EXHIBIT 10.5
Execution Copy
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into on November 7,
2002 (the "Effective Date") by and between Gemstar - TV Guide International,
Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx ("Employee").
WITNESSETH:
WHEREAS, the Company (as successor in interest to Gemstar International
Group Limited, a British Virgin Islands corporation), Employee and Gemstar
Development Corporation, a California corporation ("GDC"), are parties to that
certain Amended and Restated Employment Agreement dated as of January 7, 1998,
as amended (the "Prior Employment Agreement");
WHEREAS, the Company, GDC and Employee have agreed to terminate the Prior
Employment Agreement as provided in that certain Termination Agreement by and
among the Company, GDC and Employee (the "Termination Agreement") entered into
as of the Effective Date;
WHEREAS, the Company and Employee acknowledge the unique nature of
Employee's services and the global application of those services to the
Company's business; and
WHEREAS, the Company and Employee desire to enter into this Agreement to
set forth the terms and conditions on which Employee will be employed by the
Company from and after the Effective Date.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. Term.
The Company agrees to employ Employee, and Employee agrees to serve
the Company, in accordance with the terms of this Agreement for a five year term
commencing on the Effective Date and ending on the fifth anniversary of the
Effective Date, unless this Agreement is earlier terminated in accordance with
the provisions of this Agreement. The actual term of Employee's employment under
this Agreement is referred to herein as the "Term." Employee acknowledges and
agrees that the Company has no obligation to renew this Agreement or to continue
Employee's employment after any termination of, or the expiration of, this
Agreement, and expressly acknowledges that no promises or understandings to the
contrary have been made or reached.
2. Specific Position; Duties and Responsibilities.
(a) The Company and Employee agree that, subject to the provisions of this
Agreement, during the Term, the Company will employ Employee and Employee will
serve the Company as a non-executive Chairman of the Board of Directors of the
Company (the "Company Board") and as head of a business unit of the Company
(which may be organized as a division of the Company or of a subsidiary of the
Company or as a separate subsidiary of the Company) focused on developing new
international markets ("Gemstar International"). Employee shall perform all
duties attendant to the head of a Company business unit, and shall make
reasonable efforts to further the business interests of Gemstar International.
In addition, Employee shall use reasonable efforts to enhance and improve the
Company's existing technologies, and to develop new technologies, related to the
fields of Interactive Program Guides and Interactive Television (as such terms
are defined in the Patent Rights Agreement of even date herewith between the
Company and Employee), or that are otherwise useful to the Company's Interactive
Television or Interactive Program Guide businesses. Employee shall participate
in and assist the Company with the defense and prosecution of claims and
litigation (including, without limitation, lawsuits, arbitrations, mediations
and other forms of dispute resolution) to such extent as the Company shall
reasonably request from time to time. Employee agrees to fully and reasonably
cooperate with respect to any transition of the Company's auditors and
preparation of the quarterly financial statements for the second and third
quarters of 2002 and the 2002 annual report (and the subsequent filing of such
statements and reports with the appropriate regulatory agencies); provided,
however, that such cooperation shall not include the execution of any additional
management letters or similar letters requiring Employee to make representations
concerning the Company or its financial position or results of operations with
respect to any period after the Effective Date. Although it is expected that
Employee will devote a substantial portion of his business time and attention to
his duties under this Agreement, it is agreed and understood that the nature of
Employee's duties does not require Employee's presence at the Company's
facilities on a daily basis, and does not require Employee to devote a specific
number of hours per week to his duties under this Agreement. Employee shall have
such other additional duties and responsibilities befitting the foregoing
position, if any, as the Company and Employee shall mutually agree from time to
time. The Company also agrees that Employee shall serve as a director of the
Company during the Term. Employee acknowledges and agrees that other
subsidiaries and/or divisions of the Company (whether or not currently in
existence) may engage in the same business activities as Gemstar International,
without the involvement of Employee. During the Term, Employee shall report to
the Company Board, which, consistent with the foregoing, shall (i) establish
such policies concerning the scope of Employee's authority as the Company Board
shall from time to time deem appropriate in its sole and absolute discretion,
(ii) determine the scope of Employee's responsibilities from time to time in its
sole and absolute discretion, provided, however, that the Company Board may not
materially increase Employee's responsibilities beyond those described herein
and in the resolutions adopted by the Company Board concurrently with the
approval of this Agreement without Employee's written consent, and (iii)
determine the staffing, budget and support of Gemstar International in its sole
and absolute discretion, provided, however, that the staffing, budget and
support of Gemstar International shall initially be as set forth in the
resolutions adopted by the Company Board concurrently with the approval of this
Agreement and shall not be reduced except as provided in subsequent resolutions
adopted by the Company Board. Notwithstanding anything to the contrary contained
herein, during the Term, without the express written consent of the Company
Board, Employee shall not engage in any policy making activity, or otherwise
engage in any activity, that would
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result in his treatment as an "executive officer" under the executive
compensation disclosure rules promulgated under the Securities Exchange Act of
1934, as amended.
(b) During the Term, Employee may (i) upon approval of the Company Board,
serve as a director, consultant or trustee of any other corporation or business;
provided, however, that Employee may not become a director, consultant or
trustee of any corporation or business that competes with (A) the Company or any
subsidiary of the Company or (B) the business activities of any affiliate of the
Company in the fields of Interactive Television or Interactive Program Guides
(as such terms are defined in the Patent Rights Agreement of even date herewith
between the Company and Employee) (any such corporation or business described in
this proviso is referred to herein as a "Competitor"), (ii) accept any part-time
academic position, (iii) invest in real estate for his own account, (iv) become
a partner or a shareholder in any privately-held corporation, partnership or
other venture that is not a Competitor or (v) become a partner or a shareholder
with an equity interest of not more than five percent (5%) in any corporation,
partnership or other venture whose equity securities are publicly traded,
whether or not such corporation, partnership or other venture is a Competitor.
3. Compensation.
(a) Base Compensation and Adjustments.
During the Term, the Company agrees to pay Employee a base salary at
the rate of Two Million Dollars (US $2,000,000.00) per year (as in effect from
time to time, the "Base Salary"). Such salary shall be earned monthly and shall
be payable in periodic installments no less frequently than monthly in
accordance with the Company's customary practices. Amounts payable shall be
reduced by standard withholding and other authorized deductions. During the
Term, the Company Board shall review the Base Salary at least annually and may,
but need not, increase the Base Salary in its sole and absolute discretion.
Under no circumstances may the Base Salary as in effect at any time be reduced.
(b) Bonuses.
During the Term, Employee shall be entitled to receive such bonuses as
the Company Board may, but need not, from time to time grant to Employee in its
sole and absolute discretion.
(c) Stock Options and other Equity Awards.
(i) As of the first anniversary of the Effective Date, the Company
shall grant to Employee three million three hundred thirty-three thousand three
hundred and thirty-four (3,333,334) nonqualified stock options under the
Company's 1994 Stock Incentive Plan, as amended (the "SIP"), in accordance with
the terms and conditions set forth in the Initial Stock Option Agreement
attached hereto as Exhibit A.
(ii) As of the second anniversary of the Effective Date, the
Company shall grant to Employee three million three hundred thirty-three
thousand three hundred and thirty-three (3,333,333) nonqualified stock options
under the SIP in accordance with the terms and conditions set forth in the
Second Stock Option Agreement attached hereto as Exhibit B.
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(iii) Notwithstanding anything herein to the contrary, the Company
and Employee agree that the Company shall not (A) grant to Employee any stock
options under the SIP or under any other arrangement prior to the date that is
six months and one day after the Effective Date, or if such day is not a
business day, on the next succeeding business day or (B) accelerate any stock
option grant contemplated by this Agreement or any other arrangement prior to
the date that is six months and one day after the Effective Date, or if such day
is not a business day, on the next succeeding business day. Employee hereby
represents that he has not received any grant of options or other equity-based
compensation within the 6 month period preceding the Effective Date. Nothing in
this Section 3(c)(iii) shall prevent the vesting of stock options contemplated
by Section 3(b) of the Termination Agreement nor shall the vesting of such stock
options violate this Section 3(c)(iii).
(iv) Subject to receiving the requisite stockholder approval, the
Company shall cause the SIP to be amended (the "SIP Amendment") to provide for
awards of restricted stock, such amendment to be substantially in the form
attached hereto as Exhibit C. The Company shall schedule an annual or special
stockholders' meeting of the Company to occur as soon as reasonably practicable
after the Effective Date (the "Stockholder Meeting"); provided, however, the
parties acknowledge that the SIP Amendment will not be submitted for stockholder
approval at the informational stockholder meeting expected to be scheduled in
either November or December of 2002. At the Stockholder Meeting, the Company
shall submit the SIP Amendment for stockholder approval.
On the date of the Stockholder Meeting or as soon as reasonably
practicable thereafter, the Company shall either issue restricted stock or grant
Stock Units (as such term is defined under the SIP) to Employee as follows (the
date of such issuance or grant is referred to as the "Share Grant Date"):
(1) if the SIP Amendment is approved by the Company stockholders, the
Company shall issue two million ninety-three thousand sixty-four
(2,093,064) shares of restricted stock under the SIP to Employee in
accordance with the terms and conditions set forth in the Employment
Restricted Stock Agreement attached hereto as Exhibit D, such shares to
be issued in certificates of such denominations as Employee may
request; or
(2) if the SIP Amendment is not approved by the Company stockholders, the
Company shall grant to Employee under the SIP (i) two million
ninety-three thousand sixty-four (2,093,064) Stock Units and (ii)
Dividend Equivalent Rights representing the right to receive, if, when
and as ordinary cash dividends are paid on the Company's Common Stock
(the "Common Shares") generally, an amount (of cash or other property)
equal to the ordinary cash dividends that would be paid with respect to
two million ninety-three thousand sixty-four (2,093,064) Common Shares,
in each case in accordance with the terms and conditions set forth in
the Employment Stock Unit Agreement attached hereto as Exhibit E.
(v) If the SIP Amendment is approved by the Company stockholders
at the Stockholder Meeting, with respect to those shares of restricted stock
granted in Section 3(c)(iv)
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above for which Employee makes a valid election within 30 days after the Share
Grant Date under Section 83(b) of the Internal Revenue Code of 1986, as amended
(the "Code"), (the "83(b) Shares"), the Company shall pay Employee within five
business days after the Company's receipt from Employee of evidence of such
valid election, or as soon as reasonably practicable thereafter, an amount in
cash (subject to applicable withholding) equal to X multiplied by Y multiplied
by Z divided by W (the "83(b) Payment"), where:
X is the number of 83(b) Shares;
Y is the excess, if any, of the Maximum Share Price (as
defined herein) over the Company Share Price (as defined
herein) on the Effective Date;
Z is equal to the difference between (i) the lowest Federal
long term capital gain rate and (ii) the sum of the highest
marginal Federal income tax rate and highest marginal state
income tax rate applicable to a California resident (adjusted
for any applicable state tax deduction under Federal income
tax laws)(this calculation shall be determined using those
rates applicable in the year of the Share Grant Date); and
W is equal to (i) one (1) minus (ii) the amount equal to the
sum of the highest marginal Federal income tax rate and
highest marginal state income tax rate applicable to a
California resident (adjusted for any applicable state tax
deduction under Federal income tax laws)(this calculation
shall be determined using those rates applicable in the year
of the Share Grant Date).
The "Company Share Price" on any date shall be the Fair Market Value (as
such term is defined in the SIP) for one Common Share on such date. The "Trading
Period" shall be the period beginning on the Effective Date until the close of
business on the thirtieth Trading Day (as defined herein) following the
Effective Date. The term "Trading Day" shall mean any day on which the Company's
Common Stock is traded on a national securities exchange on which such Company
Common Stock is listed or admitted to trade; provided, however, that if the
Company's Common Stock is not listed or admitted to trade on any national
securities exchange, the term "Trading Day" shall mean any business day. The
"Maximum Share Price" shall be the lesser of (i) the highest Company Share Price
of any date within the Trading Period or (ii) the Company Share Price on the
applicable Share Grant Date. Notwithstanding anything herein to the contrary, no
payment shall be made under this Section 3(c)(v) if the Company Share Price on
the Effective Date exceeds the Maximum Share Price. To the extent Company makes
any payments to satisfy any tax withholding obligation relating to the Section
83(b) election above prior to paying the 83(b) Payment, the 83(b) Payment (to
the extent possible) shall be reduced by such payments made by the Company to
satisfy such tax withholding obligation, and, except as provided in the
immediately following sentence, in no event shall Employee be required to
reimburse the Company for such tax withholding obligation until the 83(b)
Payment is made to Employee. If the 83(b) Payment is insufficient to repay such
payments made by the Company to satisfy such tax withholding obligation,
Employee shall pay the Company an amount in cash equal to the amount of
deficiency on such date the 83(b) Payment would have been made (if not for the
deduction of the prior sentence).
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(vi) If the SIP Amendment is not approved by the Company
stockholders at the Stockholder Meeting, the Company shall pay Employee, on each
Stock Unit vesting date, or as soon as reasonably practicable thereafter, an
amount in cash (subject to applicable withholding) equal to X multiplied by Y
multiplied by Z divided by W (the "Stock Unit Payment"), where:
X is number of Stock Units that vest on the applicable Stock
Unit vesting date;
Y is the excess, if any, of the Maximum Share Price over the
Company Share Price on the Effective Date;
Z is equal to the difference between (i) the lowest Federal
long term capital gain rate and (ii) the sum of the highest
marginal Federal income tax rate and highest marginal state
income tax rate applicable to a California resident (adjusted
for any applicable state tax deduction available under Federal
income tax laws)(this calculation shall be determined using
those rates applicable in the year of the Stock Unit vesting
date in question); and
W is equal to (i) one (1) minus (ii) the amount equal to the
sum of the highest marginal Federal income tax rate and
highest marginal state income tax rate applicable to a
California resident (adjusted for any applicable state tax
deduction available under Federal income tax laws)(this
calculation shall be determined using those rates applicable
in the year of the Stock Unit vesting date in question).
Notwithstanding anything herein to the contrary, no payment shall be
made under this Section 3(c)(vi) if the Company Share Price on the Effective
Date exceeds the Maximum Share Price. To the extent that the Company has any tax
withholding obligation relating to the Stock Units (or payment of such Stock
Units) that vest on the applicable Stock Unit vesting date, the Company may
reduce (to the extent possible) the Stock Unit Payment to the extent of such tax
withholding obligation and, except as provided in the immediately following
sentence, in no event shall Employee be required to reimburse the Company for
such tax withholding obligation until the Stock Unit Payment is made to
Employee. If the Stock Unit Payment is insufficient to repay such payments made
by the Company to satisfy such tax withholding obligation, Employee shall pay
the Company an amount in cash equal to the amount of deficiency on such date the
Stock Unit Payment would have been made (if not for the deduction of the prior
sentence). To the extent any payments to be made under this Section 3(c)(vi) are
accelerated due to Employee's employment under this Agreement terminating as
provided in Sections 4(a), 4(b), 4(d) or 4(f), such payments shall be contingent
on Employee (or, if deceased, his estate's legal representative) signing a
general release of claims in a form provided by the Company which shall be
substantially similar to Exhibit F.
(vii) As of the date that is six months and one day after the
Effective Date, or if such day is not a business day, on the next succeeding
business day, the Company shall grant to
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Employee two hundred thousand (200,000) nonqualified stock options under the SIP
in accordance with the terms and conditions set forth in the Third Stock Option
Agreement attached hereto as Exhibit G.
(viii) The number and type of shares set forth above with respect to
any stock option awards, restricted stock, Stock Units or Dividend Equivalent
Rights (the "Equity Awards") provided under this Section 3, and applicable share
prices for purposes of Section 3(c)(v) and 3(c)(vi), shall be proportionately
adjusted by the Company to the extent (if any) necessary to account for, and
preserve the intended level of benefits following, any extraordinary dividend or
other extraordinary distribution in respect of the outstanding Common Shares (to
the extent paid in the form of Common Shares, or other equity securities), or
any recapitalization, stock split (including a stock split in the form of a
stock dividend), reverse stock split, reorganization, merger, combination,
consolidation, split-up, spin-off, exchange of Common Shares, or similar
extraordinary event, in each case to the extent such event affects the
outstanding Common Shares.
(ix) The Company represents and warrants that (i) as of the date
hereof, there are sufficient Common Shares available under the SIP to permit the
options under Sections 3(c)(i), 3(c)(ii) and 3(c)(vii) to be issued thereunder
and (ii) as of the Share Grant Date, there will be sufficient Common Shares
available under the SIP to permit the grants of restricted stock or Stock Units,
as the case may be, under Section 3(c)(iv) to be issued thereunder.
(x) Notwithstanding any provision herein or in the Initial Stock
Option Agreement, Second Stock Option Agreement or SIP to the contrary, if
Employee's employment under this Agreement terminates under Sections 4(a), 4(b),
4(d) or 4(f) prior to the granting of any stock option awards under Section
3(c)(i) or 3(c)(ii), such stock option awards not yet granted shall be granted
to the Employee on the later of (i) the date that is six months and one day
after the Effective Date, or if such day is not a business day, on the next
succeeding business day, or (ii) the date of Employee's termination of
employment.
(xi) Notwithstanding any provision herein or in the Initial Stock
Option Agreement, Second Stock Option Agreement, Employment Restricted Stock
Agreement, Employment Stock Unit Agreement, Third Stock Option Agreement or SIP
to the contrary, no Equity Awards shall be granted under this Section 3 after
any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g)
of this Agreement prior to the grant of such Equity Awards, or (ii) occurrence
of any Breach Event (as defined below) which (if capable of cure) has not
(together with all effects thereof) been fully cured by Employee within thirty
(30) days after receipt of written notice from the Company of such Breach Event
(the "Breach Cure Period"); provided, however, no Equity Awards shall be granted
during any Breach Cure Period (but if all Breach Events are cured during the
corresponding Breach Cure Periods, any Equity Awards scheduled to be granted
during such Breach Cure Periods shall be deemed to have been granted as of the
scheduled grant date); provided, further, no Equity Awards shall be granted
during any For Cause Determination Period (as defined herein) (but, in the event
that the Company Board determines no termination for Cause has occurred or
Employee is successful in challenging any purported termination under Section
4(c), any Equity Awards scheduled to be granted during such For Cause
Determination Period shall be deemed to have been granted as of the scheduled
grant date). The term "Breach Event" shall mean any (i) material breach by
Employee of
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Section 12 of the Termination Agreement, (ii) breach by Employee of any
representation or warranty contained in Section 15 of the Termination Agreement,
or (iii) material breach by Employee of Sections 6, 8, 10(h) or 10(i) of this
Agreement. The determination that a Breach Event has occurred shall be made by
the Company Board and following such determination, written notice of such
Breach Event shall be provided to Employee by the Company Board or any proper
officer of the Company. Employee agrees that, in his capacity as a Company Board
member, he shall not vote on such a determination nor shall he vote on any
Company Board determination that a Breach Event (as such term is defined in
Xxxxx Xxxxx'x employment agreement with the Company of even date hereof) has
occurred with respect to Xxxxx Xxxxx. Any disputes related to this Section
3(c)(xi) shall be resolved pursuant to Section 10(f).
(xii) Subject to Section 3(c)(xi) above, if Employee's employment
terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any
restricted stock or Stock Units required under Section 3(c)(iv) of this
Agreement, such restricted stock or Stock Units not yet granted shall be granted
to Employee as provided in Section 3(c)(iv) and shall be immediately vested in
full upon grant.
(xiii) In the event of a conflict or inconsistency between the terms
and conditions of this Agreement and the terms and conditions of the agreement
evidencing any Equity Award, the terms and conditions of the agreement
evidencing such Equity Award shall govern. In the event of a conflict or
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of the SIP, the terms and conditions of the SIP shall govern.
