GENESIS MICROCHIP INC
S-8, 1999-01-12
SEMICONDUCTORS & RELATED DEVICES
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<PAGE>   1
    As filed with the Securities and Exchange Commission on January 12, 1999
                                                      Registration No. 333-
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      Under
                           The Securities Act of 1933

                             GENESIS MICROCHIP INC.
             (Exact name of Registrant as specified in its charter)

                            -----------------------

          Ontario, Canada                                       None
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                      Identification Number)

                        200 Town Centre Blvd., Suite #400
                            Markham, Ontario, Canada
                                     L3R 8G5
                                 (905) 470-2742


  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)

                            -----------------------

                         1997 EMPLOYEE STOCK OPTION PLAN
                        1997 EMPLOYEE STOCK PURCHASE PLAN
                            (Full title of the Plan)

                            -----------------------

                                 Hamid Farzaneh
                          Genesis Microchip Corporation
                              1871 Landings Drive
                             Mountain View, CA 94043
                                 (650) 428-4277


            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                            -----------------------

                                   Copies to:

                             FRANCIS S. CURRIE, ESQ.
                           ANTON T. COMMISSARIS, ESQ.
                             JULIA SCHWARTZMAN, ESQ.
                        Wilson Sonsini Goodrich & Rosati
                            Professional Corporation
                               650 Page Mill Road
                           Palo Alto, California 94304
                                 (650) 493-9300
                            -----------------------
<PAGE>   2

<TABLE>
<CAPTION>
                                   CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------
                                                       Proposed          Proposed        
                                                        Maximum          Maximum        
      Title of Each Class                Amount        Offering         Aggregate         Amount of
        of Securities to                 to be           Price           Offering       Registration
         be Registered                 Registered      Per Share          Price              Fee
- --------------------------------------------------------------------------------------------------------
<S>                                    <C>              <C>           <C>                  <C>      
Common Shares, no par value        
approved for issuance under the
1997 Employee Stock Option 
Plan(1)............................    483,284          $22.9700      $11,101,033.48       $3,086.00
- --------------------------------------------------------------------------------------------------------
Common Shares, no par value
approved for issuance under the
1997 Employee Stock Purchase
Plan(2)............................     20,852          $19.5200      $   407,031.04       $  113.00
- --------------------------------------------------------------------------------------------------------
Totals                                 504,136                        $11,508,064.52       $3,199.00
- --------------------------------------------------------------------------------------------------------
</TABLE>

- -------------------------------------------------------------------------------

(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
    as amended, solely for the purpose of calculating the registration fee. The
    computation is based upon the average of the high and low price as reported
    on the Nasdaq National Market on January 5, 1999. The indicated number of
    shares to be registered represents additional shares issuable under the
    listed plan that is not covered by prior registration statements.

(2) The Proposed Maximum Offering Price Per Share has been estimated in
    accordance with Rule 457(h) under the Securities Act of 1933 solely for the
    purpose of calculating the registration fee. The computation is based upon
    85% (see explanation in following sentence) of the average of the high and
    low price of the Common Stock as reported on the Nasdaq National Market on
    January 5, 1999. Pursuant to the 1997 Employee Stock Purchase Plan, Common
    Stock issued thereunder will be sold at a per share price equal to 85% of
    the Fair Market Value of a share of Common Stock on the Enrollment Date or
    the Exercise Date, whichever is lower (as such terms are defined in such
    plan).
 
<PAGE>   3

 STATEMENT UNDER GENERAL INSTRUCTION E - REGISTRATION OF ADDITIONAL SECURITIES.

