Document:

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

  

 

8Exhibit 10.3
 
CHANGE IN CONTROL AGREEMENT
 
This Change in Control Agreement (the “Agreement”) is entered into as of February 25, 2009, by and between Michael Green, an individual (“Executive”) and Vitesse Semiconductor Corporation, a Delaware corporation (the “Company”).
 
This Agreement supersedes any previous employment agreement.
 
RECITALS
 
A. Executive is currently a member of senior management of the Company, serving in the capacity of Vice President, General Counsel & Corporate Secretary.
 
B. The Company desires to provide certain protection to Executive in the event of a Change in Control Event (as defined below) or potential Change in Control Event of the Company, in order to induce Executive to remain in the employ of the Company notwithstanding any risks and uncertainties created by a potential Change in Control Event of the Company, as set forth in this Agreement.
 
AGREEMENT
 
THEREFORE, in consideration of the mutual covenants contained herein, the parties hereby agree as follows:
 
1.                                      Benefits Upon a Change in Control Event. If (i) during the term of this Agreement and while Executive remains an employee of the Company, the Company shall be subject to a Change in Control Event and (ii) within one (1) year following such Change in Control Event the Company terminates the employment of Executive involuntarily and without Business Reasons or a Constructive Termination occurs, then, following Executive’s execution of Vitesse’s then standard form of waiver and release of claims, Executive shall be entitled to receive the following:
 
(a)  Executive’s base salary and vacation accrued through the Termination Date (as defined below);
 
(b)  severance pay equal to six (6) months of base salary, plus 1 week of base salary for every 12 months employed by the Company;
 
(c)  Executive’s Earned Bonus (as defined below);
 

(d)  vesting
of outstanding stock options and other equity arrangements subject to vesting
and held by 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 employee had completed an additional 24 months of
service with the Company, and those options and other equity arrangements would
be exercisable for an additional 90 days payable either in cash or
nonrestricted common stock of acquiring or surviving entity; and

 

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(e)  to
the extent required by COBRA only, continuation of group health benefits
pursuant to the Company’s standard programs or 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. Company shall pay twelve
(12) months of COBRA medical and dental premiums following the Termination Date.

 

All cash payments
due to Executive above shall be paid in a lump sum payment together with all
other consideration within 90 days following the Executive’s separation from
service.

 

2.                                      Exclusivity. The provisions of this Agreement are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, either at law, tort or contract, in equity, under Company policies in effect now or hereafter, or under this Agreement, under the circumstances described in Section 1 above. In such circumstances, Executive shall be entitled to no benefits, compensation or other payments or rights upon termination of employment other than those benefits expressly set forth in Section 1.
 
The provisions of this Agreement shall not affect the terms of employment between the Company and Executive or the rights and obligations of the parties under such relationship except as expressly provided herein, it being understood however that Executive’s employment is and shall continue to be at-will, as defined under applicable law. Either the Company or Executive may terminate this agreement and Executive’s employment at any time, with or without Business Reasons (as defined in subsection 3(a) below), in its or his/her sole discretion, upon fourteen (14) days prior written notice of termination. If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement (in circumstances to which this Agreement applies, as set forth in Section 1), or (in circumstances to which this Agreement does not apply) as may otherwise be available in accordance with the Company’s established employee plans and policies at the time of termination.
 
3.                                      Definition of Terms. The following terms referred to in this Agreement shall have the following meanings:
 
(a)  “Business Reasons” shall mean (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 the Company’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 6 of this Agreement. Executive’s inability to perform his duties because of death or Disability shall not constitute a basis for the Company’s termination of Executive’s employment for Business Reasons. Notwithstanding the foregoing, Executive’s employment shall not be subject to termination for Business Reasons without the Company’s delivery to Executive of a written notice of intention to terminate. Such notice must describe the reasons for the proposed employment termination for Business Reasons, and must be delivered to Executive at least fifteen (15) days prior to the proposed termination date (the “Notice Period”). Executive shall

 

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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 3(a).
 
(b)  “Board” shall mean the Board of Directors of the Company or any duly authorized committee thereof.
 
(c)  “Constructive Termination” 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 Company 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) a material reduction in Executive’s base salary; (ii) a material and adverse reduction of the nature of Executive’s duties and responsibilities, disregarding mere changes in title (it being understood that a new position within a larger combined company is not a constructive termination if it is in the same area of operations and involves similar scope of management responsibility notwithstanding that the individual may not retain as senior a position overall within the larger combined corporation as Executive’s prior position within the Company), (ii) requirement that Executive perform his principal employment duties at an office that is more than thirty-five (35) miles from Camarillo, California.
 
