def14a
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT þ
FILED BY A PARTY OTHER THAN THE REGISTRANT o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
GENESIS MICROCHIP INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
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Genesis Microchip Inc.
2150 Gold Street
Alviso, California 95002
(408) 262-6599
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 13, 2005
To our Stockholders:
We are holding our 2005 annual meeting of stockholders on
Tuesday, September 13, 2005 at 10:00 a.m. Pacific
Time. It will be held at our offices located at 180 Baytech
Drive, Suite 110, San Jose, California 95134. Only
stockholders of record on July 15, 2005 are entitled to
notice of and to vote at our annual meeting or at any
adjournment or postponement of it. The purpose of the meeting is:
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1. To elect two Class I directors, each to serve for a
term of three years, expiring on the date of our 2008 annual
meeting of stockholders or until a successor is elected; |
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2. To ratify the appointment of independent accountants for
fiscal 2006; and |
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3. To transact any other business that may properly come
before either the annual meeting or any adjournment or
postponement of it. |
Your Board of Directors unanimously recommends that you vote to
approve all of the proposals before you. Those proposals are
described more fully in the accompanying proxy statement, which
we urge you to read.
Your vote is important. Whether or not you plan to attend the
meeting in person, you are urged to ensure that your shares are
represented at the annual meeting by following the instructions
on the enclosed proxy card. Please refer to the proxy card for
more information on how to submit your vote.
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By order of the Board of Directors, |
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/s/ Ava M. Hahn |
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Ava M. Hahn |
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Secretary |
July 28, 2005
TABLE OF CONTENTS
Genesis Microchip Inc.
2150 Gold Street
Alviso, California 95002
(408) 262-6599
PROXY STATEMENT
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of
Genesis Microchip Inc., a Delaware corporation (we,
us, Genesis or the Company),
for use at our 2005 annual meeting of stockholders to be held on
Tuesday, September 13, 2005 at 10:00 a.m. Pacific
Time, or any adjournment thereof, for the purposes set forth in
this proxy statement and the accompanying Notice of Annual
Meeting. The annual meeting will be held at our offices located
at 180 Baytech Drive, Suite 110, San Jose, California
95134.
These proxy solicitation materials will be mailed on or about
August 12, 2005 to all stockholders entitled to vote at our
annual meeting.
QUESTIONS AND ANSWERS ABOUT
THE PROXY MATERIALS AND THE ANNUAL MEETING
Why are you sending me this proxy statement?
We are sending you this proxy statement and the enclosed proxy
card because our Board of Directors is soliciting your proxy to
vote at our annual meeting of stockholders. That meeting is
scheduled to take place on Tuesday, September 13, 2005.
This proxy statement summarizes information concerning the
proposals to be voted on at that meeting. This information will
help you to make an informed vote at the annual meeting.
What proposals will be voted on at the meeting?
We have scheduled two proposals to be voted on at the meeting:
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1. The election of two Class I directors, each to
serve for a term of three years expiring on the date of our 2008
annual meeting of stockholders or until a successor is
elected; and |
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2. The ratification of the appointment of independent
accountants for fiscal 2006. |
What is the voting recommendation?
Your Board of Directors recommends that you vote your shares
FOR the election of each of the nominees to the
Board and FOR the other proposal.
Who is entitled to vote?
Only stockholders of record of our common stock at the close of
business on July 15, 2005 are entitled to notice of, and to
vote at, our annual meeting. As of the close of business on the
record date, there were 34,221,940 shares of our common
stock outstanding and entitled to vote held by approximately
199 stockholders of record. Each stockholder is entitled to
one vote for each share of common stock held as of the record
date.
What is the difference between holding shares as a
stockholder of record and as a beneficial owner?
Most stockholders hold their shares through a stockbroker, bank
or other nominee rather than directly in their own name. As
summarized below, there are some distinctions between shares
held of record and those owned beneficially.
If your shares are registered directly in your name with our
transfer agent, Mellon Investor Services LLC, then you are
considered to be the stockholder of record with respect to those
shares, and we are sending these proxy materials directly to
you. As the stockholder of record, you have the right to grant
your voting proxy directly to us or to vote in person at the
meeting. We have enclosed a proxy card for you to use.
If your shares are held in a stock brokerage account or by a
bank or other nominee, you are considered the beneficial owner
of shares held in street name, and your broker or nominee is
forwarding these proxy materials to you. Your broker or nominee
is considered to be the stockholder of record with respect to
those shares. As the beneficial owner, you have the right to
direct your broker how to vote and are also invited to attend
the meeting. However, since you are not the stockholder of
record, you may not vote these shares in person at the meeting.
Your broker or nominee has enclosed a voting instruction card
for you to use in directing the broker or nominee how to vote
your shares.
How can I vote my shares in person at the meeting?
Shares held directly in your name as the stockholder of record
may be voted in person at the annual meeting. If you choose to
do so, please bring the enclosed proxy card or proof of
identification.
Even if you currently plan to attend the annual meeting, we
recommend that you also submit your proxy as described below so
that your vote will be counted if you later decide not to attend
the meeting. You may vote shares held in street name in person
only if you obtain a signed proxy from the record holder giving
you the right to vote the shares.
How can I vote my shares without attending the meeting?
Whether you hold shares directly as the stockholder of record or
beneficially in street name, you may direct your vote without
attending the meeting.
You may vote by granting a proxy. Please refer to the summary
voting instructions included on your proxy card. You may vote by
mail by signing your proxy card and mailing it in the enclosed
postage prepaid and addressed envelope. If you provide specific
voting instructions, your shares will be voted as you instruct.
If you sign the card but do not provide instructions, your
shares will be voted as described below in How are votes
counted?
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For shares held in street name, refer to the voting instruction
card included by your broker or nominee.
Can I change my vote after I submit my proxy?
Yes. You can change your vote at any time before we vote your
proxy at the annual meeting.
If you are a stockholder of record you can change your vote by:
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Sending a written notice to our Secretary at our principal
executive offices in Alviso, California stating that you would
like to revoke your proxy, |
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Completing a new proxy card and sending it to our Secretary. The
new proxy card will automatically replace any earlier-dated
proxy card that you returned, or |
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Attending the annual meeting and voting in person. |
If you choose to revoke your proxy by attending the annual
meeting, you must vote at the meeting in accordance with the
rules for voting at the annual meeting. Attending the annual
meeting will not, by itself, constitute revocation of your proxy.
If you instructed a broker or nominee to vote your shares,
follow your broker or nominees directions for changing
those instructions.
How are votes counted?
In the election of directors, you may vote FOR all
of the nominees or your vote may be WITHHELD with
respect to one or more of the nominees. For the other proposals,
you may vote FOR, AGAINST or
ABSTAIN. Shares may also be counted as broker
non-votes. Generally, broker non-votes occur when shares held by
a broker for a beneficial owner are not voted with respect to a
particular proposal because the broker has not received voting
instructions from the beneficial owner and the broker lacks
discretionary voting power to vote such shares.
The inspector of election appointed for the meeting, who will
separately tabulate affirmative votes, negative votes,
abstentions and broker non-votes, will tabulate all votes.
Shares that are voted FOR, AGAINST or
WITHHELD on a proposal will be treated as being
present at the meeting for purposes of establishing a quorum.
Shares that are voted FOR or AGAINST
will also be treated as votes cast on the proposal. Shares that
abstain from voting on a proposal, and shares held by a broker
nominee in street name where the broker indicates on
a proxy that it does not have discretionary authority to vote on
the proposal, will be treated as shares that are present at the
meeting for purposes of establishing a quorum, but will not be
treated as votes cast on the proposal. Although not considered
as votes cast, abstentions and broker non-votes may prevent a
proposal from receiving the affirmative vote of a majority of
the required quorum and, in that case, would have the same
effect as votes against the proposal.
If you sign your proxy card or broker voting instruction card
with no further instructions, your shares will be voted in
accordance with the recommendations of the Board
(FOR all of our nominees to the Board,
FOR all other items described in this proxy
statement and in the discretion of the proxy holders on any
other matters that properly come before the meeting).
What vote is required to approve each of the proposals?
With respect to the proposal to elect two Class I
directors, the two nominees receiving the greatest number of
votes will be elected, even if the votes they receive are less
than a majority of shares present and entitled to vote.
Abstentions are not counted towards the tabulation of votes cast
for the election of directors.
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All other proposals require the affirmative FOR vote
of a majority of those votes cast; that majority must also
constitute at least a majority of the required quorum.
What does it mean if I receive more than one proxy or voting
instruction card?
It means your shares are registered differently or are in more
than one account. Please provide voting instructions for each
proxy and voting instruction card you receive.
Where can I find the voting results of the meeting?
We will announce preliminary voting results at the annual
meeting and publish final results in our quarterly report on
Form 10-Q for the second quarter of fiscal year 2006, which
ends September 30, 2005.
What happens if additional proposals are presented at the
meeting?
Other than the proposals described in this proxy statement, we
do not expect any matters to be presented for a vote at the
annual meeting. If you grant a proxy, the persons named as proxy
holders will have the discretion to vote your shares on any
additional matters properly presented for a vote at the meeting.
If for any unforeseen reason any of our nominees is not
available as a candidate for director, the persons named as
proxy holders will vote your proxy for such other candidate(s)
as may be nominated by the Board of Directors.
Must a minimum number of stockholders vote or be present at
the annual meeting?
A quorum of stockholders is necessary to hold a valid meeting.
Our bylaws provide that a majority of all of the shares of our
stock entitled to vote, whether present in person or represented
by proxy, will constitute a quorum for the transaction of
business at the annual meeting. Shares that are voted
FOR, AGAINST, WITHHELD or
ABSTAIN on any proposal, as well as broker
non-votes, will be treated as being present and entitled to vote
for purposes of establishing a quorum.
Is cumulative voting permitted for the election of
directors?
Stockholders may not cumulate votes in the election of directors.
Who will bear the cost of soliciting votes for the
meeting?
We will pay the entire cost of preparing, assembling, printing,
mailing and distributing these proxy materials. If you choose to
access the proxy materials and/or vote over the Internet,
however, you are responsible for Internet access charges you may
incur. In addition to the mailing of these proxy materials, the
solicitation of proxies or votes may be made in person, by
telephone or by electronic communication by our directors,
officers and employees, who will not receive any additional
compensation for such solicitation activities. We may also hire
our transfer agent, Mellon Investor Services LLC, or another
proxy solicitor to assist us in the distribution of proxy
materials and the solicitation of votes. We will pay any proxy
solicitor a reasonable and customary fee plus expenses for those
services. We will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation
materials to our beneficial stockholders.
