Exhibit 10.07

FLEXTRONICS INTERNATIONAL LTD.

2001 EQUITY INCENTIVE PLAN

As Adopted August 13, 2001 and amended through September 23, 2004

     1. PURPOSE. The purpose of this Plan is to provide incentives to attract,
retain and motivate eligible persons whose present and potential contributions
are important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future performance
through grants of Awards. Capitalized terms not defined in the text are defined
in Section 21.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 Number of Shares Available. Subject to Sections 2.2 and 15, the
total number of Shares reserved and available for grant and issuance pursuant to
this Plan will be 27,000,000 Shares, plus shares that are subject to issuance
upon exercise of an Award but cease to be subject to such Award for any reason
other than exercise of such Award. In addition, any authorized shares not issued
or subject to outstanding grants under the Company’s 1993 Share Option Plan,
1997 Interim Option Plan, 1998 Interim Option Plan, 1999 Interim Option Plan,
ASIC International, Inc. Non-Qualified Stock Option Plan, Wave Optics, Inc. 1997
Share Option Plan, Wave Optics, Inc. 2000 Share Option Plan, Chatham
Technologies, Inc. Stock Option Plan, Chatham Technologies, Inc. 1997 Stock
Option Plan, IEC Holdings Limited 1997 Share Option Scheme, Palo Alto Products
International Private Ltd 1996 Share Option Plan, The DII Group, Inc. 1994 Stock
Incentive Plan, The DII Group, Inc. 1993 Stock Option Plan, Orbit Semiconductor,
Inc. 1994 Stock Incentive Plan, Telcom Global Solutions Holdings, Inc. 2000
Equity Incentive Plan, Telcom Global Solutions, Inc. 2000 Stock Option Plan,
KMOS Semi-Customs, Inc. 1989 Stock Option Plan, and KMOS Semi-Customs, Inc. 1990
Non-Qualified Stock Option Plan, (each a “Prior Plan” and collectively, the
“Prior Plans”) and any shares subject to outstanding grants that are forfeited
and/or that are issuable upon exercise of options granted pursuant to the Prior
Plans that expire or become unexercisable for any reason without having been
exercised in full, will no longer be available for grant and issuance under the
Prior Plans, but will be available for grant and issuance under this Plan. At
all times the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding
Awards granted under this Plan. No more than 30,000,000 Shares shall be issued
as ISOs and no more than 10,000,000 Shares shall be issued as Stock Bonuses. No
more than 2,000,000 Shares may be issued and outstanding at any point during the
term of this Plan pursuant to Awards granted under Section 20 of this Plan.

          2.2 Adjustment of Shares. Should any change be made to the Shares
issuable under the Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Shares as a class without the Company’s receipt of
consideration, then appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan, (ii) the maximum
number and/or class of securities for which any Participant may be granted
Awards over the term of the Plan, (iii) the number and/or class of securities
and price per Share in effect under each Award outstanding under Sections 5, 7,
and 20, and (iv) the class of securities for which automatic Option grants are
to be subsequently made to newly elected or continuing Outside Directors

 

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under Section 7. Such adjustments to the outstanding Awards are to be effected
in a manner which shall preclude the enlargement or dilution of rights and
benefits under such Awards, provided, however, that (i) fractions of a Share
will not be issued but will be replaced by a cash payment equal to the Fair
Market Value of such fraction of a Share, as determined by the Committee, and
(ii) no such adjustment shall be made if as a result, the Exercise Price would
fall below the par value of a Share and if such adjustment would but for this
paragraph (ii) result in the Exercise Price being less than the par value of a
Share, the Exercise Price payable shall be the par value of a Share. The
adjustments determined by the Committee shall be final, binding and conclusive.
The repricing, replacement or regranting of any previously granted Award,
through cancellation or by lowering the Exercise Price or Purchase Price of such
Award, shall be prohibited unless the shareholders of the Company first approve
such repricing, replacement or regranting.

     3. ELIGIBILITY. All Awards may be granted to employees, officers and
directors of the Company or any Parent or Subsidiary of the Company. No person
will be eligible to receive more than 4,000,000 Shares in any calendar year
under this Plan pursuant to the grant of Awards hereunder; provided, however,
that no Outside Director will be eligible to receive more than 100,000 Shares,
in the aggregate, in any calendar year under this Plan pursuant to the grant of
Awards hereunder. A person may be granted more than one Award under this Plan.

