Exhibit 10.35

 

March 24, 2003

 

Tony Shakib
2757 Lylewod Drive
Pleasanton, CA 94588

Dear Tony:

On behalf of Centillium Communications, Inc. (the "Company"), I am pleased to
offer you the position of General Manager, Vice President, Access Group. You
will be reporting to Faraj Aalaei, Chief Executive Officer. Since it is
contemplated that you would become an executive officer of the Company, this
position and all of the provisions of this letter are conditioned upon and
subject to the formal approval of the Company's Board of Directors (the
"Board"), notwithstanding anything to the contrary and notwithstanding your
possible starting employment with the Company in advance of such approval. It is
our desire that upon approval of the Board, you and the Company will enter into
agreements which memorialize the terms that have been approved by the Board.

You will be paid a salary of $225,000 (Two hundred twenty-five thousand dollars)
annually. Your salary will be payable in accordance with the Company's standard
payroll policies (subject to normal required withholding). In addition, you are
eligible for a recurring annual bonus up to a maximum of 50% of your base
salary, or $112,500 (One hundred twelve thousand, five hundred) based upon the
achievement of certain performance objectives, which will be mutually determined
within 30 days of your start date, according to the specific terms in a
definitive agreement. Your 2003 bonus will be prorated based on the number of
calendar days in 2003 that you are a full-time employee of the Company divided
by 365. Your 2003 bonus is payable in January, 2004 according to the Company's
bonus policies. You are guaranteed that $50,000 of your 2003 bonus will be paid
to you after six (6) months of service, provided you are a full-time employee in
good standing on the six month anniversary of your employment. You will accrue
3.69 hours vacation/personal time per pay period, totaling twelve days paid
vacation annually. Your salary will be paid on a bi-weekly basis. All Company
benefits begin on the 1st day of the month following your start date.

Like all of us at Centillium Communications, Inc., you will be required to sign
the Company's standard Invention Assignment and Confidentiality Agreement. Your
offer is contingent upon your agreement that you will not, during and after your
employment with Centillium Communications, Inc., improperly use or disclose
proprietary information or trade secrets of any former or concurrent employer or
other person or entity, and that you will not bring onto the premises of
Centillium Communications, Inc., any unpublished document or proprietary
information belonging to any such employer, person, or entity, unless consented
to in writing by such employer, person, or entity.

It will be recommended to the Company's Board of Directors that you be eligible
to participate in the Centillium Communications, Inc. Stock Option Program.
Subject to this approval and as more fully set forth in a definitive agreement
to be provided, you will be granted an option to purchase 250,000 (Two hundred
fifty thousand) shares of the Company's Common Stock at an exercise price equal
to the fair market value at the close of the NASDAQ market on the date your
options are granted by the Board of Directors. These options will be divided
into two separate grants.

 * The First Option Grant will be to purchase 200,000 (Two hundred thousand)
   shares of the Company's Common Stock. 25% of this First Option Grant will
   vest on the one year anniversary of your employment and 1/48 of the grant
   will vest each month thereafter.
 * The Second Option Grant will be to purchase 50,000 (Fifty thousand) shares of
   the Company's Common Stock. The Second Option Grant will vest 100% on the
   five year anniversary or your employment. If you meet certain Option Grant
   Milestones to be mutually agreed upon within 30 days after your start date
   and prior to the granting of this Second Option Grant, and if these
   Milestones are met prior to the first anniversary of your employment, then
   100% of this Second Option Grant shall vest upon completion of the
   Milestones.

If Centillium Communications, Inc. is i) acquired, merged, or a significant
change of control occurs and within eighteen months after such event, your
employment is terminated by the Company without cause or you resign from the
Company as a result of a) your job responsibilities being significantly reduced,
b) reduction by the Company of your base compensation or c) you are required to
move to a location which is more than fifty (50) miles from your job location
prior to the occurrence of the event in (i) above, then you and the Company
agree that:

 1. The vesting of your First Option Grant of 200,000 stock options would be
    accelerated by one full year,
 2. If you have been employed by the Company for less than one year, you would
    receive three months base salary and if you have been a full-time employee
    of the Company for a period of one to two years inclusive, you would receive
    six months base salary and if you have been a full-time employee of the
    Company for more than two years of service, you would receive one year of
    base salary.

Your acceptance of this offer represents the sole agreement between you and
Centillium Communications, Inc. No prior promises, representations or
understandings relative to any terms or conditions of your employment are to be
considered as part of this agreement unless expressed in writing in this letter.
Centillium Communications is an "at-will" employer which means that this
employment relationship may be terminated at any time, with or without good
cause or for any or no cause, at the option either of the Company or employee,
with or without notice.

This offer is valid until 5:00pm on Friday, 3/28/2003. Please indicate your
acceptance and start date by signing and returning this letter. For your
convenience, you may fax a signed copy to the following confidential fax
machine:

510-771-3697.

Sincerely,

/s/ Faraj Aalaei

Faraj Aalaei
Chief Executive Officer

The foregoing terms and conditions are hereby accepted:

Cc: Human Resources

Intended Start Date: 03/25/2003

Signed: /s/ Tony Shakib
                    Tony Shakib

Date: 03/25/2003