(xiv) Notwithstanding any provisions herein to the contrary, to the
extent any Equity Award required hereunder is made on a post-employment basis
(such basis being with respect to Employee), the grant of such Equity Award
shall, to the extent required by applicable law, be contingent upon the
recipient making a valid representation that such recipient is an accredited
investor under Regulation D of the Securities Act of 1933, as amended.
(xv) In the event of a Change in Control Event, as defined under
Section 7 of the Stock Option Agreements attached hereto as Exhibits A, B and G,
the Company shall grant any award of stock options required under this Agreement
(and not already granted) on the later of (i) the date that is six months and
one day after the Effective Date, or if such day is not a business day, on the
next succeeding business day, or (ii) the date of the Change in Control Event,
but only if the Company (or a successor thereto) has failed to provide for the
cash-out of such grants, or the continuation of such grants in an economically
equivalent amount (as provided in Section 7 of the Stock Option Agreements).
(xvi) With respect to any Equity Awards issued to Employee pursuant
to this Agreement, to the extent the Company is eligible to file a Registration
Statement on Form S-8, the Company shall take all steps reasonably necessary to
maintain the effectiveness of the Company's current Registration Statements on
Form S-8.
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(d) Alternative Equity Awards.
If, after being requested to determine whether or not the stock option
grants contemplated by Section 3(c) of this Agreement will result in variable
accounting, the Company's independent auditors are unable to advise the Company
that the stock option grants contemplated by Section 3(c) of this Agreement will
not result in variable accounting, the Special Committee of the Company Board or
the Company Board may, by providing (or directing the Company to provide)
written notice to Employee before the Notification Deadline (as defined herein),
commit to granting restricted stock or Stock Units rather than stock options, by
replacing Section 3(c) and its related Exhibits (the "Replaced Equity
Provisions") with a new Section 3(c) and its related Exhibits (the "New Equity
Provisions") attached hereto as Appendix A. Such written notice shall state that
the Company's independent auditors have been unable to advise the Company that
the stock option grants contemplated by Section 3(c) of this Agreement will not
result in variable accounting. Such written notice shall be provided in
accordance with Section 10(b) and shall be effective as of the date delivered to
Employee. Until such written notice is provided to Employee, the New Equity
Provisions shall have no effect and Employee shall have no rights or obligations
under the terms and conditions of the New Equity Provisions.
If the New Equity Provisions become effective, Employee shall have no
rights or obligations under the terms and conditions of the Replaced Equity
Provisions, and the terms and conditions set forth in the New Equity Provisions
shall govern as of the Effective Date. All other provisions of the Agreement
shall remain in effect.
The "Notification Deadline" shall refer to the earlier of (i) the date the
Stockholder Meeting occurs or (ii) the date that is six months after the
Effective Date.
(e) Additional Benefits.
From and after the Effective Date and through the termination of Employee's
employment, Employee shall be entitled to all rights and benefits for which
Employee is otherwise eligible under any life, medical, dental, disability or
insurance plan or policy (except that the split-dollar life insurance
arrangements referred to in Section 2(c) of the Termination Agreement shall be
governed by that provision and are not covered by this section), or other plan
or benefit that the Company, its subsidiaries or affiliates may provide for
Employee or (provided Employee is eligible to participate therein) for
executives and employees of the Company generally (other than stock option,
stock purchase or other equity-based incentive plans, and other than bonus and
other incentive compensation plans), as from time to time may be in effect
(collectively, the "Additional Benefits"). The Additional Benefits shall be
provided at the level generally available to other employees of the Company at
the time and shall recognize for vesting and eligibility purposes Employee's
prior service with the Company to the extent (if any) that such prior service is
recognized under any such plans.
To the extent Additional Benefits are to be provided under Sections 4(a),
4(d), 4(f) or 4(g) from and after the termination of Employee's employment
through the fifth anniversary of the Effective Date, Employee shall be entitled
to Additional Benefits; provided, however, that Employee shall not accrue any
benefits under any pension plans, 401(k) or profit sharing plans, or
supplemental executive retirement plans after such termination and that benefits
under such
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pension plans, 401(k) or profit sharing plans, or supplemental executive
retirement plans shall be payable to Employee in accordance with their terms.
(f) Vacation.
Employee shall not earn any vacation during the Term. From time to
time during the Term, Employee may take time off in reasonable amounts, it being
understood that time off totaling seven weeks or less during each year of the
Term shall be deemed reasonable.
(g) Organizations.
During the Term, the Company shall promptly reimburse Employee for the
membership fees and dues reasonably incurred by Employee to maintain a
membership in, or to belong to, one social or country club.
(h) Automobile Allowance.
The Company shall provide Employee with a car allowance of one
thousand dollars (US $1,000.00) per month to be used for the purchase, lease and
maintenance of an appropriate automobile for his use during the Term. If the
Company leases or purchases an automobile for Employee's use, Employee shall
have the ability to assume the lease at the end of the term thereof or purchase
the automobile at its residual or depreciated value upon termination of his
employment.
4. Termination.
Employee's employment by the Company may be terminated prior to the
fifth anniversary of the Effective Date only as provided in this Section 4:
(a) Disability.
Employee's employment hereunder may be terminated by the Company due
to his disability (as defined below). In the event of a termination due to
Employee's disability, and provided that he executes a general release of claims
in a form provided by the Company which shall be substantially similar to
Exhibit F, he shall be entitled to the following:
(i) payment of his Base Salary from the date of such termination
through the fifth anniversary of the Effective Date;
(ii) payment of the pro-rated portion of the annual bonus, if any,
previously determined by the Company Board to be due to Employee for the fiscal
year in which termination due to disability occurs, payable promptly after the
end of the fiscal year ending after the date of such termination; and
(iii) all Additional Benefits through the fifth anniversary of the
Effective Date.
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For purposes of this Agreement, "disability" shall mean Employee's
inability to substantially perform his duties and responsibilities under this
Agreement for (i) a period of 120 consecutive days or (ii) an aggregate of 180
days during any twelve month period.
(b) Death.
Employee's employment hereunder shall terminate as a result of his
death. In the event of such a termination due to Employee's death, his estate or
his beneficiaries, as the case may be, shall be entitled to:
(i) a lump sum payment equal to the lesser of (A) the amount of
Base Salary that Employee would have received from the date of his death through
the fifth anniversary of the Effective Date and (B) two times Employee's Base
Salary; and
(ii) payment of the pro-rated portion of the annual bonus, if any,
previously determined by the Company Board to be due to Employee for the fiscal
year in which Employee's death occurs, payable promptly after the end of the
fiscal year ending after the date of death.
(c) For Cause.
Employee's employment hereunder may be terminated by the Company for
Cause. For the purposes of this Agreement, "Cause" shall mean:
(i) Employee is engaging or has engaged in acts of fraud, material
dishonesty or other acts of willful misconduct that have had a material adverse
effect on the business of the Company;
(ii) Employee has habitually abused any substance (such as
narcotics or alcohol) and such abuse has had a material adverse effect on the
business of the Company;
(iii) Employee has been convicted of, or plead guilty to, an act
constituting a felony that has a material adverse effect on the business of the
Company;
(iv) Employee has not obtained prior approval of the Company Board
(or any committee designated by the Company Board for such purpose) prior to
causing or permitting the Company or any subsidiary of the Company to enter into
or otherwise be bound by any material contract; or
(v) Employee has materially breached Sections 6, 8, 10(h), or
10(i) of this Agreement, or breached any of the representations and warranties
contained in Section 15 of the Termination Agreement and (if capable of cure),
has failed to fully cure such breach and all effects thereof within thirty (30)
days after receipt of written notice from the Company of such breach.
A termination for Cause shall not be effective unless and until (i)
Employee has received written notice of a proposed termination for Cause setting
forth the facts and circumstances claimed to provide a basis for termination of
Employee's employment for Cause
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and Employee has had an opportunity to be heard before at least a majority of
the members of the Company Board and (ii) the Company Board has confirmed in
writing the termination for Cause, indicating any additional or different facts
and circumstances that the Company Board believes provide a basis for such
termination. Employee shall be deemed to have had such opportunity if given
written notice by any director acting on behalf of the Company Board at least
seventy two (72) hours in advance of a meeting, if scheduled in California, or
ninety six (96) hours in advance of a meeting, if such meeting is scheduled
outside California. Any actions or proceedings by the Company pursuant to this
subparagraph 4(c) shall be conducted in a confidential manner and all steps
shall be taken to prevent any harm to Employee's reputation.
In the event Employee commences proceedings pursuant to Section 10(f)
to dispute the Company's right to terminate his employment for Cause within 30
days from the date he receives the written notice from the Company Board
confirming his termination for Cause (the "Termination Date"), the Company shall
(i) continue to pay Employee's Base Salary and to provide Additional Benefits to
Employee until such dispute has been resolved and (ii) pay all costs reasonably
incurred by Employee in preparing for and in pursuing such proceedings,
including all professional fees and expenses. If Employee is the nonprevailing
party in such proceedings, Employee shall reimburse the Company for all costs,
fees and expenses paid by the Company on Employee's behalf and shall reimburse
the Company for any Base Salary and Additional Benefits paid to Employee since
the Termination Date.
The term "For Cause Determination Period" shall refer to the period of
time from when Employee receives written notice of a proposed termination for
Cause until the Resolution Date (as defined herein). The term "Resolution Date"
shall refer to the Termination Date or the date the Company Board determines no
termination for Cause has occurred; provided, however, that, if Employee
commences proceedings pursuant to Section 10(f) as provided in the immediately
preceding paragraph, the term "Resolution Date" shall refer to the date such
proceedings are finally resolved.
If Employee is terminated for Cause, he shall only be entitled to
benefits continuation and accrued wages as required under applicable law
(subject to the benefits and compensation continuation during a dispute as
described above).
(d) Without Cause.
Employee's employment hereunder may be terminated by the Company
without Cause. If the Company terminates Employee's employment for any reason
other than those specified in Sections 4(a), (b) or (c) above, he shall be
entitled to receive the following, provided that he signs a general release of
claims in a form provided by the Company which shall be substantially similar to
Exhibit F:
(i) a lump sum payment equal to the amount of Base Salary that
Employee would have received from the date of such termination through the fifth
anniversary of the Effective Date;
(ii) payment of the pro-rated portion of the annual bonus, if any,
previously determined by the Company Board to be due to Employee for the fiscal
year in which
12
termination without Cause occurs, payable promptly after the end of the fiscal
year ending after the date of such termination without Cause; and
(iii) all Additional Benefits through the fifth anniversary of the
Effective Date.
Employee agrees to accept the severance provided in this Section 4(d)
and in any Equity Award upon the termination of his employment pursuant to this
Section 4(d) or pursuant to Section 4(f) as liquidated damages in lieu of any
other damages or severance benefits to which he might be entitled as a result of
the termination of his employment with the Company pursuant to this Section 4(d)
or pursuant to Section 4(f). All amounts paid to Employee pursuant to this
Section 4(d) or pursuant to Section 4(f) shall be paid without regard to whether
Employee has taken or takes actions to mitigate damages.
(e) Limited Succession of Additional Benefits Upon Termination.
If Employee's services are terminated hereunder pursuant to Sections
4(a) or 4(d) and Employee is no longer eligible for Additional Benefits under
the terms of any plans relating thereto because of such termination, Employee
shall be entitled to, and the Company shall provide benefits substantially
equivalent to, those benefits in the nature of health and welfare type benefits
to which Employee was entitled immediately prior to such termination for the
period (if any) during which Employee is entitled to receive Additional Benefits
pursuant to such Sections.
(f) Constructive Termination.
A Constructive Termination (defined below) shall be treated as a
termination without Cause pursuant to Section 4(d) of this Agreement.
For purposes of this Agreement, "Constructive Termination" means (i)
the removal of Employee from any of the positions of non-executive Chairman of
the Board of the Company or head of Gemstar International or from his position
as a director of the Company (other than pursuant to Section 4(j) below), (ii)
assignment to Employee of material additional duties or responsibilities
inconsistent with such positions, (iii) a material violation by the Company of
Section 6 of the Termination Agreement, or (iv) requiring Employee to report to
any other person or entity other than the full Company Board, in any case other
than as a result of grounds for termination under Sections 4(a), 4(b), 4(c) or
4(g). If the Employee provides written notice to the Company of the occurrence
of conditions which would constitute a Constructive Termination ("Notice of
Potential Constructive Termination") within 30 days after the Employee has
knowledge of such circumstances, the Company fails to correct such circumstances
within 30 days after receipt of such notice, and Employee gives his 30 day
notice of resignation within 60 days after he gave the Notice of Potential
Constructive Termination, then a Constructive Termination shall be deemed to
have occurred.
(g) Termination by Employee.
Employee shall have the right, in his sole and absolute discretion, to
terminate his employment under this Agreement at any time for any reason. If
Employee provides the Company with notice, in writing, at least thirty (30) days
prior to the effective date of his
13
termination of employment and also signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit F, he
shall be entitled to receive all Additional Benefits through the fifth
anniversary of the Effective Date.
(h) Calculation of Bonus.
For purposes of Sections 4(a), 4(b) and 4(d), the pro-rated portion of
the annual bonus referenced in such sections, if any, shall be determined by
multiplying such annual bonus by a fraction, the numerator of which shall be the
number of days during such fiscal year that Employee was employed and the
denominator of which shall be 365.
(i) Certain Payments.
To the extent that any Payment (as such term is defined in Schedule II
to the Prior Employment Agreement) made in connection with the termination of
Employee's employment pursuant to Section 4(d) (without Cause) or Section 4(f)
(Constructive Termination) is determined (as provided in the following sentence)
to be subject to the Excise Tax (as such term is defined in Schedule II to the
Prior Employment Agreement) imposed by Section 4999 (as such term is defined in
Schedule II to the Prior Employment Agreement), Employee shall be entitled to
the benefits and protections set forth in Schedule II of the Prior Employment
Agreement, which is incorporated herein by this reference to the same extent as
if set forth in this Agreement in its entirety. Notwithstanding any provision in
Schedule II to the Prior Employment Agreement to the contrary, the determination
that any Payment made on or prior to the Effective Date is or was subject to the
Excise Tax shall be only established by a final determination by the Internal
Revenue Service ("IRS") that such Payment is or was subject to the excise tax
imposed by Section 4999 of the Code, and that such Payment was actually made by
the Employee. Further, Employee agrees to provide notice of such IRS
determination (and other IRS actions related hereto) to the Company within ten
(10) days of receipt, and the Company, in its discretion, may challenge such IRS
determination. If the Company determines to challenge such IRS determination,
Employee agrees to provide full cooperation with the Company in order to
effectuate such challenge.
(j) Board Membership In Case of Termination.
In the event of termination of Executive's employment with the
Companies for any reason, Employee agrees to resign, and shall automatically be
deemed to have resigned, with no further action required, from his membership on
the Company Board and any committees thereof, effective as of the date of such
termination of employment or effective at such later date selected by the
Company Board.
5. Business Expenses.
The Company shall reimburse Employee promptly for, or pay directly,
all reasonable business expenditures incurred by Employee during the Term in
connection with his performance of his duties hereunder (including, without
limitation, the reasonable costs and expenses of establishing and maintaining an
office in his home as set forth below), upon proper presentation of expense
statements or vouchers or such other supporting information as the Company shall
reasonably require. During the Term, Employee shall have the right to use the
14
Company airplane for appropriate business purposes in accordance with Company
policy as in effect from time to time. The Company will reimburse the Employee
for the expenses (not to exceed $50,000 (U.S. Dollars) per year and subject to
the substantiation requirements above) incurred from time to time during the
Term to acquire, upgrade or replace home office equipment and services
(including computer, printer, monitor, internet connections and telephone lines)
reasonably required for Employee to perform his duties under this Agreement.
6. Inventions and Patents.
(a) All inventions (whether or not patentable), developments, concepts,
know-how, technology, ideas, methods, techniques, products or processes, that
Employee solely or jointly makes, conceives of or reduces to practice (as those
terms have been interpreted by the Federal Courts in connection with the Patent
Act (35 U.S.C. sections 101 et. seq.)) during the Term and any works of
authorship that Employee authors during the Term (collectively, "Developed
Inventions"), and any patents or patent applications or other proprietary rights
arising from the foregoing and any other proprietary or intellectual property
rights with respect to which Employee is an inventor, creator or author during
the Term (collectively, the "Developed Intellectual Property") shall belong
exclusively to and be the exclusive property of the Company; provided, however,
that, any Developed Invention or any Developed Intellectual Property that
Employee identifies and thereafter can establish does not relate in whole or in
part to the fields of Interactive Television or Interactive Program Guides (as
such terms are defined in the Patent Rights Agreement of even date herewith
between the Company and Employee) or other aspects of the Company's business,
and did not result from any work performed by Employee for the Company, shall
belong exclusively to and be the exclusive property of Employee (the "Employee
Intellectual Property"). Employee agrees to assign, and hereby conveys and
assigns, to the Company all of Employee's right, title and interest in and to
all Developed Inventions and Developed Intellectual Property, together with the
right to xxx for past infringement or misappropriation thereof, other than the
Employee Intellectual Property (collectively, "Assigned Intellectual Property").
The Company shall have the exclusive right to direct and control prosecution of
any patent or other applications or registrations, domestic and foreign, for
protection of the Assigned Intellectual Property.
(b) Promptly following the creation thereof, Employee shall disclose
Developed Inventions and Developed Intellectual Property not previously
disclosed to the Company in written form in as much detail as Employee can
reasonably provide. Employee shall consult with the Company as reasonably
requested to provide such information as may be available to Employee to enable
one of ordinary skill in the art to practice any inventions, developments,
concepts, know-how, technology, ideas, methods, techniques, products or
processes contained in any Developed Invention or Developed Intellectual
Property and to disclose to the Company any Developed Inventions and Developed
Intellectual Property not theretofore disclosed to the Company.
15
(c) Employee shall (i) take all actions reasonably requested by the
Company and make all further assurances reasonably warranted to confirm that the
Company is the exclusive owner of all Assigned Intellectual Property, all at the
Company's sole cost and expense, and (ii) provide all reasonable assistance in
obtaining, perfecting or enforcing the Assigned Intellectual Property or any
legal rights in and to the same in any administrative agency or court, domestic
or foreign including, but not limited to, reviewing and signing all lawful
declarations, oaths, affidavits and other documents in connection with any of
the foregoing, all at the Company's sole cost and expense.
(d) Employee acknowledges hereby receipt of written notice from the
Company pursuant to California Labor Code Section 2872 that this Agreement (to
the extent it requires an assignment or offer to assign rights to any invention
of Employee) does not apply to Developed Inventions and Developed Intellectual
Property that qualifies fully under California Labor Code Section 2870.
7. Indemnity.
To the maximum extent permitted by applicable law, the Company shall
indemnify Employee, defend Employee and hold Employee harmless from and against
any and all claims, liabilities, judgments, fines, penalties, costs and expenses
(including, without limitation, reasonable attorneys' fees, costs of
investigation and experts, settlements and other amounts actually incurred by
Employee in connection with the defense of any action, suit or proceeding, and
in connection with any appeal thereon) reasonably incurred by Employee in any
and all threatened, pending or completed actions, suits or proceedings, whether
civil, criminal, administrative or investigative (including, without limitation,
actions, suits or proceedings brought by or in the name of the Company),
arising, directly or indirectly, by reason of Employee's status, actions or
inaction, including, without limitation, actual or alleged errors or omissions,
as a director, officer, employee or agent of the Company or of an affiliate of
the Company after the Effective Date so long as (i) Employee's conduct was in
good faith, (ii) Employee reasonably believed such conduct to be in or not
opposed to the best interests of the Company, and (iii) Employee's conduct was
not in violation of the representations and warranties set forth in Section 15
of the Termination Agreement; provided, however, this Section 7 shall not apply
to any claim (a) pursuant to the Xxxxxxxx-Xxxxx Act, and any rules or
regulations arising thereunder, as it may be amended from time to time, or (b)
arising as a result of the execution of this Agreement, the Umbrella Agreement,
the Termination Agreement, the Patent Rights Agreement, any ancillary agreement
(including without limitation any equity grant) to any such agreement, or
Amendment No. 1 to the Stockholders' Agreement of even date herewith among the
Company, Employee and The News Corporation Limited, as all such claims described
in the foregoing clauses (a) and (b) shall be subject to indemnification in
accordance with Section 10(a)(ii) of the Termination Agreement. The Company
shall advance to Employee upon request any and all expenses reasonably incurred
by Employee in defending any and all such actions, suits or proceedings to the
maximum extent permitted by applicable law. The advances to be made hereunder
shall be paid by the Company to Employee within ten (10) days following delivery
of a written request for payment therefor by Employee to the Company. Employee
shall have a right to select attorneys to defend him in any actual or threatened
action, suit, proceeding or investigation, subject to the Company's approval,
which shall not be unreasonably withheld. Notwithstanding any other provision of
this Agreement, the provisions
16
of this Section 7 shall survive the expiration, suspension or termination, for
any reason, of this Agreement and shall survive the termination of Employee's
employment with the Company. Notwithstanding the foregoing, this Section 7 shall
not apply to any dispute between the Company and Employee with respect to any
alleged breach of, or seeking an interpretation of, or a determination of the
rights or obligations of either party under, this Agreement, the Umbrella
Agreement, the Termination Agreement, the Patent Rights Agreement, or any
ancillary agreement (including without limitation any equity grant) to any such
agreement.
8. Noncompetition and Nonsolicitation.
During the Term, except to the extent the Company provides prior
written approval, Employee shall not, in any manner, directly or indirectly,
engage in any business that is a Competitor, and, except as expressly permitted
by clause (iv) of Section 2(b), will not, directly or indirectly, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of, or be employed by, or connected in any manner with any corporation,
firm or business that is a Competitor.
Employee acknowledges that the Company and all of its affiliates and
subsidiaries by nature of their respective businesses have a legitimate and
protectable interest in their clients, customers and employees with whom they
have established significant relationships as a result of a substantial
investment of time and money, and but for Employee's employment hereunder,
Employee would not have had contact with such clients, customers and employees.
Employee agrees that during the Term and for one additional year
thereafter (the "Non-Solicitation Period"), without the prior written approval
of the Company (which approval may be granted or withheld in the Company's sole
and absolute discretion), Employee will not (except as necessary to perform
Employee's duties as an employee of the Company):
(i) directly or indirectly, for Employee's own account, or as an
agent, executive, director, owner, partner, or consultant of any corporation,
firm, partnership, joint venture, syndicate, sole proprietorship or other
business (whether as a principal, division, subsidiary, affiliate, related
entity, or otherwise) solicit or induce any client or customer of the Company
(and with respect to the Company's subsidiaries, any client or customer of such
subsidiaries with whom Employee had contact, or who was identified to Employee,
during Employee's employment with the Company) (a) to not do business or to
alter in any adverse manner its relationship with the Company or any of its
subsidiaries, or (b) to obtain services or goods from Employee or any business
with which Employee is then affiliated, if such services or goods are comparable
to those provided by Employee during his employment with the Company and the
Company continues to provide such services or goods; or
(ii) solicit or induce any executive or employee of the Company
(and with respect to the Company's subsidiaries, any executive or employee of
such subsidiaries with whom Employee had contact, or who was identified to
Employee, during Employee's employment with the Company) to terminate his or her
employment relationship with the Company or any of its subsidiaries and commence
an employment relationship with any Competitor or with any business or entity
owned by, controlled by or affiliated with Employee.
17
9. [Reserved]
10. Miscellaneous.
(a) Succession; Survival.
This Agreement shall inure to the benefit of and shall be binding upon
the Company and the Company's successors and assigns, but without the prior
written consent of Employee this Agreement may not be assigned other than in
connection with a merger or sale of substantially all the assets of the Company
or a similar transaction in which the successor or assignee assumes (whether by
operation of law or express assumption) all obligations of the Company
hereunder. The obligations and duties of Employee hereunder are personal and
otherwise not assignable.
(b) Notices.
Any notice or other communication provided for in this Agreement shall
be in writing and sent, if to the Company, to its office at:
Gemstar - TV Guide International, Inc.
Suite 800
000 Xxxxx Xxx Xxxxxx Xxx.
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
or at such other address as the Company may from time to time in writing
designate, and, if to Employee, at such address as Employee may from time to
time in writing designate (or Employee's business address of record in the
absence of such designation). Each such notice or other communication shall be
effective (i) if given by telecommunication, when transmitted to the applicable
number so specified in (or pursuant to) this Section 10(b) and an appropriate
answerback is received, (ii) if given by mail, three days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when actually
delivered at such address.
(c) Entire Agreement; Amendments.
This Agreement, the Termination Agreement, the Umbrella Agreement (as
defined in the Termination Agreement), the Patent Rights Agreement of even date
herewith between Employee and the Company, and the Amendment No. 1 to the
Stockholders' Agreement of even date herewith among the Company, Employee and
The News Corporation Limited, together with the ancillary agreements referred to
in (or otherwise entered into in connection with) any of the foregoing
agreements, contain the entire agreement of the parties relating to the subject
matter hereof and supersede any prior agreements, undertakings, commitments and
practices relating to Employee's employment by the Company or its subsidiaries
except for any and all other agreements necessary to give effect to the
provisions of this Agreement, including, without limitation, stock option
agreements, life insurance agreements, and agreements relating
18
to Additional Benefits. No amendment or modification of the terms of this
Agreement shall be valid unless made in writing and signed by Employee and, on
behalf of the Company, by senior executive officers after approval thereof by
the Company Board.
(d) Waiver.
No failure on the part of any party to exercise or delay in exercising
any right hereunder shall be deemed a waiver thereof or of any other right, nor
shall any single or partial exercise preclude any further or other exercise of
such right or any other right.
(e) Choice of Law.
This Agreement, the legal relations between the parties and any
action, whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement, the relationship of the parties or the subject matter
hereof shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts made and performed in such State and
without regard to conflicts of law doctrines.
(f) Resolution of Disputes Generally.
In the event of any dispute, controversy, claim or disagreement
between Employee and the Company with respect to any alleged breach of this
Agreement, the interpretation of this Agreement, or the rights or obligations of
either party under this Agreement, the parties shall consult and negotiate with
each other in good faith and, recognizing their mutual interests, attempt to
reach a solution satisfactory to both parties. If they do not resolve the
dispute, controversy, claim or disagreement within a period of 30 days, or such
longer period as they may mutually agree, then such dispute, controversy, claim
or disagreement shall be resolved pursuant to confidential binding arbitration
in New York, New York by a panel of three neutral arbitrators. The arbitration
shall be conducted in accordance with the Commercial Rules of the American
Arbitration Association then in effect. Within 15 days after the initiation of
arbitration, the parties shall select three neutral arbitrators, all of whom
shall be members of a state bar actively engaged in the practice of law for at
least 10 years. Either party may seek interim or preliminary relief from the
arbitrators until an arbitration award is rendered or the controversy is
otherwise resolved. Either party also may, prior to the establishment of the
arbitral tribunal, and without waiving any remedy under this Agreement, seek
interim or provisional relief that is necessary to protect the rights or
property of that party. The arbitration award shall be made as promptly as
practicable and in any event within nine months of the filing of the notice of
intention to arbitrate, and the arbitrators shall agree to comply with this
schedule before accepting appointment; provided, however, that this time limit
may be extended by agreement of the parties or by the arbitrators if necessary.
The award of the arbitrators shall be in writing, shall be signed by a majority
of the arbitrators, and shall include findings of fact and the reasons for the
disposition of each claim. In the award, the arbitrators shall allocate all of
the costs of the arbitration, including the fees of the arbitrators and the
reasonable attorneys' fees of the prevailing party, against the non-prevailing
party. This Section 10(f) shall not be construed to limit either party's right
to obtain equitable relief with respect to any dispute and, pending a final
arbitration by the arbitrators with respect to any such disputes, either party
shall be entitled
19
to obtain any such relief by direct application to state, federal or other
applicable court, without being required to first arbitrate such dispute. Except
as may be required by law or by judicial or administrative process or order or
the rules of any securities exchange or similar self-regulatory organization
applicable to the party or arbitrator, neither the parties nor the arbitrators
may disclose the existence, content or results of any arbitration hereunder
without the prior written consent of all of the parties. Judgment on the award
may be entered in any court having jurisdiction thereof. In connection with any
dispute as to whether any Developed Invention or any Developed Intellectual
Property is Employee Intellectual Property or Assigned Intellectual Property, as
such terms are defined in Section 6, discovery shall be on an expedited basis,
the decision of the arbitration panel shall be final and there shall be no right
of appeal or right to petition to vacate such award.
(g) Reserved.
(h) Confidentiality, Proprietary Information.
Employee agrees to not make use of, divulge or otherwise disclose,
directly or indirectly, any trade secret or other confidential or proprietary
information concerning the business (including, but not limited to, confidential
or proprietary information concerning its products, employees, services,
practices or policies) of the Company or any of its subsidiaries of which
Employee may learn or be aware as a result of Employee's employment during the
Term or prior thereto as shareholder, employee, officer or director of or
consultant to the Company and its predecessors, except to the extent such use or
disclosure is (i) necessary to the performance of this Agreement and in
furtherance of the Company's best interests, (ii) required by applicable law,
(iii) lawfully obtainable from other sources, or (iv) authorized in writing by
the Company. The provisions of this Section 10(h) shall survive the expiration,
suspension or termination, for any reason, of this Agreement.
(i) Trade Secrets.
Employee, prior to and during the Term, has had and will have access
to and become acquainted with various trade secrets, consisting of software,
plans, formulas, patterns, devices, secret inventions, processes, customer
lists, contracts, and compilations of information, records and specifications
that are owned by the Company or by its subsidiaries and regularly used in the
operation of their respective businesses and that may give the Company an
opportunity to obtain an advantage over competitors who do not know or use such
trade secrets. Employee agrees and acknowledges that Employee has been granted
access to these valuable trade secrets only by virtue of the confidential
relationship created by Employee's employment and Employee's prior relationship
to, interest in and fiduciary relationships to the Company and its predecessors.
Employee shall not disclose any of the aforesaid trade secrets, directly or
indirectly, or use them in any way, either during the Term or at any time
thereafter, except as required in the course of employment by the Company and
for its benefit.
All records, files, documents, drawings, specifications, software,
equipment, and similar items relating to the business of the Company or its
subsidiaries, including without limitation all records relating to customers
(the "Documents"), whether prepared by Employee or otherwise coming into
Employee's possession, shall remain the exclusive property of the
20
Company or such subsidiaries and shall not be removed from the premises of the
Company or its subsidiaries under any circumstances whatsoever without the prior
consent of a senior executive officer of the Company. Upon termination of
employment, Employee agrees to promptly deliver to the Company all Documents in
the possession or under the control of Employee.
(j) Severability.
If any provision of this Agreement is held invalid or unenforceable,
the remainder of this Agreement shall nevertheless remain in full force and
effect, and if any provision is held invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full force and effect
in all other circumstances, to the fullest extent permitted by law.
(k) Withholding; Deductions.
All compensation payable hereunder, including salary and other
benefits, shall be subject to applicable taxes, withholding and other required,
normal or elected employee deductions.
(l) Cooperation.
Employee agrees that during the Term and thereafter he will cooperate
in the Company's and its subsidiaries' defense against any threatened or pending
litigation or in any investigation or proceeding by any governmental agency or
body that relates to any events or actions which occurred during or prior to the
Term. The Company agrees to reimburse Employee for any reasonable and necessary
out-of-pocket costs incurred by Employee in providing such assistance.
(m) Section Headings.
Section and other headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(n) Counterparts.
This Agreement and any amendment hereto may be executed in several
counterparts. All of such counterparts shall constitute one and the same
agreement and shall become effective when a copy signed by each party has been
delivered to the other party.
(o) Representation By Counsel; Interpretation.
Each party hereto acknowledges that it or he has been represented by
counsel in connection with this Agreement and the matters contemplated by this
Agreement. Accordingly, any rule of law, including but not limited to Section
1654 of the California Civil Code, or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the intent
of the parties.
21
[The remainder of this page has been intentionally left blank - signature page
follows]
22
[Signature Page to Employment Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"The Company"
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By: /s/ Xxxx Xxxxx
---------------------------------
Xxxx Xxxxx, Co-President
By: /s/ Xxxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxxx X. Xxxxxx, Executive
Vice President
"Employee"
/s/ Xxxxx X. Xxxx
------------------------------------
XXXXX X. XXXX
23
Exhibit A
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
INITIAL STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of __________, ____, between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of __________, ____ (the "Grant Date") three million three hundred
thirty-three thousand three hundred thirty-four (3,333,334) nonqualified stock
options to purchase authorized but unissued or treasury shares of the Company's
Common Shares, $.01 par value, upon and subject to the terms and conditions set
forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Common Share" shall have the meaning assigned to it under the Termination
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Option. Effective as of the Grant Date, this Agreement
evidences the Company's grant to Employee, subject to the vesting provisions and
restrictions set forth below, of three million three hundred thirty-three
thousand three hundred thirty-four (3,333,334) nonqualified stock options (the
"Options") under the SIP. Each Option shall represent the right to acquire one
1
(1) Common Share. The number, type and exercise price of the Options are subject
to adjustment pursuant to Section 4.2 of the SIP.
The Options shall expire on the first to occur of (i) the close of business on
the last business day of the Company coinciding with or immediately preceding
the day before the tenth anniversary of the Grant Date or (ii) the termination
of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the
SIP.
The exercise price per Common Share under each Option shall equal the Fair
Market Value of a Common Share on the Grant Date (or as of the last trading day
preceding the Grant Date if the Grant Date is not a trading day).
The Options are intended to be non-qualified stock options and not incentive
stock options under Code Section 422.
3. Exercisability of Options. The Options shall vest as follows:
(i) one million one hundred eleven thousand one hundred twelve (1,111,112)
Options shall vest on the Grant Date,
(ii) one million one hundred eleven thousand one hundred eleven (1,111,111)
Options shall vest on the first anniversary of the Grant Date, and
(iii) one million one hundred eleven thousand one hundred eleven (1,111,111)
Options shall vest on the second anniversary of the Grant Date;
provided, however, that no Options shall vest after any (i) termination of
Employee's employment pursuant to Section 4(c) or Section 4(g) of the New
Employment Agreement, or (ii) occurrence of any Breach Event which (if capable
of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Options shall vest during any Breach Cure Period
(but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Options scheduled to vest during such Breach Cure Periods
shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Options shall vest during any For Cause Determination
Period (but, in the event that the Company Board determines no termination for
Cause has occurred or Employee is successful in challenging any purported
termination under Section 4(c) of the New Employment Agreement, any Options
scheduled to vest during such For Cause Determination Period shall be deemed to
have vested as of the scheduled vesting date); and
provided, further, and subject to the foregoing paragraphs, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the
Options shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit F of the
New Employment Agreement. Subject to the execution of the aforementioned
release, in the event of
2
termination due to Section 4(b) of the New Employment Agreement, Employee's
estate or Beneficiaries, as the case may be, shall be entitled to exercise all
Options held by Employee at the time of his death for the balance of their term.
To the extent Employee does not purchase all or any part of the Common Shares
under the Options exercisable and to which Employee is entitled, Employee has
the right cumulatively thereafter to purchase any Common Shares not so purchased
and such right shall continue until the Option terminates or expires. Fractional
Common Share interests shall be disregarded, but may be cumulated. No fewer than
50 Common Shares may be purchased at any one time, unless the number purchased
is the total number at the time available for purchase under the Option.
4. Method of Exercise of Options. The Options shall be exercisable by the
delivery to the Company of a written exercise notice in the form to be provided
by Company, which shall state the number of Common Shares to be purchased
pursuant to the Options. The purchase price of any Common Shares purchased on
exercise of an Option shall be paid by Employee (or Employee's Personal
Representative or Beneficiary, as the case may be) in full at the time of each
purchase in one or a combination of the following methods: (i) in money,
including by electronic funds transfer; (ii) by check payable to the order of
the Company; (iii) to the extent permitted by applicable law, by a promissory
note of Employee consistent with the requirements of Section 1.8 of the SIP,
provided, however, that the Committee may in its absolute discretion limit
Employee's ability to exercise an Option that is paid by a promissory note; or
(iv) to the extent permitted by and consistent with the Company's Certificate of
Incorporation (as amended) and applicable law, by notice and third party payment
in such manner as may be authorized by the Committee or by the delivery of
Common Shares already owned by Employee, provided, however, that the Committee
may in its absolute discretion limit Employee's ability to exercise an Option by
delivering such Common Shares. Common Shares that are permitted to be used to
satisfy the exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise and shall have been beneficially owned by Employee
for at least six months prior to such delivery.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, exercise, payment or disposition of any Options, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
Employee (or Employee's Beneficiary or Personal Representative) shall furnish
any written statements required pursuant to Section 4.4 of the SIP.
5. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Options and
the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes
3
in any way with the right of the Company or any Subsidiary at any time to
terminate Employee's employment, or affects the right of the Company or any
Subsidiary to increase or decrease Employee's other compensation.
6. Forfeiture.
All Options then unvested shall be automatically terminated and forfeited upon
any (i) termination of Employee's employment pursuant to Section 4(c) or Section
4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event
which (if capable of cure) has not (together with all effects thereof) been
fully cured by Employee within the Breach Cure Period. Notwithstanding anything
herein to the contrary, in the event that Employee is successful in challenging
any purported termination under Section 4(c) of the New Employment Agreement,
any unvested Options that terminated due to such purported termination shall be
deemed reinstated and vested upon the conclusion of such successful challenge.
7. Change in Control Event. All Options referred to in this Agreement
shall be subject to immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Options at
their then fair market value, or (B) the continuation of such Options in an
economically equivalent amount (e.g. replacement shares of restricted stock,
options or stock units, based on a successor company's stock, provided that such
replacement award will have substantially similar terms and conditions as the
Options immediately prior to the Change in Control Event).
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
8. Termination of Options Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Options may be terminated or rendered
non-exercisable (to the extent they were not previously exercised) in certain
circumstances, as described therein.
9. Non-Transferability of Options. The Options and any other rights of
Employee under this Agreement or the SIP are nontransferable and subject to
extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable
on exercise of the Options are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
10. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or
4
certified, and deposited (postage and registry or certification fee prepaid) in
a post office or branch post office regularly maintained by the United States
Government.
11. Plan. The Options and all rights of Employee thereunder are subject
to, and Employee agrees to be bound by, all of the terms and conditions of the
provisions of the SIP, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the SIP, the terms and conditions of the SIP
shall govern except as expressly set forth herein. In the event of a conflict or
inconsistency between the terms and conditions of this Agreement, and the terms
and conditions of the New Employment Agreement, the terms and conditions of this
Agreement shall govern. Employee acknowledges receipt of a copy of the SIP,
which is made a part hereof by this reference, and agrees to be bound by the
terms thereof. Unless otherwise expressly provided in other Sections of this
Agreement, provisions of the SIP that confer discretionary authority on the
Committee do not (and shall not be deemed to) create any rights in Employee,
unless such rights are expressly set forth herein or are otherwise in the sole
discretion of the Committee so conferred by appropriate action of the Committee
under the SIP after the date hereof.
12. Entire Agreement. This Agreement, the Termination Agreement, the New
Employment Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
13. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
14. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
15. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any Common Shares not actually delivered to
and held of record by Employee. No adjustment will be made for dividends or
other rights as a stockholder for which a record date is prior to such date of
delivery.
16. No Restriction on Corporate Powers. The existence of the SIP and/or
the Options shall not affect or restrict in any way the right or power of the
Board or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Company's
5
capital stock or the rights thereof, the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding.
17. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
18. Execution. The grant of Options hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the Grant Date.
19. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
6
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
7
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Initial Stock Option
Agreement by Gemstar-TV Guide International, Inc., I,
___________________________________, the spouse of the Employee herein named, do
hereby join with my spouse in executing the foregoing Initial Stock Option
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------------
Signature of Spouse
8
Exhibit B
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
SECOND STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of ______, ____, between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of _____, ____ (the "Grant Date") three million three hundred
thirty-three thousand three hundred thirty-three (3,333,333) nonqualified stock
options to purchase authorized but unissued or treasury shares of the Company's
Common Shares, $.01 par value, upon and subject to the terms and conditions set
forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Common Share" shall have the meaning assigned to it under the Termination
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Option. Effective as of the Grant Date, this Agreement
evidences the Company's grant to Employee, subject to the vesting provisions and
restrictions set forth below, of three million three hundred thirty-three
thousand three hundred thirty-three (3,333,333) nonqualified stock options (the
"Options") under the SIP. Each Option shall represent the right to
1
acquire one (1) Common Share. The number, type and exercise price of the Options
are subject to adjustment pursuant to Section 4.2 of the SIP.
The Options shall expire on the first to occur of (i) the close of business on
the last business day of the Company coinciding with or immediately preceding
the day before the tenth anniversary of the Grant Date or (ii) the termination
of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the
SIP.
The exercise price per Common Share under each Option shall equal the Fair
Market Value of a Common Share on the Grant Date (or as of the last trading day
preceding the Grant Date if the Grant Date is not a trading day).
The Options are intended to be non-qualified stock options and not incentive
stock options under Code Section 422.
3. Exercisability of Options. The Options shall vest as follows:
(i) one million one hundred eleven thousand one hundred eleven (1,111,111)
Options shall vest on the Grant Date,
(ii) one million one hundred eleven thousand one hundred eleven (1,111,111)
Options shall vest on the first anniversary of the Grant Date, and
(iii) one million one hundred eleven thousand one hundred eleven (1,111,111)
Options shall vest on the second anniversary of the Grant Date;
provided, however, that no Options shall vest after any (i) termination of
Employee's employment pursuant to Section 4(c) or Section 4(g) of the New
Employment Agreement, or (ii) occurrence of any Breach Event which (if capable
of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, however, that no Options shall vest during any Breach Cure Period
(but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Options scheduled to vest during such Breach Cure Periods
shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Options shall vest during any For Cause Determination
Period (but, in the event that the Company Board determines no termination for
Cause has occurred or Employee is successful in challenging any purported
termination under Section 4(c) of the New Employment Agreement, any Options
scheduled to vest during such For Cause Determination Period shall be deemed to
have vested as of the scheduled vesting date); and
provided, further, and subject to the foregoing paragraphs, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the
Options shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit F of the
New Employment Agreement. Subject to the execution of the aforementioned
release, in the event of
2
termination due to Section 4(b) of the New Employment Agreement, Employee's
estate or Beneficiaries, as the case may be, shall be entitled to exercise all
Options held by Employee at the time of his death for the balance of their term.
To the extent Employee does not purchase all or any part of the Common Shares
under the Options exercisable and to which Employee is entitled, Employee has
the right cumulatively thereafter to purchase any Common Shares not so purchased
and such right shall continue until the Option terminates or expires. Fractional
Common Share interests shall be disregarded, but may be cumulated. No fewer than
50 Common Shares may be purchased at any one time, unless the number purchased
is the total number at the time available for purchase under the Option.
4. Method of Exercise of Options. The Options shall be exercisable by the
delivery to the Company of a written exercise notice in the form to be provided
by Company, which shall state the number of Common Shares to be purchased
pursuant to the Options. The purchase price of any Common Shares purchased on
exercise of an Option shall be paid by Employee (or Employee's Personal
Representative or Beneficiary, as the case may be) in full at the time of each
purchase in one or a combination of the following methods: (i) in money,
including by electronic funds transfer; (ii) by check payable to the order of
the Company; (iii) to the extent permitted by applicable law, by a promissory
note of Employee consistent with the requirements of Section 1.8 of the SIP,
provided, however, that the Committee may in its absolute discretion limit
Employee's ability to exercise an Option that is paid by a promissory note; or
(iv) to the extent permitted by and consistent with the Company's Certificate of
Incorporation (as amended) and applicable law, by notice and third party payment
in such manner as may be authorized by the Committee or by the delivery of
Common Shares already owned by Employee, provided, however, that the Committee
may in its absolute discretion limit Employee's ability to exercise an Option by
delivering such Common Shares. Common Shares that are permitted to be used to
satisfy the exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise and shall have been beneficially owned by Employee
for at least six months prior to such delivery.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, exercise, payment or disposition of any Options, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
Employee (or Employee's Beneficiary or Personal Representative) shall furnish
any written statements required pursuant to Section 4.4 of the SIP.
5. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Options and
the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes
3
in any way with the right of the Company or any Subsidiary at any time to
terminate Employee's employment, or affects the right of the Company or any
Subsidiary to increase or decrease Employee's other compensation.
6. Forfeiture.
All Options then unvested shall be automatically terminated and forfeited upon
any (i) termination of Employee's employment pursuant to Section 4(c) or Section
4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event
which (if capable of cure) has not (together with all effects thereof) been
fully cured by Employee within the Breach Cure Period. Notwithstanding anything
herein to the contrary, in the event that Employee is successful in challenging
any purported termination under Section 4(c) of the New Employment Agreement,
any unvested Options that terminated due to such purported termination shall be
deemed reinstated and vested upon the conclusion of such successful challenge.
7. Change in Control Event. All Options referred to in this Agreement
shall be subject to immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Options at
their then fair market value, or (B) the continuation of such Options in an
economically equivalent amount (e.g. replacement shares of restricted stock,
options or stock units, based on a successor company's stock, provided that such
replacement award will have substantially similar terms and conditions as the
Options immediately prior to the Change in Control Event).
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
8. Termination of Options Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Options may be terminated or rendered
non-exercisable (to the extent they were not previously exercised) in certain
circumstances, as described therein.
9. Non-Transferability of Options. The Options and any other rights of
Employee under this Agreement or the SIP are nontransferable and subject to
extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable
on exercise of the Options are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
10. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or
4
certified, and deposited (postage and registry or certification fee prepaid) in
a post office or branch post office regularly maintained by the United States
Government.
11. Plan. The Options and all rights of Employee thereunder are subject
to, and Employee agrees to be bound by, all of the terms and conditions of the
provisions of the SIP, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the SIP, the terms and conditions of the SIP
shall govern except as expressly set forth herein. In the event of a conflict or
inconsistency between the terms and conditions of this Agreement, and the terms
and conditions of the New Employment Agreement, the terms and conditions of this
Agreement shall govern. Employee acknowledges receipt of a copy of the SIP,
which is made a part hereof by this reference, and agrees to be bound by the
terms thereof. Unless otherwise expressly provided in other Sections of this
Agreement, provisions of the SIP that confer discretionary authority on the
Committee do not (and shall not be deemed to) create any rights in Employee,
unless such rights are expressly set forth herein or are otherwise in the sole
discretion of the Committee so conferred by appropriate action of the Committee
under the SIP after the date hereof.
12. Entire Agreement. This Agreement, the Termination Agreement, the New
Employment Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
13. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
14. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
15. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any Common Shares not actually delivered to
and held of record by Employee. No adjustment will be made for dividends or
other rights as a stockholder for which a record date is prior to such date of
delivery.
16. No Restriction on Corporate Powers. The existence of the SIP and/or
the Options shall not affect or restrict in any way the right or power of the
Board or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, preferred or prior preference stocks ahead of or affecting
the Company's
5
capital stock or the rights thereof, the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding.
17. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
18. Execution. The grant of Options hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the Grant Date.
19. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
6
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
7
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Second Stock Option Agreement
by Gemstar-TV Guide International, Inc., I, ____________________________, the
spouse of the Employee herein named, do hereby join with my spouse in executing
the foregoing Second Stock Option Agreement and do hereby agree to be bound by
all the terms and provisions thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------------
Signature of Spouse
8
Exhibit C
DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN
Delete the last sentence of Section 1.9 and replace with:
Except to the extent required by Sections 1.10 and 4.4 or by the Committee
in the Award Agreement, the restrictions set forth herein shall not apply to (i)
shares of Common Stock actually issued on exercise of any Options, (ii) shares
of Common Stock actually issued as payment for Stock Units or DERs, or (iii)
Restricted Stock awards that have vested and otherwise satisfied the conditions
that may be imposed by the Committee pursuant to Section 3.3.
Delete the last sentence of Section 3.2 and replace with:
DERs shall be payable in cash, shares of Common Stock or other Awards and
(to the extent permitted by law) may be subject to such conditions, not
inconsistent with Section 162(m) of the Code (in the case of Options or other
Awards intended to satisfy its conditions with respect to deductibility), as may
be determined by the Committee.
Add new Section 3.3:
3.3 Restricted Stock Awards.
Restricted Stock represents awards made in Common Stock in which the
shares granted may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, except upon passage of time, or upon satisfaction of
other conditions, or both, in every case as provided by the Committee in its
sole discretion (including, without limitation, Awards that may vest
immediately). The Committee, in its sole discretion, shall determine the
specific terms, conditions and provisions relating to each grant of Restricted
Stock (including, without limitation, the extent to which the recipient of the
Restricted Stock Award may have dividend and/or voting rights with respect to
the shares subject to the Award prior to the time such shares become vested) as
set forth in duly adopted rules or specific Award Agreements.
Delete the last sentence of Section 4.7 and replace with:
Except as otherwise expressly authorized by the Committee or this Plan, no
adjustment will be made for dividends or other shareholder rights for which a
record date is prior to such date of delivery.
Delete Section 5.1(a) and replace with:
(a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock
award, or DER, or any combination thereof, whether alternative, sequential, or
cumulative, authorized or granted under this Plan.
Add Section 5.1(gg):
(gg) "Restricted Stock" means an award of Common Stock, the vesting of
which is subject to vesting or other conditions pursuant to Section 3.3.
***********************************************
Exhibit D
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
EMPLOYMENT RESTRICTED STOCK AGREEMENT
THIS AGREEMENT dated as of _______, ____ between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the date hereof (i) two million ninety three thousand sixty four
(2,093,064) shares of restricted stock under the SIP and (ii) the right to
receive dividends on such restricted stock, if, when and as dividends are paid
on the shares of Common Stock generally, in each case, upon and subject to the
terms and conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Restricted Stock. Effective as of the date hereof, the
Company hereby grants to Employee, subject to the vesting provisions and
restrictions set forth below, two million ninety three thousand sixty four
(2,093,064) shares of restricted stock (the "Grant Shares") under the SIP.
1
On behalf of himself and on behalf of his beneficiaries, estate and permitted
assigns, Employee agrees:
(i) to the terms, provisions and restrictions provided by this Agreement on
any Restricted Property (as defined below) received with respect to the Grant
Shares; and
(ii) that Employee (or his beneficiaries, estate and permitted assigns)
will not vote (nor assign, pledge or transfer the right to vote to any other
party in any manner) with respect to the Grant Shares until such Grant Shares
are vested.
Employee shall have the right to receive ordinary cash dividends (if, when and
as ordinary cash dividends are paid on shares of Common Stock generally) with
respect to any unforfeited Grant Shares held under this Agreement.
Employee shall have the right to receive any securities or other property (if,
when and as such securities or properties are paid on shares of Common Stock
generally) as a result of any dividend or other distribution (other than
ordinary cash dividends), conversion or exchange with respect to any unforfeited
Grant Shares held under this Agreement (such securities or other property shall
be referred to herein as "Restricted Property"); provided, however, that such
Restricted Property received with respect to such Grant Shares shall be subject
to the terms and conditions of this Agreement. To the extent Restricted Property
is received with respect of the Grant Shares, the Restricted Property will be
subject to the restrictions set forth in this Agreement to the same extent as
the Grant Shares to which such securities or other property relate and shall be
held and accumulated for the benefit of Employee, but subject to such risks
(including, but not limited to, the risk of forfeiture).
The Company shall issue a certificate or certificates for the Grant Shares,
registered in the name of Employee, which certificate(s) shall be held by the
Company until such Grant Shares shall have become vested or forfeited in
accordance with this Agreement. The certificate(s) representing Grant Shares
forfeited in accordance with this Agreement and any shares accumulated thereon
and any other cash, rights or property (including Restricted Property)
accumulated in respect thereof shall, upon such forfeiture, automatically revert
to the Company. The certificate(s) representing Grant Shares (before such shares
shall have become vested) shall bear the following legends and/or any other
appropriate or required legends under applicable laws:
"OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY
OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE
CORPORATION."
To the extent that a certificate evidencing the Grant Shares or any related
Restricted Property is delivered to Employee prior to the vesting of such Grant
Shares, Employee shall promptly redeliver such certificate(s) to the Company to
be held by the Company pursuant to the terms hereof. Upon the occurrence of any
forfeiture of Grant Shares (including any related Restricted Property), such
forfeited Grant Shares (and related Restricted Property) shall be automatically
transferred to the
2
Company, without any other action by Employee, or Employee's Personal
Representative or Beneficiary, as the case may be. The Company may take any
other action necessary or advisable to evidence such transfer. Employee, or
Employee's Personal Representative or Beneficiary, as the case may be, shall
deliver any additional documents of transfer that the Company may reasonably
request to confirm such transfer. Without limiting the generality of the
foregoing, Employee, by execution of this Agreement, shall be deemed to appoint
the Company and each of its authorized representatives as Employee's
attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and
any related Restricted Property) and to execute such documents as the Company or
such representatives deem necessary or advisable in connection with any such
transfer.
Promptly after the vesting of the Grant Shares in accordance with the terms
hereof, a certificate or certificates evidencing the number of Grant Shares that
have vested shall be delivered to Employee (or, in the event of his death or
disability, Employee's Personal Representative or Beneficiary). Employee or such
other person shall deliver to the Company any representations or other documents
or assurances required pursuant to Section 4.4 of the SIP.
Employee shall not sell, transfer, pledge, assign or otherwise alienate or
hypothecate the Grant Shares or any Restricted Property in respect thereof until
such Grant Shares are vested. Any sale or transfer, or purported sale or
transfer, shall be null and void.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the first anniversary of the Effective Date,
(ii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the second anniversary of the Effective Date, and
(iii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the third anniversary of the Effective Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or
3
Employee is successful in challenging any purported termination under Section
4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during
such For Cause Determination Period shall be deemed to have vested as of the
scheduled vesting date); and
provided, further, and subject to the foregoing paragraph, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit F of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's stock,
provided that such replacement award will have substantially similar terms and
conditions as the Grant Shares immediately prior to the Change in Control
Event).
4
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. Unvested Grant Shares and any
other rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Grant Shares are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement and
the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
5
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties' under this Agreement.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. No Restriction on Corporate Powers. The existence of the SIP and/or
the Grant Shares shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
15. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
16. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
17. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
6
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
7
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Employment Restricted Stock
Agreement by Gemstar-TV Guide International, Inc., I, ________________________,
the spouse of Employee herein named, do hereby join with my spouse in executing
the foregoing Employment Restricted Stock Agreement and do hereby agree to be
bound by all the terms and provisions thereof and of the SIP.
Dated as of the ____ of _____________, ______. -----------------------------
Signature of Spouse
8
Exhibit E
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
EMPLOYMENT STOCK UNIT AGREEMENT
THIS AGREEMENT dated as of _______, _____ between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the date hereof (i) two million ninety three thousand sixty four
(2,093,064) Stock Units and (ii) Dividend Equivalent Rights ("DERs")
representing the right to receive, if, when and as ordinary cash dividends are
paid on the shares of Common Stock generally, an amount (of cash or other
property) equal to the ordinary cash dividends that would be paid with respect
to two million ninety three thousand sixty four (2,093,064) shares of Common
Stock, in each case, upon and subject to the terms and conditions set forth
herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Stock Units. Effective as of the date hereof, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, two million ninety
1
three thousand sixty four (2,093,064) Stock Units (the "Grant Shares") under the
SIP. The number and type of Grant Shares are subject to adjustment pursuant to
Section 4.2 of the SIP.
Employee shall be eligible for payment of Grant Shares at or following the
vesting of such Grant Shares. The form of payment of Grant Shares shall only be
in Company Common Stock and Employee shall be paid one share of Common Stock for
each Grant Share.
Employee shall have no voting rights with respect to the Grant Shares until such
Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or
otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or
purported sale or transfer, shall be null and void.
If, when and as ordinary cash dividends are paid on shares of Common Stock
generally, Employee shall be paid DERs equivalent to the ordinary cash dividends
that would be paid with respect to Z shares of Common Stock where "Z" is the
number of the unvested (and unforfeited) Grant Shares at the time of such
ordinary cash dividend payment. Any DERs provided under this Agreement shall be
paid in cash, shares of Common Stock or other Awards as may be determined by the
Committee.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the first anniversary of the Effective Date,
(ii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the second anniversary of the Effective Date, and
(iii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the third anniversary of the Effective Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement, or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or Employee is successful in challenging any
purported termination under Section 4(c) of the New Employment Agreement, any
Grant Shares scheduled to vest during such For Cause Determination Period shall
be deemed to have vested as of the scheduled vesting date); and
2
provided, further, and subject to the foregoing paragraphs, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit F of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's stock,
provided that such replacement award will have substantially similar terms and
conditions as the Grant Shares immediately prior to the Change in Control
Event).
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control
3
Event" under SIP Section 5.1(f)(5) shall not include the one-year period after
the Effective Date and such measurement period shall only commence upon the
first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. The Grant Shares and any other
rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Common Stock issuable on the Grant Shares are also subject to
restrictions on transfer under Section 1.10 of the SIP and to any and all
repurchase or redemption rights of the Company that may be provided under its
Certificate of Incorporation and Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement
4
which do not violate any statute or public policy shall continue in full force
and effect. Further, it is the parties' intent that any court order striking any
portion of this Agreement should modify the terms as narrowly as possible to
give as much effect as possible to the intentions of the parties under this
Agreement.
13. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by Employee. No adjustment will be made for
dividends or other rights as a stockholder for which a record date is prior to
such date of delivery.
15. No Restriction on Corporate Powers. The existence of the SIP, DERs
and/or the Grant Shares shall not affect or restrict in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
16. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
17. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
18. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by a duly authorized officer and Employee has hereunto
set his or her hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
---------------------------------
Title:
------------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
6
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Third Stock Option Agreement
by Gemstar-TV Guide International, Inc., I,
_____________________________________, the spouse of the Employee herein named,
do hereby join with my spouse in executing the foregoing Third Stock Option
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------
Signature of Spouse
7
Exhibit F
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (hereinafter this "Agreement")
is made and entered into by and between ___________ (hereinafter, "Employee")
and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter,
the "Company").
1. Employee's employment by the Company has terminated [or will
terminate] on __________________ (hereinafter, the "Termination Date").
2. Pursuant to the terms of that certain Employment Agreement dated
as of November __, 2002 between the Company and Employee (hereinafter, the
"Employment Agreement"), Employee is required to execute this Agreement in order
to obtain certain benefits under the Employment Agreement.
3. To the fullest extent permitted by law, Employee hereby RELEASES
and COVENANTS NOT TO XXX the Company, its parents, subsidiaries, affiliates,
predecessors, successors, assigns, its or their employee benefit plans,
trustees, fiduciaries and administrators, and any and all of its and their
respective past or present officers, directors, partners, insurers, agents,
representatives, attorneys and employees (all collectively included in the term
the "Company" for purposes of this Agreement ), from any and all claims, demands
or causes of action, known or unknown, based on any events or circumstances
relating to his employment at the Company or any subsidiary of the Company and
arising or occurring prior to and including the date of Employee's execution of
this Agreement, which Employee, his heirs, executors, administrators, agents,
attorneys, representatives or assigns (all collectively included in the term
"Employee" for purposes of this release and covenant not to xxx), has, had or
may have against the Company under Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age
Discrimination in Employment Act, the Employee Retirement Income Security Act,
the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. Section
1981, and all other federal, state and local statutes or ordinances,, any claims
that his employment was unlawfully terminated, any rights to severance pay or
benefits (other than as provided for in the Employment Agreement or that certain
Termination Agreement dated as of November __ 2002 between the Company, Gemstar
Development Corporation and Employee), and any rights of continued employment,
reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not
waiving, releasing or giving up any rights Employee may have (i) to test the
knowing and voluntary nature of this Agreement under The Older Workers Benefit
Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits
under any qualified pension or savings plan, (iv) to continued benefits in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or
(v) to unemployment insurance.
4. Employee agrees and acknowledges that he was hereby informed by
the Company in writing to consult with an attorney and that he had at least 21
days to consider this Agreement; that he has entered into this Agreement
knowingly and voluntarily with full understanding of its terms and after having
had the opportunity to seek and receive advice from counsel of his choosing; and
that he has had a reasonable period of time within which to consider
this Agreement. Employee represents that he has not filed a complaint, charge or
claim with any court or governmental agency against the Company with respect to
any claim released hereby and has not assigned any such claim against the
Company to any person or entity.
5. Employee expressly waives and relinquishes all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California with
respect to the releases provided herein, and does so understanding and
acknowledging the significance of such specific waiver of Section 1542. Section
1542 of the Civil Code of the State of California states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
Thus, notwithstanding the provisions of Section 1542, and for the purpose of
implementing the releases provided herein, Employee expressly acknowledges that
this Agreement is intended to include in its effect, without limitation other
than the express limitations set forth herein, all claims of the kind released
hereby even if he does not know or suspect such claim to exist in his favor at
the time of execution hereof, and that this Agreement contemplates the
extinguishment of any such claims. Employee acknowledges and agrees that the
foregoing waiver of the provisions of Section 1542 has been expressly bargained
for by each of the parties in the negotiation of this Agreement.
6. [This Section 6 is intentionally left blank]
7. Employee may accept this Agreement by delivering an executed copy
of this Agreement on or after the Termination Date and on or before
_______________________, in the manner described in Section 10(b), "Notices," of
the Employment Agreement.
8. Employee may revoke this Agreement within seven (7) days after it
is executed by Employee by delivering a written notice of revocation in the
manner described in Section 10(b), "Notices," of the Employment Agreement, no
later than the close of business on the seventh (7th) calendar day after this
Agreement was signed by Employee. This Agreement will not become effective or
enforceable until the eighth (8th) calendar day after Employee signs. If
Employee revokes this Agreement, the parties shall have no obligations under
this Agreement.
9. This Agreement does not constitute and shall not be construed as
an admission by the Company that it has violated any law, interfered with any
rights, breached any obligation or otherwise engaged in any improper or illegal
conduct with respect to Employee, and the Company expressly denies that it has
engaged in any such conduct.
10. If any provision, section, subsection or other portion of this
Agreement shall be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable
-2-
in whole or in part, and such determination shall become final, such provision
or portion shall be deemed to be severed or limited, but only to the extent
required to render the remaining provisions and portion of this Agreement
enforceable. This Agreement as thus amended shall be enforced so as to give
effect to the intention of the parties insofar as that is possible. In addition,
the parties hereby expressly empower a court of competent jurisdiction to modify
any term or provision of this Agreement to the extent necessary to comply with
existing law and to enforce this Agreement as modified.
11. Employee hereby agrees and acknowledges that he has carefully
read this Agreement, fully understands what this Agreement means, and is signing
this Agreement knowingly and voluntarily, and that Employee has not relied on
any statement by anyone associated with the Company that is not contained in
this Agreement in deciding to sign this Agreement.
12. This Agreement, the legal relations between the parties and any
action, whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement, the relationship of the parties or the subject matter
hereof shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts made and performed in such State and
without regard to conflicts of law doctrines.
13. All disputes arising under this Agreement shall be resolved
pursuant to Section 10(f) of the Employment Agreement.
[Remainder of page intentionally left blank]
-3-
WHEREFORE, the parties have executed this Agreement on the date or dates
set forth below.
EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC.
[_____________________] By:
--------------------------------
Name:
--------------------------------
Date: Title:
------------------- --------------------------------
Date:
--------------------------------
-4-
Exhibit G
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
THIRD STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of ___________, ____, between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
WITNESSETH
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of ___________, ____ (the "Grant Date") two hundred thousand
(200,000) nonqualified stock options to purchase authorized but unissued or
treasury shares of the Company's Common Shares, $.01 par value, upon and subject
to the terms and conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned
to them herein. Where capitalized terms are not defined herein they shall have
the meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Common Share" shall have the meaning assigned to it under the Termination
Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Option. Effective as of the Grant Date, this Agreement
evidences the Company's grant to Employee, subject to the vesting provisions and
restrictions set forth below, of two hundred thousand (200,000) nonqualified
stock options (the "Options") under the SIP. Each Option shall represent the
right to acquire one (1) Common Share. The number, type and exercise price of
the Options are subject to adjustment pursuant to Section 4.2 of the SIP.
The Options shall expire on the first to occur of (i) the close of business on
the last business day of the Company coinciding with or immediately preceding
the day before the tenth anniversary of the
1
Grant Date or (ii) the termination of the Options pursuant to Section 6 of this
Agreement or Section 4.2 of the SIP.
The exercise price per Common Share under each Option shall equal the Fair
Market Value of a Common Share on the Grant Date (or as of the last trading day
preceding the Grant Date if the Grant Date is not a trading day).
The Options are intended to be non-qualified stock options and not incentive
stock options under Code Section 422.
3. Exercisability of Options. The Options shall vest on the Grant
Date.
In the event of termination due to Section 4(b) of the New Employment Agreement,
Employee's estate or Beneficiaries, as the case may be, shall be entitled to
exercise all Options held by Employee at the time of his death for the balance
of their term.
To the extent Employee does not purchase all or any part of the Common Shares
under the Options exercisable and to which Employee is entitled, Employee has
the right cumulatively thereafter to purchase any Common Shares not so purchased
and such right shall continue until the Option terminates or expires. Fractional
Common Share interests shall be disregarded, but may be cumulated. No fewer than
50 Common Shares may be purchased at any one time, unless the number purchased
is the total number at the time available for purchase under the Option.
4. Method of Exercise of Options. The Options shall be exercisable
by the delivery to the Company of a written exercise notice in the form to be
provided by Company, which shall state the number of Common Shares to be
purchased pursuant to the Options. The purchase price of any Common Shares
purchased on exercise of an Option shall be paid by Employee (or Employee's
Personal Representative or Beneficiary, as the case may be) in full at the time
of each purchase in one or a combination of the following methods: (i) in money,
including by electronic funds transfer; (ii) by check payable to the order of
the Company; (iii) to the extent permitted by applicable law, by a promissory
note of Employee consistent with the requirements of Section 1.8 of the SIP,
provided, however, that the Committee may in its absolute discretion limit
Employee's ability to exercise an Option that is paid by a promissory note; or
(iv) to the extent permitted by and consistent with the Company's Certificate of
Incorporation (as amended) and applicable law, by notice and third party payment
in such manner as may be authorized by the Committee or by the delivery of
Common Shares already owned by Employee, provided, however, that the Committee
may in its absolute discretion limit Employee's ability to exercise an Option by
delivering such Common Shares. Common Shares that are permitted to be used to
satisfy the exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise and shall have been beneficially owned by Employee
for at least six months prior to such delivery.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, exercise, payment or disposition of any Options, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
Employee (or Employee's Beneficiary or Personal Representative) shall furnish
any written statements required pursuant to Section 4.4 of the SIP.
2
5. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Options and
the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
6. Forfeiture.
All Options then unvested shall be automatically terminated and forfeited upon
any (i) termination of Employee's employment pursuant to Section 4(c) or Section
4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event
which (if capable of cure) has not (together with all effects thereof) been
fully cured by Employee within the Breach Cure Period. Notwithstanding anything
herein to the contrary, in the event that Employee is successful in challenging
any purported termination under Section 4(c) of the New Employment Agreement,
any unvested Options that terminated due to such purported termination shall be
deemed reinstated and vested upon the conclusion of such successful challenge.
7. Reserved.
8. Termination of Options Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Options may be terminated or rendered
non-exercisable (to the extent they were not previously exercised) in certain
circumstances, as described therein.
9. Non-Transferability of Options. The Options and any other rights
of Employee under this Agreement or the SIP are nontransferable and subject to
extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable
on exercise of the Options are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
10. Notices. Any notice to be given under the terms of this
Agreement shall be in writing and addressed to the Company at its principal
office and to Employee at the addresses given beneath their respective
signatures hereon, or at such other address as either party may hereafter
designate in writing to the other. Any such notice shall be deemed given only
when received, but if Employee is no longer an Eligible Person, any notice to
Employee shall be deemed to have been duly given when enclosed in a properly
sealed envelope addressed as aforesaid, registered or certified, and deposited
(postage and registry or certification fee prepaid) in a post office or branch
post office regularly maintained by the United States Government.
3
11. Plan. The Options and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and of the terms and conditions of the SIP, the terms and conditions
of the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
12. Entire Agreement. This Agreement, the Termination Agreement, the
New Employment Agreement and the SIP together constitute the entire agreement
and supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
13. Severability. If a court of competent jurisdiction determines
that any portion of this Agreement is in violation of any statute or public
policy, then only the portions of this Agreement which violate such statute or
public policy shall be stricken, and all portions of this Agreement which do not
violate any statute or public policy shall continue in full force and effect.
Further, it is the parties' intent that any court order striking any portion of
this Agreement should modify the terms as narrowly as possible to give as much
effect as possible to the intentions of the parties under this Agreement.
14. California Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California.
15. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any Common Shares not actually delivered to
and held of record by Employee. No adjustment will be made for dividends or
other rights as a stockholder for which a record date is prior to such date of
delivery.
16. No Restriction on Corporate Powers. The existence of the SIP
and/or the Options shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
4
17. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
18. Execution. The grant of Options hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the Grant Date.
19. Counterparts. This Agreement and any amendment hereto may be
executed in several counterparts. All of such counterparts shall constitute one
and the same agreement and shall become effective when a copy signed by each
party has been delivered to the other party.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by a duly authorized officer and Employee has hereunto
set his or her hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
---------------------------------
Title:
------------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
6
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Third Stock Option Agreement
by Gemstar-TV Guide International, Inc., I,
_____________________________________, the spouse of the Employee herein named,
do hereby join with my spouse in executing the foregoing Third Stock Option
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------
Signature of Spouse
7
APPENDIX A
The terms and conditions provided under this Appendix A (including, without
limitation, the Section 3(c) and related exhibits) shall have no effect unless
and until as provided for under Section 3(d) of the Agreement.
(c) Equity Awards.
(i) Subject to receiving the requisite stockholder approval, the
Company shall cause the SIP to be amended (the "SIP Amendment") to provide for
awards of restricted stock, such amendment to be substantially in the form
attached hereto as Exhibit A. The Company shall schedule an annual or special
stockholders' meeting of the Company to occur as soon as reasonably practicable
after the Effective Date (the "Stockholder Meeting"); provided, however, the
parties acknowledge that the SIP Amendment will not be submitted for stockholder
approval at the informational stockholder meeting expected to be scheduled in
either November or December of 2002. At the Stockholder Meeting, the Company
shall submit the SIP Amendment for stockholder approval.
(ii) If the SIP Amendment is approved by the Company stockholders,
the Company shall issue:
(1) on the date of the Stockholder Meeting or as soon as reasonably
practicable thereafter (the "Initial Grant Date"), two million
ninety-three thousand sixty-four (2,093,064) shares of restricted stock
under the SIP to Employee in accordance with the terms and conditions
set forth in the Initial Employment Restricted Stock Agreement attached
hereto as Exhibit B;
(2) on the date that is six months and one day after the Effective Date or
as soon as reasonably practicable thereafter, one hundred twenty-five
thousand three hundred twenty-four (125,324) shares of restricted stock
under the SIP to Employee in accordance with the terms and conditions
set forth in the Second Employment Restricted Stock Agreement attached
hereto as Exhibit C;
(3) on the first anniversary of the Effective Date or as soon as reasonably
practicable thereafter, two million twenty-eight thousand four hundred
eighty-one (2,028,481) shares of restricted stock under the SIP to
Employee in accordance with the terms and conditions set forth in the
Third Employment Restricted Stock Agreement attached hereto as Exhibit
D; and
(4) on the second anniversary of the Effective Date or as soon as
reasonably practicable thereafter, two million twenty-eight thousand
four hundred eighty (2,028,480) shares of restricted stock under the
SIP to Employee in accordance with the terms and conditions set forth
in the Fourth Employment Restricted Stock Agreement attached hereto as
Exhibit E.
Such shares of restricted stock shall be issued in certificates of such
denominations as Employee may request.
(iii) If the SIP Amendment is not approved by the Company
stockholders, the Company shall grant:
2
(1) on the date of the Stockholder Meeting or as soon as reasonably
practicable thereafter (the "Initial Grant Date"), to Employee under
the SIP (i) two million ninety-three thousand sixty-four (2,093,064)
Stock Units and (ii) Dividend Equivalent Rights representing the right
to receive, if, when and as ordinary cash dividends are paid on the
Company's Common Stock (the "Common Shares") generally, an amount (of
cash or other property) equal to the ordinary cash dividends that would
be paid with respect to two million ninety-three thousand sixty-four
(2,093,064) Common Shares, in each case in accordance with the terms
and conditions set forth in the Initial Employment Stock Unit Agreement
attached hereto as Exhibit F;
(2) on the date that is six months and one day after the Effective Date or
as soon as reasonably practicable thereafter, to Employee under the SIP
(i) one hundred twenty-five thousand three hundred twenty-four
(125,324) Stock Units and (ii) Dividend Equivalent Rights representing
the right to receive, if, when and as ordinary cash dividends are paid
on the Common Shares generally, an amount (of cash or other property)
equal to the ordinary cash dividends that would be paid with respect to
one hundred twenty-five thousand three hundred twenty-four (125,324)
Common Shares, in each case in accordance with the terms and conditions
set forth in the Second Employment Stock Unit Agreement attached hereto
as Exhibit G;
(3) on the first anniversary of the Effective Date or as soon as reasonably
practicable thereafter, to Employee under the SIP (i) two million
twenty-eight thousand four hundred eighty-one (2,028,481) Stock Units
and (ii) Dividend Equivalent Rights representing the right to receive,
if, when and as ordinary cash dividends are paid on the Common Shares
generally, an amount (of cash or other property) equal to the ordinary
cash dividends that would be paid with respect to two million
twenty-eight thousand four hundred eighty-one (2,028,481) Common
Shares, in each case in accordance with the terms and conditions set
forth in the Third Employment Stock Unit Agreement attached hereto as
Exhibit H; and
(4) on the second anniversary of the Effective Date or as soon as
reasonably practicable thereafter, to Employee under the SIP (i) two
million twenty-eight thousand four hundred eighty (2,028,480) Stock
Units and (ii) Dividend Equivalent Rights representing the right to
receive, if, when and as ordinary cash dividends are paid on the Common
Shares generally, an amount (of cash or other property) equal to the
ordinary cash dividends that would be paid with respect to two million
twenty-eight thousand four hundred eighty (2,028,480) Common Shares, in
each case in accordance with the terms and conditions set forth in the
Fourth Employment Stock Unit Agreement attached hereto as Exhibit I.
(iv) If the SIP Amendment is approved by the Company stockholders
at the Stockholder Meeting, with respect to those shares of restricted stock
granted under Sections 3(c)(ii)(1) or 3(c)(ii)(2) or 3(c)(ii)(3) or 3(c)(ii)(4),
as the case may be, for which Employee
3
makes a valid election within 30 days after the applicable Share Grant Date (as
defined herein) under Section 83(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), (the "83(b) Shares"), the Company shall pay Employee
within five business days after the Company's receipt from Employee of evidence
of such valid election, or as soon as reasonably practicable thereafter, an
amount in cash (subject to applicable withholding) equal to X multiplied by Y
multiplied by Z divided by W (the "83(b) Payment"), where:
X is the number of 83(b) Shares with respect to such Share
Grant Date;
Y is the excess, if any, of the Maximum Share Price (as
defined herein) over the Company Share Price (as defined
herein) on the Effective Date;
Z is equal to the difference between (i) the lowest Federal
long term capital gain rate and (ii) the sum of the highest
marginal Federal income tax rate and highest marginal state
income tax rate applicable to a California resident (adjusted
for any applicable state tax deduction under Federal income
tax laws)(this calculation shall be determined using those
rates applicable in the year of such Share Grant Date); and
W is equal to (i) one (1) minus (ii) the amount equal to the
sum of the highest marginal Federal income tax rate and
highest marginal state income tax rate applicable to a
California resident (adjusted for any applicable state tax
deduction under Federal income tax laws)(this calculation
shall be determined using those rates applicable in the year
of such Share Grant Date).
The "Company Share Price" on any date shall be the Fair Market Value (as
such term is defined in the SIP) for one Common Share on such date. The "Trading
Period" shall be the period beginning on the Effective Date until the close of
business on the thirtieth Trading Day (as defined herein) following the
Effective Date. The term "Trading Day" shall mean any day on which the Company's
Common Stock is traded on a national securities exchange on which such Company
Common Stock is listed or admitted to trade; provided, however, that if the
Company's Common Stock is not listed or admitted to trade on any national
securities exchange, the term "Trading Day" shall mean any business day. The
"Maximum Share Price" shall be the lesser of (i) the highest Company Share Price
of any date within the Trading Period or (ii) the Company Share Price on the
applicable Share Grant Date or Stock Unit Grant Date, as the case may be.
Notwithstanding anything herein to the contrary, no payment shall be made under
this Section 3(c)(iv) if the Company Share Price on the Effective Date exceeds
the Maximum Share Price. To the extent Company makes any payments to satisfy any
tax withholding obligation relating to a Section 83(b) election (with respect to
those shares of restricted stock granted under Sections 3(c)(ii)(1) or
3(c)(ii)(2) or 3(c)(ii)(3) or 3(c)(ii)(4), as the case may be) above prior to
paying the applicable 83(b) Payment, such 83(b) Payment (to the extent possible)
shall be reduced by such payments made by the Company to satisfy such tax
withholding obligation, and, except as provided in the immediately following
sentence, in no event shall Employee be required to reimburse the Company for
such tax withholding obligation until such 83(b) Payment is made to Employee. If
such 83(b) Payment is insufficient to repay such payments made by the Company to
satisfy such tax withholding obligation, Employee shall pay the Company an
4
amount in cash equal to the amount of deficiency on such date such 83(b) Payment
would have been made (if not for the deduction of the prior sentence).
The term "Share Grant Date" shall mean the date such shares of restricted
stock are granted to Employee. The term "Intended Grant Date" shall mean: (i)
with respect to shares of restricted stock granted to Employee under Section
3(c)(ii)(1), the Effective Date; (ii) with respect to shares of restricted stock
granted to Employee under Section 3(c)(ii)(2), the earlier of the date that is
six months and one day after the Effective Date or the date such shares are
granted; (iii) with respect to shares of restricted stock granted to Employee
under Section 3(c)(ii)(3), the earlier of the first anniversary of the Effective
Date or the date such shares are granted; and (iv) with respect to shares of
restricted stock granted to Employee under Section 3(c)(ii)(4), the earlier of
the second anniversary of the Effective Date or the date such shares are
granted.
Notwithstanding anything herein to the contrary, no 83(b) Payment shall be
made with respect to shares of restricted stock granted to Employee under
Sections 3(c)(ii)(2) or 3(c)(ii)(3) or 3(c)(ii)(4) if (i) the applicable Share
Grant Date is the same as the corresponding Intended Grant Date for such shares
of restricted stock or (ii) such shares of restricted stock are granted after
the Initial Grant Date.
(v) If the SIP Amendment is not approved by the Company
stockholders at the Stockholder Meeting, the Company shall pay Employee, on each
Stock Unit vesting date, or as soon as reasonably practicable thereafter, an
amount in cash (subject to applicable withholding) equal to X multiplied by Y
multiplied by Z divided by W (the "Stock Unit Payment"), where:
X is number of Stock Units that vest on the applicable Stock
Unit vesting date;
Y is the excess, if any, of the Maximum Share Price over the
Company Share Price on the Effective Date;
Z is equal to the difference between (i) the lowest Federal
long term capital gain rate and (ii) the sum of the highest
marginal Federal income tax rate and highest marginal state
income tax rate applicable to a California resident (adjusted
for any applicable state tax deduction available under Federal
income tax laws)(this calculation shall be determined using
those rates applicable in the year of the Stock Unit vesting
date in question); and
W is equal to (i) one (1) minus (ii) the amount equal to the
sum of the highest marginal Federal income tax rate and
highest marginal state income tax rate applicable to a
California resident (adjusted for any applicable state tax
deduction available under Federal income tax laws)(this
calculation shall be determined using those rates applicable
in the year of the Stock Unit vesting date in question).
5
The term "Stock Unit Grant Date" shall refer to the date the
applicable Stock Units are granted to Employee. Notwithstanding anything herein
to the contrary, no payment shall be made under this Section 3(c)(v) if the
Company Share Price on the Effective Date exceeds the Maximum Share Price. To
the extent that the Company has any tax withholding obligation relating to the
Stock Units (or payment of such Stock Units) that vest on the applicable Stock
Unit vesting date, the Company may reduce (to the extent possible) the Stock
Unit Payment to the extent of such tax withholding obligation and, except as
provided in the immediately following sentence, in no event shall Employee be
required to reimburse the Company for such tax withholding obligation until the
Stock Unit Payment is made to Employee. If the Stock Unit Payment is
insufficient to repay such payments made by the Company to satisfy such tax
withholding obligation, Employee shall pay the Company an amount in cash equal
to the amount of deficiency on such date the Stock Unit Payment would have been
made (if not for the deduction of the prior sentence). To the extent any
payments to be made under this Section 3(c)(v) are accelerated due to Employee's
employment under this Agreement terminating as provided in Sections 4(a), 4(b),
4(d) or 4(f), such payments shall be contingent on Employee (or, if deceased,
his estate's legal representative) signing a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J.
(vi) The number and type of shares set forth above with respect to
any restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity
Awards") provided under this Section 3, and applicable share prices for purposes
of Sections 3(c)(iv) and 3(c)(v), shall be proportionately adjusted by the
Company to the extent (if any) necessary to account for, and preserve the
intended level of benefits following, any extraordinary dividend or other
extraordinary distribution in respect of the outstanding Common Shares (to the
extent paid in the form of Common Shares, or other equity securities), or any
recapitalization, stock split (including a stock split in the form of a stock
dividend), reverse stock split, reorganization, merger, combination,
consolidation, split-up, spin-off, exchange of Common Shares, or similar
extraordinary event, in each case to the extent such event affects the
outstanding Common Shares.
(vii) The Company represents and warrants that, as of the dates that
grants of restricted stock or Stock Units, as the case may be, are made under
this Section 3(c), there will be sufficient Common Shares available under the
SIP to permit such grants to be issued thereunder.
(viii) Notwithstanding any provision herein or in the Initial
Employment Restricted Stock Agreement, Second Employment Restricted Stock
Agreement, Third Employment Restricted Stock Agreement, Fourth Employment
Restricted Stock Agreement, Initial Employment Stock Unit Agreement, Second
Employment Stock Unit Agreement Stock, Third Employment Stock Unit Agreement,
Fourth Employment Stock Unit Agreement or SIP to the contrary, no Equity Awards
shall be granted under this Section 3 after any (i) termination of Employee's
employment pursuant to Sections 4(c) or 4(g) of this Agreement prior to the
grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined
below) which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within thirty (30) days after receipt of written
notice from the Company of such Breach Event (the "Breach Cure Period");
provided, however, no Equity Awards shall be granted during any Breach Cure
6
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any Equity Awards scheduled to be granted during such Breach Cure
Periods shall be deemed to have been granted as of the scheduled grant date);
provided, further, no Equity Awards shall be granted during any For Cause
Determination Period (as defined herein) (but, in the event that the Company
Board determines no termination for Cause has occurred or Employee is successful
in challenging any purported termination under Section 4(c), any Equity Awards
scheduled to be granted during such For Cause Determination Period shall be
deemed to have been granted as of the scheduled grant date). The term "Breach
Event" shall mean any (i) material breach by Employee of Section 12 of the
Termination Agreement, (ii) breach by Employee of any representation or warranty
contained in Section 15 of the Termination Agreement, or (iii) material breach
by Employee of Sections 6, 8, 10(h) or 10(i) of this Agreement. The
determination that a Breach Event has occurred shall be made by the Company
Board and following such determination, written notice of such Breach Event
shall be provided to Employee by the Company Board or any proper officer of the
Company. Employee agrees that, in his capacity as a Company Board member, he
shall not vote on such a determination nor shall he vote on any Company Board
determination that a Breach Event (as such term is defined in Xxxxx Xxxxx'x
employment agreement with the Company of even date hereof) has occurred with
respect to Xxxxx Xxxxx. Any disputes related to this Section 3(c)(viii) shall be
resolved pursuant to Section 10(f).
(ix) Subject to Section 3(c)(viii) above, if Employee's employment
terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any
Equity Awards required under Sections 3(c)(ii)(1) or 3(c)(iii)(1) of this
Agreement, such Equity Awards not yet granted shall be granted to Employee as
provided in such Sections and shall be immediately vested in full upon grant.
(x) Subject to Section 3(c)(viii) above, if Employee's employment
terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any
Equity Awards required under Sections 3(c)(ii)(2), 3(c)(ii)(3), 3(c)(ii)(4),
3(c)(iii)(2), 3(c)(iii)(3) or 3(c)(iii)(4) of this Agreement, such Equity Awards
not yet granted shall be granted to Employee on the later of (i) the Initial
Grant Date or (ii) the date of termination of Employee's employment, and shall
be immediately vested in full upon grant.
(xi) Subject to Section 3(c)(viii) above, in the event of a Change
in Control Event, as defined under Section 6 of the Initial Employment
Restricted Stock Agreement, the Company shall grant any Equity Award required
under Sections 3(c)(ii)(2), 3(c)(ii)(3), 3(c)(ii)(4), 3(c)(iii)(2), 3(c)(iii)(3)
or 3(c)(iii)(4) of this Agreement (and not already granted) on the later of (i)
Initial Grant Date, or (ii) the date of the Change in Control Event, but only if
the Company (or a successor thereto) has failed to provide for the cash-out of
such grants, or the continuation of such grants in an economically equivalent
amount (as provided under Section 6 of the Initial Employment Restricted Stock
Agreement).
(xii) In the event of a conflict or inconsistency between the terms
and conditions of this Agreement and the terms and conditions of the agreement
evidencing any Equity Award, the terms and conditions of the agreement
evidencing such Equity Award shall govern. In the event of a conflict or
inconsistency between the terms and conditions of this
7
Agreement and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern.
(xiii) Notwithstanding any provisions herein to the contrary, to the
extent any Equity Award required hereunder is made on a post-employment basis
(such basis being with respect to Employee), the grant of such Equity Award
shall, to the extent required by applicable law, be contingent upon the
recipient making a valid representation that such recipient is an accredited
investor under Regulation D of the Securities Act of 1933, as amended.
(xiv) With respect to any Equity Awards issued to Employee pursuant
to this Agreement, to the extent the Company is eligible to file a Registration
Statement on Form S-8, the Company shall take all steps reasonably necessary to
maintain the effectiveness of the Company's current Registration Statements on
Form S-8.
(xv) The Company and Employee agree that the Company shall not (A)
grant to Employee any stock options under the SIP or under any other arrangement
prior to the date that is six months and one day after the Effective Date, or if
such day is not a business day, on the next succeeding business day or (B)
accelerate any stock option grant contemplated by any other arrangement prior to
the date that is six months and one day after the Effective Date, or if such day
is not a business day, on the next succeeding business day. Employee hereby
represents that he has not received any grant of options or other equity-based
compensation within the 6 month period preceding the Effective Date. Nothing in
this Section 3(c)(xv) shall prevent the vesting of stock options contemplated by
Section 3(b) of the Termination Agreement nor shall the vesting of such stock
options violate this Section 3(c)(xv).
8
Exhibit A
DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN
Delete the last sentence of Section 1.9 and replace with:
Except to the extent required by Sections 1.10 and 4.4 or by the Committee
in the Award Agreement, the restrictions set forth herein shall not apply to (i)
shares of Common Stock actually issued on exercise of any Options, (ii) shares
of Common Stock actually issued as payment for Stock Units or DERs, or (iii)
Restricted Stock awards that have vested and otherwise satisfied the conditions
that may be imposed by the Committee pursuant to Section 3.3.
Delete the last sentence of Section 3.2 and replace with:
DERs shall be payable in cash, shares of Common Stock or other Awards and
(to the extent permitted by law) may be subject to such conditions, not
inconsistent with Section 162(m) of the Code (in the case of Options or other
Awards intended to satisfy its conditions with respect to deductibility), as may
be determined by the Committee.
Add new Section 3.3:
3.3 Restricted Stock Awards.
Restricted Stock represents awards made in Common Stock in which the
shares granted may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, except upon passage of time, or upon satisfaction of
other conditions, or both, in every case as provided by the Committee in its
sole discretion (including, without limitation, Awards that may vest
immediately). The Committee, in its sole discretion, shall determine the
specific terms, conditions and provisions relating to each grant of Restricted
Stock (including, without limitation, the extent to which the recipient of the
Restricted Stock Award may have dividend and/or voting rights with respect to
the shares subject to the Award prior to the time such shares become vested) as
set forth in duly adopted rules or specific Award Agreements.
Delete the last sentence of Section 4.7 and replace with:
Except as otherwise expressly authorized by the Committee or this
Plan, no adjustment will be made for dividends or other shareholder rights for
which a record date is prior to such date of delivery.
Delete Section 5.1(a) and replace with:
(a) "Award" shall mean an award of any Option, Stock Unit, Restricted
Stock award, or DER, or any combination thereof, whether alternative,
sequential, or cumulative, authorized or granted under this Plan.
Add Section 5.1(gg):
(gg) "Restricted Stock" means an award of Common Stock, the vesting of
which is subject to vesting or other conditions pursuant to Section 3.3.
***********************************************
Exhibit B
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
INITIAL EMPLOYMENT RESTRICTED STOCK AGREEMENT
THIS AGREEMENT dated as of _______, ____ between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the date hereof (i) two million ninety-three thousand sixty-four
(2,093,064) shares of restricted stock under the SIP and (ii) the right to
receive dividends on such restricted stock, if, when and as dividends are paid
on the shares of Common Stock generally, in each case, upon and subject to the
terms and conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Restricted Stock. Effective as of the date hereof, the
Company hereby grants to Employee, subject to the vesting provisions and
restrictions set forth below, two million ninety-three thousand sixty-four
(2,093,064) shares of restricted stock (the "Grant Shares") under the SIP.
1
On behalf of himself and on behalf of his beneficiaries, estate and permitted
assigns, Employee agrees:
(i) to the terms, provisions and restrictions provided by this Agreement on
any Restricted Property (as defined below) received with respect to the Grant
Shares; and
(ii) that Employee (or his beneficiaries, estate and permitted assigns)
will not vote (nor assign, pledge or transfer the right to vote to any other
party in any manner) with respect to the Grant Shares until such Grant Shares
are vested.
Employee shall have the right to receive ordinary cash dividends (if, when and
as ordinary cash dividends are paid on shares of Common Stock generally) with
respect to any unforfeited Grant Shares held under this Agreement.
Employee shall have the right to receive any securities or other property (if,
when and as such securities or properties are paid on shares of Common Stock
generally) as a result of any dividend or other distribution (other than
ordinary cash dividends), conversion or exchange with respect to any unforfeited
Grant Shares held under this Agreement (such securities or other property shall
be referred to herein as "Restricted Property"); provided, however, that such
Restricted Property received with respect to such Grant Shares shall be subject
to the terms and conditions of this Agreement. To the extent Restricted Property
is received with respect of the Grant Shares, the Restricted Property will be
subject to the restrictions set forth in this Agreement to the same extent as
the Grant Shares to which such securities or other property relate and shall be
held and accumulated for the benefit of Employee, but subject to such risks
(including, but not limited to, the risk of forfeiture).
The Company shall issue a certificate or certificates for the Grant Shares,
registered in the name of Employee, which certificate(s) shall be held by the
Company until such Grant Shares shall have become vested or forfeited in
accordance with this Agreement. The certificate(s) representing Grant Shares
forfeited in accordance with this Agreement and any shares accumulated thereon
and any other cash, rights or property (including Restricted Property)
accumulated in respect thereof shall, upon such forfeiture, automatically revert
to the Company. The certificate(s) representing Grant Shares (before such shares
shall have become vested) shall bear the following legends and/or any other
appropriate or required legends under applicable laws:
"OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY
OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE
CORPORATION."
To the extent that a certificate evidencing the Grant Shares or any related
Restricted Property is delivered to Employee prior to the vesting of such Grant
Shares, Employee shall promptly redeliver such certificate(s) to the Company to
be held by the Company pursuant to the terms hereof. Upon the occurrence of any
forfeiture of Grant Shares (including any related Restricted Property), such
forfeited Grant Shares (and related Restricted Property) shall be automatically
transferred to the
2
Company, without any other action by Employee, or Employee's Personal
Representative or Beneficiary, as the case may be. The Company may take any
other action necessary or advisable to evidence such transfer. Employee, or
Employee's Personal Representative or Beneficiary, as the case may be, shall
deliver any additional documents of transfer that the Company may reasonably
request to confirm such transfer. Without limiting the generality of the
foregoing, Employee, by execution of this Agreement, shall be deemed to appoint
the Company and each of its authorized representatives as Employee's
attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and
any related Restricted Property) and to execute such documents as the Company or
such representatives deem necessary or advisable in connection with any such
transfer.
Promptly after the vesting of the Grant Shares in accordance with the terms
hereof, a certificate or certificates evidencing the number of Grant Shares that
have vested shall be delivered to Employee (or, in the event of his death or
disability, Employee's Personal Representative or Beneficiary). Employee or such
other person shall deliver to the Company any representations or other documents
or assurances required pursuant to Section 4.4 of the SIP.
Employee shall not sell, transfer, pledge, assign or otherwise alienate or
hypothecate the Grant Shares or any Restricted Property in respect thereof until
such Grant Shares are vested. Any sale or transfer, or purported sale or
transfer, shall be null and void.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred ninety-seven thousand six hundred-eighty eight (697,688) Grant
Shares shall vest on the first anniversary of the Effective Date,
(ii) six hundred ninety-seven thousand six hundred eighty-eight (697,688) Grant
Shares shall vest on the second anniversary of the Effective Date, and
(iii) six hundred ninety-seven thousand six hundred eighty-eight (697,688) Grant
Shares shall vest on the third anniversary of the Effective Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or
3
Employee is successful in challenging any purported termination under Section
4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during
such For Cause Determination Period shall be deemed to have vested as of the
scheduled vesting date); and
provided, further, and subject to the foregoing paragraph, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's stock,
provided that such replacement award will have substantially similar terms and
conditions as the Grant Shares immediately prior to the Change in Control
Event).
4
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. Unvested Grant Shares and any
other rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Grant Shares are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement and
the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
5
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties' under this Agreement.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. No Restriction on Corporate Powers. The existence of the SIP and/or
the Grant Shares shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
15. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
16. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
17. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
6
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
7
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Initial Employment Restricted
Stock Agreement by Gemstar-TV Guide International, Inc., I,
________________________, the spouse of Employee herein named, do hereby join
with my spouse in executing the foregoing Initial Employment Restricted Stock
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of _____________, ______. -----------------------------
Signature of Spouse
8
Exhibit C
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
SECOND EMPLOYMENT RESTRICTED STOCK AGREEMENT
THIS AGREEMENT dated as of _______, ____ (the "Grant Date") between
Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxx ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the Grant Date (i) one hundred twenty-five thousand three
hundred twenty-four (125,324) shares of restricted stock under the SIP and (ii)
the right to receive dividends on such restricted stock, if, when and as
dividends are paid on the shares of Common Stock generally, in each case, upon
and subject to the terms and conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Restricted Stock. Effective as of the Grant Date, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, one hundred
1
twenty-five thousand three hundred twenty-four (125,324) shares of restricted
stock (the "Grant Shares") under the SIP.
On behalf of himself and on behalf of his beneficiaries, estate and permitted
assigns, Employee agrees:
(i) to the terms, provisions and restrictions provided by this Agreement on
any Restricted Property (as defined below) received with respect to the Grant
Shares; and
(ii) that Employee (or his beneficiaries, estate and permitted assigns)
will not vote (nor assign, pledge or transfer the right to vote to any other
party in any manner) with respect to the Grant Shares until such Grant Shares
are vested.
Employee shall have the right to receive ordinary cash dividends (if, when and
as ordinary cash dividends are paid on shares of Common Stock generally) with
respect to any unforfeited Grant Shares held under this Agreement.
Employee shall have the right to receive any securities or other property (if,
when and as such securities or properties are paid on shares of Common Stock
generally) as a result of any dividend or other distribution (other than
ordinary cash dividends), conversion or exchange with respect to any unforfeited
Grant Shares held under this Agreement (such securities or other property shall
be referred to herein as "Restricted Property"); provided, however, that such
Restricted Property received with respect to such Grant Shares shall be subject
to the terms and conditions of this Agreement. To the extent Restricted Property
is received with respect of the Grant Shares, the Restricted Property will be
subject to the restrictions set forth in this Agreement to the same extent as
the Grant Shares to which such securities or other property relate and shall be
held and accumulated for the benefit of Employee, but subject to such risks
(including, but not limited to, the risk of forfeiture).
The Company shall issue a certificate or certificates for the Grant Shares,
registered in the name of Employee, which certificate(s) shall be held by the
Company until such Grant Shares shall have become vested or forfeited in
accordance with this Agreement. The certificate(s) representing Grant Shares
forfeited in accordance with this Agreement and any shares accumulated thereon
and any other cash, rights or property (including Restricted Property)
accumulated in respect thereof shall, upon such forfeiture, automatically revert
to the Company. The certificate(s) representing Grant Shares (before such shares
shall have become vested) shall bear the following legends and/or any other
appropriate or required legends under applicable laws:
"OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY
OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE
CORPORATION."
To the extent that a certificate evidencing the Grant Shares or any related
Restricted Property is delivered to Employee prior to the vesting of such Grant
Shares, Employee shall promptly redeliver such certificate(s) to the Company to
be held by the Company pursuant to the terms hereof. Upon
2
the occurrence of any forfeiture of Grant Shares (including any related
Restricted Property), such forfeited Grant Shares (and related Restricted
Property) shall be automatically transferred to the Company, without any other
action by Employee, or Employee's Personal Representative or Beneficiary, as the
case may be. The Company may take any other action necessary or advisable to
evidence such transfer. Employee, or Employee's Personal Representative or
Beneficiary, as the case may be, shall deliver any additional documents of
transfer that the Company may reasonably request to confirm such transfer.
Without limiting the generality of the foregoing, Employee, by execution of this
Agreement, shall be deemed to appoint the Company and each of its authorized
representatives as Employee's attorney(s)-in-fact to effect any such transfer of
unvested Grant Shares (and any related Restricted Property) and to execute such
documents as the Company or such representatives deem necessary or advisable in
connection with any such transfer.
Promptly after the vesting of the Grant Shares in accordance with the terms
hereof, a certificate or certificates evidencing the number of Grant Shares that
have vested shall be delivered to Employee (or, in the event of his death or
disability, Employee's Personal Representative or Beneficiary). Employee or such
other person shall deliver to the Company any representations or other documents
or assurances required pursuant to Section 4.4 of the SIP.
Employee shall not sell, transfer, pledge, assign or otherwise alienate or
hypothecate the Grant Shares or any Restricted Property in respect thereof until
such Grant Shares are vested. Any sale or transfer, or purported sale or
transfer, shall be null and void.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest on the Grant
Date.
4. No Employment Commitment. Nothing contained in this Agreement or the
SIP constitutes an employment commitment by the Company, affects the termination
provisions of Section 4 of the New Employment Agreement, confers upon Employee
any right to remain employed by the Company or any Subsidiary, interferes in any
way with the right of the Company or any Subsidiary at any time to terminate
Employee's employment, or affects the right of the Company or any Subsidiary to
increase or decrease Employee's other compensation.
5. [Reserved]
6. [Reserved]
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. Unvested Grant Shares and any
other rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Grant Shares are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
3
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement and
the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties' under this Agreement.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. No Restriction on Corporate Powers. The existence of the SIP and/or
the Grant Shares shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's
4
capital stock or the rights thereof, the dissolution or liquidation of the
Company or any sale or transfer of all or any part of its assets or business, or
any other corporate act or proceeding.
15. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
16. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
17. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
6
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Second Employment Restricted
Stock Agreement by Gemstar-TV Guide International, Inc., I,
________________________, the spouse of Employee herein named, do hereby join
with my spouse in executing the foregoing Second Employment Restricted Stock
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of _____________, ______. -----------------------------
Signature of Spouse
7
Exhibit D
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
THIRD EMPLOYMENT RESTRICTED STOCK AGREEMENT
THIS AGREEMENT dated as of _______, ____ (the "Grant Date") between
Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxx ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the Grant Date (i) two million twenty-eight thousand four
hundred eighty-one (2,028,481) shares of restricted stock under the SIP and (ii)
the right to receive dividends on such restricted stock, if, when and as
dividends are paid on the shares of Common Stock generally, in each case, upon
and subject to the terms and conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Restricted Stock. Effective as of the Grant Date, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, two million
1
twenty-eight thousand four hundred eighty-one (2,028,481) shares of restricted
stock (the "Grant Shares") under the SIP.
On behalf of himself and on behalf of his beneficiaries, estate and permitted
assigns, Employee agrees:
(i) to the terms, provisions and restrictions provided by this Agreement on
any Restricted Property (as defined below) received with respect to the Grant
Shares; and
(ii) that Employee (or his beneficiaries, estate and permitted assigns)
will not vote (nor assign, pledge or transfer the right to vote to any other
party in any manner) with respect to the Grant Shares until such Grant Shares
are vested.
Employee shall have the right to receive ordinary cash dividends (if, when and
as ordinary cash dividends are paid on shares of Common Stock generally) with
respect to any unforfeited Grant Shares held under this Agreement.
Employee shall have the right to receive any securities or other property (if,
when and as such securities or properties are paid on shares of Common Stock
generally) as a result of any dividend or other distribution (other than
ordinary cash dividends), conversion or exchange with respect to any unforfeited
Grant Shares held under this Agreement (such securities or other property shall
be referred to herein as "Restricted Property"); provided, however, that such
Restricted Property received with respect to such Grant Shares shall be subject
to the terms and conditions of this Agreement. To the extent Restricted Property
is received with respect of the Grant Shares, the Restricted Property will be
subject to the restrictions set forth in this Agreement to the same extent as
the Grant Shares to which such securities or other property relate and shall be
held and accumulated for the benefit of Employee, but subject to such risks
(including, but not limited to, the risk of forfeiture).
The Company shall issue a certificate or certificates for the Grant Shares,
registered in the name of Employee, which certificate(s) shall be held by the
Company until such Grant Shares shall have become vested or forfeited in
accordance with this Agreement. The certificate(s) representing Grant Shares
forfeited in accordance with this Agreement and any shares accumulated thereon
and any other cash, rights or property (including Restricted Property)
accumulated in respect thereof shall, upon such forfeiture, automatically revert
to the Company. The certificate(s) representing Grant Shares (before such shares
shall have become vested) shall bear the following legends and/or any other
appropriate or required legends under applicable laws:
"OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY
OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE
CORPORATION."
To the extent that a certificate evidencing the Grant Shares or any related
Restricted Property is delivered to Employee prior to the vesting of such Grant
Shares, Employee shall promptly redeliver such certificate(s) to the Company to
be held by the Company pursuant to the terms hereof. Upon
2
the occurrence of any forfeiture of Grant Shares (including any related
Restricted Property), such forfeited Grant Shares (and related Restricted
Property) shall be automatically transferred to the Company, without any other
action by Employee, or Employee's Personal Representative or Beneficiary, as the
case may be. The Company may take any other action necessary or advisable to
evidence such transfer. Employee, or Employee's Personal Representative or
Beneficiary, as the case may be, shall deliver any additional documents of
transfer that the Company may reasonably request to confirm such transfer.
Without limiting the generality of the foregoing, Employee, by execution of this
Agreement, shall be deemed to appoint the Company and each of its authorized
representatives as Employee's attorney(s)-in-fact to effect any such transfer of
unvested Grant Shares (and any related Restricted Property) and to execute such
documents as the Company or such representatives deem necessary or advisable in
connection with any such transfer.
Promptly after the vesting of the Grant Shares in accordance with the terms
hereof, a certificate or certificates evidencing the number of Grant Shares that
have vested shall be delivered to Employee (or, in the event of his death or
disability, Employee's Personal Representative or Beneficiary). Employee or such
other person shall deliver to the Company any representations or other documents
or assurances required pursuant to Section 4.4 of the SIP.
Employee shall not sell, transfer, pledge, assign or otherwise alienate or
hypothecate the Grant Shares or any Restricted Property in respect thereof until
such Grant Shares are vested. Any sale or transfer, or purported sale or
transfer, shall be null and void.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred seventy-six thousand one hundred sixty-one (676,161) Grant
Shares shall vest on the Grant Date,
(ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the first anniversary of the Grant Date, and
(iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the second anniversary of the Grant Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
3
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or Employee is successful in challenging any
purported termination under Section 4(c) of the New Employment Agreement, any
Grant Shares scheduled to vest during such For Cause Determination Period shall
be deemed to have vested as of the scheduled vesting date); and
provided, further, and subject to the foregoing paragraph, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's
4
stock, provided that such replacement award will have substantially similar
terms and conditions as the Grant Shares immediately prior to the Change in
Control Event).
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. Unvested Grant Shares and any
other rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Grant Shares are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement and
the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely
5
affect the interests of Employee, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties' under this Agreement.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. No Restriction on Corporate Powers. The existence of the SIP and/or
the Grant Shares shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
15. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
16. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
17. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
6
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
7
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Third Employment Restricted
Stock Agreement by Gemstar-TV Guide International, Inc., I,
________________________, the spouse of Employee herein named, do hereby join
with my spouse in executing the foregoing Third Employment Restricted Stock
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of _____________, ______. -----------------------------
Signature of Spouse
8
Exhibit E
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
FOURTH EMPLOYMENT RESTRICTED STOCK AGREEMENT
THIS AGREEMENT dated as of _______, ____ (the "Grant Date") between
Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxx ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the Grant Date (i) two million twenty-eight thousand four
hundred eighty (2,028,480) shares of restricted stock under the SIP and (ii) the
right to receive dividends on such restricted stock, if, when and as dividends
are paid on the shares of Common Stock generally, in each case, upon and subject
to the terms and conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Restricted Stock. Effective as of the Grant Date, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, two million
1
twenty-eight thousand four hundred eighty (2,028,480) shares of restricted stock
(the "Grant Shares") under the SIP.
On behalf of himself and on behalf of his beneficiaries, estate and permitted
assigns, Employee agrees:
(i) to the terms, provisions and restrictions provided by this Agreement on
any Restricted Property (as defined below) received with respect to the Grant
Shares; and
(ii) that Employee (or his beneficiaries, estate and permitted assigns)
will not vote (nor assign, pledge or transfer the right to vote to any other
party in any manner) with respect to the Grant Shares until such Grant Shares
are vested.
Employee shall have the right to receive ordinary cash dividends (if, when and
as ordinary cash dividends are paid on shares of Common Stock generally) with
respect to any unforfeited Grant Shares held under this Agreement.
Employee shall have the right to receive any securities or other property (if,
when and as such securities or properties are paid on shares of Common Stock
generally) as a result of any dividend or other distribution (other than
ordinary cash dividends), conversion or exchange with respect to any unforfeited
Grant Shares held under this Agreement (such securities or other property shall
be referred to herein as "Restricted Property"); provided, however, that such
Restricted Property received with respect to such Grant Shares shall be subject
to the terms and conditions of this Agreement. To the extent Restricted Property
is received with respect of the Grant Shares, the Restricted Property will be
subject to the restrictions set forth in this Agreement to the same extent as
the Grant Shares to which such securities or other property relate and shall be
held and accumulated for the benefit of Employee, but subject to such risks
(including, but not limited to, the risk of forfeiture).
The Company shall issue a certificate or certificates for the Grant Shares,
registered in the name of Employee, which certificate(s) shall be held by the
Company until such Grant Shares shall have become vested or forfeited in
accordance with this Agreement. The certificate(s) representing Grant Shares
forfeited in accordance with this Agreement and any shares accumulated thereon
and any other cash, rights or property (including Restricted Property)
accumulated in respect thereof shall, upon such forfeiture, automatically revert
to the Company. The certificate(s) representing Grant Shares (before such shares
shall have become vested) shall bear the following legends and/or any other
appropriate or required legends under applicable laws:
"OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER
APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY
OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE
CORPORATION."
To the extent that a certificate evidencing the Grant Shares or any related
Restricted Property is delivered to Employee prior to the vesting of such Grant
Shares, Employee shall promptly redeliver such certificate(s) to the Company to
be held by the Company pursuant to the terms hereof. Upon
2
the occurrence of any forfeiture of Grant Shares (including any related
Restricted Property), such forfeited Grant Shares (and related Restricted
Property) shall be automatically transferred to the Company, without any other
action by Employee, or Employee's Personal Representative or Beneficiary, as the
case may be. The Company may take any other action necessary or advisable to
evidence such transfer. Employee, or Employee's Personal Representative or
Beneficiary, as the case may be, shall deliver any additional documents of
transfer that the Company may reasonably request to confirm such transfer.
Without limiting the generality of the foregoing, Employee, by execution of this
Agreement, shall be deemed to appoint the Company and each of its authorized
representatives as Employee's attorney(s)-in-fact to effect any such transfer of
unvested Grant Shares (and any related Restricted Property) and to execute such
documents as the Company or such representatives deem necessary or advisable in
connection with any such transfer.
Promptly after the vesting of the Grant Shares in accordance with the terms
hereof, a certificate or certificates evidencing the number of Grant Shares that
have vested shall be delivered to Employee (or, in the event of his death or
disability, Employee's Personal Representative or Beneficiary). Employee or such
other person shall deliver to the Company any representations or other documents
or assurances required pursuant to Section 4.4 of the SIP.
Employee shall not sell, transfer, pledge, assign or otherwise alienate or
hypothecate the Grant Shares or any Restricted Property in respect thereof until
such Grant Shares are vested. Any sale or transfer, or purported sale or
transfer, shall be null and void.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the Grant Date,
(ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the first anniversary of the Grant Date, and
(iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the second anniversary of the Grant Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
3
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or Employee is successful in challenging any
purported termination under Section 4(c) of the New Employment Agreement, any
Grant Shares scheduled to vest during such For Cause Determination Period shall
be deemed to have vested as of the scheduled vesting date); and
provided, further, and subject to the foregoing paragraph, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's
4
stock, provided that such replacement award will have substantially similar
terms and conditions as the Grant Shares immediately prior to the Change in
Control Event).
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. Unvested Grant Shares and any
other rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Grant Shares are also subject to restrictions on transfer under
Section 1.10 of the SIP and to any and all repurchase or redemption rights of
the Company that may be provided under its Certificate of Incorporation and
Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement and
the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely
5
affect the interests of Employee, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties' under this Agreement.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. No Restriction on Corporate Powers. The existence of the SIP and/or
the Grant Shares shall not affect or restrict in any way the right or power of
the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
15. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
16. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
17. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
6
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
7
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Fourth Employment Restricted
Stock Agreement by Gemstar-TV Guide International, Inc., I,
________________________, the spouse of Employee herein named, do hereby join
with my spouse in executing the foregoing Fourth Employment Restricted Stock
Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of _____________, ______. -----------------------------
Signature of Spouse
8
Exhibit F
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
INITIAL EMPLOYMENT STOCK UNIT AGREEMENT
THIS AGREEMENT dated as of _______, _____ between Gemstar-TV Guide
International, Inc., a Delaware corporation (the "Company"), and Xxxxx X. Xxxx
("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the date hereof (i) two million ninety three thousand sixty four
(2,093,064) Stock Units and (ii) Dividend Equivalent Rights ("DERs")
representing the right to receive, if, when and as ordinary cash dividends are
paid on the shares of Common Stock generally, an amount (of cash or other
property) equal to the ordinary cash dividends that would be paid with respect
to two million ninety three thousand sixty four (2,093,064) shares of Common
Stock, in each case, upon and subject to the terms and conditions set forth
herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
2. Grant of Stock Units. Effective as of the date hereof, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, two million ninety
1
three thousand sixty four (2,093,064) Stock Units (the "Grant Shares") under the
SIP. The number and type of Grant Shares are subject to adjustment pursuant to
Section 4.2 of the SIP.
Employee shall be eligible for payment of Grant Shares at or following the
vesting of such Grant Shares. The form of payment of Grant Shares shall only be
in Company Common Stock and Employee shall be paid one share of Common Stock for
each Grant Share.
Employee shall have no voting rights with respect to the Grant Shares until such
Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or
otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or
purported sale or transfer, shall be null and void.
If, when and as ordinary cash dividends are paid on shares of Common Stock
generally, Employee shall be paid DERs equivalent to the ordinary cash dividends
that would be paid with respect to Z shares of Common Stock where "Z" is the
number of the unvested (and unforfeited) Grant Shares at the time of such
ordinary cash dividend payment. Any DERs provided under this Agreement shall be
paid in cash, shares of Common Stock or other Awards as may be determined by the
Committee.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the first anniversary of the Effective Date,
(ii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the second anniversary of the Effective Date, and
(iii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant
Shares shall vest on the third anniversary of the Effective Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement, or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or Employee is successful in challenging any
purported termination under Section 4(c) of the New Employment Agreement, any
Grant Shares scheduled to vest during such For Cause Determination Period shall
be deemed to have vested as of the scheduled vesting date); and
2
provided, further, and subject to the foregoing paragraphs, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's stock,
provided that such replacement award will have substantially similar terms and
conditions as the Grant Shares immediately prior to the Change in Control
Event).
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control
3
Event" under SIP Section 5.1(f)(5) shall not include the one-year period after
the Effective Date and such measurement period shall only commence upon the
first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. The Grant Shares and any other
rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Common Stock issuable on the Grant Shares are also subject to
restrictions on transfer under Section 1.10 of the SIP and to any and all
repurchase or redemption rights of the Company that may be provided under its
Certificate of Incorporation and Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement
4
which do not violate any statute or public policy shall continue in full force
and effect. Further, it is the parties' intent that any court order striking any
portion of this Agreement should modify the terms as narrowly as possible to
give as much effect as possible to the intentions of the parties under this
Agreement.
13. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by Employee. No adjustment will be made for
dividends or other rights as a stockholder for which a record date is prior to
such date of delivery.
15. No Restriction on Corporate Powers. The existence of the SIP, DERs
and/or the Grant Shares shall not affect or restrict in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
16. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
17. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
18. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
6
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Initial Employment Stock Unit
Agreement by Gemstar-TV Guide International, Inc., I, _________________________,
the spouse of the Employee herein named, do hereby join with my spouse in
executing the foregoing Initial Employment Stock Unit Agreement and do hereby
agree to be bound by all the terms and provisions thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------------
Signature of Spouse
7
Exhibit G
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
SECOND EMPLOYMENT STOCK UNIT AGREEMENT
THIS AGREEMENT dated as of _______, _____ (the "Grant Date") between
Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxx ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the Grant Date (i) one hundred twenty-five thousand three
hundred twenty-four (125,324) Stock Units and (ii) Dividend Equivalent Rights
("DERs") representing the right to receive, if, when and as ordinary cash
dividends are paid on the shares of Common Stock generally, an amount (of cash
or other property) equal to the ordinary cash dividends that would be paid with
respect to one hundred twenty-five thousand three hundred twenty-four (125,324)
shares of Common Stock, in each case, upon and subject to the terms and
conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
1
2. Grant of Stock Units. Effective as of the Grant Date, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, one hundred twenty-five thousand three hundred twenty-four
(125,324) Stock Units (the "Grant Shares") under the SIP. The number and type of
Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP.
Employee shall be eligible for payment of Grant Shares at or following the
vesting of such Grant Shares. The form of payment of Grant Shares shall only be
in Company Common Stock and Employee shall be paid one share of Common Stock for
each Grant Share.
Employee shall have no voting rights with respect to the Grant Shares until such
Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or
otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or
purported sale or transfer, shall be null and void.
If, when and as ordinary cash dividends are paid on shares of Common Stock
generally, Employee shall be paid DERs equivalent to the ordinary cash dividends
that would be paid with respect to Z shares of Common Stock where "Z" is the
number of the unvested (and unforfeited) Grant Shares at the time of such
ordinary cash dividend payment. Any DERs provided under this Agreement shall be
paid in cash, shares of Common Stock or other Awards as may be determined by the
Committee.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest on the Grant
Date.
4. No Employment Commitment. Nothing contained in this Agreement or the
SIP constitutes an employment commitment by the Company, affects the termination
provisions of Section 4 of the New Employment Agreement, confers upon Employee
any right to remain employed by the Company or any Subsidiary, interferes in any
way with the right of the Company or any Subsidiary at any time to terminate
Employee's employment, or affects the right of the Company or any Subsidiary to
increase or decrease Employee's other compensation.
5. [Reserved]
6. [Reserved]
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. The Grant Shares and any other
rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Common Stock issuable on the Grant Shares are also subject to
restrictions on transfer under Section 1.10 of the SIP and to any and all
repurchase or redemption rights of the Company that may be provided under its
Certificate of Incorporation and Bylaws, as amended from time to time.
