Document:

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EXHIBIT 10.3

SOLECTRON CORPORATION

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is made by and between Solectron Corporation (the
“Company”), and [___] (“Executive”) as of January 14, 2005 (the “Effective Date”).

     1. Duties and Scope of Employment.

          (a) Positions and Duties. Executive will serve as the Company’s Executive Vice
President, [___]. Executive will render such business and professional services in
the performance of Executive’s duties, consistent with Executive’s position within the Company, as
will reasonably be assigned to Executive by the Company’s Chief Executive Officer (the “CEO”) or
the CEO’s designate. The period of Executive’s employment under this Agreement is referred to
herein as the “Employment Term.”

          (b) Obligations. During the Employment Term, Executive will devote Executive’s full
business efforts and time to the Company. For the duration of the Employment Term, Executive
agrees not to actively engage in any other employment, occupation or consulting activity for any
direct or indirect remuneration without the prior approval of the Board of Directors of the Company
(the “Board”) (which approval will not be unreasonably withheld); provided, however, that Executive
may, without the approval of the Board, serve in any capacity with any civic, educational or
charitable organization, provided such services do not interfere with Executive’s obligations to
Company.

     2. Employee Benefits. During the Employment Term, Executive will be eligible to
participate in accordance with the terms of all Company employee benefit plans, policies and
arrangements that are applicable to other senior executives of the Company, as such plans, policies
and arrangements and terms may exist from time to time.

     3. At-Will Employment. Executive and the Company agree that Executive’s employment
with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this
employment relationship may be terminated at any time, upon written notice to the other party, with
or without good cause or for any or no cause, at the option either of the Company or Executive.
However, as described in this Agreement, Executive may be entitled to severance benefits depending
upon the circumstances of Executive’s termination of employment.

     4. Compensation.

          (a) Base Salary. During the Employment Term, the Company will pay Executive an annual
salary of $[___] as compensation for his services (the “Base Salary”). The Base Salary
will be paid through payroll periods that are consistent with the Company’s normal payroll
practices, but in all events will not be less frequent than once per month. Executive’s salary

 

 

will be subject to review and adjustments will be made based upon the Company’s normal
performance review practices.

          (b) Bonuses. Executive may participate in any bonus plan or similar arrangement the
Company may have in place that are applicable to other senior executives of the Company, on such
terms and conditions as the Executive Compensation and Management Resources Committee of the Board
(the “Committee”) may determine from time to time in its discretion.

          (c) Stock Options. Executive will be eligible to receive options to purchase the
Company’s common stock pursuant to any plans or arrangements it may have in effect from time to
time. The Committee will determine in its discretion whether Executive will be granted any such
option or options and the terms of any such option or options in accordance with the terms of any
applicable plan or arrangement that may be in effect from time to time.

     5. Severance.

          (a) Involuntary Termination other than for Cause, Death or Disability Prior to a Change of
Control or After Twelve Months Following a Change of Control. If the Company terminates
Executive’s employment with the Company without Executive’s consent and for a reason other than
Cause, Executive becoming Disabled or Executive’s death, any of which occur prior to a Change of
Control or after twelve (12) months following a Change of Control and Executive signs and delivers
to the Company a separation agreement and release of claims in a form satisfactory to the Company,
then promptly following such termination of employment, or, if later, the effective date of the
separation agreement and release of claims, Executive will receive the following severance from the
Company:

               (i) Accrued Compensation. Executive will be entitled to receive all accrued vacation,
expense reimbursements and any other benefits due to Executive through the date of termination of
employment in accordance with the Company’s then existing employee benefit plans, policies and
arrangements.

               (ii) Severance Payment. Executive will be paid continuing payments of severance pay
at a rate equal to Executive’s Base Salary rate, as then in effect, and Executive’s target bonus
for the year of termination, for a period of twelve (12) months plus one additional month for every
full year Executive has been employed with the Company as of the date of such termination, not to
exceed twenty-four (24) months (the “Severance Payment Period”), from the date of such termination,
to be paid periodically in accordance with the Company’s normal payroll policies; provided,
however, that if during the Severance Payment Period Executive engages in Competition or breaches
the covenants in Section 12 or in the separation agreement, all payments pursuant to this
subsection will immediately cease

               (iii) Continued Employee Benefits. Executive will receive Company-paid coverage
during the Severance Payment Period for Executive and Executive’s eligible dependents under the
Company’s Benefit Plans; provided, however, that if during the Severance Payment Period Executive
engages in Competition or breaches the covenants in Section 12 or in the separation agreement, all
Company-paid coverage pursuant to this subsection will immediately cease.

