EXHIBIT 10.05

 

Mr. Peter Tan

President, Flextronics Asia

 

Award Agreement for Peter Tan Deferred Compensation Plan

 

Dear Peter:

 

I am pleased to confirm that Flextronics International Asia-Pacific Ltd. (the
“Company”) has agreed to provide you with a deferred long term incentive bonus
in return for services to be performed in the future as an employee of the
Company (the “Incentive Bonus”). The amount of your Incentive Bonus will be US
$3,200,000.

 

The Incentive Bonus will not be paid currently to you. Instead, as of the date
of this agreement, an amount equal to the Incentive Bonus (net of applicable
withholding taxes, if any) will be credited to an account with Merrill Lynch or
another mutually acceptable brokerage firm at a location chosen by the Company
(the “Bonus Account”). The Bonus Account will be held in the name of the
Company. However, an investment manager selected by you and acceptable to the
Company will direct the investment of the amount held in the Bonus Account.
Pending selection of an investment manager and directions as to investments of
the Bonus Account, the entire Bonus Account will be invested in a money market
fund selected by the brokerage firm with whom the account is maintained and
approved by Flextronics.

 

Until April 1, 2009, the Bonus Account must be invested in one or more
investment funds agreeable to you and the Company (the “Funds”). Beginning on
April 1, 2009, the investment manager may cause the Bonus Account to invest in
one or more securities that are traded on an established securities exchange and
are reasonably acceptable to the Company, provided, however, that no investment
in securities issued by Flextronics International Ltd. or its affiliates will be
permitted. The investment manager will not be entitled to cause the Bonus
Account to incur indebtedness or to enter into short sales or similar derivative
type transactions.

 

As soon as practical following termination of your employment with the Company
and its affiliates (other than as a result of your death or disability) at any
time on or after April 1, 2008, and before April 1, 2009, the Company will pay
you an amount equal to 50% of the account balance of the Bonus Account on the
date of payment (net of applicable withholding taxes, if any). As soon as
practical following termination of your employment with the Company and its
affiliates at any time on or after April 1, 2009, the Company will pay you an
amount equal to the entire account balance of the Bonus Account on the date of
payment (net of applicable withholding taxes, if any). However, if your
employment with the Company and its affiliate is terminated for any reason
(other than death or disability) before April 1, 2008, you will not be entitled
to receive any portion of the Incentive Bonus.

 

Should your employment with the Company and its affiliates be terminated as a
result of death or disability, the Company will pay you (or your designated
beneficiary) as soon as

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practical following the termination of employment an amount equal to the entire
balance of the Bonus Account at such time. For purposes of this agreement, you
will be considered disabled if you are 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, if later, until April 1,
2009, or if, 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, if later, until April 1,
2009, you are receiving income replacement benefits for a period of not less
than 3 months under an accident and health plan covering other employees of your
employer.

 

At the discretion of the Company, any payment to you of the balance in the Bonus
Account may be made in cash and/or in securities held in the Bonus Account,
valued at their fair market value at the closing of the payment date. At any
relevant payout date, the balance of the Bonus Account shall be the sum of any
cash amount in the account and the fair market value of the securities held in
the account, net of any accrued but unpaid account expenses. For these purposes,
the fair market value of any security shall be, 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.

 

Expenses associated with the Bonus Account and any investments in the Bonus
Account, including management fees and transaction costs, will be charged to the
Bonus Account. Earnings on the Bonus Account will be reinvested in the Bonus
Account, and the Company will not transfer or distribute any portion of the
Bonus Account to any person while you are still employed with the Company.
However, at any time after the termination of your employment with the Company,
the Company may transfer or receive all or any portion of the Bonus Account
balance.

 

No part of the balance of the Bonus Account will belong to you, and you will
have no ownership or beneficial interest in the Bonus Account. Instead, the
Bonus Account will be maintained solely in order to establish the amount that
will be payable to you following the time of the termination of your employment
with the Company and its affiliates in accordance with the terms of this
agreement. Your right to receive an amount equal to the balance in the Bonus
Account following termination of employment in accordance with the terms of this
Agreement will represent an unfunded obligation of the Company, and accordingly
will be subject to the claims of the Company’s creditors.

 

As owner of the Bonus Account, the Company will bear all income taxes, excluding
withholding taxes on investment income, on earnings in the Bonus Account.
Withholding taxes on investment income shall be born by the Bonus Account. In
addition, you will be solely responsible for all taxes, penalties and interest
imposed upon you by any taxing authority with respect to the Incentive Bonus
when such bonus is paid to you in accordance with the terms of this Agreement or
if any taxing authority determines the Incentive Bonus is taxable to you prior
to such termination.

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Your interest in the Incentive Bonus may not be sold, transferred, assigned or
pledged in any manner to any person, other than by will or the laws of descent
and distribution. Any attempt to sell, transfer, assign or pledge your interest
in the Incentive Bonus will be void.

 

The Incentive Bonus will be in addition to any rights that you have under any
other agreement with the Company. Any Incentive Bonus will not be deemed to be
salary or other compensation for the purpose of computing benefits under any
employee benefit plan or other arrangement of the Company for the benefit of its
employees.

 

The Incentive Bonus does not give you any right to be retained by the Company,
and does not affect the right of the Company to dismiss you at any time or for
any reason. The Company may withhold from any payment of the Incentive Bonus as
may be required pursuant to applicable law.

 

Any disputes concerning or related to the Incentive Bonus will be resolved
pursuant to final and binding arbitration in Singapore, before an experienced
employment arbitrator selected in accordance with the Arbitration Rules of the
Singapore International Arbitration Centre, applying Singapore law (other than
Singapore principles of conflicts of law). Arbitration in this manner shall be
the exclusive remedy for any such dispute. Each party will pay the fees of their
respective attorneys and the expenses of their witnesses and any other expenses
connected with the arbitration and will share equally all other costs of the
arbitration, provided that, if you prevail in a dispute, the Company will bear
your reasonable attorneys fees and related expenses for the dispute. The
arbitrator’s decision or award will be fully enforceable and subject to an entry
of judgment by a court of competent jurisdiction.

 

By signing below, you represent that you have read and understand this agreement
and have had adequate opportunity to ask any questions about the Incentive
Bonus. You further agree to waive and release the Company, its agents and
attorneys from any claims and liabilities in connection with the design and
implementation of the Incentive Bonus, selection of the investment manager,
selection of the Funds by the Company, investment decisions with respect to the
Bonus Account, and personal tax consequences with respect to the Incentive
Bonus. You understand that the Company cannot warrant any tax effect of the
Incentive Bonus. You also understand that the Company and its representatives
are not attempting to give you tax advice. We strongly advise you to seek any
tax advice concerning the Incentive Bonus from your own tax adviser.

 

If any provision of this agreement is determined to be unenforceable, the
remaining provisions shall nonetheless be given effect. This agreement shall be
construed in accordance with the laws of Singapore without regard to conflict of
law rules.

 

By executing this agreement, you hereby name the following persons as
beneficiaries of your benefits described in this agreement if you should die
before receiving such benefits.

 

Primary Beneficiary:

 

________________________________________

 

________________________________________

 

________________________________________

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Contingent Beneficiary: (Payable if the Primary Beneficiary does not survive you
or disclaims all or part of the benefits hereunder)

 

 

________________________________________

 

________________________________________

 

________________________________________

 

Sincerely,

 

FLEXTRONICS INTERNATIONAL ASIA-PACIFIC LTD. By:  

/s/ Manny Marimuthu

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    Manny Marimuthu     Director Accepted and agreed.

 

/s/ Peter Tan

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Peter Tan