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:
|
|
|
o
|
|
Preliminary Proxy Statement |
o
|
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
þ
|
|
Definitive Proxy Statement |
o
|
|
Definitive Additional Materials |
o
|
|
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):
|
|
|
|
|
|
|
|
|
þ |
|
No fee required. |
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
|
|
|
1 |
) |
|
Title of each class of securities to which transaction applies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
) |
|
Aggregate number of securities to which transaction applies: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 |
) |
|
Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
) |
|
Proposed maximum aggregate value of transaction: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
) |
|
Total fee paid: |
|
|
|
|
|
|
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
|
|
|
|
|
|
|
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which |
|
|
the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or |
|
|
Schedule and the date of its filing. |
|
|
|
1 |
) |
|
Amount Previously Paid: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 |
) |
|
Filing Party: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
) |
|
Date Filed: |
|
|
Genesis Microchip Inc.
2150 Gold Street
Alviso, California 95002
(408) 262-6599
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 12, 2006
To our Stockholders:
We are holding our 2006 annual meeting of stockholders on
Tuesday, September 12, 2006 at 11:00 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 14, 2006 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:
|
|
|
1. To elect two Class II directors, each to serve for
a term of three years, expiring on the date of our 2009 annual
meeting of stockholders or until a successor is elected; |
|
|
2. To ratify the appointment of KPMG LLP in Canada as
independent accountants for fiscal 2007; and |
|
|
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.
|
|
|
By order of the Board of Directors, |
|
|
|
|
|
Ava M. Hahn |
|
Secretary |
July 28, 2006
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 2006 annual meeting of stockholders to be held on
Tuesday, September 12, 2006 at 11:00 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 14, 2006 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. The annual meeting
is scheduled to take place on Tuesday, September 12, 2006.
This proxy statement summarizes information concerning the
proposals to be voted on at the annual meeting. This information
will help you to make an informed vote at our annual meeting.
What proposals will be voted on at the meeting?
We have scheduled two proposals to be voted on at the meeting:
|
|
|
1. The election of two Class II directors, each to
serve for a term of three years expiring on the date of our 2009
annual meeting of stockholders or until a successor is
elected; and |
|
|
2. The ratification of the appointment of KPMG LLP in
Canada as independent accountants for fiscal 2007. |
What is the voting recommendation?
The Companys Board of Directors recommends that you vote
your shares FOR the election of each of the nominees
to our Board of Directors 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 14, 2006 are entitled to notice of, and to
vote at, our annual meeting. As of the close of business on the
record date, there were 36,386,310 shares of our common
stock outstanding and entitled to vote held by approximately 180
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.
1
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 or nominee 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 and 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
at the annual meeting 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 the enclosed 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?
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 your shares are
voted by proxy at the annual meeting.
If you are a stockholder of record you can change your vote by:
|
|
|
|
|
Sending a written notice to our Secretary at our principal
executive offices in Alviso, California stating that you would
like to revoke your proxy, |
|
|
|
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 |
|
|
|
Attending the annual meeting and voting in person. |
2
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. If you hold your shares through a broker,
bank or other nominee and you do not provide instructions on how
to vote, your broker or other nominee may have authority to vote
your shares on certain matters, including Proposals 1 and
2. If you hold your common stock through a bank, broker or other
nominee, the broker may be prevented from voting shares held in
your account on some proposals (not including Proposals 1
and 2) (a broker non-vote) unless you have
given voting instructions to the bank, broker or nominee.
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 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 proposals.
Shares that are subject to a broker non-vote are counted for
purposes of determining whether a quorum exists but not for
purposes of determining whether a proposal has passed.
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 of Directors
(FOR all of our nominees to the Board of Directors,
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 II
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.
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 2007, which ends
September 30, 2006.
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
3
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 any 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 II directors expires at
this 2006 annual meeting. The term for the Class III
directors expires at the 2007 annual meeting and the term for
the Class I directors expires at the 2008 annual meeting.
Each director serves for a three-year term or until his
successor is duly elected and qualified.
The Board of Directors nominees for election by the
stockholders as Class II directors are Chandrashekar M.
Reddy and Elias Antoun. Our Nominating Committee has recommended
and the Board of Directors has approved these nominations.
Mr. Antoun is currently the Companys President and
Chief Executive Officer and Mr. Reddy is currently a member
of our Compensation Committee and Corporate Governance
Committee. If elected, the two nominees will serve as directors
until our 2009 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 may
nominated by our Board of Directors.
If a quorum is present and voting, the two nominees for
Class II directors receiving the highest number of votes
FOR will be elected as the Class II directors.
The persons named in the enclosed proxy intend to vote the
shares represented by those proxies for the election of these
two nominees.
4
Directors
Currently, there are seven (7) members of the Board of
Directors. The following sets forth certain information
concerning our current directors as well as our Class II
nominees to be elected at the 2006 annual meeting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director | |
Name |
|
Age | |
|
Position |
|
Since | |
|
|
| |
|
|
|
| |
Class II Nominees:
|
|
|
|
|
|
|
|
|
|
|
Chandrashekar M. Reddy(2)(3)
|
|
|
46 |
|
|
Director Nominee |
|
|
2002 |
|
Elias Antoun
|
|
|
49 |
|
|
Director Nominee |
|
|
2004 |
|
Class III Directors Whose Terms Expire at the 2007
Annual Meeting:
|
|
|
|
|
|
|
|
|
|
|
Jon Castor(1)(4)
|
|
|
54 |
|
|
Director |
|
|
2004 |
|
Chieh Chang(2)(3)
|
|
|
54 |
|
|
Director |
|
|
2004 |
|
Jeffrey Diamond(2)(4)
|
|
|
54 |
|
|
Chairman of the Board |
|
|
2001 |
|
Class I Directors Whose Terms Expire at the 2008 Annual
Meeting:
|
|
|
|
|
|
|
|
|
|
|
Tim Christoffersen(1)(3)
|
|
|
64 |
|
|
Director |
|
|
2002 |
|
Robert H. Kidd(1)(4)
|
|
|
62 |
|
|
Director |
|
|
2002 |
|
|
|
(1) |
Member of the Audit Committee. |
|
(2) |
Member of the Compensation Committee. |
|
(3) |
Member of the Corporate Governance Committee. |
|
(4) |
Member of the Nominating Committee. |
|
|
|
Nominees for Election to Class II Directorship
Expiring at the 2006 Annual Meeting |
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 of Directors and Chief Executive Officer
of Sage from its inception in 1994 until its acquisition by
Genesis in February 2002. Mr. Reddy served as the Chief
Executive Officer of Athena Semiconductors, Inc., a wireless
communications business, from December 2002 to October 2005 and
as a member of its Board of Directors from January 2002 to
October 2005. 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.
