Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into by and
between Gemstar Development Corporation ("COMPANY" or "GEMSTAR") and Xxx Xxxxxx
("EMPLOYEE"), and is effective as of January 3, 2001 ("EFFECTIVE TIME").
WITNESSETH:
WHEREAS, Company and Employee desire to set forth in this Agreement the
terms and conditions of Employee's employment with Company:
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. PERIOD OF EMPLOYMENT.
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(a) Basic Term. The Company hereby employs Employee to render
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services to the Company in the position and with the duties and responsibilities
described in Section 2 for the period (the "PERIOD OF EMPLOYMENT") commencing,
without any further action by either party, at the Effective Time and ending on
the earlier of (i) five (5) years following the date of the Effective Time (the
"TERM DATE") and (ii) the date the Period of Employment is terminated in
accordance with Section 4.
(b) Relocation Condition. Obligations of the Company under this
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Agreement shall be conditioned upon Employee's satisfaction of certain
relocation requirements as follows: (a) commencing February 1, 2001, Employee
shall spend a minimum of three (3) working days in corporate headquarters
located in Pasadena, California, unless Employee is ill or otherwise required to
travel for business to another location, and (b) commencing July 1, 2001,
Employee shall complete his relocation to Pasadena, and shall report full time
to corporate headquarters in Pasadena, California.
2. POSITION, DUTIES AND RESPONSIBILITIES.
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(a) Position. Employee hereby accepts employment with the Company
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as a Deputy General Counsel and Senior Vice President reporting directly to
Xxxxx Xxxxx, Chief Financial Officer, Co-President and Co-COO of the Company, or
in such other direct-reporting position(s) as may be designated by Xxxxx Xxxxx
("SUPERVISOR").
(b) Constructive Termination. In the event that the Employee has
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been reassigned by the Company other than by Xxxxx Xxxx, Chief Executive Officer
or Supervisor, to a position with responsibilities which are substantially less
than that described in Section 2(a) above, such assignment shall constitute a
"constructive termination" of Employee and shall entitle Employee to be treated
as being terminated without cause as provided in Section 4(d) below.
(c) Other Activities. Employee, during the Period of Employment,
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will not (i) accept any other employment, or (ii) engage in any other business
activity (whether or not
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pursued for pecuniary advantage) that is competitive with, or that places him in
a competing position to that of, the Company or any Affiliated Company.
3. COMPENSATION, BENEFITS, ETC.
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(a) Compensation. In consideration of the services to be rendered
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hereunder, including, without limitation, services to any Affiliated Company,
Employee shall be paid an annual salary of Five Hundred Thousand Dollars
($500,000) (the "ANNUAL SALARY"), with a nonnegative annual adjustment based on
the Consumer Price Index for all urban Consumers, U.S. City Average, for all
items as published by the Bureau of Labor Statistics of the Department of Labor
("CPI") with the first adjustment on July 1, 2002, and subsequent adjustments on
July 1 of each year, payable in installments at the times and pursuant to the
procedures regularly established, and as they may be amended, by the Company
during the term of this Agreement.
(b) Stock Options. Within ten (10) days of the Effective Time,
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the Company shall grant to the Executive a nonqualified stock option under
Gemstar's 1994 Stock Incentive Plan to purchase such number of shares of Gemstar
Ordinary Shares, par value $.01 per share (the "ORDINARY SHARES"), the
Black-Scholes valuation of which on the day of the grant is equal to Five
Million Dollars ($5,000,000), at an exercise price per share equal to the fair
market value of the Ordinary Shares on the day of the grant (the "EXERCISE
PRICE"), vested in equal annual installments over five (5) years as summarized
in Schedule A attached hereto and by this reference incorporated herein. Such
option shall be evidenced by a standard stock option agreement utilized by
Gemstar for the grant of other stock options under such plan and shall contain
vesting and other terms which are consistent with the grants of stock options
made to other executives of the Company. A copy of such Option Agreement is
attached hereto as Exhibit B and by this reference incorporated herein.
