Exhibit 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
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(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
