<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1997
REGISTRATION NO. 333-19373
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MACROVISION CORPORATION
(Name of Small Business Issuer in Its Charter)
<TABLE>
<S> <C> <C>
DELAWARE 7829 77-0156161
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification
No.)
</TABLE>
1341 ORLEANS DRIVE
SUNNYVALE, CALIFORNIA 94089
(408) 743-8600
(Address and Telephone Number of Principal Executive Offices and Principal Place
of Business)
--------------------------
VICTOR A. VIEGAS
CHIEF FINANCIAL OFFICER
MACROVISION CORPORATION
1341 ORLEANS DRIVE
SUNNYVALE, CALIFORNIA 94089
(408) 743-8600
(Name, Address and Telephone Number of Agent For Service)
COPIES TO:
<TABLE>
<S> <C> <C>
LAIRD H. SIMONS III, ESQ. DAVID W. HERBST, ESQ. JEFFREY D. SAPER, ESQ.
KATHERINE TALLMAN SCHUDA, ESQ. AMY L. GILSON, ESQ. PATRICK J. SCHULTHEIS, ESQ.
ERIC D. FROTHINGHAM, ESQ. SANJIV S. DHAWAN, ESQ. JAN-MARC VAN DER SCHEE, ESQ.
FENWICK & WEST LLP WISE & SHEPARD LLP WILSON SONSINI GOODRICH & ROSATI,
TWO PALO ALTO SQUARE 3030 HANSEN WAY PROFESSIONAL CORPORATION
PALO ALTO, CALIFORNIA 94306 PALO ALTO, CALIFORNIA 94304 650 PAGE MILL ROAD
(415) 494-0600 (415) 856-1200 PALO ALTO, CA 94304
(415) 493-9300
</TABLE>
--------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
--------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ________________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 145 of the Delaware General Corporation Law, the
Registrant's Certificate of Incorporation includes a provision that eliminates
the personal liability of its directors to the Registrant or its stockholders
for monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit. In addition, as
permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of
the Registrant provide that: (i) the Registrant is required to indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law; (ii) the Registrant may, in its discretion, indemnify other
officers, employees and agents as set forth in the Delaware General Corporation
Law; (iii) upon receipt of an undertaking to repay such advances if
indemnification is determined to be unavailable, the Registrant is required to
advance expenses, as incurred, to its directors and executive officers in
connection with a proceeding; (iv) the rights conferred in the Bylaws are not
exclusive and the Registrant is authorized to enter into indemnification
agreements with its directors, officers, employees and agents; (v) the
Registrant may not retroactively apply any amendment of the Bylaw provisions
relating to indemnity; and (vi) to the fullest extent permitted by the Delaware
General Corporation Law, a director or executive officer will be deemed to have
acted in good faith if his or her action is based on the records or books of
account of the Registrant or on information supplied to him or her by officers
of the Registrant in the course of their duties or on the advice of legal
counsel for the Registrant or on information or records given or reports made to
the Registrant by independent certified public accountants or appraisers or
other experts.
The Registrant intends to enter into indemnification agreements with each of
its directors and executive officers. The indemnification agreements provide
that directors and executive officers will be indemnified and held harmless to
the fullest possible extent permitted by law including against all expenses
(including attorneys' fees), judgments, fines and settlement amounts actually
and reasonably incurred by them in any action, suit or proceeding, including any
derivative action by or in the right of the Registrant, on account of their
services as directors, officers, employees or agents of the Registrant or as
directors, officers, employees or agents of any other company or enterprise when
they are serving in such capacities at the request of the Registrant.
The indemnification agreement requires a director or executive officer to
reimburse the Registrant for expenses advanced only to the extent that it is
ultimately determined that the director or executive officer is not entitled,
under Delaware law, the Bylaws, his or her indemnification agreement or
otherwise to be indemnified for such expenses. The indemnification agreement
provides that it is not exclusive of any rights a director or executive officer
may have under the Certificate of Incorporation, Bylaws, other agreements, any
vote of the stockholders or vote of directors or otherwise.
The indemnification provision in the Bylaws, and the indemnification
agreements entered into between the Registrant and its directors and executive
officers, may be sufficiently broad to permit indemnification of the
Registrant's directors and executive officers for liabilities arising under the
Securities Act.
As authorized by the Registrant's Bylaws, the Registrant, with approval by
the Registrants Board of Directors, has applied for, and expects to obtain,
directors and officers liability insurance with a per claim and annual aggregate
coverage limit of up to $5,000,000.
II-1
<PAGE>
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
DOCUMENT EXHIBIT NUMBER
- ----------------------------------------------------------------------------- -----------------
<S> <C>
Underwriting Agreement....................................................... 1.01
Registrant's Certificate of Incorporation.................................... 3.01
Registrant's Bylaws.......................................................... 3.03
Form of Indemnification Agreement............................................ 10.08
</TABLE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses to be paid in
connection with the sale of the shares of Common Stock being registered hereby.
All amounts are estimates except for the Securities and Exchange Commission
registration fee and the NASD filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 9,618
NASD filing fee............................................... 3,674
Nasdaq National Market filing fee.............................
Accounting fees and expenses..................................
Legal fees and expenses.......................................
Printing and engraving expenses...............................
Road show expenses............................................
Blue sky fees and expenses....................................