PROPOSAL 1 ELECTION OF DIRECTORS
We have a classified Board of Directors, with overlapping terms
of office. The term for the Class I directors expires at
this 2005 annual meeting. The term for the Class II
directors expires at the 2006 annual meeting and the term for
the Class III directors expires at the 2007 annual meeting.
Each director serves for a three-year term or until his
successor is duly elected and qualified.
The Boards nominees for election by the stockholders as
Class I directors are Tim Christoffersen and Robert H.
Kidd. Our Nominating Committee has recommended and the Board has
approved these nominations. Mr. Christoffersen is currently
a member of our Audit Committee and Corporate Governance
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Committee. Mr. Kidd is a currently a member of our Audit
Committee and our Nominating Committee. If elected, the two
nominees will serve as directors until our 2008 annual meeting
or until a successor is duly elected and qualified. If either of
the nominees declines to serve, proxies may be voted for a
substitute nominee as we may designate.
If a quorum is present and voting, the two nominees for
Class I directors receiving the highest number of votes
FOR will be elected as the Class I directors.
The persons named in the enclosed proxy intend to vote the
shares represented by those proxies for the election of these
two nominees.
Directors
Currently, there are eight (8) members of the Board of
Directors. However, Eric Erdman has decided to resign effective
September 13, 2005, the date of our 2005 annual meeting of
stockholders. Effective September 13, 2005, the number of
authorized directors will be reduced to seven (7). The
following sets forth certain information concerning our current
directors as well as our Class I nominees to be elected at
the 2005 annual meeting.
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Class I Nominees:
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Tim Christoffersen(1)(3)
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Director Nominee |
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Robert H. Kidd(1)(4)
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Director Nominee |
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Class II Directors Whose Terms Expire at the 2006 Annual
Meeting:
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Eric Erdman(5)
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Director |
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2003 |
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Chandrashekar M. Reddy(3)
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Director |
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Elias Antoun
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Director |
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2004 |
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Class III Directors Whose Terms Expire at the 2007
Annual Meeting:
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Jon Castor(1)(4)
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Director |
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2004 |
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Chieh Chang(2)(3)
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Director |
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Jeffrey Diamond(2)(4)
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Chairman of the Board |
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2001 |
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Member of the Audit Committee. |
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Member of the Compensation Committee. |
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Member of the Corporate Governance Committee. |
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Member of the Nominating Committee. |
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Mr. Erdman has decided to resign effective
September 13, 2005. |
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Nominees for Election to Class I Directorship
Expiring at the 2008 Annual Meeting |
Tim Christoffersen was appointed as a Director in
August 2002. Mr. Christoffersen has served as Chief
Financial Officer of Monolithic Power Systems, Inc. (MPS), a
semiconductor company, since June 2004, and served on
MPSs board of directors from March 2004 to
July 2004. Since January 1999, Mr. Christoffersen
has been a financial consultant to technology companies. Prior
to that, Mr. Christoffersen served as Chief Financial
Officer of NeoParadigm Labs, Inc. from 1998 to 1999 and as Chief
Financial Officer of Chips & Technologies, Inc. from
1994 until its sale to Intel Corporation in 1998.
Mr. Christoffersen was Executive Vice President, Director
and Chief Operating Officer of Resonex, Inc. from 1991 to 1992.
From 1986 to 1991, Mr. Christoffersen held several
managerial positions with Ford Motor Company.
Mr. Christoffersen is a Phi Beta Kappa graduate
of Stanford University where he earned a B.A. in Economics. He
also holds a Masters degree in Divinity from Union
Theological Seminary in New York City.
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Robert H. Kidd was appointed as a Director in
August 2002. Mr. Kidd serves as President of Location
Research Company of Canada Limited, a consulting company.
Mr. Kidd served as Chief Financial Officer of Technology
Convergence Inc. from 2000 to 2002, of Lions Gate Entertainment
Corp. from 1997 to 1998, and of InContext Systems Inc. from 1995
to 1996. He served as Senior Vice President, Chief Financial
Officer and Director of George Weston Limited from 1981 to 1995,
as a partner of Thome Riddell, Chartered Accountants, a
predecessor firm of KPMG LLP, from 1973 to 1981 and as a
Lecturer in Finance, Faculty of Management Studies, University
of Toronto, from 1971 to 1981. Mr. Kidd has served on
several professional committees, including the Toronto Stock
Exchange Investors & Issuers Advisory Committee from
1993 to 1998, the Canadian Institute of Chartered Accountants
Emerging Issues Committee from 1992 to 1997 and the Canadian
Securities Administrators Committee on Conflicts of Interest in
Underwriting from 1994 to 1996. He currently serves as a
director of several private entities. Mr. Kidd has a B.
Commerce from the University of Toronto and an M.B.A. from York
University. Mr. Kidd is a Fellow of the Institute of
Chartered Accountants of Ontario.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR EACH DIRECTOR NOMINEE
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Class II Directors Whose Terms Expire at the 2006
Annual Meeting |
Elias Antoun has served as President and Chief Executive
Officer of the Company and a member of our Board of Directors
since November 2004. Prior to his appointment,
Mr. Antoun served as the President and Chief Executive
Officer of Pixim, Inc., an imaging solution provider for the
video surveillance market, between March 2004 and
November 2004. From February 2000 to August 2003,
Mr. Antoun served as the President and Chief Executive
Officer of MediaQ, Inc., a mobile handheld graphics IC company
acquired by NVIDIA Corporation in August 2003. From
January 1991 to February 2000, Mr. Antoun held a
variety of positions with LSI Logic Corporation, most recently
serving as Executive Vice President of the Consumer Products
Division from 1998 until his departure in January 2000.
Mr. Antoun has served as a Director of
HPL Technologies, Inc. since August 2000 and as
Chairman of the Board of Directors of HPL Technologies,
Inc. since July 2002.
Eric Erdman became a Director in May 2003 and
previously served as a Director from October 1995 to
September 1996. Since April 2005, Mr. Erdman has
served as Executive Vice President of Operations and Chief
Financial Officer of Silicon Optix, Inc., a supplier of digital
processing integrated circuits. From July 2003 to
November 29, 2004, Mr. Erdman served as our Interim
Chief Executive Officer. Mr. Erdman also served as our
Chief Financial Officer from March 2002 to
February 2004, and previously held the position from
December 1997 to February 2002. Mr. Erdman also
served as our Secretary from June 2002 to
October 2003, and from October 1995 to
February 2002. From March 2002 to June 2002,
Mr. Erdman served as our Assistant Secretary.
Mr. Erdman joined Genesis in July 1995 as Director,
Finance and Administration and served as Vice President, Finance
and Administration from July 1996 to May 1999.
Mr. Erdman holds a Bachelor of Mathematics degree from the
University of Waterloo, and he is a member of the American
Institute of Certified Public Accountants and of the Canadian
Institute of Chartered Accountants. As noted above,
Mr. Erdman has decided to resign effective
September 13, 2005.
Chandrashekar M. Reddy joined Genesis as a director upon
its acquisition of Sage, Inc. in February 2002. He served
as Vice Chairman and as Executive Vice President, Engineering of
Genesis from February 2002 to November 2002. He served
as Chairman of the Board and Chief Executive Officer of Sage
from its inception in 1994 until its acquisition by Genesis in
February 2002. Mr. Reddy has been the Chief Executive
Officer of Athena Semiconductors, Inc., a wireless
communications business, since December 2002 and a member
of its Board of Directors since January 2002. From 1986 to
1995, Mr. Reddy held several design and program management
positions at Intel Corporation. Mr. Reddy received an M.S.
in Electrical Engineering from the University of Wisconsin,
Madison and a B.S. in Electrical Engineering from the Indian
Institute of Technology.
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Class III Directors Whose Terms Expire at the 2007
Annual Meeting |
Jon Castor has been a director of Genesis since November
2004. From January 2004 to June 2004, Mr. Castor
was an Executive Advisor to the Chief Executive Officer of Zoran
Corporation, and from August 2003 to December 2003, he
was Senior Vice President and General Manager of Zorans
DTV Division. From October 2002 to August 2003,
Mr. Castor was the Senior Vice President and General
Manager of the Teralogic Group at Oak Technology Inc., a
developer of integrated circuits (ICs) and software for digital
televisions and printers which was acquired by Zoran. Prior to
that, Mr. Castor co-founded Serologic, Inc., a developer of
digital television ICs, software and systems in June 1996
where he served in several capacities including as its
President, Chief Financial Officer and director from
June 1996 to November 2000, and as its Chief Executive
Officer and director from November 2000 to
October 2002, when it was acquired by Oak Technology.
Mr. Castor received his B.A. with distinction from
Northwestern University and his M.B.A. from Stanford Graduate
School of Business.
Chieh Chang has been a director of Genesis since November
2004. Mr. Chang has been a member of the board of directors
of Oplink Communications, Inc. since September 1995. Since
February 2003, Mr. Chang has served as Vice Chairman
of Programmable Microelectronics Company, Inc., a fabless
semiconductor design company, and from February 2000 to
February 2003, as its Chief Executive Officer. From
April 1992 to August 1996, Mr. Chang was the
Director of Technology at Cirrus Logic, Inc., a semiconductor
company. Mr. Chang received his B.S. in Electrical
Engineering from the National Taiwan University and his M.S. in
Electrical Engineering from UCLA.
Jeffrey Diamond was appointed Chairman of the Board in
July 2003, and has served as a director since
April 2001. After our acquisition of Paradise Electronics,
Inc. in May 1999, Mr. Diamond also served as an
executive officer and as a consultant to Genesis through
December 2000. Prior to that, he served as a director of
Paradise from its inception in 1996 and as its Chief Executive
Officer from September 1998 until May 1999.
Mr. Diamond held senior management positions at Cirrus
Logic, Inc. from April 1992 to March 1995.
Mr. Diamond received his B.S. in Business Administration
from the University of Illinois.
The Board of Directors, its Committees and Meetings
Board of Directors. The Board of Directors held 28
meetings during the fiscal year ended March 31, 2005. Each
director attended or participated telephonically in 75% or more
of the aggregate of (i) the total number of the meetings of
the Board of Directors (held during the period for which such
director was a director) and (ii) the total number of
meetings of all committees on which such director served (held
during the period for which such director served as a committee
member) during the fiscal year ended March 31, 2005.
