EXHIBIT 10.12

December 26, 2005

Gary Szilagyi

Address on file at Atheros

Dear Gary,

On behalf of Atheros Communications, Inc., a Delaware corporation (the
“Company”), I am pleased to extend you an offer to join the Company. This letter
sets forth the basic terms and conditions of your employment with the Company
subject to final approval by the Atheros Board of Directors. We would like you
to begin your employment with the Company on or before January 30, 2006. This
offer expires on December 29, 2005. By signing this letter, you will be agreeing
to these terms. It is important that you understand clearly both what your
benefits are and what is expected of you by the Company.

 

1. Salary: You will be paid an annual base salary of $240,000, less regular
payroll deductions, which covers all hours worked. Generally, your salary will
be reviewed annually but the Company reserves the right to change your
compensation from time to time on reasonable notice.

 

2. Bonus: Your target annual bonus will be $135,000 based upon a combination of
corporate objectives and achievement of sales revenue targets. You will be
guaranteed a minimum of one-quarter of the sales revenue portion of the bonus
for the first quarter of 2006. A copy of the plan will be provided upon hire.

 

3. Hiring Bonus: You will receive a hiring bonus of $100,000, less regular
payroll deductions, half paid in the first pay period after you start, and the
balance paid during the pay period three months after your start date, provided
you do not voluntarily resign from the Company prior to that time.

 

4. Stock Option: You will receive an option to purchase 220,000 shares of the
common stock of the Company, subject to the approval of the Compensation
Committee of the Board of Directors. The option will vest as to 12/48ths of the
shares on the first anniversary of your hire date and 1/48th of the shares each
full month thereafter, subject to your continued employment.

 

5. Duties: Effective January 30, 2006 and subject to final approval by the
Atheros Board of Directors, your job title will be Vice President of Sales,
reporting to Craig Barratt, President and CEO. Your duties generally will
include leading and developing the sales strategy for Atheros products. You may
be assigned other duties as needed and your duties may change from time to time
on reasonable notice, based on the needs of the Company and your skills, as
determined by the Company.

As an exempt employee, you are required to exercise your specialized expertise,
independent judgment and discretion to provide high-quality services. You are
required to follow office policies and procedures adopted from time to time by
the Company and to take such general direction as you may be given from to time
by your superiors. The Company reserves the right to change these policies and
procedures at any time. (Also see Adjustments and Changes in Employment Status).
You are required to devote your full energies, efforts and abilities to your
employment, unless the Company expressly agrees otherwise. You are not permitted
to engage in any business activity that competes with the Company.

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6. Hours of Work: As an exempt employee, you are expected to work the number of
hours required to get the job done. However, you are generally expected to be
present during normal hours of the Company. Normal working hours will be
established by the Company and may be changed as needed to meet the needs of the
business.

 

7. Adjustments and in Employment Status: You understand that the Company
reserves right to make personnel decisions regarding your employment, including
but not limited to decisions regarding any promotion, salary adjustment,
transfer or disciplinary action, up to and including termination, consistent
with the needs of the business.

 

8. Proprietary Information Agreement: You will be required to sign and abide by
the terms of enclosed proprietary information agreement, which is incorporated
into this agreement by reference as Exhibit A.

 

9. Change of Control: In the event of a Change of Control (as defined below)
where your employment is terminated without “Cause” (as defined below) within 12
months following the of Change of Control, and provided that you sign and do not
revoke within the time period specified by the Company a standard release of
claims in a form acceptable to the Company (or its successor), then your
unvested stock options subject to options granted by the Company to you prior to
the Change of Control shall have their vesting accelerated as to an additional
amount equal to the vesting you would have received had your employment
continued for an additional year after your termination, and the Company’s right
of repurchase with respect there to shall lapse as of the date of termination.

