidance issued by the Internal Revenue Service under Code Section 409A;
provided further that, upon an event described in clause (i) or (ii) the Company
may not, aside from any acceleration of benefits, alter any Participant’s rights
under this Plan; and provided further that, following a Change of Control, the
Plan will not be subject to amendment, alteration, suspension, discontinuation
or termination without the prior written consent of each Participant who would
be materially adversely affected by such action.

 

(b) Notwithstanding any other provision to the contrary and except as may
otherwise be provided by the Committee or Plan Administrator, the Plan shall
terminate as soon as possible following the payment of all amounts in respect of
all Deferral Accounts.

 

8. General Provisions.

 

(a) Limits on Transfer of Awards. Other than by will, the laws of descent and
distribution, or by appointing a Beneficiary, no right, title or interest of any
kind in the Plan shall be transferable or assignable by a Participant (or the
Participant’s Beneficiary) or be subject to alienation, anticipation,
encumbrance, garnishment, attachment, levy, execution or other legal or
equitable process, nor subject to the debts, contracts, liabilities or
engagements, or torts of any Participant or the Participant’s Beneficiary. Any
attempt to alienate, sell, transfer, assign, pledge, garnish, attach or take any
other action subject to legal or equitable process or encumber or dispose of any
interest in the Plan shall be void.

 

(b) Waiver, Receipt and Release.

 

(i) As between the Participant and the Company, a Participant and the
Participant’s Beneficiary shall assume all risk (other than gross negligence of
the Company or the Committee or Plan Administrator, or breach by the Company of
the terms of this Plan) in connection with the Plan, Trust design,
implementation or administration, Hypothetical Investment decisions made by the
Participant and the resulting value of the Participant’s Deferral Account, the
selection and actions of the Trustee or any other third party providing services
to the Company or the Trust in connection with the Plan or Trust (including
their administrative and investment expenses), including any income taxes of the
Participant or Participant’s Beneficiary relating to or arising out of his or
her participation in the Plan, and neither the Company nor the Committee or Plan
Administrator shall be liable or responsible therefor other than as provided in
Section 5(c).

 

(ii) As a condition of being a Participant in the Plan, each Participant must
sign a waiver (which may be a part of the Deferral Agreement) releasing the
Company and its Affiliates, the Committee, the Plan Administrator, officers of
the Company or its Affiliates (the “Officers”) and the Board from any claims and
liabilities regarding the matters to which the Participant has assumed the risk
as set forth in this Section. Payments (in any form) to any

 

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Participant or Beneficiary in accordance with the provisions of the Plan shall,
to the extent thereof, be in full satisfaction of all claims for compensation
deferred and relating to the Deferral Account to which the payments relate
against the Company or any Affiliate or the Committee or Plan Administrator, and
the Committee or Plan Administrator may require such Participant or Beneficiary,
as a condition to such payments, to execute a waiver, receipt and release to
such effect.

 

(iii) As a condition of being a Participant in the Plan, each Participant must
sign a waiver releasing the Trustee and each of its Affiliates (each, a
“Released Party”) against any and all loss, claims, liability and expenses
imposed on or incurred by any Released Party as a result of any acts taken or
any failure to act by the Trustee, where such act or failure to act is in
accordance with the directions from the Committee or Plan Administrator or any
designee of the Committee or Plan Administrator.

 

(iv) Each Participant agrees to pay any taxes, penalties and interest such
Participant or Beneficiary may incur in connection with his or her participation
in this Plan, and further agrees to indemnify the Company and its Affiliates,
the Committee, the Plan Administrator, Officers and the Board for such taxes,
penalties and interest the Participant or Participant’s Beneficiary incurs and
fails to pay and for which the Company is made liable by the appropriate tax
authority.

 

(c) Unfunded Status of Awards, Creation of Trusts. The Plan is intended to
constitute an unfunded plan for deferred compensation and each Participant shall
rely solely on the unsecured promise of the Company for payment hereunder. With
respect to any payment not yet made to a Participant under the Plan, nothing
contained in the Plan shall give a Participant any rights that are greater than
those of a general unsecured creditor of the Company.

 

(d) Participant Rights. No provision of the Plan or transaction hereunder shall
confer upon any Participant any right or impose upon any Participant any
obligation to be employed by the Company or an Affiliate, or to interfere in any
way with the right of the Company or an Affiliate to increase or decrease the
amount of any compensation payable to such Participant. Subject to the
limitations set forth in Section 8(c) hereof, the Plan shall inure to the
benefit of, and be binding upon, the parties hereto and their successors and
assigns.

 

(e) Tax Withholding. The Company shall have the right to deduct from amounts
otherwise credited to or paid from a Deferral Account any sums that federal,
state, local or foreign tax law requires to be withheld.

 

(f) Governing Law. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of California, without giving effect to principles of
conflicts of laws to the extent not pre-empted by federal law.

 

(g) Limitation. A Participant and the Participant’s Beneficiary shall assume all
risk in connection with (i) the performance of the Managers, (ii) the
performance of the Hypothetical Investments, and (iii) the tax treatment of
amounts deferred under or paid pursuant to the Plan, and the Company, the
Committee, the Plan Administrator, and the Board shall not be liable or
responsible therefor.

 

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(h) Construction. The captions and numbers preceding the sections of the Plan
are included solely as a matter of convenience of reference and are not to be
taken as limiting or extending the meaning of any of the terms and provisions of
the Plan. Whenever appropriate, words used in the singular shall include the
plural or the plural may be read as the singular.

 

(i) Severability. In the event that any provision of the Plan shall be declared
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions of the Plan but shall be fully severable, and
the Plan shall be construed and enforced as if said illegal or invalid provision
had never been inserted herein.

 

(j) Status. The establishment and maintenance of, or allocations and credits to,
the Deferral Account of any Participant shall not vest in any Participant any
right, title or interest in or to any Plan or Company assets or benefits except
at the time or times and upon the terms and conditions and to the extent
expressly set forth in the Plan and in accordance with the terms of any Trust.

 

(k) Spouse’s Interest. The interest in the benefits hereunder of a Participant’s
spouse who has predeceased the Participant shall automatically pass to the
Participant and shall not be transferable by such spouse in any manner,
including but not limited to such spouse’s will, nor shall such interest pass
under the laws of intestate succession.