        The Registrant previously filed a Registration Statement on Form S-8
with the Securities and Exchange Commission on or about April 29, 1998 (SEC File
No. 333-51001) (the "Previous Form S-8"). The Previous Form S-8 was filed in
connection with the 1987 Stock Option Plan, 1997 Employee Stock Option Plan,
1997 Non-Employee Stock Option Plan and the 1997 Employee Stock Purchase Plan.
This Registration Statement registers additional shares of the Registrant's
Common Stock to be issued pursuant to the 1997 Employee Stock Option Plan, as
amended on October 27, 1998 and the 1997 Employee Stock Purchase Plan (the "1997
Plans"). The contents of the Previous Form S-8, including periodic reports that
the Registrant filed, or to be filed, after the Previous Form S-8 to maintain
current information about the Registrant, are incorporated by reference into
this Registration Statement pursuant to General Instruction E of Form S-8.

                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 8.  EXHIBITS.

4.1     The 1997 Employee Stock Option Plan, as amended on October 27, 1998.

5.1     Opinion of Weir & Foulds regarding the validity of Securities being
        registered.

23.1    Consent of KPMG Peat Marwick LLP.

23.2    Consent of counsel (contained in Exhibit 5.1).

24.1    Power of Attorney (see page II-2).

<PAGE>   4
                                   SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in Markham, Ontario, Canada, on this 12th day of January, 1999.

                                    GENESIS MICROCHIP INC.


                                By:  /s/ I. Eric Erdman
                                     ------------------------------------------
                                     I. Eric Erdman
                                     Chief Financial Officer and Secretary



                                POWER OF ATTORNEY

        KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul M. Russo and I. Eric Erdman, jointly
and severally, his attorneys-in-fact, each with the power of substitution, for
him in any and all capacities, to sign any amendments to this Registration
Statement on Form S-8, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

        Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
        SIGNATURE                                         TITLE                         DATE
- ---------------------------------------------------------------------------------------------------
<S>                                               <C>                              <C>
     /s/ Paul M. Russo                            Chairman and Chief Executive     January 12, 1999
- ----------------------------------                Officer 
    Paul M. Russo                 

    /s/ I. Eric Erdman                            Vice President, Finance and      January 12, 1999
- ----------------------------------                Administration, Chief
    I. Eric Erdman                                Financial Officer, Chief
                                                  Accounting Officer and
                                                  Secretary

    /s/ Brian S. Campbell                         Director                         January 12, 1999
- ----------------------------------
    Brian S. Campbell                                                              

    /s/ James E. Donegan                          Director                         January 12, 1999
- ----------------------------------
    James E. Donegan                                                               

    /s/ George A. Duguay                          Director                         January 12, 1999
- ----------------------------------
    George A. Duguay                                                               



    /s/ A. David Ferguson                         Director                         January 12, 1999
- ----------------------------------
    A. David Ferguson                                                              

    /s/ Ronald A. Rohrer                          Director                         January 12, 1999
- ----------------------------------
    Ronald A. Rohrer                                                               

    /s/ William H. Welling                        Director                         January 12, 1999
- ---------------------------------
    William H. Welling

    /s/ Hamid Farzaneh                            Authorized U.S. Representative   January 12, 1999
- ----------------------------------
    Hamid Farzaneh
</TABLE>

                                      II-2
<PAGE>   5
                                INDEX TO EXHIBITS
<TABLE>
<CAPTION>
  Exhibit Number                         Exhibit Document
  --------------                         ----------------
        <S>         <C>                       
        4.1         The 1997 Employee Stock Option Plan, as amended on October
                    27, 1998.

        5.1         Opinion of Weir & Foulds regarding the validity of the
                    Securities being registered.

       23.1         Consent of KPMG Peat Marwick LLP.

       23.2         Consent of  Counsel (contained in Exhibit 5.1 hereto).

       24.1         Power of Attorney (see page II-2).
</TABLE>




<PAGE>   1
                                                                     EXHIBIT 4.1
                             GENESIS MICROCHIP INC.

                         1997 EMPLOYEE STOCK OPTION PLAN

        1. PURPOSES OF THE PLAN. The purposes of this Plan are:

           o   to attract and retain the best available personnel for positions
               of substantial responsibility,

           o   to provide additional incentive to Employees, and

           o   to promote the success of the Company's business.

        Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

        2. DEFINITIONS. As used herein, the following definitions shall apply:

                (a) "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

                (b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under Ontario corporate law, U.S. federal
and state securities laws, Ontario securities regulation, the Code, any stock
exchange or quotation system on which the Shares are listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or Stock
Purchase Rights are, or will be, granted under the Plan.

                (c) "Board" means the board of directors of the Company.

                (d) "Code" means the Internal Revenue Code of 1986, as amended.

                (e) "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

                (f) "Company" means Genesis Microchip Inc., an Ontario
corporation.

                (g) "Consultant" means any person, including an advisor, engaged
by the Company or a Parent or Subsidiary to render services to such entity.

                (h) "Director" means a member of the Board.

                (i) "Disability" means total and permanent disability as defined
in Section 22(e)(3) of the Code.


<PAGE>   2

                (j) "Employee" means any person employed by the Company or any
Parent or Subsidiary of the Company. A person shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, on the 181st day
of such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.

                (k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                (l) "Fair Market Value" means, as of any date, the value of 
Shares determined as follows:

                    (i) 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 Administrator
deems reliable;

                     (ii) 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 Administrator
deems reliable; or

                (iii) In the absence of an established market for the Shares,
the Fair Market Value shall be determined in good faith by the Administrator.

                (m) "Incentive Stock Option" means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

                (n) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

                (o) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

                (p) "Option" means a stock option granted pursuant to the Plan.

<PAGE>   3

                                      -3-

        (q) "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

        (r) "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.

        (s) "Optioned Shares" means the Shares subject to an Option or Stock
Purchase Right.

        (t) "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

        (u) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

        (v) "Plan" means this 1997 Employee Stock Option Plan.

        (w) "Restricted Stock" means Shares acquired pursuant to a grant of
Stock Purchase Rights under Section 11 of the Plan.

        (x) "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to Shares purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

        (y) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to
the Plan.

        (z) "Section 16(b)" means Section 16(b) of the Exchange Act.

        (aa) "Service Provider" means an Employee, Director or Consultant.

        (bb) "Shares" mean common shares of the Company, as adjusted in
accordance with Section 13 of the Plan.

        (cc) "Stock Purchase Right" means the right to purchase Shares pursuant
to Section 11 of the Plan, as evidenced by a Notice of Grant.

        (dd) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
<PAGE>   4

                                      -4-


               3. SHARES SUBJECT TO THE PLAN. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan shall be 800,000 Shares, plus an annual
increase to be added on the first day of each fiscal year equal to the lesser of
(i) 2,000,000 Shares, (ii) 3.5% of the outstanding Shares on such date, or (iii)
a lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Shares.

        If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

               4. ADMINISTRATION OF THE PLAN.

                  (a)  PROCEDURE.

                        (i) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.

                        (ii) SECTION 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                        (iii) RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

                        (iv) OTHER ADMINISTRATION. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

                   (b)   POWERS OF THE ADMINISTRATOR.  Subject to the provisions
of the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                        (i) to determine the Fair Market Value;
<PAGE>   5

                                      -5-
 
        (ii) to select the Employees to whom Options and Stock Purchase Rights
may be granted hereunder;

        (iii) to determine the number of Shares to be covered by each Option and
Stock Purchase Right granted hereunder;

        (iv) to approve forms of agreement for use under the Plan;

        (v) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Option or Stock Purchase Right granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options or Stock Purchase Rights may be exercised (which may
be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the Shares relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall determine;

        (vi) to reduce the exercise price of any Option or Stock Purchase Right
to the then current Fair Market Value if the Fair Market Value of the Shares
covered by such Option or Stock Purchase Right shall have declined since the
date the Option or Stock Purchase Right was granted;

        (vii) to institute an Option Exchange Program;

        (viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

        (ix) to prescribe, amend and rescind rules and regulations relating to
the Plan, including rules and regulations relating to sub-plans established for
the purpose of qualifying for preferred tax treatment under foreign tax laws;

        (x) to modify or amend each Option or Stock Purchase Right (subject to
Section 15(c) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

        (xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;

        (xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase Right
previously granted 

<PAGE>   6

                                      -6-
by the Administrator;

                (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.