(d)  “Change in Control Event” shall have the same meaning as in the Company’s Amended and Restated 2001 Stock Incentive Plan.
 

(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

 

3

 

(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.

 

(f)  “Subsidiary” means any corporation or other entity in which the Company has a direct or indirect ownership interest of 50% or more of the total combined voting power of the then outstanding securities or interests of such corporation or other entity entitled to vote generally in the election of directors or in which the Company has the right to receive 50% or more of the distribution of profits or 50% of the assets upon liquidation or dissolution.
 
4.                                      Confidential Information.
 
(a)  Executive acknowledges that the Confidential Information (as defined below) relating to the business of the Company and its subsidiaries which Executive has obtained or will obtain during the course of his/her association with the Company and subsidiaries and his/her performance under this Agreement are the property of the Company and its subsidiaries. Executive agrees that he/she will not disclose or use at any time, either during or after the Employment period, any Confidential Information without the written consent of the Board of Directors of the Company. Executive agrees to deliver to the Company at the end of the Employment period, or at any other time that the Company may request, all memoranda, notes, plans, records, documentation and other materials (and copies thereof) containing Confidential Information relating to the business of the Company and its subsidiaries, no matter where such material is located and no matter what form the material may be in, which Executive may then possess or have under his/her control. If requested by the Company, Executive shall provide to the Company written confirmation that all such materials have been delivered to the Company or have been destroyed. Executive shall take all appropriate steps to safeguard Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft.

 

4

 
(b)  “Confidential Information” shall mean information which is not generally known to the public and which is used, developed, or obtained by the Company or its subsidiaries relating to the businesses of any of the Company and its subsidiaries or the business of any customer thereof including, but not limited to: products or services; fees, costs and pricing structure; designs; analyses; formulae; drawings; photographs; reports; computer software, including operating systems, applications, program listings, flow charts, manuals and documentation; databases; accounting and business methods; inventions and new developments and methods, whether patentable or unpatentable and whether or not reduced to practice; all copyrightable works; the customers of any of the Company and its subsidiaries and the Confidential Information of any customer thereof; and all similar and related information in whatever form. Confidential Information shall not include any information which (i) was rightfully known by Executive prior to the Employment Period; (ii) is publicly disclosed by law or in response to an order of a court or governmental agency; (iii) becomes publicly available through no fault of Executive or (iv) has been published in a form generally available to the public prior to the date upon which Executive proposes to disclose such information. Information shall not be deemed to have been published merely because individual portions of the information have been separately published, but only if all the material features comprising such information have been published in combination.
 
(c)  In the event that Executive, as a part of Executive’s activities on behalf of the Company, generates, authors or contributes to any invention, new development or method, whether or not patentable and whether or not reduced to practice, any copyrightable work, any trade secret, any other Confidential Information, or any information that gives any of the Company and its subsidiaries an advantage over any competitor, or similar or related developments or information related to the present or future business of any of the Company and its subsidiaries (collectively “Developments and Information”), Executive acknowledges that all Developments and Information are the exclusive property of the Company. Executive hereby assigns to the Company, its nominees, successors or assigns, all rights, title and interest to Developments and Information. Executive shall cooperate with the Company’s Board of Directors to protect the interests of the Company and its subsidiaries in Developments and Information. Executive shall execute and file any document related to any Developments and Information requested by the Company’s Board of Directors including applications, powers of attorney, assignments or other instruments which the Company’s Board of Directors deems necessary to apply for any patent, copyright or other proprietary right in any and all countries or to convey any right, title or interest therein to any of the Company’s nominees, successors or assigns.
 
5.                                      Non-Solicitation Agreement.
 
(a)  During the term of the Agreement and for a period of one (1) year following the occurrence of both events discussed in subsections 1(i) and 1(ii) hereof, 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 the Company who earned annually $25,000 or more as an employee of the Company during the last

 

5

 
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.
 
(b)  Executive agrees that these restrictions on solicitation shall be deemed to be a series of separate non-solicitation covenants for each month within the specified periods, separate non-solicitation covenants for each state within the United States and each country in the world. If any court of competent jurisdiction shall determine any of the foregoing covenants to be unenforceable with respect to the term thereof or the scope of the subject matter or geography covered thereby, such remaining covenants shall nonetheless be enforceable by such court against such other party or parties or upon such shorter term or within such lesser scope as may be determined by the court to be enforceable.
 
(c)  The parties agree therefore that in the event of a breach or threatened breach of this Agreement, the Company or its successors or assigns may, in addition to other rights and remedies existing in their favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the provisions hereof.
 
