| Wisconsin | 39-1344447 | |
| (State of Incorporation) | (IRS Employer Identification No.) |
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(in thousands, except per share data)
Unaudited
Three Months Ended
January 2,
January 3,
2010
2009
$
430,399
$
456,109
385,858
409,559
44,541
46,550
24,319
25,269
-
550
24,319
25,819
20,222
20,731
(2,559
)
(2,930
)
456
931
(95
)
198
18,024
18,930
180
1,892
$
17,844
$
17,038
$
0.45
$
0.43
$
0.44
$
0.43
39,587
39,337
40,252
39,472
$
17,844
$
17,038
699
(4,518
)
(255
)
(4,050
)
$
18,288
$
8,470
Table of Contents
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
Unaudited
Table of Contents
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited
Three Months Ended
January 2,
January 3,
2010
2009
$
17,844
$
17,038
9,054
8,101
(5
)
10
(1,029
)
(930
)
1,839
2,810
(40,531
)
26,253
(50,253
)
(7,688
)
(1,507
)
925
52,160
11,005
(2,374
)
2,129
4,537
(10,300
)
(10,265
)
49,353
(12,315
)
(23,494
)
11
66
(12,304
)
(23,428
)
(4,194
)
(7,888
)
1,870
480
175
11
(2,149
)
(7,397
)
267
(6,107
)
(24,451
)
12,421
258,382
165,970
$
233,931
$
178,391
Table of Contents
FOR THE THREE MONTHS ENDED JANUARY 2, 2010 AND JANUARY 3, 2009
UNAUDITED
Table of Contents
January 2,
October 3,
2010
2009
$
276,884
$
237,717
35,073
29,399
60,796
55,236
$
372,753
$
322,352
January 2,
October 3,
2010
2009
$
121,019
$
120,505
227,733
220,402
73,551
72,782
20,050
11,727
442,353
425,416
(236,510
)
(227,947
)
$
205,843
$
197,469
Table of Contents
Table of Contents
Table of Contents
The Effect of Derivative Instruments on the Statements of Operations
for the Three Months Ended
In thousands of dollars
Amount of Gain or
Location of Gain or
Amount of Gain or (Loss)
(Loss) Recognized in
Location of Gain or
Amount of Gain or
(Loss) Recognized in
Recognized in Income on
Other Comprehensive
(Loss) Reclassified from
(Loss) Reclassified from
Income on Derivative
Derivative (Ineffective
Derivatives in Cash
Income (“OCI”) on
Accumulated OCI into
Accumulated OCI into
(Ineffective Portion and
Portion and Amount
Flow Hedging
Derivative (Effective
Income (Effective
Income (Effective
Amount Excluded from
Excluded from
Relationships
Portion)
Portion)
Portion)
Effectiveness Testing)
Effectiveness Testing)
January 2,
January 3,
January 2,
January 3,
January 2,
January 3,
2010
2009
2010
2009
2010
2009
$
47
$
-
Interest income (expense)
$
(1,296)
$
-
Other income (expense)
$
-
$
-
$
316
$
-
Selling and administrative expenses
$
157
$
-
Other income (expense)
$
-
$
-
Table of Contents
Fair
Value Measurements Using Input Levels: (in thousands)
Level 1
Level 2
Level 3
Total
$
-
$
7,982
$
-
$
7,982
$
-
$
689
$
-
$
689
Table of Contents
Three Months Ended
January 2,
January 3,
2010
2009
$
17,844
$
17,038
39,587
39,337
665
135
40,252
39,472
$
0.45
$
0.43
$
0.44
$
0.43
Table of Contents
Three Months Ended
January 2,
January 3,
2010
2009
$
258,849
$
294,702
193,126
160,071
13,863
12,608
18,595
21,752
(54,034
)
(33,024
)
$
430,399
$
456,109
$
2,663
$
2,456
4,378
3,610
222
192
571
559
1,220
1,284
$
9,054
$
8,101
$
20,576
$
21,733
23,306
18,187
(1,187
)
1,017
(1,073
)
(722
)
(21,400
)
(19,484
)
$
20,222
$
20,731
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Three Months Ended
January 2,
January 3,
2010
2009
$
2,994
$
5,089
5,010
8,403
194
194
580
411
3,537
9,397
$
12,315
$
23,494
January 2,
October 3,
2010
2009
$
392,471
$
346,272
426,065
370,247
82,816
86,024
47,020
45,699
150,619
174,430
$
1,098,991
$
1,022,672
Three Months Ended
January 2,
January 3,
2010
2009
$
258,849
$
294,702
170,150
135,285
22,976
24,786
13,782
12,608
18,595
21,752
81
-
(54,034
)
(33,024
)
$
430,399
$
456,109
January 2,
October 3,
2010
2009
$
59,362
$
51,811
74,167
72,325
15,577
14,266
7,102
5,989
6,951
6,940
4,416
5,760
38,268
40,378
$
205,843
$
197,469
Table of Contents
Three Months Ended
January 2,
January 3,
2010
2009
17
%
18
%
$
4,052
507
(89
)
4,470
267
(13
)
$
4,724
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Employee
Lease
Termination
Obligations and
Non-cash
and Severance
Other Exit
Asset
Costs
Costs
Impairments
Total
$
2,038
$
-
$
-
$
2,038
2,196
876
5,748
8,820
(249
)
-
-
(249
)
(3,941
)
(790
)
(5,748
)
(10,479
)
44
86
-
130
(44
)
(86
)
-
(130
)
$
-
$
-
$
-
$
-
Table of Contents
Table of Contents
•
the economic performance of the industries, sectors and customers we serve
•
the risk of customer delays, changes, cancellations or forecast inaccuracies in both
ongoing and new programs
•
the poor visibility of future orders, particularly in view of current economic
conditions
•