The Board of Directors has determined that each of its current
directors, including all nominee directors, except Elias Antoun,
Eric Erdman and Chandrashekar Reddy, has no material
relationship with Genesis and is independent within the meaning
of the NASDAQ Stock Market, Inc. director independence
standards, as currently in effect.
Our Board of Directors has standing Compensation, Audit,
Corporate Governance and Nominating Committees.
Compensation Committee. The Compensation Committee
reviews and evaluates the compensation and benefits of our
officers, reviews general policy matters relating to
compensation and benefits of our employees and makes
recommendations concerning these matters to the Board of
Directors. The Compensation Committee also administers our stock
option plans and stock purchase plan. The Compensation Committee
held seven meetings during the fiscal year ended March 31,
2005.
Currently, our Compensation Committee consists of
Mr. Diamond and Mr. Chang each of whom qualifies as
independent in accordance with the published listing
requirements of Nasdaq. Mr. Diamond serves as chairman of
this committee.
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Audit Committee. Among other things, the Audit Committee
reviews the scope and timing of audit services and any other
services that our independent accountants are asked to perform,
the auditors report on our consolidated financial
statements following completion of their audit and our policies
and procedures with respect to internal accounting and financial
controls.
Currently, our Audit Committee consists of
Mr. Christoffersen, Mr. Castor and Mr. Kidd.
Mr. Kidd serves as chairman of this committee. The Audit
Committee held eleven meetings during the fiscal year ended
March 31, 2005. In addition to qualifying as
independent in accordance with the published listing
requirements of Nasdaq, each member of the Audit Committee
qualifies as independent under special standards
established by the SEC for members of audit committees. The
Audit Committee also includes at least one independent member
who is determined by the Board to meet the qualifications of an
audit committee financial expert in accordance with
SEC rules, including that the person meets the relevant
definition of an independent director. Each of the current Audit
Committee members has been determined to be an independent
director and an audit committee financial expert. Stockholders
should understand that this designation is a disclosure
requirement of the SEC related to the Audit Committee
members experience and understanding with respect to
certain accounting and auditing matters. The designation does
not impose upon an Audit Committee member any duties,
obligations or liability that are greater than are generally
imposed on him as a member of the Audit Committee and the Board,
and his designation as an audit committee financial expert
pursuant to this SEC requirement does not affect the duties,
obligations or liability of any other member of the Audit
Committee or the Board.
The report of the Audit Committee is included herein on
page 27.
Corporate Governance Committee. The Corporate Governance
Committee oversees the Companys disclosure controls and
procedures, except for the financial reporting controls and
procedures overseen by the Audit Committee, and recommends to
the Board the adoption of any measures it deems advisable for
the improvement of disclosure controls and procedures. As of
July 1, 2005, our Corporate Governance Committee consisted
of Messrs. Christoffersen, Chang and Reddy.
Mr. Christoffersen serves as chairman of this committee.
The Corporate Governance Committee met two times during the
fiscal year ended March 31, 2005, in conjunction with
regularly scheduled Board meetings.
Nominating Committee. The Nominating Committee is
responsible for seeking, screening and recommending for
nomination candidates for election to the Board of Directors. In
so doing, the Nominating Committee may evaluate, among other
things:
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the current size, composition and needs of the Board and its
committees; |
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such factors as judgment, independence, character and integrity,
area of expertise, diversity of experience, length of service,
and potential conflicts of interest of candidates; and |
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such other factors as the Committee may consider appropriate. |
These factors, and any other qualifications considered useful by
the Nominating Committee, are reviewed in the context of an
assessment of the perceived needs of the Board at a particular
point in time. As a result, the priorities and emphasis of the
Nominating Committee and of the Board may change from time to
time to take into account changes in business and other trends,
and the portfolio of skills and experience of current and
prospective Board members. Therefore, the Nominating Committee
has not established any specific minimum criteria or
qualifications that a nominee must possess. The current
Nominating Committee charter is available at our Web site
located at www.gnss.com.
The Nominating Committee will evaluate candidates identified on
its own initiative as well as candidates referred to it by other
members of the Board, by our management, by stockholders who
submit names to the Nominating Committee, or by other external
sources. With regard to the newest nominees for election as
Class I directors, the Nominating Committee recommended and
the Board approved the nominations of
Messrs. Christoffersen and Kidd for election as
Class I directors at the 2005 annual meeting. Since our
last annual meeting in 2004, we have not employed a search firm
or paid fees to other third parties in connection with seeking
or evaluating Board nominee candidates.
8
With regard to referrals from our stockholders, the Nominating
Committees policy is to consider recommendations for
candidates to the Board of Directors from stockholders holding
not less than 1% of our outstanding common stock continuously
for at least twelve months prior to the date of the submission
of the recommendation. Candidates suggested by stockholders are
evaluated using the same criteria as for other candidates. A
stockholder that desires to recommend a candidate for election
to the Board shall direct the recommendation in written
correspondence by letter to Genesis Microchip Inc., attention of
the Companys Secretary, at our offices at 2150 Gold
Street, Alviso, California 95002. Such notice must include the
candidates name, home and business contact information,
detailed biographical data, relevant qualifications, a signed
letter from the candidate confirming willingness to serve,
information regarding any relationships between the candidate
and Genesis within the last three years, evidence of the
required ownership of common stock by the recommending
stockholder, and to the extent known by the stockholder, any
relationships between the candidate and competitors, customers,
suppliers and any other parties that might give rise to the
appearance of a potential conflict of interest. Any stockholder
who wishes to make a direct nomination for election to the Board
at an annual or special meeting for the election of directors
must comply with procedures set forth in our bylaws.
As of July 1, 2005, our Nominating Committee consisted of
Mr. Diamond, Mr. Castor and Mr. Kidd, each of
whom is independent in accordance with the published
listing requirements of Nasdaq. Mr. Diamond serves as
chairman of this committee. The Nominating Committee held three
meetings during the fiscal year ended March 31, 2005.
Annual Meeting Attendance. The Company does not have a
formal policy regarding the attendance of its directors at
annual or special meetings of stockholders, but the Company
encourages directors to attend such meetings. Of the three
directors elected at the November 3, 2004 annual meeting
and the four continuing directors not elected at that meeting,
all seven directors attended that meeting.
Compensation of Directors
Directors who are not our employees receive $5,000 per
quarter as a retainer, $1,000 for each meeting of the Board of
Directors or committee thereof attended in person and $500 for
each meeting attended by teleconference. Non-employee chairmen
of committees receive an additional retainer of $1,250 per
quarter for serving as a committee chairman, other than the
chairman of the audit committee who receives an additional
quarterly retainer of $2,500. Directors who are our employees
receive no separate compensation for services rendered as a
director. All directors are reimbursed for reasonable expenses
to attend meetings.
Non-employee directors automatically receive stock options under
the terms of our 1997 Non-Employee Stock Option Plan. Upon first
joining the board, non-employee directors receive an option to
purchase 15,000 shares of our common stock. Those
options are granted with an exercise price equal to the closing
price of our stock on the last trading day before joining the
board. Non-employee directors also automatically receive an
option to purchase 10,000 shares of our common stock
under our 2000 Nonstatutory Stock Option Plan upon first joining
the Board. Since the option pool in our 1997 Non-Employee Stock
Option Plan is nearly depleted, we intend to grant some of the
stock options described above from our 2000 Nonstatutory Stock
Option Plan or our 2001 Nonstatutory Stock Option Plan.
Grants are also made annually on the first day of the month
following our annual meeting of stockholders. Each non-employee
director receives an option to purchase 10,000 shares
of our common stock plus 2,500 shares of our common stock
for each committee on which the director serves. The options are
granted with an exercise price equal to the closing price of our
stock on the day preceding the date of the grant and vest over
twelve months. The automatic annual option grants were made on
December 1, 2004 at an exercise price of $16.94 per
share. No other stock option grants were made to non-employee
directors in fiscal 2005.
Non-employee directors may also be granted stock options under
the terms of our 2000 Nonstatutory Stock Option Plan or our 2001
Nonstatutory Stock Option Plan.
9
The following table summarizes the retainers and attendance fees
and the number of stock option grants that were made to our
non-employee directors, in their capacity as non-employee
directors, during fiscal 2005:
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Discretionary | |
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Retainers and | |
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Initial Option | |
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Automatic Annual | |
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Option | |
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Attendance | |
Name |
|
Grants | |
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Grants | |
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Grants | |
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Fees ($) | |
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Jon Castor
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25,000 |
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19,333 |
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Chieh Chang
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25,000 |
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13,833 |
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Tim Christoffersen
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15,000 |
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45,500 |
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Jeffrey Diamond
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15,000 |
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43,667 |
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Eric Erdman
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11,667 |
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Robert H. Kidd
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15,000 |
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59,917 |
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Chandrashekar M. Reddy
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12,500 |
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35,500 |
|
PROPOSAL 2 APPOINTMENT OF INDEPENDENT
ACCOUNTANTS
You are being asked to ratify the appointment of KPMG LLP
in Canada as independent accountants for the fiscal year ending
March 31, 2006.
We have selected KPMG as our independent accountants for the
2006 fiscal year. KPMG or its predecessor firms have served as
our independent accountants since our inception in Canada in
1987. Representatives of KPMG are expected to be present at the
annual meeting. They will have the opportunity to make a
statement if they desire to do so and will be available to
respond to appropriate questions from you.
The approximate fees billed to us by KPMG for services rendered
with respect to fiscal years 2005 and 2004 were as follows:
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2005 | |
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2004 | |
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| |
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| |
Audit Fees
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$ |
833,023 |
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$ |
471,468 |
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Audit-Related Fees
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218,843 |
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49,200 |
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Tax Fees
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522,529 |
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377,371 |
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Total Fees
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1,574,395 |
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898,039 |
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Audit Fees. This category consists of fees paid for
professional services provided in connection with the integrated
audit of our financial statements and internal controls over
financial reporting, and review of our quarterly financial
statements and audit services provided in connection with other
statutory or regulatory filings, including filings related to
potential mergers and acquisitions.
Audit-Related Fees. This category consists of fees paid
primarily for advisory services, research on accounting matters
and due diligence related to mergers and acquisitions, and are
not reported above under Audit Fees.
Tax Fees. This category consists of fees paid primarily
for professional services rendered by KPMG in connection with
tax advice related to specialized projects such as the
implementation of the American Jobs Creation Act, acquisition
activities and tax compliance, including technical tax advice
related to the preparation of tax returns.
The Audit Committee has determined that the provision of
non-audit services performed during fiscal 2005, including work
related to acquisition activities and for tax planning and
compliance purposes, is compatible with maintaining the
independence of KPMG.