 

(l) Successors. The provisions of the Plan shall bind the Company and its
successors.

 

9. Claims Procedures.

 

(a) Presentation of Claim. If any person (a “Claimant”) does not believe that he
or she will receive the benefits to which the person is entitled or believes
that fiduciaries of the Plan have breached their duties or that the Plan is not
being operated properly or that his or her legal rights have been or are being
violated with respect to the Plan, the Claimant must file a formal claim with
the Committee or Plan Administrator under the procedures set forth in this
Article. The procedures in this Article shall apply to all claims that any
person has with respect to the Plan, including claims against fiduciaries and
former fiduciaries, unless the Committee or Plan Administrator determines, in
its sole discretion, that it does not have the power to grant, in substance, all
relief reasonably being sought by the Claimant. If such a claim relates to the
contents of a notice received by the Claimant, the claim must be made within
sixty (60) days after such notice was received by the Claimant. All other claims
must be made within one hundred eighty (180) days of the date on which the event
that caused the claim to arise occurred. The claim must state with particularity
the determination desired by the Claimant.

 

(b) Notification of Decision. The Committee or Plan Administrator shall consider
a Claimant’s claim within twenty-five (25) days of receipt of the claim and
shall notify the Claimant in writing:

 

(i) that the Claimant’s requested determination has been made, and that the
claim has been allowed in full; or

 

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(ii) that the Committee or Plan Administrator has reached a conclusion contrary,
in whole or in part, to the Claimant’s requested determination, and such notice
must set forth in a manner reasonably believed to be understood by the Claimant:

 

(A) a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary; and

 

(B) an explanation of the claim review procedure set forth below.

 

(c) Review of a Denied Claim. Within sixty (60) days after receiving a notice
from the Committee or Plan Administrator that a claim has been denied in whole
or in part, a Claimant (or the Claimant’s duly authorized representative) may
file with the Committee or Plan Administrator a written request for a review of
the denial of the claim. Thereafter, but not later than thirty (30) days after
the review procedure begins, the Claimant (or the Claimant’s duly authorized
representative):

 

(i) may review pertinent documents;

 

(ii) will be provided specific reference(s) to the pertinent Plan provisions
upon which the decision was based; and

 

(iii) will be informed of such other matters as the Committee or Plan
Administrator deems relevant.

 

(d) Arbitration. If a Claimant’s claim described in Section 9(a) (an “Arbitrable
Dispute”) is denied pursuant to Section 9(b) and 9(c), the Claimant’s only
further recourse shall be to submit the claim to final and binding arbitration
in the city of San Jose, State of California, before an experienced employment
arbitrator selected in accordance with the Employment Dispute Resolution Rules
of the American Arbitration Association. Except as otherwise provided in this
Section 9(d) or Section 9(f), each party shall pay the fees of their respective
attorneys, the expenses of their witnesses and any other expenses connected with
the arbitration, but all other costs of the arbitration, including the fees of
the arbitrator, costs of any record or transcript of the arbitration,
administrative fees and other fees and costs shall be paid in equal shares by
each party (or, if applicable, each group of parties) to the arbitration. In any
dispute involving a Claimant in which the Claimant prevails, the Company shall
reimburse the Claimant’s reasonable attorneys fees and related expenses.
Arbitration in this manner shall be the exclusive remedy for any Arbitrable
Dispute. The arbitrator’s decision or award shall be fully enforceable and
subject to an entry of judgment by a court of competent jurisdiction. Should any
party attempt to resolve an Arbitrable Dispute by any method other than
arbitration pursuant to this Section, the responding party shall be entitled to
recover from the initiating party all damages, expenses and attorneys fees
incurred as a result.

 

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(e) Legal Action. Prior to a Change of Control, except to enforce an
arbitrator’s award, no actions may be brought by a Claimant in any court with
respect to an Arbitrable Dispute.

 

(f) Following a Change of Control. Upon the occurrence of a Change of Control,
an independent party selected jointly by the Participants in the Plan prior to
the Change in the Control and the Committee or the Plan Administrator or other
appropriate person shall assume all duties and responsibilities of the Committee
or Plan Administrator under this Article 9 and actions may be brought by a
Claimant in any appropriate court with respect to an Arbitrable Dispute. After a
Change of Control, if any person or entity has failed to comply (or is
threatening not to comply) with any of its obligations under the Plan, or takes
or threatens to take any action to deny, diminish or to recover from any
Participant the benefits intended to be provided thereunder, the Company shall
reimburse the Participant for reasonable attorneys fees and related costs
incurred in the successful pursuance or defense of the Participant’s rights. If
the Participant does not prevail, attorneys fees shall also be payable under the
preceding sentence to the extent the Participant had reasonable justification
for pursuing its claim, but only to the extent that the scope of such
representation was reasonable.

 

10. Effective Date.

 

The Plan shall be effective as of July 7, 2005.

 

Flextronics International USA, Inc.

 

By:  

/s/ Thomas J. Smach

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    Thomas J. Smach     Chief Financial Officer

 

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EXHIBIT A – Trust Agreement

 

The Merrill Lynch Non-Qualified Deferred

Compensation Plan Trust Agreement

 

TRUST UNDER:

 

 

--------------------------------------------------------------------------------

<<Plan Name>>

 

DEFERRED COMPENSATION PLAN

 

This Agreement is by and between                                         
                     (the “Employer”) and Merrill Lynch Trust Company, FSB (the
“Trustee”);

 

WHEREAS, the Employer has adopted the Non-Qualified Deferred Compensation Plan
identified above;

 

WHEREAS, the Employer has incurred or expects to incur liability under the terms
of such Plan with respect to the individuals participating in such Plan;

 

WHEREAS, the Employer wishes to establish a trust (the “Trust”) and to
contribute to the Trust assets that shall be held therein, subject to the claims
of the Employer’s creditors in the event of the Employer’s Insolvency, as herein
defined, until paid to Plan participants and their beneficiaries in such manner
and at such times as specified in the Plan;

 

WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purpose of Title I of
the Employee Retirement Income Security Act of 1974;

 

WHEREAS, it is the intention of the Employer to make contributions to the Trust
to provide itself with a source of funds to assist it in the meeting of its
liabilities under the Plan;

 

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:

 

1. Establishment of Trust

 

(a) Deposit of Funds. The Employer hereby deposits with the Trustee in trust
such cash and/or marketable securities, if any, which shall become the principal
of the Trust to be held, administered and disposed of by the Trustee as provided
in this Trust Agreement.

