Document:

Jaycor Networks, Inc. 1997 Stock Option Plan

 EXHIBIT 10.46 
  
 JAYCOR NETWORKS, INC. 
  
 1997 STOCK OPTION PLAN 
  
 1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN. 
  
 1.1 ESTABLISHMENT. The Jaycor Networks, Inc. 1997 Stock Option Plan (the “PLAN”) is hereby established effective as of February 3, 1997
(the “EFFECTIVE Date”). 
  
 1.2 PURPOSE. The
purpose of the Plan is to advance the interests of the Company and its shareholders by providing an incentive to attract, retain and reward persons performing services for the Company and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group. 
  
 1.3 TERM
OF PLAN. The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the
terms of the Plan and the agreements evidencing Options granted under the Plan have lapsed. However, all Options shall be granted, if at all, before the earlier to occur of (a) the date ten (10) years from the earlier of the date the Plan is adopted
by the Board or the date the Plan is duly approved by the shareholders of the Company, (b) the effective date of the registration statement filed by the Company under the Securities Act in connection with the initial public offering of stock by the
Company, or (c) the date on which Jaymark, pursuant to a sale or exchange of shares, merger, consolidation, or spin-off transaction, no longer owns, directly or indirectly, more than fifty percent (50%) of the total combined voting power of the
Company. 
  
 2. DEFINITIONS AND CONSTRUCTION. 

 
 2.1 DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below: 
  
 (a)
“BOARD” means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer the Plan, “Board” also means such Committee(s). 
  
 (b) “CODE” means the Internal Revenue Code of 1986, as amended, and
any applicable regulations promulgated thereunder. 
  
 (c)
“COMMITTEE” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. Unless the powers of the Committee have been specifically
limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law.

 (d) “COMPANY” means Jaycor Networks, Inc., a Delaware corporation, or any successor corporation
thereto. 
  
 (e) “EMPLOYEE” means any person treated as
an employee (including an officer or a director who is also treated as an employee) in the records of the Company; provided, however, that neither service as a director nor payment of a director’s fee shall be sufficient to constitute
employment for purposes of the Plan. 
  
 (f) “EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended. 
  
 (g) “FAIR MARKET VALUE” means, as of any date, the value of a share of Stock or other property as determined by the Board, in its sole discretion, or by the Company, in its sole discretion, if such determination is expressly
allocated to the Company herein. 
  
 (h) “INCENTIVE STOCK
OPTION” means an Option intended to be (as set forth in the Option Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code. 
  
 (i) “INSIDER” means an officer or a director of the Company or any other person whose transactions in Stock are
subject to Section 16 of the Exchange Act. 
  
 (j)
“JAYMARK” means Jaymark, Inc., a Delaware corporation, or any successor corporation thereto. 
  
 (k) “NONSTATUTORY STOCK OPTION” means an Option not intended to be (as set forth in the Option Agreement) or which does not qualify as an
Incentive Stock Option. 
  
 (l) “OPTION” means a right
to purchase shares of Stock (subject to adjustment as provided in Section 4.2) pursuant to the terms and conditions of the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. 
  
 (m) “OPTION AGREEMENT” means a written agreement between the
Company and an Optionee setting forth the terms, conditions and restrictions of the Option granted to the Optionee and any shares acquired upon the exercise thereof. 
  
 (n) “OPTIONEE” means a person who has been granted one or more Options. 
  
 (o) “PARENT CORPORATION” means any present or future “parent
corporation” of the Company, as defined in Section 424(e) of the Code. 
  
 (p) “PARTICIPATING COMPANY” means the Company or any Parent Corporation or Subsidiary Corporation. 
  

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 (q) “PARTICIPATING COMPANY GROUP” means, at any point in time, all corporations collectively
which are then Participating Companies. 
  
 (r) “RULE
16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation. 
  
 (s) “SECTION 162(M)” means Section 162(m) of the Code, as amended by the Revenue Reconciliation Act of 1993 (P.L. 103-66). 
  
 (t) “STOCK” means the common stock of the Company, as adjusted from
time to time in accordance with Section 4.2. 
  
