8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): September 26, 2013

Applied Micro Circuits Corporation

(Exact Name of Registrant as Specified in Charter)

DELAWARE	000-23193	94-2586591
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

215 Moffett Park Drive, Sunnyvale, California 94089

(Address of Principal Executive Offices)

(408) 542-8600

(Registrants telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 26, 2013, Applied Micro Circuits Corporation (“AppliedMicro”) entered into an employment offer letter agreement with Douglas T. Ahrens, pursuant to which Mr. Ahrens will serve as vice president and chief financial officer of AppliedMicro. In that capacity he will also serve as the principal financial officer and chief accounting officer of AppliedMicro. Mr. Ahrens’ officer appointment and employment are expected to commence on or before October 21, 2013.

Mr. Ahrens, age 46, most recently served as vice president of finance at Maxim Integrated, a semiconductor company, which he joined in 2001 as director, business unit finance. Before Maxim Integrated, Mr. Ahrens spent six years with Intel Corporation, a semiconductor company, in a number of financial roles, ultimately serving as worldwide revenue finance manager in the sales and marketing group. Mr. Ahrens holds a Bachelor of Science degree in Mechanical Engineering from the University of California, San Diego, and a Master of Business Administration degree from the Harvard Business School.

In connection with and effective upon Mr. Ahrens’ appointment, Shiva Natarajan will step down as AppliedMicro’s interim chief financial officer, principal financial officer and chief accounting officer, but will continue to serve as AppliedMicro’s vice president and corporate controller.

Mr. Ahrens’ offer letter provides that Mr. Ahrens will be employed by AppliedMicro “at will” and contains the following additional terms:

(1) He will receive an annual base salary of $320,000;

(2) He will be eligible to receive annual incentive compensation, currently targeted at 30% of his base salary, pursuant to bonus performance criteria established by the Compensation Committee of the Board of Directors;

(3) He will receive a grant of 100,000 restricted stock units, or RSUs, vesting over four years subject to his continuous employment, with 25% of the shares subject to the RSUs vesting on the first anniversary of the grant date and 6.25% vesting every three months thereafter. The terms of the RSUs will be governed by the AppliedMicro 2011 Equity Incentive Plan, attached as Annex A to the Definitive Proxy Statement for the 2011 Annual Meeting of Stockholders, filed with the SEC on July 5, 2011 (the “2011 Plan”), and a RSU grant notice to be approved by the Board of Directors;

(4) He will receive a grant of 100,000 shares of performance-based deferred market stock units, or MSUs. The terms of the MSUs will be governed by the 2011 Plan and a MSU grant notice to be approved by the Board of Directors;

(5) He will be eligible to participate in the AppliedMicro Executive Severance Benefit Plan, which is filed as Exhibit 10.67 to the Form 8-K filed with the SEC on September 25, 2013, and will be entitled to receive certain additional severance benefits as described in the offer letter;

(6) He will be eligible to participate in the AppliedMicro 2012 Employee Stock Purchase Plan, which is filed as Annex A to the Definitive Proxy Statement for the 2012 Annual Meeting of Stockholders, filed with SEC on July 5, 2012; and

(7) He will be eligible to participate in AppliedMicro’s comprehensive benefits programs.

A copy of the offer letter is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The foregoing description of the offer letter is subject to, and qualified in its entirety by, the offer letter.

Mr. Ahrens is also expected to enter into AppliedMicro’s standard officer indemnity agreement, a copy of the form of which is filed as Exhibit 10.2 hereto and incorporated herein by reference, which would require AppliedMicro to indemnify Mr. Ahrens, under the circumstances and to the extent provided for therein, against certain expenses and liabilities incurred by Mr. Ahrens by reason of his position as an officer of AppliedMicro.

A copy of the press release dated October 2, 2013, announcing Mr. Ahrens’ appointment as chief financial officer of AppliedMicro, is filed as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.	Description
10.1	Offer Letter Agreement, dated September 26, 2013, between Applied Micro Circuits Corporation and Douglas T. Ahrens.
10.2	Form of Indemnification Agreement between Applied Micro Circuits Corporation and each of its directors and officers.
99.1	Press Release issued on October 2, 2013.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	APPLIED MICRO CIRCUITS CORPORATION
Date: October 2, 2013	By:	/s/ L. William Caraccio
		L. William Caraccio
		Vice President and General Counsel

INDEX TO EXHIBITS

10.1	Offer Letter Agreement, dated September 26, 2013, between Applied Micro Circuits Corporation and Douglas T. Ahrens.
10.2	Form of Indemnification Agreement between Applied Micro Circuits Corporation and each of its directors and officers.
99.1	Press Release issued on October 2, 2013.