 

(b) Irrevocability. The Trust hereby established shall be irrevocable; provided
that, upon termination of a participant’s employment with Employer, the Trustee
shall pay to the Employer an amount equal to the unvested portion of the
Participant’s Deferral Account as determined under the Plan.

--------------------------------------------------------------------------------

(c) Grantor Trust. The Trust is intended to be a grantor trust, of which the
Employer is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly.

 

(d) Trust Assets. The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Employer and shall be used
exclusively for the uses and purposes of Plan participants and general creditors
as herein set forth. Plan participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plan and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their beneficiaries
against the Employer. Any assets held by the Trust will be subject to the claims
of the Employer’s general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.

 

(e) Additional Deposits. The Employer, in its sole discretion, may at any time,
or from time to time, make additional deposits of cash or other property in
trust with the Trustee to augment the principal to be held, administered and
disposed of by the Trustee as provided in this Trust Agreement. Neither the
Trustee nor any Plan participant or beneficiary shall have any right to compel
such additional deposits.

 

(f) Acceptance of Additional Deposits. The Trustee shall not be obligated to
receive such cash and/or property unless prior thereto the Trustee has agreed
that such cash and/or property is acceptable to the Trustee and the Trustee has
received such reconciliation, allocation, investment or other information
concerning, or representation with respect to, the cash and/or property as the
Trustee may require. The Trustee shall have no duty or authority to (a) require
any deposits to be made under the Plan or to the Trustee; (b) compute any amount
to be deposited under the Plan to the Trustee; or (c) determine whether amounts
received by the Trustee comply with the Plan. Assets of the Trust may, in the
Trustee’s discretion, be held in an account with an affiliate of the Trustee.

 

2. Payments to Plan Participants and Their Beneficiaries.

 

(a) Payment of Benefits by Trustee. With respect to each Plan participant, the
Employer shall deliver to the Trustee a schedule (the “Payment Schedule”) that
indicates the amounts payable in respect of the participant (and his or her
beneficiaries), that provides a formula or other instructions acceptable to the
Trustee for determining the amounts so payable, the form in which such amounts
are to be paid (as provided for or available under the Plan), and the time of
commencement for payment of such amounts. The Payment Schedule shall be
delivered to the Trustee not more than thirty (30) business days nor fewer than
fifteen (15) business days prior to the first date on which a payment is to be
made to the Plan participant. Any change to a Payment Schedule shall be
delivered to the Trustee not more than thirty (30) business days nor fewer than
fifteen (15) business days prior to the date on which the first payment is to be
made in accordance with the changed Payment Schedule. Except as otherwise
provided herein, the Trustee shall make payments to Plan participants and their
beneficiaries in accordance with such Payment Schedule. The Trustee shall make
provisions for the reporting

 

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and withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
Plan and shall pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid by the
Employer, it being understood between the parties hereto that (1) the Employer
shall on a timely basis provide the Trustee specific information as to the
amount of taxes to be withheld and (2) the Employer shall be obligated to
receive such withheld taxes from the Trustee and properly pay and report such
amounts to the appropriate taxing authorities.

 

(b) Entitlement to Benefits. The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by the Employer or
such party as it shall designate under the Plan, and any claim for such benefits
shall be considered and reviewed under the procedures set out in the Plan.

 

(c) Payment of Benefits by Employer. The Employer may make payment of benefits
directly to Plan participants or their beneficiaries as they become due under
the terms of the Plan. If the Employer determines to make a payment of a
deferred compensation benefit directly to a participant or beneficiary as the
benefit becomes payable to the participant or such participant’s beneficiary
under the terms of the Plan, the Employer shall notify the Trustee of the
decision to make payment of the benefit directly to the participant or the
participant’s beneficiary prior to the time the benefit becomes payable to the
participant or the participant’s beneficiary. The Employer shall provide written
certification to the Trustee evidencing such payment, and may at that time or at
a subsequent time request reimbursement from the Trustee of the amount of such
payment. The Trustee, upon receipt of such written certification and such
request, shall distribute such amount to the Employer. In addition, if the
principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan, the Employer
shall make the balance of each payment as it falls due. The Trustee shall notify
the Employer where principal and earnings are not sufficient.

 

(d) No Duty to Determine Sufficiency. The Trustee shall have no responsibility
to determine whether the Trust is sufficient to meet the liabilities under the
Plan, and shall not be liable for payments or Plan liabilities in excess of the
value of the assets held in the Trust.

 

3. Trustee Responsibility Regarding Payments in the Event of Insolvency.

 

(a) Insolvency. The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Employer is Insolvent. The Employer shall be
considered “Insolvent” for purposes of this Trust Agreement if (i) the Employer
is unable to pay its debts as they become due, or (ii) the Employer is subject
to a pending proceeding as a debtor under the United States Bankruptcy Code.

 

(b) Notice of Insolvency. At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the Trust, for
which the Employer is treated as grantor and owner shall be subject to the
claims of general creditors of the Employer under federal and state law as set
forth below.

 

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(i) The Board of Directors and the Chief Executive Officer of the Employer (or,
if there is no Chief Executive Officer, the highest ranking officer) shall have
the duty to inform the Trustee in writing of the Insolvency of the Employer. If
a person claiming to be a creditor of the Employer alleges in writing to the
Trustee that the Employer has become Insolvent, the Trustee shall determine
whether the Employer is Insolvent and, pending such determination, the Trustee
shall discontinue payment of benefits to Plan participants or their
beneficiaries.

 

(ii) Unless the Trustee has actual knowledge of the Insolvency of the Employer,
or has received notice from the Employer or a person claiming to be a creditor
alleging that the Employer is Insolvent, the Trustee shall have no duty to
inquire whether the Employer is Insolvent. The Trustee may in all events rely on
such evidence concerning the solvency of the Employer as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for making a
determination concerning the solvency of the Employer.

 

(iii) If at any time the Trustee has determined that the Employer is Insolvent,
the Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trust for the benefit of the
general creditors of the Employer. Nothing in this Trust Agreement shall in any
way diminish any rights of Plan participants or their beneficiaries to pursue
their rights as general creditors of the Employer with respect to benefits due
under the Plan or otherwise.