the effects of the volume of revenue from certain sectors or programs on our margins
in particular periods
•
our ability to secure new customers, maintain our current customer base and deliver
product on a timely basis
•
the risk that our revenue and/or profits associated with customers who have recently
been acquired by third parties will be negatively affected
•
the risks relative to new customers, which risks include customer delays, start-up costs,
potential inability to execute, the establishment of appropriate terms of agreements
and the lack of a track record of order volume and timing. These risks exist with any significant new customer program and include our recently announced arrangements with The Coca-Cola Company.
•
the risks of concentration of work for certain customers
•
our ability to manage successfully a complex business model
•
the risk that new program wins and/or customer demand may not result in the expected
revenue or profitability
•
the fact that customer orders may not lead to long-term relationships
•
the weakness of the global economy and the continuing instability of the global
financial markets and banking systems, including the potential inability on our part or
that of our customers or suppliers to access cash investments and credit facilities
•
material cost fluctuations and the adequate availability of components and related
parts for production, particularly due to sudden increases in customer demand
•
the effect of changes in the pricing and margins of products
•
the risk that inventory purchased on behalf of our customers may not be consumed or
otherwise paid for by customers, resulting in an inventory write-off
•
the effect of start-up costs of new programs and facilities, including our recent
and planned expansions, such as our new facilities in Hangzhou, China and Oradea,
Romania
•
the adequacy of restructuring and similar charges as compared to actual expenses
•
the risk of unanticipated costs, unpaid duties and penalties related to an ongoing
audit of our import compliance by U.S. Customs and Border Protection
•
possible unexpected costs and operating disruption in transitioning programs
•
the potential effect of world or local events or other events outside our control
(such as epidemics, drug cartel-related violence in Juarez, Mexico, changes in oil
prices, terrorism and war in the Middle East)
•
the impact of increased competition and
•
other risks detailed herein, as well as in our Securities and Exchange Commission
filings (particularly in Part I, Item 1A of our annual report on Form 10-K for the year
ended October 3, 2009).
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Table of Contents
Three Months Ended
January 2,
January 3,
2010
2009
$
258.9
$
294.7
193.1
160.1
13.9
12.6
18.6
21.7
(54.1
)
(33.0
)
$
430.4
$
456.1
Three Months Ended
January 2,
January 3,
2010
2009
$
20.6
$
21.7
23.3
18.2
(1.2
)
1.0
(1.1
)
(0.7
)
(21.4
)
(19.5
)
$
20.2
$
20.7
•
United States: Net sales for the current year period decreased primarily due to reduced
demand from our largest customer, Juniper Networks, Inc. (“Juniper”), and a defense
customer, partially offset by demand from a customer in the wireless infrastructure sector.
Net sales to Juniper decreased over the prior year period due to the transfer of
manufacturing of some products to our Asia reportable segment and as a result of decreased
demand from their end-market. In addition, our net sales to a defense customer decreased
over the prior year period due to the inability of that customer to secure additional
orders for the product we formerly manufactured. Operating income for the current year
period decreased primarily as a result of lower revenues from the customers noted above and
changes in customer mix, particularly related to the defense customer, offset by proceeds
received from a litigation settlement.
•
Asia: Net sales growth for the current year period reflected increased net sales from
the transfer of manufacturing of some Juniper products from the United States reportable
segment to the Asia reportable segment, as well as increased demand from a customer in the
wireless/infrastructure sector. Operating income in the current year period improved as a
result of the net sales growth.
•
Europe: Net sales in the current year period increased due primarily to increased
demand from a customer program in the industrial/commercial sector, offset by reduced
demand from a medical sector customer. The operating loss in the current year period, as
compared to operating income in the prior year period, resulted from changes in customer
mix.
