UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 2, 2006
VITESSE SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-31614 77-0138960
(Commission File Number) (IRS Employer Identification No.)
741 Calle Plano, Camarillo, California 93012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 388-3700
Not applicable
Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On October 2, 2006, Vitesse Semiconductor Corporation (the "Company")
entered into an agreement (the "Agreement") with Alvarez & Marsal, LLC
("A&M"). The Company and A&M previously entered into an agreement, dated
April 27, 2006, pursuant to which, among other things, A&M agreed to
provide the services of Shawn C.A. Hassel as Chief Financial Officer of
the Company. The April 27, 2006 agreement provided that the parties would
negotiate to reach agreement regarding certain incentive compensation to
be received by A&M for its services. This incentive based compensation
was partially in consideration for a negotiated discount for ongoing fees.
The Agreement is the result of those negotiations.
Pursuant to the Agreement, a copy of which is included in this Form 8-K
as Exhibit 10.1 and incorporated hereby by reference, the Company has
agreed, among other things, to:
(1) issue to A&M warrants to acquire 150,000 shares of the Company's
Common Stock at a price of $1.20 per share, subject to adjustment.
The warrants will expire five years from the date of issue;
(2) issue to A&M warrants to acquire an additional 150,000 shares of
the Company's common stock at a price of $1.20 per share, subject
to adjustment. These warrants will be issued to A&M at the earlier
of the delivery of financial statements of the Company to KPMG LLP,
the Company's independent public accountants, or the occurrence of
an event that would give A&M the right to put the warrants back to
the Company as described below. The warrants will expire five years
from the date of issue;
(3) enter into a Warrant Registration Right Agreement pursuant to which
the Company will agree, among other things, to register the resale
of the shares of the Company's Common Stock issuable upon exercise
of the warrants and the Company will grant to A&M the right to put
the warrants back to the Company under certain circumstances set
forth in the Agreement at a price equal to the difference between
the then trading price of the Company's Common Stock and the
exercise price under the warrants; and
(4) pay to A&M (i) $250,000 upon execution of the Agreement as
compensation with respect to the completed financing with affiliates
of Tennenbaum Capital Partners, LLC; (ii) $50,000 upon completion
of a second financing of $25 million as permitted by the loan
agreement with the affiliates of Tennenbaum Capital Partners LLC;
(iii) $150,000 upon setting the terms for a proposed settlement of
a dispute with the holders of the Company's 1.5 % Convertible
Subordinated Debentures due 2024; (iv) $75,000 upon the approval
and implementation of a remediation plan resulting from the internal
investigation being conducted by the Special Committee of the Board
of Directors of the Company; and (v) up to $125,000 upon delivery
of financial statements of the Company to KPMG LLC.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Item No. Description
10.1 Letter Agreement, dated October 2, 2006,
between Vitesse Semiconductor Corporation
and Alvarez & Marsal, LLC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized, in the City of Camarillo, State of
California, on October 5, 2006.
VITESSE SEMICONDUCTOR CORPORATION
By: /s/ Christopher Gardner
Christopher Gardner
Chief Executive Officer
EXHIBIT INDEX
Item No. Description
10.1 Letter Agreement, dated October 2, 2006,
between Vitesse Semiconductor Corporation
and Alvarez & Marsal, LLC.