 

(iv) The Trustee shall resume the payment of benefits to Plan participants or
their beneficiaries in accordance with Section 2 of this Trust Agreement only
after the Trustee has determined that the Employer is not Insolvent (or is no
longer Insolvent).

 

(c) Amount of Payments after Insolvency. Provided that there are sufficient
assets, if the Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the aggregate amount
of all payments due to Plan participants or their beneficiaries under the terms
of the Plan for the period of such discontinuance, less the aggregate amount of
any payments made to Plan participants provided for hereunder during any such
period of discontinuance; provided that the Employer has given the Trustee the
information with respect to such payments made during the period of
discontinuance prior to resumption of payments by the Trustee.

 

(d) Parent Assets after Insolvency. Notwithstanding the foregoing provisions of
this Section 3, to the extent a parent corporation, if any (“Parent”),
contributes Parent stock or other assets to the Trust to satisfy any subsidiary
corporation’s obligations to the Plan participants and beneficiaries (“Parent
Assets”), such Parent Assets are subject to claims of both the general creditors
of the subsidiary corporation as well as the general creditors of the Parent.

 

4. Payments to the Employer.

 

Except as provided in Section 1(b), Section 2(c) and Section 3 hereof, since the
Trust is irrevocable, in accordance with Section 1(b) hereof, the Employer shall
have no right or power to direct the Trustee to return to the Employer or to
divert to others any of the Trust assets before the payment of all benefits have
been made to Plan participants and their beneficiaries pursuant to the terms of
the Plan and this Trust Agreement.

 

-4-

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5. Investment Authority.

 

(a) Investment of Principal and Interest. The Trustee shall invest and reinvest
the principal and income of the Trust as directed by the Employer (including
directions that the Trustee follow Plan participants’ deemed investment
elections made in accordance with the terms of the Plan), which directions may
be changed from time to time, all in accordance with procedures established by
the Trustee. The Trustee may limit the categories of assets in which the Trust
may be invested.

 

(b) Voting Rights. Subject to Section 5(a), the Trustee may invest in securities
(including stock or rights to acquire stock) or obligations issued by the
Employer. All rights associated with assets of the Trust shall be exercised by
the Trustee or the person designated by the Trustee, and shall in no event be
exercised by or rest with Plan participants, except that voting rights with
respect to Trust assets will be exercised by the Employer, unless an investment
adviser has been appointed pursuant to Section 5(d) and voting authority has
been delegated to such investment adviser.

 

(c) Substitution of Assets. The Employer shall have the right at any time, and
from time to time in its sole discretion, to substitute assets of equal fair
market value for any asset held by the Trust. This right is exercised by the
Employer in a nonfiduciary capacity without the approval or consent of any
person in a fiduciary capacity.

 

(d) Appointment of Investment Manager. The Employer may appoint one or more
investment managers, including any entities affiliated with the Trustee, who
shall have the power to manage, acquire, or dispose of such portion of the
assets of the Trust as the Employer shall determine subject to the following:

 

(i) An investment manager shall act in accordance with the provisions of an
investment management agreement entered into between it and the Employer, an
executed copy of which investment management agreement shall be filed with the
Trustee;

 

(ii) Each such investment manager must be registered as an investment adviser
under the Investment Advisers Act of 1940, and shall provide investment advice
on a discretionary or nondiscretionary basis with respect to that portion of the
assets of the Trust as the Employer shall specify from time to time by written
direction(s) to the Trustee;

 

(iii) The indicia of ownership of the assets of the Trust shall be held by the
Trustee at all times;

 

(iv) Any entity affiliated with the Trustee may act as broker or dealer to
execute transactions, including the purchase of any securities directly
distributed, underwritten, or issued by an entity affiliated with the Trustee,
at standard commission rates, mark-ups or concessions, and to provide other
management or investment services with respect to such trust, including the
custody of assets;

 

-5-

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(v) Any direction provided to the Trustee by an investment manager shall be
provided in writing or given orally and confirmed in writing, or by telephonic
or electronic methods acceptable to the Trustee as soon as practicable.
Alternatively, an investment manager may provide investment instructions
directly to the broker or dealer and receipt by the Trustee of a confirmation of
the transaction from the broker or dealer shall be conclusive evidence of such
transactions. In either case, the Trustee shall have the authority within
twenty-four (24) hours of receipt of such direction from the investment manager
or confirmation of a transaction to instruct the investment manager to rescind
the transaction if the Trustee determines that the investment is inconsistent
with its operational or administrative requirements; and

 

(vi) The Trustee may pay any such investment manager for any such services from
the assets of the Trust without reduction for any fees or compensation paid to
the Trustee for its services as trustee.

 

Notwithstanding any other provision of the Trust Agreement to the contrary, with
respect to the investment of the assets of the Trust managed by an investment
manager, the Trustee shall have only the duty to follow the directions of the
investment manager and the Trustee shall not be liable to anyone:

 

  (I) for an act or omission of the investment manager with respect to the
investment of such assets;

 

  (II) or failing to act with respect to the investment or reinvestment of such
assets absent direction from the investment manager; or

 

  (III) for failing to invest, periodically review or otherwise deal with the
investment of such assets.

 

In the event the Employer is Insolvent for purposes of Section 3 and the
Employer fails to provide effective investment instructions to the Trustee as
provided in Section 5(a), the Trustee may appoint one or more investment
advisers who are registered as investment advisers under the Investment Advisers
Act of 1940, who may be affiliates of the Trustee, to provide investment advice
on a discretionary or non-discretionary basis with respect to all or a specified
portion of the assets of the Trust.

