Exhibit 10.2


 


EMPLOYMENT
AGREEMENT


 


This Employment Agreement (“Agreement”) is entered into
as of February 12, 2010 (“Effective
Date”), by and between
Vitesse Semiconductor Corporation, a Delaware corporation (“Vitesse”), and Christopher Gardner
(the “Executive”) and is intended
to supersede and replace the
Amended and Restated Employment Agreement dated as of February 9, 2009
between Vitesse and Executive (“Amended Agreement”) and the Amendment
to the Amended Agreement dated
as of July 8, 2009.


 


RECITALS


 


A.                                  Executive serves as Vitesse’s Chief Executive Officer as of the date of
this Agreement.


 


B.                                    Vitesse and Executive desire to set forth in this Agreement the terms and
conditions upon which the
Executive shall continue to serve as Vitesse’s Chief Executive Officer.


 


NOW, THEREFORE,
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
continue to be employed by Vitesse in the position of Chief Executive Officer
at a base salary of $375,000 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. In addition to salary,
Executive shall also participate in a bonus program which will provide him with
the opportunity to earn a target bonus
equal to 100% of Executive’s base salary (“Target Bonus”) and a maximum
bonus equal to 150% of Executive’s base
salary (“Maximum Bonus”). Executive’s bonus, if any, shall be determined
by the Board of Directors of Vitesse or any duly authorized committee thereof (“Board”)
in its sole discretion, taking into account Executive’s performance
during the year and such other factors as the Board deems appropriate. The
determination and payment of the amount of Executive’s bonus for a fiscal year
would be made at approximately the same time as the determination of fiscal
year performance bonuses for the Company’s other executive officers, but not
later than March 15 of the following fiscal year.


 


2.                                       EMPLOYEE STOCK INCENTIVE PLAN


 


Executive shall be eligible to receive equity
compensation grants under the Vitesse Semiconductor Corporation 2001 Stock
Incentive Plan (“SIP”) or
any successor equity compensation program approved by the Board, with the
amount of any such compensation to be determined
by the Board and consistent with his
position as Chief Executive Officer.


 


Concurrent with the execution of this
Agreement, a grant of 1,800,000 options (“Option”)
and 1,800,000 restricted stock units (“RSU”)
is being made under the Vitesse


 


1

















 


Amended
and Restated 2001 Stock Incentive Plan. The terms and conditions of the Option
and RSU grant shall be as set forth in Vitesse’s Amended and Restated 2001
Stock Incentive Plan and the grant documents and agreements associated
therewith.


 


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 five 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 and in accordance
with law.


 


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 at any time and for any reason, 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.


 


2

















 


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.


 


E.                                     By Executive
for Good Reason. A termination of employment for “Good
Reason” is defined as being 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: (a) Vitesse’s material reduction
in Executive’s base salary; (b) Vitesse’s failure to pay Executive any material
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; or (d) Vitesse’s
requirement that Executive perform his principal employment duties at an office
that is more than thirty-five (35) miles from Camarillo, California.


 


6.                                      SEVERANCE
PAY


 


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 earned through
Executive’s final day of employment, but shall not be eligible to receive any
Severance Pay (as defined below) or any other compensation, unless agreed upon
by both parties. For purposes of clarification, it is agreed that under this
Agreement, neither termination by Vitesse other than For Cause nor termination
by Executive for Good Reason includes termination of employment because of
Executive’s Disability or death. Executive’s right to receive any of the
benefits under this Section 6 shall be conditioned upon Executive’s
execution of Vitesse’s standard form of waiver and release of claims.


 


3

















 


If Executive’s employment is terminated other than on or within 24
months after a Change of Control Event by Vitesse other than For Cause or by
Executive for Good Reason, Executive shall receive (i) his base salary
earned through Executive’s final day of employment, (ii) a pro-rata
portion (based upon the portion of the fiscal year occurring prior to
Executive’s final day of employment) of Executive’s Target Bonus and (iii) Severance
Pay.


