FLEXTRONICS INTERNATIONAL LTD. NOTICE OF GRANT OF STOCK OPTION 2002 INTERIM INCENTIVE PLAN
Exhibit (d)(11)
NO.
NOTICE OF GRANT OF STOCK OPTION
2002 INTERIM INCENTIVE PLAN
2002 INTERIM INCENTIVE PLAN
This Notice of Grant of Stock Option (the “Notice”) is made and entered into as of the date of
grant set forth below (the “Date of Grant”) by and between Flextronics International Ltd., a
Singapore corporation (the “Company”), and the participant named below (the “Participant”).
Capitalized terms not defined herein shall have the meaning ascribed to them in the Company’s 2002
Interim Incentive Plan (the “Plan”) and Share Option Agreement.
Participant:
Total Option Shares:
Exercise Price Per Share:
Date of Grant:
First Vesting Date:
Expiration Date:
Type of Stock Option:
Exercisability:
| Vesting Schedule: | Provided Participant continues to provide services to the Company or to any Parent or Subsidiary of the Company, the shares issuable upon exercise of this Option will become vested with respect to twenty-five percent (25%) of the Total Option Shares on the First Vesting Date set forth above and thereafter on the same date of each succeeding month after the First Vesting Date with respect to the balance of the Total Option Shares in a series of XX equal and successive monthly installments until vested with respect to one hundred percent (100%) of the Total Option Shares. |
Participant understands and agrees that this Option is granted subject to and in accordance
with the express terms and conditions of the Plan. Participant further agrees to be bound by the
terms and conditions of the Plan and the terms and conditions of the Share Option Agreement
referred to as the 2002 Interim Incentive Plan. Participant also acknowledges receipt of a
copy of the official Plan referred to as the 2002 Interim Incentive Plan. The 2002
Interim Incentive Plan is available on the Corporate website at
xxxx://xxxx.xxx.xxxxxxxxxxx.xxx/xxxxxxx/xxxxxxxxx.xxx and Participant hereby agrees that
said Plan is deemed delivered to the Participant. The Plan is also available at the offices of the
Company.
| FLEXTRONICS INTERNATIONAL LTD. | ||||
| By: | ||||
| Title: | ||||
| PARTICIPANT SIGNATURE | DATE | |||
1. Grant of Option. Flextronics International Ltd. (the “Company”) hereby grants to
Participant an option (this “Option”) to purchase the total number of shares of Ordinary Shares of
the Company set forth in the Notice of Grant of Stock Option (the “Notice”) as Total Option Shares
(the “Shares”) at the Exercise Price Per Share set forth in the Notice (the “Exercise Price”),
subject to all of the terms and conditions of this Agreement, the Notice and the 2002 Interim
Incentive Plan (the “Plan”). Capitalized terms not defined herein shall have the meaning ascribed
to them in the Plan.
2. Vesting; Exercise Period.
2.1 Vesting of Right to Exercise Option. This Option shall be exercisable as
indicated in the Notice. Subject to the terms and conditions of the Plan, the Notice and this
Agreement, this Option shall vest and become exercisable as to portions of the Shares pursuant to
the Vesting Schedule specified in the Notice. If application of the vesting percentage causes a
fractional share, such share shall be rounded down to the nearest whole share for each month except
for the last month in such vesting period, at the end of which last month this Option shall become
vested for the full remainder of the Shares. This Option shall cease to vest upon Participant’s
Termination and Participant shall in no event be entitled under this Option to purchase a number of
shares of the Company’s Common Stock greater than the Total Option Shares as set forth in the
Notice.
2.2 Expiration. This Option shall expire on the Expiration Date set forth in the
Notice and must be exercised, if at all, on or before the earlier of the Expiration Date or the
date on which this Option is earlier terminated in accordance with the provisions of Section 3.
Provided that, in the event that this Option is assigned with respect to any Shares to a financial
institution in accordance with Section 6, then the Option insofar as it relates to the Shares so
assigned shall expire at the close of business on the third trading day after the date of such
assignment.