Transfer agent, registrar and custodian fees and expenses.....
Miscellaneous.................................................
------
Total................................................. $
------
------
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
The Common Stock, Preferred Stock and options of the Registrant issued to
stockholders of Macrovision Corporation, a California corporation, in connection
with the reincorporation into Delaware were not deemed "sold" as a result of
Rule 145(a)(2) promulgated under the Securities Act. The following table sets
forth information regarding all securities sold by the Registrant's California
predecessor since December 1, 1993.
<TABLE>
<CAPTION>
TITLE OF NUMBER OF AGGREGATE FORM OF
CLASS OF PURCHASERS DATE OF SALE SECURITIES SHARES PURCHASE PRICE CONSIDERATION
- ----------------------------------- --------------- ---------------- ----------- -------------- ------------------
<S> <C> <C> <C> <C> <C>
Victor A Viegas.................... June 7, 1996 Common Stock 58,333 $ 157,500 Promissory Note
Pacific Media Development, Inc., Series A
acting through a trustee......... July 12, 1996 Preferred Stock 543,099 $3,037,994 Conversion of Note
Recapitalization
Command Audio Corporation.......... July 30, 1996 Common Stock 194,444 $ 874,998 (1)
Exercise of options by 30
optionees, including two officers
and one former officer........... July 6, 1994 - Common Stock 78,843 $ 118,265 Cash
October 29,
1996
</TABLE>
- ------------------------------
(1) On July 31, 1996, the Company and Command Audio Corporation ("CAC") entered
into a Recapitalization and Stock Purchase Agreement pursuant to which the
Company purchased from CAC 604,000 shares of CAC common stock and 396,000
shares of CAC Series B preferred stock for the aggregate consideration of
$1.0 million paid in August 1996 in cash and in September 1996 pursuant to a
secured promissory note, 194,444 shares of the Company's Common Stock,
subject to the terms and conditions of a Restricted Stock Acquisition
Agreement, and the surrender and delivery to CAC of 500,000 shares of CAC
Series A preferred stock.
II-2
<PAGE>
The sale of Common Stock to Victor A. Viegas and all sales of Common Stock
made pursuant to the exercise of stock options granted under the stock option
plans of the Registrant (or its predecessor) were made pursuant to an exemption
from the registration requirements of the Securities Act afforded by either
Section 4(2) or Rule 701 promulgated under the Securities Act. All other sales
were made in reliance on Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act. These latter sales were made without
general solicitation or advertising. The purchasers were sophisticated investors
with access to all relevant information necessary to evaluate the investment who
represented to the Registrant that the shares were being acquired for
investment.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ----------- --------------------------------------------------------------------------------------------------
<S> <C> <C>
1.01 -- Form of Underwriting Agreement.*
2.01 -- Form of Merger Agreement by and between the Registrant and Macrovision Corporation, a California
corporation.*
3.01 -- Registrant's Certificate of Incorporation.*
3.02 -- Form of Registrant's Amended and Restated Certificate of Incorporation.*
3.03 -- Registrant's Bylaws.*
3.04 -- Form of Registrant's Amended and Restated Bylaws*
4.01 -- Registration Rights Agreement dated June 12, 1991.*
4.02 -- Addendum to Registration Rights Agreement.**
5.01 -- Opinion of Fenwick & West regarding legality of the securities being issued.**
10.01 -- Registrant's Stock Option Plan and related documents.*
10.02 -- Registrant's 1996 Equity Incentive Plan and related documents.**
10.03 -- Registrant's 1996 Directors Stock Option Plan and related documents.**
10.04 -- Registrant's 1996 Employee Stock Purchase Plan and related documents.*
10.05 -- Registrant's Executive Incentive Plan.***
10.06 -- Employment Agreement dated as of June 5, 1996, between Registrant and Victor A. Viegas.*
10.07 -- Restricted Stock Purchase Agreement dated as of June 7, 1996, between Registrant and Victor A.