•
Mexico: Net sales for the current year period decreased due primarily to decreased
demand from a customer in the industrial/commercial sector, as well as the cessation of two
customer programs, partially offset by demand from a new customer program in the
industrial/commercial sector. Operating loss for the current year period increased
slightly due to reduced net sales volume in the current year period.
Table of Contents
Three months ended
January 2,
January 3,
Increase /
2010
2009
(Decrease)
$
430.4
$
456.1
$
(25.7
)
(5.6
)%
Three months ended
January 2,
January 3,
Market Sector
2010
2009
47
%
44
%
11
%
10
%
18
%
24
%
15
%
13
%
9
%
9
%
Three months ended
January 2,
January 3,
2010
2009
17
%
18
%
62
%
61
%
Table of Contents
Three months ended
January 2,
January 3,
Increase/
2010
2009
(Decrease)
$
44.5
$
46.6
$
(2.1
)
(4.5
)%
10.3
%
10.2
%
•
decreased net sales in the medical and defense/security/aerospace sectors
•
unfavorable changes in customer mix, particularly related to our unnamed defense
customer
•
increased fixed expenses, primarily in the United States reportable segment
•
offset, in part, by proceeds received from a litigation settlement.
Three months ended
January 2,
January 3,
Increase/
2010
2009
(Decrease)
$
24.3
$
25.3
$
(1.0
)
(4.0
)%
5.7
%
5.5
%
Table of Contents
Three months ended
January 2,
January 3,
2010
2009
$
0.2
$
1.9
1
%
10
%
Table of Contents
Table of Contents
Payments Due by Fiscal Period
2015 and
Contractual Obligations
Total
2010
2011-2012
2013-2014
thereafter
$
123.8
$
11.3
$
30.0
$
82.5
$
-
30.3
7.6
7.4
7.7
7.6
40.9
7.5
15.3
11.8
6.3
312.3
309.2
3.1
-
-
8.8
1.0
1.6
1.8
4.4
2.5
0.7
1.8
-
-
$
518.6
$
337.3
$
59.2
$
103.8
$
18.3
Table of Contents
Three months ended
January 2,
January 3,
2010
2009
4
%
3
%
12
%
10
%
Table of Contents
Table of Contents
29
Amended and Restated Plexus Corp. 2008 Long-Term Incentive Plan. *
Form of Plexus Corp. Non-Qualified Stock Option Agreement. *
Form of Plexus Corp. Unrestricted Stock Award. **
Plexus Corp. Non-Employee Directors Deferred Compensation Plan. ***
Certification of Chief Executive Officer pursuant to Section 302(a) of the
Sarbanes Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to section 302(a) of the
Sarbanes Oxley Act of 2002.
Certification of the CEO pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of the CFO pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
Reflects non-material changes that were finalized in January 2010.
**
Form of award consistent with the 2008 Long-Term Incentive Plan.
***
Memorialization of current policy filed for reference. Not deemed to be a material change from
current procedures.
Table of Contents
30
Plexus Corp.
Registrant
/s/ Dean A. Foate
Dean A. Foate
President and Chief Executive Officer
/s/ Ginger M. Jones
Ginger M. Jones
Vice President and Chief Financial Officer
| (a) | Purposes . The purposes of the 2008 Long-Term Incentive Plan are to provide a means to attract and retain talented personnel and to provide to participating directors, officers and other key employees long-term incentives for high levels of performance and for successful efforts to improve the financial performance of the corporation. These purposes may be achieved through the grant of options to purchase Common Stock of Plexus Corp., the grant of Stock Appreciation Rights, the grant of Restricted Stock, the grant of Performance Stock Awards, the grant of Unrestricted Stock Awards and the grant of Cash Bonus Awards, as described below. | ||
| (b) | Effect on Prior Plans . If the 2008 Plan is approved by shareholders, the Plexus Corp. 2005 Equity Incentive Plan (the “2005 Plan”) will only be used to make grants to employees covered by the approved sub-plan for United Kingdom employees which has been established under the 2005 Plan. If and when a sub-plan for United Kingdom employees under the 2008 Plan is approved, no further awards will be granted under the Plexus Corp. 2005 Plan. Awards granted previously under the 2005 Plan will remain in effect until they have been exercised or have expired. The awards shall be administered in accordance with their terms and the 2005 Plan. |
| (a) | “1934 Act” means the Securities Exchange Act of 1934, as it may be amended from time to time. | ||
| (b) | “Award” means an Incentive Stock Option, Non-Qualified Stock Option, Stock Appreciation Right, Restricted Stock grant, Performance Stock Award, Unrestricted Stock Award or Cash Bonus Award, as appropriate. | ||
| (c) | “Award Agreement” means the agreement between the Corporation and the Grantee specifying the terms and conditions as described thereunder. | ||
| (d) | “Board” means the Board of Directors of Plexus Corp. | ||
| (e) | “Cash Bonus Award” means a cash bonus award under Article 16 of the Plan. | ||
| (f) | “Cause” means a violation of the Corporation’s Code of Conduct and Business Ethics, or substantial and continued failure of the employee to perform, which results in, or was intended to result in (i) demonstrable injury to the Corporation, monetary or otherwise or (ii) gain to, or enrichment of, the Grantee at the Corporation’s expense. | ||
| (g) | “Change in Control” means an event which shall be deemed to have occurred in the event that any person, entity or group shall become the beneficial owner of such number of shares of Common Stock, and/or any other class of stock of the Corporation then outstanding that is entitled to vote in the election of directors (or is convertible into shares so entitled to vote) as together possess more than 50% of the voting power of all of the then outstanding shares of all such classes of stock of the Corporation so entitled to vote. For purposes of the preceding sentence, “person, entity or group” shall not include (i) any employee benefit plan of the Corporation, or (ii) any person, entity or group which, as of the Effective Date of this Plan, is the beneficial owner of such number of shares of Common Stock and/or such other class of stock of the Corporation as together possess 5% of such voting power; and for these purposes “group” shall mean persons who act in concert as described in Section 14(d)(2) of the 1934 Act. |
