Exhibit 10.12
[VP Version]
Change of Control
Terms and
Conditions
TiVo Inc. (the
“Corporation”) considers it essential to the best
interests of its shareholders to foster the continuous employment
of the Corporation’s key management personnel. In this
regard, the Corporation’s Board of Directors (the
“Board”) recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control
of the Corporation may exist and the uncertainty and questions that
it may raise among management could result in the departure or
distraction of management personnel to the detriment of the
Corporation and its shareholders.
The Board has decided to reinforce
and encourage the continued attention and dedication of members of
the Corporation’s management, including yourself, to their
assigned duties without the distraction arising from the
possibility of a change in control of the Corporation.
In order to induce you to remain in
its employ, the Corporation hereby agrees that after this letter
agreement (this “Agreement”) has been fully executed,
you shall receive the severance benefits set forth in this
Agreement in the event that your employment with the Corporation is
terminated under the circumstances described below in anticipation
of or subsequent to a Change in Control (as defined
below).
1. Term of Agreement . This
Agreement shall commence on January 1, 2007 the
“Effective Date” and shall continue in effect until the
earlier of its termination by mutual consent of you and the
Corporation or the date all payments or benefits required to be
made or provided hereunder have been made or provided in their
entirety.
2. Change in Control . No
benefits shall be payable hereunder unless there has been a Change
in Control. For purposes of this Agreement, a “Change in
Control” shall mean:
(i) a dissolution or liquidation of
the Corporation;
(ii) a sale of all or substantially
all of the assets of the Corporation;
(iii) a sale by the stockholders of
the Corporation of the voting stock of the Corporation to another
corporation or its subsidiaries that results in the ownership by
such corporation and/or its subsidiaries of eighty percent
(80%) or more of the combined voting power of all classes of
the voting stock of the Corporation entitled to vote;
(iv) a merger or consolidation
involving the Corporation in which the Corporation is not the
surviving corporation or a merger or consolidation of a subsidiary
of the Corporation and in which, in either case, beneficial
ownership of securities of the Corporation representing at least
fifty percent (50%) of the combined voting power entitled to
vote in the election of members of the Board of Directors
(“Directors”) has changed;
(v) a reverse merger in which the
Corporation is the surviving corporation but the shares of the
Corporation’s Common Stock outstanding immediately preceding
the merger are
converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise, and
in which beneficial ownership of securities of the Corporation
representing at least fifty percent (50%) of the combined
voting power entitled to vote in the election of Directors has
changed;.
(vi) an acquisition by any person,
entity or group within the meaning of Section 13(d) or 14(d)
of the Exchange Act, or any comparable successor provisions
(excluding any employee benefit plan, or related trust, sponsored
or maintained by the corporation or subsidiary of the Corporation
or other entity controlled by the Corporation) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) or securities of the
Corporation representing at least fifty percent (50%) of the
combined voting power entitled to vote in the election of
Directors; or
(vii) for any reason during any
period of two (2) consecutive years (not including any period
prior to the Effective Date) a majority of the Board is constituted
by individuals other than (1) individuals who were directors
immediately prior to the beginning of such period, and (2) new
directors whose election or appointment by the Board or nomination
for election by the Corporation’s stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors immediately prior to the
beginning of the period or whose election or nomination for
election was previously so approved.
3. Termination in Anticipation of
or Following Change in Control .
(i) General . If a Change in
Control shall have occurred during the term of this Agreement, you
shall be entitled to the benefits provided in Section 4(ii) if
your employment is terminated within the thirteen (13) month
period immediately following the date of such Change in Control
(a) by the Corporation other than for Cause or Disability
(each as defined below), or (b) by you for Good Reason (as
defined below) (a termination of your employment under the
circumstances described in this sentence is sometimes hereinafter
referred to as a “Payment Termination”).
Notwithstanding anything contained herein, if your employment is
terminated during the period commencing on the public announcement
of a transaction which if consummated will constitute a Change in
Control and ending on the date of consummation of such Change in
Control either by the Corporation other than for Cause or
Disability or by you for Good Reason, and if such termination
(1) was at the request of a third party effecting the Change
in Control or (2) otherwise arose in connection with or in
anticipation of the Change in Control, then for all purposes of
this Agreement your employment shall be deemed to have been
terminated immediately after the actual occurrence of the Change in
Control; provided, however, that nothing herein shall extend the
period within which any option to purchase the Corporation’s
capital stock that you hold may be exercised following your
termination of employment in such a manner as to result in adverse
tax consequences to you under Section 409A of the Internal
revenue Code of 1986, as amended (the “Code”). Except
as described in the preceding sentence, in the event that your
employment with the Corporation is terminated for any reason and
subsequently a Change in Control occurs, you shall not be entitled
to any benefits hereunder.
(ii) Death or Disability .
Your employment with the Corporation shall terminate automatically
upon your death. The Corporation may terminate your employment for
Disability, but only if that Disability continues through the Date
of Termination (as hereinafter defined).
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For purposes of this Agreement,
“Disability” shall mean your absence from the full-time
performance of your duties with the Corporation for six
(6) consecutive months by reason of your physical or mental
illness.
