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Technology Stocks : Vitesse Semiconductor

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From: mopgcw	10/1/2005 2:42:10 AM
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is it really tanking over this? Entry into Material Agreement Item 1.01. Entry into a Definitive Material Agreement. On September 28, 2005, the Compensation Committee of the Board of Directors of Vitesse Semiconductor Corporation (the "Company") approved the accelerated vesting of certain unvested options that would have vested prior to October 31, 2006, have an exercise price of $5.27 and greater and are held by current employees (other than executive officers) and certain unvested options that would have vested prior to October 31, 2006, have an exercise price of $6.97 or greater and are held by current executive officers. This accelerated vesting will affect options with respect to approximately 3,770,000 shares of the Company's common stock. This acceleration will be effective as of September 30, 2005. The Company's executive officers have agreed that they will not sell any shares acquired through the exercise of an accelerated option, prior to the date on which the exercise would have been permitted under the option's original vesting terms. Because these options have exercise prices significantly in excess of the current market value of the Company's common stock, the Company believes that these options may not be offering sufficient incentive to its employees when compared to the potential future compensation expense that would have been attributable to the options once FASB Statement No. 123R (Share-Based Payment) ("FAS 123R") becomes effective for the Company. The Committee believes that the accelerated vesting may have a positive effect on employee morale and retention. The acceleration also eliminates future compensation expense the Company would otherwise recognize in its income statement with respect to these accelerated options under FAS 123R.

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