        (c) EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.

               5. ELIGIBILITY. Options and Stock Purchase Rights may be granted
only to Employees.

               6. LIMITATIONS.

        (a) Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by the Optionee during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000 (U.S.), such Options
shall be treated as Nonstatutory Stock Options. For purposes of this Section
6(a), Incentive Stock Options shall be taken into account in the order in which
they were granted. The Fair Market Value of the Shares shall be determined as of
the time the Option with respect to such Shares is granted.

        (b) Neither the Plan nor any Option or Stock Purchase Right shall confer
upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

        (c) The following limitations shall apply to grants of Options:

                (i) No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 500,000 Shares.

                (ii) In connection with his or her initial service, an Employee
may be granted Options to purchase up to an additional 300,000 Shares which
shall not count against the limit set forth in subsection (i) above.

                (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

                (iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), 

<PAGE>   7

                                      -7-

the cancelled Option will be counted against the limits set forth in subsections
(i) and (ii) above. For this purpose, if the exercise price of an Option is
reduced, the transaction will be treated as a cancellation of the Option and the
grant of a new Option.

               7. TERM OF PLAN.  Subject to Section 19 of the 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 terminated earlier
under Section 15 of the Plan.

               8. TERM OF OPTION. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
shares representing more than ten percent (10%) of the total combined voting
power of all classes of shares of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

               9. OPTION EXERCISE PRICE AND CONSIDERATION.

                (a) EXERCISE PRICE. The per Share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                        (i) In the case of an Incentive Stock Option

                                (A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns shares representing more than ten
percent (10%) of the voting power of all classes of shares of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110% of
the Fair Market Value per Share on the date of grant.

                                (B) granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                        (ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

                        (iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.
<PAGE>   8

                                      -8-

        (b) WAITING PERIOD AND EXERCISE DATES. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised.

        (c) FORM OF CONSIDERATION. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                (i) cash;

                (ii) cheque;

                (iii) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

                (iv) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

                (v) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

                (vi) any combination of the foregoing methods of payment; or

                (vii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

               10. EXERCISE OF OPTION.

        (a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. Unless the Administrator provides otherwise, vesting of
Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share.

        An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the


<PAGE>   9

                                      -9-

person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Shares, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.

        Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

        (b) TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

        (c) DISABILITY OF OPTIONEE. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

        (d) DEATH OF OPTIONEE. If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Option
Agreement (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquires the right to exercise the Option by bequest or inheritance, but
only to the extent that the Option is vested on the date of death. In the


<PAGE>   10
                                      -10-

absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                (e) BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

               11.           STOCK PURCHASE RIGHTS.

                (a) RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.

                (b) REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

                (c) OTHER PROVISIONS. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

                (d) RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the
<PAGE>   11

                                      -11-
Plan.

        12. NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

        13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

                (a) CHANGES IN CAPITALIZATION. Subject to any required action by
the shareholders of the Company, the number of Shares covered by each
outstanding Option and Stock Purchase Right, and the number of Shares which have
been authorized for issuance under the Plan but as to which no Options or Stock
Purchase Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock Purchase Right, as well as
the price per Share of Shares covered by each such outstanding Option or Stock
Purchase Right, 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 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 or Stock Purchase Right.

                (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator 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. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.



<PAGE>   12

                                      -12-

                (c) MERGER OR ASSET SALE. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right 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 or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Shares,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of twenty (20) days from the date of such notice, and the Option or Stock
Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right 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 or Stock Purchase Right 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 Parent, the Administrator may,
with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Shares subject to the Option or Stock Purchase Right, to be
solely common shares of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Shares in the
merger or sale of assets.