(iii) Cause . The Corporation
may terminate your employment for Cause. For purposes of this
Agreement, “Cause” shall mean (a) your willful and
continued failure to substantially perform your duties with the
Corporation (other than any such failure resulting from your
incapacity due to physical or mental illness or any such actual or
anticipated failure after your issuance of a Notice of Termination
(as defined below) for Good Reason), after a written demand for
substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties,
(b) your willful and continued failure to substantially follow
and comply with the specific and lawful directives of the Board, as
reasonably determined by the Board (other than any such failure
resulting from your incapacity due to physical or mental illness or
any such actual or anticipated failure after your issuance of a
Notice of Termination for Good Reason), after a written demand for
substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties,
(c) your willful commission of an act of fraud or dishonesty
resulting in material economic or financial injury to the
Corporation, or (d) your conviction of, or entry by you of a
guilty or no contest plea to, the commission of a felony involving
moral turpitude. For purposes of this Section 3(iii), no act,
or failure to act, on your part shall be deemed
“willful” unless done, or omitted to be done, by you
not in good faith.
(iv) Good Reason . You may
terminate your employment with the Corporation for Good Reason. For
purposes of this Agreement, “Good Reason” shall mean
the occurrence, after a Change in Control, of any one or more of
the following events without your prior written consent, unless the
Corporation fully corrects the circumstances constituting Good
Reason (provided such circumstances are capable of correction)
prior to the Date of Termination:
(a) A material reduction in the
nature or scope of your responsibilities, or the assignment to you
of duties that are materially inconsistent with your position (in
each case as compared to your responsibilities, duties or position
immediately prior to the Change in Control);
(b) the Corporation’s
reduction of your annual base salary or bonus opportunity, each as
in effect on the date hereof or as the same may be increased from
time to time;
(c) the relocation of the
Corporation’s offices at which you are principally employed
immediately prior to the date of the Change in Control (your
“Principal Location”) such that your one-way daily
commute from your principal residence to the Corporation’s
offices at which you are principally employed is increased by more
than fifty (50) miles;
(d) the Corporation’s failure
to pay to you any portion of your then current compensation or any
portion of an installment of deferred compensation under any
deferred compensation program of the Corporation, in each case
within seven (7) days of the date such compensation is
due;
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(e) the Corporation’s failure
to continue in effect compensation and benefit plans which provide
you with benefits which are no less favorable on an aggregate
basis, both in terms of the amount of benefits provided and the
level of your participation relative to other participants, to the
benefits provided to you under the Corporation’s compensation
and benefit plans and practices immediately prior to the Change in
Control;
(f) the Corporation’s failure
to obtain a satisfactory agreement from any successor to assume and
agree to perform this Agreement, as contemplated in Section 5
hereof; or
(g) any purported termination of
your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 3(v) hereof
(and, if applicable, the requirements of Section 3(iii)
hereof), which purported termination shall not be effective for
purposes of this Agreement.
Your right to terminate your
employment pursuant to this Section 3(iv) shall not be
affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any circumstance constituting Good
Reason hereunder.
(v) Notice of Termination .
Any purported termination of your employment by the Corporation or
by you (other than termination due to your death, which shall
terminate your employment automatically) shall be communicated by a
written Notice of Termination to the other party hereto in
accordance with Section 6. For purposes of this Agreement,
“Notice of Termination” shall mean a notice that shall
indicate the specific termination provision in this Agreement (if
any) relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of
your employment under the provision so indicated.
(vi) Date of Termination .
For purposes of this Agreement, “Date of Termination”
shall mean (a) if your employment is terminated due to your
death, the date of your death; (b) if your employment is
terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that you shall not have returned to
the full time performance of your duties during such thirty
(30) day period), and (c) if your employment is
terminated for any reason other than death or Disability, the date
specified in the Notice of Termination (which, in the case of a
termination by the Corporation without Cause shall not be less than
thirty (30) days from the date such Notice of Termination is
given, and in the case of a termination by you for Good Reason
shall not be less than fifteen (15) nor more than thirty
(30) days from the date such Notice of Termination is
given).
4. Compensation Upon
Termination .
(i) If your employment with the
Corporation is terminated by reason of your death, by the
Corporation for Cause or Disability, or by you other than for Good
Reason, the Corporation shall pay you your full base salary, when
due, through the Date of Termination at the rate in effect at the
time Notice of Termination is given, plus all other amounts to
which you are entitled under any compensation plan or practice of
the Corporation at the time such payments are due, and the
Corporation shall have no further obligations to you under this
Agreement.
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(ii) If you incur a Payment
Termination, then, subject to Section 4(v), in lieu of any
severance benefits to which you may otherwise be entitled under any
severance plan or program of the Corporation or by law, you shall
be entitled to the benefits provided below:
(a) the Corporation shall, at the
time specified in Section 4(iii), pay to you your full base
salary, when due, through the Date of Termination at the rate in
effect at the time Notice of Termination is given, plus all other
amounts to which you are entitled under any compensation plan or
practice of the Corporation at the time such payments are
due;
(b) the Corporation shall, at the
time specified in Section 4(iii), pay as severance pay to you
a lump-sum severance payment equal to the sum of the
following:
(A) fifty percent (50%) of the
greater of (x) your annual base salary as in effect
immediately prior to delivery of the Notice of Termination or
(y) your annual base salary as in effect immediately prior to
the Change in Control; and
(B) fifty perc
