UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, DC 20549



Form 10-K/A



Amendment No. 1

(Mark One)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended January 27, 2008,

OR

| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from             to

Commission file number 000-22009

NEOMAGIC CORPORATION

(Exact Name of Registrant as Specified in Its Charter)



|                                                                |  |                                     
|--------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                        |  | 77-0344424                          
|(State or Other Jurisdiction of Incorporation or Organization)  |  | (I.R.S. Employer Identification No.)
|                                                                | 
|3250 Jay Street                                                 |  | 95054                               
|Santa Clara, California(Address of Principal Executive Offices) |  | (Zip Code)                          

Registrants telephone number, including area code (408) 988-7020

Securities registered pursuant to Section 12(b) of the Act:

|                              |  |                                          
|----------------------------- |  | -----------------------------------------
|Title of Each Class           |  | Name of Each Exchange on Which Registered
|Common Stock, $.001 par value |  | Nasdaq Capital Market                    

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes   ̈    No  x

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes   ̈    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No    ̈

Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer   ̈        Accelerated Filer   ̈        Non-Accelerated Filer   ̈        Smaller Reporting Company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes   ̈    No  x

The aggregate market value of voting stock held by non-affiliates of the Registrant was approximately
$37,003,000 as of July 29, 2007 based upon the closing price on the Nasdaq Market reported for such date, the last business day of the registrants most recently completed second fiscal quarter. For purposes of this calculation, we have
excluded stock held by directors, executive officers and greater than 5% shareholders. This calculation does not reflect a determination that such persons are affiliates of the Registrant for any other purposes.

The number of shares of the Registrants Common Stock, $.001 par value, outstanding at April 4, 2008 was 12,455,779.







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EXPLANATORY NOTE



This Amendment No. 1 on Form 10-K/A (Form 10-K/A) to our Annual Report on Form 10-K for the fiscal year
ended January 27, 2008, initially filed with the Securities and Exchange Commission (the Commission) on April 24, 2008 (the Original Filing), is being filed to include information required by Items 10, 11, 12, 13
and 14 under Part III. This information is being included in this Form 10-K/A because our definitive proxy statement will not be filed within 120 days after the end of our 2008 fiscal year. Reference to our proxy statement on the cover page of this
Form 10-K/A has been deleted and information with respect to the outstanding number of common shares on the cover page of this Form 10-K/A has been updated.



This Amendment No. 1 includes new certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The representations contained in
the new certifications continue to relate solely to the year ended January 27, 2008. Except as described above, no changes have been made to the Annual Report as originally filed.



All references to we, us, and our, or the Company in this Form 10-K/A mean
NeoMagic Corporation.



Except for the foregoing amended
information, the Original Filing continues to describe conditions as of the date of the Original Filing, and we have not updated the disclosures contained herein to reflect events that occurred at a later date.



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NeoMagic Corporation

FORM 10-K/A



FOR THE
FISCAL YEAR ENDED JANUARY 27, 2008



TABLE OF CONTENTS





|         |  |                                                                                                |  |     
|-------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                |  | Page
|         |  |                                                                                               
|         |  | PART III.                                                                                      |  |     
|Item 10. |  | Directors, Executive Officers and Corporate Governance                                         |  | 4   
|Item 11. |  | Executive Compensation                                                                         |  | 7   
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  | 16  
|Item 13. |  | Certain Relationships and Related Transactions, and Director Independence                      |  | 18  
|Item 14. |  | Principal Accountant Fees and Services                                                         |  | 19  
|         |  |                                                                                               
|         |  | PART IV.                                                                                       |  |     
|Item 15. |  | Exhibits and Financial Statement Schedules                                                     |  | 20  
|         |  | Signatures                                                                                     |  | 21  



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PART III



|Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|-------- | ------------------------------------------------------



The following table presents the names, ages and positions of each of our directors and executive officers as of April 4, 2008:



|                        |  |     |  |                                                    
|----------------------- |  | --- |  | ---------------------------------------------------
|NAME                    |  | AGE |  | POSITION                                           
|Douglas R. Young        |  | 62  |  | President, Chief Executive Officer and Director    
|Anil K. Gupta (2)(3)    |  | 58  |  | Director                                           
|Brett A. Moyer (1)(2)   |  | 50  |  | Director                                           
|Carl Stork (1)(2)(3)    |  | 48  |  | Director                                           
|Steve Valenzuela (1)(3) |  | 51  |  | Director                                           
|Steven P. Berry         |  | 48  |  | Vice President, Finance and Chief Financial Officer
|Pierre-Yves Couteau     |  | 41  |  | Vice President, Marketing                          
|Deepraj Puar            |  | 62  |  | Vice President, Operations                         
|Syed Zaidi              |  | 49  |  | Chief Operating Officer and Director               



|(1) | Member of the Audit Committee
|--- | -----------------------------

|(2) | Member of the Compensation Committee
|--- | ------------------------------------

|(3) | Member of the Nominating and Corporate Governance Committee
|--- | -----------------------------------------------------------



Additional biographical information for each of our directors and executive offices is presented below.



Directors



Our Board of Directors currently consists of six directors. A director serves in office until the next Annual Meeting of
Stockholders or until a successor has been duly elected and qualified or until his or her earlier resignation, death or removal. There are no arrangements or understandings between any director or executive officer and any other person pursuant to
which such person is or was to be elected as a director or officer of the Company. There are no family relationships among any executive officers and directors.



The following biographies present information about each of our directors:



Dr. Anil K. Gupta has served as a Director of the Company since November 2000. Dr. Gupta is the
Ralph J. Tyser Professor of Strategy at the Robert H. Smith School of Business, University of Maryland at College Park where he has served on the faculty since 1986. Dr. Gupta has served on the board of Origene Technologies, a
privately held high-throughput gene cloning and gene expression profiling company, which develops commercially available products for pharmaceutical, biotechnology, and academic research and discovery applications, since April 2008. Dr. Gupta
holds a B. Tech. degree from the Indian Institute of Technology, an M.B.A. from the Indian Institute of Management, and a Ph.D. in business strategy from the Harvard Business School.



Brett A. Moyer has served as a Director of the Company since March 2007. Mr. Moyer has been president and chief
executive officer and a board member of Focus Enhancements, Inc., a provider of solutions in advanced, proprietary video and wireless video technologies, since September 2002 and was their executive vice president and chief operating officer from
May 1997 to September 29, 2002. From February 1986 to April 1997, Mr. Moyer worked at Zenith Electronics Corporation, Glenview, Illinois, where he was most recently the vice president and general manager of Zeniths Commercial
Products Division. Mr. Moyer has also served as vice president of sales planning and operations at Zenith where he was responsible for forecasting, customer service, distribution, MIS and regional credit operations. Mr. Moyer has a
Bachelor of Arts in Economics from Beloit College in Wisconsin and a Masters of International Management with a concentration in finance and accounting from The American Graduate School of International Management (Thunderbird).



