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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.      )

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )
Filed by the Registrantýx

Filed by a Party other than the Registranto

Check the appropriate box:

o

 

Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material underPursuant to §240.14a-12


Vitesse Semiconductor CorporationVITESSE SEMICONDUCTOR CORPORATION

(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

oý

 

No fee required.

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)(1) Title of each class of securities to which transaction applies:
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  (3)(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.



(1)


Amount Previously Paid:
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LOGO




741 Calle Plano Drive
Camarillo, California 93012
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
January 19, 2011
To Be Held Thursday,

TO OUR STOCKHOLDERS:

        Notice is hereby given that theMarch 7, 2013

To Our Stockholders:
The 2013 Annual Meeting of Stockholders of Vitesse Semiconductor Corporation a Delaware corporation, will be held on January 19, 2011March 7, 2013, at 99:00 a.m. local time, at the Renaissance Agoura Hills Hotel, 30100 Agoura Road, Agoura Hills,Hyatt Westlake Plaza in Thousand Oaks, 880 S. Westlake Boulevard, Westlake Village, California 9130191361, for the following purposes:

    1.
    To elect six directors to serve for the ensuing year and until their successors are duly elected (Proposal One);

    2.
    To approve the 2011 Vitesse Employee Stock Purchase Plan (Proposal Two);

    3.
    To ratify the appointment of BDO USA, LLP as the Company's independent registered public accounting firm for the fiscal year ending September 30, 2011 (Proposal Three); and

    4.
    To transact such other business as may properly be brought before the meeting and any adjournment(s) thereof.

1.To elect seven directors to hold office for the ensuing year and until their successors are duly elected;
2.To approve the Vitesse Semiconductor Corporation 2013 Incentive Plan;
3.To hold an advisory vote on executive compensation;
4.To ratify the selection of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2013; and
5.To transact such other business as may properly be brought before the meeting and any adjournment(s) thereof.
The foregoing items of business are more fully described in the Proxy Statementproxy statement accompanying this Notice.

Stockholders of record at the close of business on December 1, 2010January 11, 2013 are entitled to notice of, and to vote at, the meeting.

Annual Meeting.

All stockholders are cordially invited to attend the meeting. This year, we are using the Internet as our primary means of furnishing proxy materials to our stockholders. Accordingly, most stockholders will not receive paper copies of our proxy materials. We will instead send our stockholders a notice with instructions for accessing the proxy materials and voting electronically over the Internet or by telephone. The notice also provides information on how stockholders may request paper copies of our proxy materials. We believe electronic delivery ofYou may access the proxy statement and our proxy materials and annual report will help us reduceon the environmental impact and costsInternet, both of printing and distributing paper copies and improve the speed and efficiency by which our stockholders can access these materials. Any stockholder of record attending the meeting mayare available at “www.edocumentview.com/VTSS.”
Your vote in person even if he or she has returned a proxy. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.

Sincerely,



GRAPHIC
Christopher R. Gardner
President and Chief Executive Officer

Camarillo, California
December 1, 2010


YOUR VOTE IS IMPORTANT

is important. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the meeting and we urge you to vote as soon as possible. As an alternative to voting in person at the Annual Meeting, you may vote electronically over the Internet or by telephone, or if you receive a proxy card or voting instruction form in the mail, by mailing the completed proxy card or voting instruction form. Timely voting by any of these methods will ensure your representation at the Annual Meeting.

By Order of the Board of Directors,
Camarillo, CaliforniaChristopher R. Gardner
January 15, 2013President and Chief Executive Officer





VITESSE SEMICONDUCTOR CORPORATION
741 Calle Plano Drive
Camarillo, California 93012



(805) 388-3700
PROXY STATEMENT



INFORMATION CONCERNING SOLICITATION AND VOTING

General
General

The enclosed Proxyproxy is solicited on behalf of the Board of Directors (the "Board"“Board”) of Vitesse Semiconductor Corporation ("Vitesse"(“Vitesse” or the "Company"“Company”, “us”, “we”, or “our”) for use at the 2013 Annual Meeting of Stockholders (the "Annual Meeting"“Annual Meeting”) to be held at Renaissance Agoura Hills Hotel, 30100 Agoura Road, Agoura Hills,the Hyatt Westlake Plaza in Thousand Oaks, 880 S. Westlake Boulevard, Westlake Village, California 9130191361, on January 19, 2011Thursday, March 7, 2013, at 9:00 a.m., local time and at any adjournment(s) thereof, for the purposes set forth herein and in the accompanying Notice of Annual Meeting of Stockholders. Our telephone number is (805) 388-3700. This Proxy Statement is first being made available to all stockholders entitled to vote at the Annual Meeting on or about December 10, 2010.

January 24, 2013.

Record Date and Share Ownership

Shares Outstanding

Stockholders of record at the close of business on December 1, 2010January 11, 2013 (the "Record Date"“Record Date”) are entitled to notice of and to vote at the Annual Meeting and at any adjournment(s) thereof. On the Record Date, 23,986,53136,869,855 shares of our common stock, $0.01 par value, were issued and outstanding.

Revocability of Proxies

Any Proxyproxy given pursuant to this solicitation may be revoked by the person giving it at any time before its use (i) by delivering to us at our principal offices (Attention: Joyce Sheehan, Corporate Secretary) a written notice of revocation or a duly executed proxy bearing a later date, or (ii) by attending the Annual Meeting and voting in person. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote in person at the Annual Meeting, you must obtain a proxy issued in your name from that record holder, and you will need to provide a copy of such proxy at the Annual Meeting.


Attendance at the Annual Meeting

All stockholders of record as of the Record Date may attend the Annual Meeting. Please note that cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting. No items will be allowed into the Annual Meeting that might pose a concern for the safety of those attending. Additionally, to attend the meeting you will need to bring identification and proof sufficient to us that you were a stockholder of record as of the Record Date or that you are a representative of a stockholder of record as of the Record Date for a stockholder of record that is not a natural person.

For directions to attend the Annual Meeting, please visit the Renaissance Agoura Hills HotelHyatt Westlake Plaza in Thousand Oaks, 880 S. Westlake Boulevard, Westlake Village, California 91361 website at www.marriott.com/www.westlake.hyatt.com/hyatt/hotels/travel/laxag-renaissance-agoura-hills-hotel/services/maps or contact the hotel via telephone at (818) 707-1220.

(805) 557-1234.

Voting and Costs of Solicitation
Shares Directly Held-Stockholder of Record

. If you are a "registered“registered holder," that is your shares are registered in your name through our transfer agent, and you are viewing this proxy over the Internet you may vote electronically over the



Internet. For those stockholders who receive a paper proxy in the mail, you may also vote electronically over the Internet or by telephone or by completing and mailing the proxy card provided. The website identified in our Notice of Internet Availability of Proxy Materials provides specific instructions on how to vote electronically over the Internet. Those stockholders who receive a paper proxy by mail, and who elect to vote by mail, should complete and return the mailed proxy card in the prepaid and addressed envelope that was enclosed with the proxy materials.

You may request a ballot at the Annual Meeting and vote your shares in person.




Shares Indirectly Held-Beneficial Owner. If your shares are held in "street name," that is, your shares are held in the name of a stock brokerage firm,account or by a bank or other nominee, you will receive instructions fromare considered the brokerage firm, bankbeneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your broker or other nominee aswho is considered the stockholder of record with respect to those shares. We urge you to direct your record holder, that must be followed in order for your brokerage firm, bank or other nomineebroker on how to vote your shares. Beneficial owners may attend the Annual Meeting, but may not vote in person unless you obtain a signed proxy from the stockholder of record giving you the right to vote the shares perin person at the Annual Meeting. Your broker or nominee should provide you with a voting instruction card for you to use in directing the broker or nominee regarding how to vote your instructions.shares. If you have elected to receive paper copies of our proxy materials from your brokerage firm, bank or other nominee, you willdid not receive a voting instruction form. Please complete and returncard, please contact the enclosed voting instruction forminstitution holding your shares. We recommend that you vote your shares in advance as described above, so that your vote will be counted if you later decide not to attend the addressed, postage paid envelope provided.

Annual Meeting.

Only proxy cards and voting instruction forms that have been signed, dated and timely returned, and only proxies that have been timely voted electronically or by telephone will be counted in the quorum and voted.The Internet and telephone voting facilities will close at 11:59 p.m. Eastern Time, Tuesday, January 18, 2011.Wednesday, March 6, 2013. Stockholders who vote over the Internet or by telephone need not return a proxy card or voting instruction form by mail.

        You may also vote your shares in person at the Annual Meeting. If you are a registered holder, you may request a ballot at the Annual Meeting. If your shares are held in street name and you wish to vote in person at the Annual Meeting, you must obtain a proxy issued in your name from the record holder (e.g., your broker) and bring it with you to the Annual Meeting. We recommend that you vote your shares in advance as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.

We will bear the entire cost of the solicitation of proxies for the Annual Meeting, including the preparation, assembly, printing and mailing of the Notice of Internet Availability of Proxy Materials, this proxy statement, the proxy card, and any additional solicitation materials furnished to stockholders. The Company will pay Georgeson Inc. $7,500 for its proxy solicitation services and will reimburse Georgeson Inc. for payments made to brokers and other nominees for their expenses in forwarding solicitation materials. Solicitations also may be made by personal interview, telephone and electronic communications by directors, officers and other employees of the CompanyVitesse without additional compensation. We may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners. No additional compensation will be paid to those individuals for any such services.

If your proxy is properly submitted, the shares represented thereby will be voted at the Annual Meeting in accordance with your instructions. If you are a registered holder and you do not specify how the shares represented thereby are to be voted, your shares will be voted as follows:

    "For" the
“For” election of all six (6)seven nominees for director as described in Proposal One;

"For" the
“For” approval of the 2011 Vitesse Semiconductor Corporation Employee Stock Purchase2013 Incentive Plan ("ESPP") as described in Proposal Two;
“For” approval of the advisory vote on executive compensation as described in Proposal Three; and

"For" the
“For” ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2011 as described in Proposal Three;

Four.

If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the meeting to another time or place in order to solicit additional proxies in favor of the nominees of our Board of Directors, the persons named as proxies and acting thereunder will have discretion to vote on these matters according to their best judgment to the same extent as the person delivering the proxy would be entitled to vote. At the date this proxy statement went to press, we did not know of any other matter to be raised at the Annual Meeting.
Some stockholders receive more than one Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form because their shares are held in multiple accounts or registered in


different names or addresses. Please vote your shares held ineach account to ensure that all of your shares will be voted.

Quorum, Abstentions, Broker Non-Votes, Required Votes

Our Bylawsbylaws provide that stockholders holding a majority of the shares of common stockCommon Stock issued and outstanding and entitled to vote on the Record Date constitute a quorum at meetings of stockholders. Therefore, at the Annual Meeting, the presence, in person or by proxy, of the holders of at least 12,017,25218,434,929 shares of Common Stock will be required to establish a quorum. Each outstanding share of our Common Stock is entitled to one vote on each proposal at the Annual Meeting. ApprovalBoth abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to the matter on which the broker has expressly not voted. Thus, broker non-votes will not affect the outcome of any of the proposals requiresmatters being voted on at the following votes:Annual Meeting. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because (1) the six director nominees receivingbroker has not received voting instructions from the highest number of "For" votes will be elected as directors ofbeneficial owner and (2) the Company and each of Proposal 2 and 3 requiresbroker lacks discretionary voting power to vote such shares because the affirmative vote ofmatter is not considered a majority of the shares of Common Stock represented in person or by proxyroutine matter. The only routine matter that is being submitted to stockholders at the Annual Meeting and entitled to vote on the proposal. Votes will be counted by the inspectoris Proposal Four, ratification of election appointed for the Annual Meeting, who will separately count "For" and (with respect to proposals other than the election of directors) "Against" votes, abstentions, and broker non-votes. Because directors are elected by a plurality vote, abstentions in the election of directors will have no impact once a quorum exists. Abstentions will be counted towards the vote total for each proposal, other than the election of directors, and will have the same effect as "Against" votes with respect to the proposals to approve the Vitesse ESPP and to ratify the appointment of BDO USA, LLP as our independent registered public accounting firm forfirm.



In the fiscal year ending September 30, 2011.

        A "broker non-vote" occurs when a nominee holding shares for a beneficial owner does notelection of the seven directors (Proposal One), you may vote on a particular proposal because“For” all of the nominee does not have discretionary voting powernominees or your vote may be “Withheld” with respect to that proposal andone or more of the nominees. For all other proposals, you may vote “For,” “Against” or “Abstain.” If you “Abstain,” it has not received instructions with respect to that proposal from the beneficial owner. Broker non-votes have nosame effect on Proposal No. 1,as a vote “Against.”

If a quorum is present at the election of directors, because directors are elected byAnnual Meeting, a plurality of the shares voting will be sufficient to elect the director nominees (Proposal One). This means that the seven nominees for election as directors who receive the most votes cast. Broker non-votes“for” election will have no effect on Proposal No. 2,be elected. Approval of the Vitesse Semiconductor Corporation 2013 Incentive Plan (Proposal Two), approval of the Vitesse ESPP, because the shares constituting broker non-votes are not considered to be represented in person or by proxy at the Annual Meeting and entitled toadvisory vote on the proposal. Broker non-votes will also have no effect on Proposal No. 3,executive compensation (Proposal Three) and ratification of the appointment of our independent registered public accounting firm because brokers(Proposal Four), each will require an affirmative vote of the majority of the shares of Common Stock present or nominees have discretionary authorityrepresented at the Annual Meeting with respect to such proposal. If by the date of the Annual Meeting we do not receive proxies representing sufficient shares to constitute a quorum, the Chairman of the Meeting, or the stockholders entitled to vote on this proposal.

thereat, shall have power to adjourn the meeting, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted at the meeting as originally noticed.

Effect of Not Casting Your Vote

If you hold your shares in street name it is critical that you cast your vote if you want it to count in the election of directors (Proposal One of this proxy statement)One). In the past, if you held your shares in street name, and you did not indicate how you wanted your shares voted in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors as it feltdeemed appropriate.

        Recent changes in regulations were made to take away the ability of your

Your bank or broker no longer has the discretion to vote your uninstructed shares in the election of directors on a discretionary basis. Yourdirectors. Similarly, your bank or broker likewise has nodoes not have ability to vote your uninstructed shares on any other matters being submitted to the proposal to approvestockholders for a vote at the Vitesse ESPPAnnual Meeting other than ratification of the appointment of our independent registered public accounting firm (Proposal No. 2)Four). Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote inat the election of directors and approval of the Vitesse ESPP, no voteAnnual Meeting, your shares will not be castvoted on your behalf for the election of directorsProposals One, Two or the proposal to approve the Vitesse ESPP. Your broker will continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company's independent registered public accounting firm (Proposal No. 3).


Three.

Deadline for Receipt of Stockholder Proposals

In order for a stockholder proposal to be considered for inclusion in our proxy statement for our 2012 annual meeting2014 Annual Meeting of stockholders,Stockholders, the written proposal must be received by us no later than August 10, 2011,September 26, 2013, and should contain the information required under our bylaws. If the date of next year's annual meeting is moved more than 30 days before or after January 19, 2012,March 7, 2014, the first anniversary date of this year's Annual Meeting, the deadline for inclusion of proposals in our proxy statement is instead a reasonable time before we begin to print and mail our proxy materials for next year's meeting. Any proposals will also need to comply with Rule 14a-8 of the rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”), regarding the inclusion of stockholder proposals in company-sponsoredcompany sponsored proxy materials. Proposals should be addressed to Joyce Sheehan, our Corporate Secretary, at our principal executive offices.

If you intend to present a proposal at our 20122014 Annual Meeting of stockholdersStockholders and the proposal is not intended to be included in our proxy statement relating to that meeting, you must give us advance notice of the proposal in accordance with our bylaws. Pursuant to our bylaws, in order for a stockholder proposal to be deemed properly presented in these circumstances, a stockholder must deliver notice of the proposal to Joyce Sheehan, our Corporate Secretary, at our principal executive offices after the close of business on October 21, 2011December 7, 2013 and before the close of business on November 20, 2011.January 6, 2014. However, if the date of our 2012 annual meeting2014 Annual Meeting of stockholdersStockholders is more than 30 days before or after January 19, 2012,March 7, 2014, the first anniversary of this year's Annual Meeting, stockholders must give us notice of any stockholder proposals within a reasonable time before the mailing date of the proxy statement.statement for next year's Annual Meeting. If a stockholder does not provide us with notice of a stockholder proposal in accordance with the deadlines described above, the stockholder will not be permitted to present the proposal to the stockholders for a vote at the meeting.

The proxies to be solicited by us through our Board of Directors for our 2012 annual meeting2014 Annual Meeting of stockholdersStockholders will confer discretionary authority on the proxy holders to vote on any stockholder proposal properly presented at the 2012 annual meeting2014 Annual Meeting of stockholdersStockholders if we fail to receive notice of the stockholder's proposal for the meeting by August 10, 2011.

September 26, 2013.

If a stockholder wishesdesires only to recommend a candidate for consideration by the Nominating and Corporate Governance Committee as a potential nominee for theour Board, see the procedures discussed in "Proposal One—Election“Proposal One-Election of Directors—ProcessDirectors-Process for Recommending Candidates for Election to theour Board of Directors."






Further Information

We will provide without charge to each stockholder solicited by these proxy materials a copy of Vitesse's annual report on Form 10-K for the fiscal year ended September 30, 20102012, without exhibits, and any amendments, upon request of such stockholder made in writing to Vitesse Semiconductor Corporation, 741 Calle Plano Drive, Camarillo, California 93012, Attn: Investor Relations. We will also furnish any exhibit to the annual report on Form 10-K, if specifically requested in writing. You can also access our Securities and Exchange Commission ("SEC"(“SEC”) filings, including our annual reports on Form 10-K, on the SEC website at www.sec.gov.

        We have adopted






PROPOSAL ONE

ELECTION OF DIRECTORS

Our bylaws provide that the authorized number of directors is a procedure called "householding" that allows us to deliver only one copyminimum of five and a maximum of nine, with the exact number set by our NoticeBoard. Currently, the authorized number of Internet Availability of Proxy Materials, and for those stockholders that received a paper copy of proxy materials in the mail, one copy of our annual report to stockholders and this proxy statement, to multiple stockholders who share the same address (if they appear to be membersdirectors of the same family) unless we have received contrary instructions from an affected stockholder. Stockholders who participate in householding will continue to receive separate proxy cards if they received a paper copy of proxy materials in the mail.



PROPOSAL ONE
ELECTION OF DIRECTORS

Nominees

        Six (6)Company is seven, and seven members of our Board are to be elected at the Annual Meeting. Unless otherwise instructed, the proxy holders will vote the proxies received by them for the nominees named below. Each nominee has consented to be named a nominee in thethis proxy statement and to continue to serve as a director if elected. If any nominee becomes unable or declines to serve as a director, if additional persons are nominated at the meeting, or if stockholders are entitled to cumulate votes, the proxy holders intend to vote all proxies received by them in such a manner (in accordance with cumulative voting) as will ensure the election of as many of the nominees listed below as possible, and the specific nominees to be voted for will be determined by the proxy holders. We are not aware of any reason that any nominee will be unable or will decline to serve as a director. The term of office of each person elected as a director will continue until the next annual meetingAnnual Meeting of stockholders,Stockholders, or until a successor has been elected and qualified, or until his or her earlier resignation or removal. There are no family relationships among any of our directors or executive officers. Except as described below under “Proposal One-Election of Directors-Board Election Arrangement,” there are no arrangements or understandings between any director or executive officer and any other person pursuant to which he or she is or was to be selected as a director or officer.

Existing Board members G. William LaRosa, who has served as a director since August 2010, and G. Grant Lyon, who has served as a director since October 2009, will not stand for re-election at the Annual Meeting.
The names of the nominees all of whom are currently directors standing for re-election, and certain information about them as of December 1, 2010,January 11, 2013, are set forth below. All of the nominees have been nominated by theour Board acting on the recommendation of the Nominating and Corporate Governance Committee of theour Board, which consists solely of independent members of theour Board.

Name
 Age Director
Since
 Principal Occupation

Christopher R. Gardner

  50  2006 President and Chief Executive Officer

Steven P. Hanson(1)(2)

  
62
  
2007
 

Retired President and CEO of ON Semiconductor

James H. Hugar(1)(2)

  
64
  
2009
 

Retired Partner of Deloitte & Touche, LLP

G. Grant Lyon(3)

  
47
  
2009
 

President of Odyssey Capital Group, LLC

Edward Rogas, Jr.(1)(3)

  
70
  
2006
 

Chairman of the Board of Vitesse, Retired Senior Vice President of Teradyne, Inc.

G. William LaRosa(2)(3)

  
64
  
2010
 

Chief Executive Officer of G.W. LaRosa & Associates, LLC


(1)
Member of the Audit Committee

(2)
Member of the Nominating Existing Board members G. William LaRosa, who has served as a director since August 2010, and Corporate Governance Committee

(3)
Member of the Compensation Committee

Board of Directors

        The authorized number of directors under our Bylaws is a minimum of five and a maximum of nine, with the exact number set by the Board. Currently the authorized number of directors of the Company is six. The following six persons are members of our Board: Christopher R. Gardner, Steven P. Hanson, James H. Hugar, G. Grant Lyon, Edward Rogas, Jr., and G. William LaRosa.

        There are no family relationships among anywho has served as a director since October 2009, will not stand for re-election at the Annual Meeting.

The Board recommends that stockholders vote “For” the election of our directors or executive officers. Additional information regarding each of the following nominees.
Nominee Age Director
Since
 Principal Occupation
Mathew Frey 43 -- Chief Executive Officer of Optimum Energy, LLC
Christopher R. Gardner 52 2006 President and Chief Executive Officer of Vitesse
Steven P. Hanson(1)(2)(4) 64 2007 Retired President and CEO of ON Semiconductor
James H. Hugar (1)(2)(4) 66 2009 Retired Partner of Deloitte & Touche, LLP
Scot B. Jarvis (1)(4) 52 2012 Co-founder of Cedar Grove Partners, LLC
Edward Rogas, Jr. (1)(3)(4) 72 2006 Chairman of the Board of Vitesse, Retired Senior Vice President of Teradyne, Inc.
Kenneth H. Traub 51 -- President and CEO of Ethos Management, LLC
(1)Member of the Audit Committee
(2)Member of the Nominating and Corporate Governance Committee
(3)Member of the Compensation Committee
(4)Member of the Strategic Advisory Committee
Vote Required
If a quorum is present, the seven nominees receiving the highest number of votes will be elected to our directorsBoard. See “Information Concerning Solicitation and Voting-Quorum, Abstentions, Broker Non-Votes, Required Votes.”





Nominees' Principal Occupation, Business Experience and Qualifications
Matthew Frey is set forth below.

the Chief Executive Officer of Optimum Energy, LLC, a cloud based SaaS provider of energy management applications for complex buildings, data centers, campuses, hospitals and manufacturing facilities, a position he has held since November 2010. For more than 16 years, Mr. Frey has served in senior executive and advisory roles at technology companies, including Data Base, Inc., Payroll Online, World Wide Packets and Optimum Energy. Prior to his current position at Optimum Energy, from January 2004 until its sale to Ciena Corporation in March of 2008, Mr. Frey served as President and Chief Operating Officer of World Wide Packets, a leading provider of Carrier Ethernet solutions. Subsequent to the sale, Mr. Frey served as Ciena's Sr. Vice President of Business Development until January 2009. Mr. Frey brings operational, strategic, industry, and software development expertise to the Board. Mr. Frey holds a BS degree in accounting from Santa Clara University and worked as an auditor at Price Waterhouse in Silicon Valley early in his career.

Christopher R. Gardner age 50, has served as a director and our Chief Executive Officer since 2006. From 2002 until he was appointed Chief Executive Officer in 2006, he served as our Vice President



and General Manager of the Network Products Division. HeDivision, and from 2000 to 2002, he served as our Vice President and Chief Operating Officer from 2000 to 2002.Officer. Prior to joining Vitesse in 1986, Mr. Gardner served as a member of the Technical Staff at Bell Laboratories. Mr. Gardner's extensive career in the semiconductor industry, combined with his extensivebroad knowledge and understanding of our Company, the industry and the markets in which we operate, and the issues facing the Company, make Mr. Gardner a valuable member of our Board. Mr. Gardner received his BSEE degree from Cornell University and his MSEE degree from the University of California at Berkeley.

Steven P. Hanson age 62, has served as a director since August 2007. For more than 32 years, Mr. Hanson has served in senior executive roles at technology companies, including 28 years at Motorola in various engineering management and leadership positions. Mr. Hanson has served as the President and Chief Executive Officer of ON Semiconductor from 1999 to 2003. Mr. Hanson has been a senior partner at Southwest Value Acquisitions LLC, a private equity firm, since 2004. He served as the Chairman of InPlay Technologies, Inc., a high-technology firm delivering leadership human input device technologies and products from 2005 to 2007. Mr. Hanson has served Arizona State University as a member of the Dean's Advisory Council, W.P. Carey School of Business and the Dean's Advisory Council for the Ira A. Fulton School of Engineering. As a former senior executive at technology companies including ON Semiconductor and the GMGeneral Manager of Europe, Middle East and Africa Semiconductor Group of Motorola, Mr. Hanson brings operational, strategic and industry expertise to our Board. Mr. Hanson holds a BSEE degree from the College of Engineering at Arizona State University.

James H. Hugar age 64, has served as a director since October 2009. Mr. Hugar retired from Deloitte & Touche, LLP, where he was an audit partner from 1982 to 2008, specializing in the financial services industry. Prior to his retirement, he served as the partner-in-charge of the Southern California Investment Companies Industry and Broker/Dealer Practice Unit. Mr. Hugar serves on the Board of Advisors of American Relocation & Logistics, Inc., a privately-held company. With over 35 years of experience in public accounting, including participation at hundreds of audit committee meetings and serving as a director/advisor for both privately and publicly held companies, Mr. Hugar brings public company financial expertise to theour Board. Mr. Hugar holds a BS degree in Accounting from Pennsylvania State University and an MSBA degree from the University of California, Los Angeles, and is a Certified Public Accountant.

G. Grant Lyon,Scot B. Jarvis age 47, has served as a director since October 2009.May 2012. Mr. LyonJarvis co-founded Cedar Grove Partners, LLC, an investment and consulting/advisory partnership with a focus on wireless communication investments in 1997, and currently is currently the president of Odyssey Capital Group, LLC, a financial advisory and management consulting firm, whereits managing member. While at Cedar Grove, he has been employed since 1998. In 2005, heinvested in several successful early-stage companies in the telecommunications area and has served as interim Chief Financial Officeron a number of Hypercom Corporation.public and private boards. Prior to 2005,co-founding Cedar Grove, Mr. Lyon held positions as managing director at Ernst & Young Corporate Finance, LLC, and a managing member of Golf Equity, LLC and Vice President, Capital Markets at Evans Withycombe Residential, Inc. Mr. Lyon began his career at Arthur Andersen, LLP, where he worked from 1987 to 1997. Mr. Lyon served as Chairman of the Board of Three Five Systems. He has alsoJarvis served as a directorsenior executive of Tickets.com,Eagle River, Inc., a Craig McCaw investment firm. While at Eagle River, he founded Nextlink Communications on behalf of McCaw and served on its board of directors. He also served on the board of directors of Nextel Communications, NextG Networks, Inc., Wavelink Communications Inc., NextWeb, Inc., and Cantata Technologies, Inc. From 1985 to 1994, Mr. Lyon's breadthJarvis served in several executive capacities at McCaw Cellular Communications up until it was sold to AT&T. Mr. Jarvis currently serves on the board of experience in corporate financeKratos Defense & Security Solutions and strategic initiatives, includingAirspan Networks, both publicly traded companies. In addition, Mr. Jarvis currently serves on the board of directors of Good Technology, Inc., Root Wireless, Inc. and Slingshot Sports, LLC, all three of which are private companies. He is a venture partner with Oak Investment Partners, a venture capital raising, business and securities valuation, mergers and acquisitions and bankruptcy reorganizations allowsfirm. Mr. Lyon to provide guidanceJarvis brings to our Board extensive experience in the technology industry and our Company regarding our operations, growth strategies and opportunities.public company board experience. Mr. LyonJarvis holds a BSBA degree and an MBA degreein business administration from Brigham Young University. Mr. Lyon is a Certified Public Accountant and a published author and speaker.the University of Washington.

Edward Rogas, Jr., age 70, has served as a director and Chairman of theour Board since 2006. Mr. Rogas is a director and consultant to companies in the technology industry. He served as a Senior Vice President at Teradyne, Inc., an automated test equipment manufacturer, from 2000 to 2005. From 1976 to 2000, he held various management positions in the semiconductor ATE portion of Teradyne, Inc., including Vice President from 1984 to 2000. From 1973 to 1976, he served as a Vice President at American Research and Development. Mr. Rogas serves on the Board of FormFactor, Inc.,



a manufacturing test-technology






company, and Vignani Technologies, PvtPvt. Ltd. (a private Indian company). Mr. Rogas previously served on the board of directors of Photon Dynamics, Inc., a provider of digital imaging technology. Mr. Rogas brings to our Board extensive experience in engineering development and operations in the technology industry, financial sophistication and public company board experience. Mr. Rogas holds a BS degree from the United States Naval Academy and an MBA degree from Harvard Business School.

G. William LaRosa,Kenneth H. Traub age 64, has served as a director since August 2010. Mr. LaRosa is currently the President and Chief Executive Officer of G.W. LaRosa & Associates,Ethos Management LLC, which specializes in investing in and advising undervalued companies to execute strategies to build and unlock stockholder value, a position he has held since January 2009. From 1999 until its acquisition by JDS Uniphase Corp. (“JDSU”) in February 2008, he served as President and Chief Executive Officer of American Bank Note Holographics, Inc. (“ABNH”), a leading global supplier of optical security devices. Mr. Traub managed the turnaround, growth and sale of ABNH, and under his leadership, ABNH's stockholders achieved a gain exceeding 1000 percent. Following the sale of ABNH, he served as Vice President of JDSU, a global technology salesleader in optical technologies and business development firm.telecommunications, through September 2008. In 1994, Mr. LaRosa founded Lead Group International (LGI)Traub co-founded Voxware, Inc., a pioneer in Voice Over Internet Protocol (“VoIP”) communication technologies, and helped lead smaller technology companies including Silicon Graphicsserved as its Executive Vice President and American Motion Systems.Chief Financial Officer through 1998. From 1988 to 1994, he served as Vice President of Trans-Resources, Inc., a multinational holding company and investment manager. Mr. LaRosaTraub currently serves on the boardboards of advisorsdirectors of the following SEC reporting companies: (i) MRV Communications, Inc. (OTCQB: MRVC), a leading provider of Carrier Ethernet, wavelength division multiplexing optical transport, infrastructure management equipment and solutions, as well as network integration and managed services (Mr. Traub is currently Chairman of the Board), (ii) iPass, Inc. (NASDAQ: IPAS), a leading global provider of mobility services for Silvatron PartnersEnterprises and Carriers, (iii) MIPS Technologies, Inc. (NASDAQ: MIPS), a leading provider of industry standard processor architectures and cores, (iv) DSP Group, Inc. (NASDAQ: DSPG), a leading global provider of wireless chipset solutions for converged communications, and (v) Athersys, Inc. (NASDAQ: ATHX), a biotechnology company engaged in Los Gatos, California.the discovery and development of therapeutic product candidates designed to extend and enhance the quality of human life. Mr. Traub also serves as Chairman of the Board of Omnego, Inc., a privately-held supplier of digital cards, tickets and coupons on mobile devices. He ispreviously served on the Board of Directors of Phoenix Technologies, Inc. (NASDAQ: PTEC), a past directorsupplier of the basic input output system for the advisory board forpersonal computer industry, from November 2009 until its sale in November 2010. He also served as the Lubin School of Business at PACE University, and a former chairmanChairman of the Board of the New Jersey chapter of the Young Presidents Organization in 2010 and 2011. He received a BA degree from Emory College, and an MBA from Harvard Business School. Mr. Traub has over 20 years of senior management, corporate governance, turnaround and transactional experience with various public and private companies. His wealth of board at LGI. The experience he gained over 30 years holding various senior-level positions at industry-leading companies including General Electric, IBM and Advanced Micro Devices, allows Mr. LaRosacorporate governance awareness from his current and past service as a director would allow him to provide valuable advice and guidance to our Board.
Board Election Arrangement
On November 20, 2012, Raging Capital Fund, LP (the “Fund”), a stockholder of ours, notified us that the Fund intended to nominate Paul K. McWilliams and Kenneth H. Traub for election to our Board at the Annual Meeting. To provide us greater time to discuss with industry experience and public company sales, marketing and operational expertise. Mr. LaRosa earned his MBA degree from the Lubin School of Business at PACE University and has a BS degree in electrical and electronic engineering from Manhattan College in New York City.

        As a condition toFund the closing of our October 2009 debt restructuring transaction, the Company was obligated to appoint two qualified new directors prior to November 2, 2009 from a list of at least four persons identified by the holders of our convertible debentures. The Company received a list of eight director candidates from the holders of the convertible debentures, including James H. Hugar and G. Grant Lyon. Membersappropriate composition of our Board, we rescheduled the date of the Annual Meeting from January 29, 2013 to March 7, 2013. Following a series of discussions that took place between representatives of the Fund and us, we expanded the potential nominees to also include Matthew Frey. Our Nominating and Corporate Governance Committee then reviewed the background and qualifications of each nominee, and of the eight candidatesthree nominees being considered deemed Messrs. Traub and conducted interviews with fourFrey the most qualified for service on our Board. The Board considered the Nominating and Corporate Governance Committee's assessment and decided to nominate Messrs. Traub and Frey for election to our Board at the Annual Meeting, and to keep the size of the candidates. As perBoard at seven with Messrs. LaRosa and Lyon not standing for re-election at the Annual Meeting. With the nominations of Messrs. Traub and Frey, the Fund has advised us that it will not nominate any other person for election to our independent directors selection process announced on July 17, 2007, these four candidates were also vetted by an independent executive search firm, McDermott & Bull. McDermott & Bull provided an assessment of each candidate's experience as compared toBoard at the "Current Criteria for Directors" and "Independence Standards" as documented in the Company's Corporate Governance Guidelines. This document is available on the Company's website, www.vitesse.com, under "Investors—Corporate Governance." McDermott & Bull also conducted a comprehensive and confidential background investigation of the final candidates.

        The resignation of three of our former directors and the appointment of James H. Hugar and G. Grant Lyon to the Board to fill two of the resulting vacancies became effective on October 30, 2009, upon the closing of our debt restructuring transaction.

Annual Meeting.

Director Independence

The Board has determined that all of its current members and the nominees for election at the Annual Meeting, other than Mr. Gardner, meet the criteria for independence set forth in the NASDAQ Listing Rules and the Company's Corporate Governance Guidelines. Mr. Gardner does not qualify as independent because he is a Vitesse employee. Our Corporate Governance Guidelines are posted on our website at www.vitesse.com under "Investors—“Investors - Corporate Governance."

In making its determination, our Board Meetingsconsidered the objective tests and the subjective tests for determining who is an “independent director” under the NASDAQ Listing Rules. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In assessing independence under the subjective test, our Board took into account the standards in the objective tests, and reviewed and discussed additional information provided by the directors and the Company with regard to each director's business and personal activities as they may relate to us and our management for the



three year period preceding the date of determination, including the circumstances leading to Messrs. Frey and Traub's nominations for election to the Board as well as the Fund's compensation of Mr. Traub for his service on the Board as disclosed in the Fund's filings with the SEC. Based on all of the foregoing, as required by NASDAQ rules, our Board made a subjective determination as to each independent director that no relationships exist which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
The Board and Board Committees

Board of Directors

The Board held a total of seventeen (17)nine meetings during fiscal year 2010.2012. Each of our incumbent directors attended at least 75%75 percent of the aggregate of all meetings of theour Board and the committees of theour Board upon which such director served in fiscal year 2010.2012. Under our Corporate Governance Guidelines, theour Board is required to hold an executive session at each meeting of theour Board at which employee directors are not present.