        14. DATE OF GRANT. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

        15. AMENDMENT AND TERMINATION OF THE PLAN.

                (a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Plan.

                (b) SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

                (c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in 
<PAGE>   13

                                      -13-


writing and signed by the Optionee and the Company. Termination of the Plan
shall not affect the Administrator's ability to exercise the powers granted to
it hereunder with respect to Options granted under the Plan prior to the date of
such termination.

                16. CONDITIONS UPON ISSUANCE OF SHARES.

                (a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

                (b) INVESTMENT REPRESENTATIONS. As a condition to the exercise
of an Option or Stock Purchase Right, the Company may require the person
exercising such Option or Stock Purchase Right 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.

                17. INABILITY TO OBTAIN AUTHORITY. The inability of the Company
to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

                18. RESERVATION OF SHARES. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

                19. SHAREHOLDER APPROVAL. The Plan shall be subject to approval
by the shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.

<PAGE>   1

                                                                     EXHIBIT 5.1


                           [WEIR & FOULDS LETTERHEAD]


                                                               January 12, 1999

Genesis Microchip Inc.
Suite 400, 200 Town Centre Blvd.
Markham, Ontario L3R 8G5
Canada

Dear Sirs/Mesdames:

                     RE: REGISTRATION STATEMENT ON FORM S-8
                     --------------------------------------

     We have reviewed the registration statement on Form S-8 dated January 12,
1999 to be filed by Genesis Microchip Inc. (the "Company") with the Securities
and Exchange Commission on or about January 12, 1999 (the "Registration
Statement") in connection with the registration under the Securities Act of
1933, as amended, of an aggregate of 504,136 Common Shares, no par value, (the
"Option Shares") of the Company issuable as to 483,284 Option Shares pursuant to
the Company's 1997 Employee Stock Option Plan and as to 20,852 Option Shares
pursuant to the Company's 1997 Employee Stock Purchase Plan (individually each
of the 1997 Employee Stock Option Plan and the 1997 Employee Stock Purchase Plan
referred to as a "Plan"). As the Company's Canadian general counsel, we have
examined such corporate records, certificates and other documents, and such
questions of law, as we have considered necessary or appropriate for the
purposes of the following opinion. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity with the originals of all documents submitted
to us as copies.

     Upon the basis of such examination, it is our opinion that the Option
Shares, when issued in accordance with the terms of the Plan and any agreement
evidencing the options being exercised, including payment of the purchase price
therefor, will be valid, fully-paid and non-assessable.

     The foregoing opinion is limited to the laws of the Province of Ontario,
Canada, and we are expressing no opinion as to the effect of the laws of any
other jurisdiction. We have relied as to certain matters on information obtained
from officials of the Company and other sources believed by us to be
responsible.

     We hereby consent to the use of this opinion letter as an exhibit to the 
Registration Statement and to the use of our name wherever appearing in the 
Registration Statement and any amendments thereto.

                                        Yours truly,

                                        /s/ WEIR & FOULDS
                                        -----------------
                                        Weir & Foulds

<PAGE>   1
                                                                    EXHIBIT 23.1

                        CONSENT OF INDEPENDENT AUDITORS

THE BOARD OF DIRECTORS
GENESIS MICROCHIP INC.

We consent to the incorporation by reference in this Registration Statement on
Form S-8 to be filed January 12, 1999 pertaining to the 1997 Employee Stock
Option Plan, as amended on October 27, 1998, and the 1997 Employee Stock
Purchase Plan of our report dated July 10, 1998 on the consolidated financial
statements of the Company as at May 31, 1998 and 1997 and for three years ended
May 31, 1998 included in the May 31, 1998 Form 20-F of the Company.


/s/ KPMG LLP

Toronto, Canada
January 12, 1999


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