Viegas and related documents, including Promissory Note and Stock Pledge Agreement.*
10.08 -- Form of Indemnification Agreement to be entered into by Registrant with each of its directors and
executive officers.*
10.09 -- Recapitalization and Stock Purchase Agreement dated as of July 31, 1996, between Registrant and
Command Audio Corporation.*
10.10 -- Restricted Stock Acquisition Agreement dated as of July 31, 1996, between Registrant and Command
Audio Corporation, and First Amendment dated as of November 29, 1996.*
10.11 -- Technology Transfer and Royalty Agreement dated as of July 31, 1996, between Registrant and
Command Audio Corporation, and First Amendment dated as of November 29, 1996.*
10.12 -- Letter dated December 6, 1996 from Registrant to Command Audio Corporation.*
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ----------- --------------------------------------------------------------------------------------------------
<S> <C> <C>
10.13 -- License Agreement dated September 26, 1995, among Registrant, Victor Technobrain Co., Ltd. and
Video Culture Institute, Inc., Amendment Number One dated June 30, 1996 and Amendment Number Two
dated September 30, 1996.*
10.14 -- Duplicator Agreement dated as of June 1, 1988, by and between Registrant and Victor Company of
Japan, Limited.*
10.15 -- Technology Application Agreement dated November 29, 1988, by and between Registrant and Victor
Company of Japan, Limited.*
10.16 -- Agreement dated July 15, 1994, by and between Registrant and Victor Company of Japan, Limited.***
10.17 -- Copy Protection Technology Agreement dated as of January 7, 1997, between Registrant and Victor
Company of Japan, Limited.*
10.18 -- Waiver Agreement dated as of January 6, 1997, between Registrant and Pacific Media Development,
Inc.*
10.19 -- Stock and Convertible Note Purchase Agreement dated as of May 24, 1991, among Registrant, a
trustee for Pacific Media Development, Inc. and A. Victor Farrow and Carol Ann Farrow as Trustees
of the Farrow Family Trust U/T/D December 18, 1990.**
10.20 -- Lease Agreement dated April 21, 1995, by and between Registrant and Caribbean Geneva Investors.*
10.21 -- Standard Sublease dated September 21, 1995, by and between Registrant and Deutsch Technology
Research, together with Lease Agreement dated May 26, 1992, by and between Registrant and
Crossroads Investment Group.*
11.01 -- Statement regarding computation of earnings (loss) per share.*
16.01 -- Letter regarding change in certifying accountant.*
21.01 -- List of Registrant's subsidiaries.*
23.01 -- Consent of Fenwick & West (included in Exhibit 5.01).**
23.02 -- Consent of KPMG Peat Marwick LLP.*
23.03 -- Consent of Ernst & Young LLP.*
24.01 -- Power of Attorney.*
27.01 -- Financial Data Schedule.*
</TABLE>
- ------------------------
* Previously filed.
** To be supplied by amendment.
*** Filed herewith. Confidential treatment has been requested with respect to
certain portions of these Exhibits. Such portions have been omitted from
this filing and have been filed separately with the Securities and Exchange
Commission.
II-4
<PAGE>
ITEM 28. UNDERTAKINGS.
The Registrant hereby undertakes the following:
(1) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to each
purchaser.
(2) For determining liability under the Securities Act, to treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h)
under the Securities Act as part of this registration statement as of the
time the Commission declared it effective.
(3) For determining any liability under the Securities Act, to treat
each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial
bona fide offering of those securities.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 24 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form SB-2 and authorized this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, in the
City of Sunnyvale, State of California, on January 21, 1997.
MACROVISION CORPORATION
By: *
-----------------------------------------
John O. Ryan
CHIEF EXECUTIVE OFFICER
In accordance with the requirements of the Securities Act, this Amendment to
the Registration Statement was signed by the following persons in the capacities
and on the dates stated.
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------
PRINCIPAL EXECUTIVE OFFICER:
Chairman of the Board of
* Directors, Chief
- ------------------------------ Executive Officer and a January 21, 1997
John O. Ryan Director
PRINCIPAL FINANCIAL OFFICER
AND PRINCIPAL ACCOUNTING
OFFICER:
/s/ VICTOR A. VIEGAS Vice President, Finance
- ------------------------------ and Administration and January 21, 1997
Victor A. Viegas Chief Financial Officer
ADDITIONAL DIRECTORS:
*
- ------------------------------ President, Chief Operating January 21, 1997
William A. Krepick Officer and Director
*
- ------------------------------ Director January 21, 1997
Richard S. Matuszak
<TABLE>
<S> <C>
/s/ VICTOR A. VIEGAS
--------------------------------------
Victor A. Viegas
*By: ATTORNEY-IN-FACT
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ----------- --------------------------------------------------------------------------------------------------
<S> <C> <C>
1.01 -- Form of Underwriting Agreement.*
2.01 -- Form of Merger Agreement by and between the Registrant and Macrovision Corporation, a California
corporation.*
3.01 -- Registrant's Certificate of Incorporation.*
3.02 -- Form of Registrant's Amended and Restated Certificate of Incorporation.*
3.03 -- Registrant's Bylaws.*
3.04 -- Form of Registrant's Amended and Restated Bylaws*
4.01 -- Registration Rights Agreement dated June 12, 1991.*
4.02 -- Addendum to Registration Rights Agreement.**
5.01 -- Opinion of Fenwick & West regarding legality of the securities being issued.**
10.01 -- Registrant's Stock Option Plan and related documents.*
10.02 -- Registrant's 1996 Equity Incentive Plan and related documents.**
10.03 -- Registrant's 1996 Directors Stock Option Plan and related documents.**
10.04 -- Registrant's 1996 Employee Stock Purchase Plan and related documents.*
10.05 -- Registrant's Executive Incentive Plan.***
10.06 -- Employment Agreement dated as of June 5, 1996, between Registrant and Victor A. Viegas.*
10.07 -- Restricted Stock Purchase Agreement dated as of June 7, 1996, between Registrant and Victor A.
