Exhibit 10.65

 

LOGO [g43547g57h56.jpg]   

215 Moffett Park Drive

Sunnyvale CA 94089

(408) 542-8700

December 29, 2009

Mr. Bill Caraccio

Dear Bill:

On behalf of AppliedMicro, I am pleased to extend to you an offer of employment
as Vice President & General Counsel based in Sunnyvale, California. You will be
reporting to CEO Paramesh Gopi. This offer is subject to approval and acceptance
by AppliedMicro’s Board of Directors.

The following are the basic terms:

 

  1. Your start date will be January 18, 2010. After you complete at least one
full day of active employment with the Company you will be authorized to take an
unpaid personal leave of absence, to be completed by June 18, 2010, after which
you will report for full-time active and continuous employment. After six
(6) months of active and continuous employment, the Chief Executive Officer and
Board of Directors will review your position and title for promotion to Senior
Vice President.

 

  2. Your annualized base salary will be $290,000 gross before withholding for
taxes and deductions, provided that, as a result of the Company-wide pay cuts
that were implemented in April 2009, your salary will be reduced to $250,000
gross before withholding for taxes and deductions. Your base salary will be
“restored” to $290,000 upon completion of twelve months of active and continuous
employment provided the Company implements, prior to April 1, 2011, broad-based
restoration of such Company-wide pay cuts, and subject to your continued
employment in good standing. Otherwise, changes to any elements of your
compensation package, including base salary, will only take effect upon the
approval of AppliedMicro’s Compensation Committee of the Board of Directors.

 

  3. You will receive a one-time hiring bonus of $50,000.00 gross. This hiring
bonus will be paid within 30 calendar days following your completion of 30 days
of full-time active and continuous employment.

Should you choose to voluntary resign from AppliedMicro or if you are terminated
for cause before June 18, 2011, the full net amount of this bonus must be
refunded to AppliedMicro, payable to the Company within 30 days of your last day
of employment.

 

  4. You will receive stock options as set forth below. Grants of options will
be issued at the closing price of AppliedMicro’s stock on the day of the
grant. All stock options offered, and all terms of the options and repurchase
agreements (including option price) are contingent upon final approval by
AppliedMicro’s Board of Directors.

 

  5. Management will recommend to AppliedMicro’s Board of Directors that you
receive 120,000 stock options. Twenty-five percent of the stock will be
available for exercise upon the completion of twelve (12) months of eligible
service. One-forty-eighth of the grant will vest monthly thereafter and will be
fully vested after four years of eligible service. The option grant will be made
at the first scheduled date following your start date in accordance with the
granting policy. You will be eligible for refresh grants on the first scheduled
date following each anniversary of your start date.

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  6. Management will recommend to AppliedMicro’s Board of Directors that you
receive 60,000 restricted stock units (RSU’s) in accordance with the terms of
AppliedMicro’s 1992 Equity Incentive Plan and an RSU agreement that you will
enter into with AppliedMicro. The RSU grant date will be made at the first
scheduled grant date following your start date in accordance with the granting
policy based on your hire date and employment status. You will be eligible for
refresh grants on the first scheduled date following each anniversary of your
start date. All RSU’s offered are contingent upon final approval by
AppliedMicro’s Board of Directors.

 

  7. Management will recommend to AppliedMicro’s Board of Directors that you
receive 50,000 “outperformance” restricted stock units that will vest fully,
partially or not at all over a period of two years from grant, depending on the
company’s performance as measured by EBITDA, your individual performance and
your employment status. The RSU grant date will be made at the first scheduled
grant date following your start date in accordance with the granting policy. All
RSU’s offered are contingent upon final approval by AppliedMicro’s Board of
Directors.

 

  8. You will also be eligible to participate in AppliedMicro’s Employee Stock
Purchase Plan, in accordance with its terms.

 

  9. Subject to your eligibility status, commencing on your start date, you will
be eligible for AppliedMicro’s standard medical, dental and life insurance
benefits. Upon your appointment as an Executive Officer you will be eligible for
executive level benefits as described in AppliedMicro’s Proxy Statement. The
Board of Directors will determine the level of benefits for which you will
qualify, provided that benefits granted to you under the Executive Severance
Benefit Plan will be calculated the level of the Company’s Chief Financial
Officer and, in the event AppliedMicro implements a cash bonus or similar
short-term cash incentive plan, you will be eligible to receive a target amount
equal to at least 50% of your base salary. In addition, you and AppliedMicro
will enter into a directors and officers indemnification agreement substantially
similar to that used with AppliedMicro’s senior executive officers.

 

  10. AppliedMicro has a comprehensive benefits package that includes the
AppliedMicro 401(k) Employee Savings & Retirement Plan. Once you are an eligible
employee, AppliedMicro will automatically withhold five percent (5%) from your
wages each payroll period beginning the first pay date following 30 days of
employment and contribute it to the 401(k) Plan on your behalf. To begin, your
contributions will automatically be invested in the T. Rowe Price Retirement
Date Fund which has a date closest to your expected Normal Retirement Age. Of
course, once you join us at AppliedMicro you will be able to choose how much, or
how little, you want to contribute to the Plan. In addition, you will be able to
select an investment mix that meets your personal financial objectives from our
Plan’s core fund lineup. You will receive more information about the entire
AppliedMicro benefits package, including how to opt-out of participation or
change your deferral percentage in the 401(k) Plan, at new hire orientation.

 

  11. Your employment with the Company is for no specified period and
constitutes “at will employment.” As a result, you are free to resign at any
time, for any reason or for no reason. Similarly, the Company is free to
conclude its employment relationship with you at any time, with or without
cause.

 

  12. Beginning your first day of employment, you must comply with the terms and
conditions of the Company’s Employment Policies and Practices Guide.

 

  13. This offer and employment at AppliedMicro is contingent upon completion of
a successful background investigation and reference checks, your honoring all
company policies and your execution of additional documents and agreements
required by AppliedMicro, including our confidentiality and invention assignment
agreement and the enclosed arbitration agreement. This agreement cannot be
modified except by an expressed written agreement executed by both you and the
Chief Executive Officer of the Company.

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  14. Except as set forth herein, there are no other agreements or
understandings, oral or otherwise, pertaining to your employment.

 

  15. Your first day of employment will be January 18, 2010. Please bring
documentation, which verifies your eligibility to work in the United States to
the Human Resources department on your first day of employment.

 

  16. This offer expires on December 31, 2009.

If you have any questions about this offer, please contact me at (408) 542-8831.

Bill, we look forward to you joining AppliedMicro. Please sign this letter and
the arbitration agreement to indicate your acceptance of the terms and return
both of these documents to me. You may not begin your employment until you have
signed these documents.

 

Sincerely yours, /s/ Michael Major Michael Major VP Human Resources

 

    ACKNOWLEDGED AND ACCEPTED: Dated: 12-30-09     /s/ L William Caraccio    
Bill Caraccio 01-18-10     Start date