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                                                                    Exhibit 4.16



                             Private & Confidential


24 March 2003


Tan Lay Koon
P&CEO, STATS


Dear Lay Koon


TERMS AND CONDITIONS OF APPOINTMENT

Further to the letter dated 26 June 2002 from Peter Seah to you in respect of
your promotion from Chief Financial Officer to President & Chief Executive
Officer, this is to confirm that the attached terms and conditions are
applicable to your appointment as President & Chief Executive Officer. The
attached embodies all the terms and conditions agreed upon between the Company
and you as to your appointment as P & CEO of the Company and supercedes and
cancels in all respects all the previous agreements, undertakings and
arrangements of any nature if any between the Company and you with respect to
your appointment, whether such be written or oral.

Kindly acknowledge receipt and confirm by signing and returning the duplicate
copy of this letter.

Yours sincerely


/s/ Kuan Kwee Jee
Kuan Kwee Jee
Secretary ERCC
ST Assembly Test Services Ltd
Enc.
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                        ACKNOWLEDGEMENT AND CONFIRMATION

I, Tan Lay Koon, hereby acknowledge receipt and confirm the contents of your
letter herein as correct.



/s/ Tan Lay Koon                                        March 25, 2003
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Signature                                                    Date

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                             Private & Confidential

               TERMS AND CONDITIONS OF APPOINTMENT OF TAN LAY KOON
                  AS PRESIDENT & CHIEF EXECUTIVE OFFICER, STATS
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1.   RESPONSIBILITY

     You will be responsible to the Board of Directors for the overall
     profitability and growth of the Company.


2.   REMUNERATION

     a.   Your service grade will be G3. Your monthly salary shall be S$40,000.

     b.   You will also receive the 13th month Annual Wage Supplement (AWS),
          which is pro-rated to your period of service up to and including 31
          December, and is payable if you are in service with the Company on 31
          December.

     c.   Performance and salary review will be conducted annually on or about 1
          July each year. Annual salary increments are based on individual and
          company performances, in accordance with the policies approved by the
          STATS Executive Resource and Compensation Committee (ERCC) from time
          to time.

     d.   Please note that salary and bonus payments are made based on
          individual merits and should therefore be kept strictly confidential.

     e.   Your salary and other special terms will be administered by Secretary
          ERCC.


3.   PERFORMANCE BONUS

     In addition to your base salary, inclusive of the 13th month AWS, you will
     participate in the following incentive plans:

     a.   Performance Target Bonus (PTB): You will be entitled to earn a PTB
          each year, based on the achievement of mutually agreed targets set by
          the Board and yourself. PTB may reach a maximum of 2.5 months of your
          monthly base salary subject to achievement of the performance targets.

     b.   EVA-based Incentive Plan: You will participate in the EVA based
          incentive plan based on sharing as approved by the ERCC.
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                             Private & Confidential


4.   SHARE OPTIONS

     It will be recommended to the ERCC that you be granted an option to
     purchase 2,000,000 ordinary shares under the Employee Share Option Scheme
     (ESOS). The vesting period will be over a period of 4 years and the grant
     price will be determined based on the approved ESOS guidelines. Additional
     grants are planned on an annual basis, based upon individual and company
     performance.


5.   INCENTIVE SHARES

     a.   You will receive 150,000 ordinary shares upon the Company achieving an
          annual revenue of US$500 million with 20% net profit.

     b.   You will receive another 250,000 ordinary shares if the Company
          achieves an annual revenue of US$1,000 million with 25% net profit.


6.   CAR BENEFITS AND EXPENSES

     a.   The company will provide you with a grant of S$200,000 over 6 years
          for purchase of a car under the Hold-in-Trust Scheme subject to the
          terms and conditions of the Car Hold-In-Trust Agreement to be entered
          into by the Company and you.

     b.   You will be given a fixed monthly car maintenance allowance of
          S$2,000. This is to help defray the cost of general maintenance and
          running expenses of your vehicle. It will cover transport expenses
          incurred in the course of official business and you will not be
          eligible to claim for any reimbursement of mileage.

     c.   You will also receive a fixed monthly driver allowance of S$2,400.


7.   CLUB BENEFITS AND EXPENSES

     a.   You will be provided with a grant of S$80,000 over five (5) years for
          the purchase of a club membership under the Hold-in-Trust Scheme.

     b.   You will also be given a monthly club subscription allowance of S$200.


8.   OTHER GENERAL TERMS AND CONDITIONS

     a.   You shall not at any time during your service with the Company either
          directly or indirectly (without prior written consent from the
          Company) engage or interest yourself, whether for reward or
          gratuitously, in any work or business other than relating to your
          duties in the Company.
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                             Private & Confidential

     b.   You shall devote the whole of your time, knowledge, skill and
          attention in the performance of your duties in the Company, and attend
          at the premises where you shall from time to time be posted by the
          Company on such days including, if the exigencies of the work so
          require, on Sunday and public holidays and at such hours as may be
          required.

     c.   You shall enjoy all other standard benefits and be subject to all
          conditions applicable to executives under your job grade.

     d.   The Company reserves the right to vary the terms and conditions of
          service based on business needs from time to time.

     e.   You will abide by the terms and conditions of service, the rates,
          regulations and procedures as may be laid down by the Company from
          time to time and also as contained in the Company's Human Resources
          Manual as revised from time to time.


9.   WORKING HOURS

     a.   Your working hours will be as per company policy.

     b.   As a senior executive staff, you are expected to work beyond normal
          hours based on the exigencies of service without overtime claims.


10.  LEAVE

     You shall be eligible for 21 days of paid leave each year. Your leave
     administration will be as per the company's policy.


11.  EMPLOYEE BENEFITS PROGRAM

     We have put in place a flexible benefits program for our senior employees.
     This program allows for freedom and flexibility to put together the benefit
     package which best suits your needs and that of your immediate family at
     different stages of your career. The flexible benefits brochure together
     with the enrolment instructions will be forwarded to you upon your
     acceptance of the appointment.


12.  CONFIDENTIALITY & SECRECY

     During the continuance of your employment with the Company and at all times
     after the termination of your employment from any cause whatsoever, you
     shall not directly or indirectly disclose, divulge, authorize or permit to
     be disclosed to anyone not properly entitled thereto any trade secrets,
     know-how
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                             Private & Confidential

     and any confidential information relating to the business or financial
     conditions of the Company.


13.  TERMINATION OF SERVICE

     a.   Termination can only be effected in writing by either party, without
          giving any reasons, by giving 3 MONTHS' NOTICE or the payment of a sum
          equivalent to 3 months' salary in lieu of notice.

     b.   All staff benefits shall cease after the last day of service. Any
          money due and owing under any staff loan scheme, scholarships, bonds
          or otherwise payable by you to the Company must be settled before the
          last day of service. The Company reserves the right to offset any
          outstanding sum from the balance of money payable by the Company to
          you.

     c.   Notwithstanding conditions above, the Company reserves the right at
          all times to terminate your services forthwith if you should be guilty
          of misdemeanor, misconduct, negligence or breach of any of the terms
          of this offer or any other existing terms and conditions of service,
          rule or regulation laid down by the Company from time to time for all
          members of its staff.