        TheOur Board has been chaired by Mr. Rogas since December 2006. As chairman of theour Board, Mr. Rogas also serves as our Lead Director. The Board has elected to maintain a leadership structure with an independent director chairman, elected by vote of the independent directors, because we believe that, at this time, our companyCompany and its stockholders are best served by having an independent chairman convene, establish, after consultation with management, set agenda items for and preside over meetings of theour Board and executive sessions of the independent directors. We further believe that our corporate governance principles and policies ensure that strong and independent directors will continue to effectively oversee our management and key issues related to long-range business plans, strategic issues, risks and integrity.

During fiscal year 2010, the2012, our Board had three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee.

Our Board also formed a Strategic Advisory Committee as an ad hoc committee of our Board with an indefinite term.

Audit Committee

The Audit Committee, which consists of directors Messrs. Hugar, Hanson, Jarvis, and Rogas, has been chaired by Mr. Hugar since December 9, 2009. All of the members of the Audit Committee are "independent"“independent” as defined under rules promulgated by the SEC and meet the NASDAQ Listing Rules criteria for independence. TheOur Board has determined that Mr. Hugar is an "audit“audit committee financial expert"expert” as that term is defined in Item 407(d)(5) of Regulation S-K. Among other things, the Audit Committee assists our Board of Directors in its oversight of the integrity of our financial statements, the qualifications and independence of our independent auditors, the performance of our internal audit function, compliance with legal and regulatory requirements, our disclosure controls, and our systems of internal controls. The Audit Committee held fourteen (14)seven meetings during fiscal year 2010.2012. A copy of the Audit Committee charter is available on our website at www.vitesse.com.

www.vitesse.com under “Investors - Corporate Governance.”

Compensation Committee

The Compensation Committee, which consists of Messrs. Lyon, RogasLaRosa and LaRosa,Rogas, has been chaired by Mr. Lyon since December 9, 2009. Mr. Lyon and Mr. Rogas have served on this Committee since December 9, 2009, following the resignation of Mr. Adams, Ms. Shire and Mr. Lundy from the Board effective as of October 30, 2009. Mr. LaRosa was appointed to this committee on August 11, 2010. The Compensation Committee, among other things, reviews and approves our executive compensation policies and programs, and grants stock options and other equity awards to our employees, including officers, pursuant to our stock incentive plans. See "Executive Officers and Executive Compensation—Compensation“Compensation Discussion and Analysis"Analysis” and "Director Compensation"“Proposal One-Election of Directors-Director Compensation” below for a description of our processes and procedures for the consideration and determination of executive and director compensation. The Compensation Committee held twelve (12)seven meetings during fiscal year 2010.2012. A copy of the Compensation Committee charter is available on our website at www.vitesse.com.

www.vitesse.com under “Investors - Corporate Governance.”

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee, which consists of Messrs. Hanson, Hugar and LaRosa, has been chaired by Mr. Hanson since June 29, 2009. Mr. Hugar has served on this committee since December 9, 2009, following the resignation of Ms. Shire and Mr. Lundy from the Board effective October 30, 2009. Mr. LaRosa was appointed to the Committee on August 11, 2010. The Nominating and Corporate Governance Committee, among other things, assists theour Board by making recommendations to theour Board on matters concerning director nominations and elections, board committees and corporate governance. The Nominating and Corporate Governance Committee held four (4)six meetings during fiscal year 2010.2012. A copy of the Nominating and Corporate Governance Committee charter is available on our website at www.vitesse.com.

www.vitesse.com under “Investors - Corporate Governance.”
Strategic Advisory Committee



The Board forms ad hoc committees from time to time to assist our Board in fulfilling its responsibilities with respect to matters that are the subject of the ad hoc committee's mandate. During fiscal year 2012, the Board maintained a Strategic Advisory Committee to assist our Board by making recommendations on transactions and initiatives that the committee believes are reasonably likely to maximize stockholder value. The Strategic Advisory Committee has been chaired by Mr. Rogas since its formation, and currently consists of Messrs. Hanson, Hugar, Jarvis, LaRosa, Lyon and Rogas.
Corporate Governance Guidelines

The Company maintains a set of Corporate Governance Guidelines, which can be found on our website at www.vitesse.com under "Investors—“Investors - Corporate Governance." The Corporate Governance Guidelines cover a range of governance-relatedgovernance related matters, including requirements that theour Board maintain an independent Chairman of the Board, and that at least three-fourthsthree fourths of theour Board andas well as the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee consist of independent members.

Codes The Corporate Governance Guidelines also provide that no director may serve on the board of more than three other public companies while serving on Vitesse's Board. Our Board waived this guideline with respect to Mr. Traub, who presently serves on the board of four public companies, to allow for his election to the Board at the Annual Meeting.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics for members of theour Board, a Code of Business Conduct and Ethics for all officers and employees of the Company and its consolidated subsidiaries, and a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller and persons performing similar functions. Copiesfunctions, and all other officers and employees of these Codes arethe Company and its consolidated subsidiaries. A copy of this Code is posted on our website at www.vitesse.com under "Investors—“Investors - Corporate Governance." We intend to disclose any amendment to, or waiver from, the provisions of these Codesthis Code on our website at www.vitesse.com under "Investors—“Investors - Corporate Governance."

Board's Role in Risk Oversight

Our management team is responsible for identifying, assessing and managing the material risks facing our company. TheCompany. Our Board's role in risk oversight includes receiving regular updates from management on areas of material risks and key strategies and initiatives. TheOur Board also participates in a review of the Company's annual operating plan, which includes the identification of the most significant risks facing our business and evaluation of how the Company's corporate strategies align to manage those risks. While theour Board is ultimately responsible for risk oversight, each committee assists theour Board in fulfilling its oversight responsibilities. The Audit Committee oversees management of financial risks. The Compensation Committee provides oversight of the company'sCompany's compensation policies and practices including risks associated with executive compensation. The Nominating and Corporate Governance Committee manages risks associated with corporate governance, including the independence of Board members, Board composition, and policies and procedures such as our Code of Business Conduct and Ethics and Corporate Governance Guidelines, used to promote ethical conduct and compliance with law.

The full Board has evaluated Vitesse's overall compensation policies and practices for its employees to determine whether such policies and practices create incentives that can affect Vitesse's risk and management of that risk, and has further assessed whether any risks arising from these policies and practices are reasonably likely to have a material adverse effect on us. Our Board has concluded that the risks arising from our policies and practices are not reasonably likely to have a material adverse effect on us.
The Compensation Committee and our Board, in connection with their assessment of performance criteria for fiscal year 2012, concluded that while the criteria or targets reward prudent risk-taking in support of our objectives, they do not encourage or promote inappropriate risk-taking by the participants.
Attendance at Annual Meeting of Stockholders by Directors

It is the policy of the Company that, absent extraordinary circumstances, each member of theour Board shall attend our Annual Meeting of Stockholders. All of our boardBoard members attended the last year's annual meeting.

Annual Meeting of Stockholders.

Compensation Committee Interlocks and Insider Participation
During fiscal year 2012, G. Grant Lyon, G. William LaRosa and Edward Rogas, Jr. served on the Compensation Committee. None of the committee members has ever served as an officer of Vitesse. None of the committee members served as an employee of Vitesse during fiscal year 2012 or had any relationship requiring disclosure by us under Item 404 of Regulation S-



K. During fiscal year 2012, none of our executive officers served on the compensation committee (or equivalent), or the board of directors, of another entity whose executive officer(s) served on our Compensation Committee or Board of Directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers, directors, and persons who own beneficially more than 10 percent of a registered class of our equity securities to file reports of ownership and changes in ownership within specified periods with the SEC. To our knowledge, based solely on our review of the copies of Section 16(a) forms required to be furnished to us with respect to fiscal year 2012 and written representations that no other reports were required, we believe that our executive officers, directors, and greater than 10 percent stockholders complied with the Section 16(a) reporting requirements during fiscal year 2012.
Process for Recommending Candidates for Election to theour Board of Directors

The Nominating and Corporate Governance Committee will consider nominees recommended by stockholders. A stockholder that desires to recommend a candidate for election to theour Board must direct the recommendation in writing to us at our principal offices (Attention: Joyce Sheehan, Corporate Secretary) and must include the candidatecandidate's name, age, home and business contact information, principal occupation or employment, the number of shares beneficially owned by the nominee, whether any hedging transactions have been entered into by the nominee or on his or her behalf, information regarding any arrangements or understandings between the nominee and the stockholder nominating the nominee or any other persons relating to the nomination, a written statement by the nominee acknowledging that the nominee will owe a fiduciary duty to the Company, if elected, and any other information required to be disclosed about the nominee if proxies were to be



solicited to elect the nominee as a director. For a stockholder recommendation to be considered by the Nominating and Corporate Governance Committee as a potential candidate at an Annual Meeting, nominations must be received on or before the deadline for receipt of stockholder proposals for such meeting. In the event a stockholder decides to nominate a candidate for director and solicits proxies for such candidate, the stockholder will need to follow the rules set forth by the SEC and in our Bylaws.bylaws. See "Information“Information Concerning Solicitation and Voting-DeadlineVoting − Deadline for Receipt of Stockholder Proposals."

The Nominating and Corporate Governance Committee's criteria and process for evaluating and identifying the candidates that it approves as director nominees are as follows:

The Nominating and Corporate Governance Committeecommittee regularly reviews the current composition and size of theour Board.

The Nominating and Corporate Governance Committeecommittee reviews the qualifications of any candidates who have been properly recommended by a stockholder, as well as those candidates who have been identified by management, individual members of theour Board or, if the Nominating and Corporate Governance Committeecommittee determines, a search firm. Such review may, in the Nominating and Corporate Governance Committeecommittee's discretion, include a review solely of information provided to the Nominating and Corporate Governance Committeecommittee or may also include discussions with persons familiar with the candidate, an interview with the candidate or other actions that the Nominating and Corporate Governance Committeecommittee deems proper.

The Nominating and Corporate Governance Committeecommittee evaluates the performance of theour Board as a whole and evaluates the performance and qualifications of individual members of theour Board eligible for re-election at thean Annual Meeting of Stockholders.

The Nominating and Corporate Governance Committeecommittee considers the suitability of each candidate, including the current members of theour Board, in light of the current size and composition of theour Board.  Except as may be required by rules promulgated by the NASDAQ Stock Market or the SEC, it is the currentcommittee’s belief of the Nominating and Corporate Governance Committee that there are no specific minimum qualifications that must be met by any candidate for theour Board, nor are there specific qualities or skills that are necessary for one or more of the members of theour Board to possess.  In selecting new directors of the Company, consideration will be given to each individual director'sdirector’s (i) personal qualities, experiences, and abilities; (ii) the collective skills of all of the directors, taking into account the responsibilities of theour Board; and (iii) qualifications imposed by law and regulation.  As stated in the Company'sCompany’s Corporate Governance Guidelines, the Company has the following expectations of its directors and director candidates:

Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the stockholders;

Directors must have an inquisitive and objective perspective, practical wisdom and mature judgment;

Directors should represent diverse experiences at a strategy/policy setting level, and should be people who have high-level managerial experience, and who are accustomed to dealing with complex problems;



Directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively, and should be committed to serve on theour Board for an extended period of time;

Directors should possess a willingness to challenge and stimulate management and demonstrate the ability to work as part of a team in an environment of trust; and

The Nominating and Corporate Governance Committee will endeavor to notify, or cause to be notified, all directorDirector candidates, including those recommended by a stockholder, of its decision as to whether to nominate such individual for election to theour Board.

Stockholder Communication with theour Board of Directors

        We believe that management speaks for Vitesse.

Any stockholder may contact any of our directorsDirectors by writing to them by mail, c/o our Corporate Secretary, at our principal executive offices, the address of which appears on the cover of this proxy statement.

Any stockholder may report to us any complaints regarding accounting, internal accounting controls or auditing matters. Any stockholder who wishes to so contact us should send such comments to the Audit Committee, c/o James H. Hugar, at our principal executive offices, the address of which appears on the cover of this proxy statement.

Any stockholder communications sent to theour Board will first go to our Corporate Secretary, who will log the date of receipt of the communication as well as the identity and contact information of the correspondent in our stockholder communications log. After logging the communication, our Corporate Secretary will forward the communication to the Chairman of theour Board (in the case of communications directed to the whole Board) or to the applicable individual director(s)Director(s) addressed in the correspondence.

In the case of any complaints, the appropriate committee of theour Board will review and, if appropriate, investigate the complaint in a timely manner. In the case of accounting or auditing related matters, a member of the Audit Committee, or the Audit Committee as a whole, will review the summary of the communication, the results of the investigation, if any, and, if appropriate, the draft response. The summary and response will be in the form of a memo, which will become part of the stockholder communications log that the Corporate Secretary maintains with respect to all stockholder communications.

Director Compensation

        Effective April 1, 2010, after consultation with its

The general policy of our Board is that compensation for non-employee directors should be a mix of cash and equity-based compensation. We do not pay management Directors for Board service in addition to their regular employee compensation. The Compensation Committee, which consists solely of independent directors, has the primary responsibility for reviewing and considering any revisions to director compensation. Our Board reviews the Compensation Committee's recommendations and determines the amount and type of director compensation.
The Compensation Committee can engage the services of outside advisers, experts and others to assist the committee. During fiscal year 2012, the Compensation Committee engaged independent compensation consultant, DolmatConnell & Partners,Radford, an Aon Hewitt Company, to review director compensation and make recommendations to the BoardCompensation Committee for changes in director compensation for fiscal year 2013. No changes in director compensation were made for fiscal year 2012.
Fiscal Year 2012 Compensation



For fiscal year 2012, non-employee director compensation consisted of Directors adopted the following compensation package for Directors:

Annual retainer of $30,000, paid monthly;$30,000;




A non-employee director also is entitled to receive, upon initial election or appointment to our Board, a one-time award of equity compensation of 14,000 RSUs to be granted on the date of the Director's appointment or election to our Board and to vest in three annual installments of 33% on the first three anniversaries of the grant date.
If a non-employee Director Compensation Tableis appointed to our Board in between Annual Meetings of Stockholders, the annual cash compensation payable to that Director is pro-rated for Fiscal Year 2010

the remaining portion of the term in which the director is appointed to our Board, and the first award of annual equity compensation to be automatically granted to the director on the second Monday in January of the year following the Director's appointment is pro-rated based on the length of the Director's service on our Board since the date of the previous year's annual award of equity compensation.

The following table presents information regardingdetails the total compensation earned duringby our non-employee Directors in fiscal year 2010 by members of our Board who were not also our employees (referred to as "Non-Employee Directors"). The compensation paid to Mr. Gardner, who is employed by us, is presented below in the2012. 
Director Summary Compensation Table and the related explanatory tables. Directors who are also officers or employees of the Company or its subsidiaries receive no additional compensation for services as a director.

Name
 Fees Earned or
Paid in Cash
 Stock
Awards(1)(2)
 Option
Awards(2)
 Total 

Guy W. Adams(3)

 $18,918 $ $ $18,918 

Steven P. Hanson(4)(11)

  78,003  100,000  7,260  185,263 

James H. Hugar(5)(11)

  65,753  100,000  18,375  184,128 

G. William LaRosa(6)

  11,666  100,000    111,666 

Robert A. Lundy(7)

  18,418      18,418 

G. Grant Lyon(8)(11)

  52,754  100,000  18,375  171,129 

Edward Rogas, Jr.(9)(11)

  94,748  100,000  7,260  202,008 

Willow B. Shire(10)

  18,418      18,418 
Director 
Fees Earned
or Paid in
Cash
 
Stock
Awards(1)(2)
 Total
Steven P. Hanson (3)(9) $67,000
 $55,000
 $122,000
James H. Hugar (4)(9) 74,250
 55,000
 129,250
Scot B. Jarvis (5)(9) 19,333
 100,000
 119,333
G. William LaRosa (6)(9) 60,500
 55,000
 115,500
G. Grant Lyon (7)(9) 56,000
 55,000
 111,000
Edward Rogas, Jr. (8)(9) 85,000
 55,000
 140,000
  $362,083
 $375,000
 $737,083

(1)
Represents RSU awards. Each RSU entitledawards of restricted stock units, each of which entitles the directorDirector to receive one share of our common stockCommon Stock at the time of vesting, without the payment of an exercise price or other cash consideration.

(2)
Amounts shown do not reflect compensation actually received by the Directors.    These amounts represent the aggregate grant date fair value of thesethe stock awards granted in fiscal 2010, computedyear 2012 determined in accordance with FASB ASC Topic 718.  These amounts may not correspond to the actual value eventually realized by the director,Director, which depends in part on the market value of our common stockCommon Stock in future periods.  Assumptions used in calculating these amounts are set forth in the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended September 30, 2010. Vested options are not exercisable nor are2012.
(3)    Mr. Hanson served as Chairman of the shares underlyingNominating and Corporate Governance Committee and a member of the RSUs deliverable untilAudit Committee and Strategic Advisory Committee during fiscal year 2012.
(4)    Mr. Hugar served as Chairman of the Company's common stock is listedAudit Committee and a member of the Nominating and Corporate Governance Committee during fiscal year 2012.
(5)    Mr. Jarvis joined our Board on a national securities exchange.

(3)
May 9, 2012 and served as member of the Audit Committee and Strategic Advisory Committee during fiscal year 2012.
(6)    Mr. Adams became a director on October 25, 2007 and resignedLaRosa served as a director effective October 30, 2009. As of September 30, 2010, Mr. Adams had no options or RSUs outstanding.

(4)
Mr. Hanson became a director on August 16, 2007. Stock and option award amounts reflect fair valuemember of the 12,919 RSUs granted on May 11, 2010 with a grant date fair value of $100,000Compensation Committee and 2,000 options granted on January 1, 2010 with a grant date fair value of $7,260. As of September 30, 2010,the Nominating and Governance Committee during fiscal year 2012.
(7)    Mr. Hanson had 7,750 options and 12,919 RSUs outstanding.

(5)
Mr. Hugar became director on October 30, 2009. Stock and option award amounts reflect fair valueLyon served as Chairman of the 12,919 RSUs granted on May 11, 2010 withCompensation Committee and a grant date fair valuemember of $100,000, 3,750 options granted on October 30, 2009 with a grant date fair value of $11,115, and 2,000 options granted on January 1, 2010 with a grant date fair value of $7,260. As of September 30, 2010, Mr. Hugar had 5,750 options and 12,919 RSUs outstanding.

(6)
Mr. LaRosa became a director on August 4, 2010. There were no option awards granted to Mr. LaRosa for the Strategic Advisory Committee during fiscal year ended September 30, 2010.2012.
(8)    Mr. Rogas served as Chairman of our Board and Chairman of the Strategic Advisory Committee and as a member of the Audit Committee and the Compensation Committee during fiscal year 2012.
(9)    On January 9, 2012, each of Messrs. Hanson, Hugar, LaRosa, Lyon, and Rogas received an RSU award covering 18,691for 19,784 shares of Common Stock. Each RSU will vest in full on January 9, 2013. On May 9, 2012, Mr. Jarvis received an initial RSU award for 35,087 shares of Common Stock, which vests in three equal installments on the first, second and third anniversaries of the date of grant.
Stock Ownership Guidelines for Non-Employee Directors



The Board of Directors has established stock ownership guidelines for non-employee directors. Each non-employee director is expected to own Vitesse Common Stock-based holdings equal in value to at least three times such director's annual cash retainer for service on our Board, excluding retainers and other amounts paid for service as Chairperson, Lead Director or on committees of our Board. Non-employee directors may count toward these guidelines the value of (i) shares they or their immediate family members own directly or in trust, including the vested portion of shares issued as restricted stock awards, and (ii) the vested portion of restricted stock units held by them and for which shares of Common Stock have not been issued, including shares that have not been issued due to a recipient's election to defer the settlement date for such vested restricted stock units. Each non-employee director is expected to achieve this level of ownership by the later of August 9, 2015 or the third anniversary of his or her election to our Board of Directors.
The share ownership of the non-employee directors is reported below, and is based on the closing market price of our Common Stock (which was $2.24 on January 11, 2013):
DirectorCurrent Ownership Guideline as a Multiple of Annual Cash Retainer Fee Ownership as a Multiple of Annual Cash Retainer Fee as of January 11, 2013
Steven P. Hanson3 3
James H. Hugar3 3
Scot B. Jarvis3 2
G. William LaRosa3 3
G. Grant Lyon3 4
Edward Rogas, Jr.3 3





PROPOSAL TWO

APPROVAL OF 2013 INCENTIVE PLAN

Proposal Two is approval of the Vitesse Semiconductor Corporation 2013 Incentive Plan (the “2013 Incentive Plan”). The proposal to approve the 2013 Incentive Plan requires the affirmative vote of a majority of the shares of Common Stock present or represented and entitled to vote at the Annual Meeting with respect to such proposal.
Our Board believes that the continued growth of Vitesse depends, in large part, upon its ability to attract and motivate key employees and directors, and that equity incentive awards are an important means of attracting, retaining and motivating talented employees and directors. Accordingly, we are seeking stockholder approval of the 2013 Incentive Plan. Our board adopted the 2013 Incentive Plan, upon recommendation of its Compensation Committee, subject to stockholder approval at the Annual Meeting.
If the 2013 Incentive Plan is approved by stockholders, it will replace the 2010 Vitesse Semiconductor Corporation Incentive Plan, which we refer to in this proposal as the “Current Incentive Plan.” If stockholders approve the 2013 Incentive Plan, no new awards will be granted under the Current Incentive Plan. If stockholders do not approve the 2013 Incentive Plan, the Current Incentive Plan will remain available for new grants until it expires on May 11, 2020.
The 2013 Incentive Plan authorizes the issuance of 6,700,000 shares of our common stock on August 4, 2010 with a grant fair valueCommon Stock. In addition to the new shares authorized for issuance under the 2013 Incentive Plan, the 2013 Incentive Plan also provides that shares subject to awards outstanding under the Current Incentive Plan and the Vitesse Semiconductor Corporation 2001 Stock Incentive Plan (the “2001 Incentive Plan”) also may become available for issuance under the 2013 Incentive Plan to the extent that these shares cease to be subject to the awards (such as by expiration, cancellation or forfeiture of $100,000. The RSU granted on August 4, 2010 will vest in three (3) annual installmentsthe awards). In the text of 33% on August 4, 2011, 2012the 2013 Incentive Plan, we refer to the Current Incentive Plan and 2013.the 2001 Incentive Plan as the “Prior Plans.” As of September 30, 2010, Mr. LaRosa had no optionsJanuary 11, 2013, 838,525 shares were available for issuance under the Current Incentive Plan, and 18,691 RSUs outstanding.

(7)
Mr. Lundy became a director on May 2, 2008these shares will be cancelled if the stockholders approve the 2013 Incentive Plan. Our Board believes that these additional reserved shares are required in order for us to have an appropriate reserve of equity incentives to recruit, hire and resigned as a director effective October 30, 2009. retain the top talent that we will require to successfully execute our business strategy.
As of September 30, 2010, Mr. LundyJanuary 11, 2013, we had no options or RSUs outstanding.

(8)
Mr. Lyon became director on October 30, 2009. Stock and option award amounts reflect fair value of the 12,919 RSUs granted on May 11, 2010 with a grant date fair value of $100,000, 3,750 options granted on October 30, 2009 with a grant date fair value of $11,115, and 2,000 options granted on January 1, 2010 with a grant date fair value of $7,260. As of September 30, 2010, Mr. Lyon had 5,750 options and 12,919 RSUs outstanding.

(9)
Mr. Rogas became a director on January 24, 2006. Stock and option award amounts reflect fair value of the 12,919 RSUs granted on May 11, 2010 with a grant date fair value of $100,000 and 2,000 options granted on January 1, 2010 with a grant date fair value of $7,260. As of September 30, 2010, Mr. Rogas had 6,000 options and 12,919 RSUs outstanding.

(10)
Ms. Shire became a director on June 26, 2007 and resigned as a director effective October 30, 2009. As of September 30, 2010, Ms. Shire had no options or RSUs outstanding.

(11)
On May 11, 2010, each of the following directors received an RSU award covering 12,919outstanding 36,869,855 shares of our common stock: Messrs. Rogas, Hugar, Hanson, and Lyon. The total valueCommon Stock. If the 2013 Incentive Plan is approved by stockholders, the shares eligible for grant under the 2013 Incentive Plan will represent approximately 18% of the RSUs issued on May 11, 2010 was $100,000 for each director. The RSUs granted on May 11, 2010 will vest in three (3) annual installmentsour shares of 33% on May 12, 2011, 2012 and 2013.
Common Stock currently outstanding.

Vote Required

        If a quorum is present, the six (6) nominees receiving the highest number of votes will be elected

In addition to the Board. See "Information Concerning Solicitation and Voting—Quorum, Abstentions, Broker Non-Votes, Required Votes."

THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE SIX NOMINEES PRESENTED HEREIN.



PROPOSAL 2

APPROVAL OF THE 2011 EMPLOYEE STOCK PURCHASE PLAN

        We are asking stockholdersnew shares authorized for issuance under the 2013 Incentive Plan, shares subject to approveawards outstanding under the Company's 2011 Employee Stock PurchasePrior Plans (of which there were 2,833,602 shares as of January 11, 2013) may become available for issuance under the 2013 Incentive Plan (the "ESPP"). The ESPP allows employees to purchasethe extent that these shares on or after the date of our common stock at a discount using payroll deductions. Stockholderstockholder approval of the ESPP would entitle employees in the United States2013 Incentive Plan, cease to receive special tax treatment provided by the Internal Revenue Code (the "Code").

        Our Board of Directors adopted the Employee Stock Purchase Plan on November 23, 2010,be subject to stockholder approval. the awards (such as by expiration, cancellation or forfeiture of the awards).

The ESPP provides forprincipal features of the issuance of up to 2.5 million shares of common stock.2013 Incentive Plan are summarized below. This summary does not contain all information about the 2013 Incentive Plan. A copy of the ESPPcomplete text of the 2013 Incentive Plan is attachedincluded as Annex A to this proxy statement, as Appendix A. Theand the following description below is a summary and not intendedqualified in its entirety by reference to be a complete descriptionthe text of the ESPP. Please read the ESPP for more detailed information.

Description of the Employee Stock Purchase Plan

2013 Incentive Plan.






DESCRIPTION OF THE 2013 INCENTIVE PLAN
Purpose
The purpose of the ESPP2013 Incentive Plan is to attract, retain and motivate our employees, officers and directors by providing them with the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of our stockholders. The 2013 Incentive Plan also allows us to provide the same opportunity to consultants, agents, advisors and independent contractors.
Administration
The Compensation Committee of our Board of Directors administers the 2013 Incentive Plan, except that our board administers the 2013 Incentive Plan with respect to our non-employee directors. Our Board or the committee may delegate administration of the 2013 Incentive Plan in accordance with its terms. References to the “committee” in this Proposal Two are, as applicable, to the Compensation Committee, our Board or other delegate, including an officer of the Company authorized by our Board or Compensation Committee to make grants to certain eligible employees of the Company and those subsidiaries designated to participate in the ESPP with an opportunity to purchase shares of common stock. The ESPP has two portions—one portion for employees in the United States and one portion for international employees.

        The portion of the ESPP for employees in the United States is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code. The provisions of such portion of the ESPP, accordingly, willCompany.

Eligibility
Awards may be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.

        A total of 2.5 million shares of common stock will be available for issuance and purchasegranted under the ESPP. The number of shares of common stock available for issuance2013 Incentive Plan to employees, officers, directors, consultants, agents, advisors and purchase under the portion of the ESPP for United States employees will be 2.5 million shares of common stock less the number of shares of common stock used for the employee stock purchase programs for employees outside the United States. If any purchase right terminates for any reason without having been exercised, the shares of common stock not purchased under such purchase right shall again become available for the ESPP.

        The ESPP will be administered by the Compensation Committee (the "Committee") of our Board or any other Committee appointed by the Board to administer the ESPP. The Committee has the full and exclusive discretionary authority to construe and interpret the ESPP and the rights granted under it, to designate from time-to-time which subsidiaries of the Company will participate in the ESPP, to establish rules and regulations for the administration of the ESPP, and to amend the ESPP to satisfy applicable laws, to obtain any exemption under such laws or to reduce or eliminate any unfavorable legal, accounting or other consequences. The Committee also may adopt special rules for employees of the Company's international subsidiaries to conform to the particular laws and practices of the countries in which such employees reside.

Eligibility

        Generally, all employeesindependent contractors of the Company and its designated subsidiaries whose customary employmentand affiliates. As of January 11, 2013, approximately 205 employees and six non-employee directors were eligible to receive awards under the 2013 Incentive Plan.

Number of Shares
A total of 6,700,000 shares of Common Stock shall be authorized for issuance pursuant to awards granted under the 2013 Incentive Plan. In addition, shares subject to awards granted under the Prior Plans may again become available for awards under the 2013 Incentive Plan.
Any shares that are subject to appreciation awards (such as stock options and stock appreciation rights) shall be counted against the plan share limit on a 1-for-1 basis for every such share subject to appreciation awards. Any shares that are subject to full value awards (such as awards of stock, restricted stock and restricted stock units) shall be counted against the plan share limit at a ratio of 1.5 shares for every share subject to the full value award. Shares that cease to be subject to awards under the 2013 Incentive Plan and the Prior Plans, to the extent such shares again become available for awards under the 2013 Incentive Plan, will increase the shares available for issuance under the 2013 Incentive Plan at a ratio of 1.5 shares for every share subject to a full value award and on a 1-for-1 basis for every share subject to an appreciation award.
The following shares will be available again for issuance under the 2013 Incentive Plan:
subject to the discussion in the bullet immediately below, if any award granted under the 2013 Incentive Plan or the Prior Plans expires or is terminated, surrendered or cancelled without having been fully exercised, is forfeited in whole or in part (including as a result of the Company's contractual repurchase right), is settled in cash or otherwise results in any shares being forfeited or not being issued, the unused shares covered by such award are added back into the reserve of shares available for more than 20 hours per week and who have completed at least six months of servicefuture awards under the 2013 Incentive Plan;
shares withheld or tendered in connection with the Companyexercise of a full value award (but not an appreciation award) or any subsidiary are eligible to participatesatisfy tax withholding obligations of a full value award (but not an appreciation award) may be added back into the share reserve; and
awards granted in assumption of or substitution for previously granted awards in acquisition transactions will not reduce the ESPP. Employeesnumber of designated subsidiaries outsideshares authorized for issuance under the United States may have different eligibility requirements as determined appropriate by the Committee, for example, to accommodate local requirements and practices. However, any employee who would own or have options to acquire five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary is

2013 Incentive Plan.


excluded from participating in the ESPP. As of November 12, 2010, there would have been approximately 418 employees eligible to participate in the ESPP.

Purchase of Shares of Common Stock

        Pursuant to procedures established by the Committee, eligible employees may elect to have a portion of their compensation used to purchase shares of common stock. Purchase periods are established and purchasesThe maximum number of shares of commonCommon Stock that may be issued pursuant to the exercise of incentive stock are made onoptions is the last trading daysame as the total number of shares authorized under the 2013 Incentive Plan.

If any change in our stock occurs by reason of any stock dividend, stock split, spin-off, recapitalization, merger, consolidation, combination or exchange of shares, distribution to stockholders other than a normal cash dividend or other change in our corporate or capital structure, the committee will make proportional adjustments to the maximum number and kind of securities (a) available for issuance under the 2013 Incentive Plan, (b) issuable as incentive stock options, (c) issuable to certain





individuals subject to Code Section 162(m), and (d) subject to any outstanding award, including the per share price of such securities.
Types of Awards
The 2013 Incentive Plan permits the grant of any or all of the purchase periodfollowing types of awards.
Stock Options. The committee may grant either incentive stock options, which must comply with compensation amounts withheld from employees duringCode Section 422, or nonqualified stock options. The committee sets option exercise prices and terms, except that the purchase period. Pursuant to procedures established byexercise price of stock options granted under the Committee, employees may withdraw with respect to a future purchase period. If an employee withdraws from a future purchase period, such employee may not recommence withholding of compensation for the purchase of shares of common stock until the following purchase period.

        On each purchase date (the last trading day of each purchase period), any amounts withheld from an employee's compensation during the applicable purchase period for purposes of the ESPP will2013 Incentive Plan must be used to purchase the greatest number of whole shares of common stock that can be purchased with such amounts. The purchase price for a share of common stock will be set, unless the Committee determines higher percentages, at the lesser of (i) eighty-five percent (85%)least 100% of the fair market value of the Common Stock on the date of grant, except in the case of options granted in connection with assuming or substituting options in acquisition transactions. At the time of grant, the committee determines when stock options are exercisable and when they expire, except that the term of a stock option cannot exceed 10 years. Unless the committee otherwise determines, fair market value means, as of a given date, the closing price of our Common Stock on that date.

Stock Appreciation Rights (SARs). The committee may grant SARs as a right in tandem with the number of shares underlying stock options granted under the 2013 Incentive Plan or on a stand-alone basis. SARs are the right to receive payment per share of commonan exercised SAR in stock or cash, or a combination of stock and cash, equal to the excess of the share's fair market value on the first trading daydate of exercise over its fair market value on the date the SAR was granted. Exercise of an SAR issued in tandem with stock options will result in the reduction of the purchase periodnumber of shares underlying the related SAR to the extent of the SAR exercised. The term of a stand-alone SAR cannot be more than 10 years, and the term of a tandem SAR will not exceed the term of the related option.
Stock Awards, Restricted Stock and Stock Units. The committee may grant awards of shares of Common Stock, or (ii) eighty-five percent (85%)awards designated in units of Common Stock, under the 2013 Incentive Plan. These awards may be made subject to repurchase or forfeiture restrictions at the committee's discretion. The restrictions may be based on continuous service with us or the achievement of specified performance criteria, as determined by the committee.
Performance Awards. The committee may grant performance awards in the form of performance shares or performance units. Performance shares are units valued by reference to a designated number of shares of Common Stock, and performance units are units valued by reference to a designated amount of cash. Either may be payable in stock or cash, or a combination of stock and cash, upon the attainment of performance criteria and other terms and conditions as established by the committee.
Other Stock or Cash-Based Awards. The committee may grant other incentives payable in cash or in shares of Common Stock, subject to the terms of the 2013 Incentive Plan and any other terms and conditions determined by the committee.
Repricing
The 2013 Incentive Plan prohibits the committee, without stockholder approval, from lowering the price of an option after it is granted, except in connection with adjustments provided under the 2013 Incentive Plan, taking any other action that is treated as a repricing under generally accepted accounting principles, or canceling an option at a time when its strike price exceeds the fair market value of the underlying stock, in exchange for another option, restricted stock or units, or other equity, unless the cancellation and exchange occurs in connection with a sharemerger, acquisition, spin-off or other similar corporate transaction.
Performance-Based Compensation under Code Section 162(m)
Performance Goals and Criteria. If the committee intends to qualify an award under the 2013 Incentive Plan as “qualified performance-based compensation” under Section 162(m) of common stockthe Internal Revenue Code of 1986, as amended (the “Code”), the performance goals selected by the committee may be based on the purchase date. Forattainment of specified levels of one, or any combination, of the following performance criteria for the Company as a whole or any business unit, as reported or calculated by the Company: cash flows (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); working capital; earnings per share; book value per share; operating income (including or excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); revenues; operating margins; return on assets; return on equity; debt; debt plus equity; market or economic value added; stock price appreciation; total stockholder return; cost control; strategic initiatives; market share; net income; return on invested capital; improvements in capital structure; or customer satisfaction, employee satisfaction, services performance, subscriber, cash management or asset management metrics.





