2003 Committee Charter : VTSS

VITESSE SEMICONDUCTOR CORPORATION
A Delaware corporation
(the "Company")
Compensation Committee Charter
Adopted December 17, 2002
Purpose
The Compensation Committee is created by the Board of Directors of the
Company to:
oversee the Company's compensation and benefits policies generally;
evaluate senior executive performance and review the Company's management
succession plan;
oversee and set compensation for the Company's senior executives; and
prepare the report on executive compensation that Securities and Exchange
Commission rules require to be included in the Company's annual proxy
statement.
Membership
The Compensation Committee shall consist of at least three members, comprised
solely of independent directors meeting the independence requirements of Nasdaq. The
Nominating and Corporate Governance Committee shall recommend nominees for
appointment to the Compensation Committee annually and as vacancies or newly created
positions occur. Compensation Committee members shall be appointed by the Board and
may be removed by the Board at any time. The Board shall designate the Chairman of
the Compensation Committee.
Authority and Responsibilities
In addition to any other responsibilities which may be assigned from time to time
by the Board, the Compensation Committee is responsible for the following matters.
Compensation Policies
The Compensation Committee shall review and approve the Company's
compensation and benefits policies generally (subject, if applicable, to
shareholder ratification), including reviewing and approving any incentivecompensation
plans and equity-based plans of the Company. In reviewing such
compensation and benefits policies, the Compensation Committee may consider
the recruitment, development, promotion, retention and compensation of senior
executives and other employees of the Company and any other factors that it
deems appropriate. The Compensation Committee shall report the results of such
2
(MP) 21352/001/CORP.GOV/comp.charter.doc 12/05/02 10:27 PM
review and any action it takes with respect to the Company's compensation and
benefits policies to the Board.
Executive Compensation
The Compensation Committee shall review and approve for each of the
Company's senior executives his or her (i) annual base salary level, (ii) annual
incentive compensation, (iii) long-term incentive compensation, (iv) employment,
severance and change-in-control agreements, if any, and (v) any other
compensation, ongoing perquisites or special benefit items. In so reviewing and
approving executive compensation, the Compensation Committee shall, among
other things:
identify corporate goals and objectives relevant to executive
compensation;
evaluate each executive's performance in light of such goals and
objectives and set each executive's compensation based on such
evaluation and such other factors as the Compensation Committee deems
appropriate and in the best interests of the Company (including the cost to
the Company of such compensation); and
determine any long-term incentive component of each executive's
compensation based on awards given to such executive in past years, the
Company's performance, shareholder return and the value of similar
incentive awards relative to such targets at comparable companies and
such other factors as the Compensation Committee deems appropriate and
in the best interests of the Company (including the cost to the Company of
such compensation).
The Compensation Committee shall report the results of such review and any
action it takes with respect to the compensation of the Company's senior
executives to the Board.
The Compensation Committee may delegate to one or more officers of the
Company the authority to make grants and awards to any non-Section 16 officer
of the Company under such of the Company's incentive-compensation or other
equity-based plans as the Compensation Committee deems appropriate and in
accordance with the terms of such plans.
Management Succession
The Compensation Committee shall, in consultation with the Company's CEO,
periodically review the Company's management succession planning including
policies for CEO selection and succession in the event of the incapacitation,
retirement or removal of the CEO, and evaluations of, and development plans for,
any potential successors to the CEO.
3
(MP) 21352/001/CORP.GOV/comp.charter.doc 12/05/02 10:27 PM
Disclosure
The Compensation Committee shall prepare the report on executive compensation
that Securities and Exchange Commission rules require to be included in the
Company's annual proxy statement.
Reporting to the Board
The Compensation Committee shall report to the Board periodically. This report
shall include a review of any recommendations or issues that arise with respect to
Company compensation and benefits policies, executive compensation,
management succession planning and any other matters that the Compensation
Committee deems appropriate or is requested to be included by the Board.
At least annually, the Compensation Committee shall evaluate its own
performance and report to the Board on such evaluation.
The Compensation Committee shall periodically review and assess the adequacy
of this charter and recommend any proposed changes to the Nominating and
Corporate Governance Committee.
Procedures
The Compensation Committee shall meet as often as it determines is appropriate
to carry out its responsibilities under this charter. The Chairman of the Compensation
Committee, in consultation with the other committee members, shall determine the
frequency and length of the committee meetings and shall set meeting agendas consistent
with this charter.
The Compensation Committee has the sole authority to retain and terminate any
compensation consultant assisting the Compensation Committee in the evaluation of
CEO or senior executive compensation, including sole authority to approve all such
compensation consultant's fees and other retention terms.
The Compensation Committee may delegate its authority to subcommittees or the
Chairman of the Compensation Committee when it deems appropriate and in the best
interests of the Company.