 

 

               (iv) Payments or Benefits Required by Law. Executive will receive such other
compensation or benefits from the Company as may be required by law (for example, “COBRA” coverage
under Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”)).

          (b) Involuntary Termination other than for Cause, Death or Disability or Resignation for
Good Reason within Twelve Months of a Change of Control. If within twelve (12) months
following a Change of Control (i) Executive resigns from his or her employment with the Company (or
any parent or subsidiary of the Company) for Good Reason or (ii) the Company (or any parent or
subsidiary of the Company) terminates Executive’s employment for other than Cause Executive
becoming Disabled or Executive’s death, and Executive signs and delivers to the Company a
separation agreement and release of claims in a form satisfactory to the Company, then promptly
following such termination of employment, or, if later, the effective date of the separation
agreement and release of claims, Executive will receive the following severance from the Company:

               (i) Severance Payment. For a period of twenty-four (24) months following Executive’s
termination of employment (the “Change of Control Severance Payment Period”), Executive will be
paid continuing payments of severance pay equal to Executive’s average Base Salary rate for the two
years prior to such termination, and Executive’s average annual target bonus for the two years
prior to such termination, to be paid in equal installments periodically in accordance with the
Company’s normal payroll practices; provided, however, that if Executive has been employed for less
than two years prior to such termination, for a period of twenty-four (24) months following such
termination, Executive will be paid continuing payments of severance pay equal to Executive’s
average Base Salary rate for the period Executive was actually employed with the Company, and
Executive’s average annual target bonus for the period Executive was actually employed with the
Company, to be paid in equal installments periodically in accordance with the Company’s normal
payroll practices; provided, further, that in the event Executive engages in Competition or
breaches the covenants in Section 12 or in the separation agreement during the Change of Control
Severance Payment Period, all payments pursuant to this subsection will immediately cease.

               (ii) Equity Awards. Executive’s then outstanding options to purchase shares of the
Company’s Common Stock (whether granted on, before or after the date of this Agreement) (the
“Options”) will immediately vest and become exercisable as to 100% of the shares subject to such
Options. Additionally, shares of the Company’s Common Stock then held by Executive subject to a
Company repurchase or reacquisition right (whether issued on, before or after the date of this
Agreement) (the “Restricted Stock”) will immediately vest and have such Company right of repurchase
or reacquisition lapse as to 100% of such shares. Additionally, Executive will have a period of
three (3) months following such termination of employment to exercise Executive’s Options, but in
no event beyond the original maximum term of the Option. In all other respects the Options and
Restricted Stock will continue to be bound by and subject to the terms of their respective
agreements.

               (iii) Continued Employee Benefits. Executive will receive Company-paid coverage for a
period of thirty-six (36) months for Executive and Executive’s eligible dependents under the
Company’s Benefit Plans; provided, however, that in the event Executive engages in

 

 

Competition or breaches the covenants in Section 12 or in the separation agreement during the
thirty-six month period following such termination, all Company-paid coverage pursuant to this
subsection will immediately cease.

               (iv) Payments or Benefits Required by Law. Executive will receive such other
compensation or benefits from the Company as may be required by law (for example, “COBRA” coverage
under Section 4980B of the Code).

          (c) Other Terminations. If Executive voluntarily terminates Executive’s employment
with the Company (other than for Good Reason within twelve (12) months of a Change of Control) or
if the Company terminates Executive employment with the Company for Cause, then Executive will (i)
receive the Base Salary through the date of termination of employment, (ii) receive all accrued
vacation, expense reimbursements and any other benefits due to Executive through the date of
termination of employment in accordance with established Company plans, policies and arrangements,
and (iii) not be entitled to any other compensation or benefits (including, without limitation,
accelerated vesting of stock options) from the Company except to the extent provided under the
applicable stock option agreement(s) or as may be required by law (for example, “COBRA” coverage
under Section 4980B of the Code).

          (d) Termination due to Death or Disability. If Executive’s employment with the
Company is terminated due to Executive’s death or Executive’s becoming Disabled, then Executive or
Executive’s estate (as the case may be) will (i) receive the Base Salary through the date of
termination of employment, (ii) receive all accrued vacation, expense reimbursements and any other
benefits due to Executive through the date of termination of employment in accordance with
Company-provided or paid plans, policies and arrangements, and (iii) not be entitled to any other
compensation or benefits from the Company except to the extent required by law (for example,
“COBRA” coverage under Section 4980B of the Code).