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Carl Stork has served as a Director of the Company since June 2002. Mr. Stork has been Vice
Chairman of the Board for Digital Domain, a private full-service digital studio and production company, since May 2006. He has also been President of Ciconia & Co., LLC, a private investment firm, since July 2002, and a partner in Wyndcrest
Holdings, LLC, a private investment and acquisition firm, since May 2000. Mr. Stork was employed by Microsoft Corporation in a variety of management positions from 1981 through 2002, most recently as General Manager of Hardware Strategy and
Business Development. He previously served as general manager of Windows 98 and technical assistant to Bill Gates. Mr. Stork is a partner in the Baseball Club of Seattle, owner of the Seattle Mariners major league baseball team. Mr. Stork
serves on the board of Intermed Health Advisors (formerly Intermed Advisors), a private company. Mr. Stork holds an MBA from the University of Washington and a BA in Physics from Harvard University.



Steve Valenzuela has served as a Director of the Company since June
2005. Mr. Valenzuela has been the Senior Vice President of Finance and Chief Financial Officer of Rainmaker Systems, a provider of outsourced sales and marketing services, since September 2004. Mr. Valenzuela was Vice President of Finance
and Chief Financial Officer for the Thomas Kinkade Company, formerly Media Arts Group, a publisher and distributor of the works of Thomas Kinkade, from February 2003 to September 2004. Mr. Valenzuela was Senior Vice President and Chief
Financial Officer for Silicon Access Networks, a network semiconductor company, from September 2000 to July 2002. He was Senior Vice President and Chief Financial Officer for PlanetRx from February 1999 to August 2000. Prior to PlanetRx,
Mr. Valenzuela served as the Chief Financial Officer for LinkExchange from August 1998 to February 1999. Mr. Valenzuela holds an MBA from Santa Clara University and a BS degree in Finance from San Jose State University.



Douglas R. Young has served as President, Chief Executive Officer and
a Director of the Company since April 2005. Prior to his promotion to President and Chief Executive Officer, he was NeoMagics Vice President of Worldwide Sales joining NeoMagic in February 2004. Before joining NeoMagic, Mr. Young was
Senior Vice President of Worldwide Sales at Planetweb, Inc., a provider of embedded multimedia application and browser software for consumer electronics devices, from August 1999 to October 2003. At Planetweb, Mr. Young worked with customers
such as Samsung, Sharp, Philips and other large OEMs. Mr. Young has managed sales in many different environments ranging between large systems enterprise sales to the Fortune 500 and ODM and OEM sales in the consumer electronics
market. He has over 25 years experience working for companies such as IBM, Storage Technology Corporation, Unilease Computer Corporation, Data General and Hitachi Data Systems. He has worked in hardware and software sales, and he was President and
CEO of a computer and satellite leasing company. Mr. Young has a Bachelor of Arts Degree from Princeton University and a Masters Degree in Business Administration from The Stern School of Business at New York University.



Syed Zaidi has been Chief Operating Officer and has served as a
Director of the Company since February 2007. From January 2006 to February 2007, Mr. Zaidi was Vice President of Corporate Engineering and from May 2000 to January 2006, Mr. Zaidi was Vice President of Santa Clara Engineering.
Mr. Zaidi joined NeoMagics engineering team in June 1995 and worked in engineering management until his promotion to Vice President in 2000. Prior to joining NeoMagic, Mr. Zaidi worked at Sierra Semiconductor, where he was
responsible of systems engineering for Multimedia products. He has also worked at Advance Micro Research where he designed and developed UNIX based multi-user systems, multiple Video and Graphic ASICs for Multimedia products. Mr. Zaidi holds a
Bachelor of Electrical & Electronics Engineering from Leeds University, England and a BSET from Indiana State University.



Executive Officers



The following biographies present information about each of our executive officers who are not directors of the Company.



Steven P. Berry has served as Vice President of Finance and Chief
Financial Officer since August 2007. Prior to joining NeoMagic, Mr. Berry was Vice President of Finance with Sipex Corporation, a semiconductor



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company that designs, manufactures and markets a broad portfolio of high performance, value-added, analog integrated circuits for original equipment
manufacturers doing business in the high growth markets of networking, computing, communications, optical storage, since May 2004. From June 2000 to January 2004, Mr. Berry was Vice President of Finance, Chief Accounting Officer and Assistant
Secretary at BRECIS Communications, a venture backed fabless semiconductor company. He also worked at Ernst & Young, LLP as an auditor and at Cirrus Logic, most recently as Operations Controller. Mr. Berry has a BS from the University
of California, Davis, and an MBA from California State University, Hayward. He is a CPA.



Pierre-Yves Couteau has served as Vice President of Marketing since January 2008. In February 2008, Mr. Couteau was appointed an executive officer of NeoMagic. From September 2006 to January 2008,
Mr. Couteau was Senior Director of Strategic Marketing with NXP Semiconductors (founded by Philips Semiconductors), a semiconductor company that creates system solutions and software for mobile phones, personal media players, TVs, set-top
boxes, identification applications, cars and a wide range of other electronic devices. From March 1993 to September 2006, Mr. Couteau held various marketing and general management positions with Philips Semiconductors, a semiconductor company,
where he was responsible for driving innovation in high-growth businesses such as Wi-Fi, Bluetooth, UWB and semiconductors for hard disk drives. Mr. Couteau has an MBA from the Lyon School of Management (France) and an MS in Electrical
Engineering from the Grenoble Institute of Technology (France).



Deepraj Puar, a co-founder of the Company, has served as the Companys Vice President of Operations since April 2007. Since the Companys inception in 1993, Mr. Puar has served in a variety of roles, including
Technology Executive, from February 2000 to April 2007. Mr. Puar has over 35 years of engineering and management experience in the semiconductor industry, primarily in the area of memory design and logic integration technology. Mr. Puar
authored all of the Companys key patents covering embedded DRAM technology. Prior to co-founding the Company in 1993, Mr. Puar was employed by Cirrus Logic, Signetics/Philips and Texas Instruments. Mr. Puar holds a B.TECH degree from
the Indian Institute of Technology, Kanpur and a MSEE degree from Michigan State University.



Section 16(a) Beneficial Ownership Reporting Compliance



Section 16 of the Securities Exchange Act of 1934 requires our directors, officer and persons who own more than 10% of a registered class of our
equity securities to file initial reports of securities ownership and reports of changes in securities ownership with the SEC. The SEC regulations also require these persons to furnish us with a copy of all Section 16(a) forms that they file.
Based solely on our review of the copies of the forms furnished to us by such persons and written representations from our executive officers and directors, we believe that all Section 16(a) filing requirements were met in a timely manner
during our fiscal year ended January 27, 2008.



