Document:

exv10w6

 

Exhibit 10.6

1997 NON-EMPLOYEE STOCK OPTION PLAN

as amended on September 14, 2000 and June 8, 2007

     1. Purpose of the Plan.

          1.1 The purpose of the Plan is to assist non-employee directors and non-employee senior
officers of the Corporation and its Affiliates, and Service Providers, in participating in the
growth and development of the Corporation and its Affiliates by providing such persons with the
opportunity, through share options, to acquire a proprietary interest in the Corporation.

     2. Defined Terms.

     Where used herein, the following terms shall have the following meanings, respectively:

          2.1 “Affiliate” means any corporation which is an affiliate, as such term is used in
Subsection 2(2) of the Business Corporations Act (Ontario), of the Corporation;

          2.2 “Board” means the board of directors of the Corporation or, if established and duly
authorized to act, the executive committee of the board of directors of the Corporation;

          2.3 “Change in Control” means the occurrence of any of the following events:

               (a) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the total voting power represented by the Company’s then outstanding
voting securities;

               (b) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets;

               (c) A change in the composition of the Board occurring within a two (2)-year period, as a
result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” means directors who either (A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to the Company); or

               (d) The consummation 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 or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.

 

 

          2.4 “Committee” shall have the meaning attributed thereto in Section 3.1 hereof;

          2.5 “Corporation” means Genesis Microchip Inc. and includes any successor corporation thereof;

          2.6 “Eligible Person” means any non-employee director or non-employee senior officer of the
Corporation or any Affiliate, or any Service Provider.

          2.7 “Insider” means any insider, as such term is defined in Subsection 1(1) of the Securities
Act (Ontario), of the Corporation, other than a person who falls within that definition solely by
virtue of being a director or senior officer of an Affiliate, and includes any associate, as such
term is defined in Subsection 1(1) of the Securities Act (Ontario), of any such insider;

          2.8 “Market Price” at any date in respect of the Shares means the closing sale price of such
Shares on the stock exchange or market on which such Shares are listed and posted for trading on
the trading day immediately preceding such date. In the event that such Shares did not trade on
such trading day, the Market Price shall be the average of the bid and ask prices in respect of
such Shares at the close of trading on such trading day. In the event that such Shares are not
listed and for posted trading on a stock exchange or market, the Market Price shall be the fair
market value of such Shares as determined by the Board in its sole discretion;

          2.9 “Option” means an option to purchase Shares granted to an Eligible Person under the Plan;

          2.10 “Option Price” means the price per Share at which Shares may be purchased under an
Option, as the same may be adjusted from time to time in accordance with Article 8 hereof;

          2.11 “Optioned Shares” means the Shares issuable pursuant to an exercise of Options;

          2.12 “Optionee” means an Eligible Person to whom an Option has been granted and who continues
to hold such Option;

          2.13 “Plan” means the Genesis Microchip Inc, 1997 Non-Employee Stock Option Plan, as the same
may be amended or varied from time to time;

          2.14 “Service Provider” means any person engaged to provide ongoing management or consulting
services for the Corporation or for any entity controlled by the Corporation;

          2.15 “Share Compensation Arrangement” means a stock option, stock option plan, employee stock
purchase plan or any other compensation or incentive mechanism of the Corporation involving the
issuance or potential issuance of shares to one or more employees or Insiders of the Corporation or
any Affiliate or to one or more Service Providers, including a share purchase from treasury which
is financially assisted by the Corporation by way of a loan, guaranty or otherwise; and

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          2.16 “Shares” means the common shares of the Corporation or, in the event of an adjustment
contemplated by Article 8 hereof, such other shares or securities to which an Optionee may be
entitled upon the exercise of an Option as a result of such adjustment.

     3. Administration of the Plan.

          3.1 The Plan shall be administered by the Board or by any committee (the “Committee”) of the
Board established by the Board for that purpose.

          3.2 The Board or Committee shall have the power, where consistent with the general purpose and
intent of the Plan and subject to the specific provisions of the Plan:

               (a) to establish policies and to adopt rules and regulations for carrying out the purposes,
provisions and administration of the Plan;

               (b) to interpret and construe the Plan and to determine all questions arising out of the Plan
or any Option, and any such interpretation, construction or determination made by the Committee
shall be final, binding and conclusive for all purposes;

               (c) to determine the number of Shares covered by and terms and conditions of each Option;

               (d) to determine the Option Price of each Option;

               (e) to determine the time or times when Options will be granted and exercisable;

               (f) to determine if the Shares which are issuable on the exercise of an Option will be subject
to any restrictions upon the exercise of such Option;

               (g) to prescribe the form of the instruments relating to the grant, exercise and other terms
of Options; and

               (h) subject to receipt of any required approvals, to modify or amend each Option.