 (u)
“SUBSIDIARY CORPORATION” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
  
 (v) “TEN PERCENT OWNER OPTIONEE” means an Optionee who, at the time an Option is granted to the Optionee, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the Code. 
  
 2.2 CONSTRUCTION. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision
of the Plan. Except when otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular, and the term “or” shall include the conjunctive as well as the disjunctive. 
  
 3. ADMINISTRATION. 
  
 3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered by the
Board, including any duly appointed Committee of the Board. 
  
 All questions of interpretation of the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Option. Any officer of a Participating
Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the officer has apparent
authority with respect to such matter, right, obligation, determination or election. 
  
 3.2 ADMINISTRATION WITH RESPECT TO INSIDERS. With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the
Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3. 
  

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 3.3 POWERS OF THE BOARD. In addition to any other powers set forth in the Plan and subject to the
provisions of the Plan, the Board shall have the full and final power and authority, in its sole discretion: 
  
 (a) to determine the persons to whom, and the time or times at which, Options shall be granted and the number of shares of Stock to be subject to each
Option; 
  
 (b) to designate Options as Incentive Stock Options or
Nonstatutory Stock Options; 
  
 (c) to determine the Fair Market
Value of shares of Stock; 
  
 (d) to determine the terms,
conditions and restrictions applicable to each Option (which need not be identical) and any shares acquired upon the exercise thereof, including, without limitation, (i) the exercise price of the Option, (ii) the method of payment for shares
purchased upon the exercise of the Option, (iii) the method for satisfaction of any tax withholding obligation arising in connection with the Option or such shares, including by the withholding or delivery of shares of stock, (iv) the timing, terms
and conditions of the exercisability of the Option or the vesting of any shares acquired upon the exercise thereof, (v) the time of the expiration of the Option, (vi) the effect of the Optionee’s termination of employment on any of the
foregoing, and (vii) all other terms, conditions and restrictions applicable to the Option or such shares not inconsistent with the terms of the Plan; 
  
 (e) to approve one or more forms of Option Agreement; 
  
 (f) to amend, modify, extend, or renew, or grant a new Option in substitution for, any Option or to waive any restrictions or conditions applicable to any
Option or any shares acquired upon the exercise thereof; 
  
 (g)
to accelerate, continue, extend or defer the exercisability of any Option or the vesting of any shares acquired upon the exercise thereof, including with respect to the period following an Optionee’s termination of employment with the Company;

  
 (h) to prescribe, amend or rescind rules, guidelines and
policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without limitation, as the Board deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom of,
foreign jurisdictions whose citizens may be granted Options; and 
  
 (i) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Option Agreement and to make all other determinations and take such other actions with respect to the Plan or any Option as the Board may deem
advisable to the extent consistent with the Plan and applicable law. 
  
 3.4 COMMITTEE COMPLYING WITH SECTION 162(M). If a Participating Company is a “publicly held corporation” within the meaning of Section 162(m), the Board may establish a Committee of “outside directors” within the
meaning of Section 162(m) to approve the grant of any Option which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes
pursuant to Section 162(m). 
  

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 4. SHARES SUBJECT TO PLAN. 
  
 4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as provided in Section 4.2, the maximum aggregate number
of shares of Stock that may be issued under the Plan shall be Two Million One Hundred Fifty Thousand (2,150,000). Such shares shall consist of authorized but unissued or reacquired shares of Stock or any combination thereof. If any outstanding
Option for any reason expires or is terminated or canceled or shares, subject to repurchase, upon the exercise of an Option are repurchased by the Company, the shares allocable to the unexercised portion of such Option, or such repurchased shares,
shall again be available for issuance under the Plan. 
  
 4.2
ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate
adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Options and in the exercise price per share of any outstanding Options. Notwithstanding the foregoing, any fractional share resulting from an
adjustment pursuant to this Section 4.2 shall be rounded up or down to the nearest whole number, as determined by the Board, and in no event may the exercise price of any Option be decreased to an amount less than the par value, if any, of the stock
subject to the Option. The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive. 
  