Code of Ethics and
Conduct



We have adopted a Code of Ethics that applies to
all of our directors, officers, and employees. The Code of Ethics policy is available on the Companys website at http://www.neomagic.com/about/corporate_governance.asp. Any amendments or waivers to this policy affecting our senior
financial officers will also be posted on our website.



Stockholder Director
Nominations



There have been no material changes to the
procedures by which stockholders may recommend nominees to our Board of Directors since the proxy statement for our 2007 annual meeting of stockholders.



Audit Committee



We have a separately designated standing Audit Committee (the Audit Committee) of our Board of Directors. The Audit Committee monitors the
periodic reviews and audits of the adequacy of the accounting and



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financial reporting processes and systems of internal control that are conducted by our independent registered public accounting firm and our financial and
senior management. The Audit Committee evaluates the independence and performance of our independent registered public accounting firm and approves audit and non-audit services provided by the independent registered public accounting firm. The
current members of the Audit Committee are Messrs. Moyer, Stork and Valenzuela. During fiscal year ended January 27, 2008, Dr. Gupta was a member of the Audit Committee from January 2007 to January 2008. Each member of the Committee is
independent under the NASDAQ rules for audit committee member qualifications. Mr. Valenzuela serves as Chair of the Audit Committee and fulfills the Audit Committee financial expert role.



|Item 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------



Employment Agreements



We currently have employment agreements with Douglas Young, our President and Chief Executive Officer, Steven Berry, our Chief Financial Officer, Syed
Zaidi, our Chief Operating Officer, and Deepraj Puar, our Vice President of Operations. We also had an employment agreement with Scott Sullinger, our former Chief Financial Officer who left our company in March 2007. We discuss these employment
agreements, along with their severance and change-in-control provisions, below.



Douglas R. Young



The Company is party to an
employment agreement with Mr. Young, its President and Chief Executive Officer. Pursuant to the agreement, dated May 1, 2006, Mr. Young serves on an at-will basis and is entitled to receive an annual base salary of
$260,000, subject to annual review by the Compensation Committee. Mr. Young is also eligible to receive bonuses in such amounts and based upon such performance criteria as the Compensation Committee of the Board determines in its discretion
following consultation with Mr. Young. Mr. Young is also entitled to receive stock options, restricted stock or other equity awards pursuant to any plans or arrangements the Company may have in effect from time to time, at the discretion
of the Compensation Committee. In addition, the Agreement entitles Mr. Young to receive a lump-sum payment upon a change of control equal to twelve (12) months base salary and to participate in 401(k) retirement, deferred
compensation, and life, medical, dental, disability and other welfare benefit plans maintained by the Company.



The Agreement provides for certain severance payments and benefits to Mr. Young in the event of termination. If Mr. Youngs employment with
the Company is terminated by the Company for any reason other than cause, death, or disability, or if Mr. Young resigns from his employment for good reason, he shall generally be entitled to (A) a lump-sum payment
in an amount equal to six months of base salary, (B) Company-paid coverage for Mr. Young and his eligible dependents under the Companys benefit plans for 12 months following such termination, and (C) up to six months to exercise
any options he holds to purchase vested shares under the Companys then current equity plans. If Mr. Youngs employment with the Company is terminated for cause, death or disability then (A) all payments of compensation will
terminate, (B) all vesting will terminate immediately with respect to Mr. Youngs outstanding equity awards, and (C) Mr. Young will be eligible for severance benefits in accordance with the Companys established
policies for such type of termination, if any, as then in effect. If Mr. Youngs employment is terminated by the Company or its successors without cause or Mr. Young terminates his own employment for good
reason following or in connection with a Change in Control, including but not limited to, a termination within 60 days of such Change in Control, the Agreement provides for the same severance payments described above, except that in lieu of a
lump-sum severance payment equal to six months base salary, he will receive a lump-sum payment in an amount equal to twelve (12) months base salary and all of his outstanding equity awards will vest in full. All of the severance
payments and benefits are conditioned on Mr. Young signing a general release of claims against the Company. Mr. Young is subject to non-competition covenants for one year following his termination of employment for any reason.



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Steven P. Berry



The Company is party to an employment agreement with Mr. Berry, its Vice President of Finance and Chief Financial Officer. Pursuant to the agreement,
dated June 7, 2007, Mr. Berry serves on an at-will basis and is entitled to receive an annual base salary of $225,000, subject to annual review by the Compensation Committee. Mr. Berry is also eligible to receive bonuses
in such amounts and based upon such performance criteria as the Compensation Committee of the Board determines in its discretion following consultation with Mr. Berry. Mr. Berry received a signing bonus of $3,325 payable within 10 days
after the effective date of the agreement. Mr. Berry is also entitled to receive stock options, restricted stock or other equity awards pursuant to any plans or arrangements the Company may have in effect from time to time, at the discretion of
the Compensation Committee. In addition, the Agreement entitles Mr. Berry to receive a lump-sum payment upon a change of control equal to twelve (12) months base salary and to participate in 401(k) retirement, deferred compensation,
and life, medical, dental, disability and other welfare benefit plans maintained by the Company.



The Agreement provides for certain severance payments and benefits to Mr. Berry in the event of termination. If Mr. Berrys employment with
the Company is terminated by the Company for any reason other than cause, death, or disability, or if Mr. Berry resigns from his employment for good reason, he shall generally be entitled to (A) a lump-sum payment
in an amount equal to six months of base salary, (B) Company-paid coverage for Mr. Berry and his eligible dependents under the Companys benefit plans for 12 months following such termination, and (C) up to six months to exercise
any options he holds to purchase vested shares under the Companys then current equity plans. If Mr. Berrys employment with the Company is terminated for cause, death or disability then (A) all payments of compensation will
terminate, (B) all vesting will terminate immediately with respect to Mr. Berrys outstanding equity awards, and (C) Mr. Berry will be eligible for severance benefits in accordance with the Companys established
policies for such type of termination, if any, as then in effect. If Mr. Berrys employment is terminated by the Company or its successors without cause or Mr. Berry terminates his own employment for good
reason following or in connection with a Change in Control, including but not limited to, a termination within 60 days of such Change in Control, the Agreement provides for the same severance payments described above, except that in lieu of a
lump-sum severance payment equal to six months base salary, he will receive a lump-sum payment in an amount equal to nine (9) months base salary and all of his outstanding equity awards will vest in full.



If Mr. Berry resigns voluntarily, such resignation is not for good
reason, and he gives the Company at least 60 days notice of resignation, Mr. Berry will receive 6 months accelerated vesting of all outstanding options, stock appreciation rights or other similar rights to acquire Company common stock
that are not otherwise vested, such acceleration effective as of the 60th day after Mr. Berry has delivered his notice of resignation to the Company. All of the severance payments and benefits are conditioned on Mr. Berry signing a general
release of claims against the Company. Mr. Berry is subject to non-competition covenants for one year following his termination of employment for any reason.



