What is the primary reason for the amendments to Flextronics' deferred compensation plans?

The primary reason for the amendments is to ensure compliance with Section 409A of the Internal Revenue Code, which governs nonqualified deferred compensation plans. These changes are necessary to maintain the tax-deferred status of the compensation for eligible executives.

Who are the key executives affected by these changes?

The key executives affected are Michael McNamara (Chief Operating Officer, soon to be Chief Executive Officer), Thomas J. Smach (Chief Financial Officer), and Michael Marks (Chief Executive Officer). Mr. McNamara and Mr. Smach are eligible for the Senior Executive Deferred Compensation Plan, while Mr. Marks is eligible for the Special Deferred Compensation Plan.

What are the new base salaries for Michael McNamara and Thomas J. Smach?

Effective January 1, 2006, Michael McNamara's annual base salary will be $1,000,000, and Thomas J. Smach's annual base salary will be $650,000. These adjustments reflect his upcoming role as CEO and compensation reviews.

Does this filing indicate any changes in the company's financial performance?

This filing does not directly report on the company's financial performance. It focuses on executive compensation and compliance with tax regulations regarding deferred compensation plans. However, the adjustments in executive salaries are stated to be based on performance and market data.

FLEX 8-K: Material Agreements

Summary

This Form 8-K filing by Flextronics International Ltd. (FLEX) on December 23, 2005, primarily details amendments to the company's deferred compensation plans to comply with Section 409A of the Internal Revenue Code. The amendments affect the 2005 Senior Executive Deferred Compensation Plan, with eligible participants including Michael McNamara (COO) and Thomas J. Smach (CFO), and the Special Deferred Compensation Plan, with Michael Marks (CEO) as the sole eligible participant. These changes are crucial for maintaining the tax-deferred status of executive compensation, impacting the overall compensation structure for key management personnel. Additionally, the filing announces the approved annual base salaries for two key executives, effective January 1, 2006. Michael McNamara, who is set to transition to CEO, will see his base salary increase to $1,000,000. Thomas J. Smach, the CFO, will have his base salary set at $650,000. This information is significant for investors as it reflects adjustments in executive compensation in anticipation of leadership changes and in alignment with performance and market data.

Key Highlights

1Flextronics International Ltd. amended its Senior Executive Deferred Compensation Plan and Special Deferred Compensation Plan on December 22, 2005, to comply with IRS Section 409A requirements.
2The amendments are designed to ensure the tax-deferred status of compensation for eligible executives.
3Michael McNamara (COO) and Thomas J. Smach (CFO) are eligible participants in the Amended and Restated 2005 Senior Executive Deferred Compensation Plan.
4Michael Marks (CEO) is the sole eligible participant in the Amended and Restated Special Deferred Compensation Plan.
5Effective January 1, 2006, Michael McNamara's annual base salary will increase to $1,000,000 as he assumes the role of CEO.
6Effective January 1, 2006, Thomas J. Smach's (CFO) annual base salary will be set at $650,000.
7The base salary adjustments were made after a review of performance and competitive market data.

FLEX LTD. 8-K Report, Material Agreement (Dec 23, 2005)

Summary

Key Highlights

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