ex10-33.htm


    
      Exhibit
10.33

      


      CONSULTING
AGREEMENT

       

       

      THIS
CONSULTING AGREEMENT ("AGREEMENT") DATED AS OF February 4, 2010, BETWEEN NEOMAGIC CORPORATION, 2372-A
QUME DRIVE, SAN JOSE, CALIFORNIA, USA 95131, A DELAWARE CORPORATION ("NeoMagic")
AND DOUGLAS R. YOUNG, _______,
San Jose, CA, (the "Consultant") is entered into with reference to the
following facts:

       

      A.
Consultant has served as President and Chief Executive Officer of NeoMagic for
approximately four (4) years and was Vice President, Sales
of  NeoMagic for approximately an additional year prior thereto. As a
result,he has substantial knowledge and experience with respect to NeoMagic's
operations and opportunities, including the development, sales and marketing of
current and proposed products.

      


      B. In
order to be able to draw upon Consultant's expertise, NeoMagic desires to retain
Consultant to render certain consulting services to NeoMagic. In addition, it
wishes to be able to benefit, on an ongoing basis, from his expertise by
obtaining Consultant's commitment to be available to  provide his
knowledge, experience and consulting advice to NeoMagic,
from  time  to  time, as
requested  by  NeoMagic, in accordance with the terms of
this Agreement.

      


      C.
Consultant agrees to render the consulting services and to make such commitment
in accordance with the terms of this Agreement.

      


      In
consideration of the mutual agreements and covenants set forth in this
Agreement, the parties agree as follows:

      


      1.
ENGAGEMENT OF CONSULTANT.

      


      (a) In
consideration for the consulting fees and stock options described below in
Section 3, Consultant agrees to:

      


      (i)
provide to NeoMagic, without any additional fees beyond those set forth below,
up to four (4) hours of consulting services in each Month ( as defined below in
Section 2 ) during the Term ( also, as defined below in Section 2), with any
unutilized hours not being carried over to a subsequent Month; and

      


      (ii) be
available in each of the six  (6) Months during the Term, to provide
an additional twenty six  (26) hours of consulting services to
NeoMagic, upon NeoMagic's request, to be paid at the rate of Three Hundred
Dollars ($300.00) per hour.

       

      (b) The
consulting services (the "Consulting Services") to be provided hereunder shall
consist of such marketing, sales and related advice as may be requested on
behalf of NeoMagic by Mr. Jorge Granier or other member of NeoMagic’s Board of
Director, from time to time, in writing. Without Consultant's express consent,
no consulting services to be provided hereunder shall require any travel more
than 25 miles outside the San Jose, California area.  Consultant
agrees that all inventions and discoveries (including, but not limited to,
concepts, ideas, processes, programs, algorithms, methods, formulae,
compositions, techniques, articles, and machines, as well as improvements
thereof or know-how related thereto) and all original works of authorship,
whether or not patentable, copyrightable or protectable as trade secrets,
conceived or made by Consultant, alone or with others, that result from the
Consulting Services provided by Consultant under this Agreement (collectively
“Work Product”), are the
sole and exclusive property of NeoMagic.  Consultant hereby
irrevocably assigns to NeoMagic all of Consultant’s worldwide right, title and
interest in and to the Work Product, including all intellectual property rights
and moral rights relating thereto.  Consultant irrevocably agrees not
to assert against NeoMagic or its successors or licensees any claim of any
intellectual property rights or moral rights of Consultant relating to the Work
Product.

       

      
        
          
          

        

        
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      (c)
NeoMagic is aware that Consultant may be employed in a full-time or
substantially full-time position during all or part of the Term and recognizes
and agrees that all Consulting Services to be performed hereunder may be
performed by Consultant, at times which are outside of normal business
hours.

