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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 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 qualified dependents) all Welfare
Benefits at Company expense that Company
provided to Executive at Company expense
(and his spouse and qualified
dependents) immediately prior to the
termination of his employment.
Notwithstanding the foregoing, with respect
to any Welfare Benefits provided
through an insurance policy, the Company's
obligation to provide such Welfare
Benefits 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 3(a), and (ii) if such policy
is not amended to provide the continued
benefits described in this Section 3(a),
the Company shall pay Executive's cost of
comparable replacement coverage.
(b)
If prior to the termination of his employment Executive
was required to contribute towards the cost
of a Welfare Benefit as a condition
of receiving such Welfare Benefit,
Executive may be required to continue
contributing towards the cost of such
Welfare Benefit under the same terms and
c