The performance goals also may be based on the achievement of specified levels of performance for the Company as a whole or any business unit or applicable affiliate under one or more of the performance goals described above relative to the performance of other corporations.
The committee may provide in any award that any evaluation of performance may include or exclude any of the following events that occur during a performance period: asset write-downs, litigation or claim judgments or settlements, the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, any reorganization and restructuring programs, extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company's annual report to stockholders for the applicable year, acquisitions or divestitures, foreign exchange gains and losses, and gains and losses on asset sales.
Adjustments and Certification. The committee may adjust the amount payable pursuant to an award under the 2013 Incentive Plan that is intended to qualify as “performance-based compensation” under Section 162(m) downward, but not upward. The committee may not waive the achievement of performance goals related to an award except in the case of a participant's death or disability. Section 162(m) requires that the committee certify that performance goals were achieved before the payment of the “performance-based compensation.”
Limitations. Subject to certain adjustments, participants who are granted awards intended to qualify as “performance-based compensation” under Section 162(m) may not be granted awards, other than performance units, for more than 600,000 shares of Common Stock in any calendar year, except that additional awards for up to 600,000 shares may be granted to newly hired or promoted individuals in any calendar year. The maximum dollar value payable to any participant with respect to performance units or other awards payable in cash that are intended to qualify as “performance-based compensation” cannot exceed $3,000,000 in any calendar year.
Change of Control
Under the 2013 Incentive Plan, unless otherwise provided in the instrument evidencing an award or in a written employment, services or other agreement between the participant and us, in the event of a change of control:
Upon certain changes of control, such as specified reorganizations, mergers or consolidations, the awards will become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions will lapse, only if and to the extent the awards are not converted, assumed or replaced by a successor company. Except for such specified types of changes of control, all outstanding awards, other than performance shares and performance units, will become fully and immediately exercisable and all applicable deferral and restriction limitations or forfeiture provisions will lapse, immediately prior to the change of control and the awards will terminate at the effective time of the change of control.
All performance shares and performance units will be payable based on targeted performance being attained as of the effective date of the change of control and will be paid in accordance with the payout schedule for the award.
In the event of certain reorganizations, mergers or consolidations, the committee may, in its discretion, instead provide that a participant's outstanding awards will be cashed out.
Definition of Change of Control. Unless the committee determines otherwise with respect to an award at the time it is granted or unless otherwise defined for purposes of an award in a written employment, services or other agreement between a participant and us, a change of control of the ESPP, "fair market value"Company generally means the closing sales priceoccurrence of any of the following events:
an acquisition by any individual, entity or group of beneficial ownership of 40% or more of either (a) the then outstanding shares of Common Stock or (b) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (excluding generally any acquisition directly from the Company, any acquisition by the Company, any acquisition by any employee benefit plan of the Company or an affiliate, or the completion of a sharereorganization, merger or consolidation or sale or other disposition of common stockall or substantially all of the assets of the Company pursuant to which specific requirements are met);
a change in the composition of the board of directors in any two-year period with the result that the incumbent board members cease to constitute at least a majority of the board (not including directors whose election, or nomination for election by stockholders, was approved by a majority of the day. Asincumbent board); or





completion of November 12, 2010specified reorganizations, mergers or consolidations or other disposition of all or substantially all of the closing sales priceassets of the Company.
Amendment and Termination
The Board of Directors or the committee may amend the 2013 Incentive Plan, except that if any applicable statute, rule or regulation requires stockholder approval for an amendment to the 2013 Incentive Plan, then to the extent so required, stockholder approval will be obtained. Our Board or the committee may also suspend or terminate all or any portion of the 2013 Incentive Plan at any time, but any suspension or termination may not, without a participant's consent, materially adversely affect any rights under any outstanding award. Unless sooner terminated by our Board or committee, the 2013 Incentive Plan will terminate on January 14, 2023.
U.S. Federal Income Tax Information
The following is a brief summary of the U.S. federal income tax consequences of the 2013 Incentive Plan generally applicable to us and to participants in the 2013 Incentive Plan who are subject to U.S. federal taxes. The summary is based on the Code, applicable Treasury Regulations and administrative and judicial interpretations thereof, each as in effect on the date of this proxy statement and is, therefore, subject to future changes in the law, possibly with retroactive effect. The summary is general in nature and does not purport to be legal or tax advice. Furthermore, the summary does not address issues relating to any U.S. gift or estate tax consequences or the consequences of any state, local or foreign tax laws.
Nonqualified Stock Options. A participant generally will not recognize income upon the grant or vesting of a sharenonqualified stock option with an exercise price at least equal to the fair market value of common stock as reportedour Common Stock on the Pink Sheets electronic quotation system was $4.35 per share.

        The Code limitsdate of grant and no additional deferral feature. When a nonqualified stock option is exercised, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the aggregatedifference between the fair market value of the shares underlying the option on the date of common stock (determinedexercise and the option exercise price. When a participant sells the shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the beginningshares sold. The tax basis of the purchase period) that any employee inshares generally will be equal to the United States may purchase under the ESPP during any calendar year to $25,000. In addition, an employee may purchase a maximum numbergreater of shares determined by dividing $25,000 by the fair market value of the shares on the first dayexercise date or the option exercise price.

Incentive Stock Options. A participant generally will not recognize income upon the grant of an incentive stock option. If a participant exercises an incentive stock option during employment as an employee or within three months after his or her employment ends (12 months in the case of permanent and total disability), the participant will not recognize income at the time of exercise for regular U.S. federal income tax purposes (although the participant generally will recognize income for alternative minimum tax purposes at that time as if the option were a nonqualified stock option). If a participant sells or otherwise disposes of the applicable offering periodshares acquired upon exercise of an incentive stock option after the later of (a) one year from the date the participant exercised the option and the Committee may further limit the number of shares that an employee may purchase in any purchase period. Employees in the United States must notify the Company if shares of common stock are disposed of in a disposition that does not satisfy the holding period requirements of Section 423 of the Code (generally, as discussed below,(b) two years from the beginninggrant date of the applicable purchase period).

        The Companyoption, the participant generally will payrecognize long-term capital gain or loss equal to the administrative costs associated withdifference between the operation ofamount the ESPP. The employees will pay any brokerage commissions that result from their salesparticipant received in the disposition and the option exercise price. If a participant sells or otherwise disposes of shares acquired upon exercise of common stock.

        The Company may deduct or withhold or require employees to pay toan incentive stock option before these holding period requirements are satisfied, the Company any federal, state, local and other taxes the Company is required to withhold with respect to any event arising asdisposition will constitute a result of the ESPP. The Company may also deduct those amounts from the employees' wages or compensation.

Effect of Certain Corporate Events

        The ESPP provides for adjustment of the number of shares of common stock which may be granted under the ESPP as well as the purchase price per share of common stock“disqualifying disposition,” and the number of shares of common stock covered by each purchase right for any increase or decrease in the number of shares of common stock resulting from a stock split, reverse stock split, stock dividend, extraordinary cash dividend, combination or reclassification of the common stock or recapitalization, reorganization, consolidation, split-up, spin-off or any other increase or decrease in the number of shares of common stock effected without receipt of consideration by the Company.


        In the event of any corporate transaction, the Committee may make such adjustment it deems appropriate to prevent dilution or enlargement of rights in the ESPP, in the number, class of or price of shares of common stock available for purchase under the ESPP and in the number of shares of common stock which an employee is entitled to purchase and any other adjustments it deems appropriate. In the event of any such transaction, the Committee may elect to have the purchase rights under the ESPP assumed or such purchase rights substituted by a successor entity, to set an earlier purchase date, prior to the consummation of such corporate transaction, to terminate all outstanding purchase rights either prior to their expiration or upon completion of the purchase of shares of common stock on the next purchase date, or to take such other action deemed appropriate by the Committee.

Amendment or Termination

        The Board may amend the ESPP at any time, provided such amendment does not cause rights issued under the portion of the ESPP for United States employees to fail to meet the requirements of Section 423 of the Code. Moreover, any amendment for which stockholder approval is required under Section 423 of the Code or any securities exchange on which the shares are traded must be submitted to the stockholders for approval. The Board may suspend or terminate the ESPP any time.

U.S Federal Income Tax Consequences

        The following discussion is only a brief summary of the United States federal income tax consequences to the Company and employees under the portion of the ESPP applicable to employees in the United States. It is based on the Code as in effect as of the date of this proxy statement. The discussion relates only to United States federal income tax treatment; state, local, foreign, estate, gift and other tax consequences are not discussed. The summary is not intended to be a complete analysis or discussion of all potential tax consequences.

        The amounts deducted from an employee's pay pursuant to the ESPPparticipant generally will be included in the employee's compensation and be subject to federal income and employment tax. Generally, no additional income will be recognized by the employee either at the beginning of the purchase period when purchase rights are granted pursuant to the ESPP or at the time the employee purchases shares of common stock pursuant to the ESPP.

        If the shares of common stock are disposed of at least two years after the first day of the purchase period to which the shares of common stock relate and at least one year after the shares of common stock were acquired under the ESPP (the "Holding Period"), or if the employee dies while holding the shares of common stock, the employee (or in the case of the employee's death, the employee's estate) will recognize taxable ordinary income in the year of disposition or death in an amount equal to the lesser of (a) the excess of the fair market value of the shares of common stock on the first trading daydate of the purchase periodexercise over the purchaseoption exercise price of the share of common stock, or (b)(or, if less, the excess of the amount realized on the disposition of the shares over the option exercise price). The balance of the participant's gain on a disqualifying disposition, if any, will be taxed as short-term or long-term capital gain, as the case may be.

With respect to both nonqualified stock options and incentive stock options, special rules apply if a participant uses shares of Common Stock already held by the participant to pay the exercise price.
Stock Appreciation Rights. A participant generally will not recognize income upon the grant or vesting of an SAR with a grant price at least equal to the fair market value of our Common Stock on the date of grant and no additional deferral feature. Upon the exercise of an SAR, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the SAR on the date of common stock atexercise and the time of such disposition over the purchasegrant price of the sharesSAR.
Unrestricted Stock Awards. Upon receipt of common stock.

        If the shares of commonan unrestricted stock are sold or disposed of (including by way of most gifts) before the expiration of the Holding Period, the employeeaward, a participant generally will recognize compensation taxable as ordinary income in the year of sale or disposition in an amount equal to the excess of the sales price over the purchase price. Even if the shares of common stock are sold for less than their fair market value onof the purchase date,shares at such time over the same amount, if any, paid by the participant with respect to the shares.






Restricted Stock Awards. Upon receipt of a restricted stock award, a participant generally will recognize compensation taxable as ordinary income when the shares cease to be subject to restrictions in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid for the shares. Instead of postponing the federal income tax consequences of a restricted stock award until the restrictions lapse, a participant may elect to recognize compensation taxable as ordinary income in the year of the award in an amount equal to the fair market value of the shares at the time of receipt. This election is included in income.

made under Section 83(b) of the Code. In addition,general, a Section 83(b) election is made by filing a written notice with the employeeInternal Revenue Service within 30 days of the date of grant of the restricted stock award for which the election is made and must meet certain technical requirements.

The tax treatment of a subsequent disposition of restricted stock will depend upon whether a participant has made a timely and proper Section 83(b) election. If a participant makes a timely and proper Section 83(b) election, when the participant sells the restricted shares, the participant generally will recognize short-term or long-term capital gain or loss, in an amountas the case may be, equal to the difference between the amount realized uponthe participant receives from the sale of shares of common stock and the employee's tax basis inof the shares of common stock (generally,sold. If no Section 83(b) election is made, any disposition after the amount the employee paid for the shares of common stock plus the amount, if any, taxed as ordinary income). Capital gainrestriction lapses generally will result in short-term or loss recognized on a



disposition of shares of common stock will be long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the amount, if any, the employee's holding periodparticipant paid for the shares plus the amount of commontaxable ordinary income recognized either at the time the restrictions lapsed or at the time of the Section 83(b) election, if an election was made. If a participant has to forfeit the shares to us (e.g., upon the participant's termination prior to expiration of the restriction period), the participant may not claim a deduction for the amount of compensation income recognized as a result of making the Section 83(b) election, and the participant generally will have a capital loss equal to the amount, if any, paid for the shares.

Restricted Stock Units. A participant generally will not recognize income at the time a stock exceeds one year. The purchase date beginsunit is granted. When any part of a stock unit is issued or paid, the holding period for determining whetherparticipant generally will recognize compensation taxable as ordinary income at the gaintime of such issuance or loss realized is shortpayment in an amount equal to the then fair market value of any shares, cash or long term.

        Ifproperty the employee disposesparticipant receives.

Performance Shares and Performance Units. A participant generally will not recognize income upon the grant of performance shares or performance units. Upon the distribution of common stock purchasedcash, shares or other property to the participant pursuant to the ESPP afterterms of the Holding Period,performance shares or units, the Companyparticipant generally will not be entitledrecognize compensation taxable as ordinary income equal to the excess of the amount of cash or the fair market value of any federal income tax deductionproperty transferred to the participant over any amount paid by the participant with respect to the performance shares of common stock issued under the ESPP. If the employee disposes of such shares of common stock prioror units.
Tax Consequences to the expiration ofCompany. In the Holding Period, the Companyforegoing cases, we generally will be entitled to a federaldeduction at the same time and in the same amount as a participant recognizes ordinary income, tax deductionsubject to certain limitations imposed under the Code.
Code Section 409A. We intend that awards granted under the 2013 Incentive Plan comply with, or otherwise be exempt from, Code Section 409A, but make no representation or warranty to that effect.
Code Section 162(m). Under Code Section 162(m), we are generally prohibited from deducting compensation paid to “covered employees” in an amount equal toexcess of $1,000,000 per person in any year. “Covered employees” are defined as the principal executive officer and any one of the three highest paid executive officers (other than the principal executive officer or the principal financial officer) as of the close of the applicable taxable year. Compensation that qualifies as “performance-based” is excluded for purposes of calculating the amount of ordinary income recognizedcompensation subject to the $1,000,000 limit. In general, one of the requirements that must be satisfied to qualify as performance-based compensation under Code Section 162(m) is that the material terms of the performance goals under which the compensation may be paid must be disclosed to and approved by a majority vote of our stockholders. Accordingly, stockholder approval of the employee2013 Incentive Plan is necessary to ensure that we have the ability to exclude taxable compensation attributable to stock options, stock appreciation rights and performance-based awards under the 2013 Incentive Plan that are intended to qualify as “qualified performance-based compensation” under Code Section 162(m) from the limits on tax deductibility imposed by Section 162(m).
Tax Withholding. We are authorized to deduct or withhold from any award granted or payment due under the 2013 Incentive Plan, or require a participant to remit to us, the amount of any withholding taxes due in respect of the award or payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. We are not required to issue any shares of Common Stock or otherwise settle an award under the 2013 Incentive Plan until all tax withholding obligations are satisfied.





Plan Benefits
We have adopted a program that provides for the automatic grant of RSUs to non-employee directors of Vitesse under the Current Incentive Plan. If approved, we will continue this program for the 2013 Incentive Plan.
Initial Awards. Upon a non-employee director's initial election or appointment to our Board, the director is automatically granted an RSU for 14,000 shares of our Common Stock on the date of grant, which vests in three equal annual installments so long as the director is providing continuous service on our Board.
Annual Awards. Each year on the second Monday in January, each non-employee director who is then serving on our Board is automatically granted an RSU for 9,500 shares of our Common Stock, which RSU vests in full on the first anniversary of the date of grant; provided, however, that if a director initially becomes a non-employee director after the date of the previous year's annual grant, such director shall receive a pro-rated annual award based on the portion of the immediately preceding year during which he or she served as a resultnon-employee director. The next scheduled annual award of such disposition.

NewRSUs to our non-employees directors (currently Messrs. Hanson, Hugar, Jarvis, LaRosa, Lyon and Rogas) will be made on Monday, January 14, 2013.

In addition, each non-employee director who is serving on the Strategic Advisory Committee on the second Monday in January also will be automatically granted an RSU for 4,000 shares of our Common Stock, which RSU vests in full on the first anniversary of the date of grant. The last scheduled annual award of RSUs to our non-employees directors serving on the Strategic Advisory Committee (currently Messrs. Hanson, Hugar, Jarvis, and Rogas) occurred on Monday, January 14, 2013.
With the exception of automatic awards to non-employee directors, all awards to employees, officers, directors and consultants under the 2010 Incentive Plan Benefits

        Participation in the ESPP is entirely withinwill be made at the discretion of the eligible employees. Becausecommittee. Therefore, the Company cannot presently determine the participation levels by employees, the rate of contributions by employeesbenefits and the eventual purchase priceamounts that will be received or allocated under the ESPP, it is2013 Incentive Plan are not possibledeterminable at this time. However, please refer to determine the valuedescription of benefits which may be obtained bygrants made to our named executive officers and other employees under the ESPP. Nonemployee directors are not eligible to participate in the ESPP.

last fiscal year described in the “Grants of Plan-Based Awards in Fiscal Year 2012” table. Grants made to our non-employee directors in the last fiscal year are described in the “Director Compensation” section. The affirmative voteclosing price of our Common Stock, as reported on the NASDAQ Global Market on September 30, 2012, was $2.44 per share.

Equity Compensation Plan Information
The following table provides information as of September 30, 2012 concerning securities authorized for issuance under our equity compensation plans:

 A
B C
Plan Category  Number of Securities
to be Issued upon
Exercise of
Outstanding Options,
Warrants or Rights

Weighted Average Exercise Price of Outstanding Options (3) Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Shares Reflected in Column A)
Equity compensation plans approved by security holders (1) 4,024,617
(2)$9.20
 605,805
(4)
Equity compensation plans not approved by security holders (5) 80,998

60.10
 
 
Total 4,105,615

$10.38
 605,805
 
(1)Consists of the Current Incentive Plan and the 2001 Stock Incentive Plan. No additional awards are being made under the 2001 Stock Incentive Plan.
(2)Includes 1,685,564 RSUs, which do not have an exercise price.
(3)Consists of the weighted average exercise price for stock options only.
(4)Consists of shares of our Common Stock reserved for issuance under the Current Incentive Plan.  Shares available for issuance under the Current Incentive Plan can be granted pursuant to stock options, stock appreciation rights, restricted stock or units, performance units, performance shares and any other stock based award selected by the Compensation Committee.





(5)Consists of the Vitesse International Inc. 1999 International Stock Option Plan, which was adopted in 1999 to provide for the grant to international employees of incentive stock options and the assumption of options under plans of foreign subsidiaries. The Vitesse International Inc. 1999 International Stock Option Plan expired on October 31, 2009.  No additional options may be granted under the 1999 International Stock Option Plan. 
Vote Required
The approval of the holdersAmendment of the 2013 Incentive Plan will require the affirmative vote of a majority of the shares of Common Stock present or represented in person or by proxyand entitled to vote at the Annual Meeting with respect to such proposal. See “Information Concerning Solicitation and entitled to vote on the resolution is required for approval of the ESPP. The Board has unanimously approved the ESPP and believes it to be in the best interests of the Company and the stockholders.

Voting-Quorum; Abstentions; Broker Non-Votes.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOUA VOTE FOR“FOR” APPROVAL OF THE 2011 EMPLOYEE STOCK PURCHASEVITESSE SEMICONDUCTOR CORPORATION 2013 INCENTIVE PLAN.







PROPOSAL THREE
ADVISORY VOTE ON EXECUTIVE COMPENSATION
 Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), we are required to include in this proxy statement and present at the Annual Meeting a non-binding stockholder vote to approve the compensation of our executives, as described in this proxy statement, pursuant to the compensation disclosure rules of the SEC. This proposal, commonly known as a “say on pay” vote, gives stockholders the opportunity to endorse or not endorse the compensation of our executives as disclosed in this proxy statement. This proposal will be presented at the Annual Meeting as a resolution in substantially the following form:
RESOLVED, that the stockholders approve the compensation of the Company's executives, as disclosed in the Compensation Discussion and Analysis, the compensation tables and related narrative disclosure in the Company's proxy statement for the Annual Meeting.
This vote will not be binding on our Board of Directors and may not be construed as overruling a decision by our Board or creating or implying any change to the fiduciary duties of our Board. The vote will not affect any compensation previously paid or awarded to any executive. The Compensation Committee and the Board may, however, take into account the outcome of the vote when considering future executive compensation arrangements.
The purpose of our compensation programs is to attract and retain experienced, highly-qualified executives critical to our long-term success and enhancement of stockholder value.
Required Vote
Endorsement of the compensation of our executive officers will require the affirmative vote of a majority of the shares of Common Stock present or represented and entitled to vote at the Annual Meeting with respect to such proposal. See “Information Concerning Solicitation and Voting-Quorum, Abstentions, Broker Non-Votes, Required Votes.”
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” ENDORSEMENT OF THE COMPENSATION OF OUR EXECUTIVE OFFICERS.






PROPOSAL FOUR
RATIFICATION OF APPOINTMENTSELECTION OF
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

The Audit Committee of the Board has selected BDO USA, LLP, an independent registered public accounting firm, to audit our financial statements for the fiscal year ending September 30, 2011,2013, and recommends that stockholders vote for ratification of such appointment. BDO USA, LLP has audited our financial statements since the fiscal year ended September 30, 2008. Although ratification by stockholders is not required by law, the Audit Committee has determined that it is desirable to request ratification of this selection by the stockholders as a matter of good corporate practice. Notwithstanding its selection, the Audit Committee, in its discretion, may appoint a new independent registered public accounting firm at any time during the fiscal year if the Audit Committee believes that such a change would be in the best interest of Vitesse and its stockholders. If the stockholders do not ratify the appointment of BDO USA, LLP, the Audit Committee may reconsider its selection. The Audit Committee selected BDO USA, LLP to audit our financial statements for the fiscal year ended September 30, 2010.

Representatives of BDO USA, LLP are expected to be present at the meeting and will be afforded the opportunity to make a statement if they desire to do so. The representatives of BDO USA, LLP are also expected to be available to respond to appropriate questions.

Principal Accountant

Fees Paid to BDO USA, LLP and Services

BDO USA, LLP International Firms

The following table shows the approximatesets forth fees billedfor services paid to us, for fiscal years 2010 and 2009, by BDO USA, LLP, our independent registered public accounting firm:

 
 2010 2009 

Audit Fees

 $1,297,594 $2,694,422 

Audit-Related Fees

    140,958 

Tax Fees

  207,175  309,892 

All Other Fees

     
      

Total

 $1,504,769 $3,145,272 
      

Audit Fees

        This category includes the audit of our annual financial statements, review of financial statements included in our Form 10-Q quarterly reports,firm and services that are normally provided in connection with statutory and regulatory filings or engagements. This category also includes advice on accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, statutory audits required by non-U.S. jurisdictions and the preparation of an annual "management letter" on internal control matters.

Audit-Related Fees

        This category consists of professional services rendered primarily in connection with our debt restructuring activities. These professional services continued through consummation of the debt restructuring on October 30, 2009, as discussed in our annual report on Form 10-KBDO USA, LLP International firms, for the fiscal yearyears ended September 30, 2009.

2012Tax Fees and 2011:

        This category consists of professional services rendered primarily in connection with our debt restructuring activities. These professional services continued through consummation of the debt


  2012 2011
Audit Fees (1) $589,270
 $542,016
Audit-Related Fees (2) 
 13,288
Tax Fees (3) 9,744
 282,834
All Other Fees 
 
Total $599,014
 $838,138
(1)Audit fees include the audit of our annual financial statements and consent for SEC filings, the audit of management's assessment of our internal control over financial reporting and BDO USA, LLP's audit of our internal control over financial reporting, review of financial statements included in our Form 10-Q quarterly reports, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes advice on accounting matters that arose during, or as a result of, the audit or the review of interim financial statements and the preparation of an annual “management letter” on internal control matters.
(2)Audit related fees consist of fees paid in fiscal year 2011 for a 401(k) plan audit.
(3)Tax fees consist of fees paid in fiscal years 2012 and 2011 to a BDO USA LLP International firm for tax compliance services in Japan. Tax fees in fiscal year 2011 also consist of fees paid to BDO USA LLP for tax compliance and tax preparation plus tax services relating to our global restructuring project which was completed in May 2011.

restructuring on October 30, 2009, as discussed in our annual report on Form 10-K for the year ended September 30, 2009.

Pre-Approval Policies and

Approval Procedures

The Audit Committee, inat its sole discretion, pre-approved and reviewed audit and non-audit services performed by our independent registered public accounting firm, as well as the fees charged for such services. Requests for approval are considered at each regularly scheduled Audit Committee meeting or, if necessary, are approved by the unanimous consent of all members of the Audit Committee. In its pre-approval and review of non-audit service fees, the Audit Committee considers, among other factors, the possible effect of the performance of such services on the auditors' independence. The Audit Committee considered and pre-approved all services rendered during fiscal years 20102012 and 2009.

2011.






Vote Required

        If a quorum is present, the

The approval of the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending September 30, 20112013, will require the affirmative vote of a majority of the shares of Common Stock present or represented in person or by proxyand entitled to vote at the Annual Meeting and entitledwith respect to vote on the resolution.such proposal.  See "Information“Information Concerning Solicitation and Voting—Quorum; Abstentions;Quorum, Abstentions, Broker Non-Votes."

Non-Votes, Required Votes.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERSA VOTE "FOR" THE“FOR” RATIFICATION OF THE APPOINTMENTSELECTION OF BDO USA, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2011.

FIRM.





SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certainpresents information regarding the beneficial ownership of shares of our common stock based on 23,986,531 shares of common stock outstanding as of December 1, 2010 by: (i) all thoseCommon Stock with respect to:
Each person who is known byto us to be the beneficial ownersowner of more than five percent of the outstanding shares(5%) of our common stock; (ii) eachoutstanding Common Stock;
Each of our executive officers named in the Summary Compensation Table; (iii) eachdirectors and nominees;
Each of our current directors;named executive officers; and (iv) all
All of our currentdirectors and executive officers and directors as a group.
This information is as of January 11, 2013, except for information on greater than five percent (5%) stockholders.  Amounts reported under “Number of Shares of Common Stock Beneficially Owned” include the number of shares subject to stock options and RSUs that become exercisable or vest, and the number of shares that can be acquired upon conversion of Series B convertible preferred stock and debentures, within 60 days of January 11, 2013 (which shares are shown in the columns to the right).  Unless otherwise indicated, the persons named in this table have sole voting and sole investment power with respect to all shares shown as beneficially owned, subject to community property laws where applicable. Unless otherwise indicated, the address of each of the beneficial ownersperson listed in this table is:is c/o Vitesse Semiconductor Corporation, 741 Calle Plano, Camarillo, California 93012.

Name of Individuals or Identity of Group
 Shares
Beneficially
Owned
 Series B
Preferred
Stock and
Debentures
Convertible
Within
60 Days of
December 1,
2010
 Total Shares
Beneficially
Owned Plus
Exercisable
Within
60 Days of
December 1,
2010
 Stock Options
and RSUs
Vested Within
60 Days of
December 1,
2010 and upon
the Company's
Listing on an
Exchange
 Percent of
Total Shares
Outstanding
 

Linden Capital, L.P.
c/o Wakefield Quin
Victoria Place
31 Victoria Street
Hamilton HM10, Bermuda

  1,807,036(1) 589,219  2,396,255     9.9%

CNH CA Master Account, L.P.
Two Greenwich Plaza, 3rd Floor
Greenwich, CT 06830

  
  
2,396,255

(2)
 
2,396,255
     
9.9

%

Whitebox Advisors, LLC
3033 Excelsior Boulevard, Suite 300
Minneapolis, MN 55416

  
1,987,875

(3)
 
408,380
  
2,396,255
     
9.9

%

Kopp Investment Advisors, LLC
7701 France Avenue South, Suite 500
Edina, MN 55435

  
2,252,554

(4)
 
  
2,252,554
     
9.4

%

AQR Capital Management, LLC; AQR Absolute Return Master Account L.P.
Two Greenwich Plaza, 3rd Floor
Greenwich, CT 06830

  
1,683,864

(5)
 
366,482
  
2,050,346
     
8.5

%

Aristeia Capital L.L.C.
136 Madison Avenue, 3rd Floor
New York, NY 10016

  
1,540,551

(6)
    
1,540,551
     
6.4

%

Columbia Pacific Opportunity Fund, L.P.
1910 Fairview Avenue East, Suite 500
Seattle, WA 98102

  
1,537,860

(7)
    
1,537,860
     
6.4

%

Lake Union Capital Fund, L.P.
600 University Street, Suite 1520
Seattle, WA 98101

  
1,500,000

(8)
    
1,500,000
     
6.3

%

ABN AMRO Bank N.V.,
London Branch
c/o RBS Global Banking & Markets
600 Washington Boulevard
Stamford, CT 06901

  
  
1,187,778

(9)
 
1,187,778
     
5.0

%
  
Number of Shares
of Common Stock
Beneficially
Owned (1)
 
Percent
of Class
 
Number of
Shares Subject
to Options
Exercisable
Within 60 Days
 
Number of
Shares Subject
to RSUs That
Vest Within
60 Days
 
Number of Shares
Subject to Series B
Preferred Stock and
Debentures Convertible
Within 60 Days (2)
Directors, Nominees and Named Executive Officers:          
Mathew Frey 
 *
 
 
 
Christopher R. Gardner 403,564
 1.1% 196,800
 30,000
 
Steven P. Hanson 58,214
 *
 7,750
 
 
James H. Hugar 66,400
 *
 5,750
 
 
Scot B. Jarvis 28,571
 *
 
 
 
G. William LaRosa 57,552
 *
 
 
 
G. Grant Lyon 72,400
 *
 5,750
 
 
Martin S. McDermut 117,916
 *
 52,083
 4,167
 
Dr. Martin C. Nuss 93,339
 *
 47,400
 6,666
 
Edward Rogas, Jr. 65,650
 *
 6,000
 
 
Kenneth H. Traub 
 *
 
 
 
Directors and officers as a Group (11 persons) 963,606
 2.6% 321,533
 40,833
 
Greater Than 5% Stockholders:          
CNH CA Master Account, L.P.(3) 2,476,333
 6.3% 
 
 2,476,333
Whitebox Advisors, LLC (4) 2,690,690
 6.9% 
 
 1,887,234
Kopp Investment Advisors, LLC (5) 2,567,418
 7.0% 
 
 
AQR Capital Management, LLC (6) 2,315,899
 6.0% 
 
 2,018,999
Columbia Pacific Opportunity Fund, L.P. (7) 2,744,128
 7.4% 
 
 
Raging Capital Master Fund, Ltd. (8) 6,491,127
 17.6% 
 
 

Name of Individuals or Identity of Group
 Shares
Beneficially
Owned
 Series B
Preferred
Stock and
Debentures
Convertible
Within
60 Days of
December 1,
2010
 Total Shares
Beneficially
Owned Plus
Exercisable
Within
60 Days of
December 1,
2010
 Stock Options
and RSUs
Vested Within
60 Days of
December 1,
2010 and upon
the Company's
Listing on an
Exchange
 Percent of
Total Shares
Outstanding
 

Christopher R. Gardner

  17,466    17,466  138,057(10) * 

Richard C. Yonker

  
4,000
  
  
4,000
  
26,250

(11)
 
*
 

Dr. Martin C. Nuss

  
  
  
  
13,125

(12)
 
*
 

Steven P. Hanson

  
3,100
  
  
3,100
  
7,075

(13)
 
*
 

Edward Rogas, Jr.

  
3,000
  
  
3,000
  
6,000

(14)
 
*
 

G. Grant Lyon

  
10,000
  
  
10,000
  
5,750

(15)
 
*
 

James H. Hugar

  
14,000
  
  
14,000
  
5,750

(16)
 
*
 

G. William LaRosa

  
500
  
  
500
  
  
*
 

All executive officers and Directors as a group (8 persons)

  
52,066
  
  
52,066
  
202,007
  
*
 

*
Less than 1% of the outstanding Common Stock..
(1)Beneficial ownership is determined in accordance with the rules of the SEC that deem shares to be beneficially owned by any person who has or shares voting or investment power with respect to such shares. Shares of Common Stock that presently, or within 60 days of the date of this information, may be acquired by a holder upon exercise of warrants or options or conversion of preferred stock or convertible debt, or that vest under restricted stock units, are deemed outstanding for purposes of computing the percentage ownership of the person holding such securities, but are not deemed outstanding for computing the percentage ownership of any other person. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of Common Stock actually outstanding at January 11, 2013.
(2)Pursuant to the terms of Series B convertible preferred stock and convertible debentures held by certain of our stockholders, the maximum number of shares that may be acquired by any such stockholder upon conversion of the Series B convertible preferred stock or convertible debentures is limited to the extent necessary to ensure that, following such exercise, the total number of shares of Common Stock then beneficially owned by such stockholder and its affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the stockholder for purposes of Section 13(d) of the Exchange Act, does not exceed 9.99% of the total number of issued and outstanding shares of Common Stock then outstanding. The shares of Common Stock and percentage ownership listed in this table reflect these contractual limitations on a stockholder's ability to acquire shares of Common Stock upon conversion of its Series B convertible preferred stock or convertible debentures.


(1)
The shares exercisable within 60 days include shares of common stock issuable upon conversion of $2,900,000 principal amount of debt securities held by Linden Capital. The debt securities are convertible into shares of common stock but only to the extent that conversion would not cause the holder to become a beneficial owner of more than 9.99% of the shares of common stock outstanding. A Schedule 13G/A was filed by Linden Capital, L.P. ("Linden Capital"), Linden GP LLC ("Linden GP") and Siu Min Wong with the SEC on January 15, 2010. Based on the information reported in the Schedule 13G/A, (i) Linden GP is the general partner of Linden Capital and Mr. Wong is the managing member of Linden GP, and (ii) as of December 31, 2009, Linden Capital, Linden GP and Mr. Wong had shared power to vote or direct the vote and to dispose or direct the disposition of the shares held by Linden Capital.

(2)
CNH CA Master Account, L.P. and its affiliates beneficially own an aggregate of 134,718.93 shares of Series B Preferred Stock that are convertible into an aggregate of 673,595 shares of common stock and $10,689,000 aggregate principal amount of debt securities that are convertible into an aggregate of 2,375,333 shares of common stock. The shares of Series B Preferred Stock and the debt securities are convertible into shares of common stock but only to the extent that conversion would not cause the holder to become a beneficial owner of more than 9.99% of the shares of common stock outstanding.

(3)
Whitebox Advisors, LLC and its affiliates, together hold an aggregate of 50,988.92 shares of Series B Preferred Stock that are convertible into an aggregate of 254,945 shares of common stock, and $16,963,000 aggregate principal amount of debt securities that are convertible into an aggregate of 3,769,556 shares of common stock. The shares of Series B Preferred Stock and the debt securities are convertible into shares of common stock only to the extent that conversion would not cause the holder to become a beneficial owner of more than 9.99% of the shares of common stock outstanding.

(4)
On November 5, 2010, a Schedule 13D/A was filed by Kopp Investment Advisors, LLC ("KIA"), Kopp Holding Company, LLC ("KHCLLC"), and LeRoy C. Kopp with the SEC. Based on the information reported in the Schedule 13D/A, KIA is an investment advisor managing discretionary accounts owned by numerous third-party clients, KHCLLC is a holding company, and the parent company of KIA, engaged in the investment industry, and Mr. Kopp is serving as the sole governor, chairman and chief investment officer of KIA and KHCLLC. As reported in the Schedule 13D/A, both KIA and KHCLLC have shared voting power with respect to 2,249,959 shares and shared dispositive power with respect to 1,266,004 shares, and beneficially owns 2,249,959 shares, and Mr. Kopp has shared voting power with respect to 2,249,959 shares,


(5)
A Schedule 13G/A was filed on February 11, 2010 by AQR Capital Management, LLC and its affiliates which, based on the information reported in the Schedule 13G/A, together beneficially own an aggregate of 1,683,864 shares of common stock and debt securities that are convertible into 366,482 shares of common stock. The numbers that appear in the table above and in this footnote have been adjusted to reflect the 1-for-20 reverse stock split effected subsequent to the filing of the Schedule 13G/A on February 11, 2010.