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(c) Benefits. As Employee becomes eligible therefor, the Company
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shall provide Employee with the right to participate in and to receive benefits
from all present and future life, accident, disability, medical, pension and
savings plans and all similar benefits made available generally to executives of
the Company. The amount and extent of benefits to which Employee is entitled
shall be governed by the specific benefit plan, as it may be amended from time
to time.
(d) Expenses. The Company shall reimburse Employee for reasonable
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travel and other business expenses incurred by Employee in the performance of
his duties hereunder in accordance with the Company's general policies, as they
may be amended from time to time during the term of this Agreement.
(e) Bonus. Employee shall also be eligible to receive, in the
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sole and absolute discretion of the Supervisor, as may be approved by the
Compensation Committee, if necessary, an annual bonus up to twenty percent (20%)
of the Annual Salary.
(f) Automobile Allowance. As additional compensation for
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Employee's services to the Company, the Company shall pay Employee a monthly
automobile allowance of $750 during the Period of Employment.
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(g) Vacation. Employee shall be entitled to three weeks paid
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vacation per calendar year.
(h) Relocation. To compensate for any and all expenses incurred
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by the Employee in relocating to Pasadena, the Company shall pay to Employee the
amount of One Hundred and Eighty Five Thousand ($185,000) upon execution of this
Agreement. In the event that Employee has not relocated by July 1, 2001, the
Company shall have the right to demand repayment of such amount or in its
discretion, deduct the same from Employee's salary until full repayment. In the
event Employee makes a request to Company accompanied by three industry standard
appraisals on or before October 31, 2001, Company shall purchase Employee's
existing home in Livermore, California in cash for an amount which is equal to
the average of the prices of the three appraisals. Escrow shall close within 30
days of the receipt of request, subject to customary terms and conditions. In
the event Employee does not make such request and retains a real estate agent
for the sale of his home in Livennore, California, then the Company shall
reimburse Employee for the real estate commission within 30 days of the
presentation of the receipt for payment of commission. In the future event
Employee's employment with the Company requires him to relocate, the parties to
this Agreement will mutually agree, in good faith, on an appropriate relocation
reimbursement amount.
4. TERMINATION OF EMPLOYMENT.
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(a) By Death. The Period of Employment shall terminate
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automatically upon the death of Employee. The Company shall pay to Employee's
beneficiaries or estate, as appropriate, the compensation to which he is
entitled pursuant to Section 3(a) through the end of the month in which death
occurs. Thereafter, the Company's obligations hereunder shall terminate. Nothing
in this section shall affect any entitlement of Employee's heirs to the benefits
under any life insurance plan.
(b) By Disability. If, in the sole opinion of the Board, Employee
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shall be prevented from properly performing his duties hereunder by reason of
any physical or mental incapacity for a period of more than 150 days in the
aggregate or 120 consecutive days in any twelve-month period, then, to the
extent permitted by law, the Period of Employment shall terminate and the
compensation to which Employee is entitled pursuant to Section 3(a) shall be
paid up through the last day of the month in which the Board determines Employee
to be disabled hereunder, and thereafter the Company's obligations hereunder
shall terminate. Nothing in this section shall affect Employee's rights under
any disability plan in which he is a participant.
(c) By Company For Cause. The Company may terminate, without
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liability, the Period of Employment for Cause (as defined below) at any time
upon written notice to Employee. Termination shall be for "Cause" if: (i)
Employee has engaged in illegal or other wrongful conduct substantially
detrimental to the business or reputation of the Company or any Affiliated
Company, or is charged with or convicted of a felony; (ii) Employee refuses or
fails to act in accordance with any reasonable direction or order of the
Supervisor; provided, that the Supervisor has given Employee written notice of
such refusal or failure and Employee fails to comply with such direction or
order within 30 days after the date of such notice; or
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(iii) Employee has engaged in any fraud, embezzlement, misappropriation or
similar conduct against the Company.
