Exhibit 4.7
May 31, 2005
Xx. Xxxx Xxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx
00000
Dear Xxxx:
I am pleased to offer you employment with Zarlink Semiconductor Inc. ("Zarlink"
or "Company") on the following terms and conditions. This offer is conditional
upon being able to obtain any necessary work permits or visas required to permit
you to work part-time in Sweden over the first two years from your start date.
This offer, once accepted by you and subject to work permit/visa requirements,
will constitute an employment agreement between Zarlink and you. Please note
that all amounts are in United States dollars.
1. Work Responsibilities
You will be employed in the position of Vice President of the Optoelectronics
Business Unit ("Opto B/U"), reporting to myself as President and CEO of the
Company. Your U.S. office will be at your home office in Boulder, Colorado and
your office in Sweden will be at the Zarlink offices located in Jarfalla,
Sweden. For the first two (2) years, you will spend as much time as is
reasonably required in Sweden to efficiently run the Opto B/U and the balance of
your work time will be spent visiting customers and suppliers globally or
pursuing other assignments as I may request from time to time. Your start date
will be no later than June 13, 2005 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 me from time to time. Your primary
focus over the next two years will be to:
(a) Grow the Opto B/U revenues and return that business to significant
profitability; and,
(b) Identify and develop an acceptable Sweden-based executive to succeed
you in running the business unit.
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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 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 Incentives
Your annual base salary will be $225,000.
In addition, you will be eligible to earn an annual incentive payment under the
terms of the Company's Pay For Performance (PFP) Executive Plan, conditional
upon your successful achievement of specific target objectives in each fiscal
year. Your target annual incentive will be 50% of your then current base salary.
The incentive could increase to 75% of your base salary for exceptional
performance as determined by me and approved by the Board of Directors.
Objectives for each fiscal year will be reviewed and finalized with the Board
and communicated to you no later than sixty (60) days after your start date or
the commencement of each fiscal year, whichever is later.
By the end of May each year (the "incentive assessment date"), Zarlink assesses
the achievement of the previous year's objectives, and calculates any earned
incentive amount. Please note that you must be employed by Zarlink on the
incentive assessment date in order to be eligible to receive this incentive
payment.
3. Stock Options
The Board has approved a grant of one hundred thousand (100,000) stock options,
pursuant to Zarlink's 1991 Employee Stock Option Plan (a copy of which is
enclosed). Option pricing will be in accordance with the Plan formula and will
be effective as of the date you accept this offer. The option grant has a term
of 6 years and provides for staggered equal vesting over a period of 4 years
commencing one year from the date of grant.
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.
4. Health, Dental and Related Benefits
Zarlink will provide Health and Dental coverage for you and your family under
its International Benefits Plan. Life insurance, AD&D, Business Travel and LTD
coverage for yourself will be maintained on the U.S. employee group benefits
plan. You will have the option to enroll your dependents in the U.S. Group
Benefits Plan under the optional benefits for Life and AD&D insurance, Flexible
Spending Account, and Vision care. Coverage under the optional benefits will be
determined in accordance with the specific terms and conditions of the US
Benefits Plan.
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5. Company Car
Zarlink will provide you the use in Sweden of one company car (inclusive of
lease, fuel, insurance and maintenance costs). You may select your choice of
vehicle in line with Zarlink Sweden's car policy for executives.
6. Accommodations
While you are working at the Jarfalla, Sweden office, Zarlink will arrange a
suitable furnished apartment for you to a maximum cost of $2,800. per month
inclusive of all related costs such as utilities, maintenance, telephone,
internet access, television and maid service. The terms of any apartment rental
agreement must be approved by the company prior to finalizing the lease.
7. Pension
You will be entitled to participate in the Zarlink U.S. employee 401K Plan.
Zarlink will provide an annual company match payment in accordance with the
terms of the Plan.
8. Vacation
Zarlink will provide you four (4) weeks paid vacation leave per fiscal year,
accrued in equal bi-weekly instalments. In accordance with Zarlink's US Vacation
Policy, vacation accrual will cease at anytime during the year that your accrual
reaches 160 hours. The accrual will re-start once that total comes back down
below 160 hours. In addition Zarlink will provide paid U.S. statutory holidays
and any other leave you are entitled to receive, all in accordance with U.S.
employment standards legislation and Zarlink's policies.
9. Income Tax
Your payroll will remain in the United States. For the duration of the Opto B/U
assignment, Zarlink will provide you income tax protection for all relevant
taxation years relative to this assignment using the U.S. baseline, such that it
will reimburse you the grossed up cost of any tax liability you incur as a
result of this assignment in excess of the amount you would have paid if you had
worked throughout the relevant period only in the United States. Zarlink will
pay or reimburse the reasonable income tax preparation costs charged by our
designated accountants for the taxation years relative to your Opto B/U
assignment.
10. 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. In addition, you will be required to sign Zarlink'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. 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
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:
(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 Zarlink, 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 Zarlink
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. 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.
(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.
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(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 Zarlink1991 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 be paid for all time worked and your accrued vacation
balance through the Termination Date. This payment will be
made on the Termination Date.
(ii) You will be paid in a lump sum an amount equal to one times
your then current annual base salary net of required tax and
other withholdings. This payment will be made within 30
business days following the Termination Date.
(iii) You will be paid in a lump sum an amount in lieu of incentive
equal to one times your average earned annual incentive 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.
(iv) You will receive an amount equivalent to the one-year cost of
your current life, health and dental insurance coverage. You
would be eligible to participate in benefits through COBRA
following the Termination Date. You would need to contact our
insurance carrier (currently Unum) for conversion or
portability of your life insurance policy.
(v) 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 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.
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(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 Zarlink or with any subsidiary or affiliated
company.
12. Non-Competition and Non-Solicitation Obligations
We both 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 for any reason, you agree that for a
period of one (1) year from the Termination Date :
(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 (or its successors);
(b) you will not directly or indirectly solicit any of Zarlink's
customers for business in competition with Zarlink (or its
successors); and,
(c) 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 successors) or to join
another business or organization.
13. Choice of Law and Jurisdiction
This employment agreement will be governed by and construed in accordance with
the laws of the State of Colorado, U.S.A., without regard to the principles of
conflicts of law, and will in all respects be treated as an Colorado contract.
In the event of a dispute, you agree that any legal proceedings must be taken in
the City of Boulder, in the State of Colorado and you hereby consent to attorn
to the jurisdiction of the Colorado courts.
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14. 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, June 3, 2005.
All of us at Zarlink look forward to working with you to meet the challenges and
opportunities facing our Opto B/U.
Zarlink Semiconductor Inc.
Per: \S\ Xxxx Xxxxx
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Xxxx Xxxxx
President & CEO
Acknowledgement and Acceptance
I, Xxxx Xxxxxxx, have read and reviewed, in their entirety, this offer of
employment dated May 19, 2005, 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 Boulder Co. this 1 day of June 1, 2005.
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Executive Witness
\S\ Xxxx Xxxxxxx \S\ Xxxxxx Xxxxxxx
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Xxxx Xxxxxxx Witness name (please print)