-1-
| (h) | “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. | ||
| (i) | “Committee” means the committee described in Article 4 or the person or persons to whom the committee has delegated its power and responsibilities under Article 4. | ||
| (j) | “Common Stock” or “Stock” means the common stock of the Corporation having a par value of $.01 per share. | ||
| (k) | “Corporation” means Plexus Corp., a Wisconsin corporation. | ||
| (l) | “Fair Market Value” means for purposes of the Plan an amount deemed to be equal to the mean between the highest and lowest sale prices of Common Stock traded on such date, or an average of trading days, as determined by the Committee, for sales made and reported through the National Market System of the National Association of Securities Dealers or such national stock exchange on which such Stock may then be listed and which constitutes the principal market for such Stock, or, if no sales of Stock shall have been reported with respect to that date, on the next preceding date with respect to which sales were reported. Notwithstanding the foregoing, the Committee may base the determination of Fair Market Value on an average of trading days only if the requirements for the use of such methodology prescribed by applicable guidance under Section 409A of the Code are satisfied. | ||
| (m) | “Grant Date” means the date on which an Award is deemed granted, which shall be the date on which the Committee authorizes the Award or such later date as the Committee shall determine in its sole discretion. | ||
| (n) | “Grantee” means an individual who has been granted an Award. | ||
| (o) | “Incentive Stock Option” means an option that is intended to meet the requirements of Section 422 of the Code and regulations thereunder. | ||
| (p) | “Non-Qualified Stock Option” means an option other than an Incentive Stock Option. | ||
| (q) | “Option” means an Incentive Stock Option or Non-Qualified Stock Option, as appropriate. | ||
| (r) | “Performance Goal” means a performance goal established by the Committee prior to the grant of any Award of Restricted Stock or Performance Stock that is based on the attainment of goals relating to one or more of the following business criteria measured on an absolute basis or in terms of growth or reduction: income (pre-tax or after-tax and with adjustments as stipulated), earnings per share, return on equity, return on capital employed, return on assets, return on tangible book value, operating income, earnings before depreciation, interest, taxes and amortization (EBIDTA), expense ratio, increase in stock price, return on invested capital (ROIC), total shareholder return, shareholder value added (or a derivative thereof) and operating cash flow. Such performance goals may be based solely by reference to the Corporation’s performance or the performance of an affiliate, division, business segment or business unit of the Corporation or any of its subsidiaries, or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies. The Committee may also exclude charges related to an event or occurrence which the Committee determines should appropriately be excluded, including (i) restructurings, discontinued operations, impairment of goodwill or long-lived assets, extraordinary items, and other unusual or non-recurring charges, (ii) an event either not directly related to the operations of the Corporation or not within the reasonable control of the Corporation’s management, or (iii) the cumulative effects of tax or accounting changes in accordance with generally accepted accounting principles. |
-2-
| (s) | “Performance Stock Award” means an Award under Article 16 of the Plan that is conditioned upon the satisfaction of pre-established Performance Goals. | ||
| (t) | “Plan” means the Plexus Corp. 2008 Long-Term Incentive Plan as set forth herein, as it may be amended from time to time. | ||
| (u) | “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future regulation amending or superseding such regulation. | ||
| (v) | “Restricted Stock” means shares or units of Common Stock which are subject to restrictions established by the Committee. Restricted Stock Awards may consist of shares issued subject to forfeiture if specified conditions are not satisfied (“Restricted Stock Shares”) or agreements to issue shares of Common Stock in the future if specified conditions are satisfied (“Restricted Stock Units”). | ||
| (w) | “Stock Appreciation Right” or “SAR” means the right to receive cash or shares of Common Stock in an amount equal to the excess of the Fair Market Value of one share of Common Stock on the date the SAR is exercised over (1) the Fair Market Value of one share of Common Stock on the Grant Date (the “exercise price”) or (2) if the SAR is related to an Option, the purchase price of a share of Common Stock specified in the related Option. An SAR settled in cash may be referred to as a “Cash Settled Stock Appreciation Right” and an SAR settled in stock may be referred to as a “Stock Settled Stock Appreciation Right.” | ||
| (x) | “Deferred Stock Unit” means an agreement to issue an unrestricted share of Common Stock at a time determined in accordance with the Grantee’s election and the terms of the Director Deferred Compensation Plan. | ||