(d) By Company Without Cause. The Company may terminate the
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Period of Employment without Cause at any time upon written notice to Employee
("NOTICE OF TERMINATION WITHOUT CAUSE"). Upon such termination, and subject to
Employee's continuing compliance with the provisions of Sections 3(e), 5 and 6
hereof, the Company shall continue to employ Employee up to the date of
terminations specified in the Notice of Termination Without Cause, and on the
date of termination, subject to Employee's execution of a full release of claims
against the Company, the Company shall pay Employee a lump sum payment of an
amount equal to the difference between (x) twenty-four (24) months of salary,
based on the then current Annual Salary, (y) the cumulative salary received by
Employee commencing from the date of the Notice of Termination Without Cause
through the date of termination. The Company shall further pay Employee his cash
equivalent of any unused vacation time. In the event that on the date of Notice
of Termination Without Cause, the Employee has vested less than forty percent
(40%) of the Stock Options granted under Section 3(b) above, an additional
number of shares of option shall accelerate and vest so that the percentage of
vested stock options granted under Section 3(b) above shall be equal to forty
percent (40%). Thereafter all obligations of the Company hereunder shall
terminate.
(e) Termination Obligations.
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(i) Employee hereby acknowledges and agrees that all
personal property, including, without limitation, all books, manuals, records,
reports, notes, contracts, lists, blueprints and other documents, or materials,
or copies thereof, Proprietary Information (as defined below), furnished to or
prepared by Employee in the course of or incident to his employment, including,
without limitation, records and any other materials pertaining to Invention
Ideas (as defined below), belong to the Company.
(ii) Upon termination of the Period of Employment, Employee
shall be deemed to have resigned from all offices then held with the Company or
any Affiliated Company, including any seats on any Board or Boards, subject to
then applicable law.
(iii) The representations and warranties contained herein
and Employee's obligations under Sections 5, 6 and 7 shall survive termination
of the Period of Employment and the expiration of this Agreement.
5. PROPRIETARY INFORMATION.
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(a) Defined. "PROPRIETARY INFORMATION" is all information and any
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idea in whatever form, tangible or intangible, pertaining in any manner to the
business of the Company or any Affiliated Company, or to its clients,
consultants or business associates, unless: (i) the information is or becomes
publicly known through lawful means; (ii) the information was rightfully in
Employee's possession or part of his general knowledge prior to his employment
by the Company; or (iii) the information is disclosed to Employee without
confidential or proprietary restriction by a third party who rightfully
possesses the information (without
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confidential or proprietary restriction) and did not learn of it, directly or
indirectly, from the Company.
(b) General Restrictions on Use. Employee agrees to hold all
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Proprietary Information in strict confidence and trust for the sole benefit of
the Company and not to, directly or indirectly, disclose, use, copy, publish,
summarize or remove from the Company's premises any Proprietary Information (or
remove from the premises any other property of the Company), except (i) during
the Period of Employment to the extent necessary to carry out Employee's
responsibilities under this Agreement, and (ii) after termination of the Period
of Employment as specifically authorized in writing by the Board.
(c) Interference with Business; Competitive Activities. Employee
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acknowledges that pursuit of the activities prohibited by this Section 5(c)
would necessarily involve the use or disclosure of Proprietary Information in
breach of Section 5(b), but that proof of such breach would be extremely
difficult. To prevent such disclosure, use and breach and in consideration of
employment under this Agreement, Employee agrees for a period of three (3) years
after termination of the Period of Employment, he shall not for himself or any
third party, directly or indirectly, (i) divert or attempt to divert from the
Company (or any Affiliated Company) any business of any kind in which it is
engaged, including, without limitation, the solicitation of or interference with
any of its suppliers or customers, (ii) employ, solicit for employment, or
recommend for employment any person employed by the Company, or any Affiliated
Company, during the period of such person's employment and for a period of one
(1) year thereafter, or (iii) engage in any business activity that is
competitive with the Company, unless Employee can prove that action taken in
contravention of this Section 5(c)(iii) was done without the use of any
Proprietary Information; provided, that in no event shall Employee engage in
such competitive activities during the period which Employee continues to
receive payments pursuant to Section 4 above. For purposes of this Section 5(c),
"competitive activities" shall be business activities that are directly
competitive with an existing or presently planned business of the Company on the
date of termination.
(d) Remedies. Nothing in this Section 5 is intended to limit any
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remedy of the Company under the California Uniform Trade Secrets Act (California
Civil Code (S) 3426), or otherwise available under law.