(6)
On February 16, 2010, a Schedule 13G was filed by Aristeia Capital L.L.C. ("ACLLC") as the investment manager for the 1,540,551 shares held by Aristeia Master L.P., Aristeia International Limited and Aristeia Partners, L.P. (the "Funds"). Based on the information reported in the Schedule 13G, ACLLC shares voting and investment control over shares held by the Funds, and ACLLC and its affiliates disclaim beneficial ownership of the shares held by the Funds except to the extent of their respective economic interests in each Fund. The numbers that appear in the table above and in this footnote have been adjusted to reflect the 1-for-20 reverse stock split effected subsequent to the filing of the Schedule 13G on February 16, 2010.

(7)
On November 8, 2010, a Schedule 13G was filed by Columbia Pacific Opportunity Fund, L.P., Columbia Pacific Advisors, LLC ("CPA"), Alexander B. Washburn, Daniel R. Baty, Stanley L. Baty, and Brandon D. Baty with the SEC. Based on the information reported in the Schedule 13G, CPA has the sole voting power and sole dispositive power with respect to the 1,537,860 shares of common stock to which the Schedule 13G relates.

(8)
On April 29, 2010, a Schedule 13G/A was filed by Lake Union Capital Fund, LP ("LULP"), Lake Union Capital Management, LLC ("LULLC"), and Michael Self with the SEC. Based on the information reported in the Schedule 13G/A, LULP, LULLC and Mr. Self have shared voting and dispositive power with respect to all 1,500,000 shares. The numbers that appear in the table above and in this footnote have been adjusted to reflect the 1-for-20 reverse stock split effected subsequent to the filing of the Schedule 13G/A on April 29, 2010.

(9)
ABN AMRO Bank N.V., London Branch beneficially owns $5,345,000 aggregate principal amount of debt securities that are convertible into an aggregate of 1,187,777 shares of common stock. The debt securities are convertible into shares of common stock but only to the extent that conversion would not cause the holder to become a beneficial owner of more than 9.99% of the shares of common stock outstanding.

(10)
Represents 7,500 RSUs and 130,557 options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Each RSU represents a right to receive one share of common stock. Such vested options are not exercisable nor are the shares underlying RSUs deliverable until the Company's common stock is listed on a national securities exchange.

(11)
Represents 3,750 RSUs and 22,500 options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Each RSU represents a right to receive one share of common stock. Such vested options are not exercisable nor are the shares underlying RSUs deliverable until the Company's common stock is listed on a national securities exchange.

(12)
Represents 1,875 RSUs and 11,250 options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Each RSU represents a right to receive one share of common stock. Such vested options are not exercisable nor are the shares underlying RSUs deliverable until the Company's common stock is listed on a national securities exchange.

(13)
Represents 7,075 stock options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Vested options are not exercisable until the Company's common stock is listed on a national securities exchange.

(14)
Represents 6,000 stock options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Vested options are not exercisable until the Company's common stock is listed on a national securities exchange.

(15)
Represents 5,750 stock options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Vested options are not exercisable until the Company's common stock is listed on a national securities exchange.


(3)
As of January 11, 2013, CNH CA Master Account, L.P. and its affiliates beneficially own an aggregate of 20,200 shares of Series B Preferred Stock that are convertible into an aggregate of 101,000 shares of Common Stock and debt securities that are convertible into 2,375,333 shares of Common Stock. The mailing address for CNH CA Master Account, L.P. is Two Greenwich Plaza, 3rd Floor, Greenwich, CT 06830.
(4)As of January 11, 2013, based on information set forth in a Schedule 13G/A filed with the SEC on February 14, 2012, Whitebox Advisors, LLC beneficially owns 803,456 shares of our Common Stock, and own debt securities that are convertible into an aggregate of 1,887,234 shares of our Common Stock that are owned by clients for which Whitebox Advisors, LLC serves as investment adviser. The mailing address for Whitebox Advisors, LLC is 3033 Excelsior Boulevard, Suite 300, Minneapolis, MN 55416.
(5)As of January 11, 2013, based on information set forth in a Schedule 13D/A filed with the SEC on December 21, 2012 by Kopp Investment Advisors, LLC (“KIA”), Kopp Holding Company, LLC (“KHCLLC”), and LeRoy C. Kopp. KIA is an investment advisor managing discretionary accounts owned by numerous third-party clients, KHCLLC is a holding company, and the parent company of KIA, engaged in the investment industry, and Mr. Kopp is serving as the sole governor, chairman and chief investment officer of KIA and KHCLLC. As reported in the Schedule 13F, KIA beneficially owns 2,567,418 shares. The mailing address for Kopp Investment Advisors, LLC is 8400 Normandale Lake Blvd., Suite 1450, Bloomington, MN 55437.
(6)As of January 11, 2013, based on information set forth in a Schedule 13G/A filed with the SEC on February 8, 2012, AQR Capital Management, LLC, and AQR Absolute Return Master Account LP, collectively, beneficially own and report shared voting and dispositive power over 296,990 shares of our Common Stock, and own debt securities that are convertible into an aggregate of 2,018,909 shares of our Common Stock. The mailing address for AQR Capital Management, LLC and AQR Absolute Return Master Account L.P. is Two Greenwich Plaza, 3rd Floor Greenwich, CT 06830.
(7)As of January 11, 2013, based on information set forth in a Schedule 13G/A filed with the SEC on February 15, 2012, Columbia Pacific Opportunity Fund, L.P., Columbia Pacific Advisors, LLC (“CPA”), Alexander B. Washburn, Daniel R. Baty, Stanley L. Baty, and Brandon D. Baty, collectively, beneficially own and report sole voting and dispositive power over 2,744,128 shares of our Common Stock. The mailing address for Columbia Pacific Opportunity Fund, L.P. is 1910 Fairview Avenue East, Suite 500, Seattle, WA 98102.
(8)As of January 11, 2013, based on information set forth in a Schedule 13D/A filed with the SEC on January 4, 2013, Raging Capital Master Fund, Ltd, Raging Capital Management, LLC, and William C. Martin, collectively, beneficially own and report shared voting and dispositive power over 6,491,127 shares of our Common Stock, and own debt securities that are convertible into an aggregate of 1,442,666 shares of our Common Stock. The mailing address for Raging Capital Fund is Ten Princeton Avenue, Rocky Hill, NJ 08553.



(16)
Represents 5,750 stock options vested as of December 1, 2010 or that become vested within 60 days of December 1, 2010. Vested options are not exercisable until the Company's common stock is listed on a national securities exchange.

Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Exchange Act requires our executive officers, directors, and persons who own beneficially more than 10 percent of a registered class of our equity securities to file reports of ownership and changes in ownership within specified periods with the SEC. To our knowledge, based solely on our review of the copies of Section 16(a) forms required to be furnished to us with respect to fiscal year 2010 and written representations that no other reports were required, we believe that our executive officers, directors, and greater than 10% stockholders complied with the Section 16(a) reporting requirements during fiscal year 2010.

Compensation Committee Report

        The following Compensation Committee Report does not constitute soliciting materials and shall not be deemed filed or incorporated by reference into any other filings by us under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate this Compensation Committee Report by reference therein.

        The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and the fiscal year 2010 annual report on Form 10-K.

        The foregoing report is provided by the following directors, who constitute the Compensation Committee:

G. Grant Lyon, Chairman
Edward Rogas, Jr., member
G. William LaRosa, member

Compensation Committee Interlocks and Insider Participation

        The Compensation Committee currently consists of G. Grant Lyon, Chairperson, Edward Rogas, Jr. and G. William LaRosa. Former directors Guy W. Adams, Vincent Chan, Robert A. Lundy, and Willow B. Shire served as members of the Compensation Committee during fiscal year 2010 or until their resignation on October 30, 2009. No director who served on the Compensation Committee of our Board during fiscal year 2010 currently is, or during fiscal year 2010, was an officer or employee of the Company or had any relationship requiring disclosure by us under Item 404 of Regulation S-K. In addition, no member of our Compensation Committee is, or during fiscal year 2010 was, employed by a company whose Board of Directors includes or included any members of our management.



EXECUTIVE OFFICERS

Set forth below is information regarding our executive officers, other than Christopher R. Gardner, our President and Chief Executive Officer, for whom information is set forth above in Proposal One under "Nominees."

“Nominees' Principal Occupation, Business Experience and Qualifications.”

Richard C. YonkerMartin S. McDermut, age 63,61, was appointed our Chief Financial Officer in December 2006.on July 27, 2011. Prior to joining Vitesse, Mr. YonkerMcDermut provided chief financial officer and interim management advisory services since 2007. From January 2009 to July 2011, Mr. McDermut served as Managing Director of Avant Advisory Group, a financial advisory and management consulting firm to entrepreneurial and middle market companies. From May to November 2010, Mr. McDermut was the Interim Chief Financial Officer of Capella Photonics,IRIS International, Inc., a telecommunications company,publicly traded diagnostic medical equipment manufacturer. Prior to joining Avant Advisory Group, from October 20052007 to November 2006.December 2008, Mr. McDermut provided financial and management consulting services to various clients as principal of his own financial consulting firm. Prior to this role, his career included chief financial officer positions at publicly traded, entrepreneurial and early-stage companies. Mr. McDermut also worked for the certified public accounting and consulting firm Coopers & Lybrand L.L.P. (now known as PricewaterhouseCoopers LLP) where he was a partner and the practice leader of the firm's Los Angeles Entrepreneurial Advisory Services Group. Mr. McDermut is a Certified Public Accountant, Certified Merger & Acquisitions Advisor, Certified Insolvency and Restructuring Advisor, and Certified Fraud Specialist. He also served as Chief Financial Officer of Avanex Corporation, an optical telecommunications company, from April 2005 to September 2005; Actelis Networks, a telecommunications company, from May 2004 to April 2005; Bermai, a Wi-Fi semiconductor company, from November 2003 to April 2004; Gluon Networks, a telecommunications switch company, from February 2003 to October 2003; and Agility Communications, a telecommunications company, from November 2000 to January 2003. Mr. Yonker served as a director of LogicVision, a semiconductor company providing built-in-self-test and diagnostic solutions, from January 2005 until the company merged with Mentor Graphics in August 2009. Mr. Yonker holds a bachelor'sBA degree in industrial engineeringeconomics from the General Motors InstituteUniversity of Southern California and a master'san MBA degree in finance managementand accounting from the Massachusetts InstituteUniversity of Technology.Chicago.

Dr. Martin C. Nuss, age 53,55, was appointed our Vice President of Technology and Strategy in November 2007. Prior to joining Vitesse, Dr. Nuss served as Vice President and Chief Technology Officer of the Optical Ethernet groupGroup of Ciena Corporation, a network infrastructure solutions and intelligent software provider. Dr. Nuss founded Internet Photonics in 2000, and served as its Chief Technology Officer until the company was acquired by Ciena in 2004. Dr. Nuss also served 15 years at Bell Labs in various technical and management roles including Director of the Optical Data Networks Research Department. He is a Fellow of the Optical Society of America and a member of IEEE. Dr. Nuss holds a doctorate in applied physics from the Technical University in Munich, Germany.

Steve Perna, age 52, was appointed our Vice President of Product Marketing in August 2010. Prior to joining Vitesse, Mr. Perna held the position of President and Chief Executive Officer at Wiquest Communications, a wireless networking start-up, from 2007 to 2009. From 1995 to 2007 Mr. Perna held various vice president and executive-level roles at PMC-Sierra. Prior to PMC-Sierra, he spent 15 years as the Director of Marketing and Management at Texas Instruments in Dallas. Mr. Perna earned a BS degree in chemical engineering from the University of Notre Dame in 1980. He also earned an MBA degree in marketing management and an MS degree in corporate finance from the University of Dallas, as well as an MS degree in biomedical/electrical engineering from the University of Texas.







COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

        The Compensation Committee of the Board of Directors determines the overall executive compensation practices for our named executive officers. For fiscal year 2010, our named executive officers were: Christopher R. Gardner, Chief Executive Officer; Richard C. Yonker, Chief Financial Officer; Dr. Martin C. Nuss, Vice President, Technology and Strategy; Steve Perna, Vice President, Product Marketing; and Michael B. Green, Vice President, General Counsel and Secretary. Mr. Green resigned from the Company effective February 5, 2010.

        Executive compensation for our named executive officers consists of three components:

Compensation Philosophy and Objectives

        The basic

Vitesse's compensation philosophy of the Compensation Committee is to pay our executive officers a reasonable and competitive base salary, and to reward named executive officers fortheir achievements during the previous fiscal year, and to incentivize their performance in future years. ItsOur overall compensation goal is to establish and administer an executive compensation program that effectively attracts and retains highly skilledhighly-skilled executive officers, enhances stockholder value, motivates technological innovation, and rewards executive officers who contribute to the Company's long-term success. The Compensation Committee uses
We attempt to achieve these objectives by offering a compensation program comprised of base salary, annual cash incentive awards and equity-based compensation. We use all three components of compensation in an effort to create a balanced compensation package that provides adequate incentiveincentives for outstanding performance without creating undue incentives for executivesexcessive risk taking by our executives.
Our executive compensation strategy is to undertake risks that could have material adverse effectsprovide compensation opportunities at the 50th to 75th percentiles of market, depending on the Company.

Considerationcompensation component and assuming acceptable levels of Competitors'performance achievement. Specifically, we:

Target base salary levels at the market 50th percentile in aggregate;
Provide target bonus opportunities to earn between the market 50th and 60th percentiles of total cash compensation (base salary plus annual cash bonus) for achieving key business objectives and results; and
Grant long-term incentives annually such that total direct compensation (total cash plus long-term incentive) is positioned at the market 50th percentile if performance objectives are achieved.
As part of our compensation strategy, we monitor our compensation mix relative to market. We generally design our compensation program with the intent of providing a compensation mix (i.e., distribution between elements) similar to the market.
Over the past several years, the compensation for our executive officers has been between the 25th and 50th percentiles of market, well below our objective of providing opportunities at the 50th to 75th percentiles of market. While we have focused on decreasing expenses to improve profitability, we have held base salaries constant at levels that now are generally near the 25th percentile of market, and have targeted bonus opportunities for many executive officers to more closely approximate between the 25th and 50th percentiles of market with the exception of the CEO whose target bonus opportunity is at the 75th percentile. While our overall compensation philosophy has not changed, the actual compensation opportunities for our executive officers has not kept pace with our market objectives. For fiscal year 2013, we expect this trend will continue with respect to target base salaries, which for the majority of our executive officers will remain around the 25th percentile of market, but that target bonus opportunities and total direct compensation will increase as we more heavily weight executive compensation on the achievement of performance objectives.
2012 “Say on Pay” Proposal Voting Results
We are required to hold an advisory vote on compensation practices for executive officers (commonly referred to as a “say on pay” proposal). Our stockholders voted on a “say on pay” proposal at our 2012 Annual Meeting of Stockholders, and we have included a “say on pay” proposal in this proxy statement (Proposal Three) for action at this year's Annual Meeting. Our Compensation

        Each Committee will consider the results of voting on our “say on pay” proposal as part of its evaluation of whether to make changes to our compensation programs to the extent necessary to align the programs with our compensation objectives and to address market-wide or company-specific concerns about our executive compensation program. Our stockholders overwhelmingly supported our executive compensation practices at the 2012 Annual Meeting of Stockholders, with 88.2% of the shares voting on the proposal voting in favor of the compensation of our executive officers.

Determining Executive Compensation
The Compensation Committee of our Board of Directors is primarily responsible for determining the annual salaries and other compensation of executive officers. The Compensation Committee has adopted a general approach of compensating executives with cash salaries commensurate with the experience and expertise of the executive and competitive with median salaries paid to executives at comparable companies. To reward executives for their contributions to the achievement of Company-wide performance goals, incentive target bonus awards are established at a level designed to ensure that when such payouts are added to the executive's base salary, the target total compensation for meeting performance expectations will be near the median at comparable companies (with above-median compensation opportunities for exceeding performance goals).



In addition, to align our executives' compensation with our business strategies, values and management initiatives, both short- and long-term, executive officers are provided with long-term performance incentives.
We also consider the compensation levels of executive officers at other publicly traded companies. We have collected information regarding compensation levels at other companies over the last several years from a variety of sources, including proxy statements, compensation reports and surveys published or prepared by compensation consulting firms. Using this information, we generally establish compensation levels (including salary, cash bonus and equity-based compensation) comparable to the median compensation levels of our counterparts at comparable companies.
The Chief Executive Officer makes compensation recommendations for named executive officers (other than the Chief Executive Officer) and other senior executives. He actively participates in the annual executive compensation assessment (other than for the Chief Executive Officer position). In developing his recommendations, the Chief Executive Officer takes into account a number of factors, including individual performance and contribution level, current compensation relative to market, past awards, compensation level relative to internal peer positions, and internal compensation expense budgets. The Chief Executive Officer does not attend executive sessions of our Board or meetings where his own compensation is being determined.
The independent directors of our Board conduct a formal performance review of the named executive officers, including the Chief Executive Officer, which includes an assessment of financial and non-financial accomplishments. At the beginning of each fiscal year, the Chief Executive Officer develops management performance objectives for the named executive officers (other than the Chief Executive Officer) and assigns weights to each objective which vary differently from year-to-year depending on our priorities. These objectives are then submitted to the independent directors of our Board for review. At the conclusion of each fiscal year, the Chief Executive Office and the independent directors then evaluate the named executive officers' (other than the Chief Executive Officer) actual performance against the pre-established objectives to determine compensation awards for the named executive officers.
Should a restatement of earnings occur upon which incentive compensation awards were based, the Compensation Committee has the discretion to take necessary actions to protect the interests of stockholders, including actions to recover such awards. Additionally, each of Messrs. Gardner's and McDermut's employment agreement requires such executive to return to us any bonus payments if we are required to prepare an accounting restatement to correct an accounting error on an interim or annual financial statement due to material noncompliance with any financial reporting requirement under the federal securities laws, if our Board determines that misconduct by the executive occurred and caused such restatement. The executive would be required to disgorge any bonus or other incentive-based or equity-based compensation he received from us 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 any net profits realized by the executive from the sale of our stock during that 12-month period.
The Compensation Committee has the authority to engage the services of one or more independent compensation consultants to provide advice on executive compensation matters. The Compensation Committee has the discretion to hire and fire the compensation consultant, as described in the Compensation Committee's charter. The Compensation Committee determines the amountsscope of each named executive officer's base salary, annual cash bonus,the consultant's engagement and equity grants.compensation for the consultant's services. The compensation consultant may not provide any services to Vitesse other than advice on compensation matters, and works with management only at the request and subject to the oversight of the Compensation CommitteeCommittee. Management reviews industry data to gain an understandingconsultant invoices, and approves and remits payment in accordance with the terms of compensation levels within the industry for each executive position.

        Starting inengagement.

During fiscal year 2009 and again in 2010,2012, the Compensation Committee contracted with DolmatConnell,engaged independent compensation consultants,consultant Radford, an Aon Hewitt Company, to conduct a detailed assessment of our compensation programs for executive officers, including our Chief Executive Officer. Radford compared the compensation of our executive officers to a peer group compensation survey. DolmatConnell provides pay data for semiconductor companies, including the majority of our competitors, consisting of executive compensation levels for base salary, annual cash bonus and equity awards.

        The Compensation Committee considers industry compensation data because it wishes to provide compensation packages that are neither at the low nor high ends of the range of comparable companies but, instead, are targeted toward the mid-point of the range of comparablepublicly traded companies. The Compensation Committee's determinations regarding individual compensation elements are based on several factors in addition to industry data; including, but not limited to, the committee's subjective



assessmentpeer group selection criteria used by Radford consisted of the criticality of the position, individual performance, and Company performance. After reviewing industry data and assessing the role and performance of each named executive officer, the Compensation Committee uses its discretion to set compensation levels for each of the three components, base salary, annual cash bonus, and equity compensation, for the named executive officers.

        In fiscal year 2010, Vitesse was positioned, on average, at the market 50th percentile for base salary and actual total cash. The Company's equity compensation was generally positioned between the market 50th and 75th percentiles, in terms of the grant date fair value.

        DolmatConnell's October 2010 study benchmarked Vitesse's executive compensation and long-term incentives against 16 peer companies. In general, DolmatConnell included firms that have similar products and/or services to ours and that havewith revenues and market capitalizations that arebetween approximately one-half to two times Vitesse's revenues at the time they were selected and market capitalizations of less than $300 million. Of the nineteen peer group companies ultimately selected, all of the companies met at least one of the revenue and market capitalization selection criteria, and fourteen companies met both criteria. For those companies that did not meet both criteria, we nevertheless concluded that each company was a reasonable comparable in terms of business model and because we compete with it for talent in some of our Company. Duebusiness markets.

Based on these objective criteria and other subjective considerations, which were intended to recognize pay practices related to both Vitesse's industry and size, the relative lack of companies within these desired ranges, we chose to expand our scope to include companies that fall within one-third to three times Vitesse's metrics. We employed a revenue range of $50M to $500M, reflecting the expanded range around Vitesse's most recent four quarters' revenue. Consistent with our previous methodology,Compensation Committee selected the following factors were used to redefinenineteen peer group companies taking into account input from management and the recommendation from Radford:




Applied Micro Circuits CorporationMindspeed Technologies, Inc.
Cascade Microtech, Inc.MIPS Technologies, Inc.
EMCORE CorporationOplink Communications, Inc.
Exar CorporationPericom Semiconductor Corporation
FormFactor, Inc.PLX Technology, Inc.
GSI Technology, Inc.Sigma Designs, Inc.
Ikanos Communications, Inc.Supertex, Inc.
Integrated Silicon Solution, Inc.Symmetricom, Inc.
LTX-Credence CorporationTranSwitch Corporation
Mattson Technology, Inc.
While the firms included in our peer group:

        DolmatConnell reviewed the potentialgroup may not be in direct competition with Vitesse, we believe that our peer landscape by assessing direct product competitors listed in Hoover's database, companies that listed Vitesse in their peer groups, local laborgroup is representative of our market companies, and firms in Vitesse's related industries as referenced in Hoover's database.for executive talent. Compensation benchmarking for theour executive officers and other vice presidents included information published in the peer group's most recent proxy statements and Radford's Executive Compensation surveythe 2012 Radford Global Technology Survey data. Although these firms may not be in direct competition with Vitesse, DolmattConnell believes that this

The peer group selected by the Compensation Committee is representativedifferent from the peer group selected by the Compensation Committee in fiscal year 2010, when the committee last selected a peer group of companies for compensation benchmarking. The differences were to remove seven companies due to acquisition and current revenues and market capitalizations falling outside of our objective criteria. Ten companies were added to the group based on meeting the objective industry and size criteria and for other subjective considerations.
Compensation Elements
Our compensation package for executive officers consists of base salary, annual cash incentive (bonus) awards and long-term equity-based compensation. The executive officers are also eligible to participate in all of our employee benefit plans.
Base Salaries. We provide competitive base salaries to pay for day-to-day service in position that reflect an individual's duties and responsibilities, experience, expertise, and individual performance. The salaries are generally set to approximate the 50th percentile market levels for the positions at each level, although there may be variations by individual to recognize the importance of the Company's marketposition or the experience of the individual.
Individual salary levels are determined based on assessments of:
Internal job responsibilities;
Experience in role; and
Market levels for executive talent.

comparable positions.
Anadigics, Inc.Magma Design Automation, Inc.
Applied Micro Circuits CorporationMindspeed Technologies, Inc.
Conexant Systems, Inc.Oplink Communications, Inc.
DSP Group, Inc.Pericom Semiconductor Corporation
EMCORE CorporationSigma Designs, Inc.
Exar CorporationSilicon Image, Inc.
Ikanos Communications, Inc.Supertex, Inc
IXYS Corporation

The RoleSalary increases are determined based on an assessment of Managementindividual performance in Setting Executive Compensation

        Compensationthe role and relative to individual objectives established for the year.

We did not increase base salaries for our named executive officers during fiscal years 2011 or 2012. In November 2012, the Compensation Committee evaluated the base salaries of our named executive officers and compared them against our targeted philosophy of base salaries at the market 50th percentile. The Compensation Committee determined that Mr. Gardner's base salary was below the market 25th percentile, Mr. McDermut's base salary was at the market 50th percentile, and Dr. Nuss's base salary was near the market 25th percentile. With respect to Mr. Gardner, the Compensation Committee decided to consider any increase in base salary as part of the negotiation of a new employment agreement with Mr. Gardner, whose existing employment agreement expires in February 2013. With respect to all other than ournamed executive officers, the Compensation Committee decided not to increase base salaries in favor of providing these officers with a greater cash bonus opportunity for fiscal year 2013. Annual base salaries for fiscal years 2010, 2011 and 2012 for the named executive officers are as follows:



  Fiscal Year 2010 Fiscal Year 2011 Fiscal Year 2012
Executive Annual Base Salary Annual Base Salary Annual Base Salary
Christopher R. Gardner $366,667
 $375,000
 $375,000
Martin S. McDermut (1)  
 285,000
 285,000
Martin C. Nuss 226,250
 235,000
 235,000
Steve Perna (2) 235,000
 235,000
 235,000

(1)Mr. McDermut’s employment with Vitesse commenced in July 2011.
(2)Mr. Perna’s employment with Vitesse terminated in May 2012.
Annual Cash Bonus. We provide eligible employees, including the Chief Executive Officer Christopher R. Gardner, is established byand other named executive officers, the Compensation Committee in consultation with Mr. Gardner. With regardopportunity to earn annual cash awards upon achieving pre-determined performance goals and objectives and, for our named executive officers other than the Chief Executive Officer, Mr. Gardner recommends individualVitesse achieving a minimum level of financial performance for the fiscal year, typically determined by reference to the Company's Adjusted EBITDA for the year. The purpose is to reward attainment of Company financial goals and presents toindividual performance objectives, with threshold, target and maximum award opportunities expressed as a percentage of base salary. Target bonuses generally vary by executive level and are set at levels that, when combined with base salaries, will deliver market 50th percentile levels of total cash compensation if financial and performance objectives are met and above the Compensation Committee his subjective evaluation50th percentile levels if targets are exceeded.
The following are our fiscal year 2012 threshold, target and maximum annual cash bonus opportunities as a percentage of the otherbase salary for our named executive officers in executive sessions. After considerationassuming 100% of Mr. Gardner's presentation, the ultimate decision astheir individual performance objectives are achieved:
Executive Threshold Target Maximum
Christopher R. Gardner 50% 100% 150%
Martin S. McDermut 30% 40% 60%
Martin C. Nuss 20% 30% 50%
Steve Perna 20% 30% 50%
We select different financial performance metrics and individual performance objectives to compensationreward performance and to be paid to those named executive officers is mademotivate desired behaviors. Performance weightings vary by the Compensation Committee.


        The Compensation Committee is solely responsible for setting compensationexecutive. For fiscal year 2012, weightings for the Chief Executive Officer including establishingwere 80% on achieving specific Company-wide financial metrics and 20% on execution of strategic goals and evaluating performance. Mr. Gardner does not participate in any Compensation Committee decisions regarding his own compensation.

Fiscal Year 2010 Compensation

        Duringfor Vitesse. For the Chief Financial Officer, the fiscal year 2009, pursuant2012 performance objectives were 60% on achieving company-wide financial metrics and 40% on goals specific to an interimthe finance department and temporaryVitesse's financial liquidity and capital resources. For other named executive officers, the performance objectives are generally weighted 40% to 80% on goals related to new products and revenue growth and 20% to 60% on goals specific to the executive's department or principal responsibilities.

The rationale for the mix of financial and strategic objectives is to recognize that Vitesse must improve its short-term financial performance while at the same time invests in new products and organizational improvements that will lead to long-term revenue growth and financial stability. Vitesse considers both revenue and gross margins in the portion of the bonus plan designedthat is focused on financial performance because Vitesse believes top line growth and profitable operations are both equally necessary to protectsupport and increase the stock price for investors. Additionally, Vitesse includes cash in the bonus plan for our immediate operating performanceChief Executive Officer and Chief Financial Officer in recognition of the need to build cash position,balances to pay down our substantial indebtedness that matures in 2014. At the conclusion of each fiscal year, the Compensation Committee reducedevaluates the base salaries of our named executive officers and suspended all matching contributions for its named executive officers in connection withofficers' actual performance against the Company's 401(k) plan. In addition, there were reduced wages and benefitspre-established objectives to substantially all other employees of the Company. The Compensation Committee continued the reduced base salariesdetermine compensation awards for the named executive officers during fiscal year 2010.

        On October 1, 2010, the Compensation Committee increased the base salaries of the named executives back to their levels prior to the fiscal year 2009 reductions in recognition of improvements to our operating performance andofficers. If minimum thresholds are not achieved, no cash position. Wages for all other employees impacted by the temporary reduction were likewise returned to prior levels and furloughs were discontinued. The Company has not re-instituted 401(k) plan matching contributions for its named officers or other employees.

        The Compensation Committee determined bonuses for executives for fiscal year 2010 based on the Company's attainment of specific financial performance objectives for the 2010 fiscal year and each executive's personal performance.

        The bonus payment to the Chief Executive Officer for fiscal year 2010 was determined at the discretion of the Compensation Committee after assessing the Company's financial performance and reviewing Mr. Gardner's achievement in four areas, which are described in the table below, along with the portion of Mr. Gardner's potential bonus payment that related to each performance metric and the Committee's determination to what extent each metric was achieved.

Performance Metric
 Weighting of Each
Metric as a Percentage
of Total Potential Bonus
Payment
 Percentage
Achievement of
Performance Metric
(Between 0% and
150%)
 Bonus Payment as a
Percentage of
Potential Bonus
Payment
 

Financial Performance of the Company based on:

          

•       Revenue from Operations

  10% 0% 0%

•       Gross Margin

  15% 150% 22.5%

•       Cash

  15% 50% 7.2%

Execution of the Company's Annual Operating Plan established by the Board of Directors

  
20

%
 
50

%
 
10

%

Market Position of the Company based on:

          

•       Successful Execution of Major Product Strategies

  30% 30% 9%

Strengthening the Organization

  
10

%
 
50

%
 
5

%
  

Total:

  100%    55%

        Mr. Gardner had the potential to earn a bonus payment of up to 150% of his annual base salary as reflected in the Summary Compensation Table. Based on the Committee's subjective evaluation of Mr. Gardner's performance relative to the performance metrics described above, the Compensation Committee determined Mr. Gardner's bonus payment to be 55% of his base salary for fiscal year 2010.

        Named executive officers other than Mr. Gardner participate in the Company's Fiscal Year 2010 Executive Bonus Plan, under which their bonus payments are based partially on the Company achieving a minimum Adjusted EBITDA and partially on achievement of personal goals, according to the following formula:

Total
Bonus
=Base
Salary
x% of Total Bonus with 100% of Goals Achieved
for the respective Adjusted EBITDA
x% of Personal
Goals Achieved

        Adjusted EBITDAincentive is calculated as net income before interest, expenses for taxes, depreciation, amortization, deferred stock compensation, and non-recurring professional fees, with the possibility of adjustment for certain unusual or non-recurring events. The table below shows the fiscal year 2010 Adjusted EBITDA goals and minimum, target and maximum bonus payments for each level of Adjusted EBITDA assuming achievement of all personal performance goals (expressed as a percentage of annual base salary).

 
 Adjusted EBITDA Total Bonus with
100% of Goals
Achieved for
Mr. Yonker
 Total Bonus with
100% of Goals
Achieved for
Other Named
Executive Officers
(other than the
CEO and CFO)
 

Minimum

 Less than $12.2 million  25% 15.0%

Target

 

$12.2 million

  
40

%
 
30.0

%

 

More than $18.8 million

  
50

%
 
35.0

%

Maximum

 

More than $20 million

  
60

%
 
40.0

%

        The Company achieved less than the target of $12.2 million in Adjusted EBITDA. As a result, the target bonus for Mr. Yonker was 25% times the percent of personal goals achieved. The target bonus for Dr. Nuss was 15% times the percentage of personal goals achieved.

        The personal goals for each of the other named executive officerspaid under the Company's Fiscal Year 2010 Executive Bonus Plan are established by Mr. Gardner and approved by the Compensation Committee. Following fiscal year end 2010, Mr. Gardner made a subjective determination regarding the extent to which such goals have been met for each of the other named executive officers.

        The bonus payment to Mr. Yonker for fiscal year 2010 was determined after assessing the Company's financial performance and reviewing Mr. Yonker's achievement in four areas, which are described in the table below, along with the portion of Mr. Yonker's potential bonus payment that



related to each performance metric and the CEO's determination to what extent each metric was achieved.

plan.
Performance Metric
 Weighting of
Each Metric as
a Percentage of
Total Potential
Bonus Payment
 Percentage
Achievement of
Performance Metric
(Between
0% and 100%)
 Bonus Payment as
a Percentage of
Potential
Bonus Payment
 

Financial Performance of the Company based on:

          
 

• Operating income

  20% 100% 20%
 

• Gross Margin

  10% 100% 10%
 

• Cash

  20% 50% 10%

Execution of the Company's Annual Operating Plan established by the Board of Directors

  
20

%
 
0

%
 
0

%

Market Position of the Company based on:

          
 

• Customer Position

  10% 80% 8%

Strengthening the Organization

  
20

%
 
0

%
 
0

%
  

Total:

  
100

%
    
48

%

        The bonus payment to Dr. Nuss for fiscal year 2010 was determined after assessing the Company's financial performance and reviewing Dr. Nuss's achievement in four areas, which are described in the table below, along with the portion of Dr. Nuss's potential bonus payment that related to each performance metric and the CEO's determination to what extent each metric was achieved.

Performance Metric
 Weighting of
Each Metric as
a Percentage of
Total Potential
Bonus Payment
 Percentage
Achievement of
Performance Metric
(Between
0% and 100%)
 Bonus Payment as
a Percentage of
Potential
Bonus Payment
 

New Product Concepts

  30% 100% 30%

Creation of Strategic Plan

  
20

%
 
50

%
 
10

%

Market Position of the Company based on:

          
 

• Industry perception of Vitesse as a leader

  10% 100% 10%
 

• Market share

  20% 100% 20%

Strengthening the Organization

  
20

%
 
50

%
 
10

%
  

Total:

  
100

%
    
80

%

        Per the Employment Agreement between Mr. Perna and our Company, he was not eligible to participate in or receive a bonus under the Fiscal Year 2010 Executive Bonus Plan, but instead received the compensation set forth in the Employment Agreement, which is described in the narrative following the Summary Compensation Table and Grants of Plan-Based Awards Table below.

        The total incentive based on personal performance as described in this and the prior paragraph is set forth for the named executive officers in the Summary Compensation Table.

