Exhibit 4.4
May 13, 2003
Xx. Xxxxx Xxxxxxxx
0000 Xxxx Xxxxx,
Xxxxxxxx, Xxxxxxx
X0X 0X0
Dear Xxxxx:
I am pleased to offer you employment as Senior Vice President, Finance and Chief
Financial Officer of Zarlink Semiconductor Inc. ("Zarlink"), on the following
terms and conditions.
Your place of work will be the Zarlink offices located in Xxxxxx, Xxxxxxx,
Xxxxxx. You will be expected to locate with your family to the Ottawa area by
calendar year end.
This offer, once accepted, will constitute an employment agreement between
Zarlink and you. Please note that all figures are in Canadian dollars, and all
compensation will be subject to the usual statutory deductions.
(a) Work Responsibilities
You will be employed full-time in the position of Senior Vice President, Finance
and Chief Financial Officer, reporting to myself as President and CEO. Your
starting date will be no later than June 9, 2003 and will be earlier if
possible.
In this position, you will devote your best efforts, and your full time, skill
and attention to carrying out your duties and to promoting the interests of the
company. You will well and faithfully perform all services and duties
customarily associated with your position, together with such additional duties
and responsibilities as may be assigned by myself from time to time.
You agree not to be employed or engaged in any other capacity (including as a
director) in promoting, undertaking or carrying on any other business apart from
that of Zarlink, without my prior written authorization. This does not preclude
you from any passive or personal investments that you may wish to hold, unless
with a competitor of the company, in which case you will advise the Board prior
to making such investments, unless the investments are made through an
independently managed fund or your ownership represents less than 0.1 % of a
corporation's publicly traded shares.
(b) Salary and Bonus
Your annual base salary will be $335,000.
In addition, you will be eligible to earn an annual incentive payment,
conditional upon successful achievement of the annual objectives of Zarlink's
Pay for Performance ("PFP") Plan. If all objectives of the Plan are met, your
target incentive payment will be equal to 50% of your base salary. If the
Financial Component of the Plan is exceeded, you can earn up to 150% on that
portion of your individual incentive plan attributed to the financial
performance of the Company (currently 60% of your target incentive).
Incentive objectives for each fiscal year will be reviewed and finalized with
the Board and communicated to you no later than early May each year (within 45
days after the commencement of Zarlink's fiscal year).
By the middle of May each year (the "Incentive Assessment Date"), Zarlink
assesses the achievement of the previous year's objectives, and calculates any
earned incentive amounts. Any incentive earned will be paid to you by the end of
May. Please note that you must be employed by Zarlink on the Incentive
Assessment Date, in order to be eligible to receive any incentive for the prior
fiscal year.
(c) Stock Options
The Board has approved a grant of fifty thousand (50,000) options, pursuant to
Zarlink"s 1991 Employee Stock Option Plan (a copy of which is enclosed). The
option grant will provide for equal annual vesting over a period of 4 years
commencing one year from the date of grant.
The options will be priced at the current market price in effect on the date you
accept this offer of employment, pursuant to the formula set out in the Plan.
Your specific rights and entitlements relating to the options, including any
rights arising upon the cessation of employment, will be governed by the terms
and conditions of the Plan.
You will be included among those executives whose stock options will be subject
to accelerated vesting in the event of a Change in Control, as defined by and in
accordance with the enclosed Board Resolution dated January 11, 2000.
(d) Benefits
Zarlink maintains a comprehensive group employee benefits plan, made available
to our employees through Canada Life. Enclosed you will find a benefits brochure
which describes the available benefits. Your eligibility for coverage and for
benefits will be determined in accordance with the specific terms and conditions
of the benefits plan.
(e) Car Lease
Zarlink will provide you an annual car allowance of $18,000. which will be
taxable as income. In addition Zarlink will provide fuel, insurance and
maintenance for one company vehicle if you choose to lease a company vehicle
under the GE Capital lease plan. Currently the plan requires that the employee
pay 20% of the capital cost of the company car to GE Capital as a down payment
and the monthly payments will be based on the 80% balance. You may select your
choice of vehicle and monthly lease costs for that vehicle will be deducted from
your biweekly pay. If you wish to have use of additional vehicles as part of the
fleet, Zarlink will provide insurance coverage but you will be wholly
responsible for any related lease, fuel and maintenance costs.