     4. ADMINISTRATION.

          4.1 Committee Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Except for automatic grants
to Outside Directors pursuant to Section 7 hereof, and subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan. Except
for automatic grants to Outside Directors pursuant to Section 7 hereof, the
Committee will have the authority to:

               (a) construe and interpret this Plan, any Award Agreement and any
other agreement or document executed pursuant to this Plan;

               (b) prescribe, amend and rescind rules and regulations relating
to this Plan or any Award;

               (c) select persons to receive Awards;

               (d) determine the form and terms of Awards;

               (e) determine the number of Shares or other consideration subject
to Awards;

               (f) determine whether Awards will be granted singly, in
combination with, in tandem with, in replacement of, or as alternatives to,
other Awards under this Plan or any other incentive or compensation plan of the
Company or any Parent or Subsidiary of the Company;

               (g) grant waivers of Plan or Award conditions;

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               (h) determine the vesting, exercisability and payment of Awards;

               (i) correct any defect, supply any omission or reconcile any
inconsistency in this Plan, any Award or any Award Agreement;

               (j) determine whether an Award has been earned; and

               (k) make all other determinations necessary or advisable for the
administration of this Plan.

          4.2 Committee Discretion. Except for automatic grants to Outside
Directors pursuant to Section 7 hereof, any determination made by the Committee
with respect to any Award will be made in its sole discretion at the time of
grant of the Award or, unless in contravention of any express term of this Plan
or Award, at any later time, and such determination will be final and binding on
the Company and on all persons having an interest in any Award under this Plan.
The Committee may delegate to one or more officers of the Company the authority
to grant an Award under this Plan to Participants who are not Insiders of the
Company.

     5. OPTIONS. The Committee may grant Options to eligible persons and will
determine whether such Options will be Incentive Stock Options within the
meaning of the Code (“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number
of Shares subject to the Option, the Exercise Price of the Option, the period
during which the Option may be exercised, and all other terms and conditions of
the Option, subject to the following:

          5.1 Form of Option Grant. Each Option granted under this Plan will be
evidenced by an Award Agreement which will expressly identify the Option as an
ISO or an NQSO (“Stock Option Agreement”), and, except as otherwise required by
the terms of Section 7 hereof, will be in such form and contain such provisions
(which need not be the same for each Participant) as the Committee may from time
to time approve, and which will comply with and be subject to the terms and
conditions of this Plan.

          5.2 Date of Grant. The date of grant of an Option will be the date on
which the Committee makes the determination to grant such Option, unless
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.

          5.3 Exercise Period. Options may be exercisable within the times or
upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable after the expiration of ten (10) years from the date the Option is
granted; and provided further that (i) no ISO granted to a person who directly
or by attribution owns more than ten percent (10%) of the total combined voting
power of all classes of shares or stock of the Company or of any Parent or
Subsidiary of the Company (“Ten Percent Shareholder”) will be exercisable after
the expiration of five (5) years from the date the ISO is granted and (ii) no
Option granted to a person who is not an employee of the Company or any Parent
or Subsidiary of the Company on the date of grant of that Option will be
exercisable after the expiration of five (5) years from the date the Option is
granted. The Committee also may provide for Options to become exercisable at one
time or from

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time to time, periodically or otherwise, in such number of Shares or percentage
of Shares as the Committee determines.

          5.4 Exercise Price. The Exercise Price of an Option will be determined
by the Committee when the Option is granted; provided that: (i) the Exercise
Price will be not less than 100% of the Fair Market Value of the Shares on the
date of grant; and (ii) the Exercise Price of any ISO granted to a Ten Percent
Shareholder will not be less than 110% of the Fair Market Value of the Shares on
the date of grant. In no event may the Exercise Price of an Option be less than
the par value of the Shares. Payment for the Shares purchased may be made in
accordance with Section 6 of this Plan.

          5.5 Method of Exercise.

               (a) Options may be exercised only by delivery to the Company (or
as the Company may direct) of a written stock option exercise agreement (the
“Exercise Agreement”) (in the case of a written Exercise Agreement, in the form
approved by the Board or the Committee, which need not be the same for each
Participant), in each case stating the number of Shares being purchased, the
restrictions imposed on the Shares purchased under such Exercise Agreement, if
any, and such representations and agreements regarding Participant’s investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