3. Termination.
3.1 Termination for Any Reason Except Death, Disability or Cause. If Participant is
Terminated for any reason except Participant’s death, Disability or Cause, then this Option, to the
extent (and only to the extent) that it is vested in accordance with the schedule set forth in the
Notice on the Termination Date, may be exercised by the Participant no later than three (3) months
after the Termination Date, but in any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If Participant is Terminated because
of death or Disability of Participant (or the Participant dies within three (3) months after
Termination other than for Cause or because of Disability), then this Option, to the extent that it
is vested in accordance with the schedule set forth in the Notice on the Termination Date, may be
exercised by Participant (or Participant’s legal representative or authorized assignee) no later
than twelve (12) months after the Termination Date, but in any event no later than the Expiration
Date.
3.3 Termination for Cause. If Participant is Terminated for Cause, this Option will
expire on the Participant’s Termination Date.
3.4 No Obligation to Employ. Nothing in the Plan or this Agreement shall confer on
Participant any right to continue in the employ of, or other relationship with, the Company or any
Parent or Subsidiary of the Company, or limit in any way the right of the Company or any Parent or
Subsidiary of the Company to terminate Participant’s employment or other relationship at any time,
with or without cause.
4. Manner of Exercise.
4.1 Share Option Exercise Agreement. To exercise this Option, Participant (or any
assignee of Participant permitted under this Option, or in the case of exercise after Participant’s
death, Participant’s
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed share option exercise agreement in the form attached hereto as
Exhibit A, or in such other form as may be approved by the Company from time to time (the
“Exercise Agreement”), which shall set forth, inter alia, Participant’s election to
exercise this Option, the number of Shares being purchased, any restrictions imposed on the Shares
and any representations, warranties and agreements regarding Participant’s investment intent and
access to information as may be required by the Company to comply with applicable securities laws.
If someone other than Participant exercises this Option, then such person must submit documentation
reasonably acceptable to the Company that such person has the right to exercise this Option.
4.2 Limitations on Exercise. This Option may not be exercised unless such exercise is
in compliance with all applicable federal and state securities laws, as they are in effect on the
date of exercise. This Option may not be exercised as to fewer than 100 Shares unless it is
exercised as to all Shares as to which this Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the Shares being purchased in cash (by check), or where permitted by law:
| (a) | by cancellation of indebtedness of the Company to the Participant; | ||
| (b) | by waiver of compensation due or accrued to Participant for services rendered; | ||
| (c) | provided that a public market for the Company’s stock exists: (1) through a “same day sale” commitment from Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby Participant irrevocably elects to exercise this 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 (2) through a “margin” commitment from Participant and an NASD Dealer whereby Participant irrevocably elects to exercise this 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; or | ||
| (d) | by any combination of the foregoing. |
4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise of this
Option, Participant must pay or provide for any applicable federal or state withholding obligations
of the Company. If the Committee permits, and subject to compliance with all applicable laws and
regulations, Participant may provide for payment of withholding taxes upon exercise of this Option
by requesting that the Company withhold from the Shares to be issued that number of Shares with a
Fair Market Value equal to the minimum amount of taxes required to be withheld. In such case, the
Company shall only issue the net number of Shares to the Participant by deducting the Shares
withheld from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement and payment are in form
and substance satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Participant, Participant’s authorized assignee, or Participant’s legal
representative, and shall deliver certificates representing the Shares with the appropriate legends
affixed thereto.
5. Compliance with Laws and Regulations. The exercise of this Option and the issuance
and allotment of Shares shall be subject to compliance by the Company and Participant with all
applicable requirements of federal and state securities laws and with all applicable requirements
of any stock exchange on which the Company’s Shares may be listed at the time of such issuance or
allotment. Participant understands that the Company is under no obligation to register or qualify
the Shares with the Securities and Exchange Commission, any state securities commission or any
stock exchange to effect such compliance.
6. Nontransferability of Option. Except as set forth in Section 9.1 of the Plan, this
Option may not be transferred in any manner other than by will or by the laws of descent and
distribution and may be exercised during the lifetime of Participant only by Participant. In the
event that the Participant assigns this Option
(but only with respect to the Shares for which the
Option is then exercisable pursuant to Section 2.1) to a financial institution outside the United
States and Singapore approved by the Company, the Participant shall upon such assignment deliver to
the Company a Notice of Assignment in the form of Exhibit B hereto, upon receipt of which
the Company may issue to the Participant a letter confirming the balance number (if any) of the
Shares comprised in this Option following such assignment. The terms of this Option shall be
binding upon the executors, administrators, successors and assigns of Participant.
7. Tax Consequences. Set forth below is a brief summary as of the Effective Date of
the Plan of some of the federal and California tax consequences of exercise of the Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE
OPTION OR DISPOSING OF THE SHARES.
