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                                                                    EXHIBIT 10.2

 

                             MACROVISION CORPORATION

                  EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT

 

 

        THIS EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT (the "Agreement") is

made and entered into as of April 4, 2005 by and between Macrovision

Corporation, a Delaware corporation (the "Company") and Loren E. Hillberg

("Executive").

 

        WHEREAS, the Board of Directors (the "Board") of the Company has

recommended and authorized the Company to enter into a severance agreement in

the form hereof with Executive; and

 

        WHEREAS, the Board has determined that, in the event of a possible

threatened or pending sale or other change in control of the Company, it is

imperative that the Company and the Board be able to rely upon Executive to

continue in Executive's position, and that the Company be able to receive and

rely upon Executive's advice, if requested, as to the best interests of the

Company and its stockholders without concern that Executive might be distracted

by the personal uncertainties and risks created by any such possible

transactions; and

 

        WHEREAS, in connection with the foregoing, Executive may, in addition to

Executive's regular duties, be called upon to assist in the assessment of any

such possible transactions, advise management and the Board as to whether such

proposals would be in the best interests of the Company and its stockholders,

and to take such other actions as the Board might determine to be appropriate;

 

        NOW, THEREFORE, to assure the Company that it will have the continued

dedication of Executive and the availability of Executive's advice and counsel

through the occurrence of any Change in Control (as defined in Section 1(b)

below) of the Company, and to induce Executive to remain in the employ of the

Company, and for other good and valuable consideration, the Company and

Executive agree as follows:

 

        1.       PAYMENT OF SEVERANCE BENEFIT.

 

                 (a)      In the event that a Change in Control (as hereinafter

defined) occurs and, within the period beginning ninety (90) days before the

date of the Change in Control and ending twelve (12) months thereafter, (a)

Executive's employment is terminated by the Company or a Subsidiary (as

hereinafter defined) without Cause (as hereinafter defined) or (b) Executive

voluntarily terminates his/her employment with Company and its Subsidiaries with

Good Reason (as hereinafter defined), then the Company shall pay to Executive

severance pay under this Agreement. Transfer of Executive's employment from the

Company to a Subsidiary (or to an entity of which the Company is a Subsidiary)

or from a Subsidiary to the Company or to another Subsidiary (or to an entity of

which the Company is a Subsidiary), by itself shall not be considered a

termination of Executive's employment. Such severance pay shall be in the form

of salary continuation of Executive's regular base pay in effect ninety (90)

days before the time of the Change in Control or at the time of the termination

of his employment, whichever is greater. The Company shall pay such severance

pay during the twelve (12) month period immediately following the date on which

Executive's employment with the Company terminates; provided, however, that, if

Executive commences new employment within such twelve (12) month period, such

severance pay shall cease on the later of (i) the date six (6) months after

Executive's employment with the Company terminates or (ii) the date Executive

commences new employment.

 

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                (b)      "CHANGE IN CONTROL" means any of the following events:

(i) any "person" or "group" (as defined in or pursuant to Sections 13(d) or

14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))

other than the Company, is or becomes the "beneficial owner" (as defined in Rule

13d-3 promulgated under the Exchange Act), directly or indirectly (including by

holding securities which are exercisable for or convertible into shares of

capital stock of the Company), of securities of the Company representing 50% or

more of the voting power of the outstanding shares of capital stock of the

Company entitled to vote generally in the election of directors; (ii) the

Company sells or exchanges, through merger, assignment or otherwise, in one or

more transactions, other than in the ordinary course of business, assets which

provided at least seventy percent (70%) of the revenues or pre-tax net income of

the Company and its Subsidiaries on a consolidated basis during the most

recently completed fiscal year; or (iii) Continuing Directors cease to

constitute at least a majority of the Board. "Continuing Directors" are (A) each

director serving on the Board on January 1, 2005, and (B) any successor to any

such director whose nomination or selection was approved by a majority of the

directors in office at the time of the director's nomination or selection.

Notwithstanding the foregoing, the following events shall not constitute a

Change in Control: any acquisition of beneficial ownership pursuant to (i) a

reclassification, however effected, of the Company's authorized common stock, or

(ii) a corporate reorganization involving the Company or a Subsidiary which does

not result in a material change in the ultimate ownership by the stockholders of

the Company (through their ownership of the Company or its successor resulting

from the reorganization) of the assets of the Company and its Subsidiaries, but

only if such reclassification or reorganization has been approved by the Board.

 

                (c)      "CAUSE" means the occurrence of any one or more of the

following: (i) conviction of any felony or any act of fraud, misappropriation or

embezzlement which has an immediate and materially adverse effect on the Company

or a Subsidiary; (ii) engaging in a fraudulent act to the material damage or

prejudice of the Company or a Subsidiary or engaging in conduct or activities

materially damaging to the property, business or reputation of the Company or a

Subsidiary; (iii) failure to comply in any material respect with the terms of

any applicable employment agreement or any written policies or directives of the

Board which have an immediate and materially adverse effect on the Company or a

Subsidiary and which has not been corrected within 30 day


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