          3.3 The Board or the Committee may, in its discretion, require as conditions to the grant or
exercise of any Option that the Optionee shall have:

               (a) represented, warranted and agreed in form and substance satisfactory to the Corporation
that he or she is acquiring and will acquire such Option and the Shares to be issued upon the
exercise thereof or, as the case may be, is acquiring such Shares, for his or her own account, for
investment and not with a view to or in connection with any distribution, that he or she has had
access to such information as is necessary to enable him or her to evaluate the merits and risks of
such investment and that he or she is able to bear the economic risk of holding such Shares for an
indefinite period;

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               (b) agreed to restrictions on transfer in form and substance satisfactory to the Corporation
and to an endorsement on any option agreement or certificate representing the Shares making
appropriate reference to such restrictions; and

               (c) agreed to indemnify the Corporation in connection with the foregoing.

          3.4 Any Option granted under the Plan shall be subject to the requirement that, if at any time
counsel to the Corporation shall determine that the listing, registration or qualification of the
Shares subject to such Option upon any securities exchange or under any law or regulation of any
jurisdiction, or the consent or approval of any securities exchange or any governmental or
regulatory body, is necessary as a condition of, or in connection with, the grant or exercise of
such Option or the issuance or purchase of Shares thereunder, such Option may not be accepted or
exercised in whole or in part unless such listing, registration, qualification, consent or approval
shall have been effected or obtained on conditions acceptable to the Board or the Committee.
Nothing herein shall be deemed to require the Corporation to apply for or obtain such listing,
registration, qualification, consent or approval.

     4. Shares Subject to the Plan.

          4.1 Options may be granted in respect of authorized and unissued Shares, provided that the
aggregate number of Shares which may be issued pursuant to the exercise of Options, subject to any
adjustment of such number pursuant to the provisions of Article 8 hereof, is 500,000 or such
greater number of Shares as may be determined by the Board and approved, if required, by the
shareholders of the Corporation and by any relevant stock exchange or other regulatory authority.
Optioned Shares in respect of which Options are not exercised shall be available for subsequent
Options. No fractional Shares may be purchased or issued under the Plan.

     5. Eligibility: Grant: Terms of Options.

          5.1 (a) Options may be granted by the Board, in its discretion, to any Eligible Person;
provided, however, that Options may only be granted to non-employee directors of the Corporation
(each a “Director”) pursuant to the provisions of Subsections 5.1(b), (c) and (d) hereof.

               (b) Subject to the restrictions contained in Sections 4.1, 5.5 and 5.7 hereof, each Director
shall automatically be granted and receive, without any action on the part of the Board, Options to
purchase 15,000 Shares effective immediately upon such Director first being appointed or elected a
Director. The Option Price of such Options shall be equal to the Market Price on the date of such
appointment or election (the “Commencement Date”) and the expiration date of such Options shall be
10 years from the Commencement Date. Subject to Section 8.4 hereof, such Options shall vest in
amounts as follows: (i) at any time subsequent to the date which is 12 months after the
Commencement Date, such Options may be exercised to the extent of 5,000 of the Shares covered by
such Options; (ii) at any time subsequent to the date which is 24 months after the Commencement
Date, such Options may be exercised to the extent of an additional 5,000 of the Shares covered by
such Options, and to the extent the right to exercise such Options theretofore shall not have been
exercised, and (iii) at any time subsequent to the date which is 36 months after the

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Commencement Date until the expiry of such Options, such Options may be exercised in full,
except to the extent such Options theretofore shall have been exercised.

               (c) Subject to the restrictions contained in Sections 4.1, 5.5 and 5.7 hereof, on the first
day of the calendar month following the annual general meeting of the Corporation in each year,
each person who is then a Director and who has been a Director for at least 12 months shall
automatically be granted and receive, without any action on the part of the Board, (a) Options to
purchase 5,000 Shares, and (b) for each committee of the Board such Director serves on, Options to
purchase 2,500 Shares. The Option Price of such Options shall be equal to the Market Price on the
first day of the calendar month following the annual general meeting of the Corporation in the
applicable year (the “Date of Grant”) and the expiration date of such Options shall be 10 years
from the Date of Grant. Subject to Section 8.4 hereof, the Optionee may purchase not more than
one-twelfth of the Shares covered by such Options during each of the first 12 months following the
Date of Grant, provided, however, that if the number of Shares purchased under such Options during
any such month is less than one-twelfth of the Shares covered by such Options, the Optionee shall
have the right, at any time or from time to time during the remainder of the term of such Options,
to purchase such number of Shares that were purchasable, but not purchased by the Optionee, during
such month.

               (d) Subject to the restrictions contained in Section 4.1, 5.5 and 5.7 hereof, the Board may,
in its discretion, grant Options to any Director who has entered into an agreement to provide
consulting services to the Corporation in addition to Options granted in accordance with
Subsections 5.1(b) and (c). Such additional Options may be granted upon terms consistent with the
provisions of the Plan and as determined by the Board in its discretion.

          5.2 Subject as herein and otherwise specifically provided in this Article 5 and Section 8.4
hereof, the number of Shares subject to each Option, the Option Price of each Option, the
expiration date of each Option, the extent to which each Option is exercisable from time to time
during the term of the Option and other terms and conditions relating to each such Option shall be
determined by the Board. Subject to Section 8.4 hereof, the Board or the Committee may, in their
entire discretion, subsequent to the time of granting Options hereunder, permit an Optionee who is
not a Director to exercise any or all of the unvested options then outstanding and granted to the
Optionee under this Plan, in which event all such unvested Options then outstanding and granted to
the Optionee shall be deemed to be immediately exercisable during such period of time as may be
specified by the Board or the Committee.

