exv10w01



 









 





Exhibit
10.01



 




    FLEXTRONICS
    INTERNATIONAL LTD.



 



    2001 EQUITY INCENTIVE PLAN



 



    As Adopted August 13, 2001 and amended through
    September 27, 2007



 



    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
    42,000,000 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 15,000,000 Shares shall be issued as Stock
    Bonuses.



 



    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, spin-off 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
    under the terms of the Plan or that may be granted generally
    under the terms 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
    number
    and/or class
    of securities for which automatic Option grants are to be
    subsequently made to newly elected or continuing Outside
    Directors 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. 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




    

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    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;



 



    (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.




    

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    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
    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. 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 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




    

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    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 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.




    

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    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;



 



    (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
    immediately following such Annual General Meeting.



 



    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.




    

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    (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 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.



 



    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




    

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    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.



 



    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




    

    7








 






    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 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




    

   8








 






    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 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.



 



    20.1  Stock Bonuses
    Generally.  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, subject to the restrictions set forth in
    Section 20.2 hereof. 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 are subject to different Performance Periods
    and having different performance goals and other criteria.



 



    20.2  Restrictions on Stock Bonus Awards.



 



    (a) Any Stock Bonuses with vesting based on Performance
    Factors shall have a minimum Performance Period of one year, and
    any Stock Bonuses with vesting based solely on the passage of
    time and continued




    

   9








 






    service to the Company shall have a minimum Performance Period
    of three years (collectively, the “Stock Bonus
    Restriction Periods”).



 



    (b) The Stock Bonus Restriction Periods may not be waived
    except in the case of death, Disability, Termination or a
    Corporate Transaction.



 



    (c) Stock Bonuses granted not in accordance with the Stock
    Bonus Restriction Periods may not exceed five percent (5%) of
    the total Shares reserved and available for grant and issuance
    pursuant to this Plan, including (i) 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; (ii) any authorized shares not issued or subject to
    outstanding grants under the Prior Plans; and (iii) 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.



 



    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



 



    (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;




    

    10








 






    (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.



 



    “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




    

    11








 






    (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 no par value
    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.



 



    “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”).




    

    12