6. EMPLOYEE INVENTIONS AND IDEAS.
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(a) Defined; Statutory Notice. The term "INVENTION IDEAS" means
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any and all ideas, processes, trademarks, service marks, inventions, technology,
computer programs, original works of authorship, designs, formulas, discoveries,
patents, copyrights, and all improvements, rights, and claims related to the
foregoing that are conceived, developed, or reduced to practice by the Employee
alone or with others except to the extent that California Labor Code Section
2870 lawfully prohibits the assignment of rights in such ideas, processes,
inventions, etc. Section 2870(a) provides:
Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to
an invention
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that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or
trade secret information except for those inventions that either;
(i) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(ii) Result from any work performed by the employee for the
employer.
Employee hereby acknowledges that he understands the foregoing
limitations created by Section 2870.
(b) Disclosure. Employee agrees to maintain adequate and current
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written records on the development of all Invention Ideas and to disclose
promptly to the Company all Invention Ideas and relevant records, which records
will remain the sole property of the Company. Employee further agrees that all
information and records pertaining to any idea, process, trademark, service
xxxx, invention, technology, computer program, original work of authorship,
design, formula, discovery, patent, or copyright that Employee does not believe
to be an Invention Idea, but is conceived, developed, or reduced to practice by
Employee (alone or with others) during his Period of Employment or during the
one year period following termination of employment, shall be promptly disclosed
to the Company (such disclosure to be received in confidence). The Company shall
examine such information to determine if in fact the idea, process, or
invention, etc., is an Invention Idea subject to this Agreement.
(c) Assignment. Employee agrees to assign to the Company, without
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further consideration, his entire right, title, and interest (throughout the
United States and in all foreign countries), free and clear of all liens and
encumbrances, in and to each Invention Idea, which shall be the sole property of
the Company, whether or not patentable. In the event any Invention Idea shall be
deemed by the Company to be patentable or otherwise registerable, Employee shall
assist the Company (at its expense) in obtaining letters of patent, copyright,
trademark, or other applicable intellectual property registrations thereon and
shall execute all documents and do all other things (including testifying at the
Company's expense) necessary or proper to obtain letters of patent, copyright,
trademark, or other applicable intellectual property registrations thereon and
to vest the Company, or any Affiliated Company specified by the Board, with full
title thereto. Should the Company be unable to secure Employee's signature on
any document necessary to apply for, prosecute, obtain, or enforce any patent,
copyright, or other right or protection relating to any Invention Idea, whether
due to the Employee's mental or physical incapacity or any other cause, Employee
hereby irrevocably designates and appoints Company and each of its duly
authorized officers and agents as the Employee's agent and attorney in fact, to
act for and in the Employee's behalf and stead and to execute and file any such
document, and to do all other lawfully permitted acts to further the
prosecution, issuance, and enforcement of patents, copyrights, or the rights or
protections with the same force and effect as if executed and delivered by
Employee. Employee hereby agrees to maintain, update, improve and modify the
Invention Ideas, for so long as he is living, regardless of whether the Period
of Employment has terminated.
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(d) Exclusions. Employee acknowledges that there are no ideas,
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processes, trademarks, service marks, technology, computer programs, original
works of authorship, designs, formulas, inventions, discoveries, patents,
copyrights, or improvements to the foregoing that he desires to exclude from the
operation of this Agreement, except for the inventions and ideas of Employee and
his associates outside of the Company (i) which were or are developed entirely
by Employee and each such associate entirely outside of his or her activities
for the Company, (ii) which do not relate at the time of conception or reduction
to practice to the Company's business, or actually or demonstrably anticipated
research development, and (iii) which do not result from any work performed by
Employee for the Company. To the best of the Employee's knowledge, there is no
existing contract in conflict with this Agreement or any other contract to
assign ideas, processes, trademarks, service marks, inventions, technology,
computer programs, original works of authorship, designs, formulas, discoveries,
patents, or copyrights that is now in existence between Employee and any other
person or entity.