 

(e) Powers of Trustee. Subject to Section 5(a), the Trustee, or the Trustee’s
designee, is authorized and empowered:

 

(i) To invest and reinvest Trust assets, together with the income therefrom, in
common stock, preferred stock, convertible preferred stock, bonds, debentures,
convertible debentures and bonds, mortgages, notes, commercial paper and other
evidences of indebtedness (acts which the Trustee deems necessary including
those issued by the Trustee), shares of mutual funds (which funds may be
sponsored, managed or offered by an affiliate of the Trustee), guaranteed
investment contracts, bank investment contracts, other securities, policies of
life insurance, annuity contracts, options, options to buy or sell securities or
other assets, and all other property of any type (personal, real or mixed, and
tangible or intangible);

 

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(ii) To deposit or invest all or any part of the assets of the Trust in savings
accounts or certificates of deposit or other deposits in a bank or savings and
loan association or other depository institution, including the Trustee or any
of its affiliates, provided with respect to such deposits with the Trustee or an
affiliate the deposits bear a reasonable interest rate;

 

(iii) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust; to sell, convey, transfer, exchange,
partition, lease for any term, even extending beyond the duration of this Trust,
and otherwise dispose of the same from time to time;

 

(iv) To hold in cash, without liability for interest, such portion of the Trust
as is pending investments, or payment of expenses, or the distribution of
benefits;

 

(v) To take such actions as may be necessary or desirable to protect the Trust
from loss due to the default on mortgages held in the Trust including the
appointment of agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or trustees, to grant to such
agents such powers as are necessary or desirable to protect the Trust, to direct
such agent or trustee, or to delegate such power to direct, and to remove such
agent or trustee;

 

(vi) To settle, compromise or abandon all claims and demands in favor of or
against the Trust;

 

(vii) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under the laws of the
state in which the Trustee has its principal place of business so that the
powers conferred upon the Trustee herein shall not be in limitation of any
authority conferred by law, but shall be in addition thereto;

 

(viii) To borrow money from any source and to execute promissory notes,
mortgages or other obligations and to pledge or mortgage any trust assets as
security; and

 

(ix) To maintain accounts at, execute transactions through, and lend on an
adequately secured basis stocks, bonds or other securities to, any brokerage or
other firm, including any firm which is an affiliate of the Trustee.

 

6. Additional Powers Of The Trustee.

 

To the extent necessary or which it deems appropriate to implement its powers
under Section 5 or otherwise to fulfill any of its duties and responsibilities
as the Trustee of the Trust, the Trustee shall have the following additional
powers and authority:

 

(a) To register securities, or any other property, in its name or in the name of
any nominee, including the name of any affiliate or the nominee name designated
by any affiliate, with or without indication of the capacity in which property
shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;

 

-7-

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(b) To designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel and
accountants as the Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders services to such an
affiliate, and, as part of its expenses under this Trust Agreement, to pay their
reasonable expenses and compensation;

 

(c) To make, execute and deliver, as the Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or appropriate for the accomplishment of any of the powers listed in
this Trust Agreement; and

 

(d) Generally to do all other or appropriate for the protection of the Trust.

 

7. Disposition of Income.

 

During the term of this Trust Agreement, all income received by the Trust, net
of expenses and taxes, shall be accumulated and reinvested.

 

8. Accounting by the Trustee.

 

The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Employer and the Trustee. Within ninety (90) calendar days following the close
of each calendar year and within ninety (90) calendar days after removal or
resignation of the Trustee, the Trustee shall deliver to the Employer a written
account of its administration of the Trust during such year or during the period
from the close of the last preceding year to the date of such removal or
resignation, setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
The Trustee may satisfy its obligation under this Section 8 by rendering to the
Employer monthly statements setting forth the information required by this
Section separately for the month covered by the statement,

 

9. Responsibility and Indemnity of the Trustee.

 

(a) Standard of Conduct. The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person
acting in like capacity and familiar with such matters would use in the conduct
of an enterprise of a like character and with like aims, provided, however, that
the Trustee shall incur no liability to any person for any action taken pursuant
to a direction, request or approval given by the Employer which is contemplated
by, and in conformity with, the terms of the Plan and this Trust and is given in
writing by the Employer or in such other manner prescribed by the Trustee. The
Trustee shall also incur no liability to any person for any failure to act in
the absence of direction, request or approval from the Employer which is
contemplated by, and in conformity with, the terms of this Trust. In the event
of a dispute between the Employer and a party, the Trustee may apply to a court
of competent jurisdiction to resolve the dispute.

 

-8-

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(b) Indemnification of Trustee. The Employer hereby indemnifies the Trustee and
each of its affiliates (collectively, the “Indemnified Parties”) against, and
shall hold them harmless from, any and all loss, claims, liability, and expense,
including reasonable attorneys’ fees, imposed upon or incurred by any
Indemnified Party as a result of any acts taken, or any failure to act, in
accordance with the directions from the Employer or any designee of the
Employer, or by reason of the Indemnified Party’s good faith execution of its
duties with respect to the Trust, including, but not limited to, its holding of
assets of the Trust. Trustee is authorized to prosecute or defend actions,
suits, claims or proceedings for the protection of Trust assets and of the
Trustee in the performance of the duties of the Trustee and to represent the
Trust in all actions, suits, claims or proceedings. The Trustee shall have the
authority to pay, contest or settle any claim by or against the Trust by
compromise, arbitration or otherwise; to release, in whole or in part, any claim
belonging to the Trust to the extent that the claim is deemed uncollectible by
the Trustee. Notwithstanding the foregoing, the Trustee may only pay or settle a
claim assessed against the Trust by the Employer if it is compelled to do so by
a final order of a court of competent jurisdiction which is not subject to
appeal. The Employer agrees to indemnify the Trustee against the Trustee’s
costs, expenses and liabilities (including, without limitation, attorneys’ fees
and expenses) relating thereto. The Employer’s obligations in the foregoing
regard shall be satisfied promptly by the Employer, provided that in the event
the loss, claim, liability or expense involved is determined by a no longer
appealable final judgment entered in a lawsuit or proceeding to have resulted
from the gross negligence or willful misconduct of the Trustee, the Trustee
shall promptly on request thereafter return to the Employer any amount
previously received by the Trustee under this Section with respect to such loss,
claim, liability or expense. If the Employer does not pay such costs, expenses
and liabilities in a reasonably timely manner, the Trustee may obtain payment
from the Trust without direction from the Employer.

 

(c) Legal Counsel. The Trustee may consult with legal counsel (who may also be
counsel for the Employer generally) with respect to any of its duties or
obligations hereunder.

 

(d) Other Advisers. The Trustee may hire agents, accountants, actuaries,
investment advisers, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.

 

(e) Authority of Trustee. The Trustee shall have, without exclusion, all powers
conferred on the Trustee by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, the Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.

 

(f) Loan Against Insurance Policy. However, notwithstanding the provisions of
Section 9(e) above, the Trustee may loan to the Employer the proceeds of any
borrowing against an insurance policy held as an asset of the Trust.