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 served as a Director of HPL Technologies, Inc.
from August 2000 to December 2005, and as Chairman of the Board
of Directors of HPL Technologies, Inc. from July 2002 to
December 2005. Mr. Antoun received a B.S. in Electrical
Engineering from UCLA, and an M.B.A. from Stanford Graduate
School of Business.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR EACH DIRECTOR NOMINEE
5
|
|
|
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
TeraLogic, 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 also serves on
the Board of Directors of Adaptec Inc. (NASDAQ: ADPT), a data
storage solutions company, and as a member of its Audit and
Compensation Committees. Mr. Castor also serves on the
Board of Directors of Artimi, Inc., an ultrawideband wireless
technology company, where he is also Chairman of the
Compensation Committee. 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 of
Directors 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.
|
|
|
Class II Directors Whose Terms Expire at the 2008
Annual Meeting |
Tim Christoffersen was appointed as a Director in August
2002. Mr. Christoffersen served as Chief Financial Officer
of Monolithic Power Systems, Inc. (MPS), a semiconductor
company, from June 2004 to April 2006, 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.
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
also serves as a director of Hostopia.com, a website hosting
company, and as Vice Chairman of Appleby College Foundation.
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
6
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, its Committees and Meetings
Board of Directors. The Board of Directors held 18
meetings during the fiscal year ended March 31, 2006. 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, 2006.
A majority of the directors on the Companys Board of
Directors are independent within the meaning of the NASDAQ Stock
Market, Inc. director independence standards, as currently in
effect. The Board of Directors has determined that each of its
current directors, including all nominee directors, except Elias
Antoun, has no material relationship with Genesis and is
independent. In addition, the independent members of the Board
of Directors met twice during the fiscal year ended
March 31, 2006.
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 six meetings during the fiscal year ended March 31,
2006.
Currently, our Compensation Committee consists of
Mr. Diamond, Mr. Chang and Mr. Reddy, each of
whom qualify as independent in accordance with the
published listing requirements of Nasdaq. Mr. Diamond
serves as chairman of this committee.
The current Compensation Committee charter is available at our
Web site located at www.gnss.com.
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. The Audit Committee also reviews and approves any
related party transactions. The Audit Committee approves, in
advance, all permissible non-audit services provided by the
Companys independent accountants.
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 13 meetings during the fiscal year ended
March 31, 2006. 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 of Directors 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.
The Board of Directors has determined that each of the current
Audit Committee members is independent 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 as an audit committee financial expert 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 of Directors, and
his designation as an audit committee financial expert pursuant
to this SEC
7
requirement does not affect the duties, obligations or liability
of any other member of the Audit Committee or the Board of
Directors.
The report of the Audit Committee is included herein on
page 28. The current Audit Committee charter is included as
Appendix I to this proxy statement, and is available at our
Web site located at www.gnss.com.
Nominating Committee. The Nominating Committee is
responsible for seeking, screening and recommending for
nomination candidates for election to the Board of Directors and
appointments to the Board of Directors to fill any vacancies. In
so doing, the Nominating Committee may evaluate, among other
things:
|
|
|
|
|
the current size, composition and needs of the Board of
Directors and its committees; |
|
|
|
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 |
|
|
|
such other factors as the Nominating 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 of Directors at a
particular point in time. As a result, the priorities and
emphasis of the Nominating Committee and of the Board of
Directors 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 of
Directors 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 of Directors, by our management, by
stockholders who submit names to the Nominating Committee, or by
other external sources. With regard to the nominees for election
as Class I directors, the Nominating Committee recommended
and the Board of Directors approved the nominations of
Messrs. Antoun and Reddy for election as Class II
directors at the 2006 annual meeting. Since our last annual
meeting in 2005, we have not employed a search firm or paid fees
to other third parties in connection with seeking or evaluating
Board of Directors nominee candidates.
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 of Directors 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 of Directors at an annual or special
meeting for the election of directors must comply with
procedures set forth in our bylaws.
Currently, our Nominating Committee consists 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 one
meeting during the fiscal year ended March 31, 2006.
The current Nominating Committee charter is available at our Web
site located at www.gnss.com.
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
8
Audit Committee, and recommends to the Board of Directors the
adoption of any measures it deems advisable for the improvement
of disclosure controls and procedures. Currently, our Corporate
Governance Committee consists of Messrs. Christoffersen,
Chang and Reddy. Mr. Christoffersen serves as chairman of
this committee. The Corporate Governance Committee met four
times during the fiscal year ended March 31, 2006.
The current Corporate Governance Committee charter is available
at our Web site located at www.gnss.com.
Corporate Governance.
We believe transparent, effective, and accountable corporate
governance practices are key elements of our relationship with
our stockholders. To help our stockholders understand our
commitment to this relationship and our governance practices,
several of our key governance initiatives are summarized below.
Corporate Governance Guidelines. Our Board of Directors
has adopted Corporate Governance Guidelines which govern, among
other things, Board member criteria (including limits on the
number of boards upon which directors may serve),
responsibilities, compensation and education, Board committee
composition and charters, management succession, and Board
self-evaluation. You can access these Corporate Governance
Guidelines, along with other materials such as committee
charters, on our website at www.gnss.com.
Code of Ethics. We have adopted a code of ethics that
applies to our principal executive officer and all members of
our finance department, including the principal financial
officer and principal accounting officer. This code of ethics
Code of Ethics-Financial, as well as Code of
Business Conduct and Ethics, which applies to all
employees generally, are posted on our Website. The Internet
address for our Website is http://www.gnss.com, and the both
codes of ethics may be found as follows:
|
|
|
1. From our main Web page, first click on
Company, |
|
|
2. Next, click on Corporate Governance. |
|
|
3. Finally, click on Code of Business Conduct and
Ethics or Code of Ethics-Financial. |
We intend to satisfy the disclosure requirement under
Item 5.05(c) of
Form 8-K regarding
certain amendments to, or waivers from, a provision of this code
of ethics by posting such information on our website, at the
address and location specified above, within four business days
of such amendment or waiver.
Director attendance at annual meetings. 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 two
directors elected at the September 13, 2005 annual meeting
and the five continuing directors who were not up for
re-election at that meeting, all seven directors attended that
meeting.
Director continuing education. Pursuant to the
Companys Corporate Governance Guidelines, the Company
encourages the directors to attend appropriate continuing
education classes every two years. During the last two years,
each member of our Board of Directors attended a director
education program endorsed by Institutional Shareholder Services.
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.
Upon first joining the Board of Directors, non-employee
directors receive options to purchase a total of
25,000 shares of our common stock, 15,000 of which are
automatically issued pursuant to the terms of our
9
1997 Non-Employee Stock Option Plan, and 10,000 of which are
issued under our 2000 Nonstatutory Stock Option Plan. Since the
option pool in our 1997 Non-Employee Stock Option Plan is
depleted, we grant 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. However, the
Board of Directors elected to reduce their fiscal 2006 grants
from 10,000 shares to 8,000 shares, plus
2,500 shares 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 October 1, 2005 at an exercise
price of $21.95 per share. No other stock option grants
were made to non-employee directors in fiscal 2006.
Non-employee directors may also be granted stock options under
the terms of our 2000 Nonstatutory Stock Option Plan or our 2001
Nonstatutory Stock Option Plan.
The following table summarizes the retainers and attendance fees
and the number of stock option grants that were made to our
non-employee directors, in their capacity as non-employee
directors, during fiscal 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discretionary | |
|
Retainers and | |
|
|
Initial Option | |
|
Automatic Annual | |
|
Option | |
|
Attendance | |
Name |
|
Grants | |
|
Grants | |
|
Grants | |
|
Fees ($) | |
|
|
| |
|
| |
|
| |
|
| |
Jon Castor
|
|
|
|
|
|
|
13,000 |
|
|
|
|
|
|
|
42,000 |
|
Chieh Chang
|
|
|
|
|
|
|
13,000 |
|
|
|
|
|
|
|
35,500 |
|
Tim Christoffersen
|
|
|
|
|
|
|
13,000 |
|
|
|
|
|
|
|
44,500 |
|
Jeffrey Diamond
|
|
|
|
|
|
|
13,000 |
|
|
|
|
|
|
|
45,000 |
|
Robert H. Kidd
|
|
|
|
|
|
|
13,000 |
|
|
|
|
|
|
|
51,000 |
|
Chandrashekar M. Reddy
|
|
|
|
|
|
|
10,500 |
|
|
|
|
|
|
|
33,500 |
|
PROPOSAL 2 APPOINTMENT OF INDEPENDENT
ACCOUNTANTS
Stockholders of the Company are being asked to ratify the
appointment of KPMG LLP in Canada as independent accountants for
the fiscal year ending March 31, 2007.
We have selected KPMG as our independent accountants for the
2007 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 2006 and 2005 were as follows:
|
|
|
|
|
|
|
|
|
|
|
2006 | |
|
2005 | |
|
|
| |
|
| |
Audit Fees
|
|
$ |
815,790 |
|
|
$ |
833,023 |
|
Audit-Related Fees
|
|
|
180,183 |
|
|
|
218,843 |
|
Tax Fees
|
|
|
333,483 |
|
|
|
522,529 |
|
All Other Fees
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
|
Total Fees
|
|
|
1,329,456 |
|
|
|
1,574,395 |
|
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, 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.
10
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 2006, 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 2006, all fees identified above under the
captions Audit-Related Fees and 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.
This proposal to ratify the appointment of KPMG 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 proposal.
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, 2007.
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,
2006 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of | |
|
|
|
|
|
|
Securities | |
|
|
|
|
|
|
Available for | |
|
|
|
|
|
|
Issuance Under | |
|
|
Number of | |
|
|
|
Equity | |
|
|
Securities to | |
|
|
|
Compensation | |
|
|
be Issued | |
|
Weighted-Average | |
|
Plans | |
|
|
Upon Exercise | |
|
Exercise Price of | |
|
(Excluding | |
|
|
of Outstanding | |
|
Outstanding | |
|
Securities | |
|
|
Options, | |
|
Options, | |
|
Reflected in | |
|
|
Warrants and | |
|
Warrants and | |
|
the First | |
Plan Name and Type |
|
Rights | |
|
Rights | |
|
Column) | |
|
|
| |
|
| |
|
| |
Equity compensation plans approved by stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
1997 Employee Stock Purchase Plan*
|
|
|
N/A |
|
|
|
N/A |
|
|
|
319,535 |
|
1987 Stock Option Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
1997 Employee Stock Option Plan(1)
|
|
|
2,797,297 |
|
|
|
15.00 |
|
|
|
1,573,284 |
|
1997 Non-Employee Stock Option Plan
|
|
|
205,480 |
|
|
|
17.80 |
|
|
|
9,675 |
|
Equity compensation plans not formally approved by
stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
2000 Non-Statutory Stock Option Plan
|
|
|
2,512,025 |
|
|
|
16.20 |
|
|
|
478,780 |
|
2001 Non-Statutory Stock Option Plan(1)
|
|
|
371,693 |
|
|
|
19.83 |
|
|
|
59,763 |
|
2003 Stock Plan(1)
|
|
|
895,000 |
|
|
|
17.21 |
|
|
|
89,583 |
|
Equity compensation plans assumed on acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
1997 Paradise Stock Option Plan
|
|
|
1,867 |
|
|
|
0.74 |
|
|
|
|
|
Sage Stock Option Plan(1)
|
|
|
343,996 |
|
|
|
23.22 |
|
|
|
|
|
Total*
|
|
|
7,127,358 |
|
|
|
16.31 |
|
|
|
2,530,620 |
|
|
|
* |
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 June 30, 2006 (the last trading day of
the most recent offering period) was $11.56. |
|
(1) |
This plan explicitly permits repricing of options granted under
the plan. |
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 of Directors 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.
|
|
|
Eligibility to Participate in the Plan |
Nonstatutory stock options and stock appreciation rights may be
granted to our employees, consultants and directors, and to
employees and consultants of our parent or subsidiary companies.
|
|
|
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 equal to the lesser of 2,000,000 shares, 3.5% of
the outstanding shares, or a lesser amount determined by the
Board.
|
|
|
Awards Permitted Under the Plan |
The plan authorizes the granting of nonstatutory stock options
and stock appreciation rights 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.
|
|
|
Terms of Stock Appreciation Rights |
The plans administrator is able to grant stock
appreciation rights, which are the rights to receive the
appreciation in fair market value of common stock between the
exercise date and the date of grant. We can pay the appreciation
in either cash or shares of common stock. Stock appreciation
rights will become exercisable at the times and on the terms
established by the plan administrator, subject to the terms of
the plan. The plan administrator, subject to the terms of the
plan, has complete discretion to determine the terms and
conditions of stock appreciation rights granted under the plan,
provided, however, that the exercise price will not be less than
100% of the fair market value of a share on the date of grant.
13
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.
|
|
|
Dissolution or Liquidation |
In the event of the proposed dissolution or liquidation of our
Company, the award holders will be notified of such event, and
the plan administrator may, in its discretion, permit each award
to fully vest and be exercisable until ten (10) days prior
to such event, at which time the awards will terminate.
|
|
|
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) and stock appreciation rights, in the
event of a merger or proposed sale of all or substantially all
of the assets of our Company, each outstanding award 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 awards, 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 awards will terminate
upon the expiration of such period.
Awards may not be assigned or transferred for any reason (other
than upon death), except that the plan administrator may permit
awards 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.
|
|
|
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.
|
|
|
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 with
an exercise price equal to the fair market value of the
underlying stock on the date of grant. 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.
No taxable income is reportable when a stock appreciation right
with an exercise price equal to the fair market value of the
underlying stock on the date of grant is granted to an optionee.
Upon exercise, the
14
optionee will recognize ordinary income in an amount equal to
the amount of cash received and the fair market value of any
shares received. Any additional gain or loss recognized upon any
later disposition of the shares would be capital gain or loss.
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 an award.
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 and stock appreciation rights 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.
The plan provides for administration by our Board of Directors
or a committee appointed by the Board of Directors 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.
|
|
|
Eligibility to Participate in the Plan |
Nonstatutory stock options may be granted to our employees
including officers, consultants and directors.
|
|
|
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,
15
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.
|
|
|
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.
|
|
|
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.
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.
|
|
|
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.
|
|
|
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 of Directors 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
16
by us may receive awards under the Plan. Our Board of Directors
or a committee appointed by the Board of Directors 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 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, 2006,
89,583 shares remain for future issuance. By its terms, the
Plan will automatically terminate in 2013, unless earlier
terminated by the Board of Directors.
17
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, 2006 for:
|
|
|
|
|
each of our current directors and director nominees, as well as
our Chief Executive Officer and our other four most highly
compensated executive officers during the fiscal year ended
March 31, 2006; |
|
|
|
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, 2006 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 and restricted stock units exercisable
within sixty (60) days of July 1, 2006 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 36,126,459 shares of common stock
outstanding on July 1, 2006. Unless otherwise indicated,
the principal address of each stockholder listed below is
c/o Genesis Microchip Inc., 2150 Gold Street, Alviso,
California 95002.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of | |
|
|
|
|
|
|
Shares of | |
|
|
|
|
|
|
Common Stock | |
|
|
|
|
|
|
Issuable | |
|
Total Number of | |
|
|
|
|
Pursuant to | |
|
Shares of | |
|
|
|
|
Options and | |
|
Common Stock | |
|
Percentage of | |
|
|
Restricted Stock | |
|
Beneficially | |
|
Outstanding | |
Name |
|
Units | |
|
Owned | |
|
Common Stock | |
|
|
| |
|
| |
|
| |
Eastbourne Capital Management, L.L.C.(1)
|
|
|
|
|
|
|
5,300,000 |
|
|
|
14.7 |
% |
|
1101 Fifth Avenue, Suite 160
San Rafael, CA 94901 |
|
|
|
|
|
|
|
|
|
|
|
|
Kennedy Capital Management, Inc.(2)
|
|
|
|
|
|
|
3,642,232 |
|
|
|
10.1 |
% |
|
10829 Olive Blvd.
St. Louis, Missouri 63141 |
|
|
|
|
|
|
|
|
|
|
|
|
D.E. Shaw Valence Portfolios, L.L.C.(3)
|
|
|
|
|
|
|
2,334,462 |
|
|
|
6.5 |
% |
|
120 W.
45th Street,
39th Floor
New York, NY 10036 |
|
|
|
|
|
|
|
|
|
|
|
|
Elias Antoun
|
|
|
218,750 |
|
|
|
226,332 |
|
|
|
* |
|
Raphael Mehrbians(4)
|
|
|
75,515 |
|
|
|
78,202 |
|
|
|
* |
|
Ernest Lin
|
|
|
59,375 |
|
|
|
62,083 |
|
|
|
* |
|
Anders Frisk(5)
|
|
|
124,327 |
|
|
|
127,028 |
|
|
|
* |
|
Mohammad Tafazzoli(6)
|
|
|
72,750 |
|
|
|
74,686 |
|
|
|
* |
|
Jon Castor
|
|
|
19,583 |
|
|
|
19,583 |
|
|
|
* |
|
Chieh Chang
|
|
|
29,583 |
|
|
|
43,320 |
|
|
|
* |
|
Tim Christoffersen
|
|
|
48,333 |
|
|
|
48,333 |
|
|
|
* |
|
Jeffrey Diamond(7)
|
|
|
98,333 |
|
|
|
112,887 |
|
|
|
* |
|
Robert H. Kidd
|
|
|
53,333 |
|
|
|
53,333 |
|
|
|
* |
|
Chandrashekar M. Reddy
|
|
|
50,417 |
|
|
|
181,972 |
|
|
|
* |
|
Directors and Named Executive Officers as a group
(11 persons)(7)
|
|
|
850,229 |
|
|
|
1,027,759 |
|
|
|
2.8 |
% |
18
|
|
* |
Less than one percent (1%) |
|
(1) |
Based on information contained in a Schedule 13F filed
March 31, 2006. |
|
(2) |
Based on information contained in a Schedule 13G filed
June 9, 2006. |
|
(3) |
Based on information contained in a Schedule 13G filed
July 3, 2006. |
|
(4) |
Includes 80 restricted stock units vesting within sixty
(60) days of July 1, 2006. |
|
(5) |
Includes 54 restricted stock units vesting within sixty
(60) days of July 1, 2006. |
|
(6) |
Includes 67 restricted stock units vesting within sixty
(60) days of July 1, 2006. |
|
(7) |
Includes 14,554 shares owned by Diamond Family Trust, a
trust established for the benefit of Mr. Diamond and his
family. |
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, 2006,
except on May 11, 2005, Anders Frisk exercised an option
for 5,000 shares and sold such shares, which such
transaction was first reported on a Form 4 filed on
May 31, 2005.
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.
19
Executive Compensation
Summary Compensation Table
The following table contains information about compensation paid
to our Chief Executive Officer and to our four other most highly
compensated executive officers for our fiscal year ended
March 31, 2006 and the compensation of those individuals in
fiscal years 2005 and 2004, where applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Compensation | |
|
|
|
|
|
|
| |
|
|
|
|
Annual Compensation | |
|
Securities | |
|
|
|
|
Fiscal | |
|
| |
|
Underlying | |
|
All Other | |
|
|
Year | |
|
Salary ($) | |
|
Bonus ($) | |
|
Options (#) | |
|
Compensation ($) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
Elias Antoun(1)(2)
|
|
|
2006 |
|
|
|
350,004 |
|
|
|
297,500 |
|
|
|
|
|
|
|
5,400 |
|
|
Chief Executive Officer and President |
|
|
2005 |
|
|
|
119,360 |
|
|
|
|
|
|
|
500,000 |
|
|
|
2,100 |
|
Raphael Mehrbians(2)(4)
|
|
|
2006 |
|
|
|
225,500 |
|
|
|
100,980 |
|
|
|
25,500 |
|
|
|
58,256 |
|
|
Senior Vice President, |
|
|
2005 |
|
|
|
222,538 |
|
|
|
15,000 |
|
|
|
51,667 |
|
|
|
58,556 |
|
|
Product Marketing |
|
|
2004 |
|
|
|
193,249 |
|
|
|
|
|
|
|
50,000 |
|
|
|
58,220 |
|
Ernest Lin(2)(3)
|
|
|
2006 |
|
|
|
233,622 |
|
|
|
149,813 |
|
|
|
|
|
|
|
6,600 |
|
|
Senior Vice President, |
|
|
2005 |
|
|
|
55,879 |
|
|
|
15,000 |
|
|
|
150,000 |
|
|
|
1,800 |
|
|
Worldwide Sales Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anders Frisk(2)
|
|
|
2006 |
|
|
|
266,825 |
|
|
|
113,815 |
|
|
|
17,000 |
|
|
|
7,200 |
|
|
Executive Vice President |
|
|
2005 |
|
|
|
259,999 |
|
|
|
252,100 |
|
|
|
43,000 |
|
|
|
7,200 |
|
|
|
|
|
2004 |
|
|
|
250,000 |
|
|
|
|
|
|
|
20,000 |
|
|
|
100 |
|
Mohammad Tafazzoli(2)(4)
|
|
|
2006 |
|
|
|
231,500 |
|
|
|
108,438 |
|
|
|
21,250 |
|
|
|
7,200 |
|
|
Senior Vice President, Operations |
|
|
2005 |
|
|
|
220,000 |
|
|
|
10,000 |
|
|
|
40,000 |
|
|
|
7,200 |
|
|
|
|
|
2004 |
|
|
|
210,000 |
|
|
|
|
|
|
|
50,000 |
|
|
|
|
|
|
|
(1) |
Mr. Antoun became our Chief Executive Officer and President
in November 2004. For details regarding his employment
agreement, see description under the caption Employment
Agreements with Mr. Antoun. |
|
(2) |
Fiscal 2006 bonus amount was paid pursuant to the Fiscal 2006
Executive Bonus Plan in fiscal 2007. |
|
(3) |
Mr. Lin became our Senior Vice President, Worldwide Sales
in January 2005. |
|
(4) |
Fiscal 2005 bonus was paid in fiscal 2006. |
Employment contracts, termination of employment and
change-in-control
arrangements
|
|
|
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.
|
|
|
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,
20
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.
|
|
|
Employment Letter with Mr. Lin |
On January 10, 2005, we entered into an employment letter
with Mr. Lin, who currently serves as our Senior Vice
President, Worldwide Sales. In addition to base salary, bonus
and other benefits, Mr. Lin was granted a stock option with
standard four-year vesting.
|
|
|
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.
|
|
|
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.
|
|
|
Employment and Severance Agreement Relating to Change of
Control |
Mr. Antoun has entered into a change of control severance
agreement that will provide certain benefits upon an involuntary
termination of employment following a change of control of
Genesis. The agreement terminates on the earlier of (i) two
(2) years after a change of control of Genesis, or
(ii) the date that all obligations of the parties hereto
under the agreement have been satisfied, provided that if there
has not been a change of control as of November 15, 2006,
the agreement automatically terminates. The agreement generally
provides 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:
|
|
|
|
|
a lump sum severance payment equal to 12 months of the
executives base salary; |
|
|
|
a lump sum bonus payment equal to the prorated portion, based on
the number of full months Mr. Antoun was employed by
Genesis during the fiscal year in which his termination of
employment occurs, of the full target bonus, if any, that
Mr. Antoun would have earned if he had been employed for
the full fiscal year and if 100% of the objectives for receiving
the target bonus were met; |
|
|
|
fifty percent (50%) of unvested stock options become immediately
vested and exercisable, and fifty percent (50%) of
Genesiss right of repurchase shall lapse with respect to
restricted stock held by the executive prior to the change of
control; |
|
|
|
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 |
|
|
|
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. |
21
The agreement also generally provides 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:
|
|
|
|
|
a lump sum severance 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; |
|
|
|
a lump sum bonus payment equal to the prorated portion, based on
the number of full months Mr. Antoun was employed by
Genesis during the fiscal year in which his termination of
employment occurs, of the full target bonus, if any, that
Mr. Antoun would have earned if he had been employed for
the full fiscal year and if 100% of the objectives for receiving
the target bonus were met; |
|
|
|
fifty percent (50%) of unvested stock options become immediately
vested and exercisable, and fifty percent (50%) of
Genesiss right of repurchase shall lapse with respect to
restricted stock held by the executive prior to the change of
control; |
|
|
|
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 |
|
|
|
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, 2006
The following table contains information about stock option
grants made during the year ended March 31, 2006 to our
Chief Executive Officers and to our four other most highly
compensated executive officers in fiscal 2006. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants | |
|
|
|
|
| |
|
Potential Realizable | |
|
|
|
|
% of Total | |
|
|
|
Value at Assumed | |
|
|
Number of | |
|
Options | |
|
|
|
Annual Rates of Stock | |
|
|
Securities | |
|
Granted to | |
|
|
|
Price Appreciation for | |
|
|
Underlying | |
|
Employees | |
|
Exercise | |
|
|
|
Option Term | |
|
|
Options | |
|
in Fiscal | |
|
Price per | |
|
Expiration | |
|
| |
Name |
|
Granted | |
|
Year | |
|
Share | |
|
Date | |
|
5% | |
|
10% | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Elias Antoun
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raphael Mehrbians
|
|
|
25,500 |
|
|
|
3.4 |
% |
|
$ |
19.50 |
|
|
|
10/25/2011 |
|
|
$ |
202,431 |
|
|
$ |
471,750 |
|
Ernest Lin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anders Frisk
|
|
|
17,000 |
|
|
|
2.2 |
% |
|
$ |
19.50 |
|
|
|
10/25/2011 |
|
|
$ |
134,954 |
|
|
$ |
314,500 |
|
Mohammad Tafazzoli
|
|
|
21,250 |
|
|
|
2.8 |
% |
|
$ |
19.50 |
|
|
|
10/25/2011 |
|
|
$ |
168,692 |
|
|
$ |
393,125 |
|
22
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 Officer and our four other most highly
compensated executive officers in the year ended March 31,
2006 and their option holdings as of March 31, 2006.