Deepraj Puar



The Company is party to an employment agreement with Mr. Puar, its Vice President of Operations. Pursuant to the agreement, dated December 5,
2007, Mr. Puar serves on an at-will basis and is entitled to receive an annual base salary of $230,000, subject to annual review by the Compensation Committee. Mr. Puar is also eligible to receive bonuses in such amounts and
based upon such performance criteria as the Compensation Committee of the Board determines in its discretion following consultation with Mr. Puar. Mr. Puar is also entitled to receive stock options, restricted stock or other equity awards
pursuant to any plans or arrangements the Company may have in effect from time to time, at the discretion of the Compensation Committee. In addition, upon a termination of Mr. Puars employment (1) by the Company other than for cause,
(2) due to Mr. Puars death or disability, or (3) by Mr. Puar for good reason, Mr. Puar will receive: (1) a lump sum payment in an amount equal to six months of salary, (2) Company-paid coverage for
Mr. Puar and his eligible dependents under the Companys benefit plans for twelve (12) months following such termination, and (3) the right to exercise all vested and outstanding stock options and stock appreciation rights
granted to Mr. Puar by the Company for six (6) months from the effective date of such termination.



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Upon a termination of Mr. Puars employment in connection with a Change in Control by the
Company other than for cause, or by Mr. Puar for good reason, Mr. Puar will receive: (1) a lump sum payment in an amount equal to twelve months of salary, (2) Company-paid coverage for Mr. Puar and his eligible dependents
under the Companys benefit plans for twelve (12) months following such termination, (3) 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 (4) the right to exercise all vested and outstanding stock options and stock appreciation rights granted to Mr. Puar by the Company for six (6) months from the effective date of such
termination.



If Mr. Puar resigns voluntarily, such
resignation is not for good reason, and he gives the Company at least 60 days notice of resignation, Mr. Puar will receive 6 months accelerated vesting of all outstanding options, stock appreciation rights or other similar rights to
acquire Company common stock that are not otherwise vested, such acceleration effective as of the 60th day after Mr. Puar has delivered his notice of resignation to the Company. All of the severance payments and benefits are conditioned on
Mr. Puar signing a general release of claims against the Company. Mr. Puar is subject to non-competition covenants for one year following his termination of employment for any reason.



Syed Zaidi



The Company is party to an employment agreement with Mr. Zaidi, its Chief Operating Officer. Pursuant to the agreement,
dated December 5, 2007, Mr. Zaidi serves on an at-will basis and is entitled to receive an annual base salary of $240,000, subject to annual review by the Compensation Committee. Mr. Zaidi is also eligible to receive
bonuses in such amounts and based upon such performance criteria as the Compensation Committee of the Board determines in its discretion following consultation with Mr. Zaidi. Mr. Zaidi is also entitled to receive stock options, restricted
stock or other equity awards pursuant to any plans or arrangements the Company may have in effect from time to time, at the discretion of the Compensation Committee. In addition, upon a termination of Mr. Zaidis employment (1) by the
Company other than for cause, (2) due to Mr. Zaidis death or disability, or (3) by Mr. Zaidi for good reason, Mr. Zaidi will receive: (1) a lump sum payment in an amount equal to six months of salary,
(2) Company-paid coverage for Mr. Zaidi and his eligible dependents under the Companys benefit plans for twelve (12) months following such termination, and (3) the right to exercise all vested and outstanding stock options
and stock appreciation rights granted to Mr. Zaidi by the Company for six (6) months from the effective date of such termination.



Upon a termination of Mr. Zaidis employment in connection with a Change in Control by the Company other than for cause, or by Mr. Zaidi
for good reason, Mr. Zaidi will receive: (1) a lump sum payment in an amount equal to twelve months of salary, (2) Company-paid coverage for Mr. Zaidi and his eligible dependents under the Companys benefit plans for twelve
(12) months following such termination, (3) 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
(4) the right to exercise all vested and outstanding stock options and stock appreciation rights granted to Mr. Zaidi by the Company for six (6) months from the effective date of such termination.



If Mr. Zaidi resigns voluntarily, such resignation is not for good
reason, and he gives the Company at least 60 days notice of resignation, Mr. Zaidi will receive 6 months accelerated vesting of all outstanding options, stock appreciation rights or other similar rights to acquire Company common stock
that are not otherwise vested, such acceleration effective as of the 60th day after Mr. Zaidi has delivered his notice of resignation to the Company. All of the severance payments and benefits are conditioned on Mr. Zaidi signing a general
release of claims against the Company. Mr. Zaidi is subject to non-competition covenants for one year following his termination of employment for any reason.



Scott Sullinger



The Company was party to an employment agreement with Mr. Sullinger, its then Vice President, Finance and Chief Financial Officer, prior to his
resignation and termination in March 2007.



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The agreement provided for certain severance payments and benefits to Mr. Sullinger upon
termination. Upon termination, Mr. Sullinger received his accrued vacation time, as required by law and Company policy. Mr. Sullinger did not receive any other severance payments and benefits.



Explanation of Terms



The term Change in Control means the occurrence of any of the following events:



| | (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 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 into voting securities of the surviving entity) more than
fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | the date of the consummation of the sale or disposition by the Company of all or substantially all the Companys assets.
| | ----- | ------------------------------------------------------------------------------------------------------------------------



The term Cause for purposes of these agreements 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 ofnolo 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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The term
Good Reason for purposes of these agreements means Employees resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following,
without the Employees consent:



| | (i) | the assignment to Employee of any duties, or the reduction of the Employees duties, either of which results in a material diminution of the Employees position or
responsibilities with the Company in effect immediately prior to such assignment, or the removal of the Employee from such position and responsibilities; provided, however, that a reduction in position or responsibilities solely by virtue of
a Change in Control shall not constitute Good Reason unless such reduction results in the removal of Employee from the most senior management position of the Companys business;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



10



---

| | (ii) | a reduction of more than ten percent of Employees Base Salary in any one year;
| | ---- | -------------------------------------------------------------------------------



| | (iii) | the relocation of Employee to a facility that is more than twenty-five (25) miles from Employees current location;
| | ----- | -------------------------------------------------------------------------------------------------------------------



| | (iv) | the failure of the Company to obtain assumption of this Agreement by any successor; and
| | ---- | ---------------------------------------------------------------------------------------



| | (v) | the willful breach by the Company of a material provision of this Agreement. Employee will not resign for Good Reason without first providing the Company with written notice of the
acts or omissions constituting the grounds for Good Reason and a reasonable cure period of not less than thirty (30) days following the date of such notice.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11



