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Exhibit
10.05
MACROVISION
CORPORATION
EXECUTIVE SEVERANCE AND
ARBITRATION AGREEMENT
THIS EXECUTIVE SEVERANCE AND
ARBITRATION AGREEMENT (the “Agreement”) is made and
entered into as of (date)
by and between Macrovision Corporation, a Delaware corporation (the
“Company”) and
(“Executive”).
WHEREAS, the Board of
Directors (the “Board”) of the Company has recommended
and authorized the Company to enter into a severance agreement in
the form hereof with Executive; and
WHEREAS, the Board 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;
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 (as defined in
Section 1(b) below) 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. Payment of Severance
Benefit.
(a) In the event that a
Change in Control (as hereinafter defined) occurs and, within the
period beginning ninety (90) days before the date of the
Change in Control and ending twelve (12) months thereafter,
(a) Executive’s employment is terminated by the Company
or a Subsidiary (as hereinafter defined) without Cause (as
hereinafter defined) or (b) Executive voluntarily terminates
his/her employment with Company and its Subsidiaries with Good
Reason (as hereinafter defined), then the Company shall pay to
Executive severance pay under this Agreement. Transfer of
Executive’s employment from the Company to a Subsidiary (or
to an entity of which the Company is a Subsidiary) or from a
Subsidiary to the Company or to another Subsidiary (or to an entity
of which the Company is a Subsidiary), by itself shall not be
considered a termination of Executive’s employment. Such
severance pay shall be in the form of salary continuation of
Executive’s regular base pay in effect ninety (90) days
before the time of the Change in Control or at the time of the
termination of his employment, whichever is greater. The Company
shall pay such severance pay during the twelve (12) month
period immediately following the date on which Executive’s
employment with the Company terminates; provided, however, that, if
Executive commences new employment within such twelve
(12) month period, such severance pay shall cease on the later
of (i) the date six (6) months after Executive’s
employment with the Company terminates or (ii) the date
Executive commences new employment.
(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;
(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. “Continuing Directors” are
(A) each director serving on the Board on July 1, 2007,
and (B) any successor to any such director whose nomination or
selection was approved by a majority of the directors in office at
the time of the director’s nomination or selection.
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)
“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 engaging in conduct or
activities materially damaging to the property, business or
reputation of the Company or a Subsidiary; (iii) failure to
comply in any material respect with the terms of any applicable
employment agreement or any written policies or directives of the
Board which have 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 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.
(d) “Good
Reason” means the occurrence of any of the following
without the Executive’s consent: (i) a material
diminution in the Executive’s authority, duties or
responsibilities, or the assignment to the Executive of any duties
or responsibilities that are inconsistent with the
Executive’s authority, duties or responsibilities;
(ii) a material diminution in the Executive’s base
salary; or (iii) a relocation of the 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. Within 90 days of the
initial occurrence of any of the events listed in this section,
Executive must provide written notice to the Company of the
occurrence of the event, and the Company shall have 30 days
following receipt of such notice during which it may remedy the
condition. If Executive fails to give such notice within the 90 day
period or the Company remedies the condition within the 30 day
period, the occurrence of such event shall not constitute
“Good Reason.”
(e)
“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” or (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.
(f) Notwithstanding the
foregoing, if any payment hereunder, or any portion thereof, is
considered “nonqualified deferred compensation” that is
to be paid to Executive at a time that he is considered to be
a “specified employee,” in each case as defined and
determined for purposes of Section 409A of the Internal
Revenue Code of 1986 as amended (“Section 409A”), and
is to be paid within six months following Executive’s
termination of employment, then to the extent that such payment is
not otherwise exempt from the application of the 20% excise tax
under Section 409A, such payment shall be delayed and paid on
the first day of the seventh calendar month following the month in
which Executive’s termination of employment
occurs.
2
2. Welfare
Benefits.
(a) During the period that
Company is obligated to pay Executive severance pay pursuant to
Section 1(a) above, or, if sooner, until Executive is entitled
to Welfare Benefits (as defined below) under any plan maintained by
any entity employing Executive after Executive’s employment
with the Company terminates, Company shall provide to Executive
(and his/her spouse and other qualified dependents) all Welfare
Benefits that Company provided to Executive (and his/her spouse and
qualified dependents) immediately prior to the Change in Control.
For purposes of this Agreement, the term “Welfare
Benefits” shall include, 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. Notwithstanding the foregoing, with
respect to any Welfare Benefits provided through an insurance
policy, the Company’s obligation to provide such Welfare
Benefits following a Change in Control shall be limited by the
terms of such policy; provided, however, that (i) the company
shall make reasonable efforts to amend such policy to provide the
continued coverage described in this Section 2(a) and
(ii) if such policy is not amended to provide the continued
benefits described in this Section 2(a), the Company shall pay
Executive’s cost of comparable replacement
coverage.
(b) If prior to the Change in
Control
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