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 $17.04 per share on The Nasdaq National
Market on March 31, 2006 as the estimated fair market value
of our common stock in determining the value of unexercised
options.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
Value of Unexercised | |
|
|
|
|
|
|
Underlying Unexercised | |
|
In-the-Money | |
|
|
Number of | |
|
|
|
Options at | |
|
Options at | |
|
|
Shares | |
|
Value | |
|
Fiscal Year End | |
|
Fiscal Year End ($) | |
|
|
Acquired on | |
|
Received | |
|
| |
|
| |
Name |
|
Exercise | |
|
($) | |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Elias Antoun
|
|
|
|
|
|
|
|
|
|
|
166,667 |
|
|
|
333,333 |
|
|
|
24,167 |
|
|
|
48,333 |
|
Raphael Mehrbians(1)
|
|
|
65,972 |
|
|
|
767,006 |
|
|
|
52,050 |
|
|
|
69,145 |
|
|
|
322,349 |
|
|
|
165,335 |
|
Ernest Lin
|
|
|
|
|
|
|
|
|
|
|
43,750 |
|
|
|
106,250 |
|
|
|
30,187 |
|
|
|
73,312 |
|
Anders Frisk(2)
|
|
|
150,292 |
|
|
|
1,476,378 |
|
|
|
99,585 |
|
|
|
67,625 |
|
|
|
166,868 |
|
|
|
163,131 |
|
Mohammad Tafazzoli(3)
|
|
|
97,063 |
|
|
|
1,217,354 |
|
|
|
51,667 |
|
|
|
62,500 |
|
|
|
109,233 |
|
|
|
81,967 |
|
|
|
(1) |
Number of Securities Underlying Unexercised Options at Fiscal
Year End and Value of Unexercised
in-the-Money Options at
Fiscal Year End does not include 1,286 restricted stock units
that were unvested as of March 31, 2006. |
|
(2) |
Number of Securities Underlying Unexercised Options at Fiscal
Year End and Value of Unexercised
in-the-Money Options at
Fiscal Year End does not include 857 restricted stock units that
were unvested as of March 31, 2006. |
|
(3) |
Number of Securities Underlying Unexercised Options at Fiscal
Year End and Value of Unexercised
in-the-Money Options at
Fiscal Year End does not include 1,071 restricted stock units
that were unvested as of March 31, 2006. |
Compensation Committee interlocks and insider
participation
The members of our Compensation Committee during the fiscal year
ended March 31, 2006 were Messrs. Diamond and Chang.
Mr. Reddy became a member of our Compensation Committee on
May 25, 2006. 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 6 and Mr. Reddy as described in his
biography on page 5. 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 are directly linked to Genesiss performance, and
are designed to provide additional incentive cash compensation
based on short-term performance of Genesis and its employees.
For fiscal year 2007, Genesis has adopted a bonus plan for its
executives (Executive Bonus Plan) and for its
non-executive employees. The Executive Bonus Plan is designed to
provide incentive and motivation to the eligible executive
officers to achieve the companys financial and operational
plans. Eligible executive officers under the Executive Bonus
Plan include our CEO and members of his executive staff. The
Executive Bonus Plan will only be paid if certain financial
objectives, as described in the Executive Bonus Plan, are
achieved. The bonus amount to be paid to eligible executive
officers pursuant to the Executive Bonus Plan during its fiscal
year 2007 will generally be based on the achievement of certain
financial goals of the company (based on revenue and non-GAAP
operating income targets for fiscal year 2007) and individual
performance objectives of each of the eligible executive
officers. The eligible executive officers have a bonus target
specified as a percentage of their annual base salary at various
achievement levels as described in the Executive Bonus Plan. The
combined bonuses paid under the Executive Bonus Plan and the
non-executive employee bonus plan shall not exceed 15% of the
companys non-GAAP operating income. For more information,
please refer to the Executive Bonus Plan itself, which was filed
as an exhibit to our Annual Report on
Form 10-K for the
fiscal year ended March 31, 2006.
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 salary for our Chief Executive Officer in fiscal 2006,
Mr. Elias Antoun, was 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 a prorated salary of $119,360 in fiscal year 2005
pursuant to his employment agreement, and $350,004 in fiscal
year 2006. Mr. Antoun did not receive a bonus for fiscal
year 2005. For fiscal year 2006, Mr. Antoun was paid a
bonus of $297,500 based on the companys achievement of
110% of its financial goals and Mr. Antouns
performance with respect to his individual objectives, pursuant
to the companys Executive Bonus Plan for fiscal 2006,
which was filed on a Current Report on
Form 8-K on
May 6, 2005. Incentive options to
purchase 500,000 shares of our common stock were
granted to Mr. Antoun upon his employment as Chief
Executive Officer. No stock awards were granted to
Mr. Antoun in fiscal 2006.
24
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 |
|
|
Chandra Reddy |
July 28, 2006
25
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, 2001 to
March 31, 2006, the last trading date in our 2006 fiscal
year. It assumes $100 was invested on March 31, 2001 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
Total Nasdaq |
|
Date |
|
|
Genesis |
|
|
Peer Group |
|
|
Return |
|
|
|
|
| |
|
|
| |
|
|
| |
|
March 31, 2001
|
|
|
|
100.00 |
|
|
|
|
100.00 |
|
|
|
|
100.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2002
|
|
|
|
261.57 |
|
|
|
|
106.13 |
|
|
|
|
100.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2003
|
|
|
|
125.55 |
|
|
|
|
61.22 |
|
|
|
|
73.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2004
|
|
|
|
168.51 |
|
|
|
|
106.76 |
|
|
|
|
109.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2005
|
|
|
|
145.37 |
|
|
|
|
85.40 |
|
|
|
|
110.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2006
|
|
|
|
171.43 |
|
|
|
|
97.02 |
|
|
|
|
130.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26
The stock price performance shown on the graph is not
necessarily indicative of future price performance. Our closing
stock price on July 14, 2006, the record date, was $10.73.
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.
27
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 is filed
as an Exhibit to this 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 2006 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 2006.
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,
2006, 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, 2006
28
STOCKHOLDER PROPOSALS
You may present proposals for inclusion in our proxy statement
for consideration at our 2007 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 April 16, 2007 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 April 16, 2007, but on
or before June 14, 2007, 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 14, 2007 will be considered untimely
for our 2007 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.
|
|
|
By order of the Board of Directors, |
|
|
|
|
|
Ava M. Hahn |
|
Secretary |
July 28, 2006
29
Appendix I
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
GENESIS MICROCHIP INC.
as amended on July 21, 2006
PURPOSES:
The purposes of the Audit Committee of the Board of Directors
(the Board) of Genesis Microchip Inc. (the
Company) shall be to:
|
|
|
|
|
Oversee the accounting and financial reporting processes of the
Company and audits of the financial statements of the Company; |
|
|
|
Appoint independent auditors to audit the Companys
financial statements; |
|
|
|
Oversee and monitor (i) the integrity of the Companys
financial statements, (ii) the Companys compliance
with legal and regulatory requirements as they relate to
financial statements or accounting matters, (iii) the
independent auditors qualifications, independence and
performance, and (iv) the Companys internal
accounting and financial controls; |
|
|
|
Prepare the report that the rules of the Securities and Exchange
Commission (the SEC) require be included in the
Companys annual proxy statement; |
|
|
|
Provide the Companys Board with the results of its
monitoring and recommendations derived therefrom; and |
|
|
|
Provide to the Board such additional information and materials
as it may deem necessary to make the Board aware of significant
financial matters that require the attention of the Board. |
In addition, the Audit Committee will undertake those specific
duties and responsibilities listed below and such other duties
as the Board may from time to time prescribe.
