Document:

exhibit10_1.htm

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

                

                    Exhibit
              10.1
      
      

                    
      
    

        

      

      SETTLEMENT
        AGREEMENT AND MUTUAL
        RELEASE

      This
        Settlement Agreement and Mutual Release (the “Agreement”), dated
        June 6, 2007, is entered into by and between Yardville National Bancorp,
        Patrick
        M. Ryan, George Muller, Martin Tuchman, F. Kevin Tylus, Christopher S. Vernon,
        Robert Workman, James E. Bartolomei, Elbert G. Basolis, Jr., Lorraine Buklad,
        Jay G. Destribats, Anthony M. Giampetro, Sidney L. Hofing, Gilbert W. Lugossy,
        Samual D. Marrazzo, and Louis R. Matlack (collectively “YNB”) and Lawrence B.
        Seidman, Dennis Pollack, and Seidman and Associates, LLC (collectively
“Seidman”) (collectively, YNB and Seidman are referred to as the
“Parties”);

      WHEREAS,
        on or about March 3, 2006, Seidman instituted a shareholder
        disenfranchisement lawsuit against YNB with the Superior Court of New Jersey,
        Chancery Division, Passaic County, under a matter entitled Seidman, et al. v.
        Yardville National Bancorp, et al. (Docket No. PAS-C-41-06) (the
“Action”);

       

      WHEREAS,
        on or about February 8, 2007, the Court entered an Order of
        Judgment that resolved all the issues in the case; and

       

      WHEREAS,
        on or about February 9, 2007, Seidman & Associates, LLC
        instituted a summary proceeding under the caption Seidman, et al. v.
        Yardville National Bancorp, et al. (Docket No. PAS-C-20-07) for a
        declaration to require Yardville National Bancorp to hold its annual meeting
        of
        shareholders on or before June 4, 2007;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      WHEREAS,
        on or about March 21, 2007, the Court entered an Order
        requiring Yardville National Bancorp to hold its annual meeting of shareholders
        on or before July 12, 2007; and

       

      WHEREAS,
        on or about March 29, 2007, the Court entered an Order
        Awarding Attorney’s Fees and Costs that awarded Seidman certain fees and costs
        associated with the Action; and

       

      WHEREAS,
        YNB and Seidman filed appeals with the Superior Court of New
        Jersey Appellate Division under Docket Number A-004348-06-T5 to challenge
        the
        February 8th Order and the March 29th Order (the
“Appeal”); and

       

      WHEREAS,
        the Parties now wish to amicably settle and resolve all
        disputes and controversies relating to the Action, the date for the 2007
        Annual
        Meeting of Shareholders, and the Appeal in order to avoid the uncertainty
        and
        costs associated with on-going litigation; and

      WHEREAS,
        the Parties have consulted with their respective attorneys
        prior to executing this Agreement.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants set forth in
        this Agreement, the undersigned Parties do hereby agree as follows:

       

      
        
          
          

        

        
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      1.  Payment.  YNB
        agrees to pay Seidman the sum of One Hundred Thousand Fifty-Three and 6/100
        Dollars ($100,053.06) (the “Settlement Payment”) within ten (10) days of
        Seidman’s delivery of a fully executed copy of this Agreement.  The
        Settlement Payment is made in order to settle all disputes, claims and
        controversies between the Parties.  Upon receipt of the Settlement
        Payment, Seidman agrees to execute and file warrants to satisfy the monetary
        judgments entered in the Action.  The warrants shall only satisfy the
        monetary portion of the judgments entered in Action and not constitute a
        waiver
        of YNB’s ability to appeal paragraphs 4 and 6 of the February 8, 2007 Order
        entered in the Action.

       

      2.  Consent
        to Vacate the March 21, 2007 Order.  The Parties
        agree to the entry of a Consent Order that shall be entered by the Honorable
        Margaret M. McVeigh, P.J.Ch. which shall vacate the Court’s March 21, 2007 Order
        that requires the 2007 annual meeting of shareholders to take place on July
        12,
        2007.  The Consent Order shall be prepared and submitted to the Court
        by YNB’s counsel.

       

      3.  Resolution
        of the Appeal.  Seidman agrees that he will withdraw the
        cross-appeal filed in the Appeal under Docket Number
        A-004348-06-T5.  YNB agrees that it will withdraw all portions of its
        appeal, except its appeal of Paragraphs 4 and 6 of the February 8, 2007 Order
        entered in the Action.  Seidman agrees not to oppose YNB’s appeal of
        Paragraphs 4 and 6 of the Court’s February 8, 2007 Order.  The Parties
        further agree that they will use their best efforts to resolve the Appeal
        by
        jointly seeking to have the Appellate Division enter an Order that vacates
        Paragraphs 4 and 6 of the February 8, 2007 Order entered in the
        Action.  In connection with the foregoing, in the event that Seidman’s
        counsel is asked by YNB to attend any conferences or otherwise provide services,
        YNB shall promptly reimburse Seidman for the reasonable fees and expenses
        of his
        counsel.