          (e) Section 409A. Any cash severance to be paid pursuant to Sections 5(a)(ii) and
6(b)(i) will not be paid during the six-month period following Executive’s termination of
employment, unless the Company reasonably determines that paying such amounts immediately following
Executive’s termination of employment would not result the imposition of additional tax under
Section 409A of the Code (“Section 409A”), in which case such amounts shall be paid in accordance
with normal payroll practices. If no cash severance is paid to Executive as a result of the
previous sentence, on the first day following such six-month period, the Company will pay Executive
a lump-sum amount equal to the cumulative amounts that would have otherwise been paid to Executive
pursuant to Sections 5(a)(ii) and 6(b)(i). Thereafter, Executive will receive his cash severance
payments pursuant to Sections 5(a)(ii) and 6(b)(i) in accordance with the Company’s normal payroll
practices.

     6. Golden Parachute Excise Tax.

          (a) In the event it will be determined that any payment or distribution by the Company or
other amount with respect to the Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 6 (a

 

 

“Payment”), is (or will be) subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”) or any interest or penalties are (or will be)
incurred by Executive with respect to the excise tax imposed by Section 4999 of the Code with
respect to the Company (the excise tax, together with any interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), Executive will be entitled to receive an additional
cash payment (a “Gross-Up Payment”) from the Company in an amount equal to the sum of the Excise
Tax and an amount sufficient to pay the cumulative Excise Tax and all cumulative income taxes
(including any interest and penalties imposed with respect to such taxes) relating to the Gross-Up
Payment so that the net amount retained by Executive is equal to all payments to which Employee is
entitled pursuant to the terms of this Agreement (excluding the Gross-Up Payment) or otherwise less
income taxes (but not reduced by the Excise Tax or by income taxes attributable to the Gross-Up
Payment).

          (b) Subject to the provisions of Section 6(c), all determinations required to be made under
this Section 6, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at the determination, will be made
by a nationally recognized certified public accounting firm selected by the Company with the
consent of Executive, which should not unreasonably be withheld (the “Accounting Firm”) which will
provide detailed supporting calculations both to the Company and Executive within 30 days after the
receipt of notice from Executive that there has been a Payment, or such earlier time as is
requested by the Company. All fees and expenses of the Accounting Firm will be borne solely by the
Company. The Company, as determined in accordance with this Section 6, will pay any Gross-Up
Payment to Executive within five days after the receipt of the Accounting Firm’s determination. If
the Accounting Firm determines that no Excise Tax is payable by Executive, it will so indicate to
Executive in writing. Any determination by the Accounting Firm will be binding upon the Company
and Executive. As a result of uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm, it is possible that Gross-Up Payments
that the Company should have made will not have been made (an “Underpayment”), consistent with the
calculations required to be made hereunder. In the event the Company exhausts its remedies in
accordance with Section 6(c) and Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm will determine the amount of Underpayment that has occurred and the
Underpayment will be promptly paid by the Company to or for the benefit of Executive.

          (c) Executive will notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require a Gross-Up Payment (that has not already been paid by the
Company). The notification will be given as soon as practicable but no later than ten business
days after Executive is informed in writing of the claim and will apprise the Company of the nature
of the claim and the date on which the claim is requested to be paid. Executive will not pay the
claim prior to the expiration of the 30-day period following the date on which Executive gives
notice to the Company or any shorter period ending on the date that any payment of taxes with
respect to the claim is due. If the Company notifies Executive in writing prior to the expiration
of the 30-day period that it desires to contest the claim, Executive will:

               (i) give the Company any information reasonably requested by the Company relating to the
claim;

 

 

               (ii) take any action in connection with contesting the claim as the Company will reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to the claim by an attorney reasonably selected by the Company;

               (iii) cooperate with the Company in good faith in order effectively to contest the claim; and

               (iv) permit the Company to participate in any proceedings relating to the claim.

          (d) The Company will bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with the contest and will indemnify and hold
Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of the representation and payment of costs and
expenses. Without limitation of the forgoing provisions of this Section 6, the Company will
control all proceedings taken in connection with the contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings, and conferences with the taxing
authority in respect of the claim and may, at its sole option, either direct Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive
agrees to prosecute the contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company will determine. If the
Company directs Executive to pay the claim and sue for a refund, the Company will advance the
amount of the payment to Executive, on an interest-free basis, and will indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to the advance or with respect to any imputed
income with respect to the advance; and any extension of the statute of limitations relating to
payment of taxes for the taxable year of Executive with respect to which the contested amount is
claimed to be due will be limited solely to the contested amount. The Company’s control of the
contest will be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Executive will be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.

