EXHIBIT 10.01

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is entered into as of the 8th day of
July (the “Effective Date”) by and between Michael E. Marks, an individual,
(“Executive”) and Flextronics International USA, Inc. (“Flextronics” or the
“Company”).

 

1. Executive’s Relationship with the Company.

 

a. Executive acknowledges that he has been and currently is employed by
Flextronics and he currently serves as Chief Executive Officer (“CEO”) of
Flextronics International Ltd., Flextronics’s parent (“FIL”). Executive agrees
that he will continue to serve as CEO until January 31, 2006 or an earlier date
mutually agreed upon by both parties, on which date Executive agrees that he
shall relinquish his duties as CEO and shall serve exclusively in the capacity
of Chairman of the Board of Directors (the “Board”). The actual date of
Executive’s transition is referred to as the “Transition Date”.

 

b. Subject to his re-election at the 2006 Annual General Meeting of the
shareholders and unless earlier terminated as set forth in this Agreement,
Executive agrees to serve as Chairman from the Transition Date until at least
until July 1, 2009 (“Transition Period”).

 

c. Executive and Flextronics agree that unless earlier terminated as set forth
in this Agreement, Executive’s employment with Flextronics shall terminate on
July 1, 2009. The actual date of the termination of Executive’s employment is
referred to as the “Employment Termination Date”.

 

2. Cash Compensation.

 

a. Salary. Provided that the Executive does not revoke this Agreement pursuant
to Section 6(b) of this Employment Agreement, Flextronics shall continue to pay
Employee his salary at his rate of pay as of the Effective Date until July 1,
2007. From July 1, 2007 until the Employment Termination Date Flextronics shall
pay Employee at the rate of Five Thousand Dollars ($5,000) per month.
Flextronics shall make all payments under this Section 2(a) less payroll taxes
and withholdings for Executive’s benefits as set forth in Section 3 below and
otherwise as required by law.

 

b. Cash Bonuses. Beginning on the Transition Date, Executive will no longer be
eligible for a cash bonus, including without limited pursuant to Flextronics’s
executive bonus plan.

 

c. Director Cash Compensation. Executive agrees that he will not be entitled to
any cash compensation paid to members of the Board for any periods prior to the
Employment Termination Date.

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3. Benefits.

 

a. Healthcare Benefits.

 

(i) Until the Employment Termination Date, Executive shall continue to be
eligible for health insurance in accordance with the health insurance plan
maintained by Flextronics for similarly situated employees. Flextronics and
Executive shall continue to pay the previously agreed upon respective shares of
the premiums for such health care coverage through deductions from Executive’s
base salary paid pursuant to Section 2(a) above. Flextronics reserves the right
to modify or to cancel such plans at any time for any reason.

 

(ii) Following the Employment Termination Date, Flextronics shall continue to
provide medical and dental benefits equivalent to the benefits provided for
Executive as of the Employment Termination Date for the remainder of Executive’s
life, provided that if Executive is ineligible (e.g., by operation of law or the
terms of the applicable plan) to continue to participate in any such plan,
Flextronics will provide Executive with a comparable level of compensation or
benefit; provided further, that the health and medical benefits provided in this
paragraph shall be reduced to the extent, if any, that Executive receives
comparable benefits from another employer.

 

b. Certain Life and Disability Insurance Plans. Beginning on the Transition
Date, Employee shall not be eligible for life insurance, short-term disability
buy up and/or long term disability benefits due to the nature of his employment
during the Transition Period.

 

c. Individual Disability Insurance. Until the Employment Termination Date,
Flextronics will continue to pay the premiums for the UnumProvident Individual
Disability Policy. Following the Employment Termination Date, this plan will be
canceled.

 

d. 401K Plan. Until the Employment Termination Date, Executive may continue to
contribute to the 401(k) plan in accordance with Flextronics 401(k) Plan through
withholding from Executive’s salary as provided in Section 2(a) above.
Flextronics reserves the right to modify or to cancel such plan at any time for
any reason.

 

e. Use of Corporate Jets. Beginning on the Employment Termination Date Executive
will be entitled to use the Flextronics corporate jets for his personal use,
subject to availability, by paying Flextronics the variable cost of the use of
the jet as determined by Flextronics in its sole discretion.

 

4. Equity Compensation.

 

a. Executive’s Employee Options.

 

(i) Executive has been granted stock options pursuant to the Flextronics
International Ltd. 1993 Share Option Plan; the Flextronics International Ltd.
1998 Interim Option Plan; the Flextronics International Ltd. 2001 Equity
Incentive Plan; and the Flextronics International Ltd. 2002 Interim Incentive
Plan (collectively, the “Share Option and Incentive

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Plans”) as provided in the applicable option grant forms issued to Executive
pursuant to each of the Share Option and Incentive Plans. The Share Option and
Incentive Plans are incorporated herein by reference.

