|
Exhibit 10.2
GENESIS MICROCHIP INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
This
Change of Control Severance Agreement (the
“Agreement”) is made and entered into effective as
of March 2 ,
2007 (the
“Effective Date”), by and between
Elias Antoun (“Executive”)
and Genesis Microchip Inc., a Delaware corporation (the
“Company”). Certain capitalized terms used in this
Agreement are defined in Section 1 below.
RECITALS
A.
It
is expected that the Company from time to time will consider
the possibility of a Change of Control. The Board of Directors
of the Company (the “Board”) recognizes that such
consideration can be a distraction to Executive and can cause
Executive to consider alternative employment
opportunities.
B.
The
Board believes that it is in the best interests of the Company
and its shareholders to provide Executive with an incentive to
continue Executive’s employment and to maximize the
value of the Company upon a Change of Control for the benefit
of its shareholders.
C.
In
order to provide Executive with enhanced financial security
and sufficient encouragement to remain with the Company
notwithstanding the possibility of a Change of Control, the
Board believes that it is imperative to provide Executive with
certain severance benefits upon Executive’s termination
of employment following a Change of Control.
AGREEMENT
In
consideration of the mutual covenants herein contained and the
continued employment of Executive by the Company, the parties
agree as follows:
1.
Definition of Terms .
The following terms referred to in this Agreement will have the
following meanings:
(a)
Cause .
“Cause” means (a) any act of dishonesty or fraud taken
by Executive that is in connection with his or her responsibilities
as an employee which is intended to result in substantial personal
enrichment of Executive
or
which has a
material
and detrimental
effect
on the Company’s reputation or business; (b)
Executive’s conviction of, or no contest plea to, a felony;
(c) a willful act by Executive which constitutes misconduct and is
injurious to the Company; (d) a material breach of the terms of any
confidentiality, invention assignment or proprietary information
agreement with the Company; or (e) continued violations by
Executive of Executive’s obligations to the Company or
written Company policies after there has been delivered to
Executive a written demand for performance from the Company which
describes the basis for the Company’s belief that Executive
has not substantially performed his or her duties.
(b)
Change of Control .
“Change of Control” means the occurrence of any of the
following events:
(i)
the
approval by shareholders of the Company of a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the
total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation;
(ii)
the
approval by the shareholders of the Company of a plan of
complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company’s assets;
(iii)
any
“person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing 50% or more of the
total voting power represented by the Company’s then
outstanding voting securities; or
(iv)
a
change in the composition of the Board, as a result of which
fewer than a majority of the directors are Incumbent
Directors. “Incumbent Directors” will mean
directors who either (A) are directors of the Company as of
the date hereof, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least
a majority of those directors whose election or nomination was
not in connection with any transactions described in
subsections (i), (ii), or (iii) or in connection with an
actual or threatened proxy contest relating to the election of
directors of the Company.
(c)
Disability .
“Disability” means that Executive has been unable to
perform his or her Company duties as the result of his or her
incapacity due to physical or mental illness, and such inability,
at least twenty-six (26) weeks after its commencement or one
hundred eighty (180) days in any consecutive twelve (12) month
period, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to Executive
or Executive’s legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination
resulting from Disability may only be effected after at least
thirty (30) days’ written notice by the Company of its
intention to terminate Executive’s employment. In the event
that Executive resumes the performance of substantially all of his
or her duties hereunder before the termination of his or her
employment becomes effective, the notice of intent to terminate
will automatically be deemed to have been revoked.
(d)
Good Reason .
“Good Reason” means without Executive’s express
written consent (a) a significant reduction of Executive’s
duties, position or responsibilities relative to Executive’s
duties, position or responsibilities in effect immediately prior to
such reduction, or the removal of Executive from such position,
duties and responsibilities, unless Executive is provided with
comparable or greater duties, position and responsibilities;
provided, however, that a reduction in duties, position or
responsibilities solely by virtue of the Company being acquired and
made part of a larger entity, whether as a subsidiary, business
unit or otherwise (as, for example, when the Chief Financial
Officer of the Company remains the Chief Financial Officer of the
Company following a Change in Control where the Company becomes a
wholly owned subsidiary of the acquiror, but is not made the Chief
Financial Officer of the acquiring corporation) will not constitute
“Good Reason;” (b) a reduction by the Company of
Executive’s base salary as in effect immediately prior to
such reduction, other than substantially similar reductions that
are also applied to substantially similar employees of the Company;
or (c) the imposition of a requirement for the relocation of
Executive to a facility or location more than fifty (50) miles from
Executive’s current work location.
(e)
Termination Date .
“Termination Date” will mean the effective date of any
notice of termination delivered by one party to the other hereunder
pursuant to Section 8(b) or otherwise.
2.
Term of Agreement .
This Agreement is effective as of the Effective Date and will
remain in effect through the second anniversary of the Effective
Date, except in the event of a Change in Control during such term,
in which case this Agreement will remain in effect through, and
automatically terminate upon, the completion of all payments under
the terms of this Agreement. No severance benefits will be paid
under this Agreement with respect to any termination of employment
effective after the date of the Agreement’s
termination.
3.
At-Will Employment .
The Company and Executive acknowledge that Executive’s
employment is and will continue to be at-will, as defined under
applicable law. If Executive’s employment terminates for any
reason, Executive will not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this
Agreement, or as may otherwise be established under the
Company’s then existing employee benefit plans or policies at
the time of termination.
4.
Severance Benefits .
(a)
Termination Within Twelve Months Following a Change of
Control .
If within the twelve (12) month period following a Change of
Control, the Company (or any parent or subsidiary of the Company)
terminates Executive’s employment for reasons other than
Cause, death or Disability or Executive resigns from such
employment for Good Reason, then, subject to Executive complying
with Section 4(d), Executive will receive the following severance
benefits from the Company:
(i)
Executive
will be entitled to receive a lump sum cash payment equal to
(a) one (1) year of Executive’s base salary, as in
effect on the Termination Date, and (b) an amount representing
Executive’s forgone annual bonus opportunity determined
by multiplying 50% of Executive’s annual base salary, as
in effect on the Termination Date, by a fraction with a
numerator equal to the number of days between the start of the
Company’s fiscal year during which the termination
occurs and the Termination Date and a denominator equal to
365, with such amounts payable within thirty (30) days
following the Termination Date.
(ii)
Fifty
percent (50%) of Executive’s then outstanding, unvested
equity compensation awards will become fully vested and, if
applicable, exercisable. The period over which such equity
compensation awards may be exercised will be governed by the
applicable provisions of the Company’s equity award
plans and related equity award agreements.
| 