          If, after the receipt by Executive of an amount advanced by the Company pursuant to Section
6(d), Executive becomes entitled to receive any refund with respect to the claim, Executive will,
subject to the Company’s compliance with the requirements of Section 6(d), promptly pay to the
Company the amount of the refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by the Company
pursuant to this Section 6(d), a determination is made that Executive will not be entitled to any
refund with respect to the claim and the Company does not notify Executive in writing of its intent
to contest the denial of refund prior to the expiration of 30 days after the determination, then
the advance will be forgiven and will not be required to be repaid and the amount of the advance
will offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

     7. Definition of Terms. The following terms referred to in this Agreement will have
the following meanings:

 

 

          (a) Benefit Plans. “Benefit Plans” means plans, policies or arrangements that the
Company sponsors (or participates in) and that immediately prior to Executive’s termination of
employment provide Executive and/or Executive’s eligible dependents with medical, dental, vision
and/or financial counseling benefits. Benefit Plans do not include any other type of benefit
(including, but not by way of limitation, disability, life insurance or retirement benefits). A
requirement that the Company provide Executive and Executive’s eligible dependents with coverage
under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that
provided to Executive and Executive’s eligible dependents immediately prior to Executive’s
termination of employment. Notwithstanding any contrary provision of this Section 7, but subject
to the immediately preceding sentence, the Company may, at its option, satisfy any requirement that
the Company provide coverage under any Benefit Plan by instead providing coverage under a separate
plan or plans providing coverage that is no less favorable or by paying Executive a lump sum
payment sufficient to provide Executive and Executive’s eligible dependents with equivalent
coverage under a third party plan that is reasonably available to Executive and Executive’s
eligible dependents.

          (b) Cause. “Cause” means (i) a willful failure by Executive to substantially perform
Executive’s duties as an employee, other than a failure resulting from the Executive’s complete or
partial incapacity due to physical or mental illness or impairment, (ii) a willful act by Executive
that constitutes gross misconduct and that is injurious to the Company, (iii) circumstances where
Executive willfully imparts material confidential information relating to the Company or its
business to competitors or to other third parties other than in the course of carrying out
Executive’s duties, (iv) a material and willful violation by Executive of a federal or state law or
regulation applicable to the business of the Company or (v) Executive’s conviction or plea of
guilty or no contest to a felony. No act or failure to act by Executive will be considered
“willful” unless committed without good faith and without a reasonable belief that the act or
omission was in the Company’s best interest.

          (c) Change of Control. “Change of Control” means the occurrence of any of the
following:

               (i) the sale, lease, conveyance or other disposition of all or substantially all of the
Company’s assets to any “person” (as such term is used in Section 13(d) of the Securities Exchange
Act of 1934, as amended), entity or group of persons acting in concert;

               (ii) any person or group of persons becoming the “beneficial owner” (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company representing 30% or more of
the total voting power represented by the Company’s then outstanding voting securities;

               (iii) a merger or consolidation of the Company with any other corporation, other than a merger
or consolidation that would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity or its controlling entity) at least 50% of the total
voting power represented by the voting securities of the Company or such surviving entity (or its
controlling entity) outstanding immediately after such merger or consolidation; or

 

 

               (iv) a contest for the election or removal of members of the Board that results in the removal
from the Board of at least 33% of the incumbent members of the Board.

          (d) Competition. “Competition” will mean Executive’s direct or indirect engagement in
(whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), or ownership interest in or participation in the financing,
operation, management or control of, any person, firm, corporation or business that competes with
Company or is a customer of the Company.

          (e) Disability. “Disability” will mean that Executive has been unable to perform the
principal functions of Executive’s duties due to a physical or mental impairment, but only if such
inability has lasted or is reasonably expected to last for at least six months. Whether Executive
has a Disability will be determined by the Board based on evidence provided by one or more
physicians selected by the Board.

          (f) Good Reason. “Good Reason” means (without Executive’s consent) (i) a material
reduction in Executive’s title, authority, status, or responsibilities, (ii) a material breach by
the Company of its obligations as an employee, or (iii) a relocation of Executive’s principal place
of employment by more than twenty five (25) miles. With respect to a termination of employment
that occurs during the six (6) month period immediately following a Change of Control, clause (i)
of the preceding sentence will be applied by replacing the word “reduction” with the word “change.”