 

(ii) Executive’s options are listed on Exhibit A, which is attached hereto and
incorporated herein by reference (the “Employee Options”). Executive
acknowledges that he is not entitled to any additional grants of stock options
in his capacity as an employee of Flextronics.

 

(iii) Executive acknowledges and agrees that all of his Employee Options shall
continue to vest in accordance with their terms until the Employment Termination
Date In addition, in the event that the Employment Termination Date occurs prior
to July 1, 2009 for the reasons set forth in Section 5(a)(iii) below, then the
vesting of all Employee Options shall automatically be deemed to be accelerated
as of such Employment Termination Date so that all of Executives Employee
Options will be fully vested.

 

b. Director Equity Compensation. Executive agrees that he will not be entitled
to any equity compensation paid to members of the Board for any periods prior to
the Employment Termination Date.

 

5. Termination of Employment

 

a. Conflict of Interest Activity: Flextronics Competitor or Customer.

 

(i) Conflict of Interest Activities. “Conflict of Interest Activity” shall mean
being employed by, or providing services to, or serving as a consultant, agent,
independent contractor, partner, officer or director of, or owning any equity
interests in, or participate in the ownership, management, operation or control
of, or be connected in any similar manner with, any company or business that
(either directly or through a subsidiary) is engaged in any activity that is
substantially similar to or competitive with any business activity conducted or
under development by Flextronics, FIL, or any of its or their affiliates
(collectively referred to as the “Flextronics Group” and each competitor of the
Flextronics Group is referred to as a “Flextronics Competitor”) or any customer
of the Flextronics Group (each a “Flextronics Customer Competitor”); provided,
however that Executive may own less than one percent (1%) of the outstanding
capital stock of any publicly-traded company and may serve as an employee of any
company in the Flextronics Group. The geographic scope of a Conflict of Interest
Activity includes all countries in which the Flextronics Group has engaged in
manufacturing, marketing or sales or otherwise conducted business or selling or
marketing efforts at any time during the Transition Period and ending at such
time as Executive is no longer an employee of Flextronics. Executive
acknowledges that the scope and period of restrictions and the geographical area
to which the restriction imposed in this subparagraph shall apply are fair and
reasonable and are reasonably required for the protection of Flextronics and
that this Section 5(a)(i) accurately describes the business to which the
restrictions are intended to apply.

 

(ii) Flextronics Competitor. In the event that Executive wishes to resign in
order to engage in a Conflict of Interest Activity with a Flextronics Competitor
at any time during the

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Transition Period, Executive agrees to provide written notice of his intent to
the Board along with a resignation of his position as Chairman and his agreement
to refrain from engaging in such Conflict of Interest Activity for a period of
six (6) months from the date of the notice. The notice will describe the
proposed activity and identify the Flextronics Competitor. In such event, the
Employment Termination Date will be the date of Executive’s notice.

 

(iii) Flextronics Customer Competitor. In the event that Executive wishes to
engage in a Conflict of Interest Activity with a Flextronics Customer Competitor
at any time during the Transition Period, Executive agrees to provide written
notice of his intent to the Board. The notice will describe the proposed
activity and identify the Flextronics Customer Competitor. If the Board
determines that the proposed activity is a Conflict of Interest Activity with a
Flextronics Customer, then the Board may in its sole discretion request that
Executive resign his position as Chairman. If the Board requests Executive’s
resignation of his Chairman position, then the Employment Termination Date will
be the date of the Board’s request.

 

b. Termination of Employment for Good Cause. Flextronics may terminate
Executive’s employment for Good Cause effective immediately and upon written
notice to Executive, without prejudice to any other remedy to which Flextronics
may be entitled at law, in equity or otherwise under this Agreement. For the
purpose of this Agreement, “Good Cause” shall mean (i) a breach by Executive of
this Agreement, including without limitation, a failure to provide written
notice of his intent to engage in a Conflict of Interest Activity as defined in
Section 5(a), a failure to refrain from engaging in a Conflict of Interest
Activity, or a breach of paragraphs 10, 11, 12 or 13 of this Agreement and/or
any existing Confidential Information and Inventions Agreement between
Flextronics and Executive. In the event that Flextronics terminates Executive’s
employment for Good Cause prior to the expiration of the Transition Period, then
on the effective date of such termination, Flextronics shall no longer be
required to pay Executive the cash compensation or provide the benefits set
forth in Sections 2 or 3 above.