MEMBERSHIP:
The Audit Committee members will be appointed by, and will serve
at the discretion of, the Board. The Audit Committee will
consist of at least three members of the Board. Members of the
Audit Committee must meet the following criteria (as well as any
criteria required by the SEC):
|
|
|
|
|
Each member will be an independent director, as defined by
(i) the rules of the Nasdaq Stock Market and (ii) the
rules and regulations of the SEC as in effect from time to time,
in each case, subject to any applicable exemptions or exceptions
in effect; |
|
|
|
No member will have participated in the preparation of the
financial statements of the Company or any current subsidiary of
the Company at any time during the past three years; |
|
|
|
Each member will be able to read and understand fundamental
financial statements, in accordance with the Nasdaq National
Market Audit Committee requirements; and |
|
|
|
At least one member will have past employment experience in
finance or accounting, requisite professional certification in
accounting, or other comparable experience or background,
including a current or past position as a principal financial
office or other senior officer with financial oversight
responsibilities. |
I-1
RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:
|
|
|
|
|
Reviewing on a continuing basis the adequacy of the
Companys system of internal controls, including meeting
periodically with the Companys management and the
independent auditors to review the adequacy of such controls and
to review before release the disclosure regarding such system of
internal controls required under SEC rules to be contained in
the Companys periodic filings and the attestations or
reports by the independent auditors relating to such disclosure; |
|
|
|
Appointing, compensating, retaining and overseeing the work of
the independent auditors (including resolving disagreements
between management and the independent auditors regarding
financial reporting) for the purpose of preparing or issuing an
audit report or performing other audit, review or attest
services or related work; and each such independent auditors
shall report directly to the Audit Committee; |
|
|
|
Pre-approving audit and non-audit services provided to the
Company by the independent auditors and other public accounting
firms (or subsequently approving non-audit services in those
circumstances where a subsequent approval is necessary and
permissible); in this regard, the Audit Committee shall have the
sole authority to approve the hiring and firing of the
independent auditors, all audit engagement fees and terms and
all non-audit engagements, as may be permissible, with the
independent auditors; |
|
|
|
Reviewing on a continuing basis the activities, organizational
structure and qualifications of the Companys internal
audit/financial control function; |
|
|
|
Reviewing and providing guidance with respect to the external
audit and the Companys relationship with its independent
auditors by (i) reviewing the independent auditors
proposed audit scope, approach and independence;
(ii) obtaining on a periodic basis a formal written
statement from the independent auditors regarding relationships
and services with the Company which may impact independence and
presenting this statement to the Board; (iii) actively
engaging in a dialogue with the independent auditors with
respect to any disclosed relationships or services that may
impact the objectivity and independence of the independent
auditors and recommending that the Board take appropriate action
to satisfy itself with regard to the auditors
independence; (iv) reviewing the independent auditors
peer review; (v) discussing with the Companys
independent auditors the financial statements and audit
findings, including any significant adjustments, management
judgments and accounting estimates, significant new accounting
policies and disagreements with management and any other matters
described in Statement of Accounting Standards (SAS)
No. 61, as may be modified or supplemented; and
(vi) reviewing reports submitted to the Audit Committee by
the independent auditors in accordance with the applicable SEC
requirements; |
|
|
|
Reviewing the performance of the Companys independent
auditors and determining whether it is appropriate to adopt a
voluntary policy of rotating independent auditors on a periodic
basis (and, if and when required by the Securities and Exchange
Commission, adopting a policy for the mandatory rotation of
independent auditors); |
|
|
|
Reviewing with management and the Companys independent
auditors such accounting policies (and changes therein) of the
Company, including any financial reporting issues which could
have a material impact on the Companys financial
statements, as are deemed appropriate for review by the Audit
Committee prior to any interim or year-end filings with the SEC
or other regulatory body; |
|
|
|
Reviewing and discussing with management and the independent
auditors the annual audited financial statements and quarterly
unaudited financial statements, including the Companys
disclosures under Managements Discussion and
Analysis of Financial Condition and Results of Operations,
prior to filing the Companys Annual Report on
Form 10-K and
Quarterly Reports on
Form 10-Q,
respectively, with the SEC; |
I-2
|
|
|
|
|
Directing the Companys independent auditors to review
before filing with the SEC the Companys interim financial
statements included in Quarterly Reports on
Form 10-Q, using
professional standards and procedures for conducting such
reviews; |
|
|
|
Recommending to the Board whether the audited financial
statements should be included in the Companys Annual
Report on
Form 10-K; |
|
|
|
Conducting a post-audit review of the financial statements and
audit findings, including any significant suggestions for
improvements provided to management by the independent auditors; |
|
|
|
Reviewing before release the unaudited quarterly operating
results in the Companys quarterly earnings release; |
|
|
|
Reviewing before release the disclosure regarding the
Companys system of accounting and internal controls
required under SEC rules to be contained in the Companys
periodic filings and the attestations or reports by the
independent auditors relating to such disclosure; |
|
|
|
Overseeing compliance with the requirements of the SEC for
disclosure of auditors services and Audit Committee
members, member qualifications and activities; |
|
|
|
Receiving periodic reports from the Companys independent
auditors and management of the Company to review the selection,
application and disclosure of the Companys significant
accounting policies and to assess the impact of other financial
reporting developments that may have a bearing on the Company,
including an analysis of the effect of alternative GAAP methods
on the Companys financial statements and a description of
any transactions as to which management obtained SAS No. 50
letters; |
|
|
|
Reviewing with management and the independent auditor the effect
of regulatory and accounting initiatives as well as off-balance
sheet structures on the Companys financial statements; |
|
|
|
Reviewing with management and the independent auditor any
correspondence with regulators or governmental agencies and any
employee complaints or published reports that raise material
issues regarding the Companys financial statements or
accounting policies; |
|
|
|
Review the findings of any examination by regulatory agencies
regarding the Companys financial statements or accounting
policies; |
|
|
|
Reviewing the experience and qualifications of the senior
members of the independent auditor team and the quality control
procedures of the independent auditor; |
|
|
|
Recommending to the Board guidelines for the Companys
hiring of employees of the independent auditor who were engaged
on the Companys account; |
|
|
|
Reviewing, in conjunction with counsel, any legal matters that