EX-10.1

Exhibit 10.1

September 23, 2013

Douglas Ahrens

[Address Redacted]

Dear Doug:

On behalf of Applied Micro Circuits Corporation (AppliedMicro), I am pleased to extend to you an offer of employment as Vice President, Chief Financial Officer and Chief Accounting Officer of AppliedMicro based in Sunnyvale, California. You will be reporting to Paramesh Gopi, President and Chief Executive Officer.

The following are the basic terms:

1. Your annualized base salary will be $320,000.00USD gross before withholding for taxes and deductions. You will be eligible to participate in the AppliedMicro Deferred Compensation Plan that allows you to defer certain elements of your compensation on a pre-tax basis in accordance with the terms and conditions of the plan.

2. You will be eligible for an annual bonus depending on AppliedMicro’s profitability and your individual performance as assessed by AppliedMicro’s Board of Directors (the Board) and currently targeted at 30% of your base salary. The terms of the bonus plan are subject to approval by the Board or the Compensation Committee of the Board on an annual basis.

3. Management will recommend to the Board that you receive 100,000 restricted stock units (RSUs), subject to and in accordance with the terms of AppliedMicro’s 2011 Equity Incentive Plan (the 2011 Plan) and a RSU agreement that you will enter into with AppliedMicro. The RSU grant will be made on the scheduled grant date in accordance with the granting policy based on your hire date (the Grant Date). 25,000 RSUs will vest on the first anniversary of the Grant Date and thereafter 6,250 RSUs will vest quarterly over three years (such that the entire grant will be vested by the fourth anniversary of the Grant Date), in each case subject to your continuing service to AppliedMicro. All RSUs offered and the RSU agreement are contingent upon final approval by the Board.

4. Management will recommend to the Board that you receive on the Grant Date 100,000 market stock units (MSUs), subject to and in accordance with the terms of the 2011 Plan and a MSU agreement that you will enter into with AppliedMicro. MSUs will vest at between 0% and 150% of the targeted performance goal, depending on company results, and vested MSUs will be scheduled for release at the rate of one-half at the end of two years and one-half at the end of three years following the Grant Date, in each case subject to your continuing service to AppliedMicro. All MSUs offered and the MSU agreement are contingent upon final approval by the Board.

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

6. You will be eligible for AppliedMicro’s executive medical, dental and life insurance benefits.

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7. AppliedMicro has a comprehensive benefits package that includes the AppliedMicro 401(k) Employee Savings & Retirement Plan (401(k) 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 a 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 401(k) Plan. In addition, you will be able to select an investment mix that meets your personal financial objectives from our 401(k) 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 your new hire orientation.

8. You and AppliedMicro will enter into a directors and officers indemnification agreement substantially similar to that used with AppliedMirco’s senior executive officers.

9. Your employment with AppliedMicro 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, AppliedMicro is free to conclude its employment relationship with you at any time, with or without cause.

10. Beginning your first day of employment, you must comply with the terms and conditions of AppliedMicro’s Employment Policies and Practices Guide, its Code of Business Conduct and Ethics, and all other AppliedMicro policies.

11. This offer and employment at AppliedMicro is contingent upon completion of a successful background investigation, and your execution of additional documents and agreements required by AppliedMicro, including our New Employee Inventions, Confidentiality and Trade Secrets Agreement, a copy of which is enclosed, which among other things contains a binding arbitration provision (the Inventions Agreement). This letter agreement and the Inventions Agreement cannot be modified except by an express written agreement signed by you and the Chief Executive Officer.

12. You will be eligible to participate in the AppliedMicro Executive Severance Benefit Plan (the Severence Plan). In addition, as a Participant, in the event of your Covered Termination that does not qualify as a Change of Control Termination thereunder (a) your initial RSU and MSU grants will each “forward-vest” six months, i.e., in the amounts of 12,500 RSUs and 20,000 MSUs, and (b) you will qualify for the maximum Cash Severence Benefits Period of six months regardless of your actual completed years of service with AppliedMicro, in each case subject to the other terms and conditions of the Severence Plan. Finally, for the avoidance of doubt, MSUs will be treated the same as RSUs for the purposes of the Severence Plan.

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

14. Your first day of employment will be a mutually agreed upon date, not later than October 21, 2013. Please bring documentation, which verifies your eligibility to work in the United States to the Human Resources department on your first day of employment.