 

6. Releases.

 

a. General Release by Executive of Employment-Related Matters. In consideration
for the covenants and release set forth in this Agreement, Executive on his own
behalf and on the behalf his heirs, executors, administrators, successors,
attorneys, insurers, and assigns shall release and discharge the Flextronics
Group and any predecessor divisions or entities, their respective past and
present officers, directors, shareholders, partners, attorneys, agents,
employees, and their respective insurance companies, successors and assigns
(hereinafter “Flextronics Releasees”), from any and all claims, of any and every
kind, nature and character, known and unknown, suspected and unsuspected,
including any and all claims for attorneys’ fees and costs which Executive
either may now have, or has ever had, against the Flextronics Releasees, which
arise in whole or in part from Executive’s employment relationship with
Flextronics, the termination of that relationship, any other employment-related
dealings of any kind between Executive and the Flextronics Group and/or any past
or present officer, director, agent or employees of the Flextronics Group and/or
with respect to any other obligation (contractual or otherwise) event, matter,
claim, damages or injury arising prior to the execution of this Agreement by all
parties.

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This release covers, but is not limited to: any and all claims, rights, demands,
and causes of action for wrongful termination, intentional or negligent
infliction of emotional distress, defamation, breach of any employment contract
or employment agreement, breach of the covenant of good faith and fair dealing,
claim for reinstatement or rehire, failure to pay wages, commissions, benefits,
PTO, severance or other compensation of any sort, discrimination, right to paid
or unpaid leave, and/or violation of any and all statutes, rules, regulations or
ordinances whether state, federal or local, including without limitation: Title
VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities
Act, as amended, the Fair Employment and Housing Act, as amended, and the Age
Discrimination in Employment Act, as amended by the Older Workers’ Benefits
Protection Act. Nothing in this release shall affect Executive’s right, if any,
to obtain unemployment benefits or any obligation set forth in this Agreement.
This release does not extend to any of the obligations of Flextronics arising
out of this Agreement

 

b. ADEA Waiver and Release. Executive hereby acknowledges that he is waiving and
releasing any rights he might have under the Age Discrimination in Employment
Act of 1967 (“ADEA”), as amended, and that this waiver and release is knowing
and voluntary. The parties agree that this waiver and release does not apply to
any rights or claims that may arise under ADEA after the parties have executed
this Agreement and the revocation period has expired. Executive acknowledges
that a portion of the consideration given for this waiver is in addition to
anything of value to which he was already entitled for salary and PTO up to the
Transition Date. Executive further acknowledges by this writing that he has been
advised that (a) he should consult with an attorney prior to executing this
Agreement; (b) he has twenty-one (21) calendar days from the date of his receipt
within which to consider this Agreement; (c) he has seven (7) calendar days
following the execution of this Agreement by the parties to revoke the
Agreement; and (d) this Agreement shall not be effective until the revocation
period has expired. Executive acknowledges that he received this Agreement on
July 8, 2005. Executive understands that, in the event, he does not execute this
Agreement or revokes this Agreement in accordance with this paragraph, he will
not be entitled to the salary continuation through the Transition Period and any
other benefits or payments provided for in this Agreement.

 

c. No Legal Action. Executive represents that he has not filed a legal action
with any local, state or federal agency or court relating in any manner to any
claim released herein, and that if any such governmental agency or court assumes
jurisdiction of any complaint or charge against Flextronics Releasees on behalf
of Executive, relative to any claim released herein, he will request such agency
or court to withdraw from the matter.

 

d. Section 1542 Waiver. Executive acknowledges that he understands the statutory
language of Section 1542 of the Civil Code of the State of California and,
having been so apprised, agrees nevertheless to waive any and all rights or
benefits which he may now have, or in the future may have, under the terms of
Section 1542 of the California Civil Code or any similar provision of any state
or federal law. California Civil Code section 1542 provides as follows:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

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7. Confidentiality.

 

a. Restrictions on Use and Disclosure of Confidential Information. Executive
acknowledges and agrees that he will remain bound by the terms and obligations
set forth in the Disclosure and Secrecy Agreement between Flextronics and
Executive dated February 11, 1994 and attached hereto as Exhibit B (the
“Confidentiality Agreement”). Executive further acknowledges that the
confidentiality, non-solicitation and non-compete clauses in this Agreement and
the Confidentiality Agreement with Flextronics are intended to be read together.
Should the terms of the Confidentiality Agreement differ from the terms of this
Agreement, the provisions of this Agreement shall prevail.

 

Executive agrees that any original works of authorship, products, software,
and/or applications that Executive created or developed for Flextronics while in
the employ of Flextronics is the sole property of Flextronics. Executive further
acknowledges and agrees that Executive shall not, without the prior written
consent of the Board, disclose or use for any purpose (except in furtherance of
the business of the Flextronics Group) any Confidential Information (as herein
defined and as defined in the Confidentiality Agreement) of the Flextronics
Group.