7.1 Exercise of Nonqualified Share Option. If the Option does not qualify as an ISO,
there may be a regular federal and California income tax liability upon the exercise of the
Option. Participant will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. If Participant is a current or former employee of the
Company, the Company may be required to withhold from Participant’s compensation or collect from
Participant and pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
7.2 Disposition of Shares. The following tax consequences may apply upon disposition
of the Shares.
(a) Nonqualified Share Options. If the Shares are held for more than twelve (12)
months after the date of the transfer of the Shares pursuant to the exercise of an NQSO, any gain
realized on disposition of the Shares will be treated as long-term capital gain.
(b) Withholding. The Company may be required to withhold from the Participant’s
compensation or collect from the Participant and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income.
8. Privileges of Share Ownership. Participant shall not have any of the rights of a
shareholder with respect to any Shares until Participant exercises this Option and pays the
Exercise Price.
9. Interpretation. Any dispute regarding the interpretation of this Agreement shall
be submitted by Participant or the Company to the Committee for review. The resolution of such a
dispute by the Committee shall be final and binding on the Company and Participant.
10. Entire Agreement. The Plan is incorporated herein by reference. This Agreement,
the Notice, the Plan and the Exercise Agreement constitute the entire agreement and understanding
of the parties hereto with respect to the subject matter hereof and supersede all prior
understandings and agreements with respect to such subject matter.
11. Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Corporate Treasurer of the Company
at its principal corporate offices at 0000 Xxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 00000. Any notice
required to be given or delivered to Participant shall be in writing and addressed to Participant
at the address indicated above or to such other address as such party may designate in writing from
time to time to the Company. All notices shall be deemed to have been given or delivered upon:
personal delivery; three (3) days after deposit in the United States mail by certified or
registered mail
(return receipt requested); one (1) business day after deposit with any return receipt express
courier (prepaid); or one (1) business day after transmission by rapifax or telecopier.
12. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement
shall be binding upon Participant and Participant’s heirs, executors, administrators, legal
representatives, successors and assigns.
13. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
14. Acceptance. Participant hereby acknowledges receipt of a copy of the Plan and
this Agreement. Participant has read and understands the terms and provisions thereof, and accepts
this Option subject to all the terms and conditions of the Plan and this Agreement. Participant
acknowledges that there may be adverse tax consequences upon exercise of this Option or disposition
of the Shares and that the Company has advised Participant to consult a tax advisor prior to such
exercise or disposition.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in duplicate by its
duly authorized representative and Participant has executed this Agreement in duplicate as of the
Date of Grant.
| FLEXTRONICS INTERNATIONAL LTD. | PARTICIPANT | |||||||
By: |
||||||||
| (Signature) | ||||||||
| (Please print name) | (Please print name) | |||||||
| (Please print title) | ||||||||
Exhibit A
FLEXTRONICS INTERNATIONAL LTD.
2002 INTERIM INCENTIVE PLAN (the “Plan”)
SHARE OPTION EXERCISE AGREEMENT
2002 INTERIM INCENTIVE PLAN (the “Plan”)
SHARE OPTION EXERCISE AGREEMENT
I hereby elect to purchase the number of Ordinary Shares of Flextronics International Ltd. (the
“Company”) as set forth below:
Participant (and/or assignee):
|
Number of Shares Purchased: | |
Social Security Number:
|
Purchase Price per Share: | |
Address:
|
Aggregate Purchase Price: | |
| Date of Option Agreement: | ||
Type of Option: Nonqualified Option
|
Exact Name of Title to Shares: | |
1. Delivery of Purchase Price. Participant (and/or assignee) hereby delivers to the Company the
Aggregate Purchase Price, to the extent permitted in the Notice of Grant of Stock Option (the
“Notice”) and the Share Option Agreement (the “Option Agreement”), as follows (check as applicable
and complete):
o
|
in cash (by check) in the amount of $ , receipt of which is acknowledged by the Company; | |
o
|
by cancellation of indebtedness of the Company to Participant in the amount of $ ; | |
o
|
by the waiver hereby of compensation due or accrued to Participant for
services rendered in the amount of $ ; |
|
o
|
through a “same-day-sale” commitment, delivered herewith, from Participant and the NASD Dealer named therein, in the amount of $ ; or | |
o
|
through a “margin” commitment, delivered herewith from Participant and the NASD Dealer named therein, in the amount of $ . |
2. Market Standoff Agreement. Participant (and/or assignee), if requested by the Company and an
underwriter of Ordinary Shares (or other securities) of the Company, agrees not to sell or
otherwise transfer or dispose of any Ordinary Shares (or other securities) of the Company held by
Participant (and/or assignee) during the period requested by the managing underwriter following the
effective date of a registration statement of the Company filed under the Securities Act, provided
that all officers and directors of the Company are required to enter into similar agreements. Such
agreement shall be in writing in a form satisfactory to the Company and such underwriter. The
Company may impose stop-transfer instructions with respect to the Ordinary Shares (or other
securities) subject to the foregoing restriction until the end of such period.