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15. This offer expires if not accepted on or before September 27, 2013.

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

Doug, we look forward to you joining AppliedMicro. Please sign this letter and the Inventions 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 and returned these documents.

Sincerely yours,
/s/ Michael Major
Michael Major
VP, Human Resources
	ACKNOWLEDGED AND ACCEPTED:
Dated: September 26, 2013	/s/ Douglas Ahrens
	Douglas Ahrens
October 17, 2013
Start date

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EX-10.2

Exhibit 10.2

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (the “Agreement”) is entered into effective as of the      day of             , 201     by and between Applied Micro Circuits Corporation, a Delaware corporation (the “Corporation”), and                     (“Officer”) with reference to the following:

WHEREAS, Officer is                     of the Corporation and in such capacity is performing a valuable service for the Corporation;

WHEREAS, the Bylaws of the Corporation (the “Bylaws”) provide for the indemnification of the directors, officers, employees and agents of the Corporation to the maximum extent authorized by Section 145 of the General Corporation Law of the State of Delaware, as amended to date (the “State Statute”);

WHEREAS, such Bylaws and the State Statute specifically provide that they are not exclusive, and thereby contemplate that contracts may be entered into between the Corporation and its officers with respect to indemnification of such officers;

WHEREAS, recent developments with respect to the premium cost, terms and availability of directors’ and officers’ liability insurance and with respect to the application, amendment and enforcement of statutory and bylaw indemnification provisions generally have raised questions concerning the adequacy and reliability of the protection afforded to officers thereby:

WHEREAS, the foregoing questions have caused certain officers of the Corporation to reassess their continued service as officers of the Corporation; and

WHEREAS, in order to resolve such questions and thereby induce Officer to continue to serve as an officer of the Corporation, the Corporation has determined and agreed to enter in this contract with Officer;

NOW, THEREFORE, in consideration of Officer’s continued service as an officer of the Corporation after the date of this Agreement, the parties hereto agree as follows:

1. Indemnity of Officer. The Corporation hereby agrees to hold harmless and indemnify Officer to the full extent authorized or permitted by the provisions of the State Statute, or any amendment thereof or other statutory provisions authorizing or permitting such indemnification which is adopted after the date hereof.

2. Additional Indemnity. Subject only to the exclusions set forth in Section 3 hereof, the Corporation hereby further agrees to hold harmless and indemnify Officer against any and all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Officer in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including an action by or in the right of the Corporation) to which Officer is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Officer is, was or at any time becomes a director, officer, employee or agent of the Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee, agent or similar official of another corporation, partnership, joint venture, trust or other enterprise.

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3. Limitations on Additional Indemnity. No indemnity pursuant to Section 2 hereof shall be paid by the Corporation:

(a) except to the extent the aggregate of losses to be indemnified under Section 2 hereof exceed the amount of such losses for which the Officer is indemnified either pursuant to Section 1 hereof or pursuant to any directors’ and officer’s liability insurance purchased and maintained by the Corporation;

(b) in respect to any remuneration paid to Officer if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law;

(c) on account of Officer’s conduct which is finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful misconduct; or

(d) if a final decision by a Court having jurisdiction in the matter shall determine that such indemnification is not lawful.

4. Continuation of Indemnity. All agreements and obligations of the Corporation contained herein shall continue during the period Officer is a director, officer, employee, or agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee, agent or similar official of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Officer shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal or investigative, by reason of the fact that Officer was a director of the Corporation or serving in any other capacity referred to herein.

5. Notification and Defense of Claim. Promptly after receipt by Officer of notice of the commencement of any action, suit or proceeding, Officer will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement thereof; but the omission to so notify the Corporation will not relieve the Corporation from any liability which it may have to Officer under this Agreement. With respect to any such action, suit or proceeding as to which Officer notifies the Corporation of the commencement thereof:

(a) The Corporation will be entitled to participate therein at its own expense; and

(b) Except as otherwise provided below, to the extent that it may wish, the Corporation jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel satisfactory to Officer. After notice from the Corporation to Officer of its election so to assume the defense thereof, the Corporation will not be liable to Officer under this Agreement for any legal or other expense subsequently incurred by Officer in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. Officer shall have the right to employ his own counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the

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Corporation of its assumption of the defense thereof shall be at the expense of Officer unless (i) the employment of counsel by Officer has been authorized by the Corporation, (ii) Officer shall have reasonably concluded that there may be a conflict of interest between the Corporation and Officer in the conduct of the defense of such action, or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which Officer shall have made the conclusion provided for in (ii) above.