---

Executive Compensation Tables



Summary Compensation Table



The following table sets forth information regarding all compensation awarded to, earned by or paid to in fiscal years 2008 and 2007 to each person who
served as our principal executive officer during fiscal 2008 and the two other most highly compensated executive officers. We refer to the three executive officers identified in this table as our Named Executive Officers.



|                                      |  |      |  |           |         |          |   |        |                     |  |   |                                         |     |                              |   |   |          |   |        |     |  |   |        
|------------------------------------- |  | ---- |  | --------- | ------- | -------- | - | ------ | ------------------- |  | - | --------------------------------------- | --- | ---------------------------- | - | - | -------- | - | ------ | --- |  | - | -------
|Name and Principal Position           |  | Year |  | Salary($) |         | Bonus($) |   |        | OptionAwards($) (1) |  |   | Non-EquityIncentive PlanCompensation($) |     | All OtherCompensation($) (2) |   |   | Total($)
|Douglas R. Young                      |  | 2008 |  | $         | 260,746 |          | $ |       |                     |  | $ | 152,187                                 |     |                              | $ |  |          | $ | 1,444  |     |  | $ | 414,377
|President and Chief Executive Officer |  | 2007 |  | $         | 260,000 |          | $ | 30,000 | (3)                 |  | $ | 122,247                                 |     |                              | $ |  |          | $ | 21,821 |     |  | $ | 434,068
|Syed Zaidi                            |  | 2008 |  | $         | 238,462 |          | $ | 1,556  |                     |  | $ | 146,923                                 | (4) |                              | $ |  |          | $ | 48,268 | (5) |  | $ | 435,209
|Chief Operating Officer               |  | 2007 |  | $         | 220,000 |          | $ | 1,556  |                     |  | $ | 98,371                                  |     |                              | $ |  |          | $ | 13,630 |     |  | $ | 333,557
|Deepraj Puar                          |  | 2008 |  | $         | 226,154 |          | $ |       |                     |  | $ | 91,938                                  |     |                              | $ |  |          | $ | 39,244 | (6) |  | $ | 357,336
|Vice President, Operations            |  | 2007 |  | $         | 217,308 |          | $ |       |                     |  | $ | 135,477                                 |     |                              | $ |  |          | $ | 21,863 |     |  | $ | 374,648



|(1) | Represents the dollar amount recognized by the Company for financial reporting purposes under FAS 123R, disregarding forfeitures. Assumptions made for fiscal 2008 are disclosed in
Note 4 to the Notes to the Consolidated Financial Statements in the Form 10-K for the fiscal year ended January 27, 2008 and assumptions made for fiscal 2007 are disclosed in Note 4 to the Notes to the Consolidated Financial Statements in the
Form 10-K for the fiscal year ended January 28, 2007.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes premiums paid for health and life insurance and health club subsidies.
|--- | -------------------------------------------------------------------------------

|(3) | Includes $30,000 bonus earned in fiscal year ended January 29, 2006 and paid in fiscal year ended January 28, 2007.
|--- | -------------------------------------------------------------------------------------------------------------------

|(4) | Excludes $13,660 FAS 123(R) expense for participation in our Employee Stock Purchase Plan.
|--- | ------------------------------------------------------------------------------------------

|(5) | Includes $14,492 in paid out vacation.
|--- | --------------------------------------

|(6) | Includes $3,200 in personal travel paid for by our company.
|--- | -----------------------------------------------------------



Stock Awards



There were no grants or vesting of stock awards made by us to any executive officer during the fiscal year 2008 and 2007. There were no unvested stock
awards outstanding at fiscal 2008 and 2007.



Grants of Option Awards



We currently award stock options under our 2003 Stock Plan
and 1998 Stock Option Plan. The 2003 Stock Plan was approved by stockholders. The 1998 Stock Option Plan was not required to be approved by stockholders when it was adopted. Beginning with fiscal year 2004, as a result of regulatory changes, all
material changes to both plans require stockholder approval. The Compensation Committee did not issue stock options as part of an annual stock option grant refresh during fiscal 2008 as target objectives for our company had not been met. During
fiscal 2008, stock options were granted under the 2003 Stock Plan to Named Executive Officers Mr. Puar and Mr. Zaidi in connection with their promotions. The stock options are intended to align the interest of the executive officers with
those of stockholders. The stock options are also designed to attract and retain the Named Executive Officers, and to motivate them to achieve the corporate objectives.



The following table provides information concerning options to purchase the Companys Common Stock granted to each of the Named
Executive Officers during the fiscal year ended January 27, 2008. We did not grant any non-equity incentive awards or equity incentive awards, nor were any performance-based awards or stock options granted.



12



---

Grants of Plan-Based Awards

For Fiscal Year Ended January 27, 2008



|                     |  |            |  |                                                                  |  |                                                        |     
|-------------------- |  | ---------- |  | ---------------------------------------------------------------- |  | ------------------------------------------------------ | ----
|Name                 |  | Grant Date |  | All Other OptionAwards: Numberof SecuritiesUnderlying Options(#) |  | Exercise orBase Price ofOption Awards($ per share) (1)
|Douglas R. Young (2) |  |           |  |                                                                 |  | $                                                      |    
|Deepraj Puar (3)     |  | 07/26/2007 |  | 50,000                                                           |  | $                                                      | 3.85
|Syed Zaidi (3)       |  | 02/23/2007 |  | 30,000                                                           |  | $                                                      | 4.17



|(1) | The exercise price of all options was equal to the closing market price on the date of grant.
|--- | ---------------------------------------------------------------------------------------------

|(2) | Mr. Young did not receive stock options nor were there any modifications to his existing stock options during fiscal 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------

|(3) | Messrs. Puar and Zaidi received stock option grants in connection with their promotions. The options vest at the rate of
1/48thper month, with the first installment vesting one month after the date of grant. There were no modifications to their stock options
during fiscal 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



13



---

Outstanding Equity Awards at January 27, 2008



The following table provides information regarding each unexercised stock
option held by each of our named executive officers as of January 27, 2008.