Viegas and related documents, including Promissory Note and Stock Pledge Agreement.*
10.08 -- Form of Indemnification Agreement to be entered into by Registrant with each of its directors and
executive officers.*
10.09 -- Recapitalization and Stock Purchase Agreement dated as of July 31, 1996, between Registrant and
Command Audio Corporation.*
10.10 -- Restricted Stock Acquisition Agreement dated as of July 31, 1996, between Registrant and Command
Audio Corporation, and First Amendment dated as of November 29, 1996.*
10.11 -- Technology Transfer and Royalty Agreement dated as of July 31, 1996, between Registrant and
Command Audio Corporation, and First Amendment dated as of November 29, 1996.*
10.12 -- Letter dated December 6, 1996 from Registrant to Command Audio Corporation.*
10.13 -- License Agreement dated September 26, 1995, among Registrant, Victor Technobrain Co., Ltd. and
Video Culture Institute, Inc., Amendment Number One dated June 30, 1996 and Amendment Number Two
dated September 30, 1996.*
10.14 -- Duplicator Agreement dated as of June 1, 1988, by and between Registrant and Victor Company of
Japan, Limited.*
10.15 -- Technology Application Agreement dated November 29, 1988, by and between Registrant and Victor
Company of Japan, Limited.*
10.16 -- Agreement dated July 15, 1994, by and between Registrant and Victor Company of Japan, Limited.***
10.17 -- Copy Protection Technology Agreement dated as of January 7, 1997, between Registrant and Victor
Company of Japan, Limited.*
10.18 -- Waiver Agreement dated as of January 6, 1997, between Registrant and Pacific Media Development,
Inc.*
10.19 -- Stock and Convertible Note Purchase Agreement dated as of May 24, 1991, among Registrant, a
trustee for Pacific Media Development, Inc. and A. Victor Farrow and Carol Ann Farrow as Trustees
of the Farrow Family Trust U/T/D December 18, 1990.**
10.20 -- Lease Agreement dated April 21, 1995, by and between Registrant and Caribbean Geneva Investors.*
10.21 -- Standard Sublease dated September 21, 1995, by and between Registrant and Deutsch Technology
Research, together with Lease Agreement dated May 26, 1992, by and between Registrant and
Crossroads Investment Group.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ----------- --------------------------------------------------------------------------------------------------
<S> <C> <C>
11.01 -- Statement regarding computation of earnings (loss) per share.*
16.01 -- Letter regarding change in certifying accountant.*
21.01 -- List of Registrant's subsidiaries.*
23.01 -- Consent of Fenwick & West (included in Exhibit 5.01).**
23.02 -- Consent of KPMG Peat Marwick LLP.*
23.03 -- Consent of Ernst & Young LLP.*
24.01 -- Power of Attorney.*
27.01 -- Financial Data Schedule.*
</TABLE>
- ------------------------
* Previously filed.
** To be supplied by amendment.
*** Filed herewith. Confidential treatment has been requested with respect to
certain portions of these Exhibits. Such portions have been omitted from
this filing and have been filed separately with the Securities and Exchange
Commission.
<PAGE>
Exhibit 10.05
MACROVISION CORPORATION
EXECUTIVE INCENTIVE PLAN (EIP)
For 1996
February 1, 1996
COMPANY CONFIDENTIAL
1
CONFIDENTIAL
[** Confidential Treatment has been requested for certain portions of this
document]
<PAGE>
EXECUTIVE INCENTIVE PLAN (EIP)
FOR MACROVISION CORPORATE EXECUTIVES
February 1, 1996
INTRODUCTION
The Macrovision Corporation Executive Incentive Plan ("EIP") has been
established to provide incentive and reward for those key executives who, by
virtue of their position, have a significant impact on the financial performance
of the Company. It has been created with the belief that those executives who
are directly responsible for managing a major profit & loss or cost center and
who materially contribute to growth in earnings and shareholder value should be
eligible to participate in a plan which provides for annual cash incentive
awards based upon annual performance.
For each plan year, eligible participants will be involved in the determination
of annual goals and objectives that will be used as a measurement of
performance. At the end of the fiscal year, the President will review the
accomplishments of all participants and make appropriate recommendations to the
Compensation Committee based upon the Company's overall performance and the
individual executive's attainment of his/her goals. The Compensation Committee
will have the full authority to establish whether those recommended incentive
awards will be approved and the full latitude to establish the final incentive
award value, which may be zero in all cases.
The purpose of this policy is to establish incentive award guidelines. In
determining the final incentive award, Company performance, individual
accomplishment of goals and other considerations will be taken into account on
an individual basis.
OVERVIEW
The fundamental philosophy behind the EIP is to reward participants relative
to their individual contribution/performance toward the overall Macrovision
team effort in achieving annual corporate performance goals - as defined in
the annual Business Plan with respect to EBIT (earnings before interest and
taxes), or Corporate Operating Income.
The President reviews and approves individual EIP departmental goals at the
beginning of the Plan Year. These goals are weighted according to a
pre-determined formula based on 50% financial, and 50% for specific
strategic/tactical objectives. The President will assure that each
executive's individual strategic/tactical objectives will represent a
"stretch" to accomplish.
It should be noted that the Company has a variety of other Incentive Award
programs that are designed to motivate ALL employees throughout the year.
These other programs include Employee Profit Sharing, Performance Incentive
Plan (PIP), Special Recognition Awards, Inventions Reward Plan and
Time-To-Market Award.
2
CONFIDENTIAL
<PAGE>
RECOGNITION OF EXTRAORDINARY INDIVIDUAL PERFORMANCE
In the normal administration of the EIP, it is possible that the corporate EBIT
target will be achieved and that certain executives may exceed their financial
and strategic/tactical goals, while others may fall short.
In order to justly reward those executives that have exceeded their goals, the
EIP provides for individual payouts, or Individual Performance Ratings, in
excess of 100% of the Unmodified Corporate Performance Incentive Award.