 

b. Scope of Confidential Information. Confidential Information shall mean any
and all proprietary or confidential information of the Flextronics Group or any
of its vendors or customers, whether or not developed by Executive, including
without limitation the following:

 

(i) Any and all technical information, including, without limitation, product
data and specifications, know-how, formulae, source code, or other software
information, test results, processes, inventions, research projects or product
development.

 

(ii) Any and all business information, including, without limitation, cost
information, profits, profit margins, sales information, costs, overhead,
accounting and unpublished financial information, business plans, markets,
marketing methods, vendor or customer lists, including without limitation, and a
vendor’s or customer’s specific needs, advertising and operating strategies.

 

(iii) Any and all employee information, including, without limitation, salaries,
and specific strengths, weaknesses and skills of employees of the Flextronics
Group.

 

c. Customer Non-Solicitation. Executive understands and agrees that the
relationship between the Flextronics Group and each of its customers and vendors
constitutes a valuable asset of the Flextronics Group, that information related
to customers is kept confidential and may not be disclosed or converted for the
use of Executive or any third party for any reason whatsoever. Accordingly,
Executive shall not, directly or indirectly, for a period of one year after his
date of termination, on behalf of Executive or any third party, solicit any
customer or vendor to conduct any business with such customer that is the same
as or similar to, or is otherwise competitive with, the business of the
Flextronics Group or to terminate such vendor’s or customer’s business
relationship with the Flextronics Group.

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d. Employee Non-Solicitation. Executive understands and agrees that the
relationship between the Flextronics Group and each of its employees constitutes
a valuable asset of the Flextronics Group, that information related to
employee’s skills and compensation is kept confidential, and may not be
disclosed or converted for the use of Executive or any third party for any
reason whatsoever. Accordingly, Executive shall not, directly or indirectly, for
a period of one year after his date of termination, on behalf of Executive or
any third party, solicit any employee to terminate his or her employment
relationship with the Flextronics Group.

 

8. Miscellaneous

 

a. Representation by Counsel. The parties represent that they have had an
opportunity to be represented by counsel of their own choosing in the execution
of this Agreement and that this Agreement has been carefully and fully read and
is voluntarily executed.

 

b. Severability. It is the desire and intent of the parties that the provisions
of this Agreement shall be enforced to the fullest extent permissible under
applicable law. If any particular provision or portion of this Agreement shall
be adjudicated to be invalid or unenforceable, this Agreement shall be deemed
amended to revise those provisions or portions to the minimum extent necessary
to render them enforceable.

 

c. Governing Law; Waiver of Jury Trial. This Agreement shall in all respects be
interpreted, enforced, and governed under the laws of the State of California.

 

IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES, WHETHER IT RESULTS IN
PROCEEDINGS IN ANY COURT IN ANY JURISDICTION OR IN ARBITRATION, THE PARTIES
HEREBY KNOWINGLY AND VOLUNTARILY, AND HAVING HAD AN OPPORTUNITY TO CONSULT WITH
COUNSEL, WAIVE ALL RIGHTS TO TRIAL BY JURY, AND AGREE THAT ANY AND ALL MATTERS
SHALL BE DECIDED BY A JUDGE OR ARBITRATOR WITHOUT A JURY TO THE FULLEST EXTENT
PERMISSIBLE UNDER APPLICABLE LAW.

 

d. Entire Agreement. This Agreement sets forth the entire agreement between the
parties hereto, and fully supersedes any and all prior agreements or
understandings between the parties pertaining to any subject matter contained in
this Agreement, except that the Confidentiality Agreement and Share Option and
Incentive Plans as defined in Section 4 of this Agreement shall remain in full
force and effect. Any amendments or modifications to this Agreement must be made
in writing and signed by both parties.

 

e. Notices. All notices required or permitted under this Agreement will be in
writing and will be deemed received (a) when delivered personally; (b) when sent
by confirmed facsimile; (c) five (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (d) one (1) day
after deposit with a commercial overnight carrier. All communications will be
sent to the addresses set forth above or to such other address as may be
designated by a party by giving written notice to the other party pursuant to
this subsection.

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f. Counterparts. This Agreement may be signed in counterparts. A copy of a
signature shall have the full force and effect as an original signature.

 

IN WITNESS WHEREOF, this Agreement is executed as of the Effective Date.

 

/s/ Michael E. Marks

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MICHAEL E. MARKS FLEXTRONICS INTERNATIONAL USA, INC. By:  

/s/ Thomas J. Smach

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    THOMAS J. SMACH,     CHIEF FINANCIAL OFFICER