     8. Term of Agreement. This Agreement will have an initial term of two (2) years
commencing on the Effective Date. On the second anniversary of the Effective Date and on each
annual anniversary of the Effective Date thereafter, this Agreement automatically will renew for an
additional term of one year unless at least three (3) months prior to such anniversary, Executive
or the Company gives the other party written notice that the Agreement will not be renewed.
Notwithstanding the foregoing provisions of this paragraph, in the event of a Change of Control,
the term of this Agreement will extend through the one-year anniversary of such Change of Control.
Additionally, on the anniversary of such Change of Control and each annual anniversary of the
Change of Control thereafter, this Agreement automatically will renew for an additional term of one
year unless at least three (3) months prior to such anniversary, Executive or the Company gives the
other party written notice that the Agreement will not be renewed.

     If Executive incurs a termination of employment that entitles Executive to receive the
payments and benefits described in Section 5, this Agreement will not terminate until all of
Executive’s and the Company’s obligations under the Agreement have been satisfied. For avoidance
of doubt, the expiration of this Agreement upon the provision of notice as provided in this Section
8 by either party will not by itself entitle Executive to any payments or benefits described in
Section 5(a) or (b).

     9. Successors.

          (a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets will assume the obligations under this

 

 

Agreement and agree expressly to perform the obligations under this Agreement in the same
manner and to the same extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term “Company” will include
any successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 9(a) or which becomes bound by the terms of this Agreement by
operation of law.

          (b) Executive’s Successors. The terms of this Agreement and all rights of Executive
hereunder will inure to the benefit of, and be enforceable by, Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

     10. Notices. All notices, requests, demands and other communications called for
hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered
personally, (ii) one (1) day after being sent by a well established commercial overnight service,
or (iii) four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:

	 	 	 
	

	 	If to the Company:
	 
	 	 
	

	 	Solectron Corporation

847 Gibraltar Drive

Milpitas, CA 95035
	 
	 	 
	

	 	Attn: Chairman, Executive Compensation and Management Resources Committee of the
Board of Directors
	 
	 	 
	 
	 	 
	

	 	If to Executive:
	 
	 	 
	

	 	Kiran Patel
	 
	 	 
	

	 	at the last residential address known by the Company.

     11. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue
in full force and effect without said provision.

     12. Non-Solicitation. For a period beginning on the Effective Date and ending one
year after the Executive ceases to be employed by the Company or, if longer, upon the completion of
the Severance Payment Period if Executive is entitled to severance under Section 5(a) or the Change
of Control Severance Payment Period if Executive is entitled to receive severance under Section
5(b), Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner,
director, member, consultant, agent, founder, co-venturer or otherwise, will: (i) not solicit,
induce or influence any person to leave employment with the Company; or (ii) not directly or
indirectly solicit business from any of the Company’s customers and users on behalf of any business
that directly competes with the principal business of the Company.

 

 

     13. Entire Agreement. This Agreement constitutes the entire agreement of the parties
hereto and supersedes in their entirety all prior representations, understandings, undertakings or
agreements (whether oral or written and whether expressed or implied) of the parties with respect
to the subject matter hereof. No future agreements between the Company and Executive may supersede
this Agreement, unless they are in writing and specifically mention this Section 13.

     14. Arbitration.

          (a) General. In consideration of Executive’s service to the Company, its promise to
arbitrate all employment related disputes and Executive’s receipt of the compensation, pay raises
and other benefits paid to Executive by the Company, at present and in the future, Executive agrees
that any and all controversies, claims, or disputes with anyone (including the Company and any
employee, officer, director, shareholder or benefit plan of the Company in their capacity as such
or otherwise) arising out of, relating to, or resulting from Executive’s service to the Company
under this Agreement or otherwise or the termination of Executive’s service with the Company,
including any breach of this Agreement, will be subject to binding arbitration under the
Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2,
including Section 1283.05 (the “Rules”) and pursuant to California law. Disputes which Executive
agrees to arbitrate, and thereby agrees to waive any right to a trial by jury, include any
statutory claims under state or federal law, including, but not limited to, claims under Title VII
of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the California
Fair Employment and Housing Act, the California Labor Code, claims of harassment, discrimination or
wrongful termination and any statutory claims. Executive further understands that this Agreement to
arbitrate also applies to any disputes that the Company may have with Executive.