          5.3 Subject to Section 5.1 hereof and any adjustments pursuant to the provisions of Article 8
hereof, the Option Price of any Option shall in no circumstances be lower than the Market Price on
the date on which the grant of the Option is approved by the Board. If, as and when any Shares
have been duly purchased and paid for under the terms of an Option, such Shares shall be
conclusively deemed allotted and issued as fully paid non-assessable Shares at the price paid
therefor.

          5.4 The term of an Option shall not exceed 10 years from the date of the grant of the Option.

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          5.5 No Options shall be granted to any Optionee if the total number of Shares issuable to such
Optionee under this Plan, together with any Shares reserved for issuance to such Optionee under
options for services or any other stock option plans, would exceed 5% of the issued and outstanding
Shares.

          5.6 An Option is personal to the Optionee and non-assignable (whether by operation of law or
otherwise), except as provided for herein. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of an Option contrary to the provisions of the Plan, or upon the
levy of any attachment or similar process upon an Option, the Option shall, at the election of the
Corporation, cease and terminate and be of no further force or effect whatsoever.

          5.7 No Options shall be granted to any Optionee if such grant could result, at any time, in:

               (a) the number of Shares reserved for issuance pursuant to Options or other stock options
granted to Insiders exceeding 10% of the issued and outstanding Shares;

               (b) the issuance to Insiders, within a one-year period, of a number of Shares exceeding 10% of
the issued and outstanding Shares; or

               (c) the issuance to any one Insider and such Insider’s associates, within a one-year period,
of a number of Shares exceeding 5% of the issued and outstanding Shares.

     For the purposes of Subsections 5.7(b) and (c), the phrase “issued and outstanding Shares”
excludes any Shares issued pursuant to the Plan or other Share Compensation Arrangements over a
preceding one-year period, and, for the purpose of Subsection 5.7(c), “associate” means any person
associated with such Insider within the meaning of the Securities Act (Ontario).

     6. Ceasing to be an Eligible Person; Bankruptcy; Death.

          6.1 Subject to Sections 6.2 and 6.3 hereof and to any express resolution passed by the
Committee or the Board with respect to an Option, an Option and all rights to purchase Shares
pursuant thereto shall expire and terminate immediately upon the Optionee who holds such Option
ceasing to be an Eligible Person.

          6.2 The Committee or the Board may, in their entire discretion, at the time of the granting of
Options hereunder, determine that provisions to the following effect shall be contained in the
written option agreement between the Corporation and the Optionee;

               (a) If an Optionee shall retire while holding an Option which has not been fully exercised,
such Optionee may exercise the Option at any time within thirty (30) days of the date of such
retirement, but only to the same extent to which the Optionee could have exercised the Option
immediately before the date of such retirement.

               (b) If an Optionee ceases to serve the Corporation or any Affiliate, as the case may be, as an
officer or director for cause, no Option held by such Optionee may be exercised following the date
on which such Optionee ceases to serve the Corporation or any Affiliate, as the

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case may be, in such capacity. If an Optionee ceases to serve the Corporation or any
Affiliate as an officer or director for any reason other than for cause, unless otherwise provided
for in this Plan, no Option held by such Optionee at the effective date thereof may be exercised by
the Optionee following the date which is ninety (90) days after the date on which the Optionee
ceases to serve the Corporation or any Affiliate, as the case may be, in such capacity.

               (c) In the event that an Optionee commits an act of bankruptcy or any proceeding is commenced
against the Optionee under the Bankruptcy and Insolvency Act (Canada) or other applicable
bankruptcy or insolvency legislation in force at the time of such bankruptcy and such proceeding
remains undismissed for a period of thirty (30) days, no Option held by such Optionee may be
exercised following the date on which such Optionee commits such act of bankruptcy or such
proceeding remains undismissed, as the case may be.

          6.3 If any Optionee shall die holding an Option which has not been fully exercised, his
personal representatives, heirs or legatees may, at any time within three months from the date of
grant of probate of the will or letters of administration of the estate of the decedent or within
one year after the date of such death, whichever is the lesser time, exercise the Option with
respect to the unexercised balance of the Shares subject to the Option but only to the same extent
to which the decedent could have exercised the Option immediately before the date of such death.

          6.4 For greater certainty, Options shall not be affected by any change of office of the
Optionee or by the Optionee ceasing to be a Director provided that the Optionee continues to be an
Eligible Person.

          6.5 For the purposes of this Article 6, a determination by the Corporation that an Optionee
was discharged for “cause” shall be binding on the Optionee.

