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): January 6, 2016

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.)

4555 Great America Parkway, 6th Floor

Santa Clara, California 95054

(Address of Principal Executive Offices)

(408) 542-8600

(Registrants telephone number, including area code)

215 Moffett Park Drive

Sunnyvale, California 94089

(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 January 6, 2016, Applied Micro Circuits Corporation (“AppliedMicro”) entered into an employment offer letter agreement with Martin S. McDermut, pursuant to which Mr. McDermut 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. McDermut’s officer appointment and employment commenced on January 8, 2016.

Mr. McDermut, age 64, most recently served as senior vice president, finance and chief financial officer at Vitesse Semiconductor Corporation, a publicly traded semiconductor company, from August 2011 until April 2015, when the company was acquired by Microsemi Corporation. From 2007 to 2011, Mr. McDermut served as managing director and financial consultant at Avant Advisory Group, LLC, a management consulting firm based in Los Angeles and Santa Barbara, CA. He has also served as chief financial officer for publicly traded companies including Iris International Inc. and Superconductor Technologies Inc. Mr. McDermut holds a Bachelor of Arts degree in economics from the University of Southern California and a Master of Business Administration degree from the University of Chicago. He is a Certified Public Accountant.

In connection with and effective upon Mr. McDermut’s appointment, Karen Rogge has stepped down as AppliedMicro’s interim chief financial officer, principal financial officer and chief accounting officer.

Mr. McDermut’s offer letter provides that Mr. McDermut 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 70,000 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 2015 Annual Meeting of Stockholders, filed with the SEC on June 24, 2015 (the “2011 Plan”), and a RSU grant notice to be approved by the Board of Directors;

(4) He will receive a grant of 60,000 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 Exhibit 10.31 to the Form 8-K filed with SEC on August 15, 2014; 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. McDermut 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 to the Form 8-K filed with SEC on October 2, 2013 and incorporated herein by reference, which would require AppliedMicro to indemnify Mr. McDermut, under the circumstances and to the extent provided for therein, against certain expenses and liabilities incurred by Mr. McDermut by reason of his position as an officer of AppliedMicro.

A copy of the press release dated January 11, 2016, announcing Mr. McDermut’s 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.

10.1     Offer Letter, dated January 6, 2016, between Applied Micro Circuits Corporation and Martin S. McDermut.

99.1     Press Release issued on January 11, 2016.

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: January 11, 2016	By:	/s/ L. William Caraccio
		L. William Caraccio
		Vice President, General Counsel and Secretary

INDEX TO EXHIBITS

10.1     Offer Letter, dated January 6, 2016, between Applied Micro Circuits Corporation and Martin S. McDermut.

99.1     Press Release issued on January 11, 2016.

EX-10.1

Exhibit 10.1

January 6, 2016

Martin S. McDermut

[Address Redacted]

Dear Marty:

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 Principal Financial and Accounting Officer of AppliedMicro, a regular full-time position based in Santa Clara, 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 70,000 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). 17,500 RSUs will vest on the first anniversary of the Grant Date and thereafter 4,375 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 60,000 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.

    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 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 8,750 RSUs and 12,500 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 January 8, 2016. Please bring documentation, which verifies your eligibility to work in the United States to the Human Resources department on your first day of employment. Other elements of your background investigation have been completed.

    15.    This offer expires if not accepted on or before January 7, 2016. If you have any questions about this offer, please contact me at (408) 542-8831.

Marty, 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 BY / DATE:

/s/ Martin S. McDermut

EX-99.1

Exhibit 99.1

AppliedMicro Appoints Martin S. McDermut as Chief Financial Officer

SANTA CLARA, Calif., January 11, 2016 -- Applied Micro Circuits Corporation (Nasdaq:AMCC) ("AppliedMicro") today announced the appointment of Martin S. McDermut as Vice President and Chief Financial Officer. Mr. McDermut's employment with AppliedMicro commenced January 8, 2016. Mr. McDermut replaces Karen Rogge who served as interim chief financial officer since August 2015.

Mr. McDermut was most recently senior vice president, finance and chief financial officer of Vitesse Semiconductor Corporation from August 2011 until April 2015, when the company was acquired by Microsemi Corporation.

“Marty is a seasoned executive with over 30 years of financial leadership experience, a wealth of strategic and operational expertise, and deep knowledge of the semiconductor industry. We are thrilled to have him join our executive team,” said Dr. Paramesh Gopi, AppliedMicro's President & CEO.

“I am excited to join AppliedMicro at this important time in the company’s transformation,” said Mr. McDermut. “AppliedMicro is the clear leader in the ARM® server and high-speed connectivity markets and we are highly focused on maximizing value for our shareholders.”

Mr. McDermut is a Certified Public Accountant. He holds a B.A. in Economics from the University of Southern California and an M.B.A. in Finance and Accounting from the University of Chicago. He was previously chief financial officer of Vitesse Semiconductor Corporation. He has also served as chief financial officer for publicly traded companies including Iris International Inc. and Superconductor Technologies Inc. He was a partner at the public accounting firm of Coopers & Lybrand (now known as PricewaterhouseCoopers LLP), where he was the practice leader of the firm’s Los Angeles Entrepreneurial Advisory Services group.

“I would also like to extend my gratitude to interim CFO Karen Rogge, who stepped in to successfully manage Applied Micro’s finances as we conducted our search for a permanent CFO,” said Dr. Gopi. “We appreciate Karen’s contributions and wish her well in her future endeavors.”

About AppliedMicro

Applied Micro Circuits Corporation is a global leader in silicon solutions for next-generation cloud infrastructure and data centers, as well as connectivity products for edge, metro and long-haul communications equipment. Corporate headquarters are located in Santa Clara, California. www.apm.com.

© Copyright 2016, Applied Micro Circuits Corporation.  AppliedMicro, X-Gene, X-Weave, Server on a Chip, Cloud Processor, Cloud Server, and HeliX are trademarks or registered trademarks of Applied Micro Circuits Corporation. All other product or service names are the property of their respective owners. 

CONTACT:    

Applied Micro Circuits Corporation

Investor Relations

Phone: (408) 542-8353

E-mail: ir@apm.com