AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (this "Agreement") is entered
into as of June 26, 2007 by and between Vitesse Semiconductor Corporation, a
Delaware corporation ("Vitesse") and Richard C. Yonker (the "Executive") and
amends and restates the Employment Agreement dated as of November 16, 2006 (the
“Effective Date”).

 

In consideration of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, Vitesse and Executive
hereby agree as follows:

 

1. POSITION AND COMPENSATION

 

It is hereby agreed that Executive shall be employed by Vitesse. At the meeting
of the Executive Committee of the Board of Directors of Vitesse in December
2006, the Executive Committee is expected to appoint Executive to the position
of Senior Vice President, Finance and Chief Financial Officer. If Executive is
not appointed to that position, Executive can terminate this Agreement
immediately with no further obligation of either party under this Agreement.
Executive shall be employed at a base salary of $275,000 per year. Vitesse and
Executive further agree that Executive's base salary shall be reviewed not less
than once per year from the Effective Date of this Agreement. Changes in
Executive's compensation shall be recorded in a Compensation Adjustment form
signed and dated by Vitesse and Executive.

 

Upon joining Vitesse as a full-time employee, Executive received a one-time
signing bonus in the amount of $25,000.

 

During Executive’s first year of employment, Executive shall be eligible to
receive additional bonus payments of up to $100,000, payable in five
installments of $20,000 each, when and as any of the following five events
occur: a) the vacancies in Vitesse’s accounting and finance organization agreed
to by Executive and the Chief Executive Officer of Vitesse are filled by persons
satisfactory to the Chief Executive Officer of Vitesse; b) Vitesse reduces the
activities of, and the amounts paid to, Alvarez & Marsal LLC by amounts agreed
to by the Chairman of the Compensation Committee of Vitesse and Executive; c)
Vitesse secures a new independent registered public accounting firm as evidenced
by the execution of an engagement letter; d) the implementation of the remedial
action plan approved by the Special Committee of Vitesse and delivery of audited
financial statements for fiscal years 2007 and 2006; and e) the implementation
of financial accountability by individual executive staff members for all items
on Vitesse’s income statement and balance sheet as measured by a financial road
map to be agreed to by the Chairman of the Compensation Committee of Vitesse and
Executive.

 

Following Executive’s first year of employment, he shall become eligible to
participate in Vitesse's bonus plan for senior executives as from time to time
in effect.

 

2. EMPLOYEE STOCK INCENTIVE PLAN

 

Executive shall be eligible to receive options under the Vitesse Semiconductor
Corporation 2001 Stock Incentive Plan ("SIP") as determined by the Compensation
Committee of the Board of Directors of Vitesse (the "Board") and consistent with
his position as Chief Financial Officer. Vitesse and Executive further agree
that Executive's stock option position shall be reviewed not less than once per
year from the Effective Date of this Agreement.

Promptly following commencement of employment with the Company, Executive will
receive an initial grant of an option to purchase 300,000 shares of the common
stock of the Company. Such option shall be an Incentive Stock Option to the
extent permitted by law, and the shares subject to such option shall vest over a
four-year period, with the first one-quarter of the shares vesting upon the
first anniversary of Executive’s employment, and the remainder vesting in three
equal annual installments during the subsequent three years of Executive’s
employment. The exercise price of Executive’s option grant will be equal to the
fair market value as determined by the Vitesse Board of Directors on the date of
grant. At Executive’s election, Executive may immediately exercise all of
Executive’s options under a Section 83b Election, subject to a right of
repurchase in favor of the Company; and such right of repurchase will expire in
accordance with the stated vesting schedule.

 

Acceleration of Vesting: In the event of a Change of Control (as defined below)
of the Company (or its successor) and any involuntary termination other than For
Cause (as defined below) or Constructive Termination (as defined below) of
Executive’s employment within one year of such Change of Control, then,
Executive’s shares subject to all outstanding options which Executive has been
granted prior to any such Change of Control shall be accelerated and shall
immediately become vested as though all options were vesting over four years in
48 (forty-eight) equal monthly amounts, and as though Executive had completed an
additional two (2) years of service with Vitesse, and shall be exercisable for
an additional 90 days. “Constructive Termination” shall mean Executive’s
resignation following: (a) a material reduction of Executive’s overall
compensation and benefits; provided that the substitution of substantially
equivalent compensation and benefits shall not be deemed a reduction of
Executive’s compensation and benefits; (b) Vitesse's requirement that Executive
perform his principal employment duties at an office that is more than twenty
(20) miles from Camarillo, California; or (c) after, or in connection with, a
Change of Control, unless consented to in writing by Executive, any material
reduction in Executive’s overall responsibility as measured against the business
of the Company prior to a Change of Control (and not against the overall
business of the combined or surviving company resulting from a Change of
Control).

 

3. BENEFITS

 

Employment benefits shall be provided to Executive in accordance with the
programs of Vitesse then available to its senior executives, as amended from
time to time.

 

4. VACATION

 

Executive shall be entitled to three weeks of paid vacation per year. Unused
vacation time may be carried forward only to the extent consistent with
Vitesse's then current policy with respect to vacation time.

 

5. TERMINATION OF EMPLOYMENT

 

Vitesse and Executive understand and agree that Executive's employment may be
terminated under the circumstances and in accordance with the terms set forth
below:

 

A. By mutual agreement at any time with or without notice; provided that such
agreement must be stated in writing and signed and dated by Executive and an
authorized agent of Vitesse.

 

B. By either Vitesse or Executive upon sixty (60) days written notice delivered
to the other party; provided, however, that Vitesse may at its sole discretion
elect to provide sixty (60) days pay to Executive in lieu of notice.

C. By Vitesse For Cause. A termination of employment "For Cause" is defined as
termination by reason of (i) Executive's conviction of a felony or plea of
guilty or nolo contendere to a felony; (ii) Executive's intentional failure or
refusal to perform his employment duties and responsibilities; (iii) Executive's
intentional misconduct that injures Vitesse's business; (iv) Executive's
intentional violation of any other material provision of this Agreement or
Vitesse's code of business conduct and ethics; or (v) as provided in Section 8
of this Agreement. Executive's inability to perform his duties because of death
or disability shall not constitute a basis for Vitesse's termination of
Executive's employment For Cause. Notwithstanding the foregoing, Executive's
employment shall not be subject to termination For Cause without Vitesse's
delivery to Executive of a written notice of intention to terminate. Such notice
must describe the reasons for the proposed employment termination For Cause, and
must be delivered to Executive at least fifteen (15) days prior to the proposed
termination date ("the Notice Period"). Executive shall be provided an
opportunity within the Notice Period to cure any such breach (if curable) giving
rise to the proposed termination, and shall be provided an opportunity to be
heard before the Board. Thereafter, the Board shall deliver to Executive a
written notice of termination after the expiration of the Notice Period stating
that a majority of the members of the Board have found that Executive engaged in
the conduct described in this Paragraph 5.C.

 

D. Vitesse may terminate Executive's employment immediately upon his death or
upon Vitesse's provision to Executive of not less than fifteen (15) days written
notice to Executive that Vitesse has determined that Executive is unable to
continue to perform his job duties due to Disability. "Disability" means a
physical or mental impairment of Executive as certified in a written statement
from a licensed physician selected or approved by the Board that renders
Executive unable to perform his duties under this Agreement (after reasonable
accommodation, if necessary, by Vitesse that does not impose an undue hardship
on Vitesse) for one hundred and fifty (150) consecutive days or for at least two
hundred and ten (210) days (regardless of whether such days are consecutive)
during any period of three hundred sixty-five (365) consecutive days. In
conjunction with determining the existence of a Disability, Executive consents
to any reasonable medical examinations (at Vitesse's expense) that the Board
determines are relevant to a determination of Executive's Disability, and agrees
that Vitesse is entitled to receive the written results of such examinations.
Executive agrees to waive any applicable physician-patient privilege which may
arise with respect to such examinations.

 

6. SEVERANCE PAY

 

If employment is terminated by mutual agreement, by Vitesse For Cause, or by
Executive upon sixty (60) days notice of intent to terminate employment for
other than Good Reason (as defined below), Executive shall receive his base
salary and any vested bonus prorated through his final day of employment, but
shall not be eligible to receive any Severance Pay (as defined below).

 

If employment is terminated by Vitesse upon sixty (60) days notice of intent to
terminate employment or pay in lieu of notice other than For Cause, or by
Executive upon sixty (60) days notice of intent to terminate employment for Good
Reason, Executive shall receive his base salary and any vested bonus prorated
through his final day of employment and Severance Pay.

If employment is terminated because of Executive's Disability, Executive shall
receive his base salary and any vested bonus prorated through his final day of
receipt of base salary, but shall not be entitled to any Severance Pay.

 

If employment is terminated because of Executive's death, Executive's estate
shall receive Executive's base salary and any vested bonus prorated until the
date of death, but shall not be entitled to any Severance Pay.

 

"Good Reason" means, without Executive's written consent, the occurrence of any
of the following actions unless the action is fully corrected (if possible)
within fifteen (15) days after Vitesse receives written notice of the action
from Executive: (a) Vitesse's reduction in Executive's base salary; (b)
Vitesse's failure to pay Executive any amount that is expressly required to be
paid under this Agreement; (c) Vitesse's material and adverse reduction of the

nature of Executive's duties and responsibilities, disregarding mere changes in
title; (d) Vitesse's requirement that Executive perform his principal employment
duties at an office that is more than twenty (20) miles from Camarillo,
California; or, (e) a Change of Control of Vitesse (as defined below).

 

"Change Of Control" means each occurrence of any of the following:

 

(a) the acquisition, directly or indirectly, by any person or group (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended),
of beneficial ownership of more than 51% of the aggregate outstanding voting
power of the capital stock of Vitesse;

 

(b) (i) Vitesse consolidates with or merges into another entity and is not the
surviving entity or conveys, transfers or leases all or substantially all of its
property and assets to another person, or (ii) any entity consolidates with or
merges into Vitesse in a transaction pursuant to which the outstanding voting
capital stock of Vitesse is reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction described in this
clause (ii) in which no person or group (within the meaning of Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended) has, directly or indirectly,
acquired beneficial ownership of more than 51% of the aggregate outstanding
voting capital stock of Vitesse; or

 

(c) approval by Vitesse's shareholders of the complete liquidation or
dissolution of Vitesse.

 

"Severance Pay" means twelve (12) months of Executive's base salary (at the
amount before any proposed reduction) payable in a lump sum on the date of
termination of employment.

 

7. EMPLOYMENT DUTIES

 

Executive will report to Vitesse's Chief Executive Officer and shall perform all
duties assigned to him by the Chief Executive Officer. Executive's duties may be
conveyed to him through a job description, or through other written or verbal
instructions from Vitesse's Chief Executive Officer. Executive's duties are
expected to involve travel from time to time to various locations and events,
and are expected to involve significant unpaid overtime.

 

8. COMPLIANCE WITH VITESSE POLICIES AND PROCEDURES

 

As a member of Vitesse management, Executive will be expected to comply with all
provisions of the Vitesse Policies and Procedures Manual and Employee Handbook,
as amended from time to time. Executive acknowledges, by signature on this
Agreement, that failure to comply with and ensure enforcement of Vitesse's
policies and procedures and all

federal/state laws relating to business operations may result in immediate
termination of employment For Cause.

 

9. CONFLICT OF INTEREST

 

Executive acknowledges that his position is a full-time position and agrees to
devote his entire productive time, ability and attention to Vitesse's business.
Executive further agrees that while employed by Vitesse, he will not directly or
indirectly engage in outside employment, consulting or other business activities
unless he has obtained written consent from the Vitesse Board.

 

10. NO SOLICITATION OF CUSTOMERS

 

Executive promises and agrees that during the term of this Agreement and for a
period of two (2) years thereafter, Executive will not, directly or indirectly,
individually or as a consultant to, or as an employee, officer, stockholder,
director or other owner or participant in any business, influence or attempt to
influence customers, vendors, suppliers, joint venturers, associates,
consultants, agents, or partners of Vitesse, either directly or indirectly, to
divert their business away from Vitesse, to any individual, partnership, firm,
corporation or other entity then in competition with the business of Vitesse,
and he will not otherwise materially interfere with any business relationship of
Vitesse.

 

11. SOLICITATION OF EMPLOYEES

 

Executive promises and agrees that during the term of this Agreement and for a
period of two (2) years thereafter, Executive will not, directly or indirectly,
individually or as a consultant to, or as an employee, officer, stockholder,
director or other owner of or participant in any business, solicit (or assist in
soliciting) any person who is then, or at any time within six (6) months prior
thereto was, an employee of Vitesse who earned annually $25,000 or more as an
employee of Vitesse during the last six (6) months of his or her own employment
to work for (as an employee, consultant or otherwise) any business, individual,
partnership, firm, corporation, or other entity whether or not engaged in
competitive business with Vitesse.

 

12. ARBITRATION

 

Any controversy arising out of or relating to Executive's employment, any
termination of Executive's employment, this Agreement or because of an alleged
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, including (without limitation) any state or federal statutory
claims, shall be submitted to final and binding arbitration, to be held in
Ventura County, California before a sole neutral arbitrator. The arbitration
shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules
and Procedures. Judgment on the award may be entered in any court having
jurisdiction. The parties acknowledge and agree that they are hereby waiving any
rights to trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other in connection with any matter whatsoever
arising out of or in any way connected with any of the matters referenced in
this Section 12. The parties agree that in any proceeding with respect to such
matters, each party shall bear its own attorney's fees and costs.

 

13. TERM

 

Subject to the provisions of Section 5 of this Agreement, the term of this
Agreement shall end on the second anniversary of the date of this Agreement.

 

14. PARTIAL INVALIDITY

 

It is the desire and intent of Vitesse and Executive that the provisions of this
Agreement be enforced to the fullest extent permissible under applicable
federal, state and municipal laws. Accordingly, if any specific provision or
portion of this Agreement are determined to be invalid or unenforceable within
the particular jurisdiction in which enforcement is sought, that portion of the
Agreement will be considered as deleted for the purposes of adjudication. All
other portions of this Agreement will be considered valid and enforceable within
that jurisdiction.

 

15. ENTIRE AGREEMENT

 

Vitesse and Executive understand and agree that this Agreement constitutes the
full and complete understanding and agreement between them regarding the terms
of Executive's employment and supersedes all prior understandings,
representations, and agreements with respect to the employment. Vitesse and
Executive understand that the Vitesse Semiconductor Corporation 2001 Stock
Incentive Plan and the Compensation Adjustment forms (if any) referred to in
this Agreement shall be fully incorporated into this Agreement by reference.

 

16. EXECUTIVE ACKNOWLEDGEMENT

 

Executive acknowledges that he has read and understands this Employment
Agreement and agrees to the terms and conditions contained herein. Executive
agrees that he has had the opportunity to confer with legal counsel of his
choosing regarding this Agreement. Executive further acknowledges that this
Agreement has not been executed by Executive in reliance upon any representation
or promise except those contained herein, and that Vitesse has made no guarantee
regarding Executive's employment other than those specified in this Agreement.

 

"Executive"

 

Dated June 26, 2007

 

 

/s/ RICHARD YONKER

Richard C. Yonker

 

 

 

 

VITESSE SEMICONDUCTOR

CORPORATION, a Delaware Corporation

 

Dated June 26, 2007

 

 

By /s/ CHRISTOPHER GARDNER

Christopher R. Gardner

Chief Executive Officer