(f) Pension
You will be entitled to participate in the Canadian Executive Pension Plan which
provides a combination of annual payments by Zarlink into an RRSP and a SERP for
your benefit. The annual funding cost paid by Zarlink is 15% of your base
salary. Enclosed is a copy of the pension plan description.
(g) Relocation
Zarlink will provide a home sale guarantee for your current home under its
Guaranteed Home Sale Program and relocation assistance to Ottawa as described in
Zarlink's Domestic Relocation Agreement (copies of both enclosed).
(h) Vacation
Zarlink will provide you with paid vacation leave of 4 weeks per fiscal year,
accrued in equal bi-weekly instalments. If you have not used all of your paid
vacation leave for a given fiscal year, you may carry forward a maximum of 150
hours into the next fiscal year. In accordance with Zarlink's policy, any unused
remainder will be forfeited absent prior special arrangement. In addition, of
course, Zarlink will provide you with paid statutory holidays and with any other
leave you are entitled to receive, all in accordance with employment standards
legislation.
(i) Confidentiality of Information and Ownership of Proprietary Property
As a condition of your acceptance of this offer, you are required to provide
Zarlink with an executed original of the enclosed Confidentiality Agreement.
Please note the ongoing nature of the obligations set out in the Agreement. The
terms of the Confidentiality Agreement form part of the terms and conditions of
this employment agreement.
(j) Cessation of Employment
(i) Definitions
For the purposes of this employment agreement, the following definitions
apply:
"Incapacity" means any permanent physical or mental incapacity or
disability which prevents you from performing the essential duties of your
position, with no reasonable prospect of recovery, as determined by
Zarlink on the basis of medical evidence satisfactory to the Board.
"Good Just Cause" means any grounds at common law for which an employer is
entitled to dismiss an employee without notice or compensation in lieu of
notice.
"Termination Date" means:
(A) if Zarlink terminates your employment, the date designated by the
company as the last day of your employment (without reference to any
applicable
notice period to which you may be entitled, whether under statute,
common law, contract, or otherwise);
(B) if you resign your employment with Zarlink, the date which is the end
of the three months notice period or such shorter notice period as the
parties agree;
(C) if you die, the date of death;
(D) if this employment agreement is frustrated, which includes but is not
limited to Incapacity, the date designated by Zarlink as the last day of
your employment.
(ii) Notice of Resignation
You may resign at any time, for any reason, upon giving a minimum of one
month advance written notice to Zarlink. Zarlink reserves the right to
require you to immediately return all company property at any point during
the resignation notice period, and to require you to refrain from
attending at the workplace during any portion of the resignation notice
period.
(iii) Entitlements upon Resignation, Termination for Good Just Cause
If you resign or your employment is terminated for Good Just Cause, then
you will be entitled to receive any compensation, benefits and perquisites
which have accrued up to the Termination Date, but you will not be
entitled to receive other compensation of any nature, whether under
contract, statute, common law or otherwise. Your rights respecting any
options, which have been granted to you, will be determined in accordance
with the terms of the Zarlink 1991 Stock Option Plan.
(iv) Entitlements upon Death, Frustration of Contract
If you die, or frustration of this employment agreement occurs (which
includes but is not limited to Incapacity), then you (or your estate, in
the event of your death) will be entitled to receive any compensation,
benefits and perquisites which have accrued up to the Termination Date,
but you will not be entitled to receive other compensation (except as
provided in insurance plans) of any nature, whether under contract,
statute, common law or otherwise. Your rights respecting any options,
which have been granted to you, will be determined in accordance with the
terms of the Zarlink 1991 Stock Option Plan.
(v) Entitlements upon Termination without Good Just Cause
If Zarlink terminates your employment without Good Just Cause, you will be
provided with the following termination package (which is inclusive of any
statutory entitlements you may have under applicable employment standards
legislation, and will be provided net of required deductions):
(A) You will receive payment in a lump sum of an amount equal to one
times your then current annual base salary. This payment will be
made within 30 business days following the Termination Date.
(B) You will receive payment in a lump sum of an amount in lieu of
bonus equal to one times your target annual bonus. This payment will
be made within 30 business days following the Termination Date.
(C) You will receive continued group life and health benefits
coverage until the earlier of one year following the Termination
Date or 30 days after you secure substantially similar replacement
coverage through re-employment. Please note that long-term
disability coverage will not be continued after the Termination
Date. You will be required to notify Zarlink in writing forthwith if
you secure substantially similar replacement coverage, during the
continuation period.
