MACROVISION CORPORATION EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT

 

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                                                                    EXHIBIT 10.2

 

 

                             MACROVISION CORPORATION

                  EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT

 

        THIS EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT is made and entered

into as of July 5, 2005, by and between Macrovision Corporation, a Delaware

corporation (the "Company") and Alfred J. Amoroso ("Executive").

 

        WHEREAS, the Board of Directors (the "Board") of the Company has

determined that, in the event of a possible, threatened or pending sale or other

change in control of the Company, it is imperative that the Company and the

Board be able to rely upon Executive to continue in Executive's position, and

that the Company be able to receive and rely upon Executive's advice, if

requested, as to the best interests of the Company and its stockholders without

concern that Executive might be distracted by the personal uncertainties and

risks created by any such possible transactions; and

 

        WHEREAS, in connection with the foregoing, Executive may, in addition to

Executive's regular duties, be called upon to assist in the assessment of any

such possible transactions, advise management and the Board as to whether such

proposals would be in the best interests of the Company and its stockholders,

and to take such other actions as the Board might determine to be appropriate;

and

 

        WHEREAS, the Company's Compensation Committee has determined that

Executive should be provided severance benefits in the event his employment is

terminated in connection with a change in control or without cause in the

absence of a change in control, so that Executive will not be distracted by

personal uncertainties and risks concerning his employment with the Company; and

 

        WHEREAS, the Board and the Compensation Committee have authorized the

Company to enter into an agreement with Executive providing severance benefits

as set forth herein;

 

        NOW, THEREFORE, to assure the Company that it will have the continued

dedication of Executive and the availability of Executive's advice and counsel

through the occurrence of any Change in Control of the Company, and to induce

Executive to enter into and remain in the employ of the Company, and for other

good and valuable consideration, the Company and Executive agree as follows:

 

        1.      DEFINITIONS.

 

                (a)     "CAUSE" means the occurrence of any one or more of the

following: (i) conviction of any felony or any act of fraud, misappropriation or

embezzlement which has an immediate and materially adverse effect on the Company

or a Subsidiary, (ii) engaging in a fraudulent act to the material damage or

prejudice of the Company or a Subsidiary or in conduct or activities materially

damaging to the property, business or reputation of the Company or a Subsidiary,

(iii) willful and continued failure to comply in any material respect with the

terms of any applicable employment agreement or any written policies or lawful

directives of the Board which have an immediate and materially adverse effect on

the Company or a Subsidiary and which have not been corrected within 30 days

after written notice from the Company of such failure, (iv) any material act or

omission involving malfeasance or negligence in the performance of employment

duties which has an immediate and materially adverse effect on the Company or a

Subsidiary and which has not been corrected within 30 days after written notice

from the Company, or (v) material breach of any other agreement with the

Company, which has an immediate and materially adverse effect on the Company or

a Subsidiary and which has not been cured within 30 days after written notice

from the Company of such breach.

 

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                (b)     "CHANGE IN CONTROL" means any of the following events

(i) any "person" or "group" (as defined in or pursuant to Sections 13(d) or

14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))

other than the Company, is or becomes the "beneficial owner" (as defined in Rule

13d-3 promulgated under the Exchange Act), directly or indirectly (including by

holding securities which are exercisable for or convertible into shares of

capital stock of the Company), of securities of the Company representing 50% or

more of the voting power of the outstanding shares of capital stock of the

Company entitled to vote generally in the election of directors; or, (ii) the

Company sells or exchanges, through merger, assignment or otherwise, in one or

more transactions, other than in the ordinary course of business, assets which

provided at least seventy percent (70%) of the revenues or pre-tax net income of

the Company and its Subsidiaries on a consolidated basis during the most

recently-completed fiscal year, or, (iii) Continuing Directors cease to

constitute at least a majority of the Board. Notwithstanding the foregoing, the

following events shall not constitute a Change in Control: any acquisition of

beneficial ownership pursuant to (i) a reclassification, however effected, of

the Company's authorized common stock, or (ii) a corporate reorganization

involving the Company or a Subsidiary which does not result in a material change

in the ultimate ownership by the stockholders of the Company (through their

ownership of the Company or its successor resulting from the reorganization) of

the assets of the Company and its Subsidiaries, but only if such

reclassification or reorganization has been approved by the Board.

 

                (c)     "CODE" means the Internal Revenue Code of 1986, as

amended.

 

                (d)     "CONTINUING DIRECTOR" means (i) each Director in office

on July 1, 2005, and (ii) any successor to any such Director whose nomination or

selection was recommended or approved by a majority of the Directors in office

at the time of the Director's nomination or selection.

 

                (e)     "GOOD REASON" means the occurrence of any of the

following without Executive's consent: (i) a substantial diminution in

Executive's status, position or responsibilities, or the assignment to Executive

of any duties or responsibilities that are inconsistent with Executive's status,

position or responsibilities; (ii) a reduction in Executive's base salary or

target bonus compensation under the Company's Executive Incentive Plan; (iii)

the Company's failure to make the annual refresh stock option grants described

in the accepted offer of employment between Executive and the Company dated June

8, 2005 (the "Employment Letter"); (iv) the failure of any successor-in-interest

to assume all of the obligations of the Company under this Agreement; (v)

material breach of this Agreement by the Company or material breach by the

Company of any other material agreement between the Company and Executive which

breach continues after written notice from Executive and a reasonable

opportunity by the Company to cure any such breach; or (vi) a relocation of

Executive's principal place of employment to a new work site requiring an

increase in one-way commute from Executive's residence of more than thirty-five

(35) miles.

 

                (f)     "SUBSIDIARY" means (i) any corporation, foreign or

domestic, in which the Company directly or indirectly owns 50% or more of the

issued and outstanding voting stock on an "as converted basis" and (ii) any

partnership, foreign or domestic, in which the Company owns a direct or indirect

interest equal to 50% or more of the outstanding equity interests.

 

                (g)     "WELFARE BENEFITS" means and includes, without

limitation, all life, dental, health, accident and disability benefit plans,

other similar welfare plans, and any equivalent successor policy, plan, program

or arrangement that may now exist or be adopted hereafter by the Company or a

Subsidiary.

 

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        2.      SEVERANCE BENEFITS.

 

                (a)     In the event that a Change in Control occurs and, within

the period beginning four (4) months before the date of the Change in Control

and ending twelve (12) months thereafter, (i) Executive's employment is

terminated by the Company or a Subsidiary without Cause or (ii) Executive

voluntarily terminates his employment with the Company and its Subsidiaries with

Good Reason, then the Company shall provide Executive severance benefits under

this Agreement. Such severance benefits shall consist of a lump sum payment

equal to twelve (12) months of Executive's regular base salary in effect four

(4) months before the time of the Change in Control or at the time of the

termination of his employment, whichever is greater;

 

                (b)     In the event that Executive's employment is terminated

by the Company or a Subsidiary without Cause or Executive voluntarily terminates

his employment with the Company and its subsidiaries with Good Reason and not

within the period specified in Section 2(a) above, then the Company shall

provide Executive severance benefits under this Agreement. Such severance

benefits shall consist of a lump sum payment equal to twelve (12) months of

Executive's regular base salary in effect at the time of the termination of his

employment (and prior to any reduction triggering a resignation for Good Reason

as defined above).

 

        3.      WELFARE BENEFITS.

 

                (a)     During the period that the Company is obligated to pay

Executive salary continuation pursuant to Section 2 above, or, if sooner, until

Executive is entitled to Welfare Benefits (as defined