1996 PARTICIPANTS
INDIVIDUAL POSITION
- ---------- --------
Mark Belinsky VP ACP Theatrical and ACP/PPV
Patrice Capitant Direction Engineering
Brian Dunn VP Cineguard
Greg Ellis Director, Pay TV Components/Licensing
Whit Jackson VP Transmissions Systems
Carl Jorgensen VP Operations
Alistair Knox UK/Europe, M.D.
William Krepick President
Masao Kumei Japan, KK, M.D.
Rich Matuszak VP ACP Special Interest
Robert Netter, Jr. VP/CFO
John Ryan Chairman
3
CONFIDENTIAL
<PAGE>
DEFINITIONS OF TERMS
A. CORPORATE PERFORMANCE RATING
The ratio in % of Actual EBIT to EBIT Plan.
For 1996, the Business Plan EBIT is [**]. EBIT (Earnings Before
Interest and Taxes) is also known as Operating Income.
B. UNMODIFIED INCENTIVE AWARD
The percentage of participant's gross annual salary for a given Corporate
Performance Rating, which is independent of the participant's Individual
Performance Rating.
C. STATEMENT OF GOALS
A written sent of objectives (see attached form), unique to each
participant that establishes quantifiable objectives and measurements of
performance. The goals are all tied directly to the Corporate Business
Plan and specified objectives.
D. INDIVIDUAL PERFORMANCE RATING
Each participant has a Statement of Goals (pps. 10, 11) which establishes
his or her objectives for the Plan Year. They include a combination of
Financial, Strategic and Tactical goals. Each set of goals carries a
weighting factor which allows for quantification of the Individual
Performance Rating by the President. It is the responsibility of the
participant to insure that appropriate documentation is maintained to
support the measurement and accomplishment of each particular goal.
Additional or substitute accomplishments may be recognized in the
measurement of factual Individual Performance Ratings.
4
CONFIDENTIAL
[** Confidential Treatment has been requested for certain portions of this
document]
<PAGE>
DETERMINATION OF AWARDS
(See next page for 1996 rating chart)
1. CALCULATE THE CORPORATE PERFORMANCE RATING
Actual Operating Income (EBIT - earnings before interest and taxes)
divided by Plan Operating Income, in %.
Actual Operating Income is the final year-end Operating Income including
reserves for EIP Awards.
NOTE: Corporate Performance Rating must equal [**] of the Plan before
there is any payout.
2. CALCULATE THE UNMODIFIED INCENTIVE AWARD
Example: Assume Corporate Performance Rating of [**]
The Unmodified Incentive Award would be [**]
3. ESTABLISH THE INDIVIDUAL PERFORMANCE RATING
From the Statement of Goals, the participant and President will determine
the final Individual Performance Rating, based upon the attainment of the
specified, Financial and Strategic/Tactical Goals.
The Individual Performance Rating can be 0 to 200%, with 100% indicating
the satisfactory completion of all goals. The Individual Performance
Rating can exceed 100% in cases of exceptional performance.
Example: Assume individual achieved 90% of financial goals, and 80% of
strategic/tactical goals.
The Individual Performance Rating would be [0.9x50%] + [0.8x50%]
= 85%
4. DETERMINATION OF FINAL INDIVIDUAL INCENTIVE AWARD
Multiply the Unmodified Incentive Award by the Individual Performance
Rating and the Gross Annual Year-end Salary to determine the Final
Individual Incentive Award.
Example: 85% x [**] = [**] EIP payout (as percentage of actual salary)
5
CONFIDENTIAL
[** Confidential Treatment has been requested for certain portions of this
document]
<PAGE>
PERFORMANCE RATING CHART TO DETERMINE
UNMODIFIED INCENTIVE AWARD
CORPORATE
EBIT PERFORMANCE UNMODIFIED
(ACTUAL) RATING (%) INCENTIVE AWARD %
-------- ---------- -----------------
$ [**] [**] [**]
100 20 1996 PLAN
[**] [**]
NOTE: Interpolations apply for performance in between ratings listed
above.
6
CONFIDENTIAL
[** Confidential Treatment has been requested for certain portions of this
document]
<PAGE>
IMPLEMENTATION PROCEDURE
ADMINISTRATION
The Plan will be administered by the Compensation Committee which will have
the right to interpret the Plan, confirm award decisions, and establish
guidelines for determining individual awards and rules for the operation of
the Plan.
This Plan sets forth management's intent and it is the exclusive domain of
the Compensation Committee to interpret the Plan. All Compensation Committee
decisions regarding the Plan and award determinations are final.
The President's and Chairman's incentive awards will be determined solely by
the compensation committee, taking into account the overall Company
performance relative to the established Business Plan, individual
accomplishments and any special considerations.
ELIGIBILITY
The Chairman, President, executives who report directly to the President,
and key business line executives who have profit & loss responsibility are
eligible to participate in the Plan. Final approval of eligible executives
is made by the Board Chairman upon recommendation by the President prior to
the beginning of the Plan's fiscal year. EIP participants are NOT eligible
to participate in the Employee Profit Sharing Plan, Special Recognition
Awards program, or Employee Performance Incentive Plan. Participation in the
Plan does not imply employment for any specified period of time, nor does it
constitute a contract of employment, nor does it guarantee any amount of
award.
