June 8, 2009
June 8,
2009
Xxxxx
Xxxxxxxxx
C/O: Zarlink Semiconductor
000 Xxxxx Xxxx, Xxxxxx, XX, Xxxxxx
Dear
Xxxxx:
I am
pleased to offer you employment with Zarlink Semiconductor Inc. (“Zarlink” or
“Company”) on the following terms and conditions. This offer and its acceptance
by you will constitute an employment agreement between Zarlink and
you.
All
amounts are in Canadian dollars.
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1.
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Work
Responsibilities
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You will
be employed full-time in the position of Sr. Vice President, Finance and Chief
Financial Officer, reporting to Xxxx Xxxxx, Company CEO and will be based in the
Company’s Ottawa, Ontario offices. Your start date will be June 15,
2009.
In this
position, you will devote your best efforts, and your full working time, skill
and attention, to carrying out your duties and to promoting the interests of the
Company. You will be expected to perform all services and duties customarily
associated with your position, together with such additional duties and
responsibilities as assigned from time to time.
You agree
not to be employed or engaged in any other capacity (including as a director)
promoting, undertaking or carrying on any other business apart from that of
Zarlink, without the prior written authorization 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.
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2. Salary and
Incentives
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Your
annual base salary will be $239,200.
In
addition, you will be eligible to participate in the Zarlink Bonus Plan at 50%
of base salary. Details of the plan will be communicated to
you.
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3.
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Stock
Options
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We are
pleased to offer you 200,000 Zarlink Semiconductor stock options,
pursuant to Xxxxxxx’s 1991 Employee Stock Option Plan subject to and conditional
on Board of Director approval at the July 2009 Board meeting. Grants
will be made, dated and priced on the date of Board approval.
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4.
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Health, Dental and
Related Benefits
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ZARLINK
maintains a comprehensive group employee benefits plan, made available to our
employees. Enclosed you will find a benefits package 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
Plan.
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5.
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Company
car
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You are
eligible to participate in the Zarlink Canadian Senior Vice-President Fleet
Vehicle Program in accordance with its terms and conditions.
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6.
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Pension
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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 SERP for your
benefit. The annual funding cost paid by Xxxxxxx is 15% of your base
salary and car allowance.
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7.
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Vacation
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Xxxxxxx
will provide you four (4) weeks paid vacation leave per fiscal year, accrued in
equal bi-weekly installments. In accordance with Xxxxxxx’s Canadian
Vacation Policy, vacation accrual will cease at anytime during the year that
your accrual reaches 150 hours. The accrual will re-start once that
total comes back down below 150 hours. You will be offered a
reasonable time to reduce your current vacation accrual to the 150 hour cap, if
applicable. In addition Xxxxxxx will provide paid statutory holidays
in accordance with company policy and any other leave you are legally entitled
to receive, all in accordance with employment standards legislation and
Xxxxxxx’s policies.
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8.
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Expenses
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The
Company will pay or reimburse you for all reasonable and necessary out-of-pocket
expenses actually incurred by you in the performance of your services under this
Agreement, provided you provide proper records and/or receipts for such expenses
and otherwise properly account for such expenses in accordance with the
Company’s policy as presently in effect and amended from time to
time.
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9.
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D&O Insurance
Coverage
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You will
be entitled to director and officer insurance coverage in line with the
Company’s D&O insurance policy terms and conditions for your acts and
omissions while employed as an officer of the Company on a basis no less
favorable to you than the coverage provided to all other similarly situated
officers.
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10.
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Confidentiality of
Information and Ownership of Proprietary
Property
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The
Company agrees to and will impart to you and provide you with access to its
Confidential Information. “Confidential
Information” means all information and compilations of information of any
kind, type or nature (tangible and intangible, written or oral, and including
information contained, stored, or transmitted through any electronic medium),
whether owned by the Company or licensed from third parties, which, at any time
during your employment, is devised, developed, designed or discovered or
otherwise acquired or learned by you to the extent it relates to the Company,
including without limitation, products and services, including without
limitation, plans, procedures, formulae, processes, pricing, and costs;
customers, including without limitation, lists, contact information, pricing,
preferences, and other non-public information concerning customers; sources of
supply and vendors; good-will; marketing plans, strategies, and budget;
management and employees, including without limitation, compensation, personal
data, contact information, and other non-public information concerning
employees; technology, technical data, research, manuals, drawings, designs, and
documentation; financial condition, including without limitation, product or
service fees, sales information, volume, pricing, costs, properties, assets,
analysis, and reports and the information contained therein; accounting and
business methods and plans; business development, including without limitation,
plans, prospects, strategies, fees, costs, pricing, and new ideas and
developments; inventions made, developed or conceived by the Company and/or its
subsidiaries and affiliates; trade secrets; and computer software,
specifications, source code, and executable code.