      


      2. TERM;
MONTH. The term ( the "Term") of this Agreement shall commence on the Effective
Date (as defined in the Separation Agreement and Release of Claims, to
which  a copy of this Agreement is attached as Exhibit A) and shall
end on the six (6) month anniversary of the Effective Date (the "Expiration
Date").  Each monthly period (a "Month") shall consist of a calendar
month,  and any partial month shall be pro-rated with respect to the
consulting requirements under Section 1(a)(i).

      


      3.
COMPENSATION FOR SERVICES. As full and complete consideration for the Consulting
Services including the commitment set forth in Section 1(a) (ii) above, NeoMagic
shall:

      


      (a) Pay
Consultant a retainer of Twenty-Five Thousand Dollars ($25,000) (the "Cash
Compensation"), payable in six (6) equal monthly installments, commencing within
the first NeoMagic standard payroll payment date which occurs after the
Effective Date.  The Cash Compensation will be reported to the
Internal Revenue Service (“IRS”) and other appropriate taxing authorities on
Form 1099 (or other appropriate forms).  NeoMagic will not withhold
taxes related to the Cash Compensation, and Consultant shall be solely
responsible for paying such taxes.  If Consultant dies prior to
receiving all of the Cash Compensation, the Cash Compensation shall be paid to
the Consultant’s designated beneficiary, or if no such beneficiary has been
designated by the Consultant, then such Cash Compensation shall be paid to the
personal representative of the Consultant’s estate to be distributed pursuant to
the Consultant’s will or in accordance with the laws of descent and
distribution;

       

      (b) Grant
to Consultant the Five Million (5,000,000) Non-Qualified Stock Options (the
"Options"), which are described in more detail in Section 3(c) below. The
Options shall be fully vested upon issuance and shall be exercisable during
their three (3) year term (but not thereafter).

      


      (c) The
Options shall consist of the following:

      


      (i) an
option to purchase three million (3,000,000) shares of the NeoMagic common stock
at an exercise price per share equal to the greater of (i) six (6) cents or (ii)
the closing price (the "Closing Price") of the common stock quoted in the "pink
sheets" on the Board Approval Date (as defined below) or on the immediately
preceding date, if the Board meets prior to the close of the
market.  An option agreement, in substantially the form customarily
used by NeoMagic for other option grants subject to the modifications
contemplated by this Agreement (the "Option Agreement") shall be delivered to
Consultant within five (5) days following the Board Approval Date (as defined
below); and

       

      
        
          
          

        

        
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      (ii) an
option to purchase two  million  ( 2,000,000) shares of the
NeoMagic common stock at an exercise price per share equal to the greater of (i)
fifteen  (15) cents or (ii) the Closing Price. The Option Agreement
shall be delivered to Consultant within five (5) days following the Board
Approval Date.

      


      (d) Consultant
is aware that as of the date of this Agreement shown above in the first
paragraph, the terms of the NeoMagic 2003 Stock Option Plan (the “Plan”), as
currently in effect, do not permit the issuance of the Options to Consultant. He
is also aware that NeoMagic is legally required to obtain the approval of its
shareholders in order to make the amendments to the Plan required to authorize
the issuance of the Options to Consultant (the "Plan Amendments"), before
NeoMagic's Board of Directors is permitted to grant the Options to
Consultant.  The Options shall be granted to Consultant by the
NeoMagic Board of Directors on the date (the "Board Approval Date") which is no
later than five (5) business days after the effective date of the NeoMagic
shareholders' approval of the Plan Amendments.

       

      (e)
NeoMagic hereby agrees to prepare and file with the Securities and Exchange
Commission (the "SEC"), by no later than April 15, 2010, the Schedule 14C
Information Statement required by the Securities and Exchange Act of 1934, as
amended,  to obtain shareholder approval of the Plan
Amendments.

       

      (f)
NeoMagic further agrees to file (i) a Registration Statement on Form S-8 with
the SEC to register the Options and (ii) an application for qualification with
the California Department of Corporations with respect to the options, in each
case within two (2) weeks after the Board Approval Date.