|              |  |                                                                  |  |                                                                    |     |  |                         |       |                       |           
|------------- |  | ---------------------------------------------------------------- |  | ------------------------------------------------------------------ | --- |  | ----------------------- | ----- | --------------------- | ----------
|              |  | Option Awards                                                   
|Name          |  | Number of SecuritiesUnderlyingUnexercised Options (#)Exercisable |  | Number of SecuritiesUnderlyingUnexercised Options (#)Unexercisable |     |  | OptionExercisePrice ($) |       | OptionExpiration Date
|Douglas Young |  | 24,867                                                           |  | 13,333                                                             | (1) |  | $                       | 2.15  |                       | 5/4/2015  
|              |  | 54,999                                                           |  | 25,001                                                             | (2) |  | $                       | 2.40  |                       | 4/21/2015 
|              |  | 16,000                                                           |  | 0                                                                  | (3) |  | $                       | 4.65  |                       | 1/26/2015 
|              |  | 25,000                                                           |  | 35,000                                                             | (4) |  | $                       | 4.83  |                       | 5/10/2012 
|              |  | 12,188                                                           |  | 32,812                                                             | (5) |  | $                       | 6.56  |                       | 12/18/2012
|              |  | 16,000                                                           |  | 0                                                                  | (3) |  | $                       | 21.50 |                       | 2/2/2014  
|              |  |                                                                  |  |                                                                   
|Deepraj Puar  |  | 11,375                                                           |  | 9,208                                                              | (6) |  | $                       | 2.05  |                       | 5/18/2015 
|              |  | 2,667                                                            |  | 0                                                                  | (3) |  | $                       | 2.75  |                       | 7/22/2015 
|              |  | 6,250                                                            |  | 43,750                                                             | (7) |  |                         | 3.85  |                       | 7/24/2017 
|              |  | 10,417                                                           |  | 14,583                                                             | (4) |  | $                       | 4.83  |                       | 5/10/2012 
|              |  | 9,479                                                            |  | 25,521                                                             | (5) |  | $                       | 6.56  |                       | 12/18/2012
|              |  | 20,000                                                           |  | 0                                                                  | (3) |  | $                       | 12.90 |                       | 11/6/2013 
|              |  | 36,000                                                           |  | 0                                                                  | (3) |  | $                       | 13.95 |                       | 9/18/2013 
|              |  | 15,000                                                           |  | 0                                                                  | (3) |  | $                       | 16.00 |                       | 5/15/2012 
|              |  | 14,001                                                           |  | 0                                                                  | (3) |  | $                       | 16.10 |                       | 8/15/2010 
|              |  |                                                                  |  |                                                                   
|Syed Zaidi    |  | 14,000                                                           |  | 9,208                                                              | (6) |  | $                       | 2.05  |                       | 5/18/2015 
|              |  | 6,875                                                            |  | 23,125                                                             | (8) |  |                         | 4.17  |                       | 2/23/2017 
|              |  | 16,667                                                           |  | 23,333                                                             | (4) |  | $                       | 4.83  |                       | 5/10/2012 
|              |  | 10,000                                                           |  | 0                                                                  | (3) |  | $                       | 5.00  |                       | 5/30/2010 
|              |  | 18,958                                                           |  | 51,042                                                             | (5) |  | $                       | 6.56  |                       | 12/18/2012
|              |  | 20,000                                                           |  | 0                                                                  | (3) |  | $                       | 12.90 |                       | 11/6/2013 
|              |  | 14,600                                                           |  | 0                                                                  | (3) |  | $                       | 13.95 |                       | 9/18/2013 
|              |  | 20,000                                                           |  | 0                                                                  | (3) |  | $                       | 14.85 |                       | 5/30/2010 
|              |  | 20,000                                                           |  | 0                                                                  | (3) |  | $                       | 16.00 |                       | 5/15/2012 



|(1) | These options represent option awards made in fiscal 2006. The options vest at the rate of 1/48thmonthly beginning June 5, 2005 and continuing monthly thereafter until May 5, 2009.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | These options represent option awards made in fiscal 2006. The options vest at the rate 25% on the first anniversary of
the grant date and 1/48thmonthly thereafter. The initial vest day was April 21, 2006 and the options are fully vested on April 21, 2009.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | These options are fully vested as of January 27, 2008.
|--- | ------------------------------------------------------

|(4) | These options represent option awards made in fiscal 2007. The options vest at the rate of 1/48thmonthly beginning on June 10, 2007 and continuing monthly thereafter until May 10, 2010.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | These options represent option awards made in fiscal 2007. The options vest at the rate of 1/48thmonthly beginning January 18, 2007 and continuing monthly thereafter until December 18, 2010.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | These options represent option awards made in fiscal 2006. The options vest at the rate of 1/48thmonthly beginning June 30, 2005, and continuing monthly thereafter until May 31, 2009.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | These options represent option awards made in fiscal 2008. The options vest at the rate of 1/48thmonthly beginning August 24, 2007 and continuing monthly thereafter until July 24, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | These options represent option awards made in fiscal 2008. The options vest at the rate of 1/48thmonthly beginning March 23, 2007 and continuing monthly thereafter until February 23, 2011.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14



---

Pension Benefits



Currently, we do not have any pension benefit plans that are required to be reported.



Nonqualified Deferred Compensation



Currently, we do not have any nonqualified deferred compensation plans that
are required to be reported.



Director Compensation For Fiscal Year Ended
January 27, 2008



Our directors are reimbursed for
their reasonable expenses associated with their attendance at meetings of our Board of Directors. In addition, each non-employee director was paid cash compensation for their directorship for fiscal year 2008 as follows:



| |  |  | A quarterly retainer of $4,000 for service as a director;
| | - |  | ---------------------------------------------------------



| |  |  | A quarterly retainer of $2,000 for service on the Audit Committee;
| | - |  | ------------------------------------------------------------------



| |  |  | A quarterly retainer of $2,000 for serving as Chair of the Audit Committee;
| | - |  | ---------------------------------------------------------------------------



| |  |  | A payment of $1,000 for attendance at each board meeting held in person;
| | - |  | ------------------------------------------------------------------------



| |  |  | A payment of $500 for each telephonic meeting of the board and /or special committee meetings.
| | - |  | ----------------------------------------------------------------------------------------------



|                 |  |                                   |  |                |  |                     |  |                                         |  |                                          |  |                          |  |         
|---------------- |  | --------------------------------- |  | -------------- |  | ------------------- |  | --------------------------------------- |  | ---------------------------------------- |  | ------------------------ |  | --------
|Name             |  | Fees Earnedor Paid inCash ($) (1) |  | StockAwards($) |  | OptionAwards($) (2) |  | Non-EquityIncentive PlanCompensation($) |  | NonqualifiedDeferredCompensationEarnings |  | All OtherCompensation($) |  | Total($)
|Dr. Anil Gupta   |  | 30,500                            |  | 0              |  | 75,129              |  | 0                                       |  | 0                                        |  | 0                        |  | 105,629 
|Brett Moyer (3)  |  | 22,000                            |  | 0              |  | 10,532              |  | 0                                       |  | 0                                        |  | 0                        |  | 32,532  
|Carl Stork       |  | 31,500                            |  | 0              |  | 75,129              |  | 0                                       |  | 0                                        |  | 0                        |  | 106,629 
|Steve Valenzuela |  | 39,500                            |  | 0              |  | 76,631              |  | 0                                       |  | 0                                        |  | 0                        |  | 116,131 