 5. ELIGIBILITY AND OPTION LIMITATIONS. 
  
 5.1 PERSONS ELIGIBLE FOR OPTIONS. Options may be granted only to Employees. Eligible persons may be granted more than one (1) Option. 

 
 5.2 FAIR MARKET VALUE LIMITATION. To the extent that the aggregate
Fair Market Value of stock with respect to which options designated as Incentive Stock Options are exercisable by an Optionee for the first time during any calendar year (under all stock option plans of the Participating Company Group, including the
Plan) exceeds One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section 5.2, options designated as Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from
that set forth in this Section 5.2, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an
Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 5.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such
designation, the Optionee shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. 
  

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 6. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by Option Agreements specifying the
number of shares of Stock covered thereby, in such form as the Board shall from time to time establish. Option Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms
and conditions: 
  
 6.1 EXERCISE PRICE. The exercise price
for each Option shall be established in the sole discretion of the Board; provided, however, that (a) the exercise price per share of Stock for an Option shall be not less than the Fair Market Value of a share of Stock on the effective date of grant
of the Option, and (b) no Option granted to a Ten Percent Owner Optionee shall have an exercise price per share of Stock less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the
Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 
  
 6.2 EXERCISE PERIOD. Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions,
performance criteria, and restrictions as shall be determined by the Board and set forth in the Option Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the
effective date of grant of such Option, and (b) no Incentive Stock Option granted to a Ten Percent Owner Optionee shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option. 
  
 6.3 PAYMENT OF EXERCISE PRICE. 
  
 (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise provided below,
payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company of shares of Stock owned by the Optionee having a Fair
Market Value (as determined by the Company without regard to any restrictions on transferability applicable to such stock by reason of federal or state securities laws or agreements with an underwriter for the Company) not less than the exercise
price, (iii) by the assignment of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation
T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a “CASHLESS EXERCISE”), (iv) by the Optionee’s promissory note in a form approved by the Company, (v) by such other consideration as may be
approved by the Board from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Board may at any time or from time to time, by adoption of or by amendment to the standard forms of Option Agreement described
in Section 7, or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration. 
  

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 (b) TENDER OF STOCK. Notwithstanding the foregoing, an Option may not be exercised by tender of shares of
Stock to the extent such tender would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. Unless otherwise provided by the Board at the time the Option is granted, an
Option may not be exercised by the tender of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months or were not acquired, directly or indirectly, from the Company. 
  
 (c) CASHLESS EXERCISE. The Company reserves, at any and all times, the right,
in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 
  
 (d) PAYMENT BY PROMISSORY NOTE. No promissory note shall be permitted if the exercise of an Option using a promissory note
would be a violation of any law. Any permitted promissory note shall be on such terms as the Board shall determine at the time the Option is granted. The Optionee may be required to secure any promissory note used to exercise an Option with the
shares acquired upon the exercise of the Option or with other collateral acceptable to the Company. Unless otherwise provided by the Board, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal
Reserve System or any other governmental entity affecting the extension of credit in connection with the securities acquired upon exercise of the Option, any promissory note shall comply with such applicable regulations, and the Optionee shall pay
the unpaid principal and accrued interest, if any, to the extent necessary to comply with such applicable regulations. 
  
 6.4 TAX WITHHOLDING. The Company shall have the right to require the Optionee, through payroll withholding, cash payment or otherwise, including by
means of a Cashless Exercise, to make adequate provision for any tax withholding obligations of the Participating Company Group arising in connection with the Option or the shares acquired upon the exercise thereof. The Company shall have no
obligation to deliver shares or to release shares from an escrow established pursuant to the Option Agreement until such tax withholding obligations have been satisfied by the Optionee. 
  
 7. STANDARD FORMS OF OPTION AGREEMENT. 
  
 7.1 INCENTIVE STOCK OPTIONS. Unless otherwise provided by the Board at the time the Option is granted, an Option
designated as an “Incentive Stock Option” shall comply with and be subject to the terms and conditions set forth in the form of Incentive Stock Option Agreement adopted by the Board concurrently with its adoption of the Plan and as amended
from time to time. 
  