The Audit Committee has established a policy governing our use
of KPMG for non-audit services. Under the policy, management may
use KPMG for non-audit services that are permitted under SEC
rules and regulations, provided that management obtains the
Audit Committees approval before such services are
rendered. In fiscal 2005, all fees identified above under the
captions Audit-Related Fees and
10
Tax Fees that were billed by KPMG were approved by
the Audit Committee pursuant to the Companys pre-approval
policies and procedures established by the Audit Committee.
The resolution must be passed by a majority of the votes cast at
our annual meeting (which majority must also constitute at least
a majority of the required quorum) to be approved. The persons
named in the enclosed proxy intend to vote the shares
represented by those proxies in favor of this resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE
APPOINTMENT OF KPMG LLP IN CANADA AS OUR INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR ENDING MARCH 31, 2006.
TRANSACTION OF OTHER BUSINESS
We know of no other proposals to be presented at the meeting. If
any other proposal is presented, the shares represented by the
proxies we receive will be voted according to the best judgment
of the persons named in the proxies. It is the intention of the
persons named in the form of proxy to vote the shares that those
proxies represent as the Board of Directors recommends.
11
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of March 31,
2005 about our common stock that may be issued upon the exercise
of options, warrants and rights under our 1997 Employee Stock
Purchase Plan described above as well as our eight stock option
plans: the 1987 Stock Option Plan, the 1997 Employee Stock
Option Plan, the 1997 Non-Employee Stock Option Plan, the 2000
Non-Statutory Stock Option Plan, the 2001 Non-Statutory Stock
Option Plan, the 1997 Paradise Stock Option Plan, the Sage Stock
Option Plan, and the 2003 Stock Plan.
The 1997 Paradise Stock Option Plan and the Sage Stock Option
Plan, under which we do not grant any new options, were assumed
upon our acquisitions of other companies. Our stockholders have
not formally approved our 2000 Non-Statutory Stock Option Plan,
although they approved an amendment to that plan at the
September 14, 2000 annual meeting. Our stockholders have
not approved our 2001 Non-Statutory Stock Option Plan or our
2003 Stock Plan. Our stockholders have approved all other plans.
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Number of | |
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Securities | |
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Available for | |
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Issuance Under | |
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Number of | |
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Equity | |
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Securities to | |
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Compensation | |
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Be issued | |
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Weighted-average | |
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Plans | |
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upon Exercise | |
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Exercise Price of | |
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(Excluding | |
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of Outstanding | |
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Outstanding | |
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Securities | |
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Options, | |
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Options, | |
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Reflected in | |
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Warrants and | |
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Warrants and | |
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the First | |
Plan Name and Type |
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Rights | |
|
Rights | |
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Column) | |
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Equity compensation plans approved by stockholders
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1997 Employee Stock Purchase Plan*
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N/A |
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N/A |
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330,870 |
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1987 Stock Option Plan
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1,047 |
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9.00 |
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1997 Employee Stock Option Plan
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3,907,824 |
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14.40 |
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551,265 |
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1997 Non-Employee Stock Option Plan
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|
272,563 |
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15.63 |
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9,675 |
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Equity compensation plans not formally approved by
stockholders
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2000 Non-Statutory Stock Option Plan
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2,561,649 |
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|
14.05 |
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497,218 |
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2001 Non-Statutory Stock Option Plan
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527,869 |
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18.36 |
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17,274 |
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2003 Stock Plan
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925,000 |
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|
17.09 |
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|
75,000 |
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Equity compensation plans assumed on acquisitions
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1997 Paradise Stock Option Plan
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5,887 |
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1.70 |
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Sage Stock Option Plan
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603,384 |
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|
19.73 |
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Total*
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8,805,223 |
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15.22 |
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1,481,302 |
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* |
The number of securities to be issued upon exercise of
outstanding rights under the 1997 Employee Stock Purchase Plan
and the weighted average exercise price of those securities is
not determinable. The 1997 Employee Stock Purchase Plan provides
that shares of our common stock may be purchased at a per share
price equal to 85% of the fair market value of the common stock
on the beginning of the offering period or a purchase date
applicable to such offering period, whichever is lower. The
closing price per share of our common stock on the Nasdaq
National Market on December 31, 2004 (the last trading day
of the most recent offering period) was $16.22. |
12
Summaries of the stock option plans not formally approved by our
stockholders are as follows:
2000 Non-Statutory Stock Option Plan
The purposes of the plan are to attract and retain the best
available personnel for positions of substantial responsibility,
to provide additional incentive to employees and consultants and
to promote the success of our business.
The plan provides for administration by our Board of Directors
or a committee appointed by the Board and is currently
administered by the Compensation Committee of the Board of
Directors. All questions of interpretation or application of the
plan are determined by the Board of Directors or its appointed
committee, and its decisions are final and binding upon all
participants. Directors receive no additional compensation for
their services in connection with the administration of the plan.
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Eligibility to Participate in the Plan |
Nonstatutory stock options may be granted to our employees,
consultants and directors.
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Number of Shares Covered by the Plan |
The aggregate number of shares of common stock authorized for
issuance under the plan is 1,500,000 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 Companys outstanding shares of common stock on such
date, or (iii) a lesser amount determined by the Board.
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Awards Permitted under the Plan |
The plan authorizes the granting of nonstatutory stock options
only.
The plans administrator determines the exercise price of
options granted under the plan and the term of those options.
The options that are currently outstanding under the plan vest
and become exercisable over periods of from one to four years
beginning on the grant date. Payment of the exercise price may
be made by cash, check, promissory note, other shares of our
common stock, cashless exercise, any other form of consideration
permitted by applicable law or any combination of the foregoing
methods of payment. Options may be made exercisable only under
the conditions the Board of Directors or its appointed committee
may establish. If an optionees employment terminates for
any reason, the option remains exercisable for a period fixed by
the plan administrator up to the remainder of the options
term; if a period is not fixed by the plan administrator, the
exercise period is three (3) months, or twelve
(12) months in the case of death or disability.
In the event of any changes in our capitalization, such as stock
splits or stock dividends, resulting in an increase or decrease
in the number of shares of common stock, effected without
receipt of consideration by us, appropriate adjustment will be
made by us in the number of shares available for future grant
and in the number of shares subject to previously granted but
unexercised options.
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Dissolution or Liquidation |
In the event of the proposed dissolution or liquidation of our
Company, the option holders will be notified of such event, and
the plan administrator may, in its discretion, permit each
option to fully vest and be exercisable until ten (10) days
prior to such event, at which time the options will terminate.
13
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Merger, Asset Sale or Change of Control |
With respect to options granted on or before October 16,
2001 (unless the optionees have consented otherwise), in the
event of a merger of our Company with or into another
corporation, or any other capital reorganization in which more
than fifty percent (50%) of the outstanding voting shares of the
Company are exchanged (other than a reorganization effected
solely for the purpose of changing the situs of the
Companys incorporation), each outstanding option under the
plan will fully vest and be exercisable for a period often
(10) days prior to the closing of such transaction, and the
unexercised options will terminate prior to the closing of such
transaction.
With respect to options granted after October 16, 2001 (as
well as certain options granted before such date, with the
consent of the optionees), in the event of a merger or proposed
sale of all or substantially all of the assets of our Company,
each outstanding option under the plan will be assumed or an
equivalent option substituted by the successor corporation or a
parent or subsidiary of the successor corporation. In the event
the successor corporation refuses to assume or substitute
outstanding options, the plan administrator will notify each
optionee that his or her options will vest and be exercisable
for a period of twenty (20) days from the date of such
notice, and the unexercised options will terminate upon the
expiration of such period.
Options may not be assigned or transferred for any reason (other
than upon death), except that the plan administrator may permit
options to be transferred during the optionees lifetime to
members of the optionees immediate family or to trusts,
LLCs or partnerships for the benefit of such persons.
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Amendment and Termination of the Plan |
The plan provides that the Board of Directors may amend or
terminate the plan without stockholder approval, but no
amendment or termination of the plan or any award agreement may
adversely affect any award previously granted under the plan
without the written consent of the optionee.
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Certain United States Federal Income Tax
Information |
An optionee generally will not recognize any taxable income at
the time he or she is granted a non-statutory stock option.
However, upon its exercise, the optionee will recognize ordinary
income generally measured as the excess of the then fair market
value of the shares purchased over the purchase price. Any
taxable income recognized in connection with an option exercise
by one of our employees is subject to tax withholding by us.
Upon resale of such shares by the optionee, any difference
between the sales price and the optionees purchase price,
to the extent not recognized as taxable income as described
above, will be treated as long-term or short-term capital gain
or loss, depending on the holding period.
Generally, we will be entitled to a tax deduction in the same
amount as the ordinary income realized by the optionee with
respect to shares acquired upon exercise of the non-statutory
stock option.
The foregoing is only a summary of the effect of federal income
taxation upon the optionee and us with respect to the grant and
exercise of options granted under the plan and does not purport
to be complete. In addition, the summary does not discuss the
tax consequences of an optionees death or the income tax
laws of any state or foreign country in which the optionee may
reside.
2001 Non-Statutory Stock Option Plan
The purposes of the plan are to attract and retain the best
available personnel for positions of substantial responsibility,
to provide additional incentive to employees, directors and
consultants and to promote the success of our business.
14
The plan provides for administration by our Board of Directors
or a committee appointed by the Board and is currently
administered by the Compensation Committee of the Board of
Directors. All questions of interpretation or application of the
plan are determined by the Board of Directors or its appointed
committee, and its decisions are final and binding upon all
participants. Directors receive no additional compensation for
their services in connection with the administration of the plan.
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Eligibility to Participate in the Plan |
Nonstatutory stock options may be granted to our employees
including officers, consultants and directors.
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Number of Shares Covered by the Plan |
The aggregate number of shares of common stock authorized for
issuance under the plan is 1,000,000 shares.
|
|
|
Awards Permitted under the Plan |
The plan authorizes the granting of nonstatutory stock options
only.
The plans administrator determines the exercise price of
options granted under the plan and the term of those options.
The options that are currently outstanding under the plan vest
and become exercisable over periods of two to four years
beginning on the grant date. Payment of the exercise price may
be made by cash, check, promissory note, other shares of our
common stock, cashless exercise, a reduction in the amount of
any Company liability to the optionee, any other form of
consideration permitted by applicable law or any combination of
the foregoing methods of payment. Options may be made
exercisable only under the conditions the Board of Directors or
its appointed committee may establish. If an optionees
employment terminates for any reason, the option remains
exercisable for a period fixed by the plan administrator up to
the remainder of the options term; if a period is not
fixed by the plan administrator, the exercise period is three
(3) months, or twelve (12) months in the case of death
or disability.