       

      
        
          
          

        

        
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      4.  2007
        Annual Meeting of Shareholder.  On or prior to the date
        of this Agreement, Yardville National Bancorp has entered into an Agreement
        and
        Plan of Merger (as amended, supplemented, restated or otherwise modified
        from
        time to time, the “Merger Agreement”), pursuant to which Yardville National
        Bancorp will merge with and into an unaffiliated corporation (the “Merger”),
        which provides, among other things, that Yardville National Bancorp will
        promptly take all steps necessary to duly call, give notice of, convene,
        and
        hold a special meeting of its shareholders for the purpose of considering
        the
        Merger Agreement and the Merger.  In the event that the Merger
        Agreement is terminated for any reason prior to the consummation of the Merger,
        Yardville National Bancorp shall cause an annual meeting of shareholders
        to be
        held within sixty (60) days of the effective date of such termination.

       

      5.  Seidman’s
        Withdrawal of the Slate of Director Candidates.  If an
        annual meeting of shareholders is held in accordance with paragraph 4 of
        this
        Agreement, Seidman & Associates, LLC shall withdraw its slate of director
        candidates seeking election to the Yardville National Bancorp Board.

       

      6.  Withdrawal
        of Proposal to Declassify Yardville National
        Bancorp’s Board. If an annual meeting of
        shareholders is held in accordance with paragraph 4 of this Agreement, Seidman
        & Associates, LLC shall withdraw its shareholder proposal to hold an
        election on the adoption of a resolution to declassify Yardville National
        Bancorp’s Board of Directors and hold annual elections of each director
        seat.

       

      
        
          
          

        

        
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      7.  Yardville
        National Bancorp’s Nomination of Candidates.  If an
        annual meeting of shareholders is held in accordance with paragraph 4 of
        this
        Agreement, Yardville National Bancorp shall nominate the following slate
        of
        candidates for election to the Yardville National Bancorp Board of Directors
        at
        the 2007 annual meeting of shareholders: Elbert G. Basolis, Jr., Dennis Pollack,
        Patrick Robinson, Patrick M. Ryan and F. Kevin Tylus.

       

      8.  Adoption
        of Declassification Amendment.  If an annual meeting of
        shareholders is held in accordance with paragraph 4 of this Agreement, Yardville
        National Bancorp shall cause to be submitted to a vote of the shareholders
        an
        amendment to its certificate of incorporation to declassify its Board and
        hold
        annual elections for each director seat on the Board beginning at the 2008
        annual meeting of shareholders.

       

      9.  Share
        Voting Agreement.  If an annual meeting of shareholders
        is held in accordance with paragraph 4 of this Agreement, Seidman agrees
        to be
        present, in person or by proxy, and to vote or cause to be voted, in person
        or
        by proxy, all of the shares which it beneficially owns, in favor of the slate
        of
        candidates the Yardville National Bancorp Board of Directors nominates for
        election at the 2007 annual meeting of shareholders.

       

      10.  No
        Admission.  This Agreement is executed pursuant to a
        compromise and settlement entered into without any admission of liability
        by the
        Parties, but solely for the purpose of avoiding costly litigation on disputed
        claims and avoiding uncertainty, controversy and legal expense.

       

      11.  Amendment.  This
        Agreement shall be binding upon the Parties and may not be amended,
        supplemented, changed, or modified in any manner, orally or otherwise, except
        by
        an instrument in writing of concurrent or subsequent date signed by the
        Parties.

       

      
        
          
          

        

        
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      12.  Entire
        Agreement.  This Agreement contains and constitutes the
        entire understanding and agreement between the Parties and cancels all prior
        or
        contemporaneous oral or written understandings, negotiations, agreements,
        commitments, warranties, representations, and promises in connection
        herewith.

       

      13.  Severability.  If
        any provision in this Agreement is declared or determined by any court or
        arbitrator to be illegal or invalid, the validity of the remaining parts,
        terms,
        or provisions shall not be affected, and the illegal or invalid part, term,
        or
        provision shall be deemed not to be a part of this Agreement.

       

      14.  Counterparts.  This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original, and the counterparts shall together constitute one and the same
        agreement, notwithstanding that all Parties are not a signatory to the original
        or the same counterpart.  Furthermore the Parties mutually agree that
        this Agreement may be executed by a faxed signature in counterparts which
        taken
        together should be considered an original.

       

      15.  Headings.  The
        headings of the sections contained herein are for convenience only and are
        not
        to be used to define, limit or construe their contents.