PRORATE AWARDS
Participants with less than 4 months service in an Executive Manager
position are ineligible for an Incentive Award. Awards to participants in
Executive Management Incentive positions for more than 4 months, but less
than 1 year, will be pro-rated to the nearest month.
DURATION
The Compensation Committee shall review this Plan annually and make any
amendments or revisions thereto which it deems appropriate or desirable under
the circumstances, and the Plan shall remain in effect until amended or
terminated by the Compensation Committee.
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CONFIDENTIAL
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PAYMENT
Incentive Award payments will be made no later than March 31st of the
following year, allowing the Company adequate time to formally analyze its
financial results according to the regulations and procedures of a public
company.
Awards will be calculated using the participant's actual, earned gross annual
salary of the Plan Year. To receive an award if one is granted, the
participant must remain an employee of the Company through the payment date.
Failure to do so will result in forfeiture of the award.
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CONFIDENTIAL
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MACROVISION CORPORATION
EXECUTIVE INCENTIVE PLAN
Form For Statement of Goals
For Each Participant
1996 Fiscal Year
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<PAGE>
EXECUTIVE INCENTIVE PLAN
STATEMENT OF GOALS
FOR YEAR 1996
Name: __________________________ Supervisor:__________________________
Title: __________________________ Signed:______________________________
Signed:__________________________ Date:________________________________
Date: __________________________
The following is a statement of financial, strategic and tactical objectives
for 1996 that will serve as a basis for overall performance evaluation and
determination of year-end executive incentive awards. Goals will be
quantified as to amount, date and measurement basis and will be weighted as
follows: financial 50%; strategic/tactical 50%.
CORPORATE GOAL: Achieve Earnings Before Interest and Taxes of [**]
A. FINANCIAL (50%)
1. _________________________________________________________________
Actual:____________________________________
2. _________________________________________________________________
Actual:____________________________________
B. STRATEGIC/TACTICAL (50%)
1. _________________________________________________________________
Result:____________________________________
2. _________________________________________________________________
Result:____________________________________
3. _________________________________________________________________
Result:____________________________________
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CONFIDENTIAL
[** Confidential Treatment has been requested for certain portions of this
document]
<PAGE>
4. _________________________________________________________________
Result:____________________________________
5. _________________________________________________________________
Result:____________________________________
6. _________________________________________________________________
Result:____________________________________
7. _________________________________________________________________
Result:____________________________________
8. _________________________________________________________________
Result:____________________________________
Additional/substitute goals accomplished during year:
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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CONFIDENTIAL
<PAGE>
Exhibit 10.16
AGREEMENT
This Agreement made and entered into as of 15th day of July, 1994, by and
between MACROVISION CORPORATION, (hereinafter referred to as "MACROVISION"), a
corporation organized under the laws of the State of California and having its
principal place of business at 700 El Camino Real East, Mountain View,
California 94040, U.S.A., and VICTOR COMPANY OF JAPAN, LIMITED, (hereinafter
referred to as "JVC"), a corporation organized under the laws of Japan and
having its principal place of business at 12, 3-Chome, Moriya-Cho, Kanagawa-Ku,
Yokohama 221, Japan.
WITNESSETH
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the following words and phrases shall have the
following meanings:
(1) "W-VHS Anticopy Process" shall mean certain encoding process developed by
JVC for the avoidance of duplicating any program contained in a Cassette onto
any other recordable medium without using certain decoding equipment.
(2) "Processor" shall mean the equipment including and containing the
electrical circuitry required to apply the W-VHS Anticopy Process to the
Cassettes.
(3) "Cassettes" shall mean prerecorded video cassettes which are in conformity
with W-VHS Standard.
(4) "W-VHS Standard" shall mean JVC's proprietary technical information named
"W-VHS video cassette system standard" determined and defined by JVC as of
September, 1993.
(5) "Development Program" shall mean the development work to be performed
according to this Agreement in developing, designing, manufacturing, testing or
evaluating the sample of Processor during the period up to the time
prototype-sample for mass production products of Processor has been finally
approved by both parties hereto.
ARTICLE 2. OBJECT AND DEVELOPMENT
2.1 Subject to the provisions hereof, during the term of this Agreement, JVC
shall carry out the Development Program for developing, designing, producing and
testing prototypes of mass-production products of Processor which will be
commercially acceptable.
2.2 JVC shall use its all reasonable efforts to develop and finalize the
prototype model of each item of the Processor within the targeted schedule as
separately confirmed by both parties hereto.
[** Confidential Treatment has been requested for certain portions of this
document.]
<PAGE>
2.3 In order that and to the extent that JVC will be able to perform the
contemplated Development Program, JVC shall determine the basic specifications
of the Processor and modify or update them in conjunction with MACROVISION.
ARTICLE 3. COSTS AND EXPENSES
3.1 MACROVISION shall pay JVC an amount of [**] within thirty (30) days after
the effective date of this Agreement in consideration of the cost and expense
arising from JVC's activities hereunder with respect to the contemplated
Development Program.
ARTICLE 4. CONFIDENTIALITY AND REEXPORTED OF TECHNICAL DATA
4.1 Except as specifically provided in this Agreement, any and all information
furnished pursuant to this Agreement shall be used by the receiving party only
in connection with the Development Program and shall be disclosure is necessary
to achieve the objectives of this Agreement and shall not be disclosed to any
third party except MACROVISION's auditors and legal counsel without the prior
written consent of the disclosing party. The parties agree to exercise the same
degree of care and safeguards with respect to such information as used to
maintain the confidentiality of their own information of like character, but in
any event no less than a reasonable degree of care.