(c) The Corporation shall not be liable to indemnify Officer under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. The Corporation shall not settle any action or claim in any manner which would impose any cost, penalty or limitation on Officer without Officer’s written consent. Neither the Corporation nor Officer will unreasonably withhold their consent to any proposed settlement.

6. Repayment of Expenses. Officer agrees that Officer will reimburse the Corporation for all reasonable expenses paid by the Corporation in defending any civil or criminal action, suit or proceeding against Officer in the event and only to the extent that it shall be ultimately determined that Officer is not entitled to be indemnified by the Corporation for such expenses under the provisions of the State Statute, the Bylaws, this Agreement or otherwise.

7. Enforcement.

(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Corporation hereby in order to induce Officer to continue to serve as a director of the Corporation, and acknowledges that Officer is relying upon the Agreement in continuing in such capacity.

(b) In the event Officer is required to bring any action to enforce rights or to collect moneys due under this Agreement and is successful in such action, the Corporation shall reimburse Officer for all of Officer’s reasonable fees and expenses in bringing and pursuing such action.

8. Separability. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof.

9. Governing Law; Binding Effect; Amendment and Termination.

(a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware, as such laws are applied to contracts entered into and to be performed wholly within the State of Delaware.

(b) This Agreement shall be binding upon Officer and upon the Corporation, its successors and assigns, and shall inure to the benefit of Officer, his heirs, personal representatives and assigns and to the benefit of the Corporation, its successors and assigns.

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(c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on             , 201_, to be made effective as of the day and year first above written.

	APPLIED MICRO CIRCUITS CORPORATION
Attest:	By:
Secretary	President & Chief Executive Officer
	Officer

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EX-99.1

Exhibit 99.1

FOR ADDITIONAL INFORMATION:
Investor Relations Contact:	Media Contact:
Applied Micro Circuits Corporation Shiva Natarajan	Applied Micro Circuits Corporation Mike Major
Phone: (408) 542-8745	Phone: (408) 542-8831
E-Mail: snatarajan@apm.com	E-mail: mmajor@apm.com

Wednesday, October 2, 2013

Company Press Release

AppliedMicro Appoints Doug Ahrens as Chief Financial Officer

AppliedMicro’s Ahrens Previously with Maxim Integrated and Intel

Applied Micro Circuits Corporation (NASDAQ: AMCC), also known as AppliedMicro, today announced it has appointed semiconductor veteran Douglas T. Ahrens to serve as Vice President and Chief Financial Officer. Mr. Ahrens’ employment with AppliedMicro is scheduled to commence October 17, 2013.

Mr. Ahrens, age 46, most recently served as the Vice President of Finance at Maxim Integrated in San Jose, California. He joined Maxim in 2001 after spending six years at Intel Corporation.

“Doug’s wealth of experience and his conviction regarding our data center growth strategy made him the natural choice for the CFO role. We are excited to have Doug as part of our executive team,” said Dr. Paramesh Gopi, AppliedMicro’s President & CEO.

“It is rare to have the opportunity to join an established company that is poised for such potentially explosive growth,” said Mr. Ahrens, “I am excited to help AppliedMicro realize the full potential of its data center strategy.”

Mr. Ahrens joined Maxim Integrated in 2001 as Director, Business Unit Finance. He was promoted multiple times during his tenure at Maxim before assuming his role as the Vice President of Finance. Mr. Ahrens was responsible for company-wide financial planning and analysis and also drove key initiatives such as the creation of a strategic planning process for all functional groups at Maxim.

Before Maxim, Mr. Ahrens spent six years with Intel Corporation in a number of financial roles, ultimately serving as Worldwide Revenue Finance Manager in the Sales & Marketing Group.

Mr. Ahrens earned a Master of Business Administration degree from the Harvard Business School and a Bachelor of Science degree in Mechanical Engineering from the University of California, San Diego. He also holds an active professional license as a Certified Public Accountant.

About AppliedMicro

Applied Micro Circuits Corporation is a global leader in computing and connectivity solutions for next-generation cloud infrastructure and data centers. AppliedMicro delivers silicon solutions that dramatically lower total cost of ownership. Corporate headquarters are located in Sunnyvale, California. www.apm.com.

^© Copyright 2013. Applied Micro Circuits Corporation, AppliedMicro, X-Gene, Server on a Chip, and Cloud Server are trademarks or registered trademarks of Applied Micro Circuits Corporation. All other product or service names are the property of their respective owners.