AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is
entered into as of July 27 2007, by and between Vitesse Semiconductor
Corporation, a Delaware corporation ("Vitesse") and Xxxxxxxxxxx Xxxxxxx (the
"Executive") and amends and restates the Employment Agreement dated as of
June 26, 2006 (the "Effective Date").
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 $350,000
per year, retroactive to April 1, 2007. 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 be eligible to
participate in the Vitesse's bonus plan for senior executives as from time to
time in effect.
2. EMPLOYEE STOCK INCENTIVE PLAN
Executive shall be eligible to receive options under the Vitesse
Semiconductor Corporation 2001 Stock Incentive Plan ("SIP") as determined by the
Compensation Committee of the Board of Directors of Vitesse (the "Board") and
consistent with his position as Chief Executive Officer.
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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.
5. TERMINATION OF EMPLOYMENT
Vitesse and Executive understand and agree that Executive's employment may
be terminated under the circumstances and in accordance with the terms set forth
below:
A. By mutual agreement at any time with or without notice; provided that
such agreement must be stated in writing and signed and dated by
Executive and an authorized agent of Vitesse.
B. By either Vitesse or Executive upon sixty (60) days written notice
delivered to the other party; provided, however, that Vitesse may at
its sole discretion elect to provide sixty (60) days pay to Executive
in lieu of notice.
C. By Vitesse For Cause. A termination of employment "For Cause" is
defined as termination by reason of (i) Executive's conviction of a
felony or plea of guilty or nolo contendere to a felony; (ii)
Executive's intentional failure or refusal to perform his employment
duties and responsibilities; (iii) Executive's intentional misconduct
that injures Vitesse's business; (iv) Executive's intentional
violation of any other material provision of this Agreement or
Vitesse's code of business conduct and ethics; or (v) as provided in
Section 8 of this Agreement. Executive's inability to perform his
duties because of death or disability shall not constitute a basis for
Vitesse's termination of Executive's employment For Cause.
Notwithstanding the foregoing, Executive's employment shall not be
subject to termination For Cause without Vitesse's delivery to
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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 AND CHANGE IN STATUS
If employment is terminated by mutual agreement, by Vitesse For Cause,
or by Executive upon sixty (60) days notice of intent to terminate employment
for other than Good Reason (as defined below), Executive shall receive his base
salary and any vested bonus prorated through his final day of employment, but
shall not be eligible to receive any Severance Pay (as defined below) or Change
in Status (as defined below).
If employment is terminated by Vitesse upon sixty (60) days notice of
intent to terminate employment or pay in lieu of notice other than For Cause, or
by Executive upon sixty (60) days notice of intent to terminate employment for
Good Reason, Executive shall receive his base salary and any vested bonus
prorated through his final day of employment and Severance Pay and a Change in
Status.
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If employment is terminated because of Executive's Disability,
Executive shall receive his base salary and any vested bonus prorated through
his final day of receipt of base salary, but shall not be entitled to any
Severance Pay or Change in Status.
If employment is terminated because of Executive's death, Executive's
estate shall receive Executive's base salary and any vested bonus prorated until
the date of death, but shall not be entitled to any Severance Pay or Change in
Status.
"Good Reason" means, without Executive's written consent, the occurrence
of any of the following actions unless the action is fully corrected (if
possible) within fifteen (15) days after Vitesse receives written notice of
the action from Executive: (a) Vitesse's reduction in Executive's base salary;
(b) Vitesse's failure to pay Executive any amount that is expressly required to
be paid under this Agreement; (c) Vitesse's material and adverse reduction of
the nature of Executive's duties and responsibilities, disregarding mere changes
in title; (d) Vitesse's requirement that Executive perform his principal
employment duties at an office that is more than twenty (20) miles from
Camarillo, California; or, (e) a Change of Control of Vitesse (as defined
below).
"Change Of Control" means each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended), of beneficial ownership of more than 51% of the aggregate
outstanding voting power of the capital stock of Vitesse;
(b) (i) Vitesse consolidates with or merges into another entity and is
not the surviving entity or conveys, transfers or leases all or substantially
all of its property and assets to another person, or (ii) any entity
consolidates with or merges into Vitesse in a transaction pursuant to which the
outstanding voting capital stock of Vitesse is reclassified or changed into or
exchanged for cash, securities or other property, other than any such
transaction described in this clause (ii) in which no person or group (within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) has, directly or indirectly, acquired beneficial ownership of more than
51% of the aggregate outstanding voting capital stock of Vitesse; or
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(c) approval by Vitesse's shareholders of the complete liquidation or
dissolution of Vitesse.
"Severance Pay" means twenty four (24) months of Executive's base salary
plus two times the average of the maximum target bonus (whether earned or not)
for the two most recent fiscal years prior to the termination payable in a lump
sum on the date of termination of employment.