     7. Exercise of Options.

          7.1 Subject to the provisions of the Plan, an Option may be exercised from time to time by
delivery to the Corporation at its registered office of a written notice of exercise addressed to
the Secretary of the Corporation specifying the number of Shares with respect to which the Option
is being exercised and accompanied by payment in full, by cash or certified cheque, of the Option
Price of the Shares then being purchased. Subject to any provisions of the Plan to the contrary,
certificates for such Shares shall be issued and delivered to the Optionee within a reasonable time
following the receipt of such notice and payment.

          7.2 Notwithstanding any of the provisions contained in the Plan or in any Option, the
Corporation’s obligation to issue Shares to an Optionee pursuant to the exercise of any Option
shall be subject to:

               (a) completion of such registration or other qualification of such Shares or obtaining
approval of such governmental or regulatory authority as the Corporation shall determine to be
necessary or advisable in connection with the authorization, issuance or sale thereof;

               (b) the admission of such Shares to listing on any stock exchange on which the Shares may then
be listed;

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               (c) the receipt from the Optionee of such representations, warranties, agreements and
undertakings, as the Corporation determines to be necessary or advisable in order to safeguard
against the violation of the securities laws of any jurisdiction; and

               (d) the satisfaction of any conditions on exercise prescribed pursuant to Article 3 hereof.

          7.3 Options shall be evidenced by a share option agreement, instrument or certificate in such
form not inconsistent with this Plan as the Committee or the Board may from time to time determine
provided that the substance of Article 5 be included therein.

     8. Certain Adjustments.

          8.1 Subject to any required action by the shareholders of the Corporation, the number of
Shares covered by each outstanding Option, the number of Shares which have been authorized for
issuance under the Plan but as to which no Options have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as the Option Price of
each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or any other increase or decrease in the number of
issued Shares effected without receipt of consideration by the Corporation; provided, however, that
conversion of any convertible securities of the Corporation shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Corporation of shares of any class, or securities convertible into
shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of Shares subject to and Option Price of an Option.

          8.2 In the event of the proposed dissolution or liquidation of the Corporation, the Board
shall notify each Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Board in its discretion may provide for an Optionee to have the right to exercise
his or her Option until twenty (20) days prior to such transaction as to all of the Optioned Shares
covered thereby, including Shares as to which the Option would not otherwise be exercisable. To
the extent it has not been previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.

          8.3 In the event of a merger of the Corporation with or into another corporation, or the sale
of substantially all of the assets of the Corporation, each outstanding Option shall be assumed or
an equivalent option or right substituted by the successor corporation or an affiliate (within the
meaning of the Ontario Business Corporations Act (the “OBCA”) of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the Option, the Optionee
shall fully vest in and have the right to exercise the Option as to all of the Optioned Shares,
including Shares as to which it would not otherwise be vested or exercisable. If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale
of assets, the Board shall notify the Optionee in writing or electronically that the Option shall
be fully vested and exercisable for a period of twenty (20) days from the date of such

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notice, and the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the merger or sale of
assets, the option or right confers the right to purchase or receive, for each Share of Optioned
Shares subject to the Option immediately prior to the merger or sale of assets, the consideration
(whether shares, cash, or other securities or property) received in the merger or sale of assets by
holders of Shares for each Share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common shares of the successor corporation or its affiliate (within
the meaning of the OBCA), the Board may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share of Optioned Shares
subject to the Option, to be solely common shares of the successor corporation or its affiliate
(within the meaning of the OBCA) equal in fair market value to the per share consideration received
by holders of Shares in the merger or sale of assets.

          8.4 Notwithstanding Section 5.2 and the vesting requirements of Sections 5.1(b) and (c), in
the event of a Change in Control, each non-employee Director who is an Optionee shall fully vest in
and have the right to exercise the Option as to all of the Optioned Shares, including Shares that
would not otherwise be vested or exercisable.

     9. Amendment or Discontinuance of the Plan.

          9.1 The Board may amend the Plan at any time, provided, however, that no such amendment may
materially and adversely affect any Option previously granted to an Optionee without consent of the
Optionee, except to the extent required by law. Any such amendment shall, if required, be subject
to the prior approval of, or acceptance by, any stock exchange or market on which the Shares are
listed and posted for trading.

          9.2 Notwithstanding anything contained to the contrary in this Plan or in any resolution of
the Board in implementation thereof:

               (a) subject to the rules of any relevant stock exchange or other regulatory authority, the
Board may, by resolution, advance the date on which any Option may be exercised or extend the
expiration date of any Option. The Board shall not, in the event of any such advancement or
extension, be under any obligation to advance or extend the date on or by which Options may be
exercised by any other Optionee; and

               (b) the Board may, by resolution, but subject to applicable regulatory requirements, decide
that any of the provisions hereof concerning the effect of termination of the Optionee’s office or
directorship shall not apply to any Optionee for any reason acceptable to the Board.

          9.3 Notwithstanding the provisions of this Article 9, should changes be required to the Plan
by any securities commission, stock exchange or other governmental or regulatory body of any
jurisdiction to which the Plan or the Corporation now is or hereafter becomes subject, such changes
shall be made to the Plan as are necessary to confirm with such requirements and, if such

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changes are approved by the Board, the Plan, as amended, shall be filed with the records of
the Corporation and shall remain in full force and affect in its amended form as of the date of its
adoption by the Board.