In the event of any changes in our capitalization, such as stock
splits or stock dividends, resulting in an increase or decrease
in the number of shares of common stock, effected without
receipt of consideration by us, appropriate adjustment will be
made by us in the number of shares available for future grant
and in the number of shares subject to previously granted but
unexercised options.
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Dissolution or Liquidation |
In the event of the proposed dissolution or liquidation of our
Company, the option holders will be notified of such event, and
the plan administrator may, in its discretion, permit each
option to fully vest and be exercisable until ten (10) days
prior to such event, at which time the options will terminate.
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Merger, Asset Sale or Change of Control |
In the event of a merger or proposed sale of all or
substantially all of the assets of our Company, each outstanding
option under the plan will be assumed or an equivalent option
substituted by the successor corporation or a parent or
subsidiary of the successor corporation. In the event the
successor corporation refuses to assume or substitute
outstanding options, the plan administrator will notify each
optionee that his or her options will vest and be exercisable
for a period of fifteen (15) days from the date of such
notice, and the unexercised options will terminate upon the
expiration of such period.
15
Options may not be assigned or transferred for any reason (other
than upon death), except that the plan administrator may permit
options to be transferred during the optionees lifetime
upon such terms and conditions as the administrator deems
appropriate.
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Amendment and Termination of the Plan |
The plan provides that the Board of Directors may amend or
terminate the plan without stockholder approval, but no
amendment or termination of the plan or any award agreement may
adversely affect any award previously granted under the plan
without the written consent of the optionee.
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|
|
Certain United States Federal Income Tax
Information |
An optionee generally will not recognize any taxable income at
the time he or she is granted a non-statutory stock option.
However, upon its exercise, the optionee will recognize ordinary
income generally measured as the excess of the then fair market
value of the shares purchased over the purchase price. Any
taxable income recognized in connection with an option exercise
by one of our employees is subject to tax withholding by us.
Upon resale of such shares by the optionee, any difference
between the sales price and the optionees purchase price,
to the extent not recognized as taxable income as described
above, will be treated as long-term or short-term capital gain
or loss, depending on the holding period.
Generally, we will be entitled to a tax deduction in the same
amount as the ordinary income realized by the optionee with
respect to shares acquired upon exercise of the nonstatutory
stock option.
The foregoing is only a summary of the effect of federal income
taxation upon the optionee and us with respect to the grant and
exercise of options granted under the plan and does not purport
to be complete. In addition, the summary does not discuss the
tax consequences of an optionees death or the income tax
laws of any state or foreign country in which the optionee may
reside.
2003 Stock Plan
In October 2003, the Board approved the 2003 Stock Plan (the
Plan). The Plan provides for the grant of
non-statutory stock options, stock purchase rights, restricted
stock, stock appreciation rights, performance shares, and
performance units, to newly hired employees as a material
inducement to their decision to enter into our employ.
Awards under the Plan may not be granted to individuals who are
former employees or directors of ours, except that a former
employee who is returning to our employ following a bona-fide
period of non-employment by us may receive awards under the
Plan. Our Board or a committee appointed by the Board
administers the Plan and controls its operation (the
Administrator). However, all awards under the Plan
must be approved by either a majority of our independent
directors, or approved by a committee comprised of a majority of
independent directors.
The Administrator determines, on a grant-by-grant basis, the
term of each option, when options granted under the Plan will
vest and may be exercised, the exercise price of each option,
and the method of payment of the option exercise price. After a
participants termination of service with us, the vested
portion of his or her option will generally remain exercisable
for the period of time stated in the option agreement. If a
specified period of time is not stated in the option agreement,
the option will remain exercisable for three months following a
termination for reasons other than death or disability, and for
one year following a termination due to death or disability, in
each case subject to the original term of the option. The
Administrator also determines the terms and conditions of
restricted stock awards (shares that vest in accordance with the
terms and conditions established by the Administrator), stock
purchase rights (rights to purchase shares of our common stock,
and such shares are generally restricted stock), stock
appreciation rights (the right to receive the appreciation in
fair market value of our common stock between the exercise date
and the date of grant), and performance shares and/or units
(awards that will result in a payment to a participant only if
the
16
performance goals or other vesting criteria established by the
Administrator are achieved or the awards otherwise vest).
In the event we experience a change in control, each outstanding
option, stock purchase right and stock appreciation right will
be assumed or substituted for by the successor corporation (or a
parent or subsidiary of such successor corporation). If such
awards are not so assumed or substituted, the Administrator will
notify participants that their options, stock purchase rights,
and stock appreciation rights will be exercisable as to all of
the shares subject to the award for a period of time determined
by the Administrator in its sole discretion, and that the award
will terminate upon the expiration of such period. In addition,
in the event we experience any dividend or other distribution,
recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of shares or other
securities, or other change in our corporate structure affecting
the shares occurs, the Administrator, in order to prevent
diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan may make
appropriate adjustments to outstanding awards and to the shares
available for issuance under the Plan.
There are 1,000,000 shares of our common stock reserved
under the Plan, and as of March 31, 2005,
75,000 shares remain for future issuance. By its terms, the
Plan will automatically terminate in 2013, unless earlier
terminated by the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table contains information about the beneficial
ownership of our common stock as of July 1, 2005, for:
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|
|
each of our current directors and director nominees, as well as
our Chief Executive Officer as of March 31, 2005 and our
other four most highly compensated executive officers during the
fiscal year ended March 31, 2005; |
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|
|
all of our current directors and named executive officers as a
group; and |
|
|
|
all persons known by us to be beneficial owners of more than
five percent (5%) of our outstanding stock. |
The number and percentage of shares beneficially owned is
determined in accordance with Rule 13d-3 of the Securities
and Exchange Act of 1934 and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under
Rule 13d-3, beneficial ownership includes any shares over
which the individual or entity has voting power or investment
power and any shares that the individual has the right to
acquire within 60 days of July 1, 2005 through the
exercise of any stock options. Unless indicated, each person or
entity either has sole voting and investment power over the
shares shown as beneficially owned or shares those powers with
his spouse.
The number of options exercisable within sixty (60) days of
July 1, 2005 is shown in the first column of the table and
is included in the total number of shares of common stock
beneficially owned shown in the second column. The percentage of
shares beneficially owned is computed on the basis of
34,120,813 shares of
17
common stock outstanding on July 1, 2005. Unless otherwise
indicated, the principal address of each stockholder listed
below is c/o Genesis Microchip Inc., 2150 Gold Street,
Alviso, California 95002.
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Number of | |
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Total Number | |
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|
|
Shares of | |
|
of Shares of | |
|
Percentage of | |
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|
Common Stock | |
|
Common Stock | |
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Outstanding | |
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Issuable Pursuant | |
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Beneficially | |
|
Common | |
Name |
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to Options | |
|
Owned | |
|
Stock | |
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| |
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| |
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| |
Mazama Capital Management, Inc.(1)
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4,197,435 |
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12.3 |
% |
|
One S.W. Columbia, Suite 1500
Portland, Oregon 97258 |
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Kennedy Capital Management, Inc.(2)
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3,711,549 |
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10.9 |
% |
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10829 Olive Blvd.
St. Louis, Missouri 63141 |
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Mellon Financial Corporation(3)
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|
1,864,089 |
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5.5 |
% |
|
One Mellon Center
Pittsburg, Pennsylvania 15258 |
|
|
|
|
|
|
|
|
|
|
|
|
Elias Antoun
|
|
|
|
|
|
|
1,269 |
|
|
|
* |
|
Michael Healy
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|
|
75,000 |
|
|
|
77,278 |
|
|
|
* |
|
Anders Frisk
|
|
|
144,575 |
|
|
|
147,156 |
|
|
|
* |
|
Raphael Mehrbians
|
|
|
85,452 |
|
|
|
86,918 |
|
|
|
* |
|
Tzoyao Chan(4)
|
|
|
188,160 |
|
|
|
220,115 |
|
|
|
* |
|
Mohammad Tafazzoli
|
|
|
123,834 |
|
|
|
128,317 |
|
|
|
* |
|
Jon Castor
|
|
|
11,250 |
|
|
|
11,250 |
|
|
|
* |
|
Chieh Chang
|
|
|
11,250 |
|
|
|
24,987 |
|
|
|
* |
|
Tim Christoffersen
|
|
|
46,250 |
|
|
|
46,250 |
|
|
|
* |
|
Jeffrey Diamond(5)
|
|
|
102,500 |
|
|
|
117,054 |
|
|
|
* |
|
Eric Erdman
|
|
|
389,193 |
|
|
|
397,824 |
|
|
|
1.2 |
% |
Robert H. Kidd
|
|
|
52,500 |
|
|
|
52,500 |
|
|
|
* |
|
Chandrashekar M. Reddy
|
|
|
37,500 |
|
|
|
219,055 |
|
|
|
* |
|
Directors and Executive Officers as a group
(16 persons)(4)(5)
|
|
|
1,429,849 |
|
|
|
1,529,973 |
|
|
|
4.5 |
% |
|
|
* |
Less than one percent (1%) |
|
|
(1) |
Based on information contained in a Schedule 13G/ A filed
February 14, 2005. |
|
(2) |
Based on information contained in a Schedule 13G/ A filed
February 15, 2005. |
|
(3) |
Based on information contained in a Schedule 13G/ A filed
February 11, 2005. |
|
(4) |
Includes 30,004 shares directly owned and
19,489 shares owned by YTCC Foundation and T.
Chan & W. Chen Charitable Remainder Unitrust, both
trusts established for the benefit of Dr. Chan and his
family. |
|
(5) |
Includes 14,554 shares owned by Diamond Family Trust, a
trust established for the benefit of Mr. Diamond and his
family. |
18
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934
requires our officers, directors and any person who owns more
than ten percent (10%) of our shares of common stock to file
reports of ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission and with us. Based on our
review of copies of forms and written representations, we
believe that all of our officers, directors and greater than ten
percent (10%) stockholders complied with all filing requirements
applicable to them for the year ended March 31, 2005,
except as follows:
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On November 10, 2004, we entered into Amendment No. 1
to the Separation Agreement and Release with Chandrashekar M.
Reddy, which extended the exercise date to May 30, 2005 for
certain options to purchase an aggregate of 46,346 shares
of common stock, which were to expire on November 11, 2004.