3. Tax Consequences. PARTICIPANT UNDERSTANDS THAT PARTICIPANT (AND/OR ASSIGNEE) MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF PARTICIPANT’S (AND/OR ASSIGNEE’S) PURCHASE OR DISPOSITION OF THE
ORDINARY SHARES. PARTICIPANT (AND/OR ASSIGNEE) REPRESENTS THAT PARTICIPANT (AND/OR ASSIGNEE) HAS
CONSULTED WITH ANY TAX CONSULTANT(S) PARTICIPANT (AND/OR ASSIGNEE) DEEMS ADVISABLE IN CONNECTION
WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND THAT PARTICIPANT (AND/OR ASSIGNEE) IS NOT
RELYING ON THE COMPANY FOR ANY TAX ADVICE.
4. Entire Agreement. The Plan, the Notice and the Option Agreement are incorporated herein by
reference. This Exercise Agreement, the Plan, the Notice and the Option Agreement constitute the
entire agreement and understanding of the parties and supersede in their entirety all prior
understandings and agreements of the Company and Participant with respect to the subject matter
hereof, and are governed by California law except for that body of law pertaining to choice of law
or conflict of law.
Date: |
||||||
| Signature of Participant (and/or assignee) |
EXHIBIT B
NOTICE OF ASSIGNMENT
(To be signed Only Upon Assignment of Option)
(To be signed Only Upon Assignment of Option)
The undersigned, the holder of an option (the “Option”) to purchase an aggregate of
ordinary shares of S$0.01 each (“Option Shares”) in the capital of Flextronics
International Ltd. (the “Company”) pursuant to a Share Option Agreement dated and
entered into between the undersigned and the Company, hereby gives the Company notice that the
undersigned has by an assignment dated (the “Assignment”) assigned absolutely to
of (the “Assignee”), the option to subscribe for an aggregate
of Option Shares comprised in the Option (the “Assigned Option”).
The undersigned hereby certifies that, unless the Assignment is being effected pursuant to an
effective registration statement under the Securities Act, it is being effected in accordance with
Rule 904 or Rule 144 under the Securities Act and with all applicable securities laws of the states
of the United States and other jurisdictions. Accordingly, the undersigned hereby further
certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in accordance
with Rule 904:
(A) the undersigned is not a distributor of the Assigned Option, an affiliate of the Company
or any such distributor or a person acting on behalf of any of the foregoing;
(B) the Assignment is not made to a person in the United States;
(C) at the time the buy order was originated, the Assignee was outside the United States or
the undersigned and any person acting on his or her behalf reasonably believed that the Assignee
was outside the United States;
(D) no directed selling efforts in contravention of Rule 904(a)(2) have been made in the
United States by or on behalf of the undersigned or any affiliate thereof;
(E) if the undersigned is a dealer in securities or has received a selling concession, fee or
other remuneration in respect of the Assignment, and the transfer is to occur during the first year
after the Assignment, then the requirements of Rule 904(b)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme to evade the registration requirements of
the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant to Rule 144, the
transfer is occurring:
(A) after a holding period of at least one year (computed in accordance with paragraph (d) of
Rule 144) has elapsed since the Assigned Option was last acquired from the Company or from an
affiliate of the Company, whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of Rule 144; or
(B) after a holding period of at least two years has elapsed since the Assigned Option was
last acquired from the Company or from an affiliate of the Company, whichever is later, and the
undersigned is not, and during the preceding three months has not been, an affiliate of the Issuer.
Please check one (1) of the following:
| o | The transfer is being effected in accordance with Rule 904 (Regulation S under the Securities Act). | ||
| o | The transfer is being effected pursuant to Rule 144. |
Dated:
Signature |
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