          9.4 Notwithstanding any other provision of this Plan, the Board may at any time by resolution
terminate this Plan. In such event, all Options then outstanding and granted to an Optionee may be
exercised by the Optionee for a period of thirty (30) days after the date on which the Corporation
shall have notified all Optionees of the termination of this Plan, but only to the same extent as
the Optionee could have exercised such Options immediately prior to the date of such notification.

     10. Miscellaneous Provisions.

          10.1 An Optionee shall not have any rights as a shareholder of the Corporation with respect to
any of the Shares covered by such Option until the date of issuance of a certificate for Shares
upon the exercise of such Option, in full or in part, and then only with respect to the Shares
represented by such certificate or certificates. Without in any way limiting the generality of the
foregoing, no adjustment shall be made for dividends or other rights for which the record date is
prior to the date such share certificate is issued.

          10.2 Nothing in the Plan or any Option shall confer upon an Optionee any right to continue or
be re-elected as a director of the Corporation or any Affiliate or any right to continue as an
officer of the Corporation or any Affiliate.

          10.3 The Plan and all matters to which reference is made herein shall be governed by and
interpreted in accordance with the laws of the Province of [Ontario] and the laws of Canada
applicable therein.

     11. Shareholder and Regulatory Approval.

          11.1 The Plan shall be subject to ratification by the shareholders of the Corporation to be
effected by a resolution passed at a meeting of the shareholders of the Corporation, and to
acceptance by any relevant regulatory authority. Any Options granted prior to such ratification
and acceptance shall be conditional upon such ratification and acceptance being given and no such
Options may be exercised unless and until such ratification and acceptance are given.

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Exhibit 10.7

GENESIS MICROCHIP INC.

1997 EMPLOYEE STOCK PURCHASE PLAN

as amended on September 14, 2000 and August 24, 2005

     The following constitute the provisions of the 1997 Employee Stock Purchase Plan of Genesis
Microchip Inc.

     1. Purpose. The purpose of the Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Shares of the Company through accumulated payroll
deductions. It is the intention of the Company to have the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions
of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.

     2. Definitions.

          (a) “Board” shall mean the board of directors of the Company.

          (b) “Code” shall mean the Internal Revenue Code of 1986, as amended.

          (c) “Company” shall mean Genesis Microchip Inc, and any Designated Subsidiary of the Company.

          (d) “Compensation” shall mean all base straight time gross earnings and commissions, but
exclusive of payments for overtime, shift premium, incentive compensation, incentive payments,
bonuses and other compensation.

          (e) “Designated Subsidiary” shall mean any Subsidiary which has been designated by the Board
from time to time in its sole discretion as eligible to participate in the Plan.

          (f) “Employee” shall mean any individual who is an Employee of the Company for tax purposes
whose customary employment with the Company is at least twenty (20) hours per week and more than
five (5) months in any calendar year. For purposes of the Plan, the employment relationship shall
be treated as
continuing intact while the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual’s right to reemployment is
not guaranteed either by statute or by contract, the employment relationship shall be deemed to
have terminated on the

91st day of such leave.

          (g) “Enrollment Date” shall mean the first day of each Offering Period.

          (h) “Exercise Date” shall mean the last day of each Purchase Period.

          (i) “Fair Market Value” shall mean, as of any date, the value of the Shares determined as
follows:

               (1) If the Shares are listed on any established stock exchange or a national market system,
including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq
Stock Market, the Fair Market Value of the Shares shall be the closing sales price for the Shares
(or the closing bid, if no sales were reported) as quoted on such exchange or system for the last
market trading day
prior to the time of determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable, or;

               (2) If the Shares are regularly quoted by a recognized securities dealer but selling prices
are not reported, the Fair Market Value of the Shares shall be the mean between the high bid and
low asked prices for the Shares on the last market trading day prior to the day of determination,
as reported in The Wall Street Journal or such other source as the Board deems reliable, or;

 

 

               (3) In the absence of an established market for the Shares, the Fair Market Value thereof
shall be determined in good faith by the Board, or;

               (4) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair
Market Value shall be the initial price to the public as set forth in the final prospectus included
within the registration statement in Form F-1 filed with the Securities and Exchange Commission for
the initial public offering of the Company’s Shares (the “Registration Statement”).

          (j) Effective July 1, 2006, “Offering Periods” shall mean the periods of approximately twelve
(12) months during which an option granted pursuant to the Plan may be exercised, commencing on the
first Trading Day on or after June 30 and December 31 of each year and terminating on the last
Trading Day in the periods ending twelve months later; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the date on which the
Securities and Exchange Commission declares the Company’s Registration Statement effective and
ending on the last Trading Day on or before December 31, 2001. The duration and timing of Offering
Periods may be changed pursuant to Section 4 of this Plan.

          (k) “Plan” shall mean this Employee Stock Purchase Plan.

          (l) “Purchase Price” shall mean an amount equal to 85% of the Fair Market Value of a Share on
the Enrollment Date or on the Exercise Date, whichever is lower.