 7.2 NONSTATUTORY STOCK OPTIONS.
Unless otherwise provided by the Board at the time the Option is granted, an Option designated as a “Nonstatutory Stock Option” shall comply with and be subject to the terms and conditions set forth in the form of Nonstatutory Stock Option
Agreement adopted by the Board concurrently with its adoption of the Plan and as amended from time to time. 
  

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 7.3 STANDARD TERM OF OPTIONS. Except as otherwise provided in Section 6.2 or by the Board in the
grant of an Option, any Option granted hereunder shall have a term of ten (10) years from the effective date of grant of the Option. 
  
 7.4 AUTHORITY TO VARY TERMS. The Board shall have the authority from time to time to vary the terms of any of the standard forms of Option
Agreement described in this Section 7 either in connection with the grant or amendment of an individual Option or in connection with the authorization of 
 a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with the terms of the Plan.

  
 8. TRANSFER OF CONTROL. 
  
 8.1 DEFINITIONS. 
  
 (a) An “OWNERSHIP CHANGE EVENT” shall be deemed to have occurred if
any of the following occurs with respect to the Company: 
  
 (i)
the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of the Company of more than fifty percent (50%) of the voting stock of the Company; 
  
 (ii) a merger or consolidation in which the Company is a party; 

 
 (iii) the sale, exchange, or transfer of all or substantially all of the
assets of the Company; or 
  
 (iv) a liquidation or dissolution
of the Company. 
  
 (b) A “TRANSFER OF CONTROL” shall
mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the “TRANSACTION”) wherein the shareholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to which the assets of the Company were transferred (the “TRANSFEREE CORPORATION(S)”), as the case may be. For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting stock of one or more corporations which, as a result of the Transaction, own the Company or the Transferee Corporation(s), as the case may be,
either directly or through one or more subsidiary corporations. The Board shall have the right to determine whether multiple sales or exchanges of the voting stock of the Company or multiple Ownership Change Events are related, and its determination
shall be final, binding and conclusive. 
  

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 8.2 EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a Transfer of Control, the
surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be (the “ACQUIRING CORPORATION”), may either assume the Company’s rights and obligations under outstanding Options or
substitute for outstanding Options substantially equivalent options for the Acquiring Corporation’s stock. For purposes of this Section 8.2, an Option shall be deemed assumed if, following the Transfer of Control, the Option confers the right
to purchase, for each share of Stock subject to the Option immediately prior to the Transfer of Control, the consideration (whether stock, cash or other securities or property) to which a holder of a share of Stock on the effective date of the
Transfer of Control was entitled. Any Options which are neither assumed or substituted for by the Acquiring Corporation in connection with the Transfer of Control nor exercised as of the date of the Transfer of Control shall terminate and cease to
be outstanding effective as of the date of the Transfer of Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Transfer of Control and any consideration received pursuant to the Transfer of Control with
respect to such shares shall continue to be subject to all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided in such Option Agreement. Furthermore, notwithstanding the foregoing, if the corporation the
stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Transfer of Control is the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code
without regard to the provisions of Section 1504(b) of the Code, the outstanding Options shall not terminate unless the Board otherwise provides in its sole discretion. 
  
 9. PROVISION OF INFORMATION. Each Optionee shall be given access to information concerning the Company equivalent to
that information generally made available to the Company’s common shareholders. 
  
 10. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or the Optionee’s guardian or legal representative. No Option shall be assignable
or transferable by the Optionee, except by will or by the laws of descent and distribution. 
  
 11. INDEMNIFICATION. In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or
any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad 
  

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 faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such
action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. 
  
 12. TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the Plan at any time. However, subject to changes in applicable law,
regulations or rules that would permit otherwise, without the approval of the Company’s shareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of
the provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders under any applicable law,
regulation or rule. In any event, no termination or amendment of the Plan may adversely affect any then outstanding Option or any unexercised portion thereof, without the consent of the Optionee, unless such termination or amendment is required to
enable an Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule. 
  
 IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the Jaycor Networks, Inc. 1997 Stock Option Plan
was duly adopted by the Board on February 3, 1997 and approved by the Shareholders on February 25, 1997. 
  

	
	
	 /s/    DOROTHY
BIDWELL        

	Secretary

  

 10Interim CEO Employment Agreement with Eric Erdman

 Exhibit 10.26 
  
 Execution Copy 
  
 GENESIS MICROCHIP INC. 
  
 INTERIM CEO EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (the “Agreement”) is entered into by and between Genesis Microchip Inc. (the “Company”) and Eric Erdman
(“Executive” and, together with the Company, the “Parties”) as of the latest date set forth on the signature page of this Agreement, effective as of the date set forth in Section 15 below. 
  
 1. Duties and Scope of Employment. 
  
 (a) Positions and Duties. Executive will serve as Interim Chief
Executive Officer of the Company until such time as the employment relationship is terminated by either Party pursuant to Section 2. Executive will render such business and professional services in the performance of his duties, consistent with
Executive’s position within the Company, as shall reasonably be assigned to him by the Company’s Board of Directors (the “Board”). In addition, Executive will continue to serve as the Company’s Chief Financial Officer until
a new Chief Financial Officer is hired as contemplated by Section 3(b) below.  
  
 (b) Obligations. During the Employment Term (as defined in Section 2 below), Executive will perform his duties faithfully and to the best of his ability and will devote his full business efforts and time to the
Company. For the duration of the Employment Term, Executive agrees not to engage actively in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board. 
  
 2. At-Will Employment. The period of Executive’s employment under
this Agreement is referred to herein as the “Employment Term.” The Parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or notice.
However, as described in this Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment. 
  
 3. Compensation. 
  
 (a) Base Salary. During the Employment Term, the Company will pay Executive as compensation for his services a base salary at the annualized rate
of $275,000 (the “Base Salary”), and may be increased on an annual basis in connection with the Company’s normal compensation review process. The Base Salary will be paid periodically in accordance with the Company’s normal
payroll practices and will be subject to the usual, required withholding. 

 (b) One-Time Bonus. Within thirty (30) days after the Company hires a new Chief Financial Officer
of the Company, the Company will pay to Executive a one-time lump-sum bonus equal to the product of (i) $10,000 and (ii) the number of months for which Executive has served as both Interim Chief Executive Officer and Chief Financial Officer of the
Company, but in no event will the total amount of the bonus exceed $100,000. 
  
 (c) Annual Bonus. If the Company implements an annual bonus plan for senior executives, Executive will be eligible to participate in that plan, subject to the achievement of Company and individual performance
objectives as determined by the Compensation Committee of the Board (the “Bonus”). The Company reserves the right to cancel or change any bonus plan it offers to its senior executives at any time. 
  
 (d) Housing. During the Employment Term, the Company will lease for
Executive’s use in the Bay area a furnished rental house that is reasonably acceptable to Executive and that is comparable to the furnished rental house currently being leased for Executive’s use. 
  
 (e) Medical Costs Reimbursement. To the extent not reimbursed by
insurance or previously reimbursed by the Company, the Company will reimburse Executive for reasonable medical costs actually incurred by Executive (or his dependents) from March 2002 through the end of the Employment Term, up to a maximum
reimbursement of $5,000. 
  
 (f) Immigration. During the
Employment Term, the Company will reimburse Executive and his spouse for reasonable immigration expenses (including reasonable legal costs) actually incurred by Executive in connection with his working in the United States for the Company.

  
 (g) Tax Services. For years occurring during the
Employment Term, the Company will reimburse Executive for reasonable tax services expenses actually incurred by Executive for tax return preparation and tax advice associated with such preparation. The Company will reimburse Executive only for
expenses that do not exceed $10,000 per calendar year of the Employment Term. 
  
