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Genesis Microchip Inc.
Executive Bonus Plan — Fiscal Year 2007
Adopted June 10, 2006
(1) General Purpose : This Executive Bonus Plan—Fiscal Year
2007 (this “ Plan ” or “ Executive
Bonus Plan ”) is designed to provide incentive and
motivation to the Executive Staff of Genesis Microchip Inc. (the
“ Company ”) to achieve the Company’s
financial and operational plans.
(2) Duration : The Company’s fiscal year 2007 commences
on April 1, 2006 and ends on March 31, 2007. The Plan will be
in effect from April 1, 2006 through March 31, 2007 (the
“ Bonus Period ”), subject to the payment of the
bonuses after fiscal year end as described in Section 8 below,
and will be based on the full fiscal year 2007 financial and
operational results of the Company.
(3) Eligibility : This Plan covers the Chief Executive Officer
(“ CEO ”) and the members of his Executive
Staff. Eligible executives are those persons who are members of the
CEO’s Executive Staff on or before December 31, 2006,
and are employed by the Company at the time of the bonus payment
(the “ Eligible Executives ”). Any Eligible
Executive who joins the Executive Staff after the beginning of the
Bonus Period but before December 31, 2006 will receive a
prorated bonus, based upon his/her length of service during fiscal
year 2007, provided that said Eligible Executive remains employed
by the Company at the time of the bonus payment.
(4) Bonus Pool : If the Company meets or surpasses certain
minimum financial targets under its fiscal year 2007 operating plan
(the “ Operating Plan ”), a bonus pool will be
established under this Plan. Specifically, these minimum targets
are (a) 90% of the Operating Plan revenue, and (b) 90% of the
Operating Plan non-GAAP operating income. Both (a) and
(b) must be achieved in order for a bonus pool to be
established under this Plan.
(5) Calculation of Bonus
: In the event a bonus pool is
established under this Plan, Eligible Executives are eligible for
bonuses expressed in the tables below as a percentage of annual
base salary. Each Eligible Executive’s bonus will be
calculated on the basis of two components:
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(I)
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FINANCIAL COMPONENT
. This component is
based on the Company’s financial performance relative to the
Operating Plan. This component will be weighted 75% towards
non-GAAP operating income and 25% towards revenue achievement. For
purposes of this calculation, non-GAAP operating income may be
adjusted for unusual items (such as mergers and acquisitions) as
determined by the CEO and Chief Financial Officer, and as approved
by the Board of Directors. An Eligible Executive may earn a bonus
up to the percentage of his/her salary set forth below, depending
on the Company’s financial performance relative to the
Operating Plan.
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1
FINANCIAL
COMPONENT BONUS AMOUNTS
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Operating
Plan Performance
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<90%
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90%
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100%
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110%
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0
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%
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12.5
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%
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25
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%
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50
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%
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0
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%
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9.375
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%
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18.75
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%
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37.5
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%
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0
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%
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6.25
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%
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12.5
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%
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25
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%
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0
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%
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5
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%
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10
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%
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20
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%
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Corporate
financial performance levels that fall between any two Operating
Plan target levels will be paid a
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