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Exhibit
10.22
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of
June 7, 2007 (the “Effective Date”), by and
between NEOMAGIC CORPORATION, a Delaware corporation (the
“Company”), and STEVEN P. BERRY
(“Employee”).
RECITALS
A. The Company desires to
retain the services of Employee, and Employee desires 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 . Beginning on August 6, 2007 (the “Start
Date”), Employee will serve as the Company’s Vice
President of Finance and Chief Financial Officer. Employee will be
responsible for coordinating and supervising all functional areas
and operations of the finance group of the Company, as directed by
the Chief Executive Officer of the Company and including without
limitation the human resources and facilities functions, and shall
report to the Chief Executive Officer. Employee shall devote his
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 Employee
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
Board or its designees.
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 $225,000 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. The Employee will receive a
signing bonus of $3,325 to be paid within 10 days after the
Effective Date.
(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. The Committee has approved
granting the Employee options to purchase 85,000 shares of the
Company’s Common Stock, at an exercise price equal to the
closing bid price per share of the Company’s Common Stock on
the Nasdaq Global Market on the Start Date (the
“Option”). The Option shall have a vesting commencement
date equal to the Start Date and shall vest as to 25% of the total
shares subject to the Option one year after the Start Date and 1/48
of the total shares subject to the Option each month thereafter, so
that all the shares subject to the Option shall vest four years
after the Start Date.
(d) Change in Control
Payment. In the event of a Change in Control, Employee shall
receive a lump sum payment in an amount equal to twelve
(12) months of Employee’s Base Salary, which shall be
paid within ten (10) days of the effective date of such Change
in Control. Such payment shall be paid subject to Employee’s
continued employment with the Company through the date of such
Change in Control; provided, however that if Employee’s
employment is terminated by the Company and/or its successors, if
any, without Cause or Employee terminates his employment for Good
Reason in connection with a Change in Control, including, but not
limited to, any such termination within 60 days prior to such
Change in Control, Employee shall be entitled to receive the entire
Change in Control payment. The Change in Control payment to be paid
pursuant to this Section 3(d) shall be in addition to any
other payments Employee may otherwise be entitled to receive under
Section 6.
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.
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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, or due to Employee’s death or Disability,
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.
(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, (B) Company-paid 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
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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 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, 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 following or
in connection with a Change in Control, including, but not limited
to, any such termination within 60 days of 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) the
Change in Control payment pursuant to Section 3(d) to the
extent it has not yet been paid, (B) a lump sum payment in an
amount equal to nine (9) months of Employee’s Base
Salary, (C) Company-paid coverage for Employee and
Employee’s eligible dependents under the Company’s
Benefit Plans for twelve (12) months following such
termination, (D) 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 (E) 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.
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.
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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, 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 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.
(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
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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.
(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 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 ap
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