          (m) “Purchase Period” shall mean the approximately six month period commencing after one
Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of any
Offering Period shall commence on the Enrollment Date and end with the next Exercise Date.

          (n) “Reserves” shall mean the number of Shares covered by each option under the Plan which
have not yet been exercised and the number of Shares which have been authorized for issuance under
the Plan but not yet placed under option.

          (o) “Shares” shall mean common shares of the Company.

          (p) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than 50% of
the voting shares are held by the Company or a Subsidiary, whether or not such corporation now
exists or is hereafter organized or acquired by the Company or a Subsidiary.

          (q) “Trading Day” shall mean a day on which national stock exchanges and The Nasdaq Stock
Market are open for trading.

     3. Eligibility.

          (a) Any Employee who shall be employed by the Company on a given Enrollment Date shall be
eligible to participate in the Plan.

          (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted
an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any
other person whose shares would be attributed to such Employee pursuant to Section 424(d) of the
Code) would own shares of the Company and/or hold outstanding options to purchase such shares
possessing five percent (5%) or more of the total combined voting power or value of all classes of
shares of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to
purchase shares under all employee stock
purchase plans of the Company and its subsidiaries accrues at a rate which exceeds Twenty-Five
Thousand Dollars ($25,000) (U.S. dollars) worth of shares (determined at the fair market value of
the shares at the time such option is granted) for each calendar year in which such option is
outstanding at any time.

 

 

     4. Offering Periods. The Plan shall be implemented by consecutive, overlapping Offering
Periods with a new Offering Period commencing on the first Trading Day on or after June 30 and
December 31 of each year, or on such other date as the Board shall determine, and continuing
thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering Period under the Plan
shall commence with the first Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company’s Registration Statement effective and shall end on the last
Trading Day on or before December 31. 2001. The Board shall have the power to change the duration
of Offering Periods (including the commencement dates thereof) with respect to future offerings
without shareholder approval if such change is announced at least five (5) days prior to the
scheduled beginning of the first Offering Period to be affected thereafter.

     5. Participation.

          (a) An eligible Employee may become a participant in the Plan by completing a subscription
agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with
the Company’s payroll office prior to the applicable Enrollment Date.

          (b) Payroll deductions for a participant shall commence on the first payroll following the
Enrollment Date and shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the participant as provided in Section 10
hereof.

     6. Payroll Deductions.

          (a) At the time a participant files his or her subscription agreement, he or she shall elect
to have payroll deductions made on each pay day during the Offering Period in an amount not
exceeding 15% of the Compensation which he or she receives on each pay day during the Offering
Period.

          (b) All payroll deductions made for a participant shall be credited to his or her account
under the Plan and shall be withheld in whole percentages only. A participant may not make any
additional payments into such account.

          (c) A participant may discontinue his or her participation in the Plan as provided in Section
10 hereof, or may increase or decrease the rate of his or her payroll deductions during the
Offering Period by completing or filing with the Company a new subscription agreement authorizing a
change in payroll deduction rate. The Board may, in its discretion, limit the number of
participation rate changes during any Offering Period. The change in rate shall be effective with
the first full payroll period following five (5) business days after the Company’s receipt of the
new subscription agreement unless the Company elects to process a given change in participation
more quickly. A participant’s subscription agreement shall remain in effect for successive Offering
Periods unless terminated as provided in Section 10 hereof.

          (d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) hereof, a participant’s payroll deductions may be decreased to zero
percent (0%) at any time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant’s subscription agreement at the beginning of the first Purchase Period
which is scheduled to end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.

          (e) At the time the option is exercised in whole or in part, or at the time some or all of the
Shares issued under the Plan are disposed of, the participant must make adequate provision for the
Company’s federal, state, or other tax withholding obligations, if any, which arise upon the
exercise of the option or the disposition of the Shares. At any time, the Company may, but shall
not be obligated to, withhold from the participant’s compensation the amount necessary for the
Company to meet applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or
benefits attributable to sale or early disposition of Shares by the Employee.

     7. Grant of Option. On the Enrollment Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase on each Exercise Date
during

 

 

such Offering Period (at the applicable Purchase Price) up to a number of Shares determined by
dividing such Employee’s payroll deductions accumulated prior to such Exercise Date and retained in
the Participant’s account as of the Exercise Date by the applicable Purchase Price; provided that
in no event shall an Employee be permitted to purchase during each Purchase Period more than 20,000
Shares (subject to any adjustment pursuant to Section 19) on the Enrollment Date, and provided
further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12
hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant
has withdrawn pursuant to Section 10 hereof. The
option shall expire on the last day of the Offering Period.

     8. Exercise of Option. Unless a participant withdraws from the Plan as provided in Section 10
hereof, his or her option for the purchase of Shares shall be exercised automatically on the
Exercise Date, and the maximum number of full Shares subject to option shall be purchased for such
participant at the applicable Purchase Price with the accumulated payroll deductions in his or her
account. No fractional Shares shall be purchased; any payroll deductions accumulated in a
participant’s account which are not sufficient to purchase a full Share shall be retained in the
participant’s account for the subsequent Purchase Period or Offering Period subject to earlier
withdrawal by the participant as provided in Section 10 hereof. Any other monies left over in a
participant’s account after the Exercise Date shall be returned to the participant. During a
participant’s lifetime, a participant’s option to purchase Shares hereunder is exercisable only by
him or her.

