Exhibit 4.3
February 16, 2005
▇▇▇▇ K ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Dear ▇▇▇▇:
The Board of Directors of Zarlink Semiconductor Inc. ("Zarlink") is pleased to
offer you employment as President and Chief Executive Officer on the following
terms and conditions. Note that all figures are in Canadian dollars, and all
compensation will be subject to the usual statutory deductions. This agreement
will terminate your interim CEO assignment agreement dated January 31, 2005.
1. Work Responsibilities
You will be employed full-time in the position of President and CEO, reporting
to the Board of Directors. You will remain a director although you will not be
considered independent.
In this position, you will devote your best efforts, and your full time, skill,
labour 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 the Board 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 the prior written authorisation of the Chairman of the
Board. 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.
2. Salary and Bonus
Your annual base salary will be CAD $550,000.
In addition, you will be eligible to earn an annual incentive payment starting
for Fiscal 2006, conditional upon your successful achievement of specific
objectives agreed by the Board in each fiscal year. Your incentive at target
performance will be 60% of your base salary and at exceptional performance will
be 90% of your base salary.
Incentive objectives for each fiscal year will be reviewed and finalized with
the Board and communicated to you no later than 60 days after the commencement
of our fiscal year.
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By the middle of May each year (the "incentive assessment date"), ▇▇▇▇▇▇▇
assesses the achievement of the previous year's objectives, and calculates any
earned incentive amounts. Any incentives earned will be paid out to you by the
end of May. Please note that if you are not employed by ▇▇▇▇▇▇▇ on the incentive
assessment date, any incentive payment for the fiscal year in which you depart
will be at the Board's sole discretion.
3. Stock Options
The Board has approved a grant of seven hundred and fifty (750) thousand
options, pursuant to Zarlink's 1991 Employee Stock Option Plan (a copy of which
is enclosed). The option grant will provide for staggered equal vesting over a
period of 4 years commencing one year from the date of grant.
The options will be granted on February 24th, 2005 and will be priced in
accordance with the pricing formula under the Option 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 of the Plan.
You will continue to 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.
4. Benefits
▇▇▇▇▇▇▇ maintains a comprehensive group employee benefits plan, made available
to our employees through Great West 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
5. Car Lease
Zarlink will provide you with the use of one fully paid company vehicle
(inclusive of lease, fuel, insurance and maintenance costs). You may select your
choice of vehicle, subject to a maximum capital cost of $90,000. If you wish to
have use of additional vehicles as part of the Zarlink fleet, you will be wholly
responsible for any related lease, fuel and maintenance costs. If you decide not
to acquire a company vehicle, you will be paid an annual car allowance of
$25,000.
6. Pension
You will be eligible to participate in the Canadian Executive Pension Program.
▇▇▇▇▇▇▇ will contribute 15% of your base salary to this program on an annual
basis.
7. Vacation
▇▇▇▇▇▇▇ will provide you with paid vacation leave of 4 weeks per fiscal year
plus 1 day per year of bridged service over 15 years, 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 ▇▇▇▇▇▇▇'s policy, any unused remainder will
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be forfeited absent prior special arrangement. In addition, of course, ▇▇▇▇▇▇▇
will provide you with paid statutory holidays and with any other leave you are
entitled to receive, all in accordance with employment standards legislation.
8. 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 this Agreement form part of the terms and conditions of this employment
agreement.
9. Cessation of Employment
(a) 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
▇▇▇▇▇▇▇ 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:
(i) 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);
(ii) if you resign your employment with ▇▇▇▇▇▇▇, the date which is the
end of the three months notice period or such shorter notice period
as the parties agree;
(iii) if you die, the date of death;
(iv) if this employment agreement is frustrated, which includes but is
not limited to Incapacity, the date designated by ▇▇▇▇▇▇▇ as the
last day of your employment.
(b) Notice of Resignation
You may resign at any time, for any reason, upon giving a minimum of three
months advance written notice to ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ reserves the right to
require you to immediately return all company property at any point during
the resignation notice period, and to
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require you to refrain from attending at the workplace during any portion
of the resignation notice period.
(c) 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.
(d) 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 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.
(e) Entitlements upon Termination without Good Just Cause
If Zarlink terminates your employment without Good Just Cause, then 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):
(i) You will receive payment in a lump sum of an amount equal to two
times your then current annual base salary. This payment will be
made within 30 business days following the Termination Date.
(ii) You will receive payment in a lump sum of an amount in lieu of
bonus equal to two times your average earned annual bonus over the
previous three years or such shorter period if the period of
employment is shorter than three years. (Note that any special
project bonus arrangements will be excluded from this calculation.)
This payment will be made within 30 business days following the
Termination Date.
(iii) If you are then participating in the Zarlink Executive Pension
Plan, you will receive payment of two year's regular annual
contribution to the Executive Pension Plan. This payment will be
made within 30 business days following the Termination Date.
(iv) You will receive continued health benefits coverage until the
earlier of two years following the Termination Date, or 30 days
after you secure
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substantially similar replacement coverage through re-employment.
This coverage will be provided in accordance with the then current
company policy for providing post termination health benefits.
Please note that long-term disability coverage will not be continued
after the Termination Date. You will be required to notify ▇▇▇▇▇▇▇
in writing forthwith if you secure substantially similar replacement
coverage, during the continuation period.
(v) 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 Zarlink 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.
(vi) All perquisites such as company cars and the like will cease 30
days following the Termination Date.
(f) 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.
10. Non-Competition and Non-Solicitation Obligations
We both agree that it could seriously harm ▇▇▇▇▇▇▇'s legitimate business
interests if you took unfair advantage of the special knowledge you will gain in
your executive position, to compete with ▇▇▇▇▇▇▇. 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
▇▇▇▇▇▇▇ would not enter into this employment agreement without your agreement to
the restrictions set out in this paragraph.
If your employment with ▇▇▇▇▇▇▇ ceases for reasons other than "without Good Just
Cause", you agree that for a period of one (1) year from the Termination Date
and in the case of termination "without Good Just Cause" for a period of two (2)
years (as defined in subparagraph 9(a) above):
(a) 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's (or its successor);
(b) you will not directly or indirectly solicit any of Zarlink's
customers for business in competition with ▇▇▇▇▇▇▇ (or its
successors); and,
(c) you will not solicit, entice, approach or induce any of ▇▇▇▇▇▇▇'s
employees or consultants to leave their employment or to end their
consultancy arrangements
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with Zarlink (or its successor) or to join another business or
organization.
11. 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.
12. 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 ▇▇▇▇▇▇▇ 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 ▇▇▇
▇▇▇▇▇▇▇▇, no later than close of business, February 25th, 2005
All of us at Zarlink look forward to working with you to meet the challenges and
opportunities facing our dynamic company.
Zarlink Semiconductor Inc.
Per: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
Chairman, Board of Directors
Acknowledgement and Acceptance
I, ▇▇▇▇ ▇▇▇▇▇, have read and reviewed, in their entirety, this offer of
employment dated February 16th, 2005, and the documents enclosed. I have had an
opportunity to ensure that I clearly understand the terms and conditions of my
employment with ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇. I accept this offer of employment, and agree to the terms and
conditions as set out.
DATED in Ottawa as of this 16 day of February, 2005.
/s/ ▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇ Witness name and signature
