EXHIBIT 10.6
November 7, 2002
Gemstar-TV Guide International, Inc.
000 Xxxxx Xxx Xxxxxx Xxx.
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
Notwithstanding anything to the contrary contained in the
Restructuring Agreements (as defined in the Umbrella Agreement (the "Umbrella
Agreement") of even date herewith among Xx. Xxxxx Xxxx, Ms. Xxxxx Ma Xxxxx, The
News Corporation Limited and Gemstar-TV Guide International, Inc. (the
"Company")), Xx. Xxxx and the Company agree that:
1. The Company will retain, in a segregated interest bearing account
(the "Segregated Account"), the termination fee and all amounts to be paid in
settlement of Xx. Xxxx'x unpaid salary, bonuses and unused vacation days
(collectively, the "Retained Funds") due to Xx. Xxxx on the Effective Date
pursuant to Section 2(a) of the Xxxx Termination Agreement (as defined in the
Umbrella Agreement), and upon doing so, the Company will be deemed to have
performed all of its payment obligations as of the Effective Date under the
Restructuring Agreements, and, except as otherwise contemplated by this
paragraph, all other actions (including Xx. Xxxx'x resignation and the
termination of Xx. Xxxx'x existing employment agreement) required to take place
on the Effective Date will be deemed to have been performed as of such time. The
Retained Funds will be retained by the Company and remain Company property
until, with respect to any portion of the Retained Funds, the earlier of (a) the
disbursement of such Retained Funds in accordance with the terms of an agreement
reached between the Securities and Exchange Commission (the "SEC") and Xx. Xxxx
and (b) the disbursement of any remaining Retained Funds to Xx. Xxxx on May 6,
2003 (the "Release Date"). On the Release Date, the Company will transfer the
balance of the Retained Funds, as well as all interest earned thereon, to Xx.
Xxxx in accordance with clause (a) or (b) as the case may be.
Notwithstanding the prior sentences and, provided that the SEC does
not object in either of the following cases, (i) upon receipt of proper
substantiation of the amounts requested, the funds due under Section 4 of the
Xxxx Termination Agreement shall be paid directly by wire transfer to Xxxxx
Xxxxxx LLP promptly after the date hereof, and (ii) any restricted stock, stock
options, or stock units granted pursuant to the Restructuring Agreements
(collectively, the "Equity Awards") on the Effective Date, or any date
thereafter, shall be issued directly to Xx. Xxxx in accordance with the terms of
the Restructuring Agreements. If, prior to the date of issuance, a court order
prohibiting any such issuance or requiring the escrow (or other similar
arrangement) of any of the Equity Awards has not been obtained and remain in
force, such
November 7, 2002
Page 2
Equity Awards will be issued to Xx. Xxxx on the later of (a) the Release Date
and (b) such later date on which any such Equity Award is to be issued pursuant
to the Restructuring Agreements.
Xx. Xxxx hereby acknowledges that the Company will not have any
obligation under this letter agreement or under any of the Restructuring
Agreements to make any disbursement of any portion of the Retained Funds or to
issue any of the Equity Awards to the extent that a court order prohibiting any
such disbursement or issuance, or requiring the escrow (or other similar
arrangement) of such Retained Funds or Equity Awards has been obtained and
remains in force.
2. As soon as reasonably practicable after the date hereof (but in no
event later than seven business days hereafter), the Company's outside legal
counsel and/or counsel to the Special Committee of the Board of Directors, along
with counsel to Xx. Xxxx, will arrange to meet with the SEC for the purpose of
jointly seeking the SEC's concurrence to release to Xx. Xxxx from the Segregated
Account those funds to which Xx. Xxxx is entitled pursuant to his existing
employment agreement.
3. Notwithstanding the terms of the New Xxxx Employment Agreement (as
defined in the Umbrella Agreement) and the Xxxx Termination Agreement, (i) until
December 31, 2002, the Company will continue to pay Xx. Xxxx at the annualized
salary of $5,006,649 per annum, such salary being that which was effective
immediately prior to the date hereof (the "Current Salary"), and (ii) the
termination fee set forth in Section 2(a) of the Xxxx Termination Agreement will
be decreased to equal $21,999,583.
4. For all purposes under the Restructuring Agreements, the
"Effective Date" shall mean November 7, 2002 and the Restructuring Agreements
shall be effective as of such date.
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page follows]
November 7, 2002
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[Signature page to Gemstar Side Letter Dated November 7, 2002]
Approved and Agreed to:
/s/ Xxxxx X. Xxxx
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Xx. Xxxxx X. Xxxx
/s/ Xxxx Xxxxx
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Gemstar-TV Guide International, Inc.
By: Xxxx Xxxxx
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Title: Co-President
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