Exhibit 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of
June 11, 2008 (the “Effective Date”), by and
between NEOMAGIC CORPORATION, a Delaware corporation (the
“Company”), and Pierre-Yves Couteau
(“Employee”).
RECITALS
A. The Company desires to continue
to retain the services of Employee, and Employee desires to
continue to be employed by the Company, upon the terms and
conditions set forth in this Agreement.
B. Employee acknowledges that he has
had an opportunity to consider this Agreement and consult with
independent advisors of his choosing with regard to the terms of
this Agreement, and enters this Agreement voluntarily and with a
full understanding of its terms.
AGREEMENT
NOW, THEREFORE, in consideration of
the promises and the mutual covenants hereinafter set forth, the
Company and Employee agree as follows:
1. Duties and Scope of
Employment . As of the Effective Date, Employee will continue
to serve as the Company’s Vice President of Marketing.
Employee will be responsible for coordinating and supervising all
functional activities of the marketing department of the Company,
as directed by the Chief Executive Officer of the Company, and
shall report to the Chief Executive Officer. Employee shall devote
Employee’s full time and attention, with undivided loyalty,
to the business and affairs of the Company during the term of this
Agreement. Employee shall not engage in any other business or job
activity during the term of this Agreement without the Chief
Executive Officer’s prior written consent. Employee shall in
good faith perform those duties and functions as are required by
his position and as are determined and assigned to him from time to
time by the Chief Executive Officer.
2. At-Will Employment . The
parties agree that Employee’s employment with the Company
will be “at-will” employment and may be terminated at
any time with or without cause or notice. Employee understands and
agrees that neither his job performance nor promotions,
commendations, bonuses or the like from the Company give rise to or
in any way serve as the basis for modification, amendment, or
extension, by implication or otherwise, of his employment with the
Company. However, as described in this Agreement, Employee may be
entitled to notice and/or severance benefits depending upon the
circumstances of Employee’s termination of
employment.
3. Compensation . Employee
shall receive compensation from the Company for his services
hereunder determined as follows:
(a) Base Salary. The Company
agrees to pay to Employee a base salary of two hundred fifteen
thousand dollars ($215,000.00) per year (“Base
Salary”), payable in accordance with the Company’s then
current payroll practices and subject to the usual, required
withholding. Employee’s salary will be subject to review and
adjustments will be made based upon the Company’s standard
practices.
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(b) Bonuses. Employee shall
be eligible to receive bonuses in such amounts and based upon
performance criteria as the Compensation Committee of the Board
(the “Committee”) determines in its discretion
following consultation with Employee.
(c) Equity . Employee will be
eligible to receive awards of stock options, restricted stock or
other equity awards pursuant to any plans or arrangements the
Company may have in effect from time to time. The Committee will
determine in its discretion whether Employee will be granted any
such equity awards and the terms of any such award in accordance
with the terms of any applicable plan or arrangement that may be in
effect from time to time.
4. Employee Benefits . The
Company agrees to provide Employee with the following
benefits:
(a) Vacation . Employee shall
be entitled to accrue and use paid vacation time and Company
holidays in accordance with the Company’s policies, with the
timing and duration of specific vacations mutually and reasonably
agreed to by the parties hereto.
(b) Additional Benefits . In
addition to the foregoing, Employee shall be eligible to
participate in benefit plans, programs, and policies provided to
other Company employees of similar status, on the terms and
conditions existing, and as may be changed from time to time, for
participation in those plans, programs, and policies. The Company
reserves the right to cancel or change the benefit plans and
programs it offers to its employees at any time.
5. Business Expense
Reimbursement . Employee shall be authorized to incur
reasonable business expenses in performing his duties under this
Agreement, including, but not limited to, expenses for
entertainment, long distance telephone calls, mobile phone use,
lodging, meals, air fare, transportation and travel. The Company
will promptly reimburse Employee for all such reasonable expenses
upon presentation by Employee of an itemized account or other
appropriate documentation of such expenses, in accordance with the
Company’s policies.
6. Termination . Either the
Company or Employee may terminate Employee’s employment in
accordance with the provisions of this Section 6. If
Employee’s employment terminates for any reason, then the
Company will pay Employee all earned or accrued but unpaid
vacation, expense reimbursements, wages, bonuses, and other
benefits due to Employee under applicable law and any
Company-provided plans, policies, and arrangements as then in
effect.
(a) Termination by the
Company . Employee’s employment with the Company may be
terminated by the Company for any reason or no reason, with or
without Cause or justification, subject to the
following:
(i) In the event that
Employee’s employment with the Company is terminated by the
Company for Cause, then (A) all vesting will terminate
immediately with respect to Employee’s outstanding equity
awards, (B) all payments of compensation by the Company to
Employee hereunder will terminate immediately (except as to amounts
already earned or accrued), and (C) Employee will only be
eligible for severance benefits in accordance with the
Company’s established policies, if any, as then in
effect.