 (h) Vehicle Importation. The Company will reimburse Executive for reasonable costs actually incurred to meet vehicle importation guidelines for the importation of Executive’s vehicles (set forth on
Exhibit A) into the United States for use by Executive during the Employment Term. In addition, at the end of the Employment Term, the Company will reimburse Executive for reasonable costs actually incurred to meet vehicle importation
guidelines for the importation of such vehicles back to Canada. In lieu of the benefits set forth in the previous two sentences, if Executive so requests, the Company will instead lease vehicles, substantially similar to the vehicles set forth on
Exhibit A, for the Executive’s use in the Bay area during the Employment Term and pay reasonable shipment and storage fees, if any, actually incurred by Executive during the Employment term for the storage in Canada of the vehicles set
forth on Exhibit A. 
  
 (i) Canada Relocation
Expenses. At the end of the Employment Term, the Company agrees to reimburse Executive for reasonable moving expenses actually incurred by Executive and his family during their relocation from Executive’s primary residence in California
back to Canada. Such reimbursement shall not exceed $50,000. 
  

 -2- 

 (j) Employee Benefits. During the Employment Term, Executive will be entitled to participate in
the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company. The Company reserves the right to cancel or change the benefit plans and programs it offers to its
employees at any time. 
  
 (k) General Expenses. The
Company will reimburse Executive for reasonable travel, entertainment or other expenses actually incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the
Company’s expense reimbursement policy as in effect from time to time. 
  
 (l) Legal Fee Reimbursement. The Company agrees to pay Executive’s reasonable legal fees actually incurred in connection with the negotiation and execution of this Agreement upon receiving invoices for
such services. Such reimbursement shall not exceed $15,000. 
  
 4.
Severance. 
  
 (a) Removal other than for Cause. If
the Company removes Executive as Interim Chief Executive Officer, or hires a new Chief Executive Officer, in each case unless Executive is offered a comparable or greater position, or unless Executive is offered an alternative position that he
accepts, and in each case without his consent and for a reason other than Cause, then, subject to Executive entering into and not revoking a release of claims in a form acceptable to the Company, Executive will: 
  
 (i) receive a lump-sum payment equal to 100% of the then-current Base
Salary; 
  
 (ii) receive a lump-sum payment equal to the prorated
portion, based on the number of months Executive was employed by the Company during the relevant fiscal year, of the full target Bonus, if any, that Executive would have earned if he had been employed for the full fiscal year and if 100% of the
objectives for receiving the Bonus were met; 
  
 (iii) with
respect to any Company stock options granted to Executive on or prior to August 12, 2003, be entitled to immediate 100% vesting; 
  
 (iv) with respect to any Company stock options granted to Executive after August 12, 2003, be entitled to accelerated vesting such that the number of
shares that would have vested if Executive’s employment continued for twelve (12) months following the termination date will immediately vest and become fully exercisable as of the termination effective date; 
  
 (v) have up to eighteen (18) months following termination of employment to
exercise his vested stock options including options vesting pursuant to this Section 4 (or if sooner, until the maximum term of the option); 
  
 (vi) receive Company-paid coverage for himself and his eligible dependents under the Company’s health benefit plans (or, at the Company’s
option, coverage under a separate plan), except for long-term disability coverage, for a period equal to the earlier of (A) twelve (12) months following termination of employment or (B) the date Executive secures alternative employment; 

 

 -3- 

 (vii) receive any unpaid benefits provided in Sections 3(d) (for a period of 90 days), 3(g), 3(h) and
3(i) (in accordance with the terms of such Sections); and 
  
 (viii) receive all accrued vacation, expense reimbursements and any other benefits due to Executive through the date of termination of employment in accordance with the Company’s then-existing employee benefit plans and policies.

  
 (b) Voluntary Termination for Good Reason. If Executive
voluntarily terminates his employment with the Company within ninety (90) days following a Good Reason event then, subject to Executive entering into and not revoking a release of claims in a form acceptable to the Company, Executive will be
entitled to the same payments and benefits provided in Section 4(a) above, subject to the same terms and conditions provided in Section 4(a). 
  