could have a significant impact on the Companys financial
statements; |
|
|
|
Reviewing the Companys policies relating to the avoidance
of conflicts of interest and reviewing past or proposed
transactions between the Company, members of the Board and
management as well as internal control policies and procedures
with respect to officers use of expense accounts and
perquisites, including the use of corporate assets. The Audit
Committee shall consider the results of any review of these
policies and procedures by the Companys independent
auditors; |
|
|
|
Providing oversight and review at least annually of the
Companys risk management policies, including its
investment policies and performance for cash and short-term
investments; |
|
|
|
Reviewing any auditing or accounting issues concerning the
Companys employee benefit plans; |
|
|
|
Overseeing and reviewing the Companys policies regarding
information technology and management information systems; |
I-3
|
|
|
|
|
If necessary, instituting special investigations relating to
financial statements or accounting policies with full access to
all books, records, facilities and personnel of the Company; |
|
|
|
As appropriate, obtaining advice and assistance from outside
legal, accounting or other advisors, and retaining such persons
to provide such services; |
|
|
|
Reviewing and approving in advance any proposed related party
transactions; |
|
|
|
Meeting at least quarterly with the chief financial officer, the
senior internal audit/financial control executive and the
independent auditor in separate executive sessions; |
|
|
|
Establishing and maintaining free and open means of
communication between the Audit Committee, the Companys
independent auditors, the Companys internal
audit/financial control department and management with respect
to auditing and financial control matters, including providing
such parties with appropriate opportunities to meet privately
with the Audit Committee; |
|
|
|
Establishing procedures for receiving, retaining and treating
complaints received by the Company regarding accounting,
internal accounting controls or auditing matters and procedures
for the confidential, anonymous submission by employees of
concerns regarding questionable accounting or auditing matters; |
|
|
|
Reviewing its own charter, structure, processes and membership
requirements on a periodic basis; |
|
|
|
Conducting an annual performance evaluation of the Audit
Committee and an evaluation of the adequacy of its charter; |
|
|
|
Providing a report in the Companys proxy statement in
accordance with the rules and regulations of the SEC; and |
|
|
|
Providing for appropriate funding, as determined by the Audit
Committee, for payment of compensation (i) to the
independent auditors for the purpose of rendering or issuing an
audit report or performing other audit, review or attest
services and (ii) to any legal, accounting or other
advisors employed by the Audit Committee. |
While the Audit Committee has the responsibilities and powers
set forth in this Charter, it is not the duty of the Audit
Committee to plan or conduct audits or to determine that the
Companys financial statements and disclosures are complete
and accurate and are in accordance with GAAP and applicable
rules and regulations.
MEETINGS:
The Audit Committee will meet as often as it determines, but not
less frequently than once quarterly.
The Audit Committee, in its discretion, will ask members of
management or others to attend its meetings (or portions
thereof) and to provide pertinent information as necessary. The
Audit Committee will meet separately with the Chief Executive
Officer and separately with the Chief Financial Officer of the
Company at such times as are appropriate to review the financial
affairs of the Company. The Audit Committee will meet
periodically in separate executive session with the independent
auditors as well as any internal auditors/financial controllers
of the Company, at such times as it deems appropriate to fulfill
the responsibilities of the Audit Committee under this charter.
The Board shall annually appoint the Committee and (if any) the
Chair of the Committee, immediately following the Companys
annual general meeting.
MINUTES:
The Audit Committee will maintain written minutes of its
meetings, which minutes will be filed with the minutes of the
meetings of the Board.
I-4
REPORTS:
In addition to preparing the report in the Companys proxy
statement in accordance with the rules and regulations of the
SEC, the Audit Committee will summarize its examinations and
recommendations to the Board as may be appropriate, consistent
with the Committees charter.
COMPENSATION:
Members of the Audit Committee shall receive such fees for their
service as Audit Committee members as may be determined by the
Board in its sole discretion. Such fees may include retainers or
per meeting fees. Fees may be paid in such form of consideration
as is determined by the Board.
Members of the Audit Committee may not receive any compensation
from the Company except the fees that they receive for service
as a member of the Board or any committee thereof.
DELEGATION OF AUTHORITY:
The Audit Committee may delegate to one or more designated
members of the Audit Committee the authority to pre-approve
audit and permissible non-audit services, provided such
pre-approval decision is presented to the full Audit Committee
at its scheduled meetings.
RESOURCES:
The Audit Committee shall have the authority necessary to
discharge its duties and responsibilities, including the
authority to engage independent counsel and other advisers as it
deems necessary to carry out its duties, without seeking the
approval of the Board or management. In addition, the Audit
Committee shall have appropriate funding (as determined by the
Audit Committee, in its capacity as a committee of the Board)
for payment of: (i) compensation to any independent auditor
engaged for the purposes of preparing or issuing an audit report
or performing other audit, review or attest services for the
Company, (ii) compensation to any advisors employed by the
Audit Committee and (iii) ordinary administrative expenses
of the Audit Committee that are necessary or appropriate in
carrying out its duties.
I-5
PROXY
GENESIS MICROCHIP INC.
Proxy for the Annual Meeting of Stockholders
To be held on September 12, 2006
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 12, 2006 at 11:00 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, 2006 (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:
|
|
|
View account status |
|
|
|
|
Make address changes |
|
|
View certificate history |
|
|
|
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.
|
|
|
SSN |
|
|
|
|
PIN |
|
|
|
|
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:
|
|
|
SSN |
|
|
|
|
PIN |
|
|
|
|
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.
|
|
|
Certificate History |
|
|
|
|
Issue Certificate |
|
|
|
|
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
|
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE NOMINEES FOR DIRECTOR
INDICATED IN PROPOSAL 1 AND FOR
PROPOSAL 2.
|
|
Please Mark Here for Address Change or
Comments
SEE REVERSE SIDE
|
|
o |
1. |
|
Election of two (2) nominees to the Board of Directors. |
Nominees:
01 Chandrashekar M. Reddy
02 Elias Antoun
|
|
|
|
|
FOR all nominees listed
above (except as marked
to the contrary below)
|
|
WITHHOLD AUTHORITY
to vote for all nominees
listed above
|
|
|
o
|
|
o |
|
|
INSTRUCTION: To withhold authority to vote for an individual
nominee, write the nominees name in the space provided:
|
|
|
|
|
|
|
|
|
2.
|
|
To ratify the appointment of KPMG LLP in
Canada as the Companys independent
accountants for the fiscal year ending March 31, 2007.
|
|
FOR
o
|
|
AGAINST
o
|
|
ABSTAIN
o |
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature:
|
|
|
|
Date:
|
|
|
|
Signature:
|
|
|
|
Date: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 ^