This amendment was first reported on Form 8-K dated
November 15, 2004, followed by a Form 4 dated
November 23, 2004. |
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|
On May 26, 2004, Young Ahn was appointed as our Vice
President, Worldwide Sales and an executive officer, which such
event was first reported on a Form 3 on June 23, 2004.
Also on May 26, 2004, Mr. Ahn was granted an option to
purchase 50,000 shares of our common stock, which such
grant was first reported on a Form 4 dated June 23,
2004. Mr. Ahn resigned on December 28, 2004. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See the disclosure under the caption entitled Employment
contracts, termination of employment and change-in-control
arrangements on the next page.
Executive Compensation
Summary Compensation Table
The following table contains information about compensation paid
to our Chief Executive Officers and to our five other most
highly compensated executive officers for our fiscal year ended
March 31, 2005 and the compensation of those individuals in
fiscal years 2004 and 2005, where applicable.
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|
Long Term Compensation | |
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Annual Compensation | |
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Securities | |
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Fiscal | |
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| |
|
Underlying | |
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All Other | |
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|
Year | |
|
Salary ($) | |
|
Bonus ($) | |
|
Options (#) | |
|
Compensation ($) | |
|
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| |
|
| |
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| |
|
| |
|
| |
Elias Antoun(1)
|
|
|
2005 |
|
|
|
119,360 |
|
|
|
|
|
|
|
500,000 |
|
|
|
2,100 |
|
|
Chief Executive Officer and President |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Eric Erdman(2)
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|
|
2005 |
|
|
|
213,017 |
|
|
|
51,325 |
|
|
|
50,000 |
|
|
|
357,078 |
|
|
Former Chief Financial Officer and |
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2004 |
|
|
|
245,347 |
|
|
|
70,000 |
|
|
|
130,000 |
|
|
|
66,311 |
|
|
Former Interim Chief Executive Officer |
|
|
2003 |
|
|
|
212,709 |
|
|
|
28,881 |
|
|
|
70,000 |
|
|
|
|
|
Michael Healy
|
|
|
2005 |
|
|
|
220,008 |
|
|
|
80,000 |
|
|
|
|
|
|
|
7,200 |
|
|
Chief Financial Officer |
|
|
2004 |
|
|
|
34,270 |
|
|
|
|
|
|
|
200,000 |
|
|
|
1,200 |
|
Anders Frisk
|
|
|
2005 |
|
|
|
259,999 |
|
|
|
252,100 |
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|
|
43,000 |
|
|
|
7,200 |
|
|
Executive Vice President |
|
|
2004 |
|
|
|
250,000 |
|
|
|
|
|
|
|
20,000 |
|
|
|
100 |
|
|
|
|
|
2003 |
|
|
|
242,633 |
|
|
|
|
|
|
|
137,500 |
|
|
|
|
|
Tzoyao Chan
|
|
|
2005 |
|
|
|
224,231 |
|
|
|
|
|
|
|
36,500 |
|
|
|
7,200 |
|
|
Senior Vice President, Product |
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|
2004 |
|
|
|
210,000 |
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
Development |
|
|
2003 |
|
|
|
201,667 |
|
|
|
|
|
|
|
60,000 |
|
|
|
|
|
Raphael Mehrbians
|
|
|
2005 |
|
|
|
222,538 |
|
|
|
|
|
|
|
51,667 |
|
|
|
58,556 |
|
|
Senior Vice President, Product |
|
|
2004 |
|
|
|
193,249 |
|
|
|
|
|
|
|
50,000 |
|
|
|
58,220 |
|
|
Marketing |
|
|
2003 |
|
|
|
175,008 |
|
|
|
|
|
|
|
70,000 |
|
|
|
|
|
Mohammad Tafazzoli
|
|
|
2005 |
|
|
|
220,000 |
|
|
|
|
|
|
|
40,000 |
|
|
|
7,200 |
|
|
Senior Vice President, Operations |
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|
2004 |
|
|
|
210,000 |
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
2003 |
|
|
|
204,075 |
|
|
|
|
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|
|
60,000 |
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|
|
|
|
19
|
|
(1) |
Mr. Antoun became our Chief Executive Officer and President
on November 29, 2004. For details regarding his employment
agreement, see description under the caption Employment
Agreements with Mr. Antoun. |
|
(2) |
Mr. Erdman was Interim Chief Executive Officer effective
July 20, 2003 until November 29, 2004. Mr. Erdman
served as both Interim Chief Executive Officer and Chief
Financial Officer from July 20, 2003 to February 15,
2004, for which he received a bonus and certain other amounts in
fiscal 2004 pursuant to his employment agreement, which are
reflected under Bonus and All Other
Compensation. For details regarding his employment
agreement, see the description under the caption,
Separation Agreement and Release with
Mr. Erdman. |
Employment contracts, termination of employment and
change-in-control arrangements
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|
Employment Agreement with Mr. Antoun |
On November 10, 2004 and November 29, 2004,
respectively, we entered into an employment letter and change of
control severance agreement with Mr. Antoun, currently our
Chief Executive Officer and President. The employment letter
states that Mr. Antouns initial base salary is
$350,004. In addition, Mr. Antoun receives a car allowance
and is eligible to participate in any applicable corporate bonus
plan. The change of control severance agreement provides certain
benefits upon an involuntary termination of employment following
a change of control of Genesis, as set forth below under the
heading Employment and severance agreements relating to
change of control.
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|
Separation Agreement and Release with
Mr. Erdman |
We entered into a Settlement Agreement and Release with
Mr. Erdman, our former Interim Chief Executive Officer and
former Chief Financial Officer, in connection with his
resignation effective November 29, 2004. Under the
agreement, Mr. Erdman was entitled to receive as severance
a lump-sum payment equal to one year of his base salary, as well
as (i) a bonus in the amount of $51,325.65, less applicable
withholdings, based on Mr. Erdmans eight months of
employment with Genesis; (ii) reimbursement for up to
3 months of COBRA; (iii) commencing March 1, 2005
for a period of up to nine months, coverage under Genesiss
health plan for its Canadian employees or reimbursement for the
payments made by Mr. Erdman for the continuation of
post-termination health benefits as provided under Canadian law;
(iv) reimbursement for reasonable moving expenses incurred
by Mr. Erdmans relocation from California to Canada;
(v) reimbursement for certain return and tax advise, not to
exceed $10,000; and (vi) reimbursement for legal fees and
costs incurred in the preparation of the agreement and the
Consulting Agreement, discussed below. Mr. Erdman agreed
and authorized the Company to deduct from the lump-sum severance
payment monies overpaid to Mr. Erdman by the Company in
relation to his vehicle allowance. Mr. Erdman was also
entitled to: (i) accelerated vesting for all stock options
granted to Mr. Erdman on or prior to August 12, 2003;
(ii) twelve months of additional vesting for all stock
options granted to Mr. Erdman after August 12, 2003;
and (iii) the right to exercise all vested stock options
(including those vesting under the agreement) for a period of up
to eighteen months following the effective date of
Mr. Erdmans termination. Mr. Erdman agreed to
release all claims he may have had against the Company.
Mr. Erdman also agreed to provisions concerning
confidentiality, cooperation in litigation and non-solicitation
of our employees and consultants. The agreement terminated our
February 2004 Interim Chief Executive Officer employment
agreement with Mr. Erdman, under which Mr. Erdman was
to receive an annual base salary of $275,000, a one-time bonus
for his service in both the Interim Chief Executive Officer and
Chief Financial Officer positions and certain other benefits.
Mr. Erdman and the Company entered into a Consulting
Agreement, dated as of December 3, 2004, whereby
Mr. Erdman was to provide services related to the
transition of his duties as the Companys former Interim
Executive Officer at a rate of $10,000 per month, until
March 31, 2005.
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Employment Agreement with Mr. Healy |
On February 4, 2004, we entered into an employment letter
and change of control severance agreement with Mr. Healy,
currently our Senior Vice President, Finance and Chief Financial
Officer. The employment
20
letter states that Mr. Healys initial base salary is
$220,000 and that he will receive a one-time guaranteed bonus of
$80,000 at the end of twelve months of employment. In addition,
Mr. Healy receives a car allowance and is eligible to
participate in any applicable corporate bonus plan. The change
of control severance agreement provides certain benefits upon an
involuntary termination of employment following a change of
control of Genesis, as set forth below under the heading
Employment and severance agreements relating to change of
control. In addition, if during Mr. Healys
first two years of employment, he is involuntarily terminated
without cause by our Chief Executive Officer (excluding an
involuntary termination with or without cause by Eric Erdman),
he will be entitled to receive similar severance benefits.
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Employment Letter with Mr. Frisk |
On February 15, 2000, we entered into an employment letter
with Anders Frisk, currently our Executive Vice President. In
addition to base salary, bonus, car allowance and other
benefits, we granted Mr. Frisk options for
130,000 shares of our common stock that have since fully
vested. In addition, pursuant to an employment agreement with
Mr. Frisk, in the event that his employment is
involuntarily terminated at any time, he will be entitled to a
lump sum payment equal to 12 months of his base salary in
effect as of the date of his termination.
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Employment Letter with Dr. Chan |
Dr. Chan, who currently serves as our Senior Vice
President, Product Development, entered into an employment
letter with Paradise Electronics, Inc., dated April 21,
1997, which we assumed upon our acquisition of Paradise. In
addition to base salary, bonus and other benefits, Dr. Chan
was granted stock options that have since fully vested.
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Employment Letter with Mr. Mehrbians |
On February 28, 2002, we entered into an employment letter
with Mr. Mehrbians, who currently serves as our Senior Vice
President, Product Marketing. In addition to base salary, bonus
and other benefits, Mr. Mehrbians was granted a stock
option with standard four-year vesting. On February 28,
2002, which was prior to his becoming an officer of the Company
and prior to the enactment of the Sarbanes-Oxley Act of 2002, we
agreed to provide Mr. Mehrbians with a loan of $150,000,
which amount has been forgiven pursuant to its requirement that
Mr. Mehrbians remain employed by Genesis for three years.
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Employment Letter with Mr. Tafazzoli |
Mr. Tafazzoli, who currently serves as our Senior Vice
President, Operations, entered into an employment letter with
Paradise Electronics, Inc., dated February 17, 1998, which
we assumed upon our acquisition of Paradise. In addition to base
salary, bonus and other benefits, Mr. Tafazzoli was granted
a stock option that has since fully vested.
