Exhibit 10.2


 


EMPLOYMENT
AGREEMENT


 


This Employment Agreement (this “Agreement”) is entered into as of February 20,
2009 (the “Effective Date”) and replaces
and supersedes the Amended and Restated Employment Agreement dated as of June 26,
2007 by and between Vitesse Semiconductor Corporation, a Delaware, corporation
(“Vitesse”) and Richard C. Yonker (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.  It is hereby agreed that Executive shall be employed by
Vitesse as the Senior Vice President, Finance and Chief Financial Officer.  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.  Executive shall be eligible
to participate in Vitesse’s bonus plan for senior executives as from time to
time in effect.


 


2.                                       EMPLOYEE STOCK INCENTIVE PLAN


 


(a)                                  Executive
shall be eligible to receive equity compensation awards under the Vitesse
Semiconductor Corporation 2001 Stock Incentive Plan (“SIP”)
as determined by the Board of Directors of Vitesse or any duly authorized
committee thereof (the “Board”) and
consistent with his position as Chief Financial Officer.  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)                                 Acceleration
of Vesting:  In the event of a Change of
Control Event (as defined in the SIP) 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


 


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


 


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


 


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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
through the termination date of his employment, (B) the Earned Bonus, (C) Severance
Pay and (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.


 


(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) Severance Pay 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
Chief Financial Officer of the ultimate parent entity resulting from the Change
of Control Event on terms that are substantially equivalent to the compensation
paid to Chief Financial Officers 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 thirty-five (35) 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 


 


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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 twelve (12) months of Executive’s base
salary (at the amount before any proposed reduction).


 


(e)                                  “Earned Bonus” means:


 


(i)                                     with
respect to the bonus plan applicable to Executive for fiscal year 2008, the
amount of the bonus that became vested under such plan as of September 30,
2008 without regard to any requirement that Executive continue his employment
with the Company through September 30, 2009;


 


(ii)                                  with
respect to the bonus plan applicable to Executive for fiscal year 2009 as in
effect on the date hereof, (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 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 


 


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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 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.                                 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 


 


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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 


 


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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.


 


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.                                 TERM.  Subject to the
provisions of Section 5 of this Agreement, the term of this Agreement
shall end on the second anniversary of the Effective Date.  If not terminated in writing by either party at least
ninety (90) days prior to the end of the applicable term (which
termination shall be effective at the end of such term), this Agreement shall
automatically renew for an additional twenty-four (24) months from the end
of such term.


 


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 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.


 


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.


 


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.


 


20.                                 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.


 


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  “EXECUTIVE”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated

  	
  2/20/09

  	
   

  	
  /s/ Richard C. Yonker

  
	
   

  	
   

  	
  Richard C. Yonker

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VITESSE SEMICONDUCTOR
  CORPORATION,

  
	
   

  	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated

  	
  2/20/09

  	
   

  	
  By

  	
  /s/ Christopher Gardner

  
	
   

  	
   

  	
   

  	
  Christopher Gardner

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  



 


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