"Change In Status" means Executive shall continue to perform services
as a Consultant for Vitesse and receive compensation at a guaranteed rate of not
less than Three Thousand Dollars ($3,000) per month for a period not to exceed
three (3) years following the termination of Executive's employment. Vitesse
agrees that Executive shall not be required to perform more than ten (10) hours
of services per month as a Consultant, and shall receive additional compensation
at the rate of Three Hundred Dollars ($300) per hour for all services performed
in excess of ten (10) hours per month. Executive's guaranteed monthly
compensation for consulting shall expire on the earlier of either three (3)
years after the date of termination of his employment or one year after Vitesse
has an effective registration statement under the Securities Act of 1933 with
respect to the shares to be issued upon exercise of options granted to Executive
under Vitesse's SIP. Executive will continue to vest normally in all existing
options during his services as a Consultant. All existing options will be
exercisable until the earlier of 90 days following termination of Executive's
services as a Consultant and the normal expiration date of such options.
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 involve travel from time to
time to various locations and events, and are expected to involve significant
unpaid overtime.
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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
and for a period of two (2) years thereafter, Executive will not, directly or
indirectly, individually or as a consultant to, or as an employee, officer,
stockholder, director or other owner or participant in any business, influence
or attempt to influence customers, vendors, suppliers, joint venturers,
associates, consultants, agents, or partners of Vitesse, either directly or
indirectly, to divert their business away from Vitesse, to any individual,
partnership, firm, corporation or other entity then in competition with the
business of Vitesse, and he will not otherwise materially interfere with any
business relationship of Vitesse.
11. SOLICITATION OF EMPLOYEES
Executive promises and agrees that during the term of this Agreement
and for a period of two (2) years thereafter, Executive will not, directly or
indirectly, individually or as a consultant to, or as an employee, officer,
stockholder, director or other owner of or participant in any business, solicit
(or assist in soliciting) any person who is then, or at any time within six (6)
6
months prior thereto was, an employee of Vitesse who earned annually $25,000 or
more as an employee of Vitesse during the last six (6) months of his or her own
employment to work for (as an employee, consultant or otherwise) any business,
individual, partnership, firm, corporation, or other entity whether or not
engaged in competitive business with Vitesse.
12. ARBITRATION
Any controversy arising out of or relating to Executive's employment,
any termination of Executive's employment, this Agreement or because of an
alleged breach, default, or misrepresentation in connection with any of the
provisions of this Agreement, including (without limitation) any state or
federal statutory claims, shall be submitted to final and binding arbitration,
to be held in Ventura County, California before a sole neutral arbitrator. The
arbitration shall be administered by JAMS pursuant to its Comprehensive
Arbitration Rules and Procedures. Judgment on the award may be entered in any
court having jurisdiction. The parties acknowledge and agree that they are
hereby waiving any rights to trial by jury in any action, proceeding or
counterclaim brought by either of the parties against the other in connection
with any matter whatsoever arising out of or in any way connected with any of
the matters referenced in this Section 12. The parties agree that in any
proceeding with respect to such matters, each party shall bear its own
attorney's fees and costs.
13. TERM
Subject to the provisions of Section 5 of this Agreement, the term of this
Agreement shall end on the second anniversary of the date of this Agreement.
14. PARTIAL INVALIDITY
It is the desire and intent of Vitesse and Executive that the
provisions of this Agreement be enforced to the fullest extent permissible under
applicable federal, state and municipal laws. Accordingly, if any specific
provision or portion of this Agreement are determined to be invalid or
unenforceable within the particular jurisdiction in which enforcement is sought,
that portion of the Agreement will be considered as deleted for the purposes of
adjudication. All other portions of this Agreement will be considered valid and
enforceable within that jurisdiction.
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15. ENTIRE AGREEMENT
Vitesse and Executive understand and agree that this Agreement constitutes
the full and complete understanding and agreement between them regarding the
terms of Executive's employment and supersedes all prior understandings,
representations, and agreements with respect to the employment. Vitesse and
Executive understand that the Vitesse Semiconductor Corporation 2001 Stock
Incentive Plan and the Compensation Adjustment forms (if any) referred to in
this Agreement shall be fully incorporated into this Agreement by reference.
16. EXECUTIVE ACKNOWLEDGEMENT
Executive acknowledges that he has read and understands this Employment
Agreement and agrees to the terms and conditions contained herein. Executive
agrees that he has had the opportunity to confer with legal counsel of his
choosing regarding this Agreement. Executive further acknowledges that this
Agreement has not been executed by Executive in reliance upon any representation
or promise except those contained herein, and that Vitesse has made no guarantee
regarding Executive's employment other than those specified in this Agreement.
"Executive"
Dated: 27 July 2007 /s/ XXXXXXXXXXX XXXXXXX
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Xxxxxxxxxxx Xxxxxxx
VITESSE SEMICONDUCTOR CORPORATION,
a Delaware Corporation
Dated: 27 July 2007 By /s/ WILLOW B. SHIRE
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Willow B. Shire
Chairperson of the Compensation Committee