     9. Delivery. As promptly as practicable after each Exercise Date on which a purchase of
Shares occurs, the Company shall arrange the delivery to each participant as appropriate, of a
certificate representing the Shares purchased upon exercise of his or her option.

     10. Withdrawal.

          (a) A participant may withdraw all but not less than all the payroll deductions credited to
his or her account and not yet used to exercise his or her option under the Plan at any time by
giving written notice to the Company in the form of Exhibit B to this Plan. All of the
participant’s payroll Deductions credited to his or her account shall be paid to such participant
promptly after receipt of notice of withdrawal and such participant’s option for the Offering
Period shall be automatically terminated, and no further payroll deductions for the purchase of
Shares shall be made for such Offering Period. If a participant withdraws from an Offering Period,
payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription agreement.

          (b) A participant’s withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods which commence after the termination of the Offering Period from
which the participant withdraws.

     11. Termination of Employment.

     Upon a participant’s ceasing to be an Employee, for any reason he or she shall be deemed to
have elected to withdraw from the Plan and the payroll deductions credited to such participant’s
account during the Offering Period but not yet used to exercise the option shall be returned to
such participant or, in
the case of his or her death, to the person or persons entitled thereto under Section 15 hereof,
and such participant’s option shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of termination of employment
shall be treated as continuing to be an Employee for the participant’s customary number of hours per week of employment
during the period in which the participant is subject to such payment in lieu of notice.

     12. Interest. No interest shall accrue on the payroll deductions of participant in the Plan.

     13. Shares.

 

 

          (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of Shares which shall be made available for sale under the Plan shall
be 500,000, plus an annual increase to be added on each anniversary date of the adoption of the
Plan equal to the lesser of (i) the number of Shares needed to restore the maximum aggregate number of Shares
available for sale under the Plan to 500,000, or (ii) a lesser amount determined by the Board. If,
on a given Exercise Date, the number of Shares with respect to which options are to be exercised
exceeds the number of Shares then available under the Plan, the Company shall make a pro rata allocation of the
Shares remaining available for purchase in as uniform a manner as practicable and as it shall
determine to be equitable.

          (b) The participant shall have no interest or voting right in Shares covered by his option
until such option has been exercised.

          (c) Shares to be delivered to a participant under the Plan shall be registered in the name of
the participant or in the name of the participant and his or her spouse.

     14. Administration. The Plan shall be administered by the Board or a committee of members of
the Board appointed by the Board. The Board or its committee shall have full and exclusive
discretionary authority to construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent permitted by law, be
final and binding upon all parties.

     15. Designation of Beneficiary.

          (a) A participant may file a written designation of a beneficiary who is to receive any Shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such
participant of such Shares and cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant’s account under the Plan in the event
of such participant’s death prior to exercise of the option. If a participant is married and the designated beneficiary is not
the spouse, spousal consent shall be required for such designation to be effective.

          (b) Such designation of beneficiary may be changed by the participant at any time by written
notice. In the event of the death of a participant and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant’s death, the Company shall
deliver such Shares and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse, dependent or relative is known to the
Company, then to such other person as the Company may designate.

     16. Transferability. Neither payroll deductions credited to a participant’s account nor any
rights with regard to the exercise of an option or to receive Shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

     17. Use of Funds. All payroll deductions received or held by the Company under the Plan may
be used by the Company for any corporate purpose, and the Company shall not be obligated to
segregate such payroll deductions.

     18. Reports. Individual accounts shall be maintained for each participant in the Plan.
Statements of account shall be given to participating Employees at least annually, which statements
shall set forth the amounts of payroll deductions, the Purchase Price, the number of Shares
purchased and the remaining cash balance, if any.

 

 

     19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset
Sale.

          (a) Changes in Capitalization. Subject to any required action by the shareholders of the
Company, the Reserves, the maximum number of Shares each participant may purchase each Purchase
Period (pursuant to Section 7), as well as the price per Share and the number of Shares covered by
each option under the Plan which has not yet been exercised shall be proportionately adjusted for
any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Shares, or any other increase or
decrease in the number of Shares effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration”. Such adjustment shall be made by the
Board, whose determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares of any class, or securities
convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to an option.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the
Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date
(the “New Exercise Date”), and shall terminate immediately prior to the consummation of such
proposed dissolution or liquidation, unless provided otherwise by the Board. The New Exercise Date shall be
before the date of the Company’s proposed dissolution or liquidation. The Board shall notify each
participant in writing, at least ten (10) business days prior to the New Exercise Date, that the
Exercise Date for the participant’s option has been changed to the New Exercise Date and that the
participant’s option shall be exercised automatically on the New Exercise Date, unless prior to
such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