 


If Executive’s employment is terminated on or within 24 months after a
Change of Control Event by Vitesse other than For Cause or by Executive for
Good Reason, Executive shall receive (i) his base salary earned through
Executive’s final day of employment, (ii) a pro-rata portion (based upon
the portion of the fiscal year occurring prior to Executive’s final day of
employment) of the greater of (a) Executive’s Target Bonus or (b) the
bonus the Executive actually received for the fiscal year ending immediately
prior to Executive’s final day of employment and (iii) Severance Pay. In
addition, upon a termination of Executive’s employment on or within 24 months
after a Change of Control Event by Vitesse other than For Cause or by Executive
for Good Reason, all outstanding options and restricted stock units which are
subject solely to time-based vesting shall become fully vested. Furthermore, if
a Change of Control Event occurs
and if the Executive’s employment with Vitesse is terminated within one year prior to the date on which
the Change of Control Event occurs by Vitesse other than For Cause, and if it
is reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party which had taken steps reasonably calculated
to effect such Change of Control Event or (ii) otherwise arose in
connection with or anticipation of such Change of Control Event, then all
restricted stock units which are subject solely to time-based vesting and were
outstanding immediately prior to Executive’s final day of employment shall
become fully vested as of the Change of Control Event and to the extent such
Change of Control Event occurs prior to 6 months after Executive’s termination
of employment, all options outstanding immediately prior to Executive’s final
day of employment which are subject solely to time-vesting shall become fully vested as of the Change of
Control Event and subject to the other terms of the equity compensation plan
applicable upon a Change of Control Event, shall have a remaining exercise
period of the lesser of (i) the period remaining until 6 months after the
Executive’s termination of employment or (ii) 90 days after such Change of
Control Event, provided such exercise period does not extend beyond the maximum
term of the options applicable if the Executive had remained employed with the
Company.


 


“Change of Control Event” shall
have the same meaning as in Vitesse’s SIP.


 


“Severance
Pay” means twenty four (24) months of Executive’s base
salary plus two times the Maximum Bonus (whether earned or not) payable in a
lump sum on the date of termination of employment, and payment of the cost of
continuation of group medical and dental benefits pursuant to the Vitesse’s
standard programs in effect on the termination of employment date for a period
of the lesser of twelve (12) months or the date on which Executive obtains
other employment.


 


7.                                      EMPLOYMENT DUTIES


 


Executive will report to Vitesse’s Board and shall perform all duties
assigned to him by the Board. Executive’s duties may be conveyed to him through
a job description, or through other written or verbal instructions from
Vitesse’s Board. Executive’s duties are expected to


 


4

















 


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, 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 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. Executive also
promises and agrees that for a period of two (2) years after termination
of employment he will not utilize trade secrets of Vitesse to 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.


 


5

















 


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 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.


 


6

















 


14.                               SECTION 409A


 


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. Likewise
to the extent required for payments under this Agreement to comply with or be
exempt from Section 409A of the Code (with the intention to comply with Treasury Regulation
§1.409A-3(d) with the treatment of the 38th day after termination of
employment as the designated payment date), payments shall be made no sooner
than the 8th day after termination of employment nor later than the 38th day
after termination of employment based on when the waiver and release provided
in the first paragraph of Section 6 is executed and becomes non-revocable
and if such 30-day period spans two calendar years, payment shall be made in
the later calendar year. In addition, to the extent required for payments under
this Agreement (including, without limitation, the treatment of restricted stock
units) to comply with or be exempt from Section 409A of the Code, an event
shall not be treated as a Change of Control Event unless it also constitutes a
change in the ownership or effective control of Vitesse or in the ownership of
a substantial portion of the assets of Vitesse as determined under
Section 409A of the Code.


 


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


 


7

















 


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 15. The parties agree
that in any proceeding with respect to such matters, each party shall bear its
own attorney’s fees and costs.


 


16.                               TERM


 


Subject to the provisions of Section 5 of this Agreement, the term
of this Agreement shall end on February 12, 2012.


 


17.                               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.


 


18.                               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 SIP 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.


 


[Remainder
of Page Intentional Left Blank]


 


8

















 


19.                               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

  	
  2/25/10

  	
   

  	
  /s/
  Christopher Gardner

  
	
   

  	
   

  	
   

  	
  Christopher
  Gardner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  VITESSE SEMICONDUCTOR CORPORATION, a Delaware
  Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated

  	
  2/25/10

  	
   

  	
  By

  	
  /s/
  Grant Lyon

  
	
   

  	
   

  	
   

  	
  Grant
  Lyon

  
	
   

  	
   

  	
   

  	
  Chairman
  of the Compensation Committee

  



 


9