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|
Employment and Severance Agreements Relating to Change of
Control |
Messrs. Antoun and Healy have entered into change of
control severance agreements that will provide certain benefits
upon an involuntary termination of employment following a change
of control of Genesis. The agreements generally provide that if,
within 12 months after the change of control, or any other
change of control of the combined company following a merger,
the executives employment is involuntarily terminated and
signs a release of claims, then the executive will be entitled
to the following severance benefits:
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12 months of the executives base salary, payable in a
lump sum; |
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12 months of acceleration of vesting under all stock
options, and 12 months of lapsing of Genesiss right
of repurchase with respect to all restricted stock, held by the
executive prior to the change of control; |
21
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|
the ability to exercise all vested stock options being assumed
by the acquiring company that were originally granted to the
executive by Genesis prior to the change of control for a period
of 2 years following the termination of employment; and |
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|
health coverage and benefits at the same level of coverage as
was provided immediately prior to termination, for up to
12 months following the termination of employment. |
The agreements also generally provide that if, in the second
year after the change of control, or any other change of control
of the combined company following a merger, the executives
employment is involuntarily terminated, then the executive will
be entitled to the following severance benefits:
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a lump sum payment equal to the product of 100% of the
executives monthly base salary, multiplied by the number
of months remaining in such second year as of the employment
termination date; |
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|
|
12 months of acceleration of vesting under all stock
options, and 12 months of lapsing of Genesiss right
of repurchase with respect to all restricted stock, held by the
executive prior to the change of control; |
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|
|
the ability to exercise all vested stock options granted to the
executive by Genesis prior to the change of control for a period
of 2 years following the termination of employment; and |
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|
|
health coverage and benefits at the same level of coverage as
was provided immediately prior to termination, for that number
of months remaining in such second year as of the employment
termination date. |
Options granted in the year ended March 31, 2005
The following table contains information about stock option
grants made during the year ended March 31, 2005 to our
Chief Executive Officers and to our five other most highly
compensated executive officers in fiscal 2005. The stock options
were granted under our 1997 Employee Stock Option Plan, our 2001
Nonstatutory Stock Option Plan, our 2000 Nonstatutory Stock
Option Plan or our 2003 Nonstatutory Stock Option Plan. They
have a maximum term of ten years, subject to earlier termination
upon cessation of service.
The 5% and 10% assumed annual rates of compounded stock price
appreciation are mandated by rules of the Securities and
Exchange Commission. There is no assurance that the actual stock
price appreciation over the option terms will be at the assumed
5% and 10% levels or at any other defined level. Unless the
market price of our common stock appreciates over the term of
the option, no value will be realized from the option grants
made to the executive officer.
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|
|
Individual Grants |
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|
|
|
|
|
|
|
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|
|
|
|
% of Total | |
|
|
|
Potential Realizable Value |
|
|
Number of | |
|
Options | |
|
|
|
at Assumed Annual Rates of |
|
|
Securities | |
|
Granted to | |
|
|
|
Stock Price Appreciation for |
|
|
Underlying | |
|
Employees | |
|
Exercise | |
|
|
|
Option Term(2) |
|
|
Options | |
|
in Fiscal | |
|
Price per | |
|
Expiration |
|
|
Name |
|
Granted | |
|
Year | |
|
Share | |
|
Date |
|
5% |
|
10% |
|
|
| |
|
| |
|
| |
|
|
|
|
|
|
Elias Antoun(1)
|
|
|
500,000 |
|
|
|
18.3 |
% |
|
$ |
16.895 |
|
|
11/29/2014 |
|
5,312,587 |
|
13,463,139 |
Eric Erdman(2)
|
|
|
50,000 |
|
|
|
1.8 |
% |
|
$ |
15.62 |
|
|
5/26/2014 |
|
491,167 |
|
1,244,713 |
Michael Healy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anders Frisk
|
|
|
40,000 |
|
|
|
1.5 |
% |
|
$ |
15.62 |
|
|
5/26/2014 |
|
392,933 |
|
995,770 |
|
|
|
3,000 |
|
|
|
* |
|
|
$ |
15.76 |
|
|
12/28/2014 |
|
29,734 |
|
75,352 |
Tzoyao Chan
|
|
|
35,000 |
|
|
|
1.3 |
% |
|
$ |
15.62 |
|
|
5/26/2014 |
|
343,817 |
|
871,299 |
|
|
|
1,500 |
|
|
|
* |
|
|
$ |
15.76 |
|
|
12/28/2014 |
|
14,867 |
|
37,676 |
Raphael Mehrbians(3)
|
|
|
51,667 |
|
|
|
1.9 |
% |
|
$ |
13.77 |
|
|
6/30/2014 |
|
447,430 |
|
1,133,875 |
Mohammad Tafazzoli
|
|
|
40,000 |
|
|
|
1.5 |
% |
|
$ |
15.62 |
|
|
5/26/2014 |
|
392,933 |
|
995,770 |
22
|
|
(1) |
Mr. Antoun became Chief Executive Officer on
November 29, 2004. |
|
(2) |
Mr. Erdman resigned as Interim Chief Executive Officer on
November 29, 2004. |
|
(3) |
16,667 of the securities underlying these options were granted
pursuant to an Option Exchange Agreement. |
Aggregate option exercises in the last fiscal year and fiscal
year-end option values
The following table contains information about option exercises
for our Chief Executive Officers and our five other most highly
compensated executive officers in the year ended March 31,
2005 and their option holdings as of March 31, 2005.
The value of an in-the-money stock option represents the
difference between the aggregate estimated fair market value of
the underlying stock and the aggregate exercise price of the
stock option. We have used the reported closing price of
$14.45 per share on The Nasdaq National Market on
March 31, 2005 as the estimated fair market value of our
common stock in determining the value of unexercised options.
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
|
|
|
|
|
|
|
Underlying | |
|
Value of Unexercised | |
|
|
Number of | |
|
|
|
Unexercised Options at | |
|
in-the-Money Options | |
|
|
Shares | |
|
|
|
Fiscal Year End | |
|
at the Fiscal Year End ($) | |
|
|
Acquired on | |
|
Value | |
|
| |
|
| |
Name |
|
Exercise | |
|
Received | |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Elias Antoun(1)
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
500,000 |
|
|
|
|
|
|
|
|
|
Eric Erdman(2)
|
|
|
|
|
|
|
|
|
|
|
389,193 |
|
|
|
0 |
|
|
|
1,285,485 |
|
|
|
|
|
Michael Healy
|
|
|
|
|
|
|
|
|
|
|
54,167 |
|
|
|
145,833 |
|
|
|
|
|
|
|
|
|
Anders Frisk
|
|
|
|
|
|
|
|
|
|
|
192,169 |
|
|
|
108,333 |
|
|
|
532,385 |
|
|
|
212,177 |
|
Tzoyao Chan
|
|
|
|
|
|
|
|
|
|
|
164,516 |
|
|
|
86,040 |
|
|
|
571,396 |
|
|
|
143,582 |
|
Raphael Mehrbians
|
|
|
|
|
|
|
|
|
|
|
67,292 |
|
|
|
94,375 |
|
|
|
255,010 |
|
|
|
220,074 |
|
Mohammad Tafazzoli
|
|
|
|
|
|
|
|
|
|
|
99,773 |
|
|
|
90,207 |
|
|
|
208,500 |
|
|
|
139,000 |
|
|
|
(1) |
Mr. Antoun became Chief Executive Officer on
November 29, 2004. |
|
(2) |
Mr. Erdman resigned as Interim Chief Executive Officer on
November 29, 2004. |
Compensation Committee interlocks and insider
participation
The members of our Compensation Committee during the fiscal year
ended March 31, 2005 were Messrs. Diamond and Chang.
At no time since our formation have any of the members of our
Compensation Committee served as our officers or employees or as
officers or employees of any of our subsidiaries, except for
Mr. Diamond as described in his biography on page 7.
No interlocking relationship exists between our Board of
Directors or its Compensation Committee and the board of
directors or compensation committee of any other company, nor
did any interlocking relationships exist during the past fiscal
year.
COMPENSATION COMMITTEES REPORT ON EXECUTIVE
COMPENSATION
To our Stockholders:
We are responsible for reviewing and/or establishing the
compensation programs that relate to Genesiss executive
officers, senior management and other key employees and for
establishing the specific short and long-term compensation
elements thereunder. We oversee the general compensation
structure for all of Genesiss employees and we administer
the stock option and stock purchase plans. We are independent,
non-employee directors.
The executive compensation program that has been established is
designed to provide levels of compensation in formats that
assist Genesis in attracting, motivating and retaining qualified
executives by
23
providing a competitive compensation package geared to
individual and corporate performance. We strive to establish
performance criteria, evaluate performance and establish base
salary, bonuses and long-term incentives for our key decision
makers based upon performance and designed to provide
appropriate incentives for maximization of our short and
long-term financial results for the benefit of our stockholders.
In order to meet our objectives, we have chosen four basic
components for Genesiss executive compensation program to
meet our compensation philosophy. Base salaries, which are the
fixed regular component of executive compensation, are based
upon:
|
|
|
|
|
base salary levels among a competitive, geographic peer group; |
|
|
|
Genesiss past financial performance and future
expectations; |
|
|
|
the general and industry-specific business environment; and |
|
|
|
individual performance. |
Bonuses, which are directly linked to Genesiss
performance, are designed to provide additional incentive cash
compensation based on short-term performance of Genesis and its
employees. Stock option grants, under the long-term component of
executive compensation, are designed as an incentive to reward
executive officers and employees for delivering value to our
stockholders over a longer, measurable period of time.
Historically, Genesis has used the grant of stock options that
vest over some measurable period of time, generally four years,
to accomplish this objective.
The base salaries for our Chief Executive Officers in fiscal
2005, Mr. Elias Antoun and Mr. Eric Erdman, were
determined with reference to base salaries for chief executive
officers of other comparable technology companies.
Mr. Antoun has served as our Chief Executive Officer since
November 29, 2004 for which he received $119,360 in fiscal
2005 pursuant to his employment agreement. Mr. Erdman
served as our Interim Chief Executive Officer from July 20,
2003 to November 29, 2004, for which he received a salary
of $213,018, a bonus of $51,326, and severance of $285,000, in
fiscal 2005 pursuant to his employment agreement and separation
agreement. Incentive options to
purchase 500,000 shares of our common stock were
granted to Mr. Antoun upon his employment as Chief
Executive Officer. Incentive options to
purchase 50,000 shares of our common stock were
granted to Mr. Erdman in May 2004. No other stock options
were granted to Mr. Antoun or Mr. Erdman in fiscal
2005.