You
acknowledge and agree that the Confidential Information is valuable and is a
unique asset that provides the Company an advantage over competitors; is
developed or acquired by the Company at considerable time and expense, and is
proprietary to the Company and is intended to be used solely for the benefit of
the Company. You acknowledge and agree that, but for your agreement
to the terms and conditions of this Agreement, the Company would not impart or
provide access to such Confidential Information.
As a
condition of your acceptance of this offer, you are required to provide Zarlink
with an executed original of the enclosed Intellectual Property Rights &
Non-Solicitation 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. In addition, you will be
required to sign Xxxxxxx’s “Code of Ethics and Business Conduct” as a condition
of employment. This will be provided to you on your start
date.
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11.
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Notification of
Materials or Documents from Other Employers.
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You
warrant that you will not bring to Zarlink or use in the performance of your
responsibilities at Zarlink any information, materials or documents of a former
employer that are not generally available to the public, unless you obtained
express written authorization from the former employer for their possession and
use, and disclosed such circumstances to Xxxxxxx.
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12.
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Notification of Other
Post-Employment Obligations
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As part
of your employment with Xxxxxxx, you are not to breach any obligation of
confidentiality that you have to former employers, and you agree to honor all
such obligations to former employers during your employment with
Xxxxxxx. You warrant that you are not subject to an employment
agreement or restrictive covenant preventing full performance of your duties
under this Agreement.
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13.
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Director, CEO and
Executive Stock Ownership
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As an
executive of Zarlink reporting directly to the CEO, you will be required to
establish and hold specified stock ownership levels in the Company within
defined periods of time in accordance with the terms and conditions as set out
in the Directors, CEO and Executive Stock Ownership Policy (policy available at
xxx.Xxxxxxx.xxx).
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14.
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Cessation of
Employment
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a.
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Definitions
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For
the purposes of this employment agreement, the following definitions
apply:
“Cause” means (i) your
commission of any act of dishonesty, fraud, misrepresentation, misappropriation,
embezzlement or the like, which was intended to result in substantial gain or
personal enrichment for you at the expense of the Company; (ii) your
unauthorized use or intentional disclosure of any confidential information or
trade secrets of the Company (not including inadvertent or non-injurious
disclosures), including your breach of that certain Intellectual Property Rights
& Non-Solicitation Agreement entered into in connection herewith; (iii) any
willful or intentional violation by you of a law or regulation applicable to the
Company’s business, which violation, in the reasonable discretion of the Board,
is or is reasonably likely to be injurious to the Company; (iv) your commission
of (a) a felony or (b) any other crime which involves moral turpitude or which
would seriously damage the reputation of the Company; (v) gross negligence or
willful misconduct in the performance of your duties after written notice from
the Company identifying the misconduct, and if reasonably capable of being
cured, a reasonable cure period of not less than thirty (30) days; or (vi) your
willful or intentional violation of a material Company policy or procedure that
is injurious to the Company.
“Incapacity” means any
permanent physical or mental incapacity, disability or condition which prevents
you from performing the essential duties of your position, even with reasonable
accommodation, for a period of not less than 90 consecutive days and with no
reasonable prospect of recovery, as determined in good faith by Xxxxxxx on the
basis of medical evidence satisfactory to the Board.
“Termination Date”
means:
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(i)
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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);
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(ii)
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if
you resign your employment with Xxxxxxx, the date which is the end
of the three-month notice period or such shorter notice period as the
parties agree;
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(iii)
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if
you die, the date of death;
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(iv)
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in
the event of Incapacity, the date designated by Xxxxxxx as the last day of
your employment after determination that such Incapacity
exists.
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b.
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Notice of
Resignation
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You may
resign at any time, for any reason, upon giving a minimum of three month advance
written notice or such shorter notice period as the parties agree. Zarlink
reserves the right to accelerate the Termination Date.
c. Entitlements upon
Resignation, Termination for Cause
If you
resign or your employment is terminated for Cause, then you will be entitled to
receive any compensation, benefits and perquisites which have accrued up to the
Termination Date. 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, as it may be amended from time to time.
d. Entitlements upon Death,
Incapacity
If you
die, or if determined that you suffer an 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. 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,
as it may be amended from time to time.
e. Entitlements upon
Termination without Cause
If your
employment is terminated by the Company without 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):
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(i)
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You
will be paid for all time worked and your accrued vacation balance through
the Termination Date. This payment will be made within 30 days following
the Termination Date.