 (c) Other Voluntary Terminations. If Executive voluntarily terminates his employment with the Company other than pursuant to Section 4(b), then
Executive will (i) receive the Base Salary through the date of termination of employment, (ii) receive all accrued vacation, expense reimbursements and any other benefits due to Executive through the date of termination of employment in accordance
with established Company plans and policies, (iii) receive the benefits provided in Sections 3(h) and 3(i) (in accordance with the terms of such Sections), and (iv) not be entitled to any other compensation or benefits (including, without
limitation, accelerated vesting of stock options) from the Company except to the extent provided under the applicable stock option agreement(s) or as may be required by law. To the extent that Executive’s employment by the Company in the United
States ceases to comply with applicable immigration laws because of a change in those laws, Executive will take all reasonable steps, at the Company’s expense, to cause his employment by the Company in the United States to come into compliance
with such laws. If, after taking all such reasonable steps, Executive is prohibited from continuing his employment with the Company in the United States by applicable immigration laws, such event will not be deemed to be a voluntary termination of
Executive’s employment under this Agreement. 
  
 (d)
Involuntary Termination for Cause. If the Company terminates Executive’s employment with the Company for Cause, then Executive will (i) receive the Base Salary through the date of termination of employment, (ii) receive all accrued
vacation, expense reimbursements and any other benefits due to Executive through the date of termination of employment in accordance with established Company plans and policies, (iii) receive any unpaid benefits provided in Sections 3(h) and 3(i)
(in accordance with the terms of such Sections), and (iv) not be entitled to any other compensation or benefits (including, without limitation, accelerated vesting of stock options) from the Company except to the extent provided under the applicable
stock option agreement(s) or as may be required by law. 
  
 5.
Definitions. 
  
 (a) Cause. For purposes of this
Agreement, “Cause” is defined as (i) an act of dishonesty made by Executive in connection with Executive’s responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony, (iii)
Executive’s gross misconduct in connection with Executive’s responsibilities as an employee, or (iv) Executive’s failure to perform his material employment duties if such failure is not remedied within thirty (30) 

  

 -4- 

 
days following receipt by Executive of written notice from the Company specifying the facts relating to the failure. 
  
 (b) Good Reason. For purposes of this Agreement, “Good
Reason” means, in each case without Executive’s express written consent: 
  
 (i) a significant reduction of Executive’s duties or responsibilities relative to Executive’s duties or responsibilities in effect immediately prior to such reduction, unless Executive is offered comparable
or greater duties and responsibilities, or unless Executive is offered alternative duties and responsibilities that he accepts, it being understood that a reduction in duties or responsibilities solely by virtue of the Company being acquired and
made part of a larger entity (as, for example, when, following an acquisition of the Company, the Chief Executive Officer of the Company remains the Chief Executive Officer of a division or subsidiary of the acquirer that contains all or
substantially all of the Company’s business and performing comparable or greater duties and responsibilities with respect to the business) shall not constitute “Good Reason”; 
  
 (ii) a reduction by the Company of Executive’s Base Salary as in effect
immediately prior to such reduction, except pursuant to a company-wide program where all executive salaries are reduced in a similar manner; 
  
 (iii) a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to
Executive immediately prior to such reduction, except pursuant to a company-wide program where all executive facilities and perquisites are reduced in a similar manner; 
  
 (iv) a material reduction, without good business reasons, by the Company in the kind or level of employee benefits to which
Executive is entitled immediately prior to such reduction, with the result that Executive’s overall benefits package is significantly reduced, except pursuant to a company-wide program where all executive benefits are reduced in a similar
manner; 
  
 (v) the relocation of Executive to a facility or a
location more than fifty (50) miles from his current employment location in Santa Clara County, California; or 
  
 (vi) the failure of the Company to obtain the assumption of this Agreement by any successors pursuant to a change of control transaction; 
  
 provided, however, that the Company shall have a period of thirty (30) days
following receipt of written notice from Executive specifying the grounds for a purported voluntary termination for Good Reason to cure any event or failure that would otherwise constitute Good Reason. Notwithstanding the provisions of the previous
sentence, “Good Reason” shall not include the removal of Executive from the position of Chief Financial Officer or Director of the Company, or from any position with the Company other than Interim Chief Executive Officer or Chief Executive
Officer, or from any position with any of the Company’s subsidiaries or affiliates, at any time. 
  