|(1) | This column includes annual retainer and meeting fees earned in fiscal 2008 regardless of when paid.
|--- | ----------------------------------------------------------------------------------------------------

|(2) | This column includes the compensation cost recognized for financial statement reporting purposes under FAS 123(R) for fiscal year 2008 with respect to stock options that vested in
fiscal 2008. The expense is based upon a Black-Scholes model amortized over the vesting period of the options (excluding estimated forfeiture adjustments). We have described the assumptions made in this valuation in Note 4 of the Notes to
Consolidated Financial Statements in the Form 10-K for the year ended January 27, 2008. The total FAS 123(R) grant date value of options granted in fiscal year 2008 without regard to vesting for Mr. Moyer was $53,202 in connection
with his initial grant on joining our Board of Directors. Dr. Gupta, Mr. Stork and Mr. Valenzuela did not receive stock option grants in fiscal 2008. At fiscal year end, options to purchase the indicated number of shares were
outstanding and held by each director: Gupta, 87,641; Moyer, 20,000; Stork, 83,666; and Valenzuela, 52,083.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Mr. Moyer was appointed to the Board of Directors effective March 5, 2007.
|--- | --------------------------------------------------------------------------



The non-employee directors are entitled to receive stock option
grants under the provisions of the Companys 2003 Stock Plan. A non-employee director joining the Board for the first time is granted non-statutory options to purchase 20,000 shares of our common stock. The exercise price for options granted to
non-employee directors is the closing price per share of common stock on Nasdaq on the date of grant. In addition, discretionary stock options may be annually granted to non-employee directors. During fiscal 2008, one non-employee director,
Mr. Moyer, received 20,000 shares in connection with his joining our Board of Directors. Mr. Moyers options vest at the rate of 25% one year from the date of grant and 1/48thmonthly thereafter until all options are vested. Mr. Moyers options have an exercise price of $3.73 per share, the closing price per share on the date of grant. The term of the options granted
is ten years. Vesting is subject to Mr. Moyers continued service as a director. Upon a merger of the Company with or into another corporation or a change of control of the Company, excluding a financing, all options granted to
non-employee members of the Board of Directors will vest in full.



15



---

|Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|-------- | ----------------------------------------------------------------------------------------------



The following table sets forth certain information with respect to beneficial ownership of our Common Stock, as of
April 4, 2008, by:



| |  |  | Each person or entity known by us to be the beneficial owner of more than 5% of our common stock;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | Each director;
| | - |  | --------------



| |  |  | Each named executive officer;
| | - |  | -----------------------------



| |  |  | All current directors and executive officers as a group.
| | - |  | --------------------------------------------------------



The percentage of beneficial ownership of each class of our capital stock for the table is based on 12,455,779 shares of our common stock outstanding
as of April 4, 2008. To our knowledge, except under community property laws or as otherwise noted, the persons and entities named in the table have sole voting and sole investment power over their shares of our capital stock. Unless otherwise
indicated, the principal address of each of the stockholders below is c/o NeoMagic Corporation, 3250 Jay Street, Santa Clara, CA 95054.



Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the SEC) based on voting and
investment power with respect to the securities and does not necessarily indicate beneficial ownership for any other purpose. The number of shares of Common Stock outstanding used in calculating the percentage for each listed person includes shares
of Common Stock underlying options and outstanding warrants held by such person that are exercisable within 60 calendar days of April 4, 2008, but excludes shares of Common Stock underlying options and or warrants held by any other person.



Beneficial Ownership Table



|                                                                        |  |                                  |  |             |  
|----------------------------------------------------------------------- |  | -------------------------------- |  | ----------- | -
|Name of Beneficial Owner or Identity of Group                           |  | Number ofSharesBeneficiallyOwned |  | Percent (1) |  
|Douglas Young (2)                                                       |  | 177,854                          |  | 1.4         | %
|Deepraj Puar (3)                                                        |  | 145,927                          |  | 1.2         | %
|Syed Zaidi (4)                                                          |  | 169,247                          |  | 1.3         | %
|Anil Gupta (5)                                                          |  | 87,058                           |  | *           |  
|Brett Moyer (6)                                                         |  | 11,083                           |  | *           |  
|Carl Stork (7)                                                          |  | 86,223                           |  | *           |  
|Steve Valenzuela (8)                                                    |  | 44,000                           |  | *           |  
|All current executive officers and directors as a group (9 persons) (9) |  | 723,892                          |  | 5.5         | %
|Raffles Associates, L.P. (10)                                           |  | 805,191                          |  | 6.4         | %
|Entities affiliated with Special Situations (11)                        |  | 2,390,298                        |  | 18.3        | %



|(1) | Based on 12,455,779 shares outstanding as of April 4, 2008.
|--- | -----------------------------------------------------------

|(2) | Includes options to purchase an aggregate of 171,554 shares that are exercisable within 60 days of April 4, 2008.
|--- | -----------------------------------------------------------------------------------------------------------------

|(3) | Includes options to purchase an aggregate of 140,189 shares that are exercisable within 60 days of April 4, 2008.
|--- | -----------------------------------------------------------------------------------------------------------------

|(4) | Includes options to purchase an aggregate of 159,225 shares that are exercisable within 60 days of April 4, 2008.
|--- | -----------------------------------------------------------------------------------------------------------------

|(5) | Includes options to purchase an aggregate of 84,558 shares that are exercisable within 60 days of April 4, 2008. Dr. Guptas son is owner of 500 shares of common
stock, which are included in the total shares beneficially owned.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16



---

|(6) | Includes options to purchase an aggregate of 8,583 shares that are exercisable within 60 days of April 4, 2008.
|--- | ---------------------------------------------------------------------------------------------------------------

|(7) | Includes options to purchase an aggregate of 80,583 shares that are exercisable within 60 days of April 4, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------

|(8) | Includes options to purchase an aggregate of 44,000 shares that are exercisable within 60 days of April 4, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------

|(9) | Includes options to purchase an aggregate of 691,192 shares held by 9 executive officers and directors that are exercisable within 60 days of April 4, 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | This information is based on the Schedule 13G (Amendment No. 2) filed with the Securities and Exchange Commission on February 14, 2008. Raffles Associates, L.P. is located
at One Metrotech Center North, Brooklyn, NY 11201. Includes warrants to purchase 100,000 shares of common stock that are exercisable.
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | This information is based on the Schedule 13G (Amendment No. 1) filed with the Securities and Exchange Commission on February 13, 2008. Special Situations is located at 527
Madison Avenue, Suite 2600, New York, NY 10022. Austin W. Marxe and David M. Greenhouse beneficially own all of the shares and they share sole voting and investment power over the following shares: (i) 234,698 shares of Common Stock and
Warrants to purchase 83,500 shares of Common Stock owned by Special Situations Private Equity Fund, L.P., (ii) 600,100 shares of Common Stock and Warrants to purchase 218,000 shares of Common Stock owned by Special Situations Fund III QP, L.P.
(6.5%), (iii) 103,600 shares of Common Stock and Warrants to purchase 38,000 shares of Common Stock owned by Special Situations Technology Fund, L.P. and (iv) 644,000 shares of Common Stock and Warrants to purchase 235,500 shares of Common
Stock owned by Special Situations Technology Fund II, L.P. (6.9%). Includes warrants to purchase 575,000 shares of common stock detailed in this footnote that are exercisable.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|* | Less than 1%
|- | ------------



Equity Compensation Plan Table



The table set forth in Item 5 of Part II of the Original Filing is hereby incorporated by reference into this Item 12 of Part III.