The bonus payments, if any, for a fiscal year 2010 are paid by the end of the first quarter of the following fiscal year, 2011, or as soon as practicable after determination and certification of the actual financial performance levels for the year and grant of approval by the Compensation Committee in a duly held meeting, but, in no event, later than March 15 2011.

of the following fiscal year.
Chief Executive Officer. The bonus payment to our Chief Executive Officer is determined at the discretion of the Compensation Committee after assessing Vitesse's financial performance and reviewing Mr. Gardner's achievement of individual performance objectives. Mr. Gardner's fiscal year 2012 financial goals and individual performance objectives, as well as the portion of Mr. Gardner's potential bonus payment related to each performance metric, were determined in December


        On February 25, 2010, Committee's evaluation of Mr. Gardner's performance relative to his financial and individual performance metrics, the Compensation Committee determined that itMr. Gardner achieved an overall bonus payment percentage of 80% of his potential bonus payment for fiscal year 2012, as follows:

Performance Metric 
Weighting of Each
Metric as a
Percentage of
Total Potential
Bonus Payment
 
Percentage
Achievement of
Performance
Metric (Between
0% and 150%)
 
Bonus Payment
as a Percentage
of Potential
Bonus Payment
Financial Performance Metrics:  
  
  
Revenue from Operations 20% 0% 0%
Gross Margin 20% 150% 30%
Operating expenses 20% 150% 30%
Cash 10% 100% 10%
EBITDA 10% 0% 0%
Execution of Board Approved Goals 20% 50% 10%
Total: 100%  
 80%
The substantial majority of Mr. Gardner's individual performance objectives were defined in advance by reference to quantified goals and specific achievement dates, and thus, the Compensation Committee was appropriateable to evaluate Mr. Gardner's actual performance against objectives without substantial subjective analysis. Mr. Gardner did not achieve his financial performance objective for revenue from operations and EBITDA, as these metrics were below minimum thresholds. Mr. Gardner did exceed the maximum achievement criteria for gross margin and operating expenses, earning him 150% of these objectives' bonus weightings, and the target achievement for the Company's cash position, earning him 100% of this objective's bonus weighting. With respect to Board approved goals, they were strategic projects that supported our fiscal year 2012 annual plan.
While Mr. Gardner achieved an overall bonus goals percentage of 80%, Vitesse did not achieve the minimum level of Adjusted EBITDA for fiscal year 2012 that was a condition to the payout of any bonus to our Chief Executive Officer. Accordingly, Mr. Gardner did not receive a cash bonus for fiscal year 2012. The named executive officers, including Mr. Gardner, did receive a discretionary bonus for fiscal year 2012, as discussed in greater detail below.
Other Named Executive Officers. Named executive officers other than Mr. Gardner participate in our Executive Bonus Plan, under which their bonus payments are based partially on Vitesse's Adjusted EBITDA and partially on achievement of personal goals, according to the following formula:
Total
Bonus
=
Base
Salary
X
% of Total Bonus with 100% of Goals Achieved
for the respective Adjusted EBITDA
X
% of Personal
Goals Achieved
Adjusted EBITDA is calculated as net income before interest, expenses for taxes, depreciation, amortization, deferred stock compensation, gain or loss on the embedded derivative , and non-recurring professional fees, with the possibility of adjustment for certain unusual or non-recurring events. The table below shows the fiscal year 2012 Adjusted EBITDA goals (expressed as a percentage of our target Adjusted EBITDA for the fiscal year) and minimum, target and maximum bonus payments for each level of Adjusted EBITDA assuming achievement of all personal performance goals (expressed as a percentage of annual base salary).



 Adjusted EBITDA 
Total Bonus with
100% of Goals
Achieved for
CFO
 
Total Bonus with
100% of Goals
Achieved for Other
Named Executive
Officers (other than
the CEO and CFO)
Below MinimumLess than 62.5% of Target 0% 0%
Minimum62.5% of Target 30% 20.0%
Target100% of Target 40% 30.0%
 More than 112.5% of Target 50% 40.0%
MaximumMore than 125% of Target 60% 50.0%
For fiscal year 2012, Vitesse achieved an Adjusted EBITDA that was below the minimum level of Adjusted EBITDA for the payment of bonuses under the plan. As a result, none of the named executive officers participating in the Executive Bonus Plan received a cash bonus for fiscal year 2012 under the Executive Bonus Plan, irrespective of the percentage of personal goals achieved by the named executive officer. Mr. Perna was not employed by us at fiscal year-end, and thus not eligible for an annual bonus for 2012. The named executive officers did receive a discretionary bonus for fiscal year 2012, as discussed in greater detail below.
The individual performance goals for each of the named executive officers other than our Chief Executive Officer for the fiscal year 2012 Executive Bonus Plan were initially established by Mr. Gardner at the beginning of fiscal year 2012. Following fiscal year-end 2012, Mr. Gardner made both qualitative and subjective determination regarding the extent to which Messrs. McDermut and Nuss met their individual performance goals. Mr. Gardner did not evaluate Mr. Perna's performance, as he was not employed at fiscal year-end.
The financial goals and individual performance objectives for each of Messrs. McDermut, Nuss and Perna, as well as the portion of each named executive officer's potential bonus payment related to each performance metric are summarized in the following tables. Additionally, for Messrs. McDermut and Nuss, the CEO's determination to what extent each metric was achieved is also presented. Each named executive officer is able to achieve between zero percent and 100% of each individual performance metric, with achievement below a minimum threshold of 50% assigned a zero percent.
Martin S. McDermut
Performance MetricWeighting of Each Metric as a Percentage of Total Potential Bonus Payment Percentage Achievement of Performance Metric (Between 0% and 100%) Bonus Payment as a Percentage of Potential Bonus Payment
Financial Performance Metrics:     
Cash20% 100% 20%
Gross Margin20% 100% 20%
Operating expenses20% 100% 20%
Provide Accurate Budgets10% 100% 10%
Improve Financial Report10% 100% 10%
Refinance Debt20% 0% 0%
Total:100%   80%
The majority of Mr. McDermut's individual performance objectives (80%) were defined in advance by reference to quantified goals and specific achievement dates, and thus, Mr. Gardner and the Compensation Committee were able to evaluate Mr. McDermut's actual performance against objectives without substantial subjective analysis. Mr. McDermut achieved his maximum achievement percentage for all three of his financial performance metrics (cash, gross margin and operating expenses), earning him 100% of these objectives' bonus weightings. Mr. McDermut also achieved his maximum achievement percentage for improving the organization's internal financial reporting, which was more comprehensive and timely during fiscal year 2012 than in prior years, and for improving the accuracy of the Company's internal budgets. We did not resolve the first phase of debt resolution in 2012, and thus Mr. McDermut did not achieve this performance objective. For fiscal year 2012, Vitesse achieved an Adjusted EBITDA that was below the minimum level of Adjusted EBITDA for the payment of bonuses under the plan. As a result, Mr. McDermut did not receive a cash bonus for fiscal year 2012 under the Executive Bonus Plan.



Martin C. Nuss
Performance MetricWeighting of Each Metric as a Percentage of Total Potential Bonus Payment Percentage Achievement of Performance Metric (Between 0% and 100%) Bonus Payment as a Percentage of Potential Bonus Payment
Customer Penetration20% 75% 15%
IP Edge Design Wins20% 50% 10%
Establish Leadership in Network Timing20% 75% 15%
Exploit Changes in Network Architecture20% 100% 20%
Strengthening the Organization20% 75% 15%
Total:100%   75%
The substantial majority of Dr. Nuss' individual performance objectives were defined in advance by reference to quantified goals and specific achievement dates, and thus, Mr. Gardner and the Compensation Committee were able to evaluate Dr. Nuss' actual performance against objectives using both qualitative and subjective analysis. Dr. Nuss achieved his target achievement for customer penetration, where his efforts were focused on increasing business with our top customers and prospects specifically within the IP Edge market. He also realized his target achievement for establishing Vitesse's leadership in network timing, with the success of VeriTime™, and in strengthening the organization by aligning efforts within multiple departments to determine next-generation roadmaps and technologies. Dr. Nuss achieved the maximum achievement criteria for exploiting disruptions in network architecture to identify new product opportunities. Dr. Nuss achieved the minimum criteria for IP Edge design wins, which was measured by the total number of design wins that he served an instrumental role in securing during fiscal year 2012. For fiscal year 2012, Vitesse achieved an Adjusted EBITDA that was below the minimum level of Adjusted EBITDA for the payment of bonuses under the plan. As a result, Mr. Nuss did not receive a cash bonus for fiscal year 2012 under the Executive Bonus Plan.

Steve Perna
Performance MetricWeighting of Each Metric as a Percentage of Total Potential Bonus Payment
Revenue in Asia15%
Revenue from New Products15%
Revenue from IP Licensing10%
Execution of Mobile Access Strategy15%
Increasing Market Share for Select Products15%
Strengthening the Marketing Department15%
Improving Marketing Processes15%
Total:100%
Mr. Perna's employment with Vitesse terminated in May 2012, and consequently he was not eligible for a fiscal year 2012 annual bonus.
Fiscal Year 2012 Discretionary Bonus
The Compensation Committee awarded each of our named executive officers a discretionary bonus for fiscal year 2012, in recognition of the executives' service to Vitesse during a very difficult year for communications semiconductor companies. We have conditioned the payment of annual cash bonuses to our named executive officers on Vitesse's achievement of a minimum level of Adjusted EBITDA for the applicable fiscal year, in recognition of the importance of Vitesse delivering a minimum level of financial performance for our stockholders before rewarding management with cash bonuses, irrespective of the manager's individual performance for the year. The minimum level of financial performance, which for fiscal year 2012 was measured based on Adjusted EBITDA, is fixed at the beginning of the fiscal year based on our Board-approved annual operating plan. The annual operating plan includes assumptions made by management and our Board about Vitesse's company-specific operations, as well as assumptions about Vitesse's customers and the semiconductor industry as a whole. For fiscal year 2012,



the annual operating plan assumed improvements in the semiconductor industry and growth in spending on products that include the Company's component products, which did not materialize. Rather, the industry experienced further declines over what was already poor market the prior year. Consequently, the Compensation Committee concluded that the Company's failure to achieve the minimum level of Adjusted EBITDA for fiscal year 2012 was substantially outside of management's control, and the Committee determined to award the named executive officers discretionary bonuses based on an evaluation of the Company's performance in fiscal year 2012 as compared to the performance of similarly situated semiconductor companies.
In deciding to award discretionary bonuses, the Compensation Committee also considered that the Company had not awarded cash bonuses to the named executive officers since fiscal year 2010, and that Mr. Gardner had declined to accept a cash bonus of $187,500 that he had earned for fiscal year 2011. The absence of cash bonuses, when coupled with base salaries for named executive officers being below the market 25th percentile (and well below the target market 50th percentile), resulted in actual total cash compensation paid to our named executive officers being below our compensation philosophy target of delivering total cash compensation (base salary plus annual cash bonus) of between the market 50th and 60th percentiles for achieving key business objectives and results. The Committee also considered the effect of the discretionary bonuses on retention and motivation of the named executive officers.
The 2012 discretionary bonuses awarded to our named executive officers who were serving as executive officers at the end of fiscal year 2012 are as follows:
Executive
Discretionary
Bonus
Christopher R. Gardner (1)
$75,000
Martin S. McDermut (2)
$28,500
Martin C. Nuss (3)
$26,438

(1)Mr. Gardner's bonus was determined by multiplying a maximum bonus opportunity of 25% of his base salary by his individual overall bonus payment percentage of 80%.
(2)Mr. McDermut's bonus was fixed at 10% of his base salary.
(3)Dr. Nuss' bonus was determined by multiplying a maximum bonus opportunity of 15% of his base salary by his 2012 individual overall bonus payment percentage of 75%.
Long-term (Equity) Incentives. Annual awards of equity compensation vary by executive level and are generally set to approximate the market 50th percentile levels, with a desire of achieving target total direct compensation between the median and 75th percentile. Officer awards are granted based on their performance in the previous year, the importance of their role in the current year, and a subjective assessment of the difficulty in achieving Vitesse's corporate goals.
We deliver the long-term incentive value through a mix of stock options and restricted stock units to our employees. The percentage mix and number of stock options and restricted stock units varies by year and by level. For the named executive officers, the long-term incentive compensation awards in fiscal year 2012 were paid 25% in stock options and 75% in RSUs, calculated as a percentage of shares underlying such awards.
From 2006 until March 2011, we were limited in our ability to grant equity compensation awards to itsour named executive officers. With respect to equity awards granted after fiscal year 2007, such awards could not vest until Vitesse's Common Stock was once again listed on the NASDAQ Global Market, which occurred on March 2, 2011. As a consequence of the limitations on our ability to effectively use long-term equity incentives as a component of executive compensation, we believe that our Chief Executive Officer and certain of our other named executive officers and other employees. Suchhold fewer long-term equity awards than similarly situated executives within our peer group creating a potential disadvantage in terms of employee retention.
Commencing in fiscal year 2010, the Compensation Committee resolved to grant larger equity awards to our named executive officers over a three year period that approximate the market 75th percentile level in an effort to close the gap in equity ownership by our named executive officers relative to their peers. The grants were weighted in such a way to achieve short-term retention by granting restricted stock awardsRSUs and with a focus towards long-term incentive and retention by granting stock options. The number of grants of each type of award made to executive officers was determined at the discretion of the Compensation Committee after taking into consideration market data provided by DolmatConnell and each officer's total percent of stock ownership. The grants were considered by DolmatConnell to be within an acceptable run rate for our peer group (median of 4.3% and the 75th percentile of 5.8%) given Vitesse's lack of equity compensationfinal awards between 2006 and 2008. The Compensation Committee determined that the RSUs would have aunder this three year vesting while the stock options would have a fourplan occurred in fiscal year vesting schedule to promote retention. As part of the terms of the awards,2012, and the Compensation Committee determinednow expects that regardless offuture long-term equity incentives will more closely approximate the vesting schedule no options would be exercisable, nor would any RSUs be converted to shares of common stock until the shares of the Company were listed on a national securities exchange.market 50

th percentile level.




The named executive officers’ long-term incentive awards for fiscal year 2012 are reported below.
 2012 Awards
OfficerRSUs
(#)
 Options
(#)
Christopher R. Gardner165,000
 55,000
Martin S. McDermut75,000
 25,000
Martin C. Nuss45,000
 15,000
Steve Perna37,500
 12,500
Other Compensation

. The named executive officers enjoy the same benefits as all other employees of the Company,Vitesse, including medical, dental, vision, accidental death and dismemberment, group term life insurance in the amount of two times annual compensation (up to $280,000), business travel insurance, and a 401(k) plan.plan, and long-term disability pay of up to 60% of salary (with a salary cap of $10,000 per month) with an option to buy up to 67% of salary (with a salary cap of $15,000 per month). Paid leave benefits include vacation, sick leave, holidays and a sabbatical after 10 years of employment. The CompanyVitesse offers education assistance and a health/fitness benefit of $100 per year for health club membership or health/fitness classes.

Chief Executive Officer Compensation
The Company also offers monetary rewards for patents.

total compensation paid to Mr. Gardner was 19.5% lower in fiscal year 2012 compared to fiscal year 2011, as shown in the table below.
  CEO Compensation
  2011 2012
Base Salary (1) $377,644
 $375,000
Annual Bonus 
 75,000
Long-term Incentives (2) 875,688
 558,800
All Other Compensation 
 
Total $1,253,332
 $1,008,800
Percent Change  
 (19.5)%

(1)The difference in the salary amount in fiscal year 2011 compared to fiscal year 2012 reflects the change in December 2010 from a bi-weekly payroll period to a semi-monthly payroll period.
(2)Long-term incentives include value of stock and option awards.

Report of Compensation Committee
The Compensation Committee of our Board of Directors is primarily responsible for determining the annual salaries and other compensation of executive officers and administering our stock incentive and stock purchase plans. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management and based on such review and discussion has recommended to our Board of Directors that the Compensation Discussion and Analysis section be included in Vitesse's 2012 Annual Report on Form 10-K and in this proxy statement.
Compensation Committee
G. Grant Lyon
Edward Rogas, Jr.
G. William LaRosa





EXECUTIVE COMPENSATION
Summary Compensation Table for Fiscal Year 2010


The following table sets forth theinformation concerning all compensation earned bypaid to our named executive officers for services renderedto us in all capacities to the Company during the fiscal years ended September 30, 2010, 20092012, 2011 and 2008:

2010. For fiscal year 2012, our named executive officers were: Christopher R. Gardner, Chief Executive Officer; Martin S. McDermut, Chief Financial Officer; Dr. Martin C. Nuss, Vice President, Technology and Strategy; and Steve Perna, Vice President, Product Marketing. Mr. Perna resigned from the Company in May 2012.

Name and Principal Position
 Year Salary(1) Bonus Stock
Awards(2)
 Option
Awards(2)
 Non-Equity
Incentive Plan
Compensation
 All Other
Compensation
 Total 

Christopher R. Gardner

  2010 $410,676 $ $468,000 $347,760 $206,250 $ $1,432,686 
 

Chief Executive Officer

  2009  346,744    74,000  90,160  262,500  1,212  774,616 
 

  2008  388,063  262,500        6,926  657,489 

Richard C. Yonker

  
2010
  
288,799
  
  
234,000
  
173,790
  
33,915
  
  
730,504
 
 

Chief Financial Officer

  2009  272,912    37,000  45,080  116,875  2,689  474,556 
 

  2008  278,226        74,250  7,734  360,210 

Dr. Martin C. Nuss

  
2010
  
240,077
  
  
104,000
  
77,240
  
24,675
  
  
445,992
 
 

Vice President,

  2009  209,761    18,500  22,540  38,133  2,539  291,473 
 

Technology and Strategy

  2008  194,668       198,000  66,000  5,312  463,980 

Steve Perna

  
2010
  
38,242
  
75,000
  
95,750
  
70,203
  
  
  
279,195
 
 

Vice President, Product

  2009               
 

Marketing

  2008               

Michael B. Green

  
2010
  
218,077
  
  
  
  
  
  
218,077
 
 

Vice President, General

  2009  217,068    18,500  18,032  73,150  2,400  329,150 
 

Counsel and Secretary

  2008  213,985        53,300  6,150  273,435 
Name and
Principal Position
Year Salary (1) Bonus (2) Stock
Awards (3)
 Option
Awards (3)
 Non-Equity
Incentive Plan
Compensation (4)
 All Other
Compensation
  
 Total
Christopher R. Gardner2012 $375,000
 $75,000
 $419,100
 $139,700
 $
 $
  $1,008,800
Chief Executive Officer2011 377,644
   642,664
 233,024
 
 
  
 1,253,332
 2010 367,404
   468,000
 347,760
 206,250
 
  
 1,389,414
Martin S. McDermut (5)2012 285,000
 28,500
 190,500
 63,500
 
 
  567,500
Chief Financial Officer2011 53,529
   166,500
 117,815
 
 
  
 337,844
 2010 
   
 
 
 
  
 
Dr. Martin C. Nuss2012 235,000
 26,438
 114,300
 38,100
 
 
  413,838
Vice President, Technology and Strategy2011 249,311
   175,272
 63,552
 
 
  
 488,135
2010 225,769
   104,000
 77,240
 28,200
 
  
 435,209
Steve Perna (6)2012 149,587
   95,250
 31,750
   7,231
(7) 
 283,818
Vice President, Product Marketing2011 240,273
   58,424
 21,184
 
 75,000
(8) 
 394,881
 2010 36,154
   95,750
 70,203
 
 75,000
(8) 
 277,107

(1)
Salary amounts reflect the actual base salary payments, and the value of accrued vacation as of the end of the respective fiscal year, to the named executive officers.

(2)
Amounts shown for stock and option awards do not reflect compensation actually received by the named executive officers. These amounts represent the aggregate grant date fair values of such awards calculated in accordance with ASC 718, but disregarding the estimate of forfeitures related to service-based vesting conditions. Assumptions used in calculating these amounts are set forth in the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended September 30, 2010 and prior years.

(1)Salary amounts reflect the actual base salary payments, as of the end of the respective fiscal year, to the named executive officers.
(2)These amounts reflect discretionary cash bonuses awarded to the named executive officers.
(3)These amounts represent the grant date fair value of the stock and stock option awards determined in accordance with ASC Topic 718.  These amounts may not correspond to the actual value eventually realized by the officer, which depends in part on the market value of our Common Stock in future periods.  Assumptions used in calculating these amounts are set forth in the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended September 30, 2012.
(4)Non-equity incentive plan compensation represents incentive bonuses earned pursuant to awards granted under a cash bonus plan.
(5)Mr. McDermut's employment with Vitesse commenced on July 27, 2011.
(6)Mr. Perna's employment with Vitesse commenced on August 2, 2010 and terminated on May 18, 2012.
(7)Consists of severance pay.
(8)Consists of a relocation allowance of $150,000, paid out in two installments in fiscal year 2011 and 2010.






Grants of Plan-Based Awards in Fiscal Year 2010

2012

The following table sets forth information relating to plan-based awards granted to our named executive officers in fiscal year 2010:

2012: 


  
  
  
  
  
 All Other
Option
Awards:
Number of
Securities
Underlying
Options
  
  
 

 Estimate Future Payouts Under
Non-Equity Incentive Plan
Awards(1)
  
 All Other
Stock
Awards:
Number of
Stock Units
  
 Grant Date
Fair Value of
Stock and
Option
Awards(2)
 

  
  All Other
Option
Awards:
Number of
Securities
Underlying
Options
Name
 Threshold Target Maximum Grant Date  Estimate Future Payouts Under Non-Equity Incentive Plan Awards (1) Grant Date All Other
Stock Awards:
Number of Stock Units
 All Other
Option
Awards:
Number of
Securities
Underlying Options
 Exercise Price
of Options (Per Share) (2)
 Grant Date
Fair Value of
Stock and Option Awards (3)
 Threshold Target Maximum        

Christopher R. Gardner

 $ $375,000 $562,500         $
 $375,000
 $562,500
    
  
  
  

       2/12/2010   90,000 $3.86 $347,760   
  
  
 12/9/2011 165,000
  
  
 $419,100

       2/12/2010 90,000     468,000   
  
  
 12/9/2011  
 55,000
 $2.54
 139,700

Richard C. Yonker

 
$

 
$

33,915
 
$

135,375
           
Martin S. McDermut 
 114,000
 171,000
    
  
  
  

       2/25/2010   45,000 3.86 173,790   
  
  
 12/9/2011 75,000
  
  
 190,500

       2/25/2010 45,000     234,000   
  
  
 12/9/2011  
 25,000
 2.54
 63,500

Dr. Martin C. Nuss

 
$

 
$

24,675
 
$

164,500
            
 70,500
 117,500
    
  
  
  

       2/25/2010   20,000 3.86 77,240   
  
  
 12/9/2011 45,000
  
  
 114,300

       2/25/2010 20,000     104,000   
  
  
 12/9/2011  
 15,000
 2.54
 38,100

Steve Perna

 
$

 
$

 
$

            
 70,500
 117,500
        

       8/11/2010   25,000 2.81 70,203        12/9/2011 37,500
     95,250

       8/11/2010 25,000     95,750        12/9/2011   12,500
 2.54
 31,750

(1)
Represents possible payouts for fiscal year 2010 for the named executive officers under their respective bonus plans. Amounts actually earned are displayed in the Summary Compensation Table.

(1)Represents possible payouts for fiscal year 2012 for the named executive officers under their respective bonus plans. Amounts actually earned are displayed in the Summary Compensation Table.
(2)The exercise price of all stock options is equal to the closing price of our Common Stock on the grant date.
(3)The grant date fair value of the stock and stock option awards is determined in accordance with ASC Topic 718, but disregarding the estimate of forfeitures related to service-based vesting conditions. Assumptions used in calculating these amounts are set forth in the Notes to Consolidated Financial Statements included in our annual report on Form 10-K for the year ended September 30, 2012.

(2)
Amounts shown for stock and option awards do not reflect compensation actually received by the named executive officers. These amounts represent the aggregate grant date fair value of these awards calculated in accordance with ASC 718, but disregarding the estimate of forfeitures related to service-based vesting conditions. Assumptions used in calculating these amounts are set forth in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended September 30, 2010 and prior years.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Salary amounts reported in the Summary Compensation Table reflect the actual base salary payments made to the named executive officer in the respective fiscal year andyear. Non-equity incentive plan compensation amounts reported in the value of accrued vacation as of the last day of the respective fiscal year, to the named executive officers. Bonus amountssummary compensation table reflect non-incentive plan based cash payments. Non-equity incentive plan compensation represents incentive bonuses earned for services rendered during the respective fiscal year. The non-equity incentive plan compensation payments for fiscal year 20102012 are paid in a lump sum by the end of the first quarter of the fiscal year following the year in which the bonus is earned, or as soon as practicable after determination and certification of the actual financial performance levels for the year and grant of approval by the Compensation Committee but, in no event, later than March 15, 2011.

        Each option grant reflected in the Summary Compensation Table and Grants of Plan-Based Awards Table entitles the officer to purchase one share of our common stock at the time of vesting based on the price of our common stock on the date the option was granted. Each RSU entitles the officer to receive one share of our common stock at the time of vesting without the payment of an exercise price or other cash consideration. The actual value that an officer will realize on each RSU award will depend on the price per share of our common stock at the time shares underlying the RSU awards are sold. Vested options are not exercisable nor are the shares underlying RSU awards deliverable until the Company's common stock is listed on a national securities exchange.

2013.



        The terms and conditions of the employment agreements between the Company and the named executive officers are described below under "Employment Agreements."



Outstanding Equity Awards at Fiscal Year-End 2010

2012

The following table provides information regarding the holdings of equity awards by our named executive officers at September 30, 2010:

2012:


 Option Awards Stock Awards    Option Awards Stock Awards
Name
 Number of
Securities
Underlying
Unexercised
Options
Exercisable
 Number of
Securities
Underlying
Unexercised
Options
Unexercisable
 Option
Exercise
Price per
Share
 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested
 Market Value
of Shares or
Units of Stock
That Have
Not Vested(a)
  Grant Date Number of
Securities
Underlying
Unexercised
Options
Exercisable
   Number of
Securities
Underlying
Unexercised
Options
Unexercisable
   Option
Exercise
Price per
Share
 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested
   Market Value
of Shares or
Units of
Stock That
Have Not
Vested (A)

Christopher R. Gardner

 10,000(1)  348.75 4/6/2011 92,500(21)$333,925     
    
    
   264,300
 
(16) 
 $644,892

 6,000(2)  145.40 10/2/2011      10/17/2002 11,250
 
(1) 
  
   16.52
 10/17/2012  
    

 1,000(3)  145.40 10/2/2011      10/20/2004 5,000
 
(2) 
  
   139.40
 10/20/2013  
    

 144(4)  145.40 10/2/2011      10/27/2004 3,750
 
(3) 
  
   51.60
 10/27/2014  
    

 13,530(5)  145.40 10/2/2011      10/27/2004 3,750
 
(4) 
  
   51.60
 10/27/2014  
    

 1,470(6)  145.40 10/2/2011      10/27/2004 5,625
 
(5) 
  
   51.60
 10/27/2014  
    

 11,250(7)  16.52 10/17/2012      10/27/2004 1,875
 
(6) 
  
   51.60
 10/27/2014  
    

 5,000(8)  139.40 10/20/2013      12/2/2005 5,500
 
(7) 
  
   48.00
 12/2/2015  
    

 3,750(9)  51.60 10/27/2014      6/21/2006 20,000
 
(8) 
  
   30.60
 6/21/2016  
    

 3,750(10)  51.60 10/27/2014      10/13/2008 20,000
 
(9) 
  
   7.40
 10/13/2018  
    

 5,625(11)  51.60 10/27/2014      2/12/2010 45,000
 
(10) 
 45,000
 
(10) 
 5.20
 2/12/2020  
    

 1,875(12)  51.60 10/27/2014      12/9/2010 18,150
 
(11) 
 54,450
 
(11) 
 4.36
 12/9/2020  
    

 5,500(13)  48.00 12/2/2015      12/9/2011 13,750
 
(12) 
 41,250
 
(12) 
 2.54
 12/9/2021  
    

 20,000(14)  30.60 6/21/2016     

 10,000(15) 10,000(15) 7.40 10/13/2018     

   90,000(16) 5.20 2/12/2020     

Richard C. Yonker

 
11,250

(17)
 
3,750

(17)
 
17.20
 
12/11/2016
 
46,250

(22)
 
166,963
 
Martin McDermut    
 
  
  
 
  
  
    
    

 5,000(15) 5,000(15) 7.40 10/13/2018      8/10/2011 27,083
 
(13) 
 22,917
 
(13) 
 3.33
 8/10/2021 79,167
 
(17) 
 193,167

   45,000(19) 3.86 2/25/2020      12/9/2011 6,250
 
(12) 
 18,750
 
(12) 
 2.54
 12/9/2021    

Dr. Martin C. Nuss

 
5,000

(18)
 
5,000

(18)
 
19.80
 
11/16/2017
 
20,625

(23)
 
74,456
     
 
  
  
 
  
  
    
 
  
  

 2,500(15) 2,500(15) 7.40 10/13/2018      11/16/2007 10,000
 
(14) 
   19.80
 11/16/2017 70,566
 
(18) 
 172,181

   20,000(19) 3.86 2/25/2020      10/13/2008 5,000
 
(9) 
   7.40
 10/13/2018  
 
  
  

Steve Perna

   
25,000

(20)
 
2.81
 
8/11/2020
 
25,000

(24)
 
90,250
 
 2/25/2010 10,000
 
(15) 
 10,000
 
(15) 
 5.20
 2/25/2020  
 
  
  
 12/9/2010 4,950
 
(11) 
 14,850
 
(11) 
 4.36
 12/9/2020  
 
  
  
 12/9/2011 3,750
 
(12) 
 11,250
 
(12) 
 2.54
 12/9/2021    

(1)
(A)
The market value of the stock awards is based on the closing price per share of Vitesse’s stock on September 30, 2012, which was $2.44 per share.
(1)Annual Grant: Vested 20% on 10/17/02, 20% on 4/17/03, 20% on 10/17/03, 20% on 4/17/04, and 20% on 10/17/04
(2)Annual Grant: Vested 25% on 10/20/04, 25% on 10/20/05, 25% on 10/20/06, and 25% on 10/20/07
(3)Annual Grant: Vested 50% on 10/27/07 and 50% on 10/27/08
(4)Annual Grant: Vested 50% on 10/27/05 and 50% on 10/27/06
(5) Annual Grant: Vested 33% on 10/27/06, 33% on 10/27/07, and 33% on 10/27/08
(6)Annual Grant: Vested 100% on 10/27/09
(7)Annual Grant: Vested 25% on 12/2/06, 25% on 12/2/07, 25% on 12/2/08, and 25% on 12/2/09
(8)Retention Grant: Vested 25% on 6/21/07, 25% on 6/21/08, and 25% on 6/21/09 and vests 25% on 6/21/10
(9) Annual Grant: Vested 50% on 10/14/09 and vested 25% on 10/13/10, 25% on 10/13/2011
(10)Employment Agreement Grant: Vested 25% on 2/12/11, 25% on 2/12/12, and 25% on 2/12/13 and vests 25% on 2/12/14
(11) Annual Grant: Vested 25% on 12/10/11 and vests 25% on 12/10/12, 25% on 12/10/13, and 25% on 12/10/14
(12)Annual Grant: Vested 25% on 2/1/12, vests 25% on 12/9/12, 25% on 12/9/13 and 25% on 12/9/14
(13)Employment Agreement Grant:Vests monthly for 24 months  
(14)Employment Agreement Grant: Vested 25% on 11/16/08, 25% on 11/16/09, 25% on 11/16/10 and 25% on 11/16/11
(15)Employment Agreement Grant: Vested 33% on 2/25/11 and 33% on 2/25/12 and vests 33% on 2/25/13
(16)Annual Grant-10,000: Vested 50% on 10/14/09 and vested 25% on 10/13/10 and 25% on 10/13/11; Employment Agreement Grant-90,000: Vested 33% on 2/12/11 and 33% on 2/12/12 and vests 33% on 2/12/13; Annual Grant - 147,400: Vested 25% on 12/9/11 and vests 25% on 12/9/12 and 25% on 12/9/13 and 25% on 12/9/14; and Annual Grant - 165,000: Vests 25% on 2/1/12, 25% on 12/9/12, 25% on 12/9/13 and 25% on 12/9/14                   
(17)Employment Agreement Grant-50,000: Vests monthly for 24 months; Annual Grant - 75,000: Vests 25% on 2/1/12, 25% on 12/9/12, 25% on 12/9/13 and 25% on 12/9/14
(18)Annual Grant-2,500: Vested 50% on 10/14/09 and vests 25% on 10/13/10 and 25% on 10/13/11; Employment Agreement Grant-20,000: Vested 33% on 2/25/11 and 33% on 2/25/12 and vests 33% on 2/25/13; Annual Grant - 40,200: Vested 25% on 12/9/11 and vests 25% on 12/9/12, 25% on 12/9/13 and 25% on 12/9/14; and Annual Grant - 45,000: Vests 25% on 2/1/12, 25% on 12/9/12, 25% on 12/9/13 and 25% on 12/9/14





Option Exercises and Stock Vested 20%in Fiscal Year 2012
The following table provides information on 1/1/02, 20% on 1/1/03, 20% on 1/1/04, 20% on 1/1/05,RSU vesting and 20% on 1/1/06.

(2)
Special Grant: Vested 25% on 10/1/01, 25% on 10/1/02, 25% on 10/1/03, and 25% on 10/1/04.

(3)
Special Grant: Vested 20% on 1/1/02, 20% on 1/1/03, 20% on 1/1/04, 20% on 1/1/05, and 20% on 1/1/06.

(4)
Special Grant: Vested 100% on 12/31/02.

(5)
Annual Grant: Vested 22% on 10/1/02, 22% on 10/1/03, 22% on 10/1/04, 17% on 10/1/05, and 17% on 10/1/06.

(6)
Annual Grant: Vested 1% on 10/1/02, 1% on 10/1/03, 4% on 10/1/04, 47% on 10/1/05, and 47% on 10/1/06.
options exercised for each of the named executive officers during fiscal year 2012. 

  Option Awards Stock Awards
Name Number of Shares
Acquired on Exercise
 Value Realized on Exercise Number of Shares
Acquired on Vesting
 Value Realized on Vesting
Christopher R. Gardner 
 $
 110,600
 $341,112
Martin S. McDermut 
 
 43,750
 131,396
Martin C. Nuss 
 
 28,592
 88,003
Steve Perna 3,125
 8,032
 12,725
 38,978

(7)
Annual Grant: Vested 20% on 10/17/02, 20% on 4/17/03, 20% on 10/17/03, 20% on 4/17/04, and 20% on 10/17/04.

(8)
Annual Grant: Vested 25% on 10/20/04, 25% on 10/20/05, 25% on 10/20/06, and 25% on 10/20/07.

(9)
Annual Grant: Vested 50% on 10/27/07 and 50% on 10/27/08.

(10)
Annual Grant: Vested 50% on 10/27/05 and 50% on 10/27/06.

(11)
Annual Grant: Vested 33% on 10/27/06, 33% on 10/27/07, and 33% on 10/27/08.

(12)
Annual Grant: Vested 100% on 10/27/09.

(13)
Annual Grant: Vested 25% on 12/2/06, 25% on 12/2/07, 25% on 12/2/08, and 25% on 12/2/09.

(14)
Retention Grant: Vested 25% on 6/21/07, 25% on 6/21/08, and 25% on 6/21/09 and vests 25% on 6/21/10.

(15)
Annual Grant: Vested 50% on 10/14/09 and vests 25% on 10/13/10 and 25% on 10/13/11.

(16)
Employment Agreement Grant: Vested 25% on 2/12/11, 25% on 2/12/12, and 25% on 2/12/13 and vests 25% on 2/12/14.

(17)
Employment Agreement Grant: Vested 25% on 12/11/07, 25% on 12/11/08, and 25% on 12/11/09 and vests 25% on 12/11/10.

(18)
Employment Agreement Grant: Vested 25% on 11/16/08 and 25% on 11/16/09 and vests 25% on 11/16/10 and 25% on 11/16/11.

(19)
Annual Grant: Vested 25% on 2/25/11 and 25% on 2/25/12 and vests 25% on 2/25/13 and 25% on 2/25/14.

(20)
Employment Agreement Grant: Vested 25% on 8/11/11 and 25% on 8/11/12 and vests 25% on 8/11/13 and 25% on 8/11/14.

(21)
Annual Grant-10,000: Vested 50% on 10/14/09 and vests 25% on 10/13/10 and 25% on 10/13/11. Employment Agreement Grant-90,000: Vested 33% on 2/12/11 and 33% on 2/12/12 and vests 33% on 2/12/13.

