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Exhibit
10.1
MACROVISION
CORPORATION
EXECUTIVE SEVERANCE AND
ARBITRATION AGREEMENT
THIS EXECUTIVE SEVERANCE AND
ARBITRATION AGREEMENT is made and entered into as of August 6,
2007, 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.
(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, 2007, 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 material diminution
in Executive’s authority, duties or responsibilities, or the
assignment to Executive of any duties or responsibilities that are
inconsistent with Executive’s authority, duties or
responsibilities; (ii) a material diminution 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 or
restricted stock grants described in the accepted offer of
employment between Executive and the Company dated June 8,
2005, as amended (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. 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.”
(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.
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 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 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).
(c) Payment of the twelve
(12) months of Executive’s regular base salary provided
for in Section 2(a) and 2(b) shall be paid out in lump sums as
follows: (i) an amount equal to the lesser of (A) two
times Executive’s W-2 compensation for the calendar year
prior to the calendar year in which occurs Executive’s
termination of employment with the Company or (B) two times
the qualified retirement plan compensation limit under
Section 401(a)(17) of the Code (currently 2 x $225,000 =
$450,000) upon Executive’s termination of employment with the
Company; and (ii) the remainder of the severance benefit upon
the first day of the seventh calendar month following the month in
which occurs Executive’s termination of employment with the
Company.
(d) 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.
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 above) under any plan
maintained by any entity employing Executive after
Executive’s employment with the Company terminates, Company
shall provide to Executive (and his spouse and other
quali
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