4.2 Any and all information shall be deemed confidential information and the
parties shall have obligation of confidentiality described herein except to the
extent such information is:
(a) developed by the receiving party independent of the disclosing party,
as evidenced by reasonable proof, or
(b) lawfully obtained without restriction by the receiving party from a
third party, or
(c) publicly available other than through the fault or negligence of the
receiving party prior to the time of
(d) is known to the receiving party prior to the time of disclosure, as
evidenced by reasonable proof.
4.3 The obligations of nondisclosure and non-use of the confidential
information of this Article shall remain in force and effect notwithstanding the
expiration or termination of this Agreement.
4.4 The parties hereto agree, pursuant to and in conformance with the
requirements of the Export Administration Act, any Foreign Exchange Control
Regulations or the like, that neither technical data nor any direct product
produced by the use thereof, is either intended to be or will actually be
shipped, exported or reexported directly or indirectly to any person,
organization or
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[** Confidential Treatment has been requested for certain portions of this
document.]
<PAGE>
entity in a Country to which such disclosure, shipment, exportation or
re-exportation is prohibited by Act or such Regulations unless prior
authorization is obtained from the competent authorities; the Parties further
agree to keep themselves fully informed of the current basis of all the
provisions of said Regulations including any amendments and changes thereto
which are relevant to the foregoing undertaking.
ARTICLE 5. INVENTION
5.1 Subject to the contemplated Development Program, all inventions, ideas,
intellectual property, know-how, developments, designs, concepts, discoveries,
improvements or innovations ("Inventions") pursuant to Processors shall become
the sole property of JVC.
5.2 Notwithstanding the provision of the preceding paragraph, improvements made
by MACROVISION to the copy protection process in the course of its evaluation
shall be the property of MACROVISION.
ARTICLE 6. MASS-PRODUCTION AND LICENSE OF PROCESSORS
6.1 Promptly after mass-production-samples of Processors have been approved by
both parties hereto, MACROVISION and JVC shall discuss and determine the terms
and conditions of "Production and Purchase Agreement of Processors", and shall
enter into the Agreement, under which JVC agrees to manufacture and supply
Processors exclusively to MACROVISION and MACROVISION agrees to purchase such
Processors exclusively from JVC. MACROVISION shall be the exclusive distributor
of the Processors in Japan.
6.2 Should any technical trouble or inconvenience in connection with
Development Program be found by MACROVISION within sixty (60) days after first
delivery of Processors for sale by JVC to MACROVISION and be informed JVC
thereof by MACROVISION, JVC shall make it's best effort to resolve such trouble
or inconvenience on it's own responsibility without any additional charge to
MACROVISION.
6.3 JVC agrees that JVC shall not assert against MACROVISION any patent and
utility model right relating to Processors which are owned or will be acquired
by JVC so long as MACROVISION agrees not to use Processors for any purpose other
than the sale or license of Processors to ultimate users of the Processors such
as duplicators.
6.4 MACROVISION agrees that MACROVISION shall not assert against JVC any patent
and utility model right relating to Processors which are owned or will be
acquired by MACROVISION.
ARTICLE 7. PUBLICITY
Neither party hereto may open any information relating to the contemplated
Development Program hereunder to any third party during the term of this
Agreement without the prior written
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<PAGE>
consent of other party. In the event that public announcement to stockholders
or others relating to this Agreement or the contemplated Development Program
hereunder is required by any law or regulation, the party making any such
announcement shall give the other party an opportunity to review in advance the
manner or form of the announcement.
ARTICLE 8. DEVELOPMENT WITH A THIRD PARTY
Neither party hereto may cooperate with any third party during the term of
this Agreement, in any field concerning the contemplated Development Program
under this Agreement without the prior written consent of the other party,
except any development already being cooperated in with any third party prior to
the effective date of this Agreement.
ARTICLE 9. DISCLAIMER
9.1 Except as specifically provided in this Agreement, nothing contained in
this Agreement shall be construed as:
(a) granting or conferring any rights, by license or otherwise either
expressly or by implication, estoppel or any other manner, under
patent rights other than those granted hereunder; or
(b) granting or conferring any license or right with respect to any
trademark, trade or brand name, the corporate name of either Party, or
the corporate name of a subsidiary of either Party, or any other name
or mark or any contraction, abbreviation or simulation thereof; or
(c) an agreement or warranty, either expressed, implied or statutory, to
defend or indemnify the other party hereto for infringement of any
patent right, trademark or copyright of a third party arising out of
any work carried out pursuant to this Agreement, or arising out of the
manufacture, use, lease or sale of any Processor; or
(d) a warranty or representation that the use of any furnished information
will be free from patent infringement or any other claim of a third
party; or
(e) a warranty, either expressed, implied or statutory (including any
implied warranty of merchantability or fitness for a particular
purpose) as to prototypes and any commercial Development Program or
any other device or article developed pursuant to this Agreement; or
(f) an agreement by one party hereto to protect, indemnify or hold
harmless the other party hereto from any liability resulting from such
other party's use of any information of such one party; or
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<PAGE>
(g) an obligation to file any patent application, or to prosecute any
opposition, interference, conflict proceeding, or other contest of
priority, or to secure any patent or patent rights, or to maintain any
patent in force, or to provide copies of patent applications to the
other party, or to disclose any inventions described or claimed in
such patent applications.