(22)
Annual Grant-5,000: Vested 50% on 10/14/09 and vests 25% on 10/13/10 and 25% on 10/13/11. Employment Agreement Grant-45,000: Vested 33% on 2/25/11 and 33% on 2/25/12 and vests 33% on 2/25/13.

(23)
Annual Grant-2,500: Vested 50% on 10/14/09 and vests 25% on 10/13/10 and 25% on 10/13/11.Employment Agreement Grant-20,000: Vested 33% on 2/25/11 and 33% on 2/25/12 and vests 33% on 2/25/13.

(24)
Employment Agreement Grant-25,000: Vested 50% on 8/11/11 and 50% on 8/11/12.

(a)
The market value of the stock awards is based on the closing price per share of Vitesse's stock on September 30, 2010, which was $3.61.

Employment Agreements

On January 27,February 12, 2010, the Amended and Rested Employment Agreement, initially dated June 26, 2006 (the "Prior Employment Agreement"), between the Company andwe entered into a two year employment agreement with Christopher Gardner, the Company'sour President and Chief Executive Officer, terminated by its terms. Onwhich agreement was amended in February 2012 to extend the term until February 12, 2010, the Company entered into a new Employment Agreement with2013. Pursuant to his employment agreement, Mr. Gardner (the "2010 Employment Agreement"). The 2010 Employment Agreement terminates on February 12, 2012.

        Pursuant to the terms of the 2010 Employment Agreement, Mr. Gardner will receive areceives an annual base annual salary of $375,000 and is eligible to receiveparticipate in a cash incentive plan for which provides him with the opportunity to earn a target bonus of 100% of his base salary and a maximum bonus of 150% of his base salary. Thesalary, with the amount of any suchhis bonus is subject todetermined at the discretion of the Company's Compensation Committee. In connection with entering into the 2010 Employment Agreement, the Company's Compensation Committee granted Mr. Gardner stock options to purchase 90,000 shares and 90,000 RSUs. The stock options and RSUs were granted pursuant to the terms of the Company's 2001 Stock Incentive Plan. The stock options have an exercise price of $5.20 per share and vest 25% per year over four years. The RSUs vest over three years, with one-third of the RSUs vesting on each one-year anniversary of the date of grant. Mr. Gardner is eligible to receive equity awards under the Company's stock incentive plans. Mr. Gardner is entitled to five (5) weeks of vacation per year.

year, and is entitled to all other employee benefits provided to other senior executives.

If Mr. Gardner's employment is terminated by him for Good Reasongood reason or by Vitesse other than For Cause,for cause, Mr. Gardner would beis entitled to receive a lump sum payment equal to (a) two years of his base salary, plus (b) two times thehis maximum target bonus, plus (c) a pro ratapro-rata portion (based upon the portion of the fiscal year prior to his termination date) of either (i) his target bonus or (ii) inbonus. In the case of a termination for such reasons within 24 months following a Changechange of Control Event (as defined in Vitesse's 2001 Stock Incentive Plan)control of Vitesse, Mr. Gardner receives the compensation noted above for items (a) and (b), a pro rata portion ofplus the greater of his target bonus in the fiscal year in which termination occurs or the amount of his bonus in the prior fiscal year, whichever is greater. year.
If Mr. Gardner's employment is terminated by Vitesse other than For Causefor cause during the one-year period prior to a Changechange of Control Eventcontrol of Vitesse and Mr. Gardner can demonstrate that his termination arose in connection with or in anticipation of such Changechange of Control Event (including as a result of the request of a third party which had taken steps reasonably calculated to effect such Change of Control Event),control, then all RSUs which are subject solely to time-based vesting and were outstanding immediately prior to Mr. Gardner's final day of employment will become fully vested and, to the extent such Changechange of Control Eventcontrol occurs during the six-month period following the termination date of Mr. Gardner's employment, all of his outstanding options which are subject solely to time-based vesting shall become fully vested asat the time of the Changechange of Control Event.control. If
Mr. Gardner's employment is terminated for Good Reasongood reason or other than For Causefor cause during the 24-month period following a Changechange of Control Event,control, then all outstanding options and RSUs which are subject solely to time-based vesting shall become fully vested.

        For "Cause" is defined as termination by reason of: (i)vested and his stock options shall remain exercisable for an additional 90 days following the executive's conviction of a felony or plea of guilty or nolo contendere to a felony; (ii) the executive's intentional failure or refusal to perform his employment duties and responsibilities; (iii) the executive's intentional misconduct that injures the Company's business; (iv) the executive's intentional violation of any other material provisiondate of his employment agreement or the Company's Code of Business Conduct and Ethics; or (v) as otherwise provided for in the employment agreement regarding "Compliance with Vitesse Policies and Procedures" which states:

Mr. Gardner's employment For Cause."


        The term "Good Reason" and "Disability" have substantially the same meaning in the 2010 Employment Agreement as in the Prior Employment Agreement except that it does not include a "Change of Control Event" as a basis for a "Good Reason" termination by Mr. Gardner.

        The 2010 Employment Agreementagreement contains a provision that would require Mr. Gardnerhim to return to Vitesse any bonus payments earnedhe received if the Company were 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 theour Board determines that misconduct by Mr. Gardner occurred and caused such restatement.

        Mr. Yonker's compensation was established by

Martin S. McDermut
Effective July 27, 2011, we entered into a two year employment agreement with Martin McDermut, our Chief Financial Officer. Pursuant to his employment agreement, dated November 16, 2006, and was amended on June 26, 2007. An employment agreement dated February 20, 2009 superseded the prior Agreement and Amendment. Under his current agreement, Mr. YonkerMcDermut receives aan annual base salary of $275,000 per year. During 2009,$285,000 and is eligible to participate in the Company implemented several measuresCompany's cash incentive plan for senior executives which provides him with the opportunity to reduce expenses, including reductions in executive salaries. Effective February 1, 2009, Mr. Yonker'searn a target bonus of 40% of his base salary was reduced by 10%, which reduction remained in effect through September 30, 2009. On May 10, 2010, Mr. Yonker receivedand a merit adjustment increasingmaximum bonus of 60% of his annual base salary, with the amount of his bonus determined at the discretion of the Compensation Committee. Mr. McDermut is eligible to $285,000.receive equity awards under the Company's stock incentive plans. Mr. Yonker's employment agreement terminates on February 20, 2011, but automatically renews for an additional 24 months if no prior written noticeMcDermut is entitled to three weeks of terminationvacation per year, and is provided.

entitled to all other employee benefits provided to other senior executives.




If Mr. Yonker'sMcDermut's employment is terminated by him for Good Reasongood reason or by Vitesse other than For Cause (defined infor cause, Mr. McDermut is entitled to a manner substantially the same as in Mr. Gardner's employment agreement), death, or Disability (defined in a manner substantially the same as in Mr. Gardner's employment agreement), he will receive severance paylump sum payment equal to 12 months of his then base salary and beremains eligible for his earned bonus, prorated using the maximum potential annual bonus amount through his date of termination. In addition, if such termination of employment occurs within the 12 months following a change in control, (defined in a manner substantially the same as in Mr. Gardner's employment agreement); Mr. YonkerMcDermut would be entitled to (a) an additional bonuspayment equal to the amount of his maximum potential annual bonus for the fiscal year. If suchyear in which his termination occurred, (b) immediate vesting of employment does not occur within 12 months following a change in control, Mr. Yonker would be eligible for an additional bonus equal to a full year bonus based on his performance. In the event of a Change in Control (defined in a manner substantially the same as in Mr. Gardner's employment agreement) of the Company (or its successor) and any involuntary termination other than For Cause or Mr. Yonker's resignation for Good Reason within one year of such a Change in Control, then any equity compensation awards granted priorwith respect to the Change in Controlnumber of shares that would be accelerated and immediately becomehave vested as though the equity awards were vesting over four years in 48 equal monthly amounts, and as thoughif Mr. YonkerMcDermut had completed an additional two years of continuous service with the Company, and thosehis stock options would beshall remain exercisable for an additional 90 days following the date of his termination of employment.

        "Good Reason" is defined as the occurrence, without the executive's written consent, of anyemployment, and (c) payment of the following actions unless the action is fully corrected (if possible) within 15 days after the Company receives written noticecost of the action from the executive: (i)continuation of group medical and dental benefits for a material reduction in the executive's base salary; (ii) the Company's failure to pay the executive any material amount that is expressly required to be paid under hisperiod of 24 months.

Mr. McDermut's employment agreement; (iii) the Company's material and adverse reduction of the nature of the executive's duties and responsibilities, disregarding mere changes in title; (iv) the Company's requirement that the executive perform his principal employment duties at an office that is more than 35 miles from Camarillo, California or (v) the Company's failure to renew the agreement.

        Mr. Yonker is bound by a non-solicitation clause for the duration of his employment pursuant to his agreement and for two years thereafter. This clause precludes him from directly or indirectly



soliciting any person who is currently employed or has been employed by the Company within the prior six months. During the term of his agreement, Mr. Yonker is also precluded from influencing customers, vendors, and other partners of the Company in a way that would divert business away from the Company or otherwise materially interfere with any business relationship of the Company.

        Mr. Yonker's agreement contains a provision that would require him to return to Vitesse any bonus payments earnedhe received if the Company were 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 theour Board determines that misconduct by Mr. YonkerMcDermut occurred and caused such restatement.

Martin C. Nuss Employment Arrangement

        On November 16, 2007, the Board of Directors appointed

Dr. Martin Nuss serves as our Vice President Technology and Strategy. Dr. Nuss receivedStrategy pursuant to an employment letter fromagreement with us, dated October 26, 2007, as amended and restated effective November 30, 2011. The term of the Company pursuantagreement will continue until terminated by either party. Pursuant to which the Company agreed that he is entitled to receive $220,000 ashis employment letter agreement, Dr. Nuss receives an annual base salary. During 2009, the Company implemented several measures to reduce expenses, including reductions in executive salaries. Effective February 1, 2009, Dr. Nuss' base salary, was reduced by 10%, which reduction remained in effect through September 30, 2009. On May 10, 2010, Mr. Nuss received a merit adjustment increasing his annual base salary to $235,000.

        Dr. Nusspresently is $235,000, and is eligible to participate in the Executive Bonus PlanCompany's cash incentive plan for senior executives which presently provides him with the opportunity to earn a target bonus of 30% of his base salary and hea maximum bonus of 50% of his base salary, with the amount of his bonus determined at the discretion of the Compensation Committee. Dr. Nuss is also entitled to all other employee benefits provided to other senior executives. In the event that his

If Dr. Nuss' employment is terminated at any time by the Companyhim for good reason or by Vitesse other than For Cause or he terminates his employment within nine months after a Change in Control resulting in a material change in his position, responsibilities, or compensation,for cause, Dr. Nuss will beis entitled to a lump sum payment equal to 12 months of his then base salary. For this purpose, "For Cause" is defined in a manner substantially the same as in Mr. Gardner's employment agreement with the addition of failure to effectively perform his job duties and responsibilities and "Change in Control" means the occurrence of any of the following:

        Mr. Perna's compensation was established by his employment agreement dated August 2, 2010. Under his agreement, Mr. Perna receives a base salary, of $235,000 per year and an equity grant of 25,000 shares of RSUs with a vesting schedule of 50% per year over two years, and 25,000 share of nonqualified stock options with a vesting schedule of 25% per year over four years. In addition, he is eligible to receive a total relocation allowance of $150,000, pre tax. Payment will be made in two


installments: 50% on the Friday following Mr. Perna's employment date, and 50% after completing 90 days of successful employment. The relocation allowance required the relocation of Mr. Perna to within 45 miles of the Company's Camarillo, California office. In the event that Mr. Perna voluntarily terminates employment with Vitesse or is terminated "For Cause" before completing four full years of service, it is agreed that Mr. Perna will repay Vitesse for this relocation allowance.

        Mr. Perna is eligible to participate in the Executive Bonus Plan for fiscal year 2011 and thereafter and eligible for evergreen grants in cycle with the employee offering periods beginning in January 2011. He is also entitled to employee benefits provided to other senior executives.

        If Mr. Perna's employment is terminated (i) by mutual agreement, (ii) by Vitesse "For Cause", (iii) by Executive for other than Good Reason, or (iv) because of the Executive's Disability or death, Mr. Perna will receive his 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, earned bonus, or any other bonus or other compensation unless agreed upon by both parties.

        If his employment is terminated by Vitesse other than For Cause or by executive for Good Reason and such termination occurs within the 12-month period12 months following a Changechange in Control Event, he will receivecontrol.  If such termination of employment occurs within the 12 months following a change in control, Dr. Nuss would be entitled to (a) 9 months of his then base salary, and vacation accrued through the termination date of his employment, (b) the earned bonus, (c) severance pay, (d) an additional bonuspayment equal to the amount of the his maximum potential annual bonus pursuant to the bonus plan for the said fiscal year, (e) vesting of outstanding stock options and other equity arrangements as though he had completed an additional 24-months of service with Vitesse and would be exercisable, provided the Company is listed on a National Exchange, for an additional 90days, (f) COBRA benefits paid by the Company for a period of 12-months.

        If termination does not occur within the 12-month period following a Change in Control Event, Mr. Perna shall receive items (a) and (b) noted above plus six additional months of base salary and an additional bonus equal to the earned bonus multiplied by 365 and divided by the number of days in the fiscal year that have occurred prior to the his termination date, all payable on the date of termination of employment.

        "Severance Pay" means six (6) months of the executive's base salary plus one (1) week of base salary for every 12 months the executiveDr. Nuss has been employed by Vitesse, (c) his earned bonus for the Company.

        "For Cause" is defined asfiscal year in which the termination by reasonoccurred pro-rated based on termination date and subject to other terms and conditions of (i) Executive's convictionthe bonus plan then in effect, (d) an additional payment equal to 50% of a felony or pleathe amount of guilty or nolo contenderehis maximum potential annual bonus for the fiscal year in which his termination occurred, (e) immediate vesting of his equity compensation awards with respect to a felony; (ii) Executive's intentional failure or refusal to performthe number of shares that would have vested if Dr. Nuss had completed an additional two years of continuous service and his employment duties and responsibilities; (iii) Executive's intentional misconduct that injures Vitesse's business; (iv) Executive's intentional violationstock options shall remain exercisable for an additional 90 days following the date 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. Notwithstandingand (f) payment of the foregoing, Executive's employment shall not be subject to termination For Cause without Vitesse's delivery to Executivecost of COBRA medical and dental benefits for a written noticeperiod of intention to terminate. Such notice must describe the reasons for the proposed employment termination For Cause,12 months.

Steve Perna
On May 18, 2012, we entered into a resignation and must be delivered to Executive at least fifteen (15) days priorseparation agreement and general release of claims with Steve Perna, in connection with his resignation as our Vice President, Product Marketing. Pursuant 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 engagedagreement, we paid Mr. Perna severance in the conduct described in this paragraph.

        "Change in Control" is defined inamount of $7,230.72 and allowed him to retain a manner substantially the same as in Mr. Gardner's employment arrangement.


computer and cellular telephone, and Mr. Perna is bound byprovided us with a non-solicitation clause for the durationgeneral release of his employment pursuant to his agreementclaims and for two years thereafter. This clause precludes him from directly or indirectly soliciting any person who is currently employed or has been employed by the Company within the prior six months. During the term of his agreement, Mr. Perna is also precluded from influencing customers, vendors, and other partners of the Company in a way that would divert business away from the Company or otherwise materially interfere with any business relationship of the Company.

        Mr. Perna's agreement contains a provision that would require him to return any bonus payments earned if the Company were 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 Mr. Perna occurred and caused such restatement.

        On February 5, 2010 (the "Separation Date"), Mr. Green resigned as Vice President/General Counsel and Corporate Secretary of the Company and all of its applicable subsidiaries. Mr. Green received payment of all amounts due from the Company for all salary, wages, bonuses, and commissions earned through the Separation Date and all amounts due from the Company for unused vacation time accrued by him through the close of business on the Separation Date, less all applicable taxes and withholdings. Coverage under Executive's existing health benefits plan continued through the end of the month of the Separation Date, and Executive will thereafter receive any benefits to which Executive may be entitled under COBRA. Mr. Green received all reimbursements due for his outstanding and approved reimbursable expenses. More specifically, Mr. Green received in exchange for his executing a Separation Agreement and Release of Claims agreement:

        Mr. Green further agreed to cooperate with and assist the Company with respect to any pending or future litigation, disputed claims or other matters, including without limitation, by truthfully testifying, as may be reasonably requested from time to time by the Company. If the Company requests and additional expenditure of time by Mr. Green, any if the time involved is more than de minimus, he will be entitled to reasonable compensation as agreed upon between the parties taking into consideration the expected burdens of time and preparation imposed upon him and any potential impact upon then pending responsibilities.

        Mr. Green released and waived any other claims he may have against the Company and its present and former owners, agents, officers, stockholders, employees, directors, attorneys, subscribers, subsidiaries, parent, affiliates, successors and assigns.

matters.

Potential Payments upon Termination or Change-in-Control
As described above, our employment agreements with each of our named executive officers who were employed by Vitesse at

        If Mr. Gardner'sSeptember 30, 2012 provide for severance benefits in the event that the executive's employment is terminated on without cause or for good reason. These severance benefits generally increase if any such termination occurs in connection with a change in control of Vitesse. We do not have any agreements or other arrangements that provide for payments solely upon a change in control of Vitesse without the termination of employment.




Without Change in Control
The following table sets forth severance payments and benefits that we would have been obligated to pay to the named executive officers who were employed by us at September 30, 2010 for Good Reason or by Vitesse other than For Cause, Mr. Gardner would be entitled to receive2012, assuming a lump sumtriggering event had occurred under each of their respective agreements as of September 30, 2012 that did not also involve a change in control of Vitesse:
  Termination Without Change in Control
  Base Salary
Payment
 Bonus
Payment
 Continuation
of Benefits(4)
 Total
Payout
Christopher R. Gardner (1) $750,000
 $1,500,000
 $15,636
 $2,265,636
Martin S. McDermut (2) 285,000
 171,000
 
 456,000
Martin C. Nuss (3) 235,000
 
 
 235,000
(1)  Base salary payment of $2,081,250 which isrepresents cash severance payments based on the executive’s salary at September 30, 2012, in an amount equal to (a) two years of his base salary($750,000), plus (b)salary.  Bonus payment represents the sum of (i) two times thehis maximum target bonus ($1,125,000), plus (c) a pro rata portion (based upon the portion of theopportunity for fiscal year prior to his termination date) of2012 and (ii) one times his target bonus ($206,250).

        In the case of a terminationopportunity for such reasons within 24 months following a Change of Control Event, he would earn a pro rata portion of the greater of his target bonus or the amount of his bonus in the prior fiscal year whichever is greater.

        If Mr. Gardner's employment is terminated by Vitesse other than For Cause during2012.

(2)  Base salary payment represents cash severance payments based on the one-year period prior to a Change of Control Event and Mr. Gardner can demonstrate that his termination arose in connection with or anticipation of such Change of Control Event (including as a result of the request of a third party which had taken steps reasonably calculated to effect such Change of Control Event), then all RSUs which are subject solely to time-based vesting and were outstanding immediately prior to Mr. Gardner's final day of employment will become fully vested and, to the extent such Change of Control Event occurs during the six-month period following the termination date of Mr. Gardner's employment, all of his outstanding options which are subject solely to time-vesting shall become fully vested as of the Change of Control Event. If Mr. Gardner's employment is terminated for Good Reason or other than For Cause during the 24-month period following a Change of Control Event, then all outstanding options and RSUs which are subject solely to time-based vesting shall become fully vested. As of executive’s salary at September 30, 2010 all of Mr. Gardner's outstanding stock option awards were out-of-the-money. The vesting of 100,000 of Mr. Gardner's RSUs would be accelerated. Based on the closing price per share of the Company's stock on September 30, 2010 of $3.61, the value of such RSUs subject to accelerated vesting was $361,000.

        If Mr. Yonker's employment were to have been terminated on September 30, 2010, for Good Reason or for reasons other than For Cause, death or Disability, he would have received a lump sum payment of $352,830 which is equal to his annual base salary of $285,000, plus $67,830 (twice his earned bonus of $33,915). If a Change2012, in Control had occurred within the 12 months prior to September 30, 2010, Mr. Yonker would have received a lump sum payment of $489,915 which is equal to his annual base salary of $285,000 plus $204,915 (his earned bonus of $33,915 and an additional $171,000 upon such termination, representing his maximum bonus for the year). In addition, the shares underlying all of Mr. Yonker's outstanding stock options and RSU awards would be accelerated and immediately become vested as though equity awards were vesting over four years in 48 equal monthly amounts, and he had completed an additional 24 months of service with the Company. Those options would be exercisable for an additional 90 days after termination. As of September 30, 2010, all of Mr. Yonker's outstanding stock option awards were out-of-the-money. The vesting of 50,000 of Mr. Yonker's RSUs would be accelerated. Based on the closing price per share of the Company's stock on September 30, 2010 of $3.61, the value of such RSUs subject to accelerated vesting was $180,500.

        If Dr. Nuss' employment were to have been terminated on September 30, 2010 by the Company other than for cause or by Dr. Nuss within nine months after a Change in Control resulting in a material change in his position, responsibilities, or compensation, he would have received a lump sum payment of $235,000, which isamount equal to one year of his base salary.  Bonus payment represents the prorated sum of (i) one times his maximum bonus opportunity for fiscal year 2012 and (ii) one times his target bonus opportunity for fiscal year 2012.

(3)  Base salary ($235,000)payment represents cash severance payments based on the executive’s salary at September 30, 2012, in an amount equal to one year of this base salary.
(4)  Represents the aggregate amount of all premiums payable for the continuing of the executive’s health benefits for the applicable severance period, based on the amounts of such premiums at September 30, 2012.

        If Mr. Perna's employment were to

With Change in Control
The following table sets forth severance payments and benefits that we would have been terminated on obligated to pay to the named executive officers who were employed by us at September 30, 2010 by the Company other than for cause or within 12 months after2012, assuming a Changetriggering event had occurred under each of their respective agreements as of September 30, 2012 in Control resulting inconnection with a material change in control of Vitesse:
  Termination With Change in Control
  Base Salary
Payment
 Bonus
Payment
 Continuation
of Benefits(4)
 Acceleration of
Vesting of Equity
Awards(5)
 Total
Payout
Christopher R. Gardner (1) $750,000
 $1,500,000
 $15,636
 $644,892
 $2,910,528
Martin S. McDermut (2) 285,000
 342,000
 36,168
 193,167
 856,335
Martin C. Nuss (3) 194,327
 176,250
 19,332
 172,181
 562,090
(1)  Base salary payment represents cash severance payments based on the executive’s salary at September 30, 2012, in an amount equal to two years of his position, responsibilities, or compensation, he would have received a lumpbase salary.  Bonus payment represents the sum of (i) two times his maximum bonus opportunity for fiscal year 2011 and (ii) one times his target bonus opportunity for fiscal year 2011.
(2)  Base salary payment represents cash severance payments based on the executive’s salary at September 30, 2012, in an amount equal to one year of $117,500. In addition,his base salary.  Bonus payment represents the shares underlyingprorated sum of (i) one times his maximum bonus opportunity for fiscal year 2011 and (ii) one times his target bonus opportunity for fiscal year 2011.
(3)  Base salary payment represents cash severance payments based on the executive’s salary at September 30, 2012, in an amount equal to one year of this base salary.
(4)  Represents the aggregate amount of all premiums payable for the continuing of Mr. Perna's outstandingthe executive’s health benefits for the applicable severance period, based on the amounts of such premiums at September 30, 2012.
(5)  Represents the value of accelerated “in the money” stock options and RSUrestricted stock awards would be accelerated and immediately become vested as though equity awards were vesting over four years in 48 equal monthly amounts, and he had completed an additional 24 months of service



with the Company. Those options would be exercisable for an additional 90 days after termination. As of September 30, 2010, all of Mr. Perna's outstanding stock option awards were out-of-the-money. The vesting of 25,000 of Mr. Perna's RSUs would be accelerated. Based onusing the closing price of our Common Stock on September 30, 2012 of $2.44per shareshare.






Risk Assessment Regarding Compensation Policies and Practices
Our compensation program for employees does not create incentives for excessive risk taking by our employees or involve risks that are reasonably likely to have a material adverse effect on Vitesse. Our base salary component of compensation does not encourage risk-taking because it is a fixed amount. Our executive bonus plan for senior executives and our equity compensation awards have the following risk-limiting characteristics:
Cash awards to each executive officer are set in a market range and are limited by the terms of the Company's stockexecutive bonus plan for senior executives to a fixed maximum specified in the plan;

Cash awards are made based on a review of a variety of indicators of performance, thus diversifying the grant daterisk associated with any single indicator of $3.61, the value of such RSUs subjectperformance;

Neither cash nor equity awards are not tied to accelerated vesting was $90,250.

        Upon termination, all named executive officers would also receive any vacation accrued and unpaid asformulas that could focus executives on specific short-term outcomes;


Members of the date of termination.



EQUITY COMPENSATION PLAN INFORMATION

Equity Compensation Plan Information Table

        The following table provides information as of September 30, 2010 concerning securities authorized for issuance under equity compensation plans ofCommittee approve the Company.

 
 A B C 
Plan Category
 Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants or Rights
 Weighted Average
Exercise Price of
Outstanding Options,
Warrants or Rights
 Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in Column A)
 

Equity Compensation Plans approved by Stockholders(1)

  2,129,685(2)$31.51  2,691,759(4)

Equity Compensation Plans not approved by Stockholders(5)

  128,693 $110.17   
        
 

Total(6)

  2,258,378 $35.99(3) 2,691,759 
        

(1)
Consists of the 2010 Incentive Plan, the 2001 Stock Incentive Plan, the 1991 Stock Option Plan, the 1991 Directors' Stock Option Plan and the 1991 Employee Stock Purchase Plan. No additionalfinal cash incentive awards are being made under the 1991 Stock Option Plan,executive bonus plan for senior executives in their discretion, after the 1991 Directors' Stock Option Plan orreview of executive and corporate performance;

Members of the 2001 Stock Incentive Plan,Compensation Committee approve all equity awards for senior executives in their discretion;

An equity award's value is delivered in the form of stock and options that vest over multiple years, which was suspended after stockholders approvedaligns the 2010 Incentive Plan atinterests of executive officers to long-term shareholder interests; and

Equity and cash awards, as well as profits realized upon the Annual Meeting held in May 2010. The 1991 Employee Stock Purchase Plan was suspended in July 2006.

(2)
Includes 770,786 RSUs, which do not have an exercise price.

(3)
Includes weighted average exercise price for stock options only.

(4)
Consists of 2,464,229 sharessale of our common stock reserved for issuancesecurities, may be recovered by us should a restatement of earnings occur upon which incentive compensation awards were based, or in the event of certain other wrong-doing by the recipient.

Cash awards are made based on a review of a variety of indicators of performance, thus diversifying the risk associated with any single indicator of performance;
Neither cash nor equity awards are not tied to formulas that could focus executives on specific short-term outcomes;
Members of the Compensation Committee approve the final cash incentive awards made under the 2010 Incentive Planexecutive bonus plan for senior executives in their discretion, after the review of executive and 227,530 sharescorporate performance;
Members of the Compensation Committee approve all equity awards for senior executives in their discretion;
An equity awards value is delivered in the form of stock and options that vest over multiple years, which aligns the interests of executive officers to long-term shareholder interests; and
Equity and cash awards, as well as profits realized upon the sale of our common stock reserved for future issuance undersecurities, may be recovered by us should a restatement of earnings occur upon which incentive compensation awards were based, or in the 1991 Employee Stock Purchase Plan. Shares available for issuance under the 2010 Incentive Plan can be granted pursuant to stock options, stock appreciation rights, restricted stock or units, performance units, performance shares and anyevent of certain other stock based award selectedwrong-doing by the compensation committee.

(5)
Consists of the Vitesse International Inc. 1999 International Stock Option Plan, which was adopted in 1999 to provide for the grant to international employees of incentive stock options and the assumption of options under plans of foreign subsidiaries. The Vitesse International Inc. 1999 International Stock Option Plan expired on October 31, 2009.

(6)
The table does not include information for equity compensation plans assumed by the Company in connection with acquisitions of the companies that originally established those plans. As of September 30, 2010, a total of 2,772 shares of the Company's common stock were issuable upon exercise of outstanding options under those assumed plans. The weighted average exercise price of those options outstanding is $400.00 per share. No additional options may be granted under those assumed plans.

recipient.


CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Review, Approval or Ratification of

Certain Relationships and Related Person Transactions

In accordance with the charter for the Audit Committee of theour Board, the members of the Audit Committee, all of whom are independent directors, review and approve in advance any proposed related person transactions. Additionally, from time to time thetime-to-time our Board may directly consider these transactions. We will report all such material related person transactions under applicable accounting rules and SEC rules and regulations. For purposes of these procedures, the individuals and entities that are considered "related persons"“related persons” include:

Any of our directors, nominees for director and executive officers;

Any person known to be the beneficial owner of five percent or more of our common stockCommon Stock (a "5% Stockholder"“5% Stockholder”); and

Any immediate family member, as defined in Item 404(a) of Regulation S-K, of a director, nominee for director, executive officer and 5% Stockholder. We will report all such material related person transactions under applicable accounting rules and SEC rules and regulations.

Related Person Transactions

        There has not been a transaction or series of related transactions to which Vitesse was or is a party involving an amount in excess of $120,000 and in which any director, executive officer, holder of more than five percent (5%) of any class of our voting securities, or any member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest.




The charter of our Board's Audit Committee provides that the Audit Committee is responsible for reviewing, in consultation with our General Counsel,counsel, reports and disclosures of insider and affiliated party transactions and compliance with our policy and procedures with respect to related party transactions. Our policies and procedures regarding related party transactions are evidenced in writing by our Code of Business Conduct and Ethics, which we refer to as our Employees' Code, and our Code of Business Conduct and Ethics for Members of the Board of Directors, which we refer to as our Directors' Code.Ethics. The Employees' Code requires all directors, officers and employees to discharge their responsibilities solely on the basis of the Company's best interests, independent of personal interests, considerations or relationships. This codeThe Code also requires anyone who personally becomes involved in a situation that gives rise to an actual or potential conflict of interest to immediately notify our Corporate Secretary.Human Resources department. The Directors' Code requires members of our Board to take all reasonable steps to avoid conflicts of interest with the Company. Additionally, the Directors' Code requires members of our Board to promptly disclose to the Chairperson of our Nominating and Corporate Governance Committee any situation that involves, or may reasonably be expected to involve, a conflict of interest with the Company. The charter of our Board's Nominating and Corporate Governance Committee provides that this committee will review potential conflicts of interest involving members of our Board and will determine whether such Directordirector or Directorsdirectors may vote on any issue as to which there may be a conflict.

Reportable Related Person Transactions
Since October 1, 2011, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party, in which the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest.






REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee Report does not constitute soliciting materials and shall not be deemed filed or incorporated by reference into any other filings by us under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate this Audit Committee Report by reference therein.

The Audit Committee hereby reports as follows:

            1.     Management has primary responsibility for the accuracy and fairness of the Company's consolidated financial statements as well as the processes employed to prepare the financial statements, and the system of internal control over financial reporting.

            2.     The Audit Committee represents the Board of Directors in discharging its responsibilities relating to the Company's accounting, financial reporting, financial practices, and system of internal controls. As part of its oversight role, the Audit Committee has reviewed and discussed with Company's management the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2010.

            3.     The Audit Committee has discussed with the Company's independent registered public accounting firm, BDO USA, LLP, the overall scope of and plans for their audit. The Audit Committee has met with and without management present, to discuss the Company's financial reporting processes and system of internal control over financial reporting in addition to those matters required to be discussed by Statement on Auditing Standards No. 61 as amended (AICPA,Professional Standards, Vol. I AU section 380), as adopted by the Public Company Accounting Oversight Board ("PCAOB") in Rule 3200T.

            4.     The Audit Committee has received the written disclosures and the letter from BDO USA, LLP required by applicable requirements of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with BDO USA, LLP their independence.

            5.     Based on the review and discussions referred to in paragraphs (1) through (4) above, the Audit Committee recommended to the Board of Directors and the Board of Directors has approved the inclusion of the audited financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2010, for filing with SEC.

1.
Management has primary responsibility for the accuracy and fairness of the Company's consolidated financial statements as well as the processes employed to prepare the financial statements, and the system of internal control over financial reporting.


2.The Audit Committee represents the Board of Directors in discharging its responsibilities relating to the Company's accounting, financial reporting, financial practices, and system of internal controls. As part of its oversight role, the Audit Committee has reviewed and discussed with Company's management the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2012.

3.
The Audit Committee has discussed with the Company's independent registered public accounting firm, BDO USA, LLP, the overall scope of and plans for their audit. The Audit Committee has met with and without management present, to discuss the Company's financial reporting processes and system of internal control over financial reporting in addition to those matters required to be discussed by Statement on Auditing Standards No. 61 as amended (AICPA, Professional Standards, Vol. I AU section 380), as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T.

4.The Audit Committee has received the written disclosures and the letter from BDO USA, LLP required by applicable requirements of the PCAOB regarding the independent accountant's communications with the Audit Committee concerning independence, and has discussed with BDO USA, LLP their independence.

5.Based on the review and discussions referred to in paragraphs (1) through (4) above, the Audit Committee recommended to the Board of Directors and the Board of Directors has approved the inclusion of the audited financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2012, for filing with SEC.

 Respectfully submitted by
 Respectively submitted by
THE AUDIT COMMITTEE

 

 

James H. Hugar, Chairman
Steve
Steven P. Hanson member
Ed
Scot B. Jarvis
Edward Rogas, Jr., member





OTHER MATTERS

We know of no other matters to be submitted to the meeting. If any other matters properly come before the meeting, it is the intention of the persons named in the form proxy to vote the shares they represent as the Board may recommend.

 BY ORDER OF THE BOARD OF DIRECTORSBy Order of the Board of Directors,

Dated: December 1, 2010


GRAPHIC
  
Camarillo, CaliforniaChristopher R. Gardner
January 15, 2013President and Chief Executive Officer




APPENDIX

ANNEX A

VITESSE SEMICONDUCTOR CORPORATION

2011 EMPLOYEE STOCK PURCHASE
2013 INCENTIVE PLAN

SECTION 1. PURPOSE
The Vitesse Semiconductor Corporation 2011 Employee Stock Purchase Plan is comprisedpurpose of two sub-plans as set forth below, each of which is intended to constitute a separate offering: The Vitesse Semiconductor Corporation U.S. Employee Stock Purchase Plan and the Vitesse Semiconductor Corporation International Employee2013 Incentive Plan is to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company's stockholders.
SECTION 2. DEFINITIONS
Certain capitalized terms used in the Plan have the meanings set forth in Appendix A.
SECTION 3. ADMINISTRATION
3.1Administration of the Plan
(a)    The Plan shall be administered by the Board or the Compensation Committee, which shall be composed of two or more directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission, and an “outside director” within the meaning of Section 162(m) of the Code, or any successor provision thereto.
(b)    Notwithstanding the foregoing, the Board may delegate concurrent responsibility for administering the Plan, including with respect to designated classes of Eligible Persons, to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate, except with respect to Awards to Participants who are subject to Section 16 of the Exchange Act or Awards granted pursuant to Section 16 of the Plan. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board or the Compensation Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person subject to Section 16 of the Exchange Act.
(c)    All references in the Plan to the “Committee” shall be, as applicable, to the Board, the Compensation Committee or any other committee or any officer to whom authority has been delegated to administer the Plan.
3.2Administration and Interpretation by Committee
(a)    Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board or a Committee composed of members of the Board, to (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Participant under the Plan; (iii) determine the number of shares of Common Stock Purchaseto be covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (vii) interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan; (viii) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan; (ix) delegate ministerial duties to such of the Company's employees as it so determines; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(b)    In no event, however, shall the Committee have the right, without stockholder approval, to (i) lower the price of an option after it is granted, except in connection with adjustments provided in Section 15.1; (ii) take any other action that is treated as a repricing under generally accepted accounting principles; or (iii) cancel an option at a time when its strike price exceeds the fair market value of the underlying stock, in exchange for another option, restricted stock, or other equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction.