               (b) A written Exercise Agreement may be communicated
electronically through the use of such security device (including, without
limitation, any logon identifier, password, personal identification number,
smartcard, digital certificate, digital signature, encryption device, electronic
key, and/or other code or any access procedure incorporating any one or more of
the foregoing) as may be designated by the Board or the Committee for use in
conjunction with the Plan from time to time (“Security Device”), or via an
electronic page, site, or environment designated by the Company which is
accessible only through the use of such Security Device, and such written
Exercise Agreement shall thereby be deemed to have been sent by the designated
holder of such Security Device. The Company (or its agent) may accept and act
upon any written Exercise Agreement issued and/or transmitted through the use of
the Participant’s Security Device (whether actually authorized by the
Participant or not) as his authentic and duly authorized Exercise Agreement and
the Company (or its agent) may treat such Exercise Agreement as valid and
binding on the Participant notwithstanding any error, fraud, forgery, lack of
clarity or misunderstanding in the terms of such Exercise Agreement. All written
Exercise Agreements issued and/or transmitted through the use of the
Participant’s Security Device (whether actually authorized by the Participant or
not) are irrevocable and binding on the Participant upon transmission to the
Company (or as the Company may direct) and the Company (or its agent) shall be
entitled to effect, perform or process such Exercise Agreement without the
Participant’s further consent and without further reference to the Participant.

               (c) The Company’s records of the Exercise Agreements (whether
delivered or communicated electronically or in printed form), and its record of
any transactions maintained by any relevant person authorized by the Company
relating to or connected with the

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Plan, whether stored in audio, electronic, printed or other form, shall be
binding and conclusive on the Participant and shall be conclusive evidence of
such Exercise Agreements and/or transactions. All such records shall be
admissible in evidence and, in the case of a written Exercise Agreement which
has been communicated electronically, the Participant shall not challenge or
dispute the admissibility, reliability, accuracy or the authenticity of the
contents of such records merely on the basis that such records were incorporated
and/or set out in electronic form or were produced by or are the output of a
computer system, and the Participant waives any of his rights (if any) to so
object.

          5.6 Termination. Notwithstanding the exercise periods set forth in the
Stock Option Agreement, exercise of an Option will always be subject to the
following:

               (a) If the Participant is Terminated for any reason except death
or Disability, then the Participant may exercise such Participant’s Options only
to the extent that such Options would have been exercisable upon the Termination
Date no later than three (3) months after the Termination Date (or such shorter
or longer time period not exceeding five (5) years as may be determined by the
Committee, provided, that any Option which is exercised beyond three (3) months
after the Termination Date shall be deemed to be an NQSO), but in any event no
later than the expiration date of the Options.

               (b) If the Participant is Terminated because of the Participant’s
death or Disability (or the Participant dies within three (3) months after a
Termination other than for Cause or because of the Participant’s Disability),
then the Participant’s Options may be exercised only to the extent that such
Options would have been exercisable by the Participant on the Termination Date
and must be exercised by the Participant (or the Participant’s legal
representative or authorized assignee) no later than twelve (12) months after
the Termination Date (or such shorter or longer time period not exceeding five
(5) years as may be determined by the Committee, provided, that any Option which
is exercised beyond twelve (12) months after the Termination Date when the
Termination is for Participant’s Disability, shall be deemed to be an NQSO), but
in any event no later than the expiration date of the Options.

               (c) If the Participant is terminated for Cause, then the
Participant’s Options shall expire on such Participant’s Termination Date, or at
such later time and on such conditions as are determined by the Committee (but
in any event, no later than the expiration date of the Options).

          5.7 Limitations on Exercise. The Committee may specify a reasonable
minimum number of Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Participant from exercising
the Option for the full number of Shares for which it is then exercisable.

          5.8 Limitations on ISO. The aggregate Fair Market Value (determined as
of the date of grant) of Shares with respect to which ISO are exercisable for
the first time by a Participant during any calendar year (under this Plan or
under any other incentive stock option plan of the Company, Parent or Subsidiary
of the Company) will not exceed US$100,000. If the Fair Market Value of Shares
on the date of grant with respect to which ISO are exercisable for the first
time by a Participant during any calendar year exceeds US$100,000, then the
Options

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for the first US$100,000 worth of Shares to become exercisable in such calendar
year will be ISO and the Options for the amount in excess of US$100,000 that
become exercisable in that calendar year will be NQSOs. In the event that the
Code or the regulations promulgated thereunder are amended after the Effective
Date of this Plan to provide for a different limit on the Fair Market Value of
Shares permitted to be subject to ISO, such different limit will be
automatically incorporated herein and will apply to any Options granted after
the effective date of such amendment.