       

      
        
          
          

        

        
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      16.  Successors.  All
        of the rights and obligations of the Parties under this Agreement shall bind
        and
        inure to the benefit of the respective successors, grantees and assigns of
        the
        Parties.

       

      17.  Representation
        by Counsel.  The Parties hereby acknowledge that each has
        been represented by legal counsel of its own choice throughout all of the
        negotiations which preceded the execution of this Agreement and that each
        of
        them has executed this Agreement with the consent and on the advice of such
        legal counsel.  The Parties further acknowledge that each of them and
        their counsel have had an adequate opportunity to make whatever investigations
        or inquiry that they may deem necessary or desirable in connection with the
        subject matter of this Agreement prior to the execution hereof and the delivery
        and acceptance of the consideration specified herein.  Each party has
        reviewed and revised, or had the opportunity to revise this Agreement, and
        accordingly the rule of construction to the effect that any ambiguities are
        to
        be resolved against the drafting party shall not be employed in the
        interpretation of this Agreement.

       

      
        
          
          

        

        
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      By
        signing below, the Parties acknowledge that they have consulted
        with legal counsel regarding this Agreement and have carefully read and fully
        understand all of the provisions of this Agreement and that they are voluntarily
        entering into this Agreement.

       

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Lawrence B. Seidman

              
	 	
                Lawrence
                  B. Seidman

              

      

      

       

      SEIDMAN
&
ASSOCIATES,
        LLC

       

      
        	
                Dated:  June
                  6, 2007

              	
                By:
                  /s/ Lawrence B. Seidman

              
	 	
                Lawrence
                  B. Seidman

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	 
	 	
                Dennis
                  Pollack

              

      

      

       

      YARDVILLE
        NATIONAL BANCORP

       

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  By: Patrick M. Ryan

              
	 	
                Patrick
                  M. Ryan , CEO

              

      

       

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Patrick M. Ryan

              
	 	
                Patrick
                  M. Ryan

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  George Muller

              
	 	
                George
                  Muller

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Martin Tuchman

              
	 	
                Martin
                  Tuchman

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  F. Kevin Tylus

              
	 	
                F.
                  Kevin Tylus

              

      

      

      
        	
                Dated:  June
                  8, 2007

              	
                /s/
                  Christopher S. Vernon

              
	 	
                Christopher
                  S. Vernon

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Robert Workman

              
	 	
                Robert
                  Workman

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  James E. Bartolomei

              
	 	
                James
                  E. Bartolomei

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Elbert G. Basolis, Jr.

              
	 	
                Elbert
                  G. Basolis, Jr.

              

      

      

      
        	
                Dated:

              	 
	 	
                Lorraine
                  Buklad

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Jay G. Destribats

              
	 	
                Jay
                  G. Destribats

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Anthony M. Giampetro

              
	 	
                Anthony
                  M. Giampetro

              

      

      
 

      
        	
                Dated:  June
                  8, 2007

              	
                /s/
                  Sidney L. Hofing

              
	 	
                Sidney
                  L. Hofing

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Gilbert W. Lugossy   

              
	 	
                Gilbert
                  W. Lugossy

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Samuel D. Marrazzo

              
	 	
                Samuel
                  D. Marrazzo

              

      

      

      
        	
                Dated:  June
                  6, 2007

              	
                /s/
                  Louis R. Matlack      

              
	 	
                Louis
                  R. Matlack

              

      

      

      

       

      
        
          
          

        

        
          8Exhibit 4.3

February 16, 2005 (Revised May 24, 2007 by direction of the Board of Directors)

Kirk K Mandy
234 Old Quarry Road
Woodlawn, Ontario

Dear Kirk:

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.

<PAGE>

                                      -2-

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 incentives earned will be paid out to you by the
end of May. Please note that if you are not employed by Zarlink 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

Zarlink  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.
Zarlink  will  contribute  15% of your base salary to this  program on an annual
basis.

7. Vacation

Zarlink  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  Zarlink's  policy,  any  unused  remainder  will

<PAGE>

                                      -3-

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.

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
      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 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

<PAGE>

                                      -4-

      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 target annual bonus. 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 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

<PAGE>

                                      -5-

            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.

            (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  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 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  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 successor) or to join
            another business or organization.

<PAGE>

                                      -6-

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  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 Don
McIntyre, 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
Signed H. Simon, Board Chair.              Revised May 24, 2007 by direction of
                                           the Board
                                                   /s/ Don McIntyre
                                                   -----------------------------
                                                   D. McIntyre,
                                                   Corporate Secretary

Acknowledgement and Acceptance
I,  Kirk  Mandy,  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  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  ___________________  as of this   _______day of February, 2005.

signed: K. Mandy                           Revised May 24, 2007

                                                   /s/ Kirk Mandy
                                                   -----------------------------
                                                   Kirk Mandy

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