(c)    The effect on the vesting of an Award of a Company-approved leave of absence or a Participant's reduction in hours of employment or service shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors or executive officers, by the Compensation Committee, whose determination shall be final.
(d)    Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any stockholder and any Eligible Person. A majority of the members of the Committee may determine its actions.
SECTION 4. SHARES SUBJECT TO THE PLAN
4.1Authorized Number of Sharesand Share Usage
(a)    Subject to adjustment as provided in this Section 4.1 and in Section 15.1, a total of 6,700,000 shares of Common Stock shall be authorized for issuance pursuant to Awards granted under the Plan. No further grants may be made under the Prior Plans after the Effective Date, but shares subject to awards granted under the Prior Plans may become again available for Awards under the Plan, in addition to the number of shares specified immediately above, pursuant to Section 4.1(c) below. Any shares that are subject to Awards of Options or Stock Appreciation Rights shall be counted against the Plan's share limit as one (1) share for every one (1) share granted. Any shares that are subject to Awards other than Options or Stock Appreciation Rights shall be counted against the Plan's share limit as one and five-tenths (1.5) shares for every one (1) share granted. Any shares that are subject to Awards granted under the Plan, and any shares that are subject to awards granted under the Prior Plans, that again become available for the grant of Awards under the Plan as provided in Section 4.1(c) below, shall increase the Plan's share limit as follows: (i) any such shares that are subject to Awards of Options or Stock Appreciation Rights, and any such shares that are subject to awards of options or stock appreciation rights granted under the Prior Plans, shall increase the Plan's share limit on a one (1) for one (1) basis; and (ii) any such shares that are subject to Awards other than Options or Stock Appreciation Rights, and any such shares that are subject to awards other than options or stock appreciation rights granted under the Prior Plans, shall increase the Plan's share limit on a one and five-tenths (1.5) for one (1) basis.
(b)    Notwithstanding the other provisions in this Section 4 to the contrary, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate share number stated in Section 4.1(a), subject to adjustment as provided in Section 15.1.
(c)    If any Award granted under the Plan or any award granted under the Prior Plans expires or is terminated, surrendered or canceled without having been fully exercised, is forfeited in whole or in part (including as a result of shares subject to such Award or award under the Prior Plans being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right), is settled in cash or otherwise results in any shares not being issued, the unused shares covered by such Award or award under the Prior Plans shall again be available for the grant of Awards under the Plan, and shall be added back to the Plan's share limit in the manner provided in Section 4.1(a); provided, however, that (i) shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy any applicable tax withholding obligation with respect to Awards other than Options, Stock Appreciation Rights and options and stock appreciation rights granted under the Prior Plans (including shares retained from such Award or award under the Prior Plans creating the tax obligation) shall be added to the number of shares available for the grant of Awards under the Plan; (ii) shares delivered (either by actual delivery, attestation or net exercise) to the Company by a Participant to exercise an Option, Stock Appreciation Right or option or stock appreciation right granted under the Prior Plans or to satisfy any applicable tax withholding obligation on an Option, Stock Appreciation Right or option or stock appreciation right granted under the Prior Plans (including shares retained from the Option, Stock Appreciation Right or option or stock appreciation right granted under the Prior Plans creating the tax obligation) shall not be so added to the number of shares available for the grant of Awards under the Plan; and (iii) shares repurchased by the Company on the open market using the proceeds from the exercise of an Award or an award granted under the Prior Plans shall not increase the number of shares available for future grant of Awards. The number of shares of the Common Stock available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Vitesse Semiconductor Corporation reservedCommon Stock or credited as additional shares of Common Stock subject or paid with respect to an Award or an award under the Prior Plans.
(d)    In the case of freestanding Stock Appreciation Rights (as defined in Section 9.1), the full number of shares subject to such Stock Appreciation Right, if settled in stock, shall be counted against the shares available under the Plan in proportion to the portion of the freestanding Stock Appreciation Right exercised, regardless of the number of shares actually used to settle such freestanding Stock Appreciation Right upon exercise.
(e)    Substitute Awards may be granted under the Plan and any such grants shall not reduce the shares authorized for salegrant under the Plan or authorized for grant to a Participant in any calendar year. In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in contemplation of such acquisition or combination, then, to the extent determined by the Board or the Compensation Committee, the shares available for grant pursuant to the terms of such preexisting plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or



formula used in such acquisition or combination to determine the consideration payable to holders of common stock of the entities that are parties to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or a Related Company prior to such acquisition or combination. In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Vitesse Semiconductor Corporation 2011 Employee Stock Purchase Plan, comprisedBoard and that agreement sets forth the terms and conditions of the Vitesse Semiconductor Corporation U.S. Employee Stock Purchase Plansubstitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the Vitesse Semiconductor Corporation International Employee Stock Purchase Plan, is 2,500,000 shares, subjectpersons holding such awards shall be deemed to adjustmentbe Participants.
(f)    The Committee shall also, without limitation, have the authority to grant Awards as set forth in Section 9an alternative to or as the form of each sub-plan.payment for grants or rights earned or due under other compensation plans or arrangements of the Company.
(g)    Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.



VITESSE SEMICONDUCTOR CORPORATION
U.S. EMPLOYEE STOCK PURCHASE PLAN

SECTION 1.    PURPOSE

        The purpose of this Plan is5. ELIGIBILITY

An Award may be granted to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company. It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Code. The provisions of this Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Code.


SECTION 2.    DEFINITIONS

        Certain terms used in this Plan have the meanings set forth in Appendix A.


SECTION 3.    ELIGIBILITY REQUIREMENTS

3.1   Initial Eligibility

        Except as provided in Section 3.2, each Employee shall become eligible to participate in the Plan in accordance with Section 4 on the first Enrollment Date onany employee, officer or following the later of (a) the date on which such Employee completes six (6) months of employment; and (b) the Effective Date. Participation in the Plan is entirely voluntary.

3.2   Limitations on Eligibility

        The following Employees are not eligible to participate in the Plan:

            (a)   Employees who have been employed less than six (6) months;

            (b)   Employees whose customary employment is twenty (20) hours or less per week; and

            (c)   Employees who, immediately upon purchasing Shares under the Plan, would own directly or indirectly, an aggregate of five percent (5%) or more of the total combined voting power or value of all outstanding shares of all classes of stockdirector of the Company or a Related Company whom the Committee from time to time selects. An Award may also be granted to any Subsidiary (andconsultant, agent, advisor or independent contractor for purposes of this paragraph,bona fide services rendered to the rules of Section 424(d)Company or any Related Company that (a) are not in connection with the offer and sale of the CodeCompany's securities in a capital-raising transaction and (b) do not directly or indirectly promote or maintain a market for the Company's securities.

SECTION 6. AWARDS
6.1Form, Grant and Settlement of Awards
The Committee shall apply,have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone or in addition to or in tandem with any other type of Award. Any Award settlement may be subject to such conditions, restrictions and stock which the Employee may purchase under outstanding options shall be treated as stock owned by the Employee).


SECTION 4.    ENROLLMENT

        Any Eligible Employee may enroll in the Plan for any Offering Period by completing and signing an enrollment election form or by such other meanscontingencies as the Committee shall prescribedetermine.

6.2Evidence of Awards
Awards granted under the Plan shall be evidenced by a written, including an electronic, instrument that shall contain such terms, conditions, limitations and submitting such enrollment electionrestrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.
6.3Dividends and Distributions
Participants may, if the Committee so determines, be credited with dividends paid with respect to shares of Common Stock underlying an Award in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units. Notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on the number of shares underlying an Option or a Stock Appreciation Right may not be contingent, directly or indirectly on the exercise of the Option or Stock Appreciation Right, and must comply with or qualify for an exemption under Section 409A. Also notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on Restricted Stock must (i) be paid at the same time they are paid to other shareholders and (ii) comply with or qualify for an exemption under Section 409A.
SECTION 7. OPTIONS
7.1Grant of Options
The Committee may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.
7.2Option Exercise Price
Options shall be granted with an exercise price per share not less than 100% of the Fair Market Value of the Common Stock on the Grant Date (and shall not be less than the minimum exercise price required by Section 422 of the Code with respect to Incentive Stock Options), except in the case of Substitute Awards.
7.3Term of Options
Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be ten years from the Grant Date. For Incentive Stock Options, the maximum term of such an Option shall comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder.



7.4Exercise of Options
(a)    The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time.
(b)    To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery to or as directed or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, on or beforesetting forth the Cut-Off Datenumber of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such Offering Period. Unless otherwiseexercise agreement or notice, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in Section 7.5. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee,Committee.
7.5Payment of Exercise Price
The exercise price for shares purchased under an Option shall be paid in full to the enrollment electionCompany by delivery of consideration equal to the product of the Option exercise price and the designated ratenumber of payroll deduction shall continueshares purchased. Such consideration must be paid before the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for future Offering Periods unlessthat purchase, which forms may include:
(a)    cash;
(b)    check or wire transfer;
(c)    having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;
(d)    tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common Stock owned by the Participant changes or cancels the enrollment election or designated rate of payroll deduction priorthat have an aggregate Fair Market Value equal to the Cut-Off Date.


SECTION 5.    GRANT OF OPTIONS ON ENROLLMENT

5.1   Option Grant

        Enrollmentaggregate exercise price of the shares being purchased under the Option;

(e)    so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by an Eligible Employee in the Plan aslaw, delivery of an Enrollment Date will constitute the granta properly executed exercise agreement or notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to such Participant of an option on such Enrollment Datedeliver promptly to purchase Shares from the Company pursuantthe aggregate amount of proceeds to pay the Plan.


5.2   Option Expiration

        An option granted to a Participant pursuant to this Plan shall expire, if not terminated forexercise price and any reason first, onwithholding tax obligations that may arise in connection with the earliest to occur of: (a)exercise, all in accordance with the endregulations of the Offering PeriodFederal Reserve Board; or

(f)    such other consideration as the Committee may permit.
7.6Effect of Termination of Service
(a)    The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which such option was granted;provisions may be waived or modified by the Committee at any time.
(b)    If the exercise of the Option following a Participant's Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate the registration requirements under the Securities Act or similar requirements under the laws of any state or foreign jurisdiction, then the Option shall remain exercisable until the earlier of (a)the Option Expiration Date and (b) the completionexpiration of the purchasea period of Shares under the option under Section 7; or (c) the date on which participationthree months (or such longer period of such Participant in the Plan terminates for any reason.

5.3   Purchase of Shares

        An option granted to a Participant under the Plan shall give the Participant a right to purchase on a Purchase Date the largest number of whole Shares,time as determined by the Committee in its sole discretion) after the Participant's Termination of Service during which the funds accumulatedexercise of the Option would not be in violation of such Securities Act or other requirements.

SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS
Notwithstanding any other provision of the Plan to the contrary, the terms and conditions of any Incentive Stock Options shall in addition comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder.
SECTION 9. STOCK APPRECIATION RIGHTS
9.1Grant of Stock Appreciation Rights
The Committee may grant Stock Appreciation Rights to Participants at any time on such terms and conditions as the Committee shall determine in its sole discretion. An SAR may be granted in tandem with an Option or alone (“freestanding”). The grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in Section 7.2. An SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be ten years, and in the Participant's Account ascase of such Purchase Date will purchase ata tandem SAR, (a) the applicable Purchase Price; provided, however,term shall not exceed the term of the related Option and (b) the tandem SAR may be



exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that such optionthe tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.
9.2Payment of SAR Amount
Upon the exercise of an SAR, a Participant shall be for a maximum number of sharesentitled to receive payment in an amount determined by dividing $25,000 bymultiplying: (a) the difference between the Fair Market Value of the SharesCommon Stock on the first daydate of exercise over the grant price of the applicable Offering Period; provided, further, that the Committee may, in its discretion, limitSAR by (b) the number of Shares purchased by each Participantshares with respect to which the SAR is exercised. At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in shares, in some combination thereof or in any Purchase Period.

        Notwithstanding anything toother manner approved by the contrary herein, to the extent required by Section 423Committee in its sole discretion.

9.3Waiver of the Code, no Employee shall be granted an option under the Plan (orRestrictions
The Committee, in its sole discretion, may waive any other planterms, conditions or restrictions on any SAR under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.
SECTION 10. STOCK AWARDS,
RESTRICTED STOCK AND STOCK UNITS
10.1Grant of Stock Awards, Restricted Stock and Stock Units
The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Subsidiary intended to qualify under Section 423Related Company or the achievement of any performance goals, as the Code)Committee shall determine in its sole discretion, which would permit the Employee to purchase Shares under the Plan (and such other plan) in any calendar year with a Fair Market Value (determined at the time such option is granted) in excess of $25,000terms, conditions and any payments made by a Participant in excess of this limitationrestrictions shall be returnedset forth in the instrument evidencing the Award.
10.2Vesting of Restricted Stock and Stock Units
Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant's release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee (a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and (b) Stock Units shall be paid in shares of Common Stock or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock. Any fractional shares subject to such Awards shall be paid to the Participant in accordance with procedures established bycash.
10.3Waiver of Restrictions
The Committee, in its sole discretion, may waive the Committee.


repurchase or forfeiture period and any other terms, conditions or restrictions on any Restricted Stock or Stock Unit under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.

SECTION 6.    PAYMENT
11. PERFORMANCE AWARDS
11.1

Performance Shares

The Committee may grant Awards of Performance Shares, designate the time and manner for payment ofParticipants to whom Performance Shares are to be purchased duringawarded and determine the Purchase Period, including, but not limited to, through payroll deductions from Eligible Compensation,number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit valued by reference to a designated number of shares of Common Stock, the value of which are designatedmay be paid to the Participant by delivery of shares of Common Stock or, if set forth in the instrument evidencing the Award, of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. Payment amountsThe amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.
11.2Performance Units
The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be credited onawarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a bookkeeping basisunit valued by reference to a Participant's Account under this Plan. All payment amountsdesignated amount of property other than shares of Common Stock, which value may be usedpaid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. The amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.





SECTION 12. OTHER STOCK OR CASH-BASED AWARDS
Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan.
SECTION 13. WITHHOLDING
13.1Payment of Tax Withholding and Other Obligations
The Company formay require the Participant to pay to the Company the amount of (a) any purposetaxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”) and (b) any amounts due from the Participant to the Company or to any Related Company (“other obligations”). Notwithstanding any other provision of the Plan to the contrary, the Company shall have no obligationnot be required to segregateissue any shares of Common Stock or otherwise settle an Award under the Plan until such funds. No interest accrues on paymentstax withholding obligations and other obligations are satisfied.
13.2Payment Methods
The Committee, in its sole discretion, may permit or require a Participant to satisfy all or part of the Participant's tax withholding obligations and other obligations by Participants.


SECTION 7.    PURCHASE OF SHARES

7.1   Option Exercise

        Any option held by(a) paying cash to the Company, (b) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant, that was granted under this Plan and that remains outstanding as of(c) having the Company withhold a Purchase Date shall be deemed to have been exercised on such Purchase Date for the number of whole Shares,shares of Common Stock that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, (d) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations, (e) selling shares of Common Stock issued under an Award on the open market or to the Company, or (f) taking such other action as may be necessary in the opinion of the Committee to satisfy any applicable tax withholding obligations. The value of the shares so withheld or tendered may not exceed the employer's applicable minimum required tax withholding rate or such other applicable rate as is necessary to avoid adverse treatment for financial accounting purposes, as determined by the Committee whichin its sole discretion.

SECTION 14. ASSIGNABILITY
No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the funds accumulated in the Participant's Account asperformance of the Purchase Datean obligation or for any other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will purchase ator by the applicable Purchase Price (but not in excesslaws of the number of Shares for which options have been granted to the Participant pursuant to Section 5.3). Options for other Shares for which options have been granted that are not purchased on the last Purchase Date during the Offering Period shall terminate. Shares shall not be issued with respect to an option unless the exercise of such optiondescent and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed. As a condition to the exercise of an option, the Committee may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares.


7.2   Refund of Excess Amount

        If, after a Participant's exercise of an option under Section 7.1, an amount remains credited to the Participant's Account as of a Purchase Date, then the remaining amount shall be (a) if no further Purchase Periods are immediately contemplated by the Committee, distributed to the Participant as soon as administratively feasible, or (b) if another Purchase Period is contemplated by the Committee, carried forward in the Account for application to the purchase of Shares on the next following Purchase Date.

7.3   Employees of Subsidiary

        In the case of Participants employed by a Designated Subsidiary, the Committee may provide for Shares to be sold through the Subsidiary to such Participants,distribution, except to the extent consistent withthe Participant designates one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant's death. During a Participant's lifetime, an Award may be exercised only by the Participant. Notwithstanding the foregoing and to the extent permitted by Section 423422 of the Code.

7.4   Pro Rata Allocation

        IfCode, the totalCommittee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify.

SECTION 15. ADJUSTMENTS
15.1Adjustment of Shares
(a)    In the event, at any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in (a) the outstanding shares of Common Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of Shares for which options aresecurities of the Company or could be exercised on(b) new, different or additional securities of the Company or any Purchase Dateother company being received by the holders of shares of Common Stock, then the Committee shall make proportional adjustments in accordance with this Section 7, when aggregated with all Shares for which options have been previously exercised under this Plan, exceeds(i) the maximum number and kind of Shares reserved in Section 12, the Company may, in accordance with Section 12, allocate the Sharessecurities available for delivery and distribution in the ratio that the balance in each Participant's Account bears to the aggregate balances of all Participants' Accounts, and the remaining balance of the amount credited to the Account of each Participant under the Plan shall be returned to him or her as promptly as possible.

7.5   Notice of Disposition

        If a Participant or former Participant sells, transfers or otherwise makes a disposition of Shares purchased pursuant to an option granted under the Plan if such Participant or former Participant is subject to United States federal income tax, then such Participant or former Participant shall notify the Company or the Employer in writing of such sale, transfer or other disposition within ten (10) days of the consummation of such sale, transfer or other disposition. Without limitation on the Participant or former Participant's ability to sell, transfer or otherwise make a disposition of Shares and without limitation on Section 11.2, Participants and former Participants must maintain any Shares purchased pursuant to an option granted under the Plan within two (2) years after the date such option is granted or within one (1) year after the date such Shares were transferred to the Participant at the broker designated by the Committee, unless the Committee determines otherwise.


SECTION 8.    WITHDRAWAL FROM THE PLAN, TERMINATION
OF EMPLOYMENT, AND LEAVE OF ABSENCE

8.1   Withdrawal From the Plan

        A Participant may withdraw all funds accumulated in the Participant's Account from the Plan with respect to a future Purchase Period by delivering a notice of withdrawal to the Company or the Employer (in a manner prescribed by the Committee) at any time up to but not including the thirty (30) days prior to the Enrollment Date next following the date such notice of withdrawal is delivered, or at such shorter time in advance of such Enrollment Date as the Committee may permit. If a notice of complete withdrawal as described in the preceding sentence is timely received, the Company or the Employer will cease the Participant's payroll withholding for the Plan in accordance with timing and other procedures established by the Committee. An Employee who has withdrawn with respect to a future Purchase Period may not return funds to the Company or the Employer during that Purchase Period and require the Company or the Employer to apply those funds to the purchase of Shares. Any



Eligible Employee who has withdrawn from the Plan may, however, re-enroll in the Plan on the next subsequent Enrollment Date, if any.

8.2   Termination of Participation

        Participation in the Plan terminates immediately on the date on which a Participant ceases to be employed by the Company or the Employer for any reason whatsoever or otherwise ceases to be an Eligible Employee, and all funds then accumulated in the Participant's Account shall not be used to purchase Shares, but shall instead be distributed to the Participant as soon as administratively feasible.

8.3   Leaves of Absence

        If a Participant takes a leave of absence, such Participant shall have the right, in accordance with procedures prescribed by the Committee, to elect to withdraw from the Plan in accordance with Section 8.1. To the extent determined by the Committee or required by Section 423 of the Code, certain leaves of absence may be treated as cessations of employment for purposes of the Plan.


SECTION 9.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,
DISSOLUTION, LIQUIDATION, MERGER OR ASSET SALE

9.1   Adjustments Upon Changes in Capitalization

        Subject to any required action by the stockholders of the Company, the right to purchase Shares of Common Stock covered by a current Offering Period and the number of Shares which have been authorized for issuance under the Plan for any future Offering Period,Plan; (ii) the maximum number and kind of Shares each Participant may purchase each Offering Period (pursuantsecurities issuable as Incentive Stock Options as set forth in Section 4.1; (iii) the maximum numbers and kind of securities set forth in Section 16.3; and (iv) the number and kind of securities that are subject to Section 5.3 hereof), as well as the price per Shareany outstanding Award and the numberper share price of Shares covered by each right under the Plan which have not yet been purchased shall be proportionately adjustedsuch securities, without any change in the sole discretion of the Committee for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, extraordinary cash dividend, combination or reclassification of the Common Stock, or recapitalization, reorganization, consolidation, split-up, spin-off, or any other increase or decrease in the number of Shares effected without receipt of consideration by the Company. Except as expressly provided otherwiseaggregate price to be paid therefor. The determination by the Committee, noas to the terms of any of the foregoing adjustments shall be conclusive and binding.

(b)    Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the numberforegoing, a dissolution or priceliquidation of Shares.

the Company or a Company Transaction shall not be governed by this 9.2   Adjustment Upon Section 15.1 but shall be governed by Sections 15.2 and 15.3, respectively.

15.2Dissolution Liquidation, Merger or Asset SaleLiquidation

        Without limitation on

To the preceding provisions,extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. To the extent a vesting condition, forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.





15.3Change in Control
Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of any dissolution, liquidation, merger, consolidation, sale ofa Change in Control:
(a)    All outstanding Awards, other than Performance Shares and Performance Units, shall become fully and immediately exercisable, and all applicable restrictions or substantially allforfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Company's outstanding voting securities, sales, lease, exchangeChange in Control; provided, however, that with respect to a Change in Control that is a Company Transaction in which such Awards could be converted, assumed or replaced by the Successor Company, such Awards shall become fully and immediately exercisable, and all applicable restrictions or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company.
For the purposes of this Section 15.3(a), an Award shall be considered converted, assumed or replaced by the Successor Company if following the Company Transaction the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Company Transaction, the consideration (whether stock, cash or other transfersecurities or property) received in the Company Transaction by holders of all or substantially allCommon Stock for each share held on the effective date of the Company's assets,transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Company Transaction is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received pursuant to the Award, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per share consideration received by holders of Common Stock in the Company Transaction. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.
(b)    All Performance Shares or Performance Units earned and outstanding as of the date the Change in Control is determined to have occurred and for which the payout level has been determined shall be payable in full in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any remaining Performance Shares or Performance Units (including any similar transactionapplicable performance period) for which the payout level has not been determined shall be prorated at the target payout level up to and including the date of such Change in Control and shall be payable in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any existing deferrals or other restrictions not waived by the Committee in its sole discretion shall remain in effect.
(c)    Notwithstanding the foregoing, the Committee, in its sole discretion, may instead provide in the event of a Change in Control that is a Company Transaction that a Participant's outstanding Awards shall terminate upon or immediately prior to such Company Transaction and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per share consideration received by holders of Common Stock in the Company Transaction, or, in the event the Company Transaction is one of the transactions listed under subsection (c) in the definition of Company Transaction or otherwise does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the number of shares of Common Stock subject to such outstanding Awards (whether or not then vested and exercisable) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.
15.4Further Adjustment of Awards
Subject to Sections 15.2 and 15.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation, dissolution or change of control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may maketake such adjustment it deems appropriateactions with respect to prevent dilutionall Participants, to certain categories of Participants or enlargementonly to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation, dissolution or change of rightscontrol that is the reason for such action.
15.5No Limitations
The grant of Awards shall in no way affect the Company's right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.




15.6Fractional Shares
In the event of any adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment.
15.7Section 409A
Notwithstanding any other provision of the Plan to the contrary, (a) any adjustments made pursuant to this Section 15 to Awards that are considered “deferred compensation” within the meaning of Section 409A shall be made in compliance with the requirements of Section 409A and class(b) any adjustments made pursuant to this Section 15 to Awards that are not considered “deferred compensation” subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A or (ii) comply with the requirements of SharesSection 409A.
SECTION 16. CODE SECTION 162(m) PROVISIONS
Notwithstanding any other provision of the Plan to the contrary, if the Committee determines, at the time Awards are granted to a Participant who is, or is likely to be as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, a Covered Employee, then the Committee may provide that this Section 16 is applicable to such Award.
16.1Performance Criteria
(a)    If an Award is subject to this Section 16, then the lapsing of restrictions thereon and the distribution of cash, shares of Common Stock or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one of or any combination of the following “performance criteria” for the Company as a whole or any business unit of the Company, as reported or calculated by the Company: cash flows (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); working capital; earnings per share; book value per share; operating income (including or excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); revenues; operating margins; return on assets; return on equity; debt; debt plus equity; market or economic value added; stock price appreciation; total stockholder return; cost control; strategic initiatives; market share; net income; return on invested capital; improvements in capital structure; or customer satisfaction, employee satisfaction, services performance, subscriber, cash management or asset management metrics (together, the Performance Criteria).
(b)    Such performance goals also may be deliveredbased on the achievement of specified levels of Company performance (or performance of an applicable affiliate or business unit of the Company) under one or more of the Performance Criteria described above relative to the performance of other corporations. Such performance goals shall be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 12,162(m) of the Code, or any successor provision thereto, and the regulations thereunder.
(c)    The Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a performance period: (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (iv) any reorganization and restructuring programs, (v) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in the number, classCompany's annual report to stockholders for the applicable year, (vi) acquisitions or divestitures, (vii) foreign exchange gains and losses, and (viii) gains and losses on asset sales. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that satisfies the requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or priceany successor provision thereto.
16.2Compensation Committee Certification; Adjustment of Shares availableAwards
(a)    After the completion of each performance period, the Compensation Committee shall certify the extent to which any performance goal established under this Section 16 has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting, as applicable, of any Award subject to this Section 16.
(b)    Notwithstanding any provision of the Plan other than Section 15, with respect to any Award that is subject to this Section 16, the Committee may adjust downwards, but not upwards, the amount payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance goals except in the case of the death or disability of the Covered Employee.
16.3Limitations
(a)    Subject to adjustment from time to time as provided in Section 15.1, no Covered Employee may be granted Awards other than Performance Units subject to this Section 16 in any calendar year period with respect to more than 600,000 shares of Common Stock for purchasesuch Awards, except that the Company may make additional onetime grants of such Awards for up to 600,000 shares to newly hired or newly promoted individuals, and the maximum dollar value payable with respect to Performance



Units or other awards payable in cash subject to this Section 16 granted to any Covered Employee in any one calendar year is $3,000,000.
(b)    The Committee shall have the power to impose such other restrictions on Awards subject to this Section 16 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.
SECTION 17. AMENDMENT AND TERMINATION
17.1Amendment, Suspension or Termination
The Board or the Compensation Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires stockholder approval may be made only by the Board. Subject to Section 17.3, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.
17.2Term of the Plan
Unless sooner terminated as provided herein, the Plan shall terminate ten years from the Effective Date. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan's terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten years after the later of (a) the adoption of the Plan by the Board and (b) the adoption by the Board of any amendment to the Plan that constitutes the adoption of a new plan for purposes of Section 422 of the Code.
17.3Consent of Participant
The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant's consent, materially adversely affect any rights under any Award theretofore granted to the Participant under the Plan. Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a “modification” that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Section 15 shall not be subject to these restrictions.
SECTION 18. GENERAL
18.1No Individual Rights
No individual or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan. Furthermore, nothing in the numberPlan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, Shares which a Participant is entitledor to purchase andcontinue any other adjustments it deems appropriate. Without limitingrelationship with, the Committee's authorityCompany or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant's employment or other relationship at any time, with or without cause.
18.2Issuance of Shares
(a)    Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under thisthe Plan or make any other distribution of benefits under the Plan unless, in the eventopinion of the Company's counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.
(b)    The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.
(c)    As a condition to the exercise of an Option or any other receipt of Common Stock pursuant to an Award under the Plan, the Company may require (a) the Participant to represent and warrant at the time of any such transaction,exercise or receipt that such shares are being purchased or received only for the Committee may electParticipant's own account and without any present intention to have the options hereunder assumedsell or distribute such options substituted by a successor entity, to terminate all outstanding options either prior to their expiration or upon completion of the purchase of Shares on the next Purchase Date, to shorten the Offering Period by setting a new Purchase Date, or to takeshares and (b) such other action deemed appropriateor agreement by the Committee.



SECTION 10.    DESIGNATION OF BENEFICIARY

        Each Participant under the Planas may from time to time namebe necessary to comply with the federal, state and foreign securities laws. At the option of the Company, a stop-transfer order against any beneficiary or beneficiaries (whosuch shares may be named contingentlyplaced on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or successively)otherwise transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration.




The Committee may also require the Participant to execute and deliver to the Company a purchase agreement or such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to the shares.
(d)    To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

18.3Indemnification
(a)    Each person who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the amountCompany against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in hisconnection with or her Accountresulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company's approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person's own behalf, unless such loss, cost, liability or expense is to be paid in case of his or her death before he or she receives any or alla result of such benefit. Eachperson's own willful misconduct or except as expressly provided by statute.
(b)    The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such designation shall revoke all prior designations byperson may be entitled under the same Participant, shall be inCompany's certificate of incorporation or bylaws, as a form prescribedmatter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.
18.4No Rights as a Stockholder
Unless otherwise provided by the Committee and will be effective only when filed byor in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award or Restricted Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.
18.5Compliance with Laws and Regulations
(a)    In interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an “incentive stock option” within the meaning of Section 422 of the Code.
(b)    The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in writingTreasury Regulation Section 1.409A-1(b)(4), the exclusion applicable to stock options, stock appreciation rights and certain other equity-based compensation under Treasury Regulation Section 1.409A-1(b)(5), or otherwise. To the extent Section 409A is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan comply with the Committeedeferral, payout and other limitations and restrictions imposed under Section 409A. Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan 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 the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant's employment or service are intended to mean the Participant's “separation from service,” within the meaning of Section 409A(a)(2)(A)(i). In addition, if the Participant is a “specified employee,” within the meaning of Section 409, then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the Participant's lifetime. In the absence of any such designation, any Account balance remaining unpaid atsix-month period immediately following the Participant's death“separation from service,” within the meaning of Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant's estate.


death, the Participant's estate) in a lump sum on the first business day after the earlier of the date that is six months following the Participant's separation from service or the Participant's death. Notwithstanding any other provision of the Plan to the contrary, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A;
SECTION 11.    ADMINISTRATION
provided

11.1 Administration by, however, that the Committee

        The makes no representations that Awards granted under the Plan shall be administered byexempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to Awards granted under the Committee. ThePlan.






18.6Participants in Other Countries or Jurisdictions
Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to delegate dutiesadopt such modifications, procedures, subplans and the like as may be necessary or desirable to officers, directors or employeescomply with provisions of the Company.

11.2 Authoritylaws or regulations of Committee

        The Committee shallother countries or jurisdictions in which the Company or any Related Company may operate or have employees to ensure the full and exclusive discretionary authorityviability of the benefits from Awards granted to construe and interpretParticipants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws or regulations and options granted under it; to establish, amend, and revoke rules and regulations for administrationmeet the objectives of the Plan.

18.7No Trust or Fund
The Plan (including, without limitation,is intended to constitute an “unfunded” plan. Nothing contained herein shall require the determination and changeCompany to segregate any monies or other property, or shares of Offering Periods, Purchase Periods and payment procedures, the requirement that Shares be held by a specified broker, and the establishment of the exchange ratio applicableCommon Stock, or to amounts withheld in a currency other than U.S. dollars); to determine all questions of eligibility, disputed claims and policy that may arise in the administration of the Plan;create any trusts, or to make any changesspecial deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Plan or its operations to reduce or eliminate any unfavorable legal, accounting or other consequences to the extent deemed appropriate by the Committee; and, generally, to exercise such powers and perform such acts as the Committee deems necessary or expedient to promote the best interestsCompany.
18.8Successors
All obligations of the Company including, but not limitedunder the Plan with respect to designating from time to time which Subsidiaries of the Company shall be part of the Employer. The Committee's determinations as to the interpretation and operation of this Plan shall be final and conclusive and each action of the CommitteeAwards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all persons.

        In exercisingor substantially all the powers described inbusiness and/or assets of the foregoing paragraph, the Committee may adopt special or different rules for the operationCompany.

18.9Severability
If any provision of the Plan including, but not limitedor any Award is determined to rules which allow employees ofbe invalid, illegal or unenforceable in any foreign Subsidiaryjurisdiction, or as to participate in, and enjoyany person, or would disqualify the tax benefits offeredPlan or any Award under any law deemed applicable by the Plan; provided thatCommittee, such rulesprovision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee's determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.
18.10Choice of Law and Venue
The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not resultotherwise governed by the laws of the United States, shall be governed by the laws of the State of Delaware without giving effect to principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in any granteesthe State of options having different rights and/or privilegesDelaware.
18.11Legal Requirements
The granting of Awards and the issuance of shares of Common Stock under the Plan in violation of Section 423are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
SECTION 19. EFFECTIVE DATE
The effective date (the “Effective Date”) is the date on which the Plan is adopted by the Board. If the stockholders of the Code nor otherwise causeCompany do not approve the Plan to fail to satisfywithin 12 months after the requirements of Section 423 of the Code and the regulations thereunder.

11.3 Administrative Modifications

        The Plan provisions relating to the administrationBoard's adoption of the Plan, any Incentive Stock Options granted under the Plan will be treated as Nonqualified Stock Options.




APPENDIX A

DEFINITIONS
As used in the Plan,
Acquired Entity” means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.
Award” means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, cash-based award or other incentive payable in cash or in shares of Common Stock as may be modifieddesignated by the Committee from time to time as may be desirable to satisfy any requirements of or under the federal securities and/or other applicable laws of the United States, to obtain any exemption under such laws, or to reduce or eliminate any unfavorable legal, accounting or other consequences or for any other purpose deemed appropriate by the Committee.

time.


SECTION 12.    NUMBER OF SHARES

        Subject to adjustment as set forth in Section 9, the number of Shares reserved for sale and authorized for issuance pursuant to the Vitesse Semiconductor Corporation 2011 Employee Stock Purchase Plan is 2,500,000 shares and, therefore, the number of Shares authorized for issuance pursuant to the Plan is the number of Shares specified above less the number of Shares issued pursuant



to the Vitesse Semiconductor Corporation International Employee Stock Purchase Plan. If any option granted under the Plan shall for any reason terminate without having been exercised, the Shares not purchased under such option shall again become available for the Vitesse Semiconductor Corporation 2011 Employee Stock Purchase Plan. If on a given Purchase Date, the number of Shares with respect to which options are to be exercised exceeds the number of Shares then available under the Plan, the Committee shall make a pro rata allocation of the Shares remaining available for purchase in as uniform a manner as shall be practical and as it shall determine to be equitable.


Board
SECTION 13.    MISCELLANEOUS

13.1 Restrictions on Transfer

        Options granted under the Plan to a Participant may not be exercised during the Participant's lifetime other than by the Participant. Neither amounts credited to a Participant's Account nor any rights with respect to the exercise of an option or to receive stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw from the Plan in accordance with Section 8.1.