          5.9 Modification, Extension or Renewal. The Committee may modify,
extend or renew outstanding Options and authorize the grant of new Options in
substitution therefor, provided that any such action may not, without the
written consent of a Participant, impair any of such Participant’s rights under
any Option previously granted, and provided further that the exercise period of
any Option may not in any event be extended beyond the periods specified in
Section 5.3. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.

          5.10 No Disqualification. Notwithstanding any other provision in this
Plan, no term of this Plan relating to ISO will be interpreted, amended or
altered, nor will any discretion or authority granted under this Plan be
exercised, so as to disqualify this Plan under Section 422 of the Code or,
without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

     6. PAYMENT FOR SHARE PURCHASES.

          6.1 Payment. Payment for Shares purchased pursuant to this Plan may be
made in cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:

               (a) by cancellation of indebtedness of the Company to the
Participant;

               (b) by waiver of compensation due or accrued to the Participant
for services rendered;

               (c) with respect only to purchases upon exercise of an Option,
and provided that a public market for the Company’s Shares exists:

                    (i) through a “same day sale” commitment from the
Participant and a broker-dealer that is a member of the National Association of
Securities Dealers (an “NASD Dealer”) whereby the Participant irrevocably elects
to exercise the Option and to sell a portion of the Shares so purchased to pay
for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price directly to the Company; or

                    (ii) through a “margin” commitment from the Participant and
a NASD Dealer whereby the Participant irrevocably elects to exercise the Option
and to pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the Exercise Price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company;

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               (d) conversion of a convertible note issued by the Company, the
terms of which provide that it is convertible into Shares issuable pursuant to
the Plan (with the principal amount and any accrued interest being converted and
credited dollar for dollar to the payment of the Exercise Price); or

               (e) by any combination of the foregoing.

     7. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.

          7.1 Types of Options and Shares. Options granted under this Plan and
subject to this Section 7 shall be NQSOs.

          7.2 Eligibility. Options subject to this Section 7 shall be granted
only to Outside Directors. In no event, however, may any Outside Director be
granted any Options under this Section 7 if such grant is (a) prohibited, or
(b) restricted (either absolutely or subject to various securities requirements,
whether legal or administrative, being complied with), in the jurisdiction in
which such Outside Director is resident under the relevant securities laws of
that jurisdiction.

          7.3 Initial Grant. Each Outside Director who first becomes a member of
the Board after the Effective Date will automatically be granted an Option for
25,000 Shares (an “Initial Grant”) on the date such Outside Director first
becomes a member of the Board. Each Outside Director who became a member of the
Board on or prior to the Effective Date and who did not receive a prior option
grant (under this Plan or otherwise and from the Company or any of its corporate
predecessors) will receive an Initial Grant on the Effective Date.

          7.4 Succeeding Grant. Immediately following each Annual General
Meeting of shareholders of the Company, each Outside Director will automatically
be granted an Option for 12,500 Shares (a “Succeeding Grant”), provided, that
the Outside Director is a member of the Board on such date and has served
continuously as a member of the Board for a period of at least twelve
(12) months since the last Option grant (whether an Initial Grant or a
Succeeding Grant) to such Outside Director. If less than twelve (12) months has
passed, then the number of shares subject to the Succeeding Grant will be
pro-rated based on the number of days passed since the last Option grant to such
Outside Director, divided by 365 days.

          7.5 Vesting and Exercisability. The date an Outside Director receives
an Initial Grant or a Succeeding Grant is referred to in this Plan as the “Start
Date” for such Option.

               (a) Initial Grant. Each Initial Grant will vest and be
exercisable as to 25% of the Shares on the first one year anniversary of the
Start Date for such Initial Grant, and thereafter as to 1/48 of the Shares at
the end of each full succeeding month, so long as the Outside Director
continuously remains a director or a consultant of the Company.

               (b) Succeeding Grant. Each Succeeding Grant will vest and be
exercisable as to 25% of the Shares on the first one year anniversary of the
Start Date for such Succeeding Grant, and thereafter as to 1/48 of the Shares at
the end of each full succeeding month, so long as the Outside Director
continuously remains a director or a consultant of the