 

(g) Limitation on Trustee. Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or to applicable law, the Trustee shall not
have any power that

 

-9-

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could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301. 7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.

 

10. Compensation and Expenses of the Trustee.

 

The Trustee is authorized, unless otherwise agreed by the Trustee, to withdraw
from the Trust without direction from the Employer the amount of its fees in
accordance with the fee schedule agreed to by the Employer and the Trustee. The
Employer shall pay all administrative expenses, but if not so paid, the expenses
shall be paid from the Trust.

 

11. Resignation and Removal of the Trustee.

 

(a) Resignation of Trustee. The Trustee may resign at any time by written notice
to the Employer, which shall be effective sixty (60) calendar days after receipt
of such notice unless the Employer and the Trustee agree otherwise.

 

(b) Removal of Trustee. The Trustee may be removed by the Employer on sixty (60)
calendar days’ written notice or upon shorter written notice accepted by the
Trustee.

 

(c) Transfer of Assets to Successor.

 

(i) Upon resignation or removal of the Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed within 60 days after receipt of notice of
resignation, removal or transfer, unless the Employer extends the time limit,
provided that the Trustee is provided assurance by the Employer satisfactory to
the Trustee that all fees and expenses reasonably anticipated will be paid.

 

(ii) Upon settlement of the account and transfer of the Trust assets to the
successor Trustee, all rights and privileges under this Trust Agreement shall
vest in the successor Trustee and all responsibility and liability of the
Trustee with respect to the Trust and assets thereof shall terminate subject
only to the requirement that the Trustee execute all necessary documents to
transfer the Trust assets to the successor Trustee.

 

12. Appointment of Successor.

 

(a) Employer Appointment of Successor. If the Trustee resigns or is removed in
accordance with Section 11(a) or Section 11(b), the Employer may appoint any
third party, such as a bank trust department or other party that may be granted
corporate trustee powers under state law, as a successor to replace the Trustee
upon resignation or removal. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by the
Employer or the successor Trustee to evidence the transfer.

 

(b) Court Appointment of Successor. If the Trustee resigns or is removed, a
successor shall be appointed, in accordance with Section 12(a) hereof, by the
effective date of

 

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resignation or removal under Section 11(a) or Section 11(b). If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as administrative
expenses of the Trust.

 

(c) Duty of Successor Trustee. The successor Trustee need not examine the
records and acts of any prior Trustee and may retain or dispose of existing
Trust assets, subject to Sections 8 and 9. The successor Trustee shall not be
responsible for and the Employer shall indemnify and defend the successor
Trustee from any claim or liability resulting from any action or inaction of any
prior Trustee or from any other past event, or any condition existing at the
time it becomes successor Trustee.

 

13. Amendment or Termination.

 

(a) Amendment. This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Employer. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable, since the Trust is irrevocable in accordance with Section 1(b)
hereof.

 

(b) Termination by Employer. The Trust shall not terminate until the date on
which Plan participants and their beneficiaries are no longer entitled to
benefits pursuant to the terms of the Plan. Upon termination of the Trust any
assets remaining in the Trust shall be returned to the Employer. Notwithstanding
the preceding sentence, if Parent Assets remain in the Trust at termination,
such Parent Assets shall be returned to Parent.

 

(c) Termination with Participant Approval. Upon written approval of participants
or beneficiaries entitled to payment of benefits pursuant to the terms of the
Plan, the Employer may terminate this Trust prior to the time all benefit
payments under the Plan have been made. All assets in the Trust at termination
shall be returned to the Employer. Notwithstanding the preceding sentence, if
Parent Assets remain in the Trust at termination, such Parent Assets shall be
returned to Parent.

 

14. Miscellaneous.

 

(a) Severability. Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.

 

(b) No Assignment of Benefits. Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or equitable process.

 

(c) Governing Law. This Trust Agreement and its enforcement shall be governed by
and construed in accordance with the laws of the State of New Jersey.

 

(d) Survival. The provisions of Sections 2(d), 3(b)(iii), 9(b) and 15 of this
Agreement shall survive termination of this Agreement.

 

-11-

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(e) Conflict with Plan Document. The rights, duties, responsibilities,
obligations and liabilities of the Trustee are as set forth in this Trust
Agreement, and no provision of the Plan or any other documents shall affect such
rights, responsibilities, obligations and liabilities, If there is a conflict
between provisions of the Plan and this Trust Agreement with respect to any
subject involving the Trustee, including but not limited to the responsibility,
authority or powers of the Trustee, the provisions of this Trust Agreement shall
be controlling.

 

(f) Shareholder Communications Act. The Employer agrees that the Trustee will
not supply the Employer’s name to issuers of any securities held in the Trust
and, therefore, the Employer will not receive information regarding those
securities directly from the issuer. Instead, the Employer will receive
information from the Trustee, unless the Employer notifies the Trustee in
writing otherwise.

 

15. Arbitration.

 

(a) Binding Effect. Arbitration is final and binding on the parties.

 

(b) Waiver of Other Remedies. The parties waive their right to seek remedies in
court, including the right to jury trial.

 

(c) Discovery. Pre-arbitration discovery is generally more limited than and
different from court proceedings.

 

(d) Award. The arbitrators’ award is not required to include factual findings or
legal reasoning and any party’s right to appeal or seek modification of rulings
by the arbitrators is strictly limited.

 

(e) Arbitrators. The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.

 

(f) Determination by Arbitration. The Employer agrees that all controversies
which may arise between the Employer and either or both the Trustee and its
affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) in
connection with the Trust, including, but not limited to, those involving any
transactions, or the construction, performance, or breach of this or any other
agreement between the Employer and either or both the Trustee and MLPF&S,
whether entered into prior, on, or subsequent to the date hereof, shall be
determined by arbitration. Any arbitration under this Agreement shall be
conducted only before the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., or arbitration facility provided by any other exchange of which
MLPF&S is a member, the National Association of Securities Dealers, Inc., or the
Municipal Securities Rulemaking Board, and in accordance with its arbitration
rules then in force. The Employer may elect in the first instance whether
arbitration shall be conducted before the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., other exchange of which MLPF&S is a member, the
National Association of Securities Dealers, Inc., or the Municipal Securities
Rulemaking Board, but if the Employer fails to make such election, by registered
letter or telegram addressed to Merrill Lynch Trust Company, FSB, Employee
Benefit Trust Operations, 1600 Merrill Lynch Drive, Pennington, NJ 08534, before
the expiration of five days after receipt of a written request from MLPF&S
and/or the Trustee to make such election then MLPF&S and/or the Trustee may make
such election.