| (y) | “Director Deferred Compensation Plan” means the Plexus Corp. Non-Employee Directors Deferred Compensation Plan. | ||
| (z) | “Unrestricted Stock Award” means an Award described in Article 16A. |
| (a) | If an SAR is exercised pursuant to Article VI, only the number of shares of Common Stock issued upon exercise shall be counted against the Share Limit (not the number of shares subject to the SAR). | ||
| (b) | If any Award granted under this Plan is canceled, terminates, expires, or lapses for any reason, any shares subject to such Award again shall be available for the grant of an Award under the Plan. Any Awards or portions thereof that are settled in cash and not in shares of Common Stock shall not be counted against the foregoing Share Limit. |
-3-
| (c) | Following the approval of the 2008 Plan by shareholders, the 2005 Plan may be used to make grants to employees covered by the approved sub-plan for United Kingdom employees under the 2005 Plan. Any shares of Common Stock subject to options which are granted to United Kingdom employees after the 2008 Plan has been approved by shareholders shall be counted against the 2008 Plan Share Limit as one share for every one share subject thereto. |
| (a) | grant Awards, to determine the terms of each Award, the individuals to whom, the number of shares subject to, and the time or times at which, Awards shall be granted; | ||
| (b) | interpret the Plan; | ||
| (c) | prescribe, amend and rescind rules and regulations relating to the Plan; | ||
| (d) | determine the terms and provisions of the respective agreements (which need not be identical) by which Awards shall be evidenced; | ||
| (e) | make all other determinations deemed necessary or advisable for the administration of the Plan; | ||
| (f) | require withholding from or payment by a Grantee of any federal, state or local taxes; | ||
| (g) | impose, on any Grantee, such additional conditions, restrictions and limitations upon exercise and retention of Awards as the Committee shall deem appropriate; | ||
| (h) | treat any Grantee who retires as a continuing employee for purposes of the Plan; and | ||
| (i) | modify, extend or renew any Award previously granted; provided, however, that this provision shall not provide authority to reprice Awards to a lower exercise price. |
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| (a) | Incentive Stock Options : Any Option designated as an Incentive Stock Option shall comply with the requirements of Section 422 of the Code, including the requirement that incentive stock options may only be granted to individuals who are employed by the Corporation, a parent or a subsidiary corporation of the Corporation. If an Option is so designated, the Fair Market Value (determined as of the Grant Date) of the shares of Stock with respect to which that and any other Incentive Stock Option first becomes exercisable during any calendar year under this Plan or any other stock option plan of the Corporation or its affiliates shall not exceed $100,000; provided, however, that the time or times of exercise of an Incentive Stock Option may be accelerated pursuant to Article 12, 13 or 19 hereof, terms of the Plan and, in the event of such acceleration, such Incentive Stock Option shall be treated as a Non-Qualified Option to the extent that the aggregate Fair Market Value (determined as of the Grant Date) of the shares of stock with respect to which such Option first becomes exercisable in the calendar year (including Options under this Plan and any other Plan of the corporation or its affiliates) exceeds $100,000, the extent of such excess to be determined by the Committee taking into account the order in which the Options were granted, or such other factors as may be consistent with the requirements of Section 422 of the Code and rules promulgated thereunder. Furthermore, no Incentive Stock Option shall be granted to any individual who, immediately before the Option is granted, directly or indirectly owns (within the meaning of Section 425(d) of the Code, as amended) shares representing more than 10% of the total combined voting power of all classes of stock of the Corporation or its subsidiaries, unless, at the time the option is granted, and in accordance with the provisions of Section 422, the option exercise price is 110% of the Fair Market Value of shares of Stock subject to the Option and the Option must be exercised within 5 years of the Grant Date. | ||
| (b) | Non-Qualified Stock Options : All Options not subject to or in conformance with the additional restrictions required to satisfy Section 422 shall be designated Non-Qualified Stock Options. |
-5-
| (a) | No SAR granted hereunder shall be exercisable until the expiration of six months from the Grant Date of the SAR unless the Grantee terminates employment by reason of death or disability prior to the expiration of such six-month period. | ||
| (b) | A Grantee’s right to exercise an SAR shall terminate when the Grantee is no longer an employee of the Corporation or any of its subsidiaries unless such right is extended as provided under Article 13 hereunder. | ||
| (c) | In the event adjustments are made to the number of shares, exercise price, or time or times of exercise of outstanding Options upon the occurrence of an event described in Article 19 hereunder, appropriate adjustments shall be made in the number of SARs available for future grant, the number of SARs under existing grants, the exercise price of the existing SARs, and the time or times of exercise of such SARs. | ||