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Company. No Options granted to an Outside Director will be exercisable after the
expiration of five (5) years from the date the Option is granted to such Outside
Director. If the Outside Director is Terminated, the Outside Director may
exercise such Outside Director’s Options only to the extent that such Options
would have been exercisable upon the Termination Date for such period as set
forth in Section 5.6. Notwithstanding any provision to the contrary, in the
event of a Corporate Transaction described in Section 15.1, the vesting of all
Options granted to Outside Directors pursuant to this Section 7 will accelerate
and such Options will become exercisable in full prior to the consummation of
such event at such times and on such conditions as the Committee determines, and
must be exercised, if at all, within three (3) months of the consummation of
said event. Any Options not exercised within such three-month period shall
expire. Notwithstanding any provision to the contrary, in the event of a Hostile
Take-Over, the Outside Director shall have a thirty-day period in which to
surrender to the Company each option held by him or her under this Plan for a
period of at least six (6) months. The Outside Director shall in return be
entitled to a cash distribution from the Company in an amount equal to the
excess of (i) the Take-Over Price of the Shares at the time subject to the
surrendered Option (whether or not the Option is otherwise at the time
exercisable for those Shares) over (ii) the aggregate Exercise Price payable for
such Shares. Such cash distribution shall be paid within five (5) days following
the surrender of the Option to the Company. Neither the approval of the
Committee nor the consent of the Board shall be required in connection with such
option surrender and cash distribution. The Shares subject to each Option
surrendered in connection with the Hostile Take-Over shall NOT be available for
subsequent issuance under the Plan.

          7.6 Exercise Price. The Exercise Price of an Option pursuant to an
Initial Grant and Succeeding Grant shall be the Fair Market Value of the Shares,
at the time that the Option is granted.

     8. WITHHOLDING TAXES.

          8.1 Withholding Generally. Whenever Shares are to be issued in
satisfaction of Awards granted under this Plan, the Company may require the
Participant to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements prior to the delivery of any
certificate or certificates for such Shares. Whenever, under this Plan, payments
in satisfaction of Awards are to be made in cash, such payment will be net of an
amount sufficient to satisfy federal, state, and local withholding tax
requirements.

          8.2 Stock Withholding. When, under applicable tax laws, a Participant
incurs tax liability in connection with the exercise or vesting of any Award
that is subject to tax withholding and the Participant is obligated to pay the
Company the amount required to be withheld, the Committee may in its sole
discretion, and subject to compliance with all applicable laws and regulations,
allow the Participant to satisfy the minimum withholding tax obligation by
electing to have the Company withhold from the Shares to be issued that number
of Shares having a Fair Market Value equal to the minimum amount required to be
withheld, determined on the date that the amount of tax to be withheld is to be
determined. All elections by a Participant to have Shares withheld for this
purpose will be made in accordance with the requirements established by the
Committee and be in writing in a form acceptable to the Committee.

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     9. TRANSFERABILITY.

          9.1 Except as otherwise provided in this Section 9, Awards granted
under this Plan, and any interest therein, will not be transferable or
assignable by a Participant, and may not be made subject to execution,
attachment or similar process, otherwise than by will or by the laws of descent
and distribution or as determined by the Committee and set forth in the Award
Agreement with respect to Awards. Notwithstanding the foregoing,
(i) Participants may transfer or assign their Options to Family Members through
a gift or a domestic relations order (and not in a transfer for value), and
(ii) if the terms of the applicable instrument evidencing the grant of an Option
so provide, Participants who reside outside of the United States and Singapore
may assign their Options to a financial institution outside of the United States
and Singapore that has been approved by the Committee, in accordance with the
terms of the applicable instrument, subject to Code regulations providing that
any transfer of an ISO may cause such ISO to become a NQSO. The Participant
shall be solely responsible for effecting any such assignment, and for ensuring
that such assignment is valid, legal and binding under all applicable laws. The
Committee shall have the discretion to adopt such rules as it deems necessary to
ensure that any assignment is in compliance with all applicable laws.

          9.2 All Awards other than NQSO’s. All Awards other than NQSO’s shall
be exercisable: (i) during the Participant’s lifetime, only by (A) the
Participant, or (B) the Participant’s guardian or legal representative; and
(ii) after Participant’s death, by the legal representative of the Participant’s
heirs or legatees. 9.3 NQSOs. Unless otherwise restricted by the Committee, an
NQSO shall be exercisable: (i) during the Participant’s lifetime only by (A) the
Participant, (B) the Participant’s guardian or legal representative, (C) a
Family Member of the Participant who has acquired the NQSO by “permitted
transfer;” as defined below, (ii) by a transferee that is permitted pursuant to
clause (ii) of Section 9.2, for such period as may be authorized by the terms of
the applicable instrument evidencing the grant of the applicable Option, or by
the Committee, and (iii) after Participant’s death, by the legal representative
of the Participant’s heirs or legatees. “Permitted transfer” means any transfer
of an interest in such NQSO by gift or domestic relations order effected by the
Participant during the Participant’s lifetime. A permitted transfer shall not
include any transfer for value; provided that the following shall be permitted
transfers and shall not be considered to be transfers for value: (a) a transfer
under a domestic relations order in settlement of marital property rights or
(b) a transfer to an entity in which more than fifty percent of the voting
interests are owned by Family Members or the Participant in exchange for an
interest in that entity.