 

-12-

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Judgment upon the award of arbitrators may be entered in any court, state or
federal, having jurisdiction. No person shall bring a putative or certified
class action to arbitration, nor seek to enforce any pre-dispute arbitration
agreement, against any person: who has initiated in court a putative class
action, or who is a member of putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until:

 

  (i) the class certification is denied;

 

  (ii) the class is decertified; or

 

  (iii) the person is excluded from the class by the court.

 

Such forbearance to enforce an agreement to arbitrate shall not constitute a
waiver of any rights under this agreement except to the extent stated herein.

 

-13-

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Employer Copy

 

16. Effective Date.

 

The effective date of this Trust Agreement shall be                     , 20
    .

 

IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust
Agreement each by action of a duty authorized person.

 

By signing this Agreement, the undersigned Employer acknowledges (1) that, in
accordance with Section 15 of this Agreement, the Employer is agreeing in
advance to arbitrate any controversies which may arise with either or both the
Trustee or MLPF&S and (2) receipt of a copy of this Agreement.

 

Merrill Lynch Trust Company, FSB  

 

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        <<Employer>> By:  

 

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  By:  

 

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Name/Title:  

 

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  Name/Title:  

 

--------------------------------------------------------------------------------

Date:  

 

--------------------------------------------------------------------------------

  Date:  

 

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        Add second signature if required:         By:  

 

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        Name/Title:  

 

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        Date:  

 

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Merrill Lynch Trust Company, FSB Copy

 

Section 16. Effective Date.

 

The effective date of this Trust Agreement shall be                     , 20
    .

 

IN WITNESS WHEREOF, the Employer and the Trustee have executed this Trust
Agreement each by action of a duly authorized person.

 

By signing this Agreement, the undersigned Employer acknowledges (1) that, in
accordance with Section 15 of this Agreement, the Employer is agreeing in
advance to arbitrate any controversies which may arise with either or both the
Trustee or MLPF&S and (2) receipt of a copy of this Agreement.

 

Merrill Lynch Trust Company, FSB  

 

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        <<Employer>> By:  

 

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  By:  

 

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Name/Title:  

 

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  Name/Title:  

 

--------------------------------------------------------------------------------

Date:  

 

--------------------------------------------------------------------------------

  Date:  

 

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        Add second signature if required:         By:  

 

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        Name/Title:  

 

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        Date:  

 

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FLEXTRONICS INTERNATIONAL USA, INC.

2005 SENIOR EXECUTIVE DEFERRED COMPENSATION PLAN

Deferral Agreement Form for 2005

and Beneficiary Form

 

Please complete and sign this form and submit it to the Company no later than
July 15, 2005. When signed by the eligible participant and the Company, this
document shall evidence a binding contract between such parties. All capitalized
terms used but not defined herein shall have the meanings assigned to them in
the Plan.

 

1. Personal Information

 

Name:  

 

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Social Security Number:  

 

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Address:  

 

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2. Enrollment Information

 

I understand that I have been designated as a Participant in the Flextronics
International USA, Inc. 2005 Senior Executive Deferred Compensation Plan (the
“Plan”). By entering into this Deferral Agreement, I understand I will be
enrolled in the Plan.

 

3. Deferral Agreements

 

In addition, I elect to defer (fill in any blank that applies):

 

(i)             % of base salary payable in cash in 2005 for services performed
during payroll periods that begin after the effective date of the Plan (Provide
a percentage between 0% and 50%; absence of any designation will be treated as a
0% designation) for services performed during 2005; and

 

(ii)             % of each cash bonus otherwise payable in the calendar year
2005 for services performed during calendar quarters that begin after the
effective date of the Plan (Provide a percentage between 0% and 100%; absence of
any designation will be treated as a 0% designation);

 

and to have the amount deferred credited to my Deferral Account under the Plan.
I will be 100% vested in the portion of the Deferral Account represented by such
amounts of base salary and cash bonus.

 

I understand and agree that the Company may reduce any amounts to be credited to
my Deferral Account under this Deferral Agreement by the amount of any
applicable federal,

--------------------------------------------------------------------------------

state or local tax (including in respect of FICA taxes for social security
and/or Medicare, as applicable) required to be withheld with respect to such
amount, if not withheld or provided by me from other sources.

 

4. Distribution Election

 

I elect the following payment date(s) for my Deferral Account, each of which is
after the date of my Separation from Service from the Company (the “Termination
Date”):

 

Check One Applicable Box:

 

(    ) Single Lump Sum Payment to be payable on the fifteenth day of the first
calendar month following the calendar year in which the Termination Date occurs,
or, if later and if I am treated as a Specified Employee, the first business day
that is at least six months after the Termination Date; or

 

(    ) Annually (    ) Semi-Annualy (    ) Quarterly $                    
(enter an amount not less than $25,000 annually; absence of a dollar designation
if a box is checked will be treated as a $25,000 designation) commencing on the
fifteenth day of the first calendar month that begins after the calendar year in
which the Termination Date occurs, or, if later and if I am treated as a
Specified Employee, the first business day that is at least six months after the
Termination Date and continuing until the date that is              (enter a
number between 1 and 10; absence of any designation will be treated as a
designation of 10) year(s) after the Termination Date, at which time the
remaining balance of the Deferral Account shall be payable in full; or

 

(    ) An amount payable annually, on the fifteenth day of the first calendar
month that begins after the first calendar year in which the Termination Date
occurs, or, if later and if I am treated as a Specified Employee, the first
business day that is at least six months after the Termination Date, and on each
annual anniversary of the such day, in the amount of             % (enter a
percentage between 1% and 20%; absence of a designation if the box is checked
will be treated as a 20% designation) of the balance of the Deferral Account on
such day, continuing until the date that is              (enter a number between
1 and 10; absence of any designation will be treated as a designation of 10)
year(s) after the Termination Date, at which time the remaining balance of the
Deferral Account shall be payable in full.

