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
2
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) m
