Exhibit 10.23

December 14, 2012

Rajiv Khemani

Re: Separation Agreement

Dear Rajiv:

This letter sets forth the terms of the consulting and separation agreement (the
“Agreement”) that Cavium, Inc. (“Cavium” or the “Company”) is offering to you to
aid in your employment transition.

 

1. Separation Date. Your last day of employment with the Company will be
January 7, 2013 (the “Separation Date”).

 

2. Accrued Salary and PTO. On the Separation Date, or within the stipulated
timeframe per final paycheck regulations, as applicable, the Company will pay
you all accrued salary, and all accrued and unused PTO earned through the
Separation Date, subject to all required payroll deductions and withholdings.
You are entitled to these payments regardless of whether or not you sign this
Agreement.

 

3. Health Care Continuation Coverage. To the extent provided by the federal
COBRA law or, if applicable, state insurance laws (collectively, “COBRA”), and
by the Company’s current group health insurance policies, you will be eligible
to continue your group health insurance benefits after the Separation Date if
you so elect. You will be provided with a separate notice of your COBRA rights
and obligations within the timing required by law.

 

4. Consulting Agreement. If you sign this Agreement, and allow the releases
contained herein to become effective, then even though it has no obligation to
do so, the Company will retain you as a consultant on the following terms:

 

  (a) Consulting Period. The consulting relationship commences on January 7,
2013 and continues for approximately one month until February 7, 2013
(“Consulting Period”) unless: (i) you elect to terminate the Consulting Period
prior to February 7, 2013 for any reason by providing written notice to the
Company; or (ii) the Company terminates the Consulting Period prior to
February 7, 2013 because you materially breach this Agreement or the
Confidential Information Agreement (as defined in Section 4(e)). The consulting
period will automatically terminate at the end of this period unless renewed in
writing by both parties.

 

  (b) Consulting Services. You agree to provide reasonable consulting services
to the Company in any area of your expertise to enable a transition upon the
reasonable request by the President and CEO (the “Manager”) of the Company.
During the Consulting Period, you will report directly to the Manager, or as
otherwise specified by the Manager. You agree to exercise the highest degree of
professionalism and utilize your expertise and creative talents in performing
these services. During the Consulting Period, you shall continue to be subject
to, and you agree to comply with, all of the Company’s policies and procedures.

 

  (c) Stock Options and Restricted Stock Units If you do not enter into this
Agreement, vesting of your outstanding stock options (the “Options”) and
restricted stock units (the “RSUs”) will cease on the Separation Date and your
unvested Options and RSUs shall terminate. However, if you timely enter into
this Agreement, the Company will consider your change in status from an employee
to a consultant to not constitute a termination of your continuous service for
purposes of the Company’s equity incentive plan (the “Equity Plan”).

As a result, the Options and RSUs will continue to vest in accordance with their
terms during your continuous service (provided that you remain in compliance
with the terms of this Agreement and the Confidential Information Agreement),
and vesting of the Options and RSUs will cease as of the earlier of either the
termination of your continuous service, or the termination of the Consulting
Period. You will be able to exercise any vested shares within the time period
provided in your operative agreements with the Company and the Equity Plan. Note
that your Options may cease to qualify as an “incentive stock option” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”) to the extent such stock option previously would have qualified as an
“incentive stock option.” You are advised to seek tax guidance from your
personal tax advisors with regard to the potential change in tax treatment of
the Options if you enter into this Agreement, as well as the other tax-related
implications of this Agreement.

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  (d) Independent Contractor Relationship. Your relationship with the Company
during the Consulting Period is that of an independent contractor, and nothing
in this Agreement is intended to, or should be construed to, create a
partnership, agency, joint venture or employment relationship. You will not be
entitled to any of the benefits which the Company may make available to its
employees, including, but not limited to, group health or life insurance,
profit-sharing or retirement benefits, other than your entitlement to continued
group health insurance coverage pursuant to COBRA due to your status as a former
employee.

 

  (e) Limitations on Authority. You will have no responsibilities or authority
as a consultant to the Company other than as provided above. You agree not to
represent or purport to represent the Company in any manner whatsoever to any
third party unless authorized by the Company, in writing, to do so.