     10. PRIVILEGES OF STOCK OWNERSHIP. No Participant will have any of the
rights of a shareholder with respect to any Shares until the Shares are issued
to the Participant. After Shares are issued to the Participant, the Participant
will be a shareholder and have all the rights of a shareholder with respect to
such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares.

     11. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.

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     12. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from
time to time and subject to compliance with all applicable laws and regulations,
authorize the Company, with the consent of the respective Participants, to issue
new Awards in exchange for the surrender and cancellation of any or all
outstanding Awards. The Committee may at any time and subject to compliance with
all applicable laws and regulations buy from a Participant an Award previously
granted with payment in cash, Shares or other consideration, based on such terms
and conditions as the Committee and the Participant may agree.

     13. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable federal and
state securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which the
Shares may then be listed or quoted, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding
any other provision in this Plan, the Company will have no obligation to issue
or deliver certificates for Shares under this Plan prior to: (a) obtaining any
approvals from governmental agencies that the Company determines are necessary
or advisable; and/or (b) completion of any registration or other qualification
of such Shares under any state or federal law or ruling of any governmental body
that the Company determines to be necessary or advisable. The Company will be
under no obligation to register the Shares with the SEC or to effect compliance
with the registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

     14. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted
under this Plan will confer or be deemed to confer on any Participant any right
to continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time, with or without
cause.

     15. CORPORATE TRANSACTIONS.

          15.1 Assumption or Replacement of Awards by Successor. Except for
automatic grants to Outside Directors pursuant to Section 7 hereof, in the event
of (a) a dissolution or liquidation of the Company, (b) a merger or
consolidation in which the Company is not the surviving corporation (other than
a merger or consolidation with a wholly-owned subsidiary, a reincorporation of
the Company in a different jurisdiction, or other transaction in which there is
no substantial change in the shareholders of the Company or their relative share
holdings and the Awards granted under this Plan are assumed, converted or
replaced by the successor corporation, which assumption will be binding on all
Participants), (c) a merger in which the Company is the surviving corporation
but after which the shareholders of the Company immediately prior to such merger
(other than any shareholder that merges, or which owns or controls another
corporation that merges, with the Company in such merger) cease to own their
shares or other equity interest in the Company, (d) the sale of substantially
all of the assets of the Company, or (e) the acquisition, sale, or transfer of
more than 50% of the outstanding shares of the Company by tender offer or
similar transaction (each, a “Corporate Transaction ”), each Option which is at
the time outstanding under this Plan shall automatically

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accelerate so that each such Option shall, immediately prior to the specified
effective date for the Corporate Transaction, become fully exercisable with
respect to the total number of Shares at the time subject to such Option and may
be exercised for all or any portion of such Shares. However, subject to the
specific terms of a Participant’s Award Agreement, an outstanding Option under
this Plan shall not so accelerate if and to the extent: (i) such Option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable Option to
purchase shares of the capital stock of the successor corporation or parent
thereof, (ii) such Option is to be replaced with a cash incentive program of the
successor corporation which preserves the Option spread existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same vesting schedule applicable to such Option or (iii) the acceleration of
such Option is subject to other limitations imposed by the Committee at the time
of the Option grant. The determination of Option comparability under clause
(i) above shall be made by the Committee, and its determination shall be final,
binding and conclusive.

          15.2 Other Treatment of Awards. Subject to any greater rights granted
to Participants under the foregoing provisions of this Section 15 or other
specific terms of a Participant’s Award Agreement, in the event of the
occurrence of any Corporate Transaction described in Section 15.1, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of merger, consolidation, dissolution, liquidation, or sale of assets.

          15.3 Assumption of Awards by the Company. The Company, from time to
time, also may substitute or assume outstanding awards granted by another
company, whether in connection with an acquisition of such other company or
otherwise, by either; (a) granting an Award under this Plan in substitution of
such other company’s award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award
granted under this Plan. Such substitution or assumption will be permissible if
the holder of the substituted or assumed award would have been eligible to be
granted an Award under this Plan if the other company had applied the rules of
this Plan to such grant. In the event the Company assumes an award granted by
another company, the terms and conditions of such award will remain unchanged
(except that the Exercise Price and the number and nature of Shares issuable
upon exercise of any such Option will be adjusted appropriately pursuant to
Section 424(a) of the Code). In the event the Company elects to grant a new
Option rather than assuming an existing Option, such new Option may be granted
with a similarly adjusted Exercise Price.