| (d) | Unless the written agreement expressly provides otherwise, if and to the extent an SAR is granted in relation to an Option, exercise of the SAR or Option shall result in the extinguishment of the related right to the extent such SAR or Option for shares is exercised. | ||
| (e) | Unless the written agreement expressly provides otherwise, any SARs granted shall be exercisable in accordance with Article 12. | ||
| (f) | Upon the exercise of SARs, the Grantee shall be entitled to receive an amount determined by multiplying (1) the difference obtained by subtracting the Fair Market Value of the share of Common Stock as of the Grant Date of the SAR or, in the case of a SAR which is related to an Option, the purchase price per share of Common Stock under such Option, from the Fair Market Value of a share of Common Stock on the date of exercise, by (2) the number of SARs exercised. At the discretion of the Committee, the payment upon the exercise of the SARs may be in cash, in shares of Common Stock of equivalent value, or in some combination thereof. The number of available shares under Award shall not be affected by any cash payments. |
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| (a) | in the case of an Incentive Stock Option: |
| (i) | 10 years from the date the option is granted, or five years from the date the option is granted to an individual owning (after the application of the family and other attribution rules of Section 424(d) of the Code) at the time such option was granted, more than 10% of the total combined voting power of all classes of stock of the Corporation, | ||
| (ii) | three months after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is for any reason other than death, disability (within the meaning of Code Section 22(e)(3)), retirement or Cause, | ||
| (iii) | three years after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is by reason of the Grantee’s death, disability (within the meaning of Code Section 22(e)(3)) or retirement in accordance with normal Corporation retirement practices, as determined by the Committee in its sole discretion (provided that such Option must be exercised within the time period prescribed by Section 422 of the Code to be treated as an Incentive Stock Option); or | ||
| (iv) | the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is for Cause, as determined by the Corporation or the Committee in its sole discretion; |
| (b) | in the case of a Nonqualified Stock Option: |
| (i) | ten (10) years from the date of grant, | ||
| (ii) | ninety days after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is for any reason other than death, permanent disability, retirement or Cause, | ||
| (iii) | three years after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is by reason of the Grantee’s death, permanent disability or retirement in accordance with normal Corporation retirement practices, as determined by the Committee in its sole discretion; or | ||
| (iv) | the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is for Cause, as determined by the Corporation or the Committee in its sole discretion; |
-7-
| (c) | in the case of an SAR: |
| (i) | seven (7) years from the date of grant, | ||
| (ii) | ninety days after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is for any reason other than death, permanent disability, retirement or Cause, | ||
| (iii) | one year after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is by reason of death or permanent disability, | ||
| (iv) | three years after the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is by reason of the Grantee’s retirement in accordance with normal Corporation retirement practices, as determined by the Committee in its sole discretion; or | ||
| (v) | the date the Grantee ceases to perform services for the Corporation or its subsidiaries, if such cessation is for Cause, as determined by the Corporation or the Committee in its sole discretion; |
| (a) | Options : Options may be exercised in whole or in part from time to time as specified in the Option agreement. The exercise notice shall state the number of shares being purchased and be accompanied by the payment in full of the exercise price for such shares. Such payment shall be made in cash, outstanding shares of the Common Stock which the Grantee, the Grantee’s spouse or both have beneficially owned for at least six months prior to the time of exercise, or in combinations thereof. If shares of Common Stock are used in part or full payment for the shares to be acquired upon exercise of the Option, such shares shall be valued for the purpose of such exchange as of the date of exercise of the Option at the Fair Market Value of the shares. | ||
| (b) | SARs : SARs may be exercised in whole or in part from time to time as specified in the SAR agreement. |
| (a) | Each Restricted Stock Award shall be confirmed by, and be subject to the terms of, an Award Agreement identifying the restrictions applicable to the Award. |
-8-
| (b) | Until the applicable restrictions lapse or the conditions are satisfied, the Grantee shall not be permitted to sell, assign, transfer, pledge or otherwise encumber the Restricted Stock Award. | ||
| (c) | Except to the extent otherwise provided in the applicable Award Agreement and (d) below, the portion of the Restricted Stock Award still subject to restriction shall be forfeited by the Grantee upon termination of the Grantee’s service for any reason. | ||
| (d) | In the event of hardship or other special circumstances of a Grantee whose service is terminated (other than for Cause), the Committee may waive in whole or in part any or all remaining restrictions with respect to such Grantee’s Restricted Stock Award. | ||
| (e) | If and when the applicable restrictions lapse, unrestricted shares of Common Stock shall be issued to the Grantee. | ||