(D) You will have six months following the Termination Date (or
until the natural expiry date of your stock options, whichever is
earlier), to exercise any stock options which have been granted to
you under the Zarlnk 1991 Stock Option Plan and which have vested as
of the last day of that 6 month period. In all other respects, your
rights respecting any options, which have been granted to you, will
be determined in accordance with the terms of the Zarlink 1991 Stock
Option Plan.
(E) All perquisites such as company cars and the like will cease 30
days following the Termination Date.
(vi) Resignation of Office
If your employment ends for any reason, you agree to resign in
writing effective upon the Termination Date from any office or
directorship held with the Zarlink or with any subsidiary or
affiliated company.
(vii) Retirement
Zarlink requires that you retire as an employee, and that you resign
from any office or directorship held with the Mitel or with any
subsidiary or affiliated company, effective at the end of the month
in which you reach your 65th birthday.
(k) Non-Competition and Non-Solicitation Obligations
You agree that it could seriously harm Zarlink's legitimate business interests
if you took unfair advantage of the special knowledge you will gain in your
executive position, to compete with Zarlink. Accordingly, you agree that the
restrictions set out below are reasonably required to protect Zarlink and its
goodwill from unfair competition. You also acknowledge that your agreement to
such restrictions is of essence to this employment agreement, and that Zarlink
would not enter into this employment agreement without your agreement to the
restrictions set out in this paragraph.
If your employment with ZARLINK ceases in the case of (i) due to termination by
Zarlink without Good Just Cause and in the case of (ii) and (iii) for any
reason, you agree that for a period of one (1) year from the Termination Date:
(i) you will not participate (as an employee or consultant, executive,
director or significant investor (greater than 20%) in any business
operating anywhere in the world that competes directly with the principal
businesses of Zarlink (or its successor);
(ii) you will not directly or indirectly solicit any of Zarlink's
customers for business in competition with Zarlink (or its successors);
and,
(iii) you will not solicit, entice, approach or induce any of Zarlink's
employees or consultants to leave their employment or to end their
consultancy arrangements with Zarlink (or its successor) or to join
another business or organization.
(l) Choice of Law and Jurisdiction
This employment agreement will be governed by and construed in accordance with
the laws of the Province of Ontario, Canada, without regard to the principles of
conflicts of law, and will in all respects be treated as an Ontario contract. In
the event of a dispute, you agree that any legal proceedings must be taken in
the City of Ottawa, in the Province of Ontario, Canada, and you hereby consent
to attorn to the jurisdiction of the Ontario courts.
(m) Whole Agreement
By accepting this offer of employment, you are agreeing that the terms and
conditions set out in this offer (including the terms and conditions of any
documents enclosed) represent the entire agreement relating to your employment
with the company; that any and all previous agreements or representations,
written or oral, are hereby terminated and cancelled; and that you hereby
release Zarlink from any and all claims whatsoever under or in respect of any
such previous agreements or representations.
We trust that you will find this offer of employment responsive to your needs.
To signify your acceptance, please sign below, and return one complete signed
original of this offer and of the enclosed Agreement to the attention of Xxx
XxXxxxxx, no later than close of business, May 19th, 2003.
The executive management team and I are looking forward to working with you to
meet the challenges and opportunities facing our dynamic company.
Zarlink Semiconductor Inc.
Per: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxx
President and CEO
Acknowledgement and Acceptance
I, Xxxxx Xxxxxxxx, have read and reviewed, in their entirety, this offer of
employment dated May, 2003, and the documents enclosed. I have had an
opportunity to ensure that I clearly understand the terms and conditions of my
employment with Zarlink, and I have had the opportunity to confer with an
independent legal advisor if I so wished, in advance of accepting this offer of
employment. I hereby represent and confirm to Zarlink that I am not under any
contractual or other legal obligation, which prevents me from accepting this
offer of employment or from abiding by the terms and conditions of my employment
with Zarlink. I accept this offer of employment, and agree to the terms and
conditions as set out.
Dated at Oakville this 13 day of May 2003.
Executive Witness
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxxxx Xxxxxxxx
------------------------ ---------------------------------
Xxxxx Xxxxxxxx Witness name (please print)
Enclosures:
a/ Pay for Performance Plan
b/ Code of Ethics and Business Conduct
c/ Stock Option Plan for Key Employees
d/ Confidentiality Agreement
e/ Benefit Plans
f/ Guaranteed House Sale Program
g/ Domestic Relocation Agreement
h/ Canadian Executive Pension Plan