17



---

|Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|-------- | -------------------------------------------------------------------------



Other than the compensation arrangements described in Item 11 under Director Compensation, Executive
Compensation and Employment Contracts, Termination of Employment and Change in Control Arrangements and the transactions described below, since January 29, 2006, there has not been, nor is there currently proposed, any
transaction or series of similar transactions to which we were or will be a party to which the amount involved exceeds $120,000 and in which any executive officer, director or beneficial owner of more than 5% of our common stock had or will have a
direct or indirect material interest.



Director Independence



The Nominating and Corporate Governance Committee of our Board of
Directors determines the independence of each director and nominee for election as a director observing all criteria for independence as set forth in the NASDAQ Stock Market listing standards and applicable rules of the Securities and Exchange
Commission (the Commission).



The Nominating and
Corporate Governance Committee has determined that a majority of our Board is independent according to the applicable rules of the Commission and the listing standards of the NASDAQ Stock Market. In making the determinations as to which members of
the Board are independent, the committee considered the fact that certain of these independent directors, as disclosed in their biographies set forth in Item 10. Directors, Executive Officers and Corporate Governance above, are
associated with other companies in the semiconductor industry. In reviewing these relationships, the Board determined that, absent a direct conflict (in which the Board may require recusal or other similar procedures), such relationships do not
impede any such directors ability to act independently on behalf of the Company and its stockholders. The Board has determined that, except Douglas R. Young and Syed Zaidi, who are also executive officers of NeoMagic, each of the current
directors has no material relationship with NeoMagic Corporation (either directly or as a partner, stockholder or officer of an organization that has a material relationship with NeoMagic Corporation) and is independent within the meaning of the
applicable rules of the Commission and the listing standards of the NASDAQ Stock Market.



18



---

|Item 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------



The table below sets forth the aggregate fees billed during the fiscal years ended January 27, 2008 and January 28, 2007 for audit and other
services provided by Stonefield Josephson, Inc., the Companys principal accountant. These fees do not reflect all fees incurred, only fees actually billed.



|                   |  |                        |     |      |   |    
|------------------ |  | ---------------------- | --- | ---- | - | ---
|                   |  | Fiscal Year           
|                   |  | 2008                   |     | 2007
|                   |  | (amounts in thousands)
|Audit Fees (1)     |  | $                      | 453 |      | $ | 413
|Audit-Related Fees |  |                        |    |      |   |   
|Tax Fees (2)       |  |                        |    |      |   |   
|All Other Fees     |  |                        | 27  |      |   | 158
|                   |  |                        |     |      |   |    
|Total              |  | $                      | 480 |      | $ | 571
|                   |  |                        |     |      |   |    



|(1) | Audit fees include fees associated with the annual audit, reviews of our companys quarterly financial statements, statutory audits required for the international subsidiaries,
permitted accounting consultations and review of regulatory filings.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Stonefield Josephson, Inc. does not provide tax-related services. During fiscal 2008 and 2007, tax services were provided by Deloitte Tax LLP and Ernst & Young LLP, and the
amounts billed were $246,000 and $244,000, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Audit Committee Pre-Approval of Services



Under the Audit Committee charter, the Audit Committee must pre-approve all audit and permitted non-audit services, including the fees and terms thereof, to be performed by our independent registered public accounting firm. The Audit
Committee shall have the sole authority to approve the hiring and firing of the independent registered public accounting firm, all audit engagement fees and terms and all non-audit engagements, as may be permissible, with the independent auditors.
In the past two fiscal years, the Audit Committee has pre-approved all audit and non-audit services performed by and fees paid to Stonefield Josephson, Inc.



The Audit Committee has determined that the provision of services described above is compatible with maintaining Stonefield Josephson, Inc.s
independence.



19



---

PART IV



|Item 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------



|(a) | The following documents are filed as part of this report:
|--- | ---------------------------------------------------------



| | 3. | Exhibits
| | -- | --------



The exhibits listed in the index to exhibits immediately following the signature pages are filed or incorporated by reference as a part of this Form 10-K/A. These are in addition to the exhibits filed with the
Original Filing.



20



---

SIGNATURES



Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



NEOMAGIC CORPORATIONBy:

/s/     STEVEN P. BERRYSTEVEN P. BERRYVice President of Finance and Chief Financial Officer (Principal Financial Officer)Date: May 27, 2008




|                                     |  |                                                                                                                      |  |             
|------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------- |  | ------------
|Name                                 |  | Title                                                                                                                |  | Date        
|                                     |  |                                                                                                                     
|/S/ DOUGLAS R.YOUNG Douglas R. Young |  | President and Chief Executive Officer (Principal Executive Officer) and Director                                     |  | May 27, 2008
|                                     |  |                                                                                                                     
|/S/ STEVEN P. BERRY Steven P. Berry  |  | Vice President of Finance and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |  | May 27, 2008
|                                     |  |                                                                                                                     
|* Anil Gupta                         |  | Director                                                                                                             |  | May 27, 2008
|                                     |  |                                                                                                                     
|* Brett Moyer                        |  | Director                                                                                                             |  | May 27, 2008
|                                     |  |                                                                                                                     
|* Carl Stork                         |  | Director                                                                                                             |  | May 27, 2008
|                                     |  |                                                                                                                     
|* Steve Valenzuela                   |  | Director                                                                                                             |  | May 27, 2008
|                                     |  |                                                                                                                     
|* Syed Zaidi                         |  | Director                                                                                                             |  | May 27, 2008



|     |  |                        
|---- |  | -----------------------
|     | 
|*By: |  | /s/     STEVEN P. BERRY
|     |  | STEVEN P. BERRY        
|     |  | Attorney-in-Fact       



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EXHIBIT INDEX



The following Exhibits are filed as part of, or incorporated by reference into, this Form 10-K/A:



|       |  |                                                                                                                                                                               
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Description                                                                                                                                                                   
|31.1   |  | Certification of the Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|       | 
|31.2   |  | Certification of the Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|       | 
|32.1   |  | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                        
|       | 
|32.2   |  | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                        



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