| (f) | A Grantee receiving an Award of Restricted Stock Shares shall have all of the rights of a shareholder of the Corporation, including the right to vote the shares and the right to receive any cash dividends. Unless otherwise determined by the Committee, cash dividends shall be paid in cash and dividends payable in stock shall be paid in the form of additional Restricted Stock Shares. | ||
| (g) | A Grantee receiving an Award of Restricted Stock Units shall not be deemed the holder of any shares covered by the Award, or have any rights as a shareholder with respect thereto, until such shares are issued to him/her. |
| (a) | The Performance Stock Awards will be conditioned upon the attainment of one or more preestablished, objective corporate Performance Goals so that the Award qualifies as “performance-based compensation” within the meaning of Section 162(m) of the Code. Performance Goals shall be based on one or more business criteria that apply to the individual, a business unit, or the Corporation as a whole. It is intended that any Performance Goal will be in a form that relates the Performance Stock Award to an increase in the value of the Corporation to its shareholders. | ||
| (b) | Performance Goals shall be established in writing by the Committee not later than 90 days after the commencement of the period of service to which the Performance Goal relates. The preestablished Performance Goal must state, in terms of an objective formula or standard, the method for computing the number of shares earned or subject to further vesting conditions if the goal is attained. | ||
| (c) | Following the close of the performance period, the Committee shall determine whether the Performance Goal was achieved, in whole or in part, and determine the number of shares earned or subject to further vesting conditions. | ||
| (d) | The Performance Stock Awards may be conditioned upon such other conditions, restrictions and contingencies as the Committee may determine, including the Grantee’s continued employment. The provisions of Performance Stock Awards need not be the same with respect to each recipient. |
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| (e) | Until all conditions for a Performance Stock Award have been satisfied, the Grantee shall not be permitted to sell, assign, transfer, pledge or otherwise encumber the Award. | ||
| (f) | Except to the extent otherwise provided by the Committee and (g) below, the portion of the Award still subject to restriction shall be forfeited by the Grantee upon termination of a Grantee’s service for any reason. | ||
| (g) | In the event of hardship or other special circumstances of a Grantee whose employment is terminated (other than for Cause), the Committee may waive in whole or in part any or all remaining restrictions with respect to such Grantee’s Performance Stock Award. | ||
| (h) | If and when the applicable restrictions lapse, unrestricted shares of Common Stock for such shares shall be issued to the Grantee. |
| (a) | The Committee may grant Unrestricted Stock Awards, either alone or in addition to other Awards granted under the Plan. Except as otherwise provided in Section 16A(b), an Unrestricted Stock Award shall consist of unrestricted shares of Common Stock. | ||
| (b) | To the extent permitted by the Committee in its discretion and in accordance with Section 409A of the Code, a Grantee who is a non-employee director of the Corporation may elect to defer receipt of the Stock covered by an Unrestricted Stock Award pursuant to a valid election under the Director Deferred Compensation Plan, in which event such Grantee’s Award shall consist of Deferred Stock Units. A Grantee receiving an Award of Deferred Stock Units shall not be deemed the holder of any Shares covered by the Award, or have any rights as a shareholder with respect thereto, until such Shares are issued to him/her in payment of such Deferred Stock Units. The timing of the issuance of such Shares, and the timing of payment of any dividends payable with respect to the Shares underlying the Deferred Stock Units, shall be determined in accordance with the terms of the Director Deferred Compensation Plan and the Grantee’s election thereunder. | ||
| (c) | Unrestricted Stock Awards shall be evidenced in such manner as the Committee shall determine. |
| (a) | A Cash Bonus Award under the Plan shall be paid solely on account of the attainment of one or more preestablished, objective Performance Goals. Performance Goals shall be based on one or more business criteria that apply to the individual, a business unit, or the Corporation as a whole. It is intended that any Performance Goal will be in a form that relates the bonus to an increase in the value of the Corporation to its shareholders. | ||
| (b) | Performance Goals shall be established in writing by the Committee not later than 90 days after the commencement of the period of service to which the Performance Goal relates The pre-established Performance Goal must state, in terms of an objective formula or standard, the method for computing the amount of compensation payable to any employee if the goal is attained. |
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| (c) | Following the close of the performance period, the Committee shall determine whether the Performance Goal was achieved, in whole or in part, and determine the amount payable to each employee. |