The information contained in this report of the Compensation
Committee shall not be deemed soliciting material or
to be filed with the Securities and Exchange Commission, nor
shall such information be incorporated by reference by any
general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that Genesis specifically incorporates this
information by reference, and shall not otherwise be deemed
filed under such Acts.
|
|
|
Respectfully submitted by the Compensation Committee, |
|
|
Jeffrey Diamond |
|
Chairman |
|
|
Chieh Chang |
|
|
|
July 28, 2005 |
24
STOCK PERFORMANCE GRAPH
The following performance graph compares the percentage change
in the cumulative total stockholder return on shares of our
common stock with the cumulative total return for:
|
|
|
|
|
a group of our peer corporations, comprising the Nasdaq
Electronic Components Stocks; and |
|
|
|
the Total Return Index for The Nasdaq Stock Market (US and
Foreign). |
This comparison covers the period from March 31, 2000 to
March 31, 2005, the last trading date in our 2005 fiscal
year. It assumes $100 was invested on March 31, 2000 in
shares of our common stock, our peer corporations and The Nasdaq
Stock Market, and assumes reinvestment of dividends, if any.
The Nasdaq Electronic Components Stocks consists of all
corporations traded on The Nasdaq Stock Market with 367 as their
primary standard industrial classification number. The Total
Return Index for The Nasdaq Stock Market (US and Foreign)
comprises all ADRs, domestic shares, and foreign common shares
traded on The Nasdaq National Market and The Nasdaq Small Cap
Market, excluding preferred shares, rights and warrants.
Comparative chart
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|
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|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
| |
|
|
|
|
|
|
|
|
Total Nasdaq | |
Date |
|
|
Genesis |
|
|
Peer Group |
|
Return | |
|
|
|
| |
|
|
| |
|
| |
March 31, 2000
|
|
|
|
100.00 |
|
|
|
|
100.00 |
|
|
|
100.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 30, 2001
|
|
|
|
45.70 |
|
|
|
|
31.29 |
|
|
|
39.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2002
|
|
|
|
119.54 |
|
|
|
|
33.21 |
|
|
|
40.14 |
|
|
|
|
|
|
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|
|
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|
|
March 31, 2003
|
|
|
|
57.38 |
|
|
|
|
19.15 |
|
|
|
29.30 |
|
|
|
|
|
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|
|
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|
|
March 31, 2004
|
|
|
|
77.01 |
|
|
|
|
33.40 |
|
|
|
43.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2005
|
|
|
|
66.44 |
|
|
|
|
26.72 |
|
|
|
44.02 |
|
|
|
|
|
|
|
|
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|
|
|
|
25
The stock price performance shown on the graph is not
necessarily indicative of future price performance. Our closing
stock price on July 15, 2005, the record date, was $20.64.
Information used on this graph was obtained from Nasdaq.
Although we believe the information to be accurate, we are not
responsible for any errors or omissions.
This chart is not soliciting material. It is not
deemed filed with the Securities and Exchange Commission and it
is not to be incorporated by reference in any of our filings
under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended.
26
AUDIT COMMITTEE REPORT
The Audit Committee is responsible for reviewing the scope and
timing of audit services and any other services that
Genesiss independent accountants are asked to perform, the
auditors report on Genesiss consolidated financial
statements following completion of their audit, and
Genesiss policies and procedures with respect to internal
accounting and financial controls. The Board of Directors has
adopted a written charter for the Audit Committee, which is
available on our Web site located at www.gnss.com, and was filed
as an Exhibit to our 2004 proxy statement. All members of this
committee are independent members of the Board of Directors.
We reviewed Genesiss audited consolidated financial
statements for fiscal year 2005 and discussed such statements
with management. We discussed the matters required by Statement
of Auditing Standards No. 61 (Communication with Audit
Committees) with KPMG LLP in Canada, Genesiss independent
accountants during fiscal year 2005.
We received the written disclosures and the letter required by
Independent Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), as may be modified or
supplemented, from KPMG LLP and discussed with them their
independence. Based on the review and discussions noted above,
we recommended to the Board of Directors that Genesiss
audited consolidated financial statements be included in its
Annual Report on Form 10-K and the annual report to
stockholders for the year ended March 31, 2005, and be
filed with the U.S. Securities and Exchange Commission.
The information contained in this report of the Audit Committee
shall not be deemed soliciting material or to be
filed with the Securities and Exchange Commission, nor shall
such information be incorporated by reference by any general
statement incorporating by reference this proxy statement into
any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, except to the
extent that Genesis specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such
Acts.
|
|
|
Respectfully submitted by the Audit Committee, |
|
|
Robert H. Kidd |
|
Chairman |
|
|
Tim Christoffersen |
|
|
Jon Castor |
July 28, 2005
27
STOCKHOLDER PROPOSALS
You may present proposals for inclusion in our proxy statement
for consideration at our 2006 annual meeting by submitting them
in writing to our Secretary in a timely manner. Pursuant to
Rule 14a-8(e) of the Securities Exchange Act of 1934, as
amended, your proposals must be received by us no later than
March 29, 2006 to be included in the proxy statement for
that meeting and must comply with the requirements of
Rule 14a-8.
Any proposals submitted by you after March 29, 2006, but on
or before June 15, 2006, may be eligible for consideration
at next years annual meeting, but will not be eligible for
inclusion in the proxy statement for that meeting. Any proposal
received after June 15, 2006 will be considered untimely
for our 2006 annual meeting.
CONTACTING THE BOARD OF DIRECTORS
Stockholders may communicate with the Board of Directors of the
Company by sending an email to the Secretary of the Company at
corporate.secretary@gnss.com. Alternatively, stockholders may
communicate with the Board of Directors by mail at the following
address: Board of Directors c/o Corporate Secretary,
Genesis Microchip Inc., 2150 Gold Street, Alviso, California
95002. The Secretary will collect, organize and monitor these
communications and will ensure that appropriate summaries of all
received messages are provided to the Board of Directors at its
regularly scheduled meetings. Stockholders who would like their
submission directed to a specific director may so specify, and
the communication will be so forwarded, as appropriate. Where
the nature of a communication warrants, the Secretary may decide
to obtain the more immediate attention of the appropriate
committee of the Board of Directors or an independent director,
or the Companys management or independent advisors, as the
Secretary considers appropriate.
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By order of the Board of Directors, |
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/s/ Ava M. Hahn |
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Ava M. Hahn |
|
Secretary |
July 28, 2005
28
PROXY
GENESIS MICROCHIP INC.
Proxy for the Annual Meeting of Stockholders
To be held on September 13, 2005
Solicited by the Board of Directors
The undersigned hereby appoints Michael E. Healy and Ava M. Hahn, and each of them, with full
power of substitution, to represent the undersigned and to vote all of the shares of stock in
Genesis Microchip Inc., a Delaware corporation (the Company), which the undersigned is entitled
to vote at the Annual Meeting of Stockholders of the Company to be held at 180 Baytech Drive, Suite
110, San Jose, California 95134 on September 13, 2005 at 10:00 a.m. Pacific Time, and at any
adjournment or postponement thereof (i) as hereinafter specified upon the proposals listed on the
reverse side and as more particularly described in the Proxy Statement of the Company dated on or
about July 28, 2005 (the Proxy Statement), receipt of which is hereby acknowledged, and (ii) in
their discretion upon such other matters as may properly come before the meeting.
THE SHARES REPRESENTED HEREBY SHALL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, SUCH
SHARES SHALL BE VOTED FOR THE NOMINEES FOR DIRECTOR INDICATED IN PROPOSAL 1 AND FOR PROPOSAL 2.
(continued and to be signed on the reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side)
^ FOLD AND DETACH HERE ^
Access your Genesis Microchip shareholder account online via Investor ServiceDirect® (ISD).
Mellon Investor Services LLC, agent for Genesis Microchip Inc., now makes it easy and
convenient to get current information on your stockholder account. After a simple and secure
process of establishing a Personal Identification Number (PIN), you are ready to log in and access
your account to:
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View account status |
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Make address changes |
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View certificate history |
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Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
and follow the instructions shown on this page.
Step 1: FIRST TIME USERSEstablish a PIN
You must first establish a Personal Identification Number (PIN) online by following the
directions provided in the upper right portion of the web screen as follows. You will also need
your Social Security Number (SSN) available to establish a PIN.
Investor ServiceDirect® is currently only available for domestic individual and joint accounts.
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SSN |
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PIN |
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Then click on the Establish PIN button |
Please be sure to remember your PIN, or maintain it in a secure place for future reference.
Step 2: Log in for Account Access
You are now ready to log in. To access your account please enter your:
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SSN |
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PIN |
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Then click on the Submit button |
If you have more than one account, you will now be asked to select the appropriate account.
Step 3: Account Status Screen
You are now ready to access your account information. Click on the appropriate button to view
or initiate transactions.
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Certificate History |
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Issue Certificate |
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Address Change |
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am7pm
MondayFriday Eastern Time
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THE BOARD OF DIRECTORS RECOMMENDS A
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Please Mark Here for Address Change or |
VOTE FOR THE NOMINEES FOR DIRECTOR
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Comments
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o |
INDICATED IN PROPOSAL 1 AND FOR
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SEE REVERSE SIDE |
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PROPOSAL 2. |
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1. |
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Election of two (2) nominees to the Board of Directors. |
Nominees:
01 Tim Christoffersen
02 Robert H. Kidd
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FOR all nominees listed
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WITHHOLD AUTHORITY
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above (except as marked
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to vote for all nominees |
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to the contrary below)
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listed above |
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o
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o |
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INSTRUCTION: To withhold authority to vote for an individual
nominee, write the nominees name in the space provided:
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2.
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To ratify the appointment of KPMG LLP in
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FOR
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AGAINST
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ABSTAIN |
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Canada as the Companys independent
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o
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o
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o |
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accountants for the fiscal year ending March 31, 2006. |
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WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED
TO
SIGN AND PROMPTLY MAIL THIS PROXY CARD IN THE RETURN ENVELOPE
SO THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING.
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Signature:
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Date:
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Signature:
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Date: |
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Note: Sign exactly as your name(s) appear(s) on your stock certificate. If shares of stock are
held in the name of two or more persons or in the name of husband and wife, either as joint tenants
or otherwise, both or all of such persons should sign the above proxy card. If shares of stock are
held by a corporation, the proxy card should be executed by the president or vice president and the
secretary or assistant secretary. Executors or administrators or other fiduciaries who execute the
above proxy card for a deceased stockholder should give their full title. Please date the proxy
card.
^ FOLD AND DETACH HERE ^