ARTICLE 10. TERM AND TERMINATION
10.1 This Agreement shall commence on the date when both parties signed on this
Agreement and continue in effect until effective date of "Production and
Purchase Agreement of Development Products" set forth in Article 6.1 hereof,
unless sooner terminated as permitted herein. The Agreement may be extended by
mutual agreement of the Parties.
10.2 In the event that either party shall default in any of its obligations
hereunder, and should such default continue for thirty (30) days after the same
shall have been called to the attention of such party in writing by the other
party, or should file a petition in bankruptcy or make a general assignment for
the benefit of creditors or otherwise acknowledge insolvency, or be adjudged
bankrupt, or should go or be placed into a process or complete liquidation other
than for an amalgamation or reconstruction, or if a receiver be appointed for
its business and such receiver is not discharged within sixty (60) days after
appointment, then the other party, at its option, may terminate such party's
rights under this Agreement by giving ten (10) days notice in writing.
10.3 Subject to the provisions of Paragraphs 10.1, 10.2 and 10.4, any
obligations which accrue prior to termination or expiration, including the
obligations of confidentiality and the prohibition on reexport in Article 4
shall survive such termination or expiration for their full term.
10.4 No failure or delay on the part of a Party to exercise any of its rights
under this Article for one or more defaults shall be construed to prejudice its
rights in connection with such or any subsequent default.
ARTICLE 11. NOTICES
Any and all communications or notices required or permitted under this
Agreement shall be in writing, shall identify this Agreement, and shall be hand
delivered or sent by air mail, postage prepaid and addressed to the last known
address of the party for which the communication is intended. As of the
effective date, any communications or notices to be given to MACROVISION shall
be addressed to:
MACROVISION CORPORATION
700 El Camino Real East, Suite 200
Mountain View, California 94040
Attention: Chief Financial Officer
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As of the effective date, any communications or notices to be given to JVC
shall be addressed to:
VICTOR COMPANY OF JAPAN, LIMITED
12, 3-Chome, Moriya-Cho
Kanagawa-Ku, Yokohama 221, Japan
Attention: General Manager
W-VHS System Promotion Department
Video Sector
ARTICLE 12. ASSIGNMENT
This Agreement shall not be assigned or transferred by either party without
the written consent of the other, except as to a successor in ownership of all
or substantially all the assets of the assigning or transferring party, and
which successor shall expressly assume in writing the performance of all the
terms and conditions of this Agreement to be performed by the assigning or
transferring Party as if it were named herein in the place of the assigning
Party.
ARTICLE 13. GOVERNING LAW
This Agreement shall be governed and interpreted in accordance with the
laws of Japan.
ARTICLE 14. MISCELLANEOUS
14.1 Expiration or termination of this Agreement shall not release either party
hereto from any liability or obligation which as of the date of expiration or
termination has already accused to a party hereto, or affect in any way the
survival of any right, duty or obligation of either Party hereto which is
expressly stated elsewhere in this Agreement to survive expiration or
termination hereto.
14.2 Neither party hereto shall be liable for delay in performance or failure to
perform in whole or in part, the terms of this Agreement due to labor dispute,
strike, labor shortage, war or act of war (whether an actual declaration is made
or not), insurrection, riot or civil commotion, act of public enemy, accident,
fire, flood or other act of God, act of any governmental authority, judicial
action, short or reduced supply of fuel or raw material, technical failure where
such party has exercised ordinary care in the prevention thereof, or other
causes beyond the control of such Party, whether or not similar to the matters
herein enumerated; provided however, that if such delay continues for a period
of six (6) months, then the non-delaying party shall have the right to terminate
this Agreement, and such termination shall be treated as a termination due to
default in accordance with the Article 10.
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<PAGE>
14.3 The provisions of this Agreement supersede all previous communications,
negotiations, representations or agreements, either oral or written, with
respect to and to the extent of the Development Program of Development Product,
and no modification of, or addition to, the terms hereof shall be binding on
either party hereto unless reduced to writing and duly executed by the Parties
hereto.
14.4 This Agreement is intended to be valid and effective throughout the world
and, to the extent permissible under applicable law, shall be construed in a
manner to avoid violation of or invalidity under any applicable law. Should any
provision hereof nevertheless be or become invalid, illegal or unenforceable
under any applicable law, the other provisions hereof shall not be affected, and
to the extent permissible under applicable law, any such invalid, illegal or
unenforceable provision shall be deemed amended lawfully to conform to the
intent of the Parties.
14.5 In the event of any dispute or difference which may arise between the
parties, in connection with this Agreement, the parties shall promptly attempt
to resolve such dispute or difference by mutual discussion.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representative as of the date shown below.
MACROVISION CORPORATION VICTOR COMPANY OF JAPAN,
LIMITED
By: /s/ Joseph F. Swyt By: /s/ Hiroki Shimizu
------------------------------ -----------------------------------
Title: President Title: Director, General Manager of
---------------------------- ---------------------------------
Video Sector
---------------------------------
Date: July 15, 1994 Date:
----------------------------- ----------------------------------
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