 

  (f) Confidential Information and Inventions. You agree that the Proprietary
Information and Invention Assignment Agreement between you and the Company dated
June 9, 2003 (“Confidential Information Agreement,” a copy of which is attached
hereto as Exhibit A) shall continue to govern any Company information to which
you have access or which you develop, or inventions made by you while performing
services during the Consulting Period.

 

  (g) Other Work Activities. Throughout the Consulting Period, you do not retain
the right to engage in outside employment, consulting, or other work
relationships with any semiconductor company in addition to your work for the
Company. In order to protect the trade secrets and confidential and proprietary
information of the Company, you agree that, during the Consulting Period, you
will notify the Company, in writing, before you obtain competitive employment,
perform competitive work for any business entity, or engage in any other work
activity that is competitive with the Company. If you engage in such competitive
activity without the Company’s express written consent, or otherwise materially
breach this Agreement, the Company’s obligation to pay you Consulting Fees under
Section 4 will cease immediately.

 

5. Other Compensation or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive from the Company any additional
compensation, including but not limited to salary or bonuses, severance or
employee benefits on or after the Separation Date.

 

6. Restrictions. In exchange for the Consulting Agreement, and other
consideration provided to you by this Agreement that you are not otherwise
entitled to receive, and to protect the Company’s interests in its trade
secrets, its valuable confidential business information, and its goodwill, which
you agree are legitimate protectable interests, you agree that:

 

  (a) During the Consulting Period and for a period of one (1) year following
the Consulting Period, you will not, either directly or indirectly, solicit or
attempt to solicit any employee, independent contractor, or consultant of the
Company to terminate his, her or its relationship with the Company in order to
become an employee, consultant, or independent contractor to or for any other
person or entity.

 

  (b) During the Consulting Period and for a period of six (6) months following
the Consulting Period, you will not, directly or indirectly, compete with the
Company by working for, as an employee, consultant, advisor, independent
contractor, or in any other capacity, any person or entity engaged in the
design, development, manufacture, marketing, or sale of any product or component
thereof, product line, or service that has been or is being designed, developed,
manufactured, marketed, or sold by anyone other than the Company and is: (i) of
the same general type as, (ii) performs similar functions as, (iii) is used for
the same purpose as a product or service that the Company designed, developed,
manufactured, marketed, or sold during your employment with the Company as; or
(iv) competes for the same customers and/or patients with, any product or
service that the Company markets or developed to market during your employment
with the Company.

 

7. Other Compensation or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive any additional compensation,
benefits or severance after the Separation Date, with the exception of any
vested right you may have under the express terms of a written ERISA-qualified
benefit plan (e.g., a 401(k) account).

 

8. Expense Reimbursements. You agree that, within ten (10) days after the
Separation Date, you will submit your final documented expense reimbursement
statement reflecting all business expenses you incurred through the Separation
Date, if any, for which you seek reimbursement. The Company will reimburse you
for these expenses pursuant to its regular business practice.

 

9.

Return of Company Property. By the Separation Date, you agree to return to the
Company all of Company’s property, equipment, and documents, together with all
copies thereof, and any other material containing or disclosing any Inventions,
Third Party Information or Confidential Information of Company and certify in
writing that you have fully complied with the foregoing obligation. You agree
that you will not copy, delete, or alter any information contained upon your
Company computer before you return it to Company. If you have used any personal
computer, server, or email system to receive, store, review, prepare, or

 

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  transmit any Company information, you agree to provide the Company with a copy
of all such information then permanently delete and expunge such information
from those systems. You also agree to provide the Company access to your system
as reasonably requested to verify that the necessary copying and/or deletion is
completed. You agree to cooperate with the Company in attending an exit
interview and completing and signing the Company’s termination certification. If
you discover after the Separation Date that you have retained any Company
proprietary or confidential information, you agree, immediately upon discovery,
to contact the Company and make arrangements for returning the information. The
Consulting Fees and other consideration provided to you under this Agreement are
conditioned on the return of all Company property and information, as described
herein. Notwithstanding the foregoing, you may retain such documents, property,
and materials during the Consulting Period only to the extent approved in
writing by the Company and you shall return them immediately upon written
request from the Company (and no later than upon termination or expiration of
the Consulting Period).