     16. ADOPTION AND SHAREHOLDER APPROVAL. This Plan will become effective on
the date on which the Board adopts the Plan (the “Effective Date”). This Plan
shall be approved by the shareholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve
(12) months before or after the date this Plan is adopted by the Board. Upon the
Effective Date, the Committee may grant Awards pursuant to this Plan; provided,
however, that: (a) no Option may be exercised prior to initial shareholder
approval of this Plan; (b) no Option granted pursuant to an increase in the
number of Shares subject to this Plan approved by the Board will be exercised
prior to the time such increase has been approved by the shareholders of the
Company; (c) in the event that initial shareholder approval is not obtained
within the time period provided herein, all Awards granted hereunder shall be
cancelled; and (d) in the event that shareholder approval of such increase is
not obtained

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within the time period provided herein, all Awards granted pursuant to such
increase will be cancelled.

     17. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided
herein, this Plan will terminate ten (10) years from the date this Plan is
adopted by the Board or, if earlier, the date of shareholder approval. This Plan
and all agreements thereunder shall be governed by and construed in accordance
with the laws of the State of California.

     18. AMENDMENT OR TERMINATION OF PLAN. The Board has complete and exclusive
power and authority to amend or modify the Plan (or any component thereof) in
any or all respects whatsoever. However, (i) no such amendment or modification
shall adversely affect rights and obligations with respect to Options at the
time outstanding under the Plan, unless the Participant consents to such
amendment, and (ii) the automatic grants to Outside Directors pursuant to
Section 7 may not be amended at intervals more frequently than once every six
(6) months, other than to the extent necessary to comply with applicable U.S.
income tax laws and regulations. In addition, the Board may not, without the
approval of the Company’s shareholders, amend the Plan to (i) materially
increase the maximum number of Shares issuable under the Plan or the number of
Shares for which Options may be granted per newly-elected or continuing Outside
Director or the maximum number of Shares for which any one individual
participating in the Plan may be granted Options, (ii) materially modify the
eligibility requirements for plan participation or (iii) materially increase the
benefits accruing to Participants. The Board may at any time terminate or amend
this Plan in any respect, including without limitation amendment of any form of
Award Agreement or instrument to be executed pursuant to this Plan; provided,
however, that the Board will not, without the approval of the shareholders of
the Company, amend this Plan in any manner that requires such shareholder
approval.

     19. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Board, the submission of this Plan to the shareholders of the Company for
approval, nor any provision of this Plan will be construed as creating any
limitations on the power of the Board to adopt such additional compensation
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under this Plan, and such
arrangements may be either generally applicable or applicable only in specific
cases.

     20. STOCK BONUSES. A Stock Bonus is a grant of Shares by the Company to an
individual who has satisfied the terms and conditions set by the Committee on
the making of such grant. The Committee will determine to whom a grant may be
made, the number of Shares that may be granted, the restrictions to the making
of such grant, and all other terms and conditions of the Stock Bonus. The
conditions to grant may be based upon completion of a specified number of years
of service with the Company or upon completion of the performance goals as set
out by the Committee. Grants of Stock Bonuses may vary from Participant to
Participant and between groups of Participants. Prior to the grant of a Stock
Bonus, the Committee shall: (a) determine the nature, length and starting date
of any Performance Period that may be a condition precedent to grant of a Stock
Bonus; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be
awarded to the Participant. Prior to the grant of any Stock Bonus, the Committee
shall determine the extent to which such Stock Bonus has been earned.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Stock Bonuses that

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are subject to different Performance Periods and having different performance
goals and other criteria. Participants shall be required to pay the par value
for any Shares issued as a Stock Bonus.

     21. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:

     “Award” means any Options or shares from Stock Bonuses granted under this
Plan.

     “Award Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award.

     “Board” means the Board of Directors of the Company.

     “Cause” means (a) the commission of an act of theft, embezzlement, fraud,
dishonesty, (b) a breach of fiduciary duty to the Company or a Parent or
Subsidiary of the Company or (c) a failure to materially perform the customary
duties of the employee’s employment.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Committee” means the Compensation Committee of the Board.

     “Company” means Flextronics International Ltd. or any successor
corporation.