          (b) Procedure. Executive agrees that any arbitration will be administered by the
American Arbitration Association (“AAA”) and that a neutral arbitrator will be selected in a manner
consistent with its National Rules for the Resolution of Employment Disputes. The arbitration
proceedings will allow for discovery according to the rules set forth in the National Rules for the
Resolution of Employment Disputes or California Code of Civil Procedure. Executive agrees that the
arbitrator will have the power to decide any motions brought by any party to the arbitration,
including motions for summary judgment and/or adjudication and motions to dismiss and demurrers,
prior to any arbitration hearing. Executive agrees that the arbitrator will issue a written
decision on the merits. Executive also agrees that the arbitrator will have the power to award any
remedies, including attorneys’ fees and costs, available under applicable law. Executive
understands the Company will pay for any administrative or hearing fees charged by the arbitrator
or AAA except that Executive will pay the first $125.00 of any filing fees associated with any
arbitration Executive initiates. Executive agrees that the arbitrator will administer and conduct
any arbitration in a manner consistent with the Rules and that to the extent that the AAA’s
National Rules for the Resolution of Employment Disputes conflict with the Rules, the Rules will
take precedence.

          (c) Remedy. Except as provided by the Rules, arbitration will be the sole, exclusive
and final remedy for any dispute between Executive and the Company. Accordingly, except as provided
for by the Rules, neither Executive nor the Company will be permitted to pursue court action
regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not

 

 

have the authority to disregard or refuse to enforce any lawful Company policy, and the
arbitrator will not order or require the Company to adopt a policy not otherwise required by law,
which the Company has not adopted.

          (d) Availability of Injunctive Relief. In addition to the right under the Rules to
petition the court for provisional relief, Executive agrees that any party may also petition the
court for injunctive relief where either party alleges or claims a violation of this Agreement or
the Confidentiality Agreement or any other agreement regarding trade secrets, confidential
information, nonsolicitation or Labor Code §2870. In the event either party seeks injunctive
relief, the prevailing party will be entitled to recover reasonable costs and attorneys’ fees.

          (e) Administrative Relief. Executive understands that this Agreement does not
prohibit Executive from pursuing an administrative claim with a local, state or federal
administrative body such as the Department of Fair Employment and Housing, the Equal Employment
Opportunity Commission or the workers’ compensation board. This Agreement does, however, preclude
Executive from pursuing court action regarding any such claim.

          (f) Voluntary Nature of Agreement. Executive acknowledges and agrees that Executive
is executing this Agreement voluntarily and without any duress or undue influence by the Company or
anyone else. Executive further acknowledges and agrees that Executive has carefully read this
Agreement and that Executive has asked any questions needed for Executive to understand the terms,
consequences and binding effect of this Agreement and fully understand it, including that Executive
is waiving Executive’s right to a jury trial. Finally, Executive agrees that Executive has been
provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this
Agreement.

     15. No Oral Modification, Cancellation or Discharge. This Agreement may be changed or
terminated only in writing (signed by Executive and the Company).

     16. Waiver of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in writing, will not operate as or be construed to be a waiver of any
other previous or subsequent breach of this Agreement.

     17. Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.

     18. Withholding. The Company is authorized to withhold, or cause to be withheld, from
any payment or benefit under this Agreement the full amount of any applicable withholding taxes.

     19. Governing Law. This Agreement will be governed by the laws of the State of
California (with the exception of its conflict of laws provisions).

     20. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss
this matter with and obtain advice from Executive’s private attorney, has had sufficient time to,
and has carefully read and fully understands all the provisions of this Agreement, and is knowingly
and voluntarily entering into this Agreement.

 

 

     21. Counterparts. This Agreement may be executed in counterparts, and each
counterpart will have the same force and effect as an original and will constitute an effective,
binding agreement on the part of each of the undersigned.

[Signature Page to Follow]

 

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement on the respective dates set
forth below:

	 	 	 
	EXECUTIVE
	 	 
	 
	

	 	Date:
	 
	 	 
	SOLECTRON CORPORATION

	 	

Date:exv10w4

 

EXHIBIT 10.4

AMENDMENT AGREEMENT

          This AMENDMENT AGREEMENT (this “Amendment”) is entered into as of January 13, 2005,
among SOLECTRON CORPORATION, a Delaware corporation (the “Company”), the lending
institutions party hereto (collectively, the “Lenders” and individually, a
“Lender”), and BANK OF AMERICA, N.A., as Administrative Agent.

          The Company, the L/C Issuers, the Lenders, and the Administrative Agent have entered into a
Credit Agreement dated as of August 20, 2004 (as in effect as of the date of this Amendment, the
“Credit Agreement”).

          The Company has requested that the Lenders agree to certain amendments to the Credit
Agreement, and the Lenders party hereto have agreed to such request, subject to the terms and
conditions of this Amendment.