 

10. Confidential Information Obligations. You acknowledge your continuing
obligations under your Confidential Information Agreement, which prohibits the
use or disclosure of any confidential or proprietary information of the Company
and solicitation of Company employees.

 

11. Nondisparagement. You agree not to disparage the Company, and its officers,
directors, employees, agents, shareholders, parents, subsidiaries, or affiliates
in any manner likely to be harmful to them or their business, business
reputation or personal reputation; provided, however, that statements which are
made in good faith in response to any question, inquiry or request for
information required by legal process shall not violate this paragraph. The
Company and its officers, directors and vice-president level or higher
executives agree not to disparage you in any manner likely to be harmful to you
or your business reputation or personal reputation; provided, however, that
statements which are made in good faith in response to any question, inquiry or
request for information required by legal process shall not violate this
paragraph.

 

12. Release of Claims.

 

  (a) General Release. In exchange for the Consulting Period, and other
consideration provided to you by this Agreement that you are not otherwise
entitled to receive, you hereby generally and completely release Cavium, TriNet
HR Corporation, and their current and former directors, officers, employees,
shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring prior to your
signing this Agreement.

 

  (b) Scope. This general release includes, but is not limited to: (1) all
claims arising out of or in any way related to your employment with the Company,
or the termination of that employment; (2) all claims related to your
compensation or benefits from the Company, including salary, bonuses,
commissions, vacation pay, expense reimbursements, severance pay, fringe
benefits, stock, stock options, or any other ownership interests in the Company;
(3) all claims for breach of contract, wrongful termination, and breach of the
implied covenant of good faith and fair dealing; (4) all tort claims, including
claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (5) all federal, state, and local statutory claims, including
claims for discrimination, harassment, retaliation, attorneys’ fees, or other
claims arising under the federal Civil Rights Act of 1964 (as amended), the
federal Americans with Disabilities Act of 1990, the federal Age Discrimination
in Employment Act of 1967 (as amended) (“ADEA”), California Fair Employment and
Housing Act (Cal. Gov’t Code §12900 et seq.); California Family Rights Act (Cal.
Gov. Code §12945.2); and California WARN Act (Cal. Lab. Code §1400 et seq.)

 

  (c) ADEA Waiver. You acknowledge that you are knowingly and voluntarily
waiving and releasing any rights you may have under the ADEA (“ADEA Waiver”).
You also acknowledge that the consideration given for the ADEA Waiver is in
addition to anything of value to which you were already entitled. You further
acknowledge that you have been advised by this writing, as required by the ADEA,
that: (a) your ADEA Waiver does not apply to any rights or claims that arise
after the date you sign this Agreement; (b) you should consult with an attorney
prior to signing this Agreement; (c) you have twenty-one (21) days to consider
this Agreement (although you may choose to voluntarily sign it sooner); (d) you
have seven (7) days following the date you sign this Agreement to revoke the
ADEA Waiver, with such revocation to be effective only if you deliver written
notice of revocation to the Company within the seven (7) day period; and (e) the
ADEA Waiver will not be effective until the date upon which the revocation
period has expired unexercised, which will be the eighth day after you sign this
Agreement (“Effective Date”). Nevertheless, your general release of claims,
except for the ADEA Waiver, is effective immediately, and not revocable.

 

  (d) Section 1542 Waiver. YOU UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS. In giving the release herein, which includes
claims which may be unknown to you at present, you acknowledge that you have
read and understand Section 1542 of the California Civil Code, which reads as
follows:

 

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A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.

You hereby expressly waive and relinquish all rights and benefits under that
section and any law of any other jurisdiction of similar effect with respect to
your release of any unknown or unsuspected claims herein.