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(ii) In the event
Employee’s employment with the Company is terminated by the
Company for any reason other than a reason set forth in
Section 6(a)(i) above, such termination will be effective upon
sixty (60) days’ notice to Employee, and, subject to
Sections 7 and 9, Employee will be entitled to: (A) a lump sum
payment in an amount equal to six (6) months of
Employee’s Base Salary (provided, however, that such payment
shall not be made if Employee terminates due to death or
Disability), (B) reimbursement of premiums for coverage for
Employee and Employee’s eligible dependents under the
Company’s Benefit Plans for twelve (12) months following
such termination, and (C) Employee may exercise all vested and
outstanding stock options and stock appreciation rights granted by
the Company to Employee until the earliest of:
(a) six (6) months from the effective date of
Employee’s termination, (b) the latest date the stock
option or stock appreciation right could have expired by its
original terms under any circumstances, or (c) the
tenth (10 th ) anniversary of the original
date of grant of the stock option or stock appreciation
right.
(b) Termination by Employee .
Employee may terminate his employment with the Company for any
reason or no reason, with or without cause or justification,
subject to the following:
(i) If
Employee’s employment with the Company is terminated by
Employee for any reason other than a reason set forth in
Section 6(b)(ii), then (A) all vesting will terminate
immediately with respect to Employee’s outstanding equity
awards, (B) all payments of compensation by the Company to
Employee hereunder will terminate immediately (except as to amounts
already earned or accrued), and (C) Employee will only be
eligible for severance benefits in accordance with the
Company’s established policies, if any, as then in effect. If
the Employee gives at least sixty (60) days’ prior
written notice of termination of his employment with the Company
under this Section 6(b)(i), then, notwithstanding
Section 6(b)(i)(A), Employee shall receive acceleration of
six (6) months vesting of all outstanding stock options and
stock appreciation rights granted by the Company to the Employee,
such acceleration effective as of the 60 th day after Employee has delivered
such written notice of termination to the Company.
(ii) In the event Employee resigns
from his employment with the Company for Good Reason, or due to
Employee’s death or Disability, then, subject to
Section 7, Employee will become entitled to the severance
payments and benefits set forth in
Section 6(a)(ii).
(c) Change in Control
Termination . In the event Employee’s employment is
terminated by the Company or its successors, if any, without Cause
or Employee terminates his employment with Good Reason in the 12
months following, or in connection with, a Change in Control,
including, but not limited to, any such termination within 60 days
prior to such Change in Control, then in lieu of any severance
benefits pursuant to Sections 6(a)(ii) or (b)(ii), Employee shall
be entitled to: (A) a lump sum payment in an amount equal to
twelve (12) months of Employee’s Base Salary,
(B) reimbursement of premiums for coverage for Employee and
Employee’s eligible dependents under the Company’s
Benefit Plans for twelve (12) months
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following such
termination, (C) immediate vesting of all outstanding options,
stock appreciation rights or other similar rights to acquire
Company common stock that are not otherwise vested as of such date
shall immediately vest in full, and (D) Employee may exercise
all vested and outstanding stock options and stock appreciation
rights (including stock options and stock appreciation rights that
vest as a result of this Agreement) granted by the Company to
Employee until the earliest of: (a) six (6) months from
the effective date of Employee’s termination, (b) the
latest date the stock option or stock appreciation right could have
expired by its original terms under any circumstances, or
(c) the tenth (10 th ) anniversary of the
original date of grant of the stock option or stock appreciation
right.
(d) Term . Unless earlier
terminated, this Agreement shall terminate on June 30, 2010,
provided , however , that if the effective date of a
Change of Control occurs after June 30, 2009, this Agreement
shall automatically extend until the date that is 12 months after
the effective date of the Change of Control.
7. Conditions to Receipt of
Severance; No Duty to Mitigate .
(a) Separation Agreement and
Release of Claims . The receipt of any severance pursuant to
Sections 6(a)(ii), (b)(ii), or (c) will be subject to Employee
signing and not revoking a Separation Agreement and Release of
Claims, the form of which is attached as Exhibit A of this
Agreement. The parties agree to use the Exhibit A form of
agreement, and that no additional terms, separation agreements,
and/or releases will be required. No severance pursuant to such
Section will be paid or provided until the Separation Agreement and
Release of Claims, attached as Exhibit A, becomes
effective.
(b) No Duty to Mitigate .
Employee will not be required to mitigate the amount of any payment
contemplated by this Agreement, nor will any earnings that Employee
may receive from any other source reduce any such
payment.
8. Other Agreements
.
(a) Confidentiality
Agreement. Employee will execute the Company’s standard
Employment, Confidential Information, Invention Assignment and
Arbitration Agreement and agrees to abide by its terms.