       

      (g) To
the extent not otherwise prohibited by the Plan, if Consultant dies prior to the
exercise of all of the Options, the Options may be exercised during their
applicable term by the Consultant’s designated beneficiary, or if no such
beneficiary has been designated by the Consultant, then such Options may be
exercised by the personal representative of the Consultant’s estate or by the
person(s) to whom the Options are transferred pursuant to the Consultant’s will
or in accordance with the laws of descent and distribution.

      


      4.
NONEXCLUSIVITY OF THIS AGREEMENT. NeoMagic confirms that Consultant shall not be
prevented or barred from rendering services of any nature for or on behalf of
any other person, firm, corporation or entity, subject to Consultant's
obligation to maintain confidentiality of NeoMagic's Confidential Information
pursuant to Section 6. Consultant confirms that NeoMagic shall not be prevented
or barred from retaining other persons or entities to provide services of the
same nature or similar nature as those described herein or of any nature
whatsoever.

      


      5.
TERMINATION. This Agreement may be terminated by either Consultant or NeoMagic,
either for cause or not for cause, upon written notice specifying the effective
date of termination; provided, that such written notice shall be given at least
sixty (60) days prior to the date of termination. Notwithstanding anything
herein or in the Option Agreement to the contrary, if Consultant elects to
terminate this Agreement prior to the Expiration Date then, upon such
termination, Consultant shall be obligated (a) to pay NeoMagic on a pro-rata
basis, based on the number of days of the Term remaining after the effective
date of any termination, the net after tax proceeds Consultant has received
during the Term from the sale of the shares underlying the Options or shall
return to NeoMagic, as liquidated damages a pro-rated portion of the Options
granted hereunder based on the number of days of the Term remaining after the
effective date of any termination; provided, however, that
Consultant’s death shall not constitute an election by Consultant to terminate
and upon Consultant’s death, Consultant shall have no obligation to pay NeoMagic
proceeds from the sale of shares underlying Options pursuant to the preceding
clause. Notwithstanding anything herein to the contrary, if NeoMagic elects to
terminate this Agreement for a reason other than Consultant’s breach of the
terms of this Agreement prior to its Expiration Date, it shall immediately pay
to Consultant any Cash Compensation not paid to Consultant prior to the
termination date.

       

      
        
          
          

        

        
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      6.
CONFIDENTIALITY.

      


      (a)
Consultant and its partners, associates, and affiliates will not disclose to any
other person, firm, or corporation, nor use for their own benefit, during or
after the Term of this Agreement, any trade secrets or other confidential
information of NeoMagic (collectively “Confidential Information”) which is
acquired by Consultant and its partners, associates, and affiliates in the
course of performing services hereunder or was acquired by Consultant previously
while he was employed by NeoMagic.  For purposes of this Agreement, a
"trade secret" is information not generally known to the public which gives
NeoMagic an advantage over its competitors, including products or services under
development, production methods and processes, subscriber or customer lists and
marketing plans.  For purposes of this Agreement, “confidential
information” is any non-public information that relates to the actual or
anticipated business or research and development of
NeoMagic.  Confidential Information includes any third-party
information that was provided to NeoMagic subject to an obligation of
confidentiality.  Any Confidential Information, which (i) at or prior
to the time of disclosure by NeoMagic to Consultant was generally available to
the public through no breach of this Agreement, (ii) was available to the public
on a non-confidential basis prior to its disclosure by NeoMagic to Consultant or
(iii) was made available to Consultant from a third party (provided that
Consultant did not know that such party obtained or disseminated such
information in breach of any legal obligation to NeoMagic) shall not be deemed
Confidential Information of NeoMagic for purposes hereof.  If
Consultant is required to disclose any Confidential Information pursuant to a
court order or other legally required process, Consultant shall immediately
inform NeoMagic prior to any such disclosure by Consultant.