13.2 Administrative Assistance

        If the Committee in its discretion so elects, it may retain a brokerage firm, bank or other financial institution to assist in the purchase of Shares, delivery of reports or other administrative aspects of the Plan. If the Committee so elects, each Participant shall (unless prohibited by applicable law) be deemed upon enrollment in the Plan to have authorized the establishment of an account on his or her behalf at such institution. Shares purchased by a Participant under the Plan shall be held in the Account in the Participant's name, or if the Participant so indicates in the enrollment form, in the Participant's name together with the name of his or her spouse in joint tenancy with right of survivorship or spousal community property, or in certain forms of trust approved by the Committee.

13.3 Treatment of Non-U.S. Participants

        Participants who are employed by non-U.S. Designated Subsidiaries, who are paid in foreign currency, and who contribute foreign currency to the Plan through contributions or payroll deductions will have such contributions converted to U.S. dollars. The exchange rate and method for such conversion will be determined as prescribed by the Committee. In no event will any procedure implemented for dealing with exchange rate fluctuations that may occur during an Offering Period result in a purchase price below the Purchase Date Price permitted under the Plan. Each Participant shall bear the risk of any currency exchange fluctuations (if applicable) between the date on which any Participant contributions are converted to U.S. dollars and the following Purchase Date.

13.4 Withholding

        The Company or any Employer shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company or any member of the Employer, an amount sufficient to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.

13.5 Equal Rights and Privileges

        All Eligible Employees shall have equal rights and privileges with respect to the Plan so that the Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 or any successor provision of the Code and the related regulations. Notwithstanding the express terms of the



Plan, any provision of the Plan which is inconsistent with Section 423 or any successor provision of the Code shall without further act or amendment by the Company or the Committee be reformed to comply with the requirements of Section 423 of the Code. This Section 13.5 shall take precedence over all other provisions in the Plan.

13.6 Applicable Law

        The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of the State of Delaware.

13.7 Amendment and Termination

        The Board may amend, alter or terminate the Plan at any time; provided, however, that (1) the Plan may not be amended in a way which will cause rights issued under the Plan to fail to meet the requirements of Section 423 of the Code; and (2) no amendment that would amend or modify the Plan in a manner requiring stockholder approval under Section 423 of the Code or the requirements of any securities exchange on which the Shares are traded shall be effective unless such stockholder approval is obtained. In addition, the Committee may amend the Plan as provided in Section 11.3, subject to the conditions set forth in this Section 13.7.

        If the Plan is terminated, the Committee may elect to terminate all outstanding options either prior to their expiration or upon completion of the purchase of Shares on the next Purchase Date, or may elect to permit options to expire in accordance with their terms (and participation to continue through such expiration dates). If the options are terminated prior to expiration, all funds accumulated in Participants' Accounts as of the date the options are terminated shall be returned to the Participants as soon as administratively feasible.

13.8 No Right of Employment

        Neither the grant nor the exercise of any rights to purchase Shares under this Plan nor anything in this Plan shall impose upon the Company or a member of the Employer any obligation to employ or continue to employ any Employee. The right of the Company or a member of the Employer to terminate any Employee shall not be diminished or affected because any rights to purchase Shares have been granted to such Employee.

13.9 Rights as Shareholder

        No Participant shall have any rights as shareholder unless and until Shares have been issued to him or her.

13.10  Governmental Regulation

        The Company's obligation to sell and deliver Shares under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such Shares.

13.11  Gender

        When used herein, masculine terms shall be deemed to include the feminine, except when the context indicates to the contrary.

13.12  Condition for Participation

        As a condition to participation in the Plan, Eligible Employees agree to be bound by the terms of the Plan (including, without limitation, the notification and holding requirements of Section 7.5) and the determinations of the Committee.



APPENDIX A-1

DEFINITIONS

        As used in the Plan,

"Account" means a recordkeeping account maintained for a Participant to which Participant contributions and payroll deductions, if applicable, shall be credited.

"Board" means the Board of Directors of the Company.

"Code"Cause,” unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by law (except minor violations), in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Compensation Committee, whose determination shall be conclusive and binding.
Change in Control,” unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means the occurrence of any of the following events:
(a)    an acquisition by any Entity of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (1) the then outstanding shares of Common Stock of the Company (the “Outstanding Company Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”), provided, however, that the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege where the security being so converted was not acquired directly from the Company by the party exercising the conversion privilege, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Company, or (iv) an acquisition by any Entity pursuant to a transaction that meets the conditions of clauses (i), (ii) and (iii) set forth in the definition of Company Transaction;
(b)    a change in the composition of the Board during any two-year period such that the individuals who, as of the beginning of such two-year period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board subsequent to the beginning of the two-year period, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any such individual whose initial assumption of office occurs as a result of or in connection with an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an Entity other than the Board shall not be considered a member of the Incumbent Board; or
(c)    the consummation of a Company Transaction.
Code means the Internal Revenue Code of 1986, as amended.amended from time to time.

"Committee"Committee” has the meaning set forth in Section 3.1.
Common Stock means the Compensation Committee or any other committee appointed by the Board to administer the Plan.

"Common Stock" means the Common Stockcommon stock, no par value, of the Company.

"Company"Company means Vitesse Semiconductor Corporation, a Delaware corporation.

"Cut-Off Date"Company Transaction,” unless the Committee determines otherwise with respect to an Award at the time the Award is granted or unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means consummation of:
(a)    a merger or consolidation of the Company with or into any other company;
(b)    a sale in one transaction or a series of transactions undertaken with a common purpose of all of the Company's outstanding voting securities; or
(c)    a sale, lease, exchange or other transfer in one transaction or a series of related transactions undertaken with a common purpose of all or substantially all of the Company's assets,



excluding, however, in each case, a transaction pursuant to which
(i)    the Entities who are the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Company Transaction will beneficially own, directly or indirectly, at least 50% of the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Successor Company in substantially the same proportions as their ownership, immediately prior to such Company Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities;
(ii)    no Entity (other than the Company, any employee benefit plan (or related trust) of the Company, a Related Company or a Successor Company) will beneficially own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common stock of the Successor Company or the combined voting power of the outstanding voting securities of the Successor Company entitled to vote generally in the election of directors unless such ownership resulted solely from ownership of securities of the Company prior to the Company Transaction; and
(iii)    individuals who were members of the Incumbent Board will immediately after the consummation of the Company Transaction constitute at least a majority of the members of the board of directors of the Successor Company.
Where a series of transactions undertaken with a common purpose is deemed to be a Company Transaction, the date established by the Committee from time to time by which enrollment forms mustof such Company Transaction shall be received prior to an Enrollment Date.

"Designated Subsidiary" means any Subsidiary which has been designated by the Committee from time to time in its sole discretion as eligible to participate in the Plan and which has adopted the Plan with the approval of the Committee in its sole and absolute discretion.

"Effective Date" means the first trading day for the Common Stock on the Nasdaq Stock Market, the New York Stock Exchange or other applicable trading market after the date on which the Planlast of such transactions is approved byconsummated.

Compensation Committee” means the Company's stockholders.Compensation Committee of the Board.

"Eligible Compensation"Covered Employee means all base gross earnings, including such amountsa “covered employee” as that term is defined for purposes of gross earnings as are deferred by an Eligible Employee (a) under a qualified cash or deferred arrangement described in Section 401(k)162(m)(3) of the Code or (b) to a plan qualified under Section 125any successor provision.
Disability,” unless otherwise defined by the Committee for purposes of the Code. Eligible Compensation does not include overtime, cash bonuses, commissions, severance pay, hiring and relocation bonuses, pay in lieu of vacations or sabbaticals, sick leave, gain from stock option exercises or any other special payments.

"Eligible Employee" means an Employee eligible to participate in the Plan in accordance with the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means a mental or physical impairment of the Participant that is expected to result in death or that has lasted or is expected to last for a continuous period of 12 months or more and that causes the Participant to be unable to perform his or her material duties for the Company or a Related Company and to be engaged in any substantial gainful activity, in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Compensation Committee, whose determination shall be conclusive and binding.

Effective Date” has the meaning set forth in Section 3.

"Employee"19.

Eligible Person” means any person eligible to receive an Award as set forth in Section 5.
Entity means any individual, who is an employeeentity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Employer for tax purposes.Exchange Act).

"Employer" means the Company or any Designated Subsidiary of the Company by which an Employee is employed.

"Enrollment Date"Exchange Act means the first Trading Day of an Offering Period.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.amended from time to time.

"Fair Market Value"Value means as of any date, the closing price for the Common Stock on any given date during regular trading, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.

"Grant Date" means a date on which an Eligible Employee is granted an option under the Plan pursuant to Section 5.

"Grant Price" means the Fair Market Value of a Share on the Grant Date for such option.


"Offering Period" means the period beginning and ending on the dates designated by the Committee; provided, that each period shall in no event end later than twenty-seven (27) months from the Grant Date. The Offering Period may but need not be the same as the Purchase Period, as determined by the Committee.

"Participant" means an Eligible Employee who has enrolled in the Plan pursuant to Section 4.

"Plan" means this Vitesse Semiconductor Corporation U.S. Employee Stock Purchase Plan.

"Purchase Date" with respect to a Purchase Period means the last Trading Day in such Purchase Period.

"Purchase Date Price" means the Fair Market Value of a Share on the applicable Purchase Date.

"Purchase Period" means the period beginning and ending on the dates designated by the Committee; provided, that each period shall, in no event end later than twenty-seven (27) months from the Grant Date.

"Purchase Price" means the price designated by the Committee, at which each Share may be purchased under any option, but in no event less than eighty-five percent (85%) of the lesser of:

    (1)
    The Grant Price and

    (2)
    The Purchase Date Price.

"Shares" means shares of the Company's Common Stock.

"Subsidiary" means a corporation, domestic or foreign, of which not less than 50% of the combined voting power is held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary.

"Trading Day" means a day on which the New York Stock Exchange, the Nasdaq Stock Market or other alternative exchange or service on which the Common Stock is traded, listed or quoted is open for trading.



VITESSE SEMICONDUCTOR CORPORATION
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN

SECTION 1.    PURPOSE

        The purpose of this Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company.


SECTION 2.    DEFINITIONS

        Certain terms used in this Plan have the meanings set forth in Appendix A.


SECTION 3.    ELIGIBILITY REQUIREMENTS

3.1   Initial Eligibility

        Except as provided in Section 3.2, each Employee shall become eligible to participate in the Plan in accordance with Section 4 on the first Enrollment Date on or following the later of (a) the date on which such Employeethe Committee completes six (6) monthsthe corporate action authorizing the grant of employmentan Award or such shorter period determined appropriate by the Committee; and (b) the Effective Date. Participation in the Plan is entirely voluntary.

3.2   Limitations on Eligibility

        The following Employees are not eligible to participate in the Plan:

    (a)
    Employees who have been employed less than six (6) months or such shorter period determined appropriate by the Committee; and

    (b)
    Unless otherwise determined appropriatelater date specified by the Committee Employees whose customary employment is twenty (20) hours or less per week.


SECTION 4.    ENROLLMENT

        Any Eligible Employee may enroll in the Plan for any Offering Period by completing and signing an enrollment election form or by such other means as the Committee shall prescribe and submitting such enrollment election to the Company in accordance with procedures established by the Committee on or before the Cut-Off Date with respect to such Offering Period. Unless otherwise determined by the Committee, the enrollment election and the designated rate of payroll deduction shall continue for future Offering Periods unless the Participant changes or cancels the enrollment election or designated rate of payroll deduction prior to the Cut-Off Date.


SECTION 5.    GRANT OF OPTIONS ON ENROLLMENT

5.1   Option Grant

        Enrollment by an Eligible Employee in the Plan as of an Enrollment Date will constitute the grant by the Company to such Participant of an option on such Enrollment Date to purchase Shares from the Company pursuant to the Plan.

5.2   Option Expiration

        An option granted to a Participant pursuant to this Plan shall expire, if not terminated for any reason first, on the earliest to occur of: (a) the end of the Offering Period in which such option was granted; (b) the completion of the purchase of Shares under the option under Section 7; or (c) the date on which participationall conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of such Participant inAwards shall not defer the Plan terminatesGrant Date.

Incentive Stock Option” means an Option granted with the intention that it qualify as an “incentive stock option” as that term is defined for purposes of Section 422 of the Code or any reason.

successor provision.

Nonqualified Stock Option” means an Option other than an Incentive Stock Option.

5.3   Purchase of Shares

        An option granted to a Participant under the Plan shall give the ParticipantOption” means a right to purchase on a PurchaseCommon Stock granted under Section 7.

Option Expiration Date” means the largest numberlast day of whole Shares, as determined by the Committee, whichmaximum term of an Option.
Outstanding Company Common Stock” has the funds accumulatedmeaning set forth in the Participant's Accountdefinition of “Change in Control.”
Outstanding Company Voting Securities” has the meaning set forth in the definition of “Change in Control.”
Parent Company” means a company or other entity which as a result of such Purchase Date will purchase at the applicable Purchase Price; provided, however, that the Committee may, in its discretion, limit the number of Shares purchased by each Participant in any Purchase Period.


SECTION 6.    PAYMENT

        The Committee may designate the time and manner for payment of Shares to be purchased during the Purchase Period, including, but not limited to, through payroll deductions from Eligible Compensation, the terms and conditions of which are designated by the Committee. Payment amounts shall be credited on a bookkeeping basis to a Participant's Account under this Plan. All payment amounts may be used byCompany Transaction owns the Company for any purpose and the Company shall have no obligation to segregate such funds. No interest accrues on payments by Participants.


SECTION 7.    PURCHASE OF SHARES

7.1   Option Exercise

        Any option held by the Participant that was granted under this Plan and that remains outstanding as of a Purchase Date shall be deemed to have been exercised on such Purchase Date for the number of whole Shares, as determined by the Committee, that the funds accumulated in the Participant's Account as of the Purchase Date will purchase at the applicable Purchase Price (but not in excess of the number of Shares for which options have been granted to the Participant pursuant to Section 5.3). Options for other Shares for which options have been granted that are not purchased on the last Purchase Date during the Offering Period shall terminate. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed. As a condition to the exercise of an option, the Committee may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares.

7.2   Refund of Excess Amount

        If, after a Participant's exercise of an option under Section 7.1, an amount remains credited to the Participant's Account as of a Purchase Date, then the remaining amount shall be: (a) if no further Purchase Periods are immediately contemplated by the Committee, distributed to the Participant as soon as administratively feasible or (b) if another Purchase Period is contemplated by the Committee, carried forward in the Account for application to the purchase of Shares on the next following Purchase Date.

7.3   Employees of Subsidiary

        In the case of Participants employed by a Designated Subsidiary, the Committee may provide for Shares to be sold through the Subsidiary to such Participants.


7.4   Pro Rata Allocation

        If the total number of Shares for which options are or could be exercised on any Purchase Date in accordance with this Section 7, when aggregated with all Shares for which options have been previously exercised under this Plan, exceeds the maximum number of Shares reserved in Section 12, the Company may, in accordance with Section 12, allocate the Shares available for delivery and distribution in the ratio that the balance in each Participant's Account bears to the aggregate balances of all Participants' Accounts, and the remaining balance of the amount credited to the Account of each Participant under the Plan shall be returned to him or her as promptly as possible.


SECTION 8.    WITHDRAWAL FROM THE PLAN, TERMINATION
OF EMPLOYMENT, AND LEAVE OF ABSENCE

8.1   Withdrawal From The Plan

        A Participant may withdraw all funds accumulated in the Participant's Account from the Plan for the next future Purchase Period by delivering a notice of withdrawal to the Company or the Employer (in a manner prescribed by the Committee) at any time up to but not including the thirty (30) days prior to the Enrollment Date next following the date such notice of withdrawal is delivered, or at such shorter time in advance of such Enrollment Date as the Committee may permit. If a notice of complete withdrawal as described in the preceding sentence is timely received, the Company or the Employer will cease the Participant's payroll withholding for the Plan in accordance with timing and other procedures established by the Committee. An Employee who has withdrawn from a future Purchase Period may not return funds to the Company or the Employer during that Purchase Period and require the Company or the Employer to apply those funds to the purchase of Shares. Any Eligible Employee who has withdrawn from the Plan may, however, re-enroll in the Plan on the next subsequent Enrollment Date, if any.

8.2   Termination of Participation

        Participation in the Plan terminates immediately on the date on which a Participant ceases to be employed by the Company or the Employer for any reason whatsoever or otherwise ceases to be an Eligible Employee, and all funds then accumulated in the Participant's Account shall not be used to purchase Shares, but shall instead be distributed to the Participant as soon as administratively feasible.

8.3   Leaves of Absence

        If a Participant takes a leave of absence, such Participant shall have the right, in accordance with procedures prescribed by the Committee, to elect to withdraw from the Plan in accordance with Section 8.1. To the extent determined by the Committee, certain leaves of absence may be treated as cessations of employment for purposes of the Plan.


SECTION 9.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,
DISSOLUTION, LIQUIDATION, MERGER OR ASSET SALE

9.1   Adjustments Upon Changes in Capitalization

        Subject to any required action by the stockholders of the Company, the right to purchase Shares of Common Stock covered by a current Offering Period and the number of Shares which have been authorized for issuance under the Plan for any future Offering Period, the maximum number of Shares each Participant may purchase each Offering Period (pursuant to Section 5.3 hereof), as well as the price per Share and the number of Shares covered by each right under the Plan which have not yet been purchased shall be proportionately adjusted in the sole discretion of the Committee for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split,



stock dividend, extraordinary cash dividend, combination or reclassification of the Common Stock, or recapitalization, reorganization, consolidation, split-up, spin-off, or any other increase or decrease in the number of Shares effected without receipt of consideration by the Company. Except as expressly provided otherwise by the Committee, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares.

9.2   Adjustments Upon Dissolution, Liquidation, Merger or Sale of Assets

        Without limitation on the preceding provisions, in the event of any dissolution, liquidation, merger, consolidation, sale of all or substantially all of the Company's outstanding voting securities, sales, lease, exchange or other transfer of all or substantially all of the Company's assets either directly or through one or more subsidiaries.

Participant” means any similar transaction as determined by the Committee in its sole discretion, the Committee may make such adjustment it deems appropriate to prevent dilution or enlargement of rights in the number and class of Shares which may be delivered under Section 12, in the number, class of or price of Shares available for purchase under the Plan and in the number of Shares which a Participant is entitled to purchase and any other adjustments it deems appropriate. Without limiting the Committee's authority under this Plan, in the event of any such transaction, the Committee may elect to have the options hereunder assumed or such options substituted by a successor entity, to terminate all outstanding options either prior to their expiration or upon completion of the purchase of Shares on the next Purchase Date, to shorten the Offering Period by setting a new Purchase Date, or to take such other action deemed appropriate by the Committee.


SECTION 10.    DESIGNATION OF BENEFICIARY

        Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively)Eligible Person to whom the amount in hisan Award is granted.

Performance Award” means an Award of Performance Shares or her Account is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed by the Participant in writing with the Committee during the Participant's lifetime. In the absence of any such designation, any Account balance remaining unpaid at the Participant's death shall be paid to the Participant's estate.


SECTION 11.    ADMINISTRATION

11.1 Administration by Committee

        The Plan shall be administered by the Committee. The Committee shall have the authority to delegate duties to officers, directors or employees of the Company.

11.2 Authority of Committee

        The Committee shall have the full and exclusive discretionary authority to construe and interpret the Plan and optionsPerformance Units granted under it; to establish, amend, and revoke rules and regulations for administration ofSection 11.

Performance Criteria” has the Plan (including, without limitation, the determination and change of Offering Periods, Purchase Periods and payment procedures, the requirement that Shares be held by a specified broker, and the establishment of the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars); to determine all questions of eligibility, disputed claims and policy that may arise in the administration of the Plan; to make any changes to the Plan or its operations to reduce or eliminate any unfavorable legal, accounting or other consequences to the extent deemed appropriate by the Committee; and, generally, to exercise such powers and perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company, including, but not limited to, designating from time to time which Subsidiaries of the Company shall be part of the Employer. The



Committee's determinations as to the interpretation and operation of this Plan shall be final and conclusive and each action of the Committee shall be binding on all persons. The Committee may adopt special or different rules for the operation of the Plan for different Participants, including, but not limited to, rules designed to accommodate the practices of the applicable jurisdiction.

11.3 Administrative Modification

        The Plan provisions relating to the administration of the Plan may be modified by the Committee from time to time as may be desirable to satisfy any requirements of or under the securities or other applicable laws of the United States or other jurisdiction, to obtain any exemption under such laws, or to reduce or eliminate any unfavorable legal, accounting or other consequences or for any other purpose deemed appropriate by the Committee.


SECTION 12.    NUMBER OF SHARES

        Subject to adjustment asmeaning set forth in Section 9, the number16.1.

Performance Share” means an Award of Shares reserved for sale and authorized for issuance pursuant tounits denominated in shares of Common Stock granted under Section 11.1.



Performance Unit” means an Award of units denominated in cash or property other than shares of Common Stock granted under Section 11.2.
Plan” means the Vitesse Semiconductor Corporation 2011 Employee Stock Purchase Plan is 2,500,000 shares and, therefore, the number of Shares authorized for issuance pursuant to the Plan is the number of Shares specified above less the number of Shares issued pursuant to2013 Incentive Plan.
Prior Plans” means the Vitesse Semiconductor Corporation U.S. Employee Stock Purchase Plan. If any option granted under the2010 Incentive Plan shall for any reason terminate without having been exercised, the Shares not purchased under such option shall again become available forand the Vitesse Semiconductor Corporation 2011 Employee2001 Stock PurchaseIncentive Plan. If on a given Purchase Date,
Related Company” means any entity that is directly or indirectly controlled by, in control of or under common control with the numberCompany.
Restricted Stock” means an Award of Shares with respect to which options are to be exercised exceeds the numbershares of Shares then available under the Plan, the Committee shall make a pro rata allocation of the Shares remaining available for purchase in as uniform a manner as shall be practical and as it shall determine to be equitable.


SECTION 13.    MISCELLANEOUS

13.1 Restrictions on Transfer

        OptionsCommon Stock granted under Section 10, the Planrights of ownership of which are subject to a Participant may not be exercised during the Participant's lifetime other than by the Participant. Neither amounts credited to a Participant's Account nor any rights with respect to the exercise of an option or to receive stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way by the Participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw from the Plan in accordance with Section 8.1.

13.2 Administrative Assistance

        If the Committee in its discretion so elects, it may retain a brokerage firm, bank or other financial institution to assist in the purchase of Shares, delivery of reports or other administrative aspects of the Plan. If the Committee so elects, each Participant shall (unless prohibited by applicable law) be deemed upon enrollment in the Plan to have authorized the establishment of an account on his or her behalf at such institution. Shares purchased by a Participant under the Plan shall be held in the Account in the Participant's name, or if the Participant so indicates in the enrollment form, in the Participant's name together with the name of his or her spouse in joint tenancy with right of survivorship or spousal community property, or in certain forms of trust approved by the Committee.

13.3 Treatment of Non-U.S. Participants

        Participants who are employed by non-U.S. Designated Subsidiaries, who are paid in foreign currency, and who contribute foreign currency to the Plan through contributions or payroll deductions



will have such contributions converted to U.S. dollars. The exchange rate and method for such conversion will be determined asrestrictions prescribed by the Committee. Each Participant shall bear

Retirement,” unless otherwise defined in the risk of any currency exchange fluctuations (if applicable)instrument evidencing the Award or in a written employment, services or other agreement between the date on which any Participant contributions are converted to U.S. dollars and the following Purchase Date.

13.4 Withholding

        The Company or any Employer shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company or any member of the Employer, an amount sufficient to satisfy taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan.

13.5 Applicable Law

        The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of the State of Oregon.

13.6 Amendment and Termination

        The Board may amend, alter or terminate the Plan at any time; provided, however, that no amendment which would amend or modify the Plan in a manner requiring stockholder approval under the requirements of any securities exchange on which the Shares are traded shall be effective unless such stockholder approval is obtained. In addition, the Committee may amend the Plan as provided in Section 11.3, subject to the conditions set forth in this Section 13.6.

        If the Plan is terminated, the Committee may elect to terminate all outstanding options either prior to their expiration or upon completion of the purchase of Shares on the next Purchase Date, or may elect to permit options to expire in accordance with their terms (and participation to continue through such expiration dates). If the options are terminated prior to expiration, all funds accumulated in Participants' Accounts as of the date the options are terminated shall be returned to the Participants as soon as administratively feasible.

13.7 No Right of Employment

        Neither the grant nor the exercise of any rights to purchase Shares under this Plan nor anything in this Plan shall impose upon the Company or a member of the Employer any obligation to employ or continue to employ any Employee. The right of theRelated Company, or a member of the Employer to terminate any Employee shall not be diminished or affected because any rights to purchase Shares have been granted to such Employee.

13.8 Rightsmeans “Retirement” as Shareholder

        No Participant shall have any rights as shareholder unless and until Shares have been issued to him or her.

13.9 Governmental Regulation

        The Company's obligation to sell and deliver Shares under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such Shares.

13.10  Gender

        When used herein, masculine terms shall be deemed to include the feminine, except when the context indicates to the contrary.

13.11  Condition for Participation

        As a condition to participation in the Plan, Eligible Employees agree to be bound by the terms of the Plan and the determinations of the Committee.



APPENDIX A

DEFINITIONS

        As used in the Plan,

"Account" means a recordkeeping account maintained for a Participant to which Participant contributions and payroll deductions, if applicable, shall be credited.

"Board" means the Board of Directors of the Company.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means the Compensation Committee or any other committee appointed by the Board to administer the Plan.

"Common Stock" means the Common Stock of the Company.

"Company" means Vitesse Semiconductor Corporation, a Delaware corporation.

"Cut-Off Date" means the date established by the Committee from time to time by which enrollment forms must be received prior to an Enrollment Date.

"Designated Subsidiary" means any Subsidiary which has been designated by the Committee from time to time in its sole discretion as eligible to participate in the Plan and which has adopted the Plan with the approval of the Committee in its sole and absolute discretion.

"Effective Date" means the first trading day for the Common Stock on the Nasdaq Stock Market, the New York Stock Exchange or other applicable trading market after the date on which the Plan is approved by the Company's stockholders.

"Eligible Compensation" means all base gross earnings, including such amounts of gross earnings as are deferred by an Eligible Employee (a) under a qualified cash or deferred arrangement described in Section 401(k) of the Code or (b) to a plan qualified under Section 125 of the Code. Eligible Compensation does not include overtime, cash bonuses, commissions, severance pay, hiring and relocation bonuses, pay in lieu of vacations or sabbaticals, sick leave, gain from stock option exercises or any other special payments.

"Eligible Employee" means an Employee eligible to participate in the Plan in accordance with Section 3.

"Employee" means any individual who is an employee of the Employerdefined for purposes of the Plan as determined by the Committee.

"Employer"Committee or the Company's chief human resources officer or other person performing that function or, if not so defined, means Termination of Service on or after the Company or any Designated Subsidiarydate the Participant reaches “normal retirement age,” as that term is defined in Section 411(a)(8) of the Company by which an Employee is employed.Code.

"Enrollment Date" means the first Trading Day of an Offering Period.

"Exchange Act"Securities Act means the Securities Exchange Act of 1934,1933, as amended.amended from time to time.

"Fair Market Value"Section 409A means asSection 409A of any date, the closing price for the Common Code.
Stock on any given date during regular trading,Appreciation Right or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.

"Grant Date"SAR means a date on which an Eligible Employee isright granted an option under the Plan pursuant to Section 5.

"Grant Price"9.1 meansto receive the excess of the Fair Market Value of a Share onspecified number of shares of Common Stock over the Grant Date for such option.grant price.


"Offering Period"Stock Award means an Award of shares of Common Stock granted under Section 10, the period beginning and ending on the dates designated by the Committee; provided, that each period shall in no event end later than twenty-seven (27) months from the Grant Date. The Offering Period may but needrights of ownership of which are not be the same as the Purchase Period, as determinedsubject to restrictions prescribed by the Committee.

"Participant"Stock Unit means an Eligible Employee who has enrolledAward denominated in units of Common Stock granted under Section 10.
Substitute Awards” means Awards granted or shares of Common Stock issued by the Plan pursuant to Section 4.Company in substitution or exchange for awards previously granted by an Acquired Entity.

"Plan" means this Vitesse Semiconductor Corporation International Employee Stock Purchase Plan.

"Purchase Date"Successor Company with respect to a Purchase Period means the last Trading Daysurviving company, the successor company or Parent Company, as applicable, in such Purchase Period.connection with a Company Transaction.

"Purchase Date Price" means the Fair Market ValueTermination of a Share on the applicable Purchase Date.

"Purchase Period"Service means the period beginning and ending on the dates designated by the Committee; provided, that each period shall, in no event end later than twenty-seven (27) months from the Grant Date.

"Purchase Price" means the price designated by the Committee, at which each Share may be purchased under any option, but in no event less than eighty-five percent (85%) of the lesser of:

    (1)
    The Grant Price and

    (2)
    The Purchase Date Price.

"Shares" means shares of the Company's Common Stock.

"Subsidiary" means a corporation, domestictermination of employment or foreign, of which not less than 50% of the combined voting power is held byservice relationship with the Company or a Subsidiary,Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability or Retirement. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors and executive officers, by the Compensation Committee, whose determination shall be conclusive and binding. Transfer of a Participant's employment or service relationship between the Company and any Related Company shall not such corporation now existsbe considered a Termination of Service for purposes of an Award. Unless the Compensation Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant's employment or service relationship is hereafter organized or acquired bywith an entity that has ceased to be a Related Company. A Participant's change in status from an employee of the Company or a Subsidiary.Related Company to a nonemployee director, consultant, advisor, or independent contractor of the Company or a Related Company or a change in status from a nonemployee director, consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.

"Trading Day"Vesting Commencement Date means a day onthe Grant Date or such other date selected by the Committee as the date from which the New York Stock Exchange, the Nasdaq Stock Market or other alternative exchange or service on which the Common Stock is traded, listed or quoted is open for trading.an Award begins to vest.



Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. X 0198GH 6 2 D V + Annual Meeting Proxy Card . Authorized Signatures — This section must be completed for your vote to be counted — Date and Sign Below C Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. Date (mm/dd/yyyy) — Please print date below. + Change of Address — Please print your new address below. Comments — Please print your comments below. B Non-Voting Items A Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposals 2 and 3. For Against Abstain 2. To approve the Vitesse Semiconductor Corporation 2011 Employee Stock Purchase Plan. For Against Abstain 3. To ratify the appointment of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2011. Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting. 01 - Christopher R. Gardner 04 - G. Grant Lyon 02 - Steve P. Hanson 05 - Edward Rogas, Jr. 03 - James H. Hugar 1. Election of Directors: For Withhold For Withhold For Withhold 06 - G. William LaRosa IMPORTANT ANNUAL MEETING INFORMATION 000004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 ENDORSEMENT_LINE SACKPACK MMMMMMMMMMMM MMMMMMMMMMMMMMM 044444444400000000.0000 00 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext MMMMMMM 1 0 5 2 3 9 1 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MMMMMMMMM C 1234567890 J N T C123456789 1234 5678 9012 345 Admission Ticket IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. Electronic Voting Instructions You can vote by Internet or telephone! Available 24 hours a day, 7 days a week! Instead of mailing your proxy, you may choose one of the two voting methods outlined below to vote your proxy. VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on January 18, 2011. Vote by Internet • Log on to the Internet and go to www.envisionreports.com/VTSS • Follow the steps outlined on the secured website. Vote by telephone • Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada any time on a touch tone telephone. There is NO CHARGE to you for the call. • Follow the instructions provided by the recorded message.





. Notice of 2011 Annual Meeting of Stockholders Proxy Solicited by Board of Directors for Annual Meeting — January 19, 2011 The undersigned, stockholder of Vitesse Semiconductor Corporation, a Delaware corporation, hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated December 1, 2010, and hereby appoints Christopher R. Gardner and Richard C. Yonker, and each of them, proxies and attorneys-in-fact, with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the Annual Meeting of Stockholders of Vitesse Semiconductor Corporation to be held on January 19, 2011 at 9:00 a.m., local time, at the Renaissance Hotel, 30100 Agoura Road, Agoura Hills, California 91301, and at any adjournment(s) thereof and to vote all shares of common stock which the undersigned would be entitled to vote if then and there personally present, on all the matters set forth on the reverse side. THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, WILL BE VOTED (1) TO ENSURE AS MANY OF THE NOMINEES FOR THE ELECTION OF DIRECTORS SET FORTH IN PROPOSAL ONE ARE ELECTED AS DIRECTORS, (2) FOR THE APPROVAL OF THE VITESSE SEMICONDUCTOR CORPORATION 2011 EMPLOYEE STOCK PURCHASE PLAN AS SET FORTH IN PROPOSAL TWO, (3) FOR THE RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AS SET FORTH IN PROPOSAL THREE, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING AND ANY ADJOURNMENT(S) THEREOF. Proxy — VITESSE SEMICONDUCTOR CORPORATION 2011 Annual Meeting Admission Ticket 2011 Annual Meeting of VITESSE SEMICONDUCTOR CORPORATION January 19, 2011 at 9:00 a.m. Local Time Renaissance Hotel 30100 Agoura Road Agoura Hills, California 91301 Upon arrival, please present this admission ticket and photo identification at the registration desk. Directions From Los Angeles Int’l Airport: Take Century Blvd. to 405 San Diego Freeway North to 101 West/Ventura Fwy.-North. Follow the 101 to the Reyes Adobe exit. Turn left and drive over the freeway to Agoura Road. Turn left onto Agoura Road and make an immediate right into the hotel driveway. From Burbank Airport: Exit to Hollywood Way South. Turn left onto Alameda Ave. Follow signs to 134 Ventura Fwy.-West. Hwy 134 converts to 101 Ventura Fwy.-North. Follow the 101 to the Reyes Adobe exit. Turn left and drive over the freeway to Agoura Road. Turn left onto Agoura Road and make an immediate right into the hotel driveway. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.




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INFORMATION CONCERNING SOLICITATION AND VOTING





PROPOSAL ONE ELECTION OF DIRECTORS



PROPOSAL 2 APPROVAL OF THE 2011 EMPLOYEE STOCK PURCHASE PLAN




PROPOSAL THREE RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

EXECUTIVE COMPENSATION
EQUITY COMPENSATION PLAN INFORMATION
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OTHER MATTERS
VITESSE SEMICONDUCTOR CORPORATION 2011 EMPLOYEE STOCK PURCHASE PLAN
VITESSE SEMICONDUCTOR CORPORATION U.S. EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
SECTION 2. DEFINITIONS
SECTION 3. ELIGIBILITY REQUIREMENTS
SECTION 4. ENROLLMENT
SECTION 5. GRANT OF OPTIONS ON ENROLLMENT
SECTION 6. PAYMENT
SECTION 7. PURCHASE OF SHARES
SECTION 8. WITHDRAWAL FROM THE PLAN, TERMINATION OF EMPLOYMENT, AND LEAVE OF ABSENCE
SECTION 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION, MERGER OR ASSET SALE
SECTION 10. DESIGNATION OF BENEFICIARY
SECTION 11. ADMINISTRATION
SECTION 12. NUMBER OF SHARES
SECTION 13. MISCELLANEOUS
APPENDIX A-1 DEFINITIONS
VITESSE SEMICONDUCTOR CORPORATION INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
SECTION 2. DEFINITIONS
SECTION 3. ELIGIBILITY REQUIREMENTS
SECTION 4. ENROLLMENT
SECTION 5. GRANT OF OPTIONS ON ENROLLMENT
SECTION 6. PAYMENT
SECTION 7. PURCHASE OF SHARES
SECTION 8. WITHDRAWAL FROM THE PLAN, TERMINATION OF EMPLOYMENT, AND LEAVE OF ABSENCE
SECTION 9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION, MERGER OR ASSET SALE
SECTION 10. DESIGNATION OF BENEFICIARY
SECTION 11. ADMINISTRATION
SECTION 12. NUMBER OF SHARES
SECTION 13. MISCELLANEOUS
APPENDIX A DEFINITIONS