“Change of Control” shall mean: (a) merger, acquisition or similar transaction
or series of related transactions in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
jurisdiction in which the Company is incorporated; (b) the sale, transfer or
other disposition of all or substantially all of the assets of the Company; or
(c) any reverse merger or acquisition in which the Company is the surviving
entity but in which more than fifty percent (50%) of the Company’s outstanding
voting stock is transferred to holders different from those who held the stock
immediately prior to such merger.

“Cause” means (a) intentional and material dishonesty in performance of your
duties for the Company; (b) conduct (including conviction of or a plea of nolo
contendere to a felony) which has a direct and material adverse effect on the
Company or its reputation; (c) failure to perform your reasonable duties or
comply with your obligations under this Agreement or the Company’s Confidential
Information and Invention Assignment Agreement after receipt of written notice
from the Company specifying the failure, if you do not remedy that failure
within 10 business days of receipt of written notice from the Company, which
notice will state that failure to remedy such conduct may result in termination
for Cause; or (d) an incurable material breach of the Company’s Confidential
Information and Invention Assignment Agreement, including, without limitation,
theft or other misappropriation of the Company’s proprietary information.
Nothing in this section shall alter the at-will nature of employment or provide
an obligation express or implied for the payment of severance except as
expressly provided herein.

 

10. Severance: If the Company terminates your employment other than for “Cause”
as defined above, and provided that you sign and do not revoke within the time
period specified by the Company a standard release of claims in a form mutually
acceptable to the Company and you, then you will be paid a severance at such
time equal to six months of your then annual base salary. In addition, if you
properly elect to continue the Company’s group health plan coverage under COBRA,
the Company will continue your health

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coverage for you and your enrolled dependents at no cost to you for six months
following the effective date of termination. You will be able to continue your
health benefits beyond six months at your own expense as allowed under the
Company’s health plans.

 

11. Immigration Documentation: Please be advised that your employment is
contingent on your ability to prove your identity and authorization to work in
the U.S. for the Company. You must comply with the Immigration and
Naturalization Service’s employment verification requirements.

 

12. Representation and Warranty of Employee: You represent and warrant to the
Company that the performance of your duties will not violate any agreements with
or trade secrets of any other person or entity.

 

13. Employee Benefits: You will be eligible for paid vacation, sick leave and
holidays. You will be provided with health insurance and dental insurance
benefits, as provided in our benefit plans. These benefits may change from time
to time. You will be covered by workers’ compensation insurance and State
Disability Insurance, as required by state law.

 

14. Term of Employment: Your employment with the Company is “at-will.” In other
words, either you or the Company can terminate your employment at any time for
any reason, with or without cause and with or without notice.

 

15. Dispute Resolution Procedure: I agree that prior to my employment with the
Company, I must sign and agree to the Arbitration Agreement attached as Exhibit
B to this Agreement.

 

16. Integrated Agreement: Please note that this Agreement, along with the
attached Employee’s Proprietary Information and Inventions Agreement (Exhibit A)
and the Arbitration Agreement (Exhibit B), supersedes any prior agreements,
representations or promises of any kind, whether written, oral, express or
implied between the parties hereto with respect to the subject matters herein.
It constitutes the full, complete and exclusive agreement between you and the
Company with respect to the subject matters herein. This agreement cannot be
changed unless in writing, signed by you and the Vice President of Finance and
Administration.

 

17. Severability: If any term of this Agreement is held to be invalid, void or
unenforceable, the remainder of this Agreement shall remain in full force and
effect and shall in no way be affected; and, the parties shall use their best
efforts to find an alternative way to achieve the same result.

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We look forward to your joining our organization. In order to confirm your
agreement with and acceptance of these terms, please sign one copy of this
letter and return it to me. The other copy is for your records. If there is any
matter in this letter that you wish to discuss further, please do not hesitate
to speak to me.

 

Very truly yours,

ATHEROS COMMUNICATIONS, INC.

By:  

/s/ Jack Lazar, for Craig Barratt

Title:   President and CEO

 

I agree to the terms of employment set forth in this Agreement.

 

/s/ Gary Szilagyi

  

12/29/05

Gary Szilagyi    Date