 

  (e) Exceptions. Notwithstanding the foregoing, you are not releasing any claim
that cannot be waived under applicable state or federal law. You are not
releasing any rights that you have to be indemnified (including any right to
reimbursement of expenses) arising under applicable law, the certificate of
incorporation or by-laws (or similar constituent documents of the Company), any
indemnification agreement between you and the Company, or any directors’ and
officers’ liability insurance policy of the Company. Nothing in this Agreement
shall prevent you from filing, cooperating with, or participating in any
proceeding before the Equal Employment Opportunity Commission, the Department of
Labor, or the California Department of Fair Employment and Housing, except that
you acknowledge and agree that you shall not recover any monetary benefits in
connection with any such claim, charge or proceeding with regard to any claim
released herein. Nothing in this Agreement shall prevent you from challenging
the validity of the release in a legal or administrative proceeding.

 

13. Representations. You hereby represent that you have been paid all
compensation owed and for all hours worked, have received all the leave and
leave benefits and protections for which you are eligible, pursuant to the
Family and Medical Leave Act or otherwise, and have not suffered any on-the-job
injury for which you have not already filed a claim.

 

14. Arbitration. To ensure the rapid and economical resolution of disputes that
may arise in connection with your employment with the Company, you and the
Company agree that any and all disputes, claims, or causes of action, in law or
equity, arising from or relating to the enforcement or interpretation of this
Agreement, your employment or the termination of your employment (collectively,
“Claims”), shall be resolved, to the fullest extent permitted by law, by final,
binding, and (to the extent permitted by law) confidential arbitration in San
Jose, California, conducted by JAMS, Inc. (“JAMS”), or its successors, under its
then current rules for employment disputes. The arbitrator shall: (a) have the
authority to compel adequate discovery for the resolution of all Claims and to
award such relief as would otherwise be permitted by law; and (b) issue a
written arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. The Company shall pay all
administrative fees in excess of the amount of those administrative fees you
would have been required to pay if the Claims were decided in a court of law.
You and the Company both acknowledge that, by agreeing to this arbitration
procedure, both you and the Company waive the right to resolve any Claims
through a trial by jury or judge or by administrative proceeding. Nothing in
this Agreement is intended to prevent either you or the Company from obtaining
injunctive relief in court to prevent irreparable harm pending the conclusion of
any such arbitration.

 

15. Successors and Assigns. This Agreement will bind the heirs, personal
representatives, successors, assigns, executors and administrators of each
party, and will inure to the benefit of each party, its heirs, successors and
assigns.

 

16. Applicable Law. This Agreement will be deemed to have been entered into and
will be construed and enforced in accordance with the laws of the State of
California as applied to contracts made and to be performed entirely within
California.

 

17. Severability. If a court of competent jurisdiction determines that any term
or provision of this Agreement is invalid or unenforceable, in whole or in part,
then the remaining terms and provisions hereof will be unimpaired. The court or
arbitrator will then have the authority to modify or replace the invalid or
unenforceable term or provision with a valid and enforceable term or provision
that most accurately represents the parties’ intention with respect to the
invalid or unenforceable term or provision.

 

18. Counterparts. This Agreement may be executed in two counterparts, each of
which will be deemed an original, all of which together constitutes one and the
same instrument. Facsimile signatures and signatures transmitted via .pdf file
are as effective as original signatures.

 

19. Entire Agreement. This Agreement, including all exhibits, constitutes the
complete, final and exclusive embodiment of the entire agreement between you and
the Company with regard to the subject matter hereof. It supersedes any and all
other agreements entered into by and between you and the Company. It is entered
into without reliance on any promise or representation, written or oral, other
than those expressly contained herein. It may not be modified except in a
writing signed by you and a duly authorized officer of the Company. Each party
has carefully read this Agreement, has been afforded the opportunity to be
advised of its meaning and consequences by his or its respective attorneys, and
signed the same of his or its own free will.

 

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If this Agreement is acceptable to you, please sign below and return the
original to me no later than January 4, 2013.

I wish you good luck in your future endeavors.

Sincerely,

 

Cavium, Inc. By:   /s/ Syed Ali   Syed Ali   President and CEO

 

Agreed:   /s/ Rajiv Khemani   Rajiv Khemani

Date: December 14, 2012

Exhibit A

PROPRIETARY INFORMATION AND INVENTION ASSIGNMENT AGREEMENT

 

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