          (c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into another corporation, each
outstanding option shall be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods then in progress
shall be shortened by setting a new Exercise Date (the “New
Exercise Date”) and any Offering Periods then in progress shall end on the New Exercise Date. The
New Exercise Date shall be before the date of the Company’s proposed sale or merger. The Board
shall notify each participant in writing, at least ten (10) business days prior to the New Exercise
Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the
participant’s option shall be exercised automatically on the New Exercise Date, unless prior to
such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

     20. Amendment or Termination.

          (a) The Board may at any time and for any reason terminate or amend the Plan. Except as
provided in Section 19 hereof, no such termination can affect options previously granted, provided
that an Offering Period may be terminated by the Board on any Exercise Date if the Board determines
that the termination of the Plan is in the best interests of the Company and its shareholders.
Except as provided in Section 19 hereof, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent necessary to comply
with Section 423 of the Code (or any successor rule or Provision or any other applicable law,
regulation or stock exchange rule), the Company shall obtain shareholder approval in such a manner
and to such a degree as required.

          (b) Without shareholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Board (or its committee) shall be entitled to
change the Offering Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied

 

 

toward the purchase of Shares for each participant properly correspond with amounts withheld from
the participant’s Compensation, and establish such other limitations or procedures as the Board (or
its committee) determines in its sole discretion advisable which are consistent with the Plan.

     21. Notices. All notices or other communications by a participant to the Company under or in
connection with the Plan shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

     22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option
unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the Securities Act (Ontario), the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such compliance.

     As a condition to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

     23. Term of Plan. The Plan shall become effective upon the effective date of its adoption by
the Board. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 20 hereof.

     24. Automatic Transfer to Low Price Offering Period. To the extent permitted by any applicable
laws, regulations, or stock exchange rules, if the Fair Market Value of the Shares on any Exercise
Date in an Offering Period is lower than the Fait Market Value of the Shares on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be automatically
withdrawn from such Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period as of the first day
thereof.

 

 

EXHIBIT A

GENESIS MICROCHIP INC.

1997 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

_____ Original Application            Enrollment Date: ________________

_____ Change in Payroll Deduction Rate

_____ Change of Beneficiary(ies)

     1.                      hereby elects to participate in the 1997 Employee Stock Purchase Plan
(the “Employee Stock Purchase Plan”) of Genesis Microchip Inc. (the “Company”) and subscribes to
purchase common shares of the Company (“Shares”) in accordance with this Subscription Agreement and
the Employee Stock Purchase Plan.

     2. I hereby authorize payroll deductions from each paycheck in the amount of ___% of my
Compensation on each payday (from 0 to 15%) during the Offering Period in accordance with the
Employee Stock Purchase Plan. (Please note that no fractional percentages are permitted.)

     3. I understand that said payroll deductions shall be accumulated for the purchase of Shares
at the applicable Purchase Price determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions
will be used to automatically exercise my option.

     4. I have received a copy of the complete Employee Stock Purchase Plan. I understand that my
participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the
Employee Stock Purchase Plan. I understand that my ability to exercise the option under this
Subscription Agreement is subject to shareholder approval of the Employee Stock Purchase Plan.

     5. Shares purchased for me under the Employee Stock Purchase Plan should be issued in the
name(s) of (Employee or Employee and Spouse only):

                                  .

     6. I represent that I have consulted with any tax consultants I deem advisable in connection
with my participation in the Employee Stock Purchase Plan and the purchase and disposition of
Shares thereunder, and that I am not relying on the Company for any tax advice. I hereby agree to
notify the Company in writing within 30 days after the date of any disposition of my shares and I
will make adequate provision for the tax

 

 

withholding obligations of the Company, if any, which arise upon the acquisition or disposition of
the Shares.

     7. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the
Employee Stock Purchase Plan.

     8. In the event of my death, I hereby designate the following as my beneficiary(ies) to
receive all payments and Shares due to me under the Employee Stock Purchase Plan.

	 	 	 
	Name
	 	 
	 

	 	 

	 	 	 
	Relationship
	 	 
	 

	 	 

	 	 	 
	Address
	 	 
	 

	 	 

	 	 	 
	Employee’s Social Security Number
	 	 
	 

	 	 

	 	 	 
	Employee’s Address
	 	 
	 

	 	 

I UNDERSTAND THAT THE SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING
PERIODS UNLESS TERMINATED BY ME.

Dated                                        

Signature of Employee                                        

Spouse’s Signature (If beneficiary other than spouse)                                        

 

 

EXHIBIT B

GENESIS MICROCHIP INC.

1997 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Genesis Microchip Inc. 1997 Employee
Stock Purchase Plan which began on                     , ___(the “Enrollment Date”) hereby notifies
the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the
Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to
his or her account with respect to such Offering Period. The undersigned understands and agrees
that his or her option for such Offering Period will be automatically terminated. The undersigned
understands further that no further payroll deductions will be made for the purchase of shares in
the current Offering Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement.

     Print Name and Address of Participant:

	 	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	 	 	 
	Signature
	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	 

	 	 	 	 
	Date

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