      


      (b)
Return of Confidential Information and other Documents.  Upon the
expiration or earlier termination of this Agreement, or upon NeoMagic’s earlier
request, Consultant will deliver to NeoMagic all of NeoMagic’s Confidential
Information and other documents in Consultant’s possession or control, in
whatever form or media, or at NeoMagic’s direction, destroy the same, and (to
the extent reasonably possible) delete all NeoMagic Confidential Information and
other NeoMagic documents from its computers, PDAs, and other electronic
devices.  However, it shall not be a violation of this deletion
requirement for copies to remain in computer back-up files that are not normally
accessible.  Consultant is prohibited from keeping copies of such
documents or materials, recreating them, or delivering them to anyone
else.  Consultant shall certify in writing to NeoMagic such return or
destruction and deletion within ten (10) days thereafter.

       

      7.
AMENDMENT; WAIVER. No amendment to this Agreement shall be valid unless such
amendment is in writing and is signed by both of the parties to this Agreement.
Any of the terms and conditions of this Agreement may be waived at any time in
writing by the party entitled to the benefit thereof, but a waiver in one
instance shall not be deemed to constitute a waiver in any other instance. A
failure to enforce any provision of this Agreement shall not operate as a waiver
of the provision or of any other provision hereof.

       

      8.
SEVERABILITY. In the event that any provision of this Agreement shall be held to
be invalid, illegal or unenforceable in any circumstances, a modified provision
shall be substituted which carries out as nearly as possible the original intent
of the parties and the remaining provisions shall nevertheless remain in full
force and effect and shall be construed as if the unenforceable portion or
portions were deleted.  If no such substitution can be made, such
invalid, illegal or unenforceable provision shall be deleted, and the remaining
provisions shall not in any way be affected or impaired thereby.

       

      
        
          
          

        

        
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      9.
GOVERNING LAW; ATTORNEYS’ FEES. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California.
The parties recognize that all obligations hereunder are subject to all required
regulatory approvals. In the case of any dispute, the prevailing party shall be
entitled to recover its reasonable attorneys fees.

       

      10.
ASSIGNMENT. The obligations under this Agreement shall not be assignable,
without the consent of the non-assigning party, which shall be entitled to
withhold such consent, in its sole discretion.

       

      11.  INDEPENDENT
CONTRACTOR.  It is the express intention of NeoMagic and Consultant
that Consultant perform the Consulting Services as an independent contractor to
NeoMagic.  Nothing in this Agreement shall in any way be construed to
constitute Consultant as an agent, employee, or representative of
NeoMagic.  NeoMagic and Consultant agree that Consultant will receive
no Company-sponsored benefits from NeoMagic.

       

      12.
INDEMNIFICATION. Consultant agrees to indemnify and hold harmless NeoMagic and
its directors, officers and employees from and against all losses, damages,
liabilities, costs and expenses, including attorneys’ fees and other legal
expenses, taxes, penalties, and interest arising directly or indirectly from or
in connection with (i) any negligent, reckless or intentionally wrongful
act of Consultant or Consultant’s assistants, employees or agents, (ii) a
determination by a court or agency that the Consultant is not an independent
contractor, (iii) any breach by the Consultant or Consultant’s assistants,
employees or agents of any of the covenants contained in this Agreement, (iv)
any failure of Consultant to perform the Consulting Services in accordance with
all applicable laws, rules and regulations, or (v) any violation or claimed
violation of a third party’s rights resulting in whole or in part from
NeoMagic’s use of the Work Product of Consultant under this
Agreement.

       

      13.
EXECUTION IN COUNTERPARTS. This Agreement may be executed by the parties in
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement.

       

      IN
WITNESS WHEREOF, each of the parties has executed this Consulting Agreement as
of the date first written above.

       

      
        	 	 	 	NEOMAGIC
      Corporation	 
	 	 	 	 	 
	
                 

              	 	 	
                /s/
      Syed Zaidi  

              	 
	
                 

              	 	 	
                Syed
      Zaidi  

                 President and Interim Chief Executive Officer

              	 
	 	 	 	 	 
	 	 	 	/s/
      Douglas R. Young 	 
	 	 	 	DOUGLAS
      R YOUNG 	 


      

    

     

     

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