EXHIBIT 10.04

 

July 8, 2005

 

Mr. Thomas Smach

Chief Financial Officer

Flextronics International USA, Inc.

2090 Fortune Drive

San Jose, California 95131

 

Award Agreement for Deferred Compensation Plan

 

Dear Tom:

 

I am pleased to confirm that Flextronics International USA, Inc. (the “Company”)
has agreed to provide you with a deferred long term incentive bonus in return
for services to be performed in the future as an employee of the Company (the
“Deferred Bonus”). The amount of your Deferred Bonus will be $3,000,000. Your
Deferred Bonus will not be paid currently to you. Instead, the Deferred Bonus
will be credited to the account (the ”Deferral Account”) established on your
behalf under the Flextronics International USA, Inc. 2005 Senior Executive
Deferred Compensation Plan (the “Deferred Compensation Plan”).

 

Your Deferral Account will be payable to you on the date(s) following your
separation from service with the Company that are specified in your Deferral
Agreement entered into pursuant to the Deferred Compensation Plan. This
agreement will constitute the Award Agreement referred to in Section 3 of your
Deferral Agreement.

 

The Deferral Account will vest as follows: ten percent (10%) will vest on April
1, 2006; an additional fifteen percent (15%) will vest on April 1, 2007; an
additional 20 percent (20%) will vest on April 1, 2008; an additional
twenty-five percent (25%) will vest on April 1, 2009; and an additional thirty
percent (30%) will vest on April 1, 2010 (the “Vesting Dates”). Your Deferral
Account shall be 100% vested upon a “Change of Control” as defined in the
Deferred Compensation Plan, if you are employed by the Company at that time.

 

The Deferral Account will be deemed invested in one or more hypothetical
investments as determined by an investment manager selected by you under the
Deferred Compensation Plan. If you are still an employee of the Company on a
Vesting Date, a percentage of the unvested balance of your Deferral Account will
be transferred to a vested subaccount of your Deferral Account maintained for
you under the Plan. The percentage to be transferred will be the percentage of
the Deferral Account that vests at such time divided by that percentage of the
Deferral Account that has not already vested. For example, on April 1, 2006, 10%
of your Deferral Account will be transferred to your vested subaccount; on April
1, 2007, if you are still employed with the Company, 16.67% (i.e., 15/90) of the
unvested balance of your Deferral Account will be transferred to your vested
subaccount; and on April 1, 2008, 26.67% (i.e., 20/75) of the unvested balance
of your Deferral Account will be transferred to your vested subaccount. The
“unvested balance” of your Deferral Account at any time will be the entire
balance of your Deferral Account less the balance, if any, of your vested
subaccount.

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Page 2

 

To the extent allowed under the Deferred Compensation Plan, you may also elect
to defer portions of your base salary or cash bonuses to be earned after the
date of the election, and these amounts will be vested when they are credited to
your account under the Deferred Compensation Plan. If you elect to defer any
such amounts, they will be accounted for in your separate vested subaccount
under the Deferred Compensation Plan.

 

If your employment with the Company is terminated for any reason (other than
death or disability) before the entire Deferred Bonus has vested, the unvested
balance of your Deferral Account (as determined at the end of the day of your
termination) will be terminated and forfeited for no consideration.

 

Should your employment with the Company be terminated as a result of death or
disability, you (or your estate) will be 100% vested in your Deferral Account,
and the entire unvested balance of your Deferral Account will be transferred to
your vested subaccount. 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 May 1, 2010, 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 May 1, 2010, 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.

 

When your employment with the Company is terminated, you will be entitled to
receive distributions of any vested balance of your Deferral Account in
accordance with a payout election that you will make under the Deferred
Compensation Plan.

 

You understand and acknowledge that your account balance under the Deferred
Compensation Plan will reachable by the Company’s general creditors upon the
insolvency of the Company. You also understand and acknowledge that you will not
be entitled to accelerate distributions from the Deferred Compensation Plan
except in the event of your Disability or Unforeseeable Emergency as defined
under the Deferred Compensation Plan.

 

The Deferred Bonus will be in addition to any rights that you have under any
other agreement with the Company. Any Deferred 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 Deferred Bonus does not give you any right to be retained by the Company,
and does not affect the right of the Company to dismiss any employee. The
Company may withhold from any payment of the Deferred Bonus as may be required
pursuant to applicable law.

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Enclosed are:

 

  (1) Flextronics International USA, Inc. 2005 Deferred Compensation Plan;

 

  (2) Deferral Agreement Form for 2005 and Beneficiary Form; and

 

  (3) Summary of the 2005 Deferred Compensation Plan.

 

By signing below, you represent that you have read and understand these
documents and have had adequate opportunity to ask any questions about the
documents. You understand that although the Company has attempted to structure a
plan to accomplish the tax results discussed in the documents, the Company
cannot warrant that the tax effect on you will be as expected. 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 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 the State of California without regard
to conflict of law rules.

 

Sincerely,

 

FLEXTRONICS INTERNATIONAL USA, INC. By:  

/s/ Michael Marks

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    Michael Marks     Chief Executive Officer Accepted and agreed on this 8th
day of July, 2005.

 

/s/ Thomas Smach

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Thomas Smach