6.                                       Compliance With Vitesse Policies And Procedures.
 

As a member of the Company’s management,
Executive will be expected to comply with all provisions of the Company’s
Policies and Procedures 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 the Company’s policies, procedures and all federal/state
laws relating to business operations may result in immediate termination of
employment Business Reasons.

 

7.                                       Term of Agreement.
 
This Agreement shall commence as of the date first set forth above and shall continue until the date (the “Termination Date”) which is the earlier of (i) the date that Executive ceases to be an employee of the Company, for any reason, and (ii) February 25, 2011. Any benefits accruing to Executive under Section 1 hereof prior to or upon the Termination Date shall survive termination of the Agreement, and any obligations of Executive under any provision of this Agreement shall survive any such termination.
 
8.                                      Miscellaneous Provisions.
 
(a)  Notice. Notices and all other communications contemplated by this Agreement shall be in writing, shall be effective when given, and in any event shall be deemed to have been duly given (i) when delivered, if personally delivered, (ii) three (3) business days after deposit in the U.S. mail, if mailed by U.S. registered or certified mail, return receipt requested, or (iii) one (1) business day after the business day of deposit with Federal Express or similar overnight courier, if so delivered, freight prepaid. In the case of Executive, notices shall be

 

6

 
addressed to him at the home address which he/she most recently communicated to the Company in writing. In the case of the Company, notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Corporate Secretary.
 
(b)  Successors.
 
(i)                                 Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall be entitled to assume the rights and shall be obligated to assume the obligations of the Company under this Agreement and shall agree to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this subsection (i) or which becomes bound by the terms of this Agreement by operation of law.
 
(ii)                              Executive’s Successors. The terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
 
(iii)                           No Other Assignment of Benefits. Except as provided in this Section 8(b), the rights of any person to payments or benefits under this Agreement shall not be made subject to option or assignment, either by voluntary or involuntary assignment or by operation of law, including (without limitation) bankruptcy, garnishment, attachment or other creditor’s process, and any action in violation of this subsection (iii) shall be void.
 
(c)  Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
 
(d)  Entire Agreement. Executive acknowledges and reaffirms his/her obligations contained in the Company’s standard form of Employment, Confidential Information and Invention Assignment Agreement, which was previously executed by Executive (or, if Executive has not previously executed such agreement, by which Executive hereby agrees to be bound in consideration for the mutual agreements herein), and offer letter or employment agreement, if any, which was previously executed by Executive, which documents include, without limitation, obligations regarding confidential information, non-competition and non-solicitation. If there is

 

7

 
any conflict between the terms of this Agreement, the Employment, Confidential Information and Invention Assignment Agreement, and any offer letter or employment agreement, the terms of the more restrictive provisions shall control. This Agreement, the Employment, Confidential Information and Invention Assignment Agreement, any offer letter or employment agreement and any stock option agreements collectively contain the entire understanding of the parties with respect to the subject matter hereof and supersede any prior understandings or agreements between the parties with respect to such subject matter.
 
(e)  Severability. 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.
 
(f)  Governing Law; Arbitration. This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware without regard to conflicts of law principles. 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 at 707 Wilshire Boulevard, 46th Floor, Los Angeles, California 90017 before a sole neutral arbitrator. The arbitration shall be administered by JAMS (Judicial Arbitration and Mediation Services) 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 8. The parties agree that in any proceeding with respect to such matters, each party shall bear its own attorney’s fees and costs.
 
(g)  Employment Taxes. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.
 
(h)  Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
 
9.                                      Section 409A
 
(a)  It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the U.S. Internal Revenue Code (including the Treasury regulations and other published guidance relating thereto) (“Section 409A”) so as not to subject you to payment of any additional tax, penalty or interest imposed under Section 409A.

 

8

 
The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive.
 
(b)  Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of separation from service, the Executive shall not be entitled to any payment or benefit pursuant to this Agreement until the earlier of (1) the date which is six (6) months after separation from service for any reason other than death or (2) the date of the Executive’s death. The provisions of this Section 9(b) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A. Any amounts otherwise payable to the Executive upon or in the six (6) month period following the Executive’s separation from service that are not so paid by reason of this Section 9(b) shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after the Executive’s separation from service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of the Executive’s death).
 
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.
 
 

	
   

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ Michael Green

  
	
   

  	
  Michael Green

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VITESSE SEMICONDUCTOR CORPORATION,

  
	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
      /s/ Christopher
  Gardner

  
	
   

  	
   

  	
  Christopher Gardner

  
	
   

  	
   

  	
  Chief Executive Officer

  

 

9

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