 6. Confidential Information. Executive agrees to continue to maintain the confidentiality of all confidential and proprietary information of the
Company and agrees to abide by the terms of the confidentiality agreement entered into by Executive with the Company on July 24, 1995 (the “Confidential Information Agreement”). 
  

 -5- 

 7. Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs,
executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes. For
this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the
Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer,
conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void. 
  
 8. Notices. All notices, requests, demands and other communications called for hereunder shall be in writing and shall be deemed given (a) on the
date of delivery if delivered personally, (b) one (1) day after being sent by a well established commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed
to the Parties or their successors at the following addresses, or at such other addresses as the Parties may later designate in writing: 
  
 If to the Company: 
  
 Genesis Microchip Inc. 
 2150 Gold Street

 Alviso, California 95002 
 Attn: General Counsel 
  
 If to Executive:

  
 at the last residential address known by the Company.

  
 9. Severability. In the event that any provision hereof
becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision. 
  
 10. Arbitration. 
  
 (a) Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Santa Clara County, California in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the
American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator will be final, conclusive and binding on the Parties to the arbitration.
Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. 
  

 -6- 

 (b) The arbitrator(s) will apply California law to the merits of any dispute or claim, without reference
to rules of conflicts of law. The arbitration proceedings will be governed by federal arbitration law and by the Rules, without reference to state arbitration law. Executive hereby consents to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the Parties are participants. 
  
 (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS
AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION OF THIS AGREEMENT, TO BINDING ARBITRATION, AND THAT
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING, BUT NOT LIMITED TO, DISCRIMINATION CLAIMS.

  
 11. Integration; Waiver. This Agreement, together with
the Confidential Information Agreement, any agreements relating to proprietary rights between Executive and the Company, and any written stock option agreements provided previously by the Company to Executive, represents the entire agreement and
understanding between the Parties as to the subject matter herein and supersedes and terminates in their entirety all prior or contemporaneous agreements, whether written or oral, including the settlement agreement between Executive and the Company
dated February 14, 2002, the General Release between Executive and the Company dated February 18, 2002, and the offer letter dated March 18, 2002. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding
unless in writing and signed by duly authorized representatives of the Parties hereto. Notwithstanding anything to the contrary in this Agreement, Executive hereby agrees that the hiring of a new Chief Financial Officer does not trigger, directly or
indirectly, any severance payments or benefits under this Agreement or the offer letter between the Company and Executive dated March 18, 2002. 
  
 12. Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes. 
  
 13. Governing Law. This Agreement will be governed by the laws of the
State of California (without regard to its conflict of laws provisions). 
  
 14. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this Agreement with, and to obtain advice regarding this Agreement from, his private attorney, and that he has had
sufficient time to review, and has carefully read and fully understands, all the provisions of this Agreement, and that he is knowingly and voluntarily entering into this Agreement. 
  
 15. Effective Date. This Agreement shall be deemed effective as of July 20, 2003, which was the date that Executive
first assumed the role of Interim Chief Executive Officer of the Company. 
  

 -7- 

 16. Amendment. This Agreement may not be amended or modified except by a written instrument signed
by Executive and a duly authorized member of the Board. Executive understands and agrees that neither his job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for
modification, amendment, or extension, by implication or otherwise, of the terms of this Agreement or of his employment with the Company. 
  
 [The remainder of this page has been left blank intentionally.] 
  

 -8- 

 IN WITNESS WHEREOF, each of the Parties has executed this Agreement, in the case of the Company by its
duly authorized officer, as of the respective date set forth below. 
  
  

			
	GENESIS MICROCHIP INC.
		
	By:	 	 /s/ Jeffrey Diamond

	Title:	 	 Chairman of the Board

		
	Date:	 	February 13, 2004
	
	EXECUTIVE
	
	 /s/ Eric Erdman

	Eric Erdman
		
	Date:	 	February 13, 2004

  

 -9- 

 EXHIBIT A 
  
 1998 BMW R1200C 
  
 2001 Audi A4 
  
 2002 Subaru Forester

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