 

5. Beneficiary Election

 

I hereby name the following persons as beneficiaries of my remaining benefit
under the Plan if I should die before I receive my entire benefit under the
Plan:

 

    Primary Beneficiary:    

 

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-2-

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Contingent Beneficiary: (Payable if the Primary Beneficiary does not survive me
by at least 120 hours or disclaims all or part of the Plan benefits)

 

   

 

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    OR:

 

(    ) See attached primary and contingent beneficiary designation

 

6. Agreement

 

I understand and agree further that:

 

  (a) In accordance with the Award Agreement, the unvested portion of my
Deferral Account shall be forfeited and terminated for no consideration if and
when my employment with the Company is terminated for any reason. Under the
Plan, the portion of the unvested balance of my Deferral Account that becomes
vested at any time shall therafter be accounted for in a separate vested
subaccount, and any elective deferrals of my base salary and/or cash bonus shall
also be accounted for in the separate vested subaccount.

 

  (b) I cannot change my agreements and elections under Section 3 above except
as expressly allowed under the Plan and this Deferral Agreement.

 

  (c) The Plan is incorporated into and made a part of this document as though
set forth in full herein. In the event there is any inconsistency between the
terms of the Plan and this document, the terms of the Plan shall prevail.

 

  (d) I can change my distribution election specified in Section 4 above at any
time only in accordance with the Plan.

 

  (e) I can change my beneficiary designation at any time by a writing delivered
to the Committee or Plan Administrator. Such change shall be effective upon
receipt by the Committee or Plan Adminstrator.

 

  (f) The amount allocated to my Deferral Account pursuant to my Deferral
Agreement shall be reflected in my Deferral Account established for me under the
Plan. Such Deferral Account shall be considered unfunded for purposes of the
Code and the Employee Retirement Income Security Act of 1974, as amended, and I
shall rely solely on the unsecured promise of the Company for payments with
respect to my Deferral Account.

 

  (g) The Company may deduct from my Deferral Account the amount of any expenses
incurred with respect to a particular Hypothetical Investment in which my
Deferral Account is or was deemed invested if the Company acquires, holds and/or
disposes of a corresponding investment.

 

-3-

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  (h) My rights and interests under the Plan, including amounts that I am to
receive under the Plan, may not be assigned, pledged, or transferred other than
to the designated beneficiary upon my death (or, if none, to my estate).

 

  (i) I waive and release the Company and its Affiliates, the Officers, the
Board, the Committee and Plan Administrator, and their agents and attorneys,
from any claims and liabilities (other than from gross negligence of the Company
or the Committee or Plan Administrator or breach by the Company of the terms of
the Plan) in connection with the Plan, Trust design, implementation or
administration, my Hypothetical Investment decisions resulting in the value of
my Deferral Account(s), or the selection and actions of the Trustee or any other
third party providing services to the Company or the Trust in connection with
the Plan or Trust, including any income taxes to me relating to or arising out
of participation in the Plan and any penalties payable under Section 409A of the
Code, and neither the Company nor the Committee or Plan Administrator shall be
liable or responsible therefor.

 

  (j) I agree that I or my Beneficiary shall pay any taxes, penalties and
interest that I or my Beneficiary may incur in connection with my participation
in the Plan, and further agree to indemnify the Company and its Affiliates, the
Committee, the Plan Administrator, the Officers and the Board for such taxes,
penalties and interest I incur and fail to pay and for which the Company is made
liable by the appropriate tax authority, in each case, not to include taxes on
any income, gains and losses of the Company from investment of the assets of the
Trust that the Company has agreed to report pursuant to the Plan.

 

  (k) I waive and release the Trustee and each of its Affiliates from any loss,
claims, liability or expenses imposed on or incurred by any of them as a result
of any act or failure to act by the Trustee, where such act or failure to act is
in accordance with directions from the Committee or Plan Administrator.

 

  (l) If a future change in law would, in the judgment of the Committee or Plan
Administrator, likely accelerate taxation to me of amounts that would be
credited to my Deferral Account in the future under this Deferral Agreement ,
the Company and I will attempt to amend the Plan to satisfy the requirements of
the change in law and, unless and until such an amendment is agreed to, the
Company shall cease deferrals under this Deferral Agreement on the effective
date of such change in law.

 

  (m) I assume all risk in connection with any decrease in value of my Deferral
Account and neither the Company nor the Committee or Plan Administrator shall be
liable or responsible therefor.

 

  (n) I waive any claim against the Company and its Affiliates, Committee, Plan
Administrator, the Officers and the Board for any liability relating to the
income tax treatment of the Plan or the Trust or any payments received under the
Plan.

 

-4-

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  (o) My participation in the Plan does not confer upon me any right or impose
upon me any obligation to be employed by the Company or an Affiliate, nor does
it interfere in any way with the right of the Company or an Affiliate to
increase or decrease the amount of any compensation payable to me.

 

  (p) I have read the Plan and understand the provisions therein. I have been
advised by the Company to consult with counsel before I agree to participate in
the Plan.

 

  (q) Disputes under the Plan are subject to binding arbitration in accordance
with the Plan.

 

  (r) If, and to the extent that, the Plan or this Deferral Agreement is
inconsistent with any provision of an employment agreement, bonus agreement, or
similar agreement between the Company and me, the provisions of the Plan and my
Deferral Agreement shall control; provided that neither the Plan nor the
Deferral Agreement shall otherwise amend or alter the terms of any such
agreement.

 

  (s) This Deferral Agreement and the Plan constitute the entire agreement
between the Company and me and are the complete, final, and exclusive embodiment
of our agreement with regard to this subject matter.

 

7. Initial Hypothetical Investment

 

I understand and agree that amounts deferred pursuant to this election shall
initially be hypothetically invested in a money market fund selected by the
Committee.

 

8. Initial Investment Manger

 

I designate the following initial Manager, who shall select Hypothetical
Investments on my behalf under the Plan:

 

   

 

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9. Authorization

 

I hereby agree to participate in the Plan and authorize the above elections. By
agreeing to participate in the Plan, I agree that all benefits and rights to
which I am entitled will be determined only in accordance with the terms of the
Plan and all amendments thereto. I understand that this Deferral Agreement
consitutes a contract between me and the Company and shall be binding on me, my
successors-in-interest, my heirs, devisees and legal representatives and the
Company and its legal successors.

 

   

 

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    Employee Signature             Date

 

-5-

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Agreed to by the Company

 

    By  

 

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    Name:   Michael Marks     Title:   Chief Executive Officer     Date:   July
8, 2005

 

-6-