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EMPLOYMENT
AGREEMENT
This Employment Agreement (this "Agreement") is entered into as
of November 16, 2006, (the "Effective Date") 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.
At the meeting of the Executive Committee of the Board of Directors
of Vitesse in December 2006, the Executive Committee is expected to
appoint Executive to the position of Senior Vice President, Finance
and Chief Financial Officer. If Executive is not appointed to that
position, Executive can terminate this Agreement immediately with
no further obligation of either party under this Agreement.
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.
Upon joining Vitesse as a full-time employee, Executive shall
receive a one-time signing bonus in the amount of $25,000.
During Executive’s first year of employment, Executive
shall be eligible to receive additional bonus payments of up to
$100,000, payable in three installments of $33,333 each, when and
as any of the following three events occur: a) the vacancies in
Vitesse’s accounting and finance organization agreed to by
Executive and the Chief Executive Officer of Vitesse are filled by
persons satisfactory to the Chief Executive Officer of Vitesse; b)
Vitesse is current in its filings under the Securities Exchange Act
of 1934; and c) Vitesse’s common stock is re-listed on the
Nasdaq Global Market.
Following Executive’s first year of employment, he shall
become eligible to participate in 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
Financial Officer. Vitesse and Executive further agree that
Executive's stock option position shall be reviewed not less than
once per year from the Effective Date of this Agreement.
Promptly following commencement of employment with the Company,
Executive will receive an initial grant of an option to purchase
300,000 shares of the common stock of the Company. Such option
shall be an Incentive Stock Option to the extent permitted by law,
and the shares
subject to such option shall vest over a four-year period, with
the first one-quarter of the shares vesting upon the first
anniversary of Executive’s employment, and the remainder
vesting in three equal annual installments during the subsequent
three years of Executive’s employment. The exercise price of
Executive’s option grant will be equal to the fair market
value as determined by the Vitesse Board of Directors on the date
of grant. At Executive’s election, Executive may immediately
exercise all of Executive’s options under a Section 83b
Election, subject to a right of repurchase in favor of the Company;
and such right of repurchase will expire in accordance with the
stated vesting schedule.
Acceleration of Vesting: In the event of a Change of Control (as
defined below) 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, then,
Executive’s shares subject to all outstanding options which
Executive has been granted prior to any such Change of Control
shall be accelerated and shall immediately become vested as though
all options 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. "Constructive Termination"
shall mean Executive’s resignation following: (a) a
material reduction of Executive’s overall compensation and
benefits; provided that the substitution of substantially
equivalent compensation and benefits shall not be deemed a
reduction of Executive’s compensation and benefits;
(b) Vitesse's requirement that Executive perform his principal
employment duties at an office that is more than twenty (20) miles
from Camarillo, California; or (c) after, or in connection with, a
Change of Control, unless consented to in writing by Executive, any
material reduction in Executive’s overall responsibility as
measured against the business of the Company prior to a Change of
Control (and not against the overall business of the combined or
surviving company resulting from a Change of Control).
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 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:
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A.
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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.
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B.
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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.
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C.
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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
sh
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