(b) Indemnification
Agreement. Employee will execute and become a party to the
Company’s standard form Indemnification Agreement, in the
same form of such agreement as to which the Company is a party with
its senior executive officers and members of its Board.
9. Section 409A
.
(a) Distributions. Notwithstanding anything
to the contrary in this Agreement, if Employee is a
“specified employee” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the final regulations and any guidance
promulgated thereunder (“Section 409A”) at the time of
Employee’s termination (other than due to death), and the
severance payable to Employee, if any, pursuant to this Agreement,
when considered together with any other severance payments or
separation benefits which may be considered deferred compensation
under Section 409A (together, the “Deferred
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Compensation Separation
Benefits”) will not and could not under any circumstances,
regardless of when such termination occurs, be paid in full by
March 15 of the year following Employee’s termination,
then only that portion of the Deferred Compensation Separation
Benefits which do not exceed the Section 409A Limit (as
defined below) may be made within the first six (6) months
following Employee’s termination of employment in accordance
with the payment schedule applicable to each payment or benefit.
For these purposes, each severance payment is hereby designated as
a separate payment and will not collectively be treated as a single
payment. Any portion of the Deferred Compensation Separation
Benefits in excess of the Section 409A Limit shall accrue and,
to the extent such portion of the Deferred Compensation Separation
Benefits would otherwise have been payable within the first six
(6) months following Employee’s termination of
employment, will become payable on the first payroll date that
occurs on or after the date six (6) months and one
(1) day following the date of Employee’s termination of
employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if Employee dies following his
termination but prior to the six (6) month anniversary of his
termination, then any payments delayed in accordance with this
paragraph will be payable in a lump sum as soon as administratively
practicable after the date of Employee’s death and all other
Deferred Compensation Separation Benefits will be payable in
accordance with the payment schedule applicable to each payment or
benefit.
(b) Amendment . This provision is intended to
comply with the requirements of Section 409A so that none of
the severance payments and benefits to be provided hereunder will
be subject to the additional tax imposed under Section 409A,
and any ambiguities herein will be interpreted to so comply. The
Company and the Employee agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable
actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to
actual payment to the Employee under Section 409A.
10. Definitions .
(a) Benefit Plans . For
purposes of this Agreement, “Benefit Plans” means
plans, policies or arrangements that the Company sponsors (or
participates in) and that immediately prior to Employee’s
termination of employment provide Employee and/or Employee’s
eligible dependents with medical, dental, and/or vision benefits.
Benefit Plans do not include any other type of benefit (including,
but not by way of limitation, disability, life insurance or
retirement benefits). A requirement that the Company provide
Employee and Employee’s eligible dependents with coverage
under the Benefit Plans will not be satisfied unless the coverage
is no less favorable than that provided to senior executives of the
Company at any applicable time during the period Employee is
entitled to receive severance pursuant to Section 6. The
Company may, at its option, satisfy any requirement that the
Company provide coverage under any Benefit Plan by
(i) reimbursing Employee’s premiums under Title X
of the Consolidated Budget Reconciliation Act of 1985, as amended
(“COBRA”) after Employee has properly elected
continuation coverage under COBRA (in which case Employee will be
solely responsible for electing such coverage for his eligible
dependents), or (ii) providing coverage under a separate plan
or plans providing coverage that is no less favorable or by paying
Employee a lump sum payment which is, on an after-tax basis,
sufficient to provide Employee and Employee’s eligible
dependents with equivalent coverage under a third party plan that
is reasonably available to Employee and Employee’s eligible
dependents.
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(b) Cause . For purposes of
this Agreement, “Cause” means (i) the willful
failure by Employee to substantially perform Employee’s
material duties under this Agreement other than a failure resulting
from the Employee’s death or Disability,
(ii) Employee’s conviction of or plea of nolo
contendere to the commission of any felony or gross
misdemeanor, but only if such event significantly harms the
Company’s reputation or business; (iii) any fraud,
misrepresentation or gross misconduct by Employee that is
materially injurious to the Company; (iv) a material and
willful violation by Employee of a federal or state law or
regulation applicable to the business of the Company which is
materially injurious to the Company, and (v)
Employee’s willful breach of a material provision of this
Agreement. The Company will not terminate Employee’s
employment for Cause without first providing Employee with written
notice specifically identifying the acts or omissions constituting
the grounds for a Cause termination and, with respect to clauses
(i), (iii) and (v), a reasonable cure period of not less than
thirty (30) business days following such notice. No act or
failure to act by Executive will be considered
“willful” unless committed without good faith and
without a reasonable belief that the act or omission was in the
Company’s best interest, as determined by the Company’s
Board of Directors.
(c) Change in Control . For
purposes of this Agreement, a “Change in Control” shall
be defined as follows: (i) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the
Company’s then outstanding voting securities; or
(ii) the date of the consummation of a merger or consolidation
of the Company with any other corporation that has been approved by
the stockholders of the Company, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
int