| (a) | Appropriate provision may be made for the protection of such Option and SAR by the substitution on an equitable basis of appropriate shares of the surviving or related corporation, provided that the excess of the aggregate Fair Market Value of the shares subject to such Award immediately before such substitution over the exercise price thereof is not more than the excess of the aggregate fair market value of the substituted shares made subject to Award immediately after such substitution over the exercise price thereof; or | ||
| (b) | The Committee may cancel such Award. In the event any Option or SAR is canceled, the Corporation, or the corporation assuming the obligations of the Corporation hereunder, shall pay the Grantee an amount of cash (less normal withholding taxes) equal to the excess of the Fair Market Value per share of the Stock immediately preceding the cancellation over the exercise price, multiplied by the number of shares subject to such Option or SAR. In the event any other Award is canceled, the Corporation, or the corporation assuming the obligations of the Corporation hereunder, shall pay the Grantee an amount of cash or stock, as determined by the Committee, based upon the value, as determined by the Committee, of the property (including cash) received by the holder of a share of Common Stock as a result of such event. No payment shall be made to a Grantee for any Option or SAR if the exercise price for such Option or SAR exceeds the value, as determined by the Committee, of the property (including cash) received by the holder of a share of Common Stock as a result of such event. |
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| TO: | <<FIRST_NAME>> <<LAST_NAME>> | |
| DATE: | <<OPTION DATE>> |
| o | Alternative 1: This Option shall become exercisable in accordance with the schedule set forth below: |
|
Years After
Grant Date |
Percentage of Grant
Which May Be Exercised |
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|
Less than 1
|
0 | % | ||
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1 but less than 2
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Fifty percent (50%) | |||
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2 or more
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One hundred percent (100%) | |||
| o | Alternative 2: This Option shall become exercisable on the Grant Date. |
| o |
Alternative 3: This Option shall become exercisable in accordance with the schedule
established by the Committee at the time of grant and set forth below:
. |
|
PLEXUS CORP.
|
||||
| /s/ Angelo M. Ninivaggi | ||||
| By: Angelo M. Ninivaggi, Secretary | ||||
|
PLEXUS CORP.
|
||||
| By: | Angelo M. Ninivaggi, Secretary | |||
2
3
| Each Non-Employee Director will be eligible to participate in the Plan. |
4
| (a) | the date specified by the Non-Employee Director in his or her Deferral Election for such Plan Year; | ||
| (b) | the Non-Employee Director’s Termination Date; and | ||
| (c) | the date on which a Change in Control occurs. |
| (a) | To the extent necessary to avoid liability under Section 16(b) of the Exchange Act, the amount attributable to any stock units that will have been credited to the Non-Employee Director’s Deferral Account for a period of less than six months will be distributed, or commence to be distributed, within 10 days following the expiration of such six month period. | ||
| (b) | If the Non-Employee Director is a “specified employee” (within the meaning of Code Section 409A(a)(2)(B)), then notwithstanding any provision in the Plan to the contrary, payments triggered by the Non-Employee Director’s Termination Date will not be paid until six months after the Non-Employee Director’s Termination Date or until the Non-Employee Director’s earlier death. The foregoing six-month delay provision will not affect the timing of payments that would otherwise be paid more than six months after the Non-Employee Director’s Termination Date. |
5
6
| (a) | Insider Trading. To the extent any provision of the Plan or action by the Board would subject any Non-Employee Director to liability under Section 16(b) of the Exchange Act, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Board. | ||
| (b) | Section 409A. This Plan is intended to comply with Code Section 409A and the regulations thereunder, and will be administered and interpreted in accordance with such intent. If the Corporation determines that any provision of the Plan is or might be inconsistent with the requirements of Code Section 409A, it will attempt in good faith to make such changes to the Plan as may be necessary or appropriate to avoiding a Non-Employee Director’s becoming subject to adverse tax consequences under Code Section 409A. No provision of the Plan will be interpreted to transfer any liability for a failure to comply with Code Section 409A from a Non-Employee Director or any other individual to the Corporation. |
7
| % (Enter any whole percentage less than or equal to 100%. This election does not apply to any portion of the award consisting of stock options.) |
| (a) | the date of my separation from service with the Corporation, and | ||
| (b) | the date on which a Change in Control occurs, and | ||
| (c) | (insert a date no earlier than [INSERT DATE] or insert “N/A”) . |
8
| single lump sum payment, or | |||
| installments over years (not to exceed 10 years) payable (elect one) : |
| quarterly, | |||
| semi-annually, or | |||
| annually. |
| Director’s Signature | ||||
| Director’s Name (please print) | ||||
9
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11
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Dean A. Foate | ||||
| Dean A. Foate | ||||
| President and Chief Executive Officer | ||||
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Ginger M. Jones | ||||
| Ginger M. Jones | ||||
| Chief Financial Officer | ||||
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |