EXHIBIT 10.22


 


EMPLOYMENT
AGREEMENT


 


This Employment Agreement (this “Agreement”)
is entered into as of August 2, 2010 (the “Effective
Date”) by and between Vitesse Semiconductor Corporation, a
Delaware, corporation (“Vitesse”)
and Steve M. Perna (the “Executive”).


 


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.


 


(a)                                  It is hereby agreed that Executive shall be employed by Vitesse as the
Vice President, Product Marketing. 
Executive shall be employed at a base salary of $235,000 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.  Executive shall be eligible to participate in
Vitesse’s bonus plan for senior executives as from time to time in effect.


 


(b)                                 Executive shall be eligible to receive a total relocation allowance of
$150,000, pre tax.  Payment will be made
in two installments: 50% on the Friday following Executive’s employment date,
and 50% after completing 90 days of successful employment.  This relocation allowance requires the
relocation of Executive to within 45 miles of the Camarillo, CA office.  In the event Executive voluntarily terminates
employment with Vitesse or is terminated “for cause” before completing four
full years of service, it is agreed that Executive will repay Vitesse for this
relocation allowance.


 


2.                                       EMPLOYEE STOCK INCENTIVE PLAN


 


(a)                                  Executive shall be eligible to receive equity compensation awards
under the Vitesse Semiconductor Corporation 2010 Incentive Plan (“IP”) as determined by the Board of
Directors of Vitesse or any duly authorized committee thereof (the “Board”) and consistent with his
position as Vice President, Product Marketing. 
Vitesse and Executive further agree that Executive’s equity compensation
position shall be reviewed not less than once per year from the Effective Date
of this Agreement.


 


(b)                                 Executive shall be eligible to receive an equity grant of 25,000
shares of RSUs with a vesting schedule of 50% per year over two years, and
25,000 shares of nonqualified stock options with a vesting schedule of 25% per
year over four years.  In addition,
Executive will be eligible for evergreen grants in cycle with employee offering
periods beginning in January 2011. 
All equity grant recommendations are subject to approval by the
Compensation Committee and the Board.


 


(c)                                  Acceleration of Vesting:  In the
event of a Change of Control Event (as defined in the IP) 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 Event, then, any vesting associated
with any equity compensation awards which Executive has been granted prior to
any such Change of Control Event shall be accelerated and shall immediately
become vested as though all equity compensation awards 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 following the date of termination of
Executive’s employment with the Company.


 


(d)                                 “Constructive Termination”
shall mean Executive’s resignation for Good Reason.


 


3.                                       BENEFITS.  Employment benefits shall be provided to Executive in accordance with
the programs 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.


 


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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 Vitesse at any time and for any reason in writing, with or without
prior 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


 


(a)                                  If Executive’s employment is terminated (i) by mutual agreement, (ii) by
Vitesse For Cause (iii) by Executive for other than Good Reason (as
defined below) or (iv) because of Executive’s Disability or death,
Executive (or Executive’s estate in the case of Executive’s death) shall
receive Executive’s base salary through Executive’s final day of employment and
any fully accrued and unpaid bonus, but shall not be eligible to receive any
Severance Pay (as defined below), Earned Bonus, or any other bonus or other
compensation, unless agreed upon by both parties.


 


(b)                                 Benefits Payable Upon Certain Terminations.


 


(i)                                     If Executive’s employment is terminated by Vitesse other than For
Cause or by Executive for Good Reason and such termination occurs within the 12
months period following a Change in Control Event, Executive shall receive (A) his
base salary and vacation accrued through the termination date of his
employment, (B) the Earned Bonus, (C) Severance Pay (D) an
additional bonus equal to the amount of Executive’s maximum potential annual
bonus pursuant to the bonus plan adopted by Vitesse’s Board of Directors for
the fiscal year in which such termination occurs,
all of which shall be payable in a lump sum on the date of termination of
employment, (E) vesting of outstanding stock options and other equity
arrangements subject to vesting and held by


 


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Executive
through the Termination Date, as though all options and other equity
arrangements were vesting over four years in 48 equal monthly amounts, and as
though Executive had completed an additional 24 months of service with Vitesse,
and these options and other equity arrangements would be exercisable for an
additional 90 days payable either in cash or non-restricted common stock of the
acquiring or surviving entity and (F) To the extent required by COBRA
only, continuation of group health benefits pursuant to Vitesse’s standard
programs in effect at the Termination Date, for a period of not less than 18
months (or such longer period as may be required by COBRA) following the
Termination Date.  Vitesse will be
obligated to pay no more than twelve (12) months of COBRA medical and dental
premiums following the Termination Date.


 


(ii)                                  If Executive’s employment is terminated by Vitesse other than For
Cause or by Executive for Good Reason and such termination does not occur
within the 12 month period following a Change in Control Event, Executive shall
receive (A) his base salary through the termination date of his
employment, (B) the Earned Bonus, (C) six (6) additional months
of Executive’s then current base salary and (D) an additional bonus equal
to (I) the Earned Bonus multiplied by (II) 365 and divided by (III) the
number days in the fiscal year prior to the Executive’s termination date
(including the day of such termination), all of which
shall be payable in a lump sum on the date of termination of employment. (For
example, if Executive is terminated 55 days following the start of the fiscal
year and such termination meets the conditions set forth in the first sentence
of this clause (ii), then Executive would receive an additional bonus amount
equal to the Earned Bonus * 365/55).


 


(iii)                               Executive’s right to receive any of the benefits under Section 2(b) or
under this Section 6 shall be conditioned upon Executive’s execution of
Vitesse’s then standard form of waiver and release of claims.


 


(c)                                  “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 the Board receives written notice from Executive of such action (which
notice shall have been provided by Executive within thirty (30) days of the
occurrence of such action), and provided that Executive actually terminates
employment within thirty (30) days following the end of such fifteen (15) day
period:  (i) Vitesse’s material
reduction in Executive’s base salary; (ii) Vitesse’s failure to pay
Executive any material amount that is expressly required to be paid under this
Agreement; (iii) Vitesse’s material and adverse reduction of the nature of
Executive’s duties and responsibilities, disregarding mere changes in title
(for purposes of clarity, it is expressly agreed that if there is a Change of
Control Event (as defined below) and Executive is not offered the position of
Vice President, Product Marketing of the ultimate parent entity resulting from
the Change of Control Event on terms that are substantially equivalent to the
compensation paid to Vice President, Product Marketing of similarly sized
technology companies, Executive shall have suffered a material and adverse
reduction of the nature of his duties and responsibilities);  (iv) Vitesse’s requirement that
Executive perform his principal employment duties at an office that is more
than forty-five (45) miles from Camarillo, California or (v) Vitesse
terminates this Agreement in accordance with Section 16 hereof (it being
understood by Executive that if prior to the termination date of this Agreement
Executive elects to terminate his employment for Good Reason based upon this
clause (v), Executive shall not have the right to set a termination date for
his employment prior to the termination date of this Agreement)


 


(d)                                 “Severance Pay” means six (6) months
of Executive’s base salary plus one (1) week of base salary for every 12
months Executive has been employed by Vitesse.


 


(e)                                  “Earned Bonus” means:


 


(i)                                     Executive will not be eligible to participate in the fiscal year 2010
Executive Bonus Plan;


 


(ii)                                  with respect to the bonus plan applicable to Executive for fiscal year
2011 and thereafter, (A) a pro-rata portion (based upon the portion of the
fiscal year occurring prior to Executive’s termination date) of the bonus
applicable to any time-based goals (any goals not satisfied as of the date of
the termination of Executive’s employment shall be deemed to have been
satisfied as of the date of such termination) and (B) a pro-rata portion
of the bonus applicable to any other goals


 


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satisfied
by Executive, provided that the Board shall make a good faith determination
within 10 business days following Executive’s termination date of the extent to
which Executive either has satisfied such goals as of such date or the extent
to which he would have been reasonably likely to have satisfied such goals
during the fiscal year if Executive’s employment had not otherwise terminated;
and


 


(iii)          with
respect to any other bonus plan applicable to Executive, a pro-rata portion of
the bonus applicable to any other goals satisfied by Executive under such plan,
provided that the Board shall make a good faith determination within 10
business days following Executive’s termination date of the extent to which
Executive either has satisfied such goals as of such date or the extent to
which he would have been reasonably likely to have satisfied such goals during
the fiscal year if Executive’s employment had not otherwise terminated.


 


Example:


 


If                                        (A) Executive’s maximum bonus under the bonus plan in effect at
the time of Executive’s termination of employment was 40% of Executive’s base
salary, (B) Executive’s employment is terminated 55 days following the
start of the fiscal year and (C) in making the determination of the amount
of the Earned Bonus the Board determines that Executive has satisfied 75% of
his bonus goals,


 


Then                    Executive’s Earned Bonus = Executive’s base salary * 0.40 * 55/365 *
0.75.


 


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, 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 ventures,
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.                                 OBLIGATION TO RETURN BONUS PAYMENTS.  Executive agrees to disgorge
to the Company certain bonus payments and profits if the Company is required to
prepare an accounting restatement to correct an


 


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accounting
error on an interim or annual financial statement included in a report on Form 10-Q
or Form 10-K, due to material noncompliance with any financial reporting
requirement under the federal securities laws, and the Board determines that
misconduct by the Executive has occurred and caused such restatement.  ‘Misconduct’
shall refer to any definition included in the applicable statute(s) or
applicable judicial precedents The amounts that shall be disgorged shall be (i) any
bonus or other incentive-based or equity-based compensation received by
Executive from the Company during the 12-month period following the first
public issuance or filing with the SEC (whichever first occurs) of the
financial document embodying such error; and (ii) any net profits realized
by Executive from the sale of the Company’s stock during that 12-month
period.  In any dispute between the Company and Executive regarding such
misconduct, Executive will continue to be entitled to any indemnification or
reimbursement for legal representation available to Executive pursuant to any
statute, charter provision, By-law, contract or other arrangement that insures
or indemnifies Executive.


 


13.                                 LIMITATION ON PAYMENTS.  In
the event that the severance and other benefits provided for in this Agreement
or otherwise payable to Executive (i) constitute “parachute payments”
within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), and (ii) would
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then Executive’s
benefits under this Agreement shall be either (a) delivered in full, or (b) delivered
as to such lesser extent which would result in no portion of such benefits
being subject to the Excise Tax, whichever of the foregoing amounts, taking
into account the applicable federal, state and local income taxes and the
Excise Tax, results in the receipt by Executive on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such
benefits may be taxable under Section 4999 of the Code.  The payments or benefits subject to any such
reduction shall be reduced by Vitesse in its reasonable discretion in the
following order: (i) reduction of any payments and benefits otherwise
payable to Executive that are exempt from Section 409A of the Code, and (ii) reduction
of any other payments and benefits otherwise payable to Executive on a pro-rata
basis or such other manner that complies with Section 409A of the Code, as
determined by Vitesse.


 


Unless
Vitesse and Executive otherwise agree in writing, any determination required
under this section shall be made in writing by Vitesse’s independent public
accountants (the “Accountants”), whose
determination shall be conclusive and binding upon Executive and Vitesse for
all purposes.  For purposes of making the
calculations required by this section, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Section 280G
and 4999 of the Code.  Vitesse and
Executive shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this section.  Vitesse shall bear all
costs the Accountants may reasonably incur in connection with any calculations
contemplated by this section.


 


14.                                 SECTION 409.  Vitesse makes no representations or
warranties to Executive with respect to any tax, economic or legal consequences
of this letter or any payments or other benefits provided hereunder, including
without limitation under Section 409A of the Code.  However, the parties intend that this
Agreement and the payments and other benefits provided hereunder be exempt from
the requirements of Section 409A of the Code to the maximum extent
possible, whether pursuant to the short-term deferral exception described in
Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay
plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii),
or otherwise.  To the extent Section 409A
of the Code is applicable to this Agreement (and such payments and benefits),
the parties intend that this Agreement (and such payments and benefits) comply
with the deferral, payout and other limitations and restrictions imposed under Section 409A
of the Code.  Notwithstanding any other
provision of this Agreement to the contrary, this Agreement shall be
interpreted, operated and administered in a manner consistent with such
intentions.  Without limiting the
generality of the foregoing, and notwithstanding any other provision of this
Agreement to the contrary, with respect to any payments and benefits under this
letter to which Section 409A of the Code applies, all references in this
letter to the termination of Executive’s employment are intended to mean
Executive’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i) of
the Code.  In addition, if Executive is a
“specified employee,” within the meaning of Section 409A(a)(2)(B)(i) of
the Code, then to the extent necessary to avoid subjecting Executive to the
imposition of any additional tax under Section 409A of the Code, amounts
that would otherwise be payable under this Agreement during the six-month
period immediately following Executive’s “separation from service,” within the
meaning of Section 409A(a)(2)(A)(i) of the Code, will not be paid to
Executive during such period, but will instead be accumulated and paid to
Executive (or, in the event of Executive’s death, Executive’s estate) in a lump
sum on the first business day following the earlier of (a) the date that
is six months after Executive’s separation from service or (b) Executive’s
death.  It is intended that each
installment, if any, of any severance payments shall be treated as a separate “payment”
for purposes of Section 409A.


 


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15.                                 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.


 


16.                              AT-WILL EMPLOYMENT.  Vitesse
agrees to employ Executive, and Executive agrees to serve Vitesse in accordance
with the terms of this Agreement. 
Executive’s employment shall be AT WILL employment, meaning that
Executive’s employment can be terminated by Vitesse or by Executive at any
time, with or without notice, for any reason or for no reason.  Such termination may, however, be subject to
payment of a Severance Package, as more particularly described in Section 6.


 


17.                               TERM.  Subject to the provisions of
Sections 5 and 16 herein, the Term of this Agreement, shall be indefinite.


 


18.                               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 is 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.


 


19.                               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 IP and the Compensation Adjustment forms
(if any) referred to in this Agreement shall be fully incorporated into this
Agreement by reference.  The parties’
rights and obligations hereunder may not be assigned without the consent of
each party hereto, except that Vitesse may assign its rights and obligations
hereunder to any successor entity. 
Executive agrees that following a Change in Control Event, “Vitesse”
shall refer to any successor entity.


 


20.                               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.


 


21.                               GOVERNING
LAW.  
This Agreement shall be construed in accordance with and governed by the
laws of the State of California without regard to conflicts of law principles.


 


	
   

  	
   

  	
  “EXECUTIVE”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated 

  	
  August 2, 2010

  	
   

  	
  /s/ Steve M. Perna

  
	
   

  	
   

  	
  Steve M. Perna

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VITESSE SEMICONDUCTOR CORPORATION,

  
	
   

  	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated 

  	
  August 2, 2010

  	
   

  	
  By /s/ CHRISTOPHER R. GARDNER

  
	
   

  	
   

  	
  Christopher R. Gardner

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


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