Exhibit 10.9(b)(ii)
2005 10-K
PLEXUS CORP.
2005 VARIABLE INCENTIVE COMPENSATION PLAN
(as amended and restated August 31, 2005)
EXECUTIVE LEADERSHIP TEAM
PLAN OBJECTIVES
The primary objectives of the 2005 Variable Incentive Compensation Plan (Plan)
are to reward results delivered by plan participants that enhance shareholder
value and to assist Plexus Corp. (Plexus) to attract, retain and motivate highly
qualified and talented executives. The Plan provides annual variable incentive
compensation opportunities to participants for the achievement of specified
financial performance and other significant results that contribute to the
overall success of Plexus. Increasing revenues, improving financial returns on
capital employed, and achieving specific personal objectives are the three
performance elements of this Plan.
PLAN YEAR
The Plan Year is effective for each Plexus fiscal year, unless and until
terminated or modified. The Compensation and Leadership Development Committee of
the Board of Directors may modify or terminate the Plan at any time.
ELIGIBILITY FOR PLAN PARTICIPATION
Participation in this Plan is limited to the members of the Plexus Executive
Leadership Team.
INCENTIVE PLAN COMPENSATION
Plan awards are to be calculated based upon the Plan Year base salary (salary
excluding bonuses, paid commissions, reimbursed relocation expenses, or any
other special pay, but including amounts deferred) of each participant adjusted
for pro-rations as applicable (See Award Payment Timing and Eligibility, below).
Incentive awards are calculated for each position (job) a participant holds
through the plan year and are pro-rated accordingly based on calendar weeks in
each position (for example, FY 2005 = 52 weeks).
INCENTIVE PLAN PERFORMANCE MEASURES
The incentive performance measures, each of which stands independently of the
others with regard to award opportunities, are:

  •   Revenues: Total Fiscal Year Net Sales of Plexus Corp.     •   Return on
Average Capital Employed (ROCE): Annual Operating Income for the Fiscal Year
divided by Average Capital Employed. Where,

  •   Operating Income: As reported in the company’s audited income statement
for the Fiscal Year adjusted, if necessary, to eliminate non-recurring or
unusual charges.     •   Average Capital Employed: The 5 point average of the
prior Fiscal Year end and the quarterly current Fiscal Year Capital Employed
balances.

  o   Capital Employed: Total Assets (minus Cash) less non-interest bearing
Current and Non-current Liabilities.

  •   Objectives: Individual participant objectives that relate to measurable
personal or site/location/department goals for the plan year; typically the
number of goals should be limited to 3 to 5, which have been developed with,
reviewed by and approved by the participant’s supervisor.

 

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INCENTIVE PLAN PERFORMANCE AND REWARD OPPORTUNITIES
Incentive compensation is paid based on the following achievement levels:

                                                  Component   Threshold    
Payout     Target     Payout     Maximum     Payout  
Revenue
  $ *       0 %   $ *       40 %   $ *       * %
ROCE
    * %     0 %     * %     40 %     * %     * %
Personal Objectives
            0 %             20 %             * %
 
                                   
Total Incentive = Revenues + ROCE + Personal Objectives
            0 %             100 %             200 %
 
                                   

 

[*   Specific threshold, target and maximum amounts, and percentages allocated
to each component, are the same for each participant and determined with the
approval of the Compensation and Leadership Development Committee; that
information shall be communicated to eligible participants. All year references
herein will be deemed to refer to the appropriate Fiscal Year and numbers in
this matrix will be re-set for such years.]

•   Threshold: At or below Revenue and/or ROCE Thresholds, only personal
objectives awards can be earned. Revenue and ROCE measures begin producing
incentive awards for above Threshold achievement.   •   Target: Targets for the
Revenue and ROCE measures relate to the relevant Fiscal Year financial plan.
Personal objectives relate to individual participant performance and may reflect
personal, location, site, department, or other measurable objectives. Awards
will be pro-rated on a straight-line basis for performance that falls between
Threshold and Target achievement.   •   Maximum: The maximum performance levels
reflect the maximum award for each component. Awards will be pro-rated on a
straight-line basis for performance that falls between Target and Maximum
achievement.

Note: No award will be paid for any component if the company incurs a net loss
for the fiscal year (excluding non-recurring or unusual charges).
AWARD PAYMENT TIMING AND ELIGIBILITY
Eligible participants will receive earned incentive awards no later than
December 15 of the subsequent fiscal year (payment date). Adjustments occur
under the following circumstances:

  •   Participant Transfer: Awards will be pro-rated for participants who
transfer between company organizations (sites, locations, departments, SBU’s,
etc.) based upon time spent in each job.     •   Participant Status Change:
Participants changing status (to/from eligible/ineligible position) are to be
pro-rated by eligible weeks on the company payroll divided by the number of
weeks of the plan year (For example, FY 2005 = 52 weeks).     •  
Employment/Re-employment: New or rehired employees who enter the Plan after the
start of the Plan Year will receive a pro-rated award based on the time actually
in the Plan.

 

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  •   Employment Termination: Plan participants who leave the employ of Plexus
(whether voluntarily or involuntarily) prior to the payout date (December 15),
except in the case of retirement, disability, death or approval by the CEO,
forfeit all rights to incentive awards accrued during the Plan Year.     •  
Retirement, Disability, or Death: “Retirement” means eligible for retirement
under Plexus Corp.’s retirement guidelines. Disability means eligible for
disability benefits and unable to continue in the employ of the company due to
such disability. In the event of death, any payable award will be paid to the
participant’s beneficiary(ies), or to the estate in the event that no
beneficiary is named, following the end of the Plan Year. Awards for
participants who leave due to retirement, disability or death will be pro-rated
by eligible weeks on the company payroll divided by the number of weeks of the
plan year (For example, FY 2005 = 52 weeks).     •   Non-performing Employees:
If at any time during the plan year an individual’s performance is not
satisfactory and the participant is on a formal written performance improvement
plan, such participant may be removed from this Plan, and either no award or a
reduced award will be paid to the individual. Approval of such action will be
made by the CEO subject to the final approval of the Compensation and Leadership
Development Committee of the Board.     •   Leaves of Absence: Awards for
participants who are on an unpaid Leave of Absence will be pro-rated for the
ROCE and Revenue components based upon eligible calendar weeks on the company
payroll divided by the number of weeks of the plan year. (For example, FY 2005 =
52 weeks)

COMMUNICATION
Each participant will receive a copy of this plan document and a Participant
Award Opportunity Summary. To ensure understanding of the status of plan awards,
Management will communicate periodic performance trends and results to
participants.
ADMINISTRATION
Overall policy direction shall be provided by the Board of Directors. Plan
administration shall be the responsibility of the CEO with support and guidance
from the Compensation and Leadership Development Committee of the Board of
Directors.
EXCEPTIONS AND REVISIONS
It is conceivable that there may be particular situations which are not properly
accommodated by the regular criteria and boundaries of the prevailing incentive
program, (e.g. the effect that an acquisition, a secondary stock offering, or
the like may have on Plexus’ financial performance). Should such situation(s)
occur, the CEO will recommend appropriate adjustments to the Compensation and
Leadership Development Committee of the Board of Directors. If adjustments are
made, the reason for such adjustments will be set forth in the Committee’s
Minutes and communicated to Plan participants. Nothing in this plan document or
associated communications in any way promises or guarantees the compensation or
employment of any participant with Plexus Corp. or any successor or related
company(ies).