     “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exercise Price” means the price at which a holder of an Option may
purchase the Shares issuable upon exercise of the Option.

     “Fair Market Value” means, as of any date, the value of the Shares
determined as follows:

               (a) if such Shares are then quoted on the Nasdaq National Market,
the closing price of such Shares on the Nasdaq National Market on the date of
determination as reported in The Wall Street Journal;

               (b) if such Shares are publicly traded and are then listed on a
national securities exchange, the closing price of such Shares on the date of
determination on the principal national securities exchange on which the Shares
are listed or admitted to trading as reported in The Wall Street Journal;

               (c) if such Shares are publicly traded but are not quoted on the
Nasdaq National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on the date
of determination as reported in The Wall Street Journal; or

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               (d) if none of the foregoing is applicable, by the Committee in
good faith.

     “Family Member” includes any of the following:

               (a) child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of
the Participant, including any such person with such relationship to the
Participant by adoption;

               (b) any person (other than a tenant or employee) sharing the
Participant’s household;

               (c) a trust in which the persons in (a) and (b) have more than
fifty percent of the beneficial interest;

               (d) a foundation in which the persons in (a) and (b) or the
Participant control the management of assets; or

               (e) any other entity in which the persons in (a) and (b) or the
Participant own more than fifty percent of the voting interest.

     “Hostile Take-Over” means a change in ownership of the Company effected
through the following transaction:

               (a) the direct or indirect acquisition by any person or related
group of persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company’s outstanding securities pursuant to a tender or exchange
offer made directly to the Company’s shareholders which the Board does not
recommend such shareholders to accept, and

               (b) the acceptance of more than fifty percent (50%) of the
securities so acquired in such tender or exchange offer from holders other than
Insiders.

     “Insider” means an officer or director of the Company or any other person
whose transactions in the Company’s Shares are subject to Section 16 of the
Exchange Act.

     “Option” means an award of an option to purchase Shares pursuant to
Sections 5 and 7.

     “Outside Director” means a member of the Board who is not an employee of
the Company or any Parent or Subsidiary.

     “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing more than 50% of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

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     “Participant” means a person who receives an Award under this Plan.

     “Performance Factors” means the factors selected by the Committee from
among the following measures to determine whether the performance goals
established by the Committee and applicable to Awards have been satisfied:

     (a) Net revenue and/or net revenue growth;

     (b) Earnings before income taxes and amortization and/or earnings before
income taxes and amortization growth;

     (c) Operating income and/or operating income growth;

     (d) Net income and/or net income growth;

     (e) Earnings per share and/or earnings per share growth;

     (f) Total stockholder return and/or total stockholder return growth;

     (g) Return on equity;

     (h) Operating cash flow return on income;

     (i) Adjusted operating cash flow return on income;

     (j) Economic value added; and

     (k) Individual confidential business objectives.

     “Performance Period” means the period of service determined by the
Committee, not to exceed five years, during which years of service or
performance is to be measured for Awards.

     “Plan” means this Flextronics International Ltd. 2001 Equity Incentive
Plan, as amended from time to time.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Shares” means ordinary shares of par value S$0.01 each in the capital of
the Company reserved for issuance under this Plan, as adjusted pursuant to
Sections 2 and 15, and any successor security.

     “Stock Bonus” means an award of Shares pursuant to Section 20.

     “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing more
than 50% of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

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     “Take-Over Price” means the greater of (a) the Fair Market Value per Share
on the date the particular Option to purchase Shares is surrendered to the
Company in connection with a Hostile Take-Over or (b) the highest reported price
per Share paid by the tender offeror in effecting such Hostile Take-Over.
However, if the surrendered Option is an ISO, the Take-Over Price shall not
exceed the clause (a) price per Share.

     “Termination” or “Terminated” means, for purposes of this Plan with respect
to a Participant, that the Participant has for any reason ceased to provide
services as an employee, officer or director to the Company or a Parent or
Subsidiary of the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence approved by the Committee, provided, that such
leave is for a period of not more than 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless provided
otherwise pursuant to formal policy adopted from time to time by the Company and
issued and promulgated to employees in writing. In the case of any employee on
an approved leave of absence, the Committee may make such provisions respecting
suspension of vesting of the Award while on leave from the employ of the Company
or a Subsidiary as it may deem appropriate, except that in no event may an
Option be exercised after the expiration of the term set forth in the Stock
Option Agreement. The Committee will have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the
Participant ceased to provide services (the “Termination Date”).

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