          In consideration of the mutual covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

1. Definitions; References; Interpretation.

     (a) Unless otherwise specifically defined herein, each term used herein (including in the
Recitals hereof) which is defined in the Credit Agreement shall have the meaning assigned to such
term in the Credit Agreement.

     (b) As used herein, “Amendment Documents” means this Amendment, the Consent and
Agreement of Subsidiaries related hereto and the Credit Agreement (as amended by this Amendment).

     (c) Each reference to “this Agreement,” “hereof,” “hereunder,” “herein” and “hereby” and each
other similar reference contained in the Credit Agreement, and each reference to “the Credit
Agreement” and each other similar reference in the other Loan Documents, shall from and after the
Effective Date refer to the Credit Agreement as amended hereby.

     (d) The rules of interpretation set forth in Section 1.02 of the Credit Agreement
shall be applicable to this Amendment.

2. Amendments to Credit Agreement. Subject to the terms and conditions hereof, the Credit
Agreement is amended as follows, effective as of January 13, 2005 (the “Effective Date”):

     (a) The defined term “Consolidated EBITDA” in Section 1.01 of the Credit
Agreement shall be amended by inserting in clause (g) “or premiums or transaction costs paid in
connection with” after “losses arising from”.

     (b) The second proviso in the defined term “Restricted Junior Payment” in Section
1.01 of the Credit Agreement shall be amended and restated to read as follows:

provided further, that (for the avoidance of doubt) no Restricted
Junior Payment

 

 

shall be deemed to occur with respect to (A) the delivery of Capital Stock upon
conversion of or in exchange for any Convertible Note, (B) the ACES converting from
Subordinated Indebtedness into senior Indebtedness in accordance with their terms,
(C) any repurchase, prepayments, redemption or acquisition of the LYONs that does
not violate the terms of this Agreement, (D) any Convertible Note Cash Conversion
Settlement in respect of any Senior Convertible Notes, or any other payment,
prepayment, redemption, retirement, sinking fund or similar payment, purchase or
other acquisition of any Senior Convertible Notes, including any payment of interest
or premium thereon, other than any portion of any Convertible Note
Cash Conversion Settlement resulting from an optional election by the Company to
effect settlement of conversion in cash, or (E) any premium paid to existing holders
of Senior Convertible Notes in connection with any Exchange Offer in respect thereof

     (c) The following definitions in Section 1.01 of the Credit Agreement shall be amended
and restated in their entirety as follows:

               “Convertible Notes” means notes or other Indebtedness that are
convertible into Capital Stock of the Company or any of its Subsidiaries at the
option of the holders thereof (including any such convertible notes or other
Indebtedness providing for cash settlement in lieu of delivery of shares of Capital
Stock upon any surrender of such notes or other Indebtedness for conversion).

               “Exchange Offers” means one or more exchange offers by the Company to
the holders, or purchases from the holders, of (i) the ACES in substantially the
form described to the Administrative Agent and the Lenders in the Company’s letter
dated March 29, 2004, and (ii) the Company’s 0.5% Convertible Senior Notes due 2034
in substantially the form described to the Administrative Agent and the Lenders in
the Company’s letter dated January 6, 2005.

     (d) The following new definitions shall be inserted in Section 1.01 of the Credit
Agreement:

               “Convertible Note Cash Conversion Settlement” means any settlement in
cash received by any holder of Convertible Notes upon any surrender of its
Convertible Notes for conversion.

               “Senior Convertible Notes” means any Convertible Notes other than
Convertible Notes which constitute Subordinated Indebtedness.

     (e) The text “and” immediately preceding subsection (g) in Section 7.06 of the Credit
Agreement shall be deleted, the text “and” shall be inserted at the end of subsection (g), and a
new subsection (h) shall be added as follows:

               (h) the Company may effect any Convertible Note Cash Conversion Settlement in
respect of any Convertible Notes, if at the time of such Convertible Note Cash
Conversion Settlement and after giving effect thereto, no Default or

2

 

Event of Default shall exist or shall result from such Convertible Note Cash
Conversion Settlement

3. Representations and Warranties. The Company hereby represents and warrants to the
Administrative Agent and the Lenders as follows:

     (a) No Default or Event of Default has occurred and is continuing (or would result from the
amendment of the Credit Agreement contemplated hereby).

     (b) The execution, delivery and performance by the Company of the Amendment Documents have
been duly authorized by all necessary corporate and other action and do not and will not require
any registration with, consent or approval of, or notice to or action by, any Person (including any
Governmental Authority) in order to be effective and enforceable.

