Exhibit 10.22
SETTLEMENT AGREEMENT AND
RELEASE
This Settlement Agreement and
Release (“Agreement”) is made by and between
Neomagic (the “Company”), and Prakash Agarwal
(“Employee”) dated May 31, 2005.
WHEREAS, Employee is employed by the
Company;
WHEREAS, the Company and Employee
have entered into an Employment, Confidential Information,
Invention Assignment and Arbitration Agreement (the
“Confidentiality Agreement”);
WHEREAS, the Company and Employee
have mutually agreed to terminate the employment relationship
including the Confidentiality Agreement and to release each other
from any claims arising from or related to the employment
relationship effective May 31, 2005 (the “Termination
Date”).
NOW THEREFORE, in consideration of
the mutual promises made herein, the Company and Employee
(collectively referred to as “the Parties”) hereby
agree as follows:
1. Consideration .
(a) Provided that Employee does not
revoke this Agreement prior to Effective Date, the Company agrees
to pay Employee continuing payments of severance pay at a bi-weekly
rate of $12,115.38 ($315,000 annualized), less applicable
withholding in accordance with the Company’s standard payroll
practices, through July 29, 2005. Should Employee accept other full
time employment prior to July 29, 2005, the Company will terminate
the payment of severance under this Section 1, effective the date
of acceptance of such new full time employment.
(b) Stock Options . The
Parties agree that Employee’s outstanding options to purchase
1,600,000 shares of the Company’s common stock, which
includes options to purchase 1,000,000 shares at $3.22 per share
and options to purchase 600,000 shares at $3.20 per share, will be
cancelled and forfeited to the Company and Employee will have no
further rights with respect to such options or the shares
underlying such options. The Company will accelerate the vesting of
Employee’s remaining outstanding options to purchase
1,700,000 shares at various exercise prices less than $3.00 per
share and these options will be exercisable as soon as practicable
following the Effective Date and will remain outstanding and
exercisable until April 30, 2006 at which point all unexercised
options will expire.
(c) Benefits . The Company
agrees to pay Employee a lump sum payment of $7,875, less
applicable withholding taxes, upon the Effective Date. This payment
represents $1,575 per month for five months of COBRA health care
coverage. Employee acknowledges that it is his sole responsibility
to timely elect such coverage. Employee life insurance and
disability benefits terminated on April 22, 2005. Cashed out
vacation accrual was paid on April 22, 2005 and there will be no
additional accrual for sick or vacation after said date.
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2. Confidential Information .
Employee shall continue to maintain the confidentiality of all
confidential and proprietary information of the Company and shall
continue to comply with the terms and conditions of the
Confidentiality Agreement between Employee and the Company. The
Company acknowledges that Employee has returned all Company
property and confidential information that needs to be
returned.
3. Payment of Salary .
Employee acknowledges and represents that the Company has paid all
salary, wages, bonuses, accrued vacation, commissions and any and
all other benefits due to Employee once the above noted payments
and benefits are received.
4. Release of Claims .
Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee
by the Company. Employee, on his behalf and his executors, heirs,
family members and assigns, hereby fully and forever releases the
Company and its officers, directors, employees, investors,
shareholders, administrators, affiliates, divisions, subsidiaries,
predecessor and successor corporations, and assigns, from, and
agrees not to sue concerning, any claim, duty, obligation or cause
of action relating to any matters of any kind, whether presently
known or unknown, suspected or unsuspected, that he may possess
arising from any omissions, acts or facts that have occurred up
until and including the Termination Date, without
limitation,
(a) any and all claims relating to
or arising from Employee’s employment relationship with the
Company and the termination of that relationship;
(b) any and all claims relating to,
or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without
limitation, any claims for fraud, misrepresentation, breach of
fiduciary duty, breach of duty under applicable state corporate
law, and securities fraud under any state or federal
law;
(c) any and all claims for wrongful
discharge of employment; termination in violation of public policy;
discrimination; breach of contract, both express and implied;
breach of a covenant of good faith and fair dealing, both express
and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; negligent or intentional
misrepresentation; negligent or intentional interference with
contract or prospective economic advantage; unfair business
practices; defamation; libel; slander; negligence; personal injury;
assault; battery; invasion of privacy; false imprisonment; and
conversion;
(d) any and all claims for violation
of any federal, state or municipal statute, including, but not
limited to, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Age Discrimination in Employment Act of
1967, the Americans
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with Disabilities Act of 1990, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974,
The Worker Adjustment and Retraining Notification Act, Older
Workers Benefit Protection Act; the California Fair Employment and
Housing Act, and Labor Code section 201, et seq . and
section 970, et seq .;
(e) any and all claims for violation
of the federal, or any state, constitution;
(f) any and all claims arising out
of any other laws and regulations relating to employment or
employment discrimination; and
(g) any and all claims for
attorneys’ fees and costs.
The Company and Employee agree that the
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