(e) Post-Termination Period. Because of the difficulty of
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establishing when any idea, process, invention, etc., is first conceived or
developed by Employee, or whether it results from access to Proprietary
Information or the Company's equipment, facilities, and data, Employee agrees
that any idea, process, trademark, service xxxx, technology, computer program,
original work of authorship, design, formula, invention, discovery, patent,
copyright, or any improvement, rights, or claims related to the foregoing shall
be presumed to be an Invention Idea if it is conceived, developed, used, sold,
exploited, or reduced to practice by Employee or with the aid of Employee within
one (1) year after termination of the Period of Employment. Employee can rebut
the above presumption if he proves that the invention, idea, process, etc., (i)
was first conceived and/or developed prior to the date of this Agreement, (ii)
was first conceived or developed after termination of the Period of Employment,
(iii) was conceived or developed entirely on Employee's own time without using
the Company's equipment, supplies, facilities, or Proprietary Information, and
(iv) did not result from any work performed by Employee for the Company. Nothing
in this Agreement is intended to expand the scope of protection provided
Employee by Sections 2870 through 2872 of the California Labor Code.
7. ASSIGNMENT; SUCCESSORS AND ASSIGNS. Employee agrees that he will
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not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement, nor shall Employee's rights be subject to encumbrance or
the claims of creditors. Any purported assignment, transfer or delegation shall
be null and void. Nothing in this Agreement shall prevent the consolidation of
the Company with, or its merger into, any other corporation, or the sale by the
Company of all or substantially all of its properties or assets, or the
assignment by the Company of this Agreement and the performance of its
obligations hereunder to any successor in interest or any Affiliated Company.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective heirs, legal representatives,
successors and permitted assigns, and shall not benefit any person or entity
other than those enumerated above.
In the event of a consolidation or merger of the Company with or into
another corporation, or the sale of all, or substantially all, of the Company's
assets to another corporation, such corporation as may survive said transaction
shall assume this Agreement and become obligated to perform all the terms and
conditions hereof, and Employee's obligations hereunder shall continue in favor
of such surviving corporation.
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8. NOTICES. All notices or other communications required or
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permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand or mailed, postage prepaid, by certified or
registered mail, return receipt requested, and addressed to the Company at:
Gemstar-TV Guide International, Inc.
000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
or to Employee at:
______________________________________
______________________________________
______________________________________
______________________________________
Notice of change of address shall be effective only if done in
accordance with this section.
9. ENTIRE AGREEMENT. Except as expressly provided herein with
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respect to certain rights of Employee under the Prior Employment Agreement, the
terms of this Agreement are intended by the parties to be the final and
exclusive expression of their agreement with respect to the employment of
Employee by the Company and may not be contradicted by evidence of any prior or
contemporaneous agreement any and all of which are superceded as of the
Effective Time. The parties further intend that this Agreement shall constitute
the complete and exclusive statement of its terms and that no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
10. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended
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or terminated except by an instrument in writing, signed by Employee and by a
duly authorized representative of the Company other than Employee. By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform, provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any right,
remedy or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy or power hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy or
power provided herein or by law or in equity.
11. SEVERABILITY; ENFORCEMENT. If any provision of this Agreement, or
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the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
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12. GOVERNING LAW. The validity, interpretation, enforceability and
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performance of this Agreement shall be governed by and construed in accordance
with the law of the State of California.
13. INJUNCTIVE RELIEF. The parties agree that in the event of any
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breach or threatened breach of any of the covenants in Section 6, the damage or
imminent damage to the value and the goodwill of the Company's business will be
irreparable and extremely difficult to estimate, making any remedy at law or in
damages inadequate. Accordingly, the parties agree that the Company shall be
entitled to injunctive relief against Employee in the event of any breach or
threatened breach of any such provisions by Employee, in addition to any other
relief (including damages) available to the Company under this Agreement or
under law.
The parties have duly executed this Agreement as of the date first
written above.
/s/ Xxx Xxxxxx
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Xxx Xxxxxx, Employee
/s/ Xxxxx Xxxxx
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Gemstar-TV Guide International, Inc.
By: Xxxxx Xxxxx, Co-President and Co-COO
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