     (c) The Amendment Documents constitute the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their respective terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditor’s rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at law).

     (d) All representations and warranties of the Company contained in the Credit Agreement are
true and correct in all material respects (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and correct as of such earlier
date and except that this subsection (d) shall be deemed instead to refer to the last day of the
most recent quarter and year for which financial statements have then been delivered in respect of
the representation and warranty made in Section 5.05 of the Credit Agreement and to take
into account any amendments to the Schedules to the Credit Agreement and other disclosures made in
writing by the Company to the Administrative Agent and the Lenders after the Closing Date and
approved by the Administrative Agent and the Required Lenders).

     (e) There has occurred since August 20, 2004, no event or circumstance that has resulted or
could reasonably be expected to result in a Material Adverse Effect.

     (f) The Company is entering into this Amendment on the basis of its own investigation and for
its own reasons, without reliance upon the Administrative Agent and the Lenders or any other
Person.

     (g) The Company’s obligations under the Credit Agreement and under the other Loan Documents
are not subject to any defense, counterclaim, set-off, right of recoupment, abatement or other
claim.

4. Conditions of Effectiveness.

     (a) The effectiveness of Section 2 of this Amendment shall be subject to the
satisfaction of each of the following conditions precedent:

3

 

          (1) The Administrative Agent shall have received from the Company and the Required Lenders a
duly executed original (or, if elected by the Administrative Agent, an executed facsimile copy) of
this Amendment.

          (2) The Administrative Agent shall have received the consent of the Subsidiaries of the
Company party to the Pledge Agreement, the Interco Subordination Agreement, the Security Agreement
and the Subsidiary Guaranty, in form and substance satisfactory to the Administrative Agent, in
their capacities as such, to the execution and delivery hereof by the Company.

          (3) The Administrative Agent shall have received evidence of payment by the Company of all
fees, costs and expenses due and payable as of the date hereof hereunder and under the Credit
Agreement, including any costs and expenses payable under Section 5(g) of this Amendment
(including the reasonable fees, charges and disbursements of counsel for the Administrative Agent,
to the extent invoiced on or prior to the date hereof).

          (4) The Administrative Agent shall have received from the Company, in form and substance
satisfactory to the Administrative Agent, copies of the resolutions passed by the board of
directors of the Company, certified as of the date hereof by the Secretary or an Assistant
Secretary of the Company, authorizing the execution, delivery and performance of this Amendment,
together with such incumbency certificates and/or other certificates of Responsible Officers of the
Company, as the Administrative Agent may require to establish the identities of and verify the
authority and capacity of each Responsible Officer thereof authorized to act as such in connection
with this Amendment and each other Loan Document to which the Company is a party.

          (5) The Administrative Agent shall have received all other documents it or the Required
Lenders may reasonably request relating to any matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent.

     (b) For purposes of determining compliance with the conditions specified in Section
4(a), each Lender that has executed this Amendment shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document or other matter either sent, or made
available for inspection, by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable
or satisfactory to such Lender.

     (c) From and after the Effective Date, the Credit Agreement is amended as set forth herein.
Except as expressly amended pursuant hereto, the Credit Agreement shall remain unchanged and in
full force and effect and is hereby ratified and confirmed in all respects.

     (d) The Administrative Agent will notify the Company and the Lenders of the satisfaction of
the conditions precedent in this Section 4.

5. Miscellaneous.

4

 

     (a) The Company acknowledges and agrees that the execution and delivery by the Administrative
Agent and the Lenders of this Amendment shall not be deemed to create a course of dealing or an
obligation to execute similar waivers or amendments under the same or similar circumstances in the
future.

     (b) This Amendment shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns permitted by the Credit Agreement.

     (c) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

     (d) This Amendment may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Amendment and the other Amendment Documents
constitute the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4, this Amendment shall become
effective when it shall have been executed by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. Delivery of an executed counterpart of a signature page of this
Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this
Amendment.

     (e) This Amendment may not be amended except in accordance with the provisions of Section
10.01 of the Credit Agreement.

     (f) If any provision of this Amendment or the other Amendment Documents is held to be illegal,
invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions
of this Amendment and the other Amendment Documents and Loan Documents shall not be affected or
impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable provisions. The
invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

     (g) The Company agrees to pay or reimburse all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent), in connection with the preparation,
negotiation, execution, delivery and administration of this Amendment and the other Amendment
Documents Agreement or any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be consummated).

     (h) This Amendment shall constitute a Loan Document.

[Signature pages follow]

5

 

[Intentionally Omitted]

S-1

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