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(ii)
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You
will be paid in a lump sum an amount equal to twelve (12) months of your
then current annual base salary net of required tax and other
withholdings. This payment will be made within 30 days following the
Termination Date.
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(iii)
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You
will be paid in a lump sum an amount in lieu of bonus equal to one times
your target
annual bonus.
This payment will be made within 30 days following the Termination
Date.
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(iv)
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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 Xxxxxxx in writing forthwith if you secure
substantially similar replacement coverage, during the continuation
period.
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(v)
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You
will have six (6) 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, as it may be amended from time to time,
and which have vested as of the last day of that six (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, as it may be amended
from time to time.
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(vi)
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All
other perquisites, if any, will cease 30 days following the Termination
Date.
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f.
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Resignation of
Office
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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 Zarlink or with any subsidiary or affiliated company.
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15.
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Non-Competition and
Non-Solicitation Obligations
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You
acknowledge and agree that your training, work and experience with the Company
will enhance your value to competitors, and that the nature of the Confidential
Information will make it difficult, if not impossible for you to work in any
business that competes directly with the principal business of the Company
without disclosing or utilizing the Confidential Information to which you have
access during the course of your employment. You further acknowledge
and agree that the Company’s agreement to impart to and to provide you with
access to its Confidential Information is ancillary to and contingent upon your
agreement that you will not, for a period of twelve (12) months immediately
following the Termination Date:
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a.
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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
successors);
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b.
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directly
or indirectly solicit any of Zarlink’s customers for business in
competition with Xxxxxxx (or its successors);
and,
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c.
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solicit,
entice, approach or induce any of Xxxxxxx’s employees or consultants to
leave their employment or to end their consultancy arrangements with
Xxxxxxx (or its successors) or to join another business or
organization.
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16.
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Notices
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All
notices, requests, and other communications hereunder must be in writing and
will be deemed to have been duly given only if (i) delivered personally to a
person authorized to accept, (ii) delivered by facsimile transmission with
transmission confirmation, (iii) mailed (by Canadian certified or registered
mail, return receipt requested), or (iv) delivered by overnight courier at the
following addresses and facsimile numbers:
To the
Company:
400 March
Road
Ottawa,
Ontario, Canada K2K 3H4
Facsimile:
000 000-0000
Attn: Xxxxxx Xxxxxx
To the
Employee:
Xxxxx Xxxxxxxxx
C/O 000 Xxxxx Xxxx, Xxxxxx, XX, Xxxxxx
All such
notices, requests, and other written communications will (i) if delivered
personally or by overnight carrier to the address as provided herein, be deemed
given upon delivery and (ii) if delivered by facsimile transmission or by
Canadian mail in the manner and to the address as provided herein, be deemed
given three (3) days after the date of the facsimile transmission verification
or after deposit in the Canadian mail. Any party from time to time
may change its address, facsimile number, or other information for the purpose
of notices to that party by giving written notice specifying such change to the
other parties hereto.
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17.
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Choice of Law and
Jurisdiction
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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 brought in the state or federal courts in the City of
Ottawa, in the Province of Ontario, and you hereby submit to personal
jurisdiction in such courts in connection with any such dispute.
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18.
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Whole
Agreement
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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 Xxxxxxx from any and all claims whatsoever under or in respect of any
such previous agreements or representations. If any provision of this Agreement
is held to be unenforceable in whole or in part, the remaining provisions shall
remain in full force and effect, and such unenforceable provision shall be
deemed to be automatically amended and replaced by a legal, valid and
enforceable provision which accomplishes as far as possible the purposes and
intent of such original provision.
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 Xxxxxx Xxxxxx, no
later than the close of business, June 8, 2009.
All of us
at Zarlink look forward to working with you.
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Per: /s/ Xxxx
Xxxxx
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Xxxx
Xxxxx
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President
and CEO
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Acknowledgement and
Acceptance
I, Xxxxx
Xxxxxxxxx, have read and reviewed, in their entirety, this offer of employment
dated June 8, 2009 and the documents enclosed. I have had an
opportunity to ensure that I clearly understand the terms and conditions of my
employment with Xxxxxxx, 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 Xxxxxxx. I accept this conditional offer of
employment, and agree to the terms and conditions as set out.
DATED
AT ____Ottawa_______________
this 8th__day of
___June__, 2009.
/s/ Xxxxx
Xxxxxxxxx
Xxxxx Xxxxxxxxx