2
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
13. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by Employee. No adjustment will be made for
dividends or other rights as a stockholder for which a record date is prior to
such date of delivery.
3
15. No Restriction on Corporate Powers. The existence of the SIP, DERs
and/or the Grant Shares shall not affect or restrict in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
16. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
17. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
18. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
4
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
5
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Second Employment Stock Unit
Agreement by Gemstar-TV Guide International, Inc., I,
_______________________________, the spouse of the Employee herein named, do
hereby join with my spouse in executing the foregoing Second Employment Stock
Unit Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------------
Signature of Spouse
6
Exhibit H
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
THIRD EMPLOYMENT STOCK UNIT AGREEMENT
THIS AGREEMENT dated as of _______, _____ (the "Grant Date") between
Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxx ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the Grant Date (i) two million twenty-eight thousand four
hundred eighty-one (2,028,481) Stock Units and (ii) Dividend Equivalent Rights
("DERs") representing the right to receive, if, when and as ordinary cash
dividends are paid on the shares of Common Stock generally, an amount (of cash
or other property) equal to the ordinary cash dividends that would be paid with
respect to two million twenty-eight thousand four hundred eighty-one (2,028,481)
shares of Common Stock, in each case, upon and subject to the terms and
conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
1
2. Grant of Stock Units. Effective as of the Grant Date, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, two million twenty-eight thousand four hundred eighty-one
(2,028,481) Stock Units (the "Grant Shares") under the SIP. The number and type
of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP.
Employee shall be eligible for payment of Grant Shares at or following the
vesting of such Grant Shares. The form of payment of Grant Shares shall only be
in Company Common Stock and Employee shall be paid one share of Common Stock for
each Grant Share.
Employee shall have no voting rights with respect to the Grant Shares until such
Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or
otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or
purported sale or transfer, shall be null and void.
If, when and as ordinary cash dividends are paid on shares of Common Stock
generally, Employee shall be paid DERs equivalent to the ordinary cash dividends
that would be paid with respect to Z shares of Common Stock where "Z" is the
number of the unvested (and unforfeited) Grant Shares at the time of such
ordinary cash dividend payment. Any DERs provided under this Agreement shall be
paid in cash, shares of Common Stock or other Awards as may be determined by the
Committee.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred seventy-six thousand one hundred sixty-one (676,161) Grant
Shares shall vest on the Grant Date,
(ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the first anniversary of the Grant Date, and
(iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the second anniversary of the Grant Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement, or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or
2
Employee is successful in challenging any purported termination under Section
4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during
such For Cause Determination Period shall be deemed to have vested as of the
scheduled vesting date); and
provided, further, and subject to the foregoing paragraphs, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's stock,
provided that such replacement award will have substantially similar terms and
conditions as the Grant Shares immediately prior to the Change in Control
Event).
3
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. The Grant Shares and any other
rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Common Stock issuable on the Grant Shares are also subject to
restrictions on transfer under Section 1.10 of the SIP and to any and all
repurchase or redemption rights of the Company that may be provided under its
Certificate of Incorporation and Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
4
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
13. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by Employee. No adjustment will be made for
dividends or other rights as a stockholder for which a record date is prior to
such date of delivery.
15. No Restriction on Corporate Powers. The existence of the SIP, DERs
and/or the Grant Shares shall not affect or restrict in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
16. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
17. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
18. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
6
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Third Employment Stock Unit
Agreement by Gemstar-TV Guide International, Inc., I,
_______________________________, the spouse of the Employee herein named, do
hereby join with my spouse in executing the foregoing Third Employment Stock
Unit Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------------
Signature of Spouse
7
Exhibit I
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
FOURTH EMPLOYMENT STOCK UNIT AGREEMENT
THIS AGREEMENT dated as of _______, _____ (the "Grant Date") between
Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"),
and Xxxxx X. Xxxx ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended (the "SIP"), the Company has granted to Employee
effective as of the Grant Date (i) two million twenty-eight thousand four
hundred eighty (2,028,480) Stock Units and (ii) Dividend Equivalent Rights
("DERs") representing the right to receive, if, when and as ordinary cash
dividends are paid on the shares of Common Stock generally, an amount (of cash
or other property) equal to the ordinary cash dividends that would be paid with
respect to two million twenty-eight thousand four hundred eighty (2,028,480)
shares of Common Stock, in each case, upon and subject to the terms and
conditions set forth herein and in the SIP.
NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties agree as
follows:
1. Defined Terms. Capitalized terms shall have the meaning assigned to
them herein. Where capitalized terms are not defined herein they shall have the
meaning assigned to them in the SIP.
For purposes of this Agreement:
"Breach Event" shall have the meaning assigned to it under the New Employment
Agreement.
"Breach Cure Period" shall have the meaning assigned to it under the New
Employment Agreement.
"Effective Date" shall have the meaning assigned to it under the New Employment
Agreement.
"For Cause Determination Period" shall have the meaning assigned to it under the
New Employment Agreement.
"New Employment Agreement" shall mean the employment agreement between the
Company and Employee dated as of _________, 2002.
"Termination Agreement" shall mean the termination agreement between the
Company, Employee and Gemstar Development Corporation, a California corporation,
dated as of _______, 2002.
1
2. Grant of Stock Units. Effective as of the Grant Date, the Company
hereby grants to Employee, subject to the vesting provisions and restrictions
set forth below, two million twenty-eight thousand four hundred eighty
(2,028,480) Stock Units (the "Grant Shares") under the SIP. The number and type
of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP.
Employee shall be eligible for payment of Grant Shares at or following the
vesting of such Grant Shares. The form of payment of Grant Shares shall only be
in Company Common Stock and Employee shall be paid one share of Common Stock for
each Grant Share.
Employee shall have no voting rights with respect to the Grant Shares until such
Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or
otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or
purported sale or transfer, shall be null and void.
If, when and as ordinary cash dividends are paid on shares of Common Stock
generally, Employee shall be paid DERs equivalent to the ordinary cash dividends
that would be paid with respect to Z shares of Common Stock where "Z" is the
number of the unvested (and unforfeited) Grant Shares at the time of such
ordinary cash dividend payment. Any DERs provided under this Agreement shall be
paid in cash, shares of Common Stock or other Awards as may be determined by the
Committee.
In the event that the Company determines that the Company (or any affiliate or
subsidiary of Company) is required to withhold any tax as a result of the
issuance, vesting, payment or disposition of any Grant Shares, the tax
withholding obligation shall be satisfied in accordance with the provisions and
terms of Section 4.5 of the SIP.
3. Vesting of Grant Shares. The Grant Shares shall vest as follows:
(i) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the Grant Date,
(ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the first anniversary of the Grant Date, and
(iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares
shall vest on the second anniversary of the Grant Date;
provided, however, that no Grant Shares shall vest after any (i)
termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of
the New Employment Agreement, or (ii) occurrence of any Breach Event which (if
capable of cure) has not (together with all effects thereof) been fully cured by
Employee within the Breach Cure Period;
provided, further, that no Grant Shares shall vest during any Breach Cure
Period (but if all Breach Events are cured during the corresponding Breach Cure
Periods, any unvested Grant Shares scheduled to vest during such Breach Cure
Periods shall be deemed to have vested as of the scheduled vesting date);
provided, further, no Grant Shares shall vest during any For Cause
Determination Period (but, in the event that the Company Board determines no
termination for Cause has occurred or Employee is successful in challenging any
purported termination under Section 4(c) of the New
2
Employment Agreement, any Grant Shares scheduled to vest during such For Cause
Determination Period shall be deemed to have vested as of the scheduled vesting
date); and
provided, further, and subject to the foregoing paragraphs, that if
Employee's employment under the New Employment Agreement terminates as provided
in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant
Shares shall be vested at such termination provided Employee (or, if deceased,
his estate's legal representative) signs a general release of claims in a form
provided by the Company which shall be substantially similar to Exhibit J of the
New Employment Agreement.
4. Continuance of Employment Required; No Employment Commitment. The
vesting schedule requires continued service through each applicable vesting date
as a condition to the vesting of the applicable installment of the Grant Shares
and the rights and benefits under this Agreement. Service for less than the full
portion of any vesting period, even if substantial, will not entitle Employee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
herein or under the SIP.
Nothing contained in this Agreement or the SIP constitutes an employment
commitment by the Company, affects the termination provisions of Section 4 of
the New Employment Agreement, confers upon Employee any right to remain employed
by the Company or any Subsidiary, interferes in any way with the right of the
Company or any Subsidiary at any time to terminate Employee's employment, or
affects the right of the Company or any Subsidiary to increase or decrease
Employee's other compensation.
5. Forfeiture.
All Grant Shares then unvested shall be automatically terminated and forfeited
upon any (i) termination of Employee's employment pursuant to Section 4(c) or
Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach
Event which (if capable of cure) has not (together with all effects thereof)
been fully cured by Employee within the Breach Cure Period. Notwithstanding
anything herein to the contrary, in the event that Employee is successful in
challenging any purported termination under Section 4(c) of the New Employment
Agreement, any unvested Grant Shares that terminated due to such purported
termination shall be deemed reinstated and vested upon the conclusion of such
successful challenge.
6. Change in Control Event. All Grant Shares shall be subject to
immediate vesting upon the occurrence of:
(i) a Change in Control Event (as defined below); and
(ii) the Company has not provided for either (A) the cash-out of such Grant
Shares at their then fair market value, or (B) the continuation of such Grant
Shares in an economically equivalent amount (e.g. replacement shares of
restricted stock, options or stock units, based on a successor company's stock,
provided that such replacement award will have substantially similar terms and
conditions as the Grant Shares immediately prior to the Change in Control
Event).
3
The term "Change in Control Event" shall have the meaning assigned to such term
under SIP Section 5; provided, however, that the measurement period for
determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not
include the one-year period after the Effective Date and such measurement period
shall only commence upon the first anniversary of the Effective Date.
7. Termination of Grant Shares Under Certain Events. As contemplated by
Section 4.2 of the SIP, the Grant Shares may be terminated in certain
circumstances, as described therein.
8. Non-Transferability of Grant Shares. The Grant Shares and any other
rights of Employee under this Agreement or the SIP are nontransferable and
subject to extensive restrictions under Section 1.9 of the SIP and as set forth
herein. The Common Stock issuable on the Grant Shares are also subject to
restrictions on transfer under Section 1.10 of the SIP and to any and all
repurchase or redemption rights of the Company that may be provided under its
Certificate of Incorporation and Bylaws, as amended from time to time.
9. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Company at its principal office and to
Employee at the addresses given beneath their respective signatures hereon, or
at such other address as either party may hereafter designate in writing to the
other. Any such notice shall be deemed given only when received, but if Employee
is no longer an Eligible Person, any notice to Employee shall be deemed to have
been duly given when enclosed in a properly sealed envelope addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are
subject to, and Employee agrees to be bound by, all of the terms and conditions
of the provisions of the SIP, incorporated herein by this reference. In the
event of a conflict or inconsistency between the terms and conditions of this
Agreement, and the terms and conditions of the SIP, the terms and conditions of
the SIP shall govern except as expressly set forth herein. In the event of a
conflict or inconsistency between the terms and conditions of this Agreement,
and the terms and conditions of the New Employment Agreement, the terms and
conditions of this Agreement shall govern. Employee acknowledges receipt of a
copy of the SIP, which is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly provided in other
Sections of this Agreement, provisions of the SIP that confer discretionary
authority on the Committee do not (and shall not be deemed to) create any rights
in Employee, unless such rights are expressly set forth herein or are otherwise
in the sole discretion of the Committee so conferred by appropriate action of
the Committee under the SIP after the date hereof.
11. Entire Agreement. This Agreement, the New Employment Agreement, the
Termination Agreement and the SIP together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. The SIP and this
Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must
be in writing and signed by the Company. The Company may, however, unilaterally
waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of Employee, but no such waiver shall operate as
or be construed to be a subsequent waiver of the same provision or a waiver of
any other provision hereof.
4
12. Severability. If a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any statute or public policy, then
only the portions of this Agreement which violate such statute or public policy
shall be stricken, and all portions of this Agreement which do not violate any
statute or public policy shall continue in full force and effect. Further, it is
the parties' intent that any court order striking any portion of this Agreement
should modify the terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.
13. California Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
14. Privileges of Stock Ownership. Except as otherwise expressly
authorized by the Committee or the SIP, Employee will not be entitled to any
privilege of stock ownership as to any shares of Common Stock not actually
delivered to and held of record by Employee. No adjustment will be made for
dividends or other rights as a stockholder for which a record date is prior to
such date of delivery.
15. No Restriction on Corporate Powers. The existence of the SIP, DERs
and/or the Grant Shares shall not affect or restrict in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Company's capital stock or the rights thereof, the dissolution or
liquidation of the Company or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding.
16. Further Assurances. Each of the parties hereto shall use its
reasonable and diligent best efforts to proceed promptly with the transactions
contemplated herein, to fulfill the conditions precedent for such party's
benefit or to cause the same to be fulfilled and to execute such further
documents and other papers and perform such further acts as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated herein.
17. Execution. The grant of Grant Shares hereunder shall be rendered
ineffective if Employee and spouse fail to execute this Agreement (with Consent
of Spouse) and return the executed Agreement (with Consent of Spouse) to the
Company within 30 days of the date hereof.
18. Counterparts. This Agreement and any amendment hereto may be executed
in several counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when a copy signed by each party has
been delivered to the other party.
[Remainder of page intentionally left blank.]
5
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by a duly authorized officer and Employee has hereunto set his or her
hand.
GEMSTAR-TV GUIDE INTERNATIONAL, INC.
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE
------------------------------------
Xxxxx X. Xxxx
------------------------------------
(Address)
------------------------------------
(City, State, Zip Code)
6
CONSENT OF SPOUSE
In consideration of the execution of the foregoing Fourth Employment Stock Unit
Agreement by Gemstar-TV Guide International, Inc., I,
_______________________________, the spouse of the Employee herein named, do
hereby join with my spouse in executing the foregoing Fourth Employment Stock
Unit Agreement and do hereby agree to be bound by all the terms and provisions
thereof and of the SIP.
Dated as of the ____ of ____, ____. -----------------------------
Signature of Spouse
7
Exhibit J
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (hereinafter this "Agreement") is
made and entered into by and between ___________ (hereinafter, "Employee") and
Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the
"Company").
1. Employee's employment by the Company has terminated [or will
terminate] on __________________ (hereinafter, the "Termination Date").
2. Pursuant to the terms of that certain Employment Agreement dated as of
November __, 2002 between the Company and Employee (hereinafter, the "Employment
Agreement"), Employee is required to execute this Agreement in order to obtain
certain benefits under the Employment Agreement .
3. To the fullest extent permitted by law, Employee hereby RELEASES and
COVENANTS NOT TO XXX the Company, its parents, subsidiaries, affiliates,
predecessors, successors, assigns, its or their employee benefit plans,
trustees, fiduciaries and administrators, and any and all of its and their
respective past or present officers, directors, partners, insurers, agents,
representatives, attorneys and employees (all collectively included in the term
the "Company" for purposes of this Agreement), from any and all claims, demands
or causes of action, known or unknown, based on any events or circumstances
relating to his employment at the Company or any subsidiary of the Company and
arising or occurring prior to and including the date of Employee's execution of
this Agreement, which Employee, his heirs, executors, administrators, agents,
attorneys, representatives or assigns (all collectively included in the term
"Employee" for purposes of this release and covenant not to xxx), has, had or
may have against the Company under Title VII of the Civil Rights Act of 1964,
the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age
Discrimination in Employment Act, the Employee Retirement Income Security Act,
the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. section.
1981, and all other federal, state and local statutes or ordinances,, any claims
that his employment was unlawfully terminated, any rights to severance pay or
benefits (other than as provided for in the Employment Agreement or that certain
Termination Agreement dated as of November __ 2002 between the Company, Gemstar
Development Corporation and Employee), and any rights of continued employment,
reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not
waiving, releasing or giving up any rights Employee may have (i) to test the
knowing and voluntary nature of this Agreement under The Older Workers Benefit
Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits
under any qualified pension or savings plan, (iv) to continued benefits in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or
(v) to unemployment insurance.
4. Employee agrees and acknowledges that he was hereby informed by the
Company in writing to consult with an attorney and that he had at least 21 days
to consider this Agreement; that he has entered into this Agreement knowingly
and voluntarily with full understanding of its terms and after having had the
opportunity to seek and receive advice from counsel of his choosing; and that he
has had a reasonable period of time within which to consider
this Agreement. Employee represents that he has not filed a complaint, charge or
claim with any court or governmental agency against the Company with respect to
any claim released hereby and has not assigned any such claim against the
Company to any person or entity.
5. Employee expressly waives and relinquishes all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California with
respect to the releases provided herein, and does so understanding and
acknowledging the significance of such specific waiver of Section 1542. Section
1542 of the Civil Code of the State of California states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
Thus, notwithstanding the provisions of Section 1542, and for the purpose of
implementing the releases provided herein, Employee expressly acknowledges that
this Agreement is intended to include in its effect, without limitation other
than the express limitations set forth herein, all claims of the kind released
hereby even if he does not know or suspect such claim to exist in his favor at
the time of execution hereof, and that this Agreement contemplates the
extinguishment of any such claims. Employee acknowledges and agrees that the
foregoing waiver of the provisions of Section 1542 has been expressly bargained
for by each of the parties in the negotiation of this Agreement.
6. [This Section 6 is intentionally left blank]
7. Employee may accept this Agreement by delivering an executed copy of
this Agreement on or after the Termination Date and on or before
_______________________, in the manner described in Section 10(b), "Notices," of
the Employment Agreement.
8. Employee may revoke this Agreement within seven (7) days after it is
executed by Employee by delivering a written notice of revocation in the manner
described in Section 10(b), "Notices," of the Employment Agreement, no later
than the close of business on the seventh (7th) calendar day after this
Agreement was signed by Employee. This Agreement will not become effective or
enforceable until the eighth (8th) calendar day after Employee signs. If
Employee revokes this Agreement, the parties shall have no obligations under
this Agreement.
9. This Agreement does not constitute and shall not be construed as an
admission by the Company that it has violated any law, interfered with any
rights, breached any obligation or otherwise engaged in any improper or illegal
conduct with respect to Employee, and the Company expressly denies that it has
engaged in any such conduct.
10. If any provision, section, subsection or other portion of this
Agreement shall be determined by any court of competent jurisdiction to be
invalid, illegal or unenforceable
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in whole or in part, and such determination shall become final, such provision
or portion shall be deemed to be severed or limited, but only to the extent
required to render the remaining provisions and portion of this Agreement
enforceable. This Agreement as thus amended shall be enforced so as to give
effect to the intention of the parties insofar as that is possible. In addition,
the parties hereby expressly empower a court of competent jurisdiction to modify
any term or provision of this Agreement to the extent necessary to comply with
existing law and to enforce this Agreement as modified.
11. Employee hereby agrees and acknowledges that he has carefully read
this Agreement, fully understands what this Agreement means, and is signing this
Agreement knowingly and voluntarily, and that Employee has not relied on any
statement by anyone associated with the Company that is not contained in this
Agreement in deciding to sign this Agreement.
12. This Agreement, the legal relations between the parties and any
action, whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement, the relationship of the parties or the subject matter
hereof shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts made and performed in such State and
without regard to conflicts of law doctrines.
13. All disputes arising under this Agreement shall be resolved pursuant
to Section 10(f) of the Employment Agreement.
[Remainder of page intentionally left blank]
-3-
WHEREFORE, the parties have executed this Agreement on the date or dates
set forth below.
EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL,
INC.
[_____________________] By:
--------------------------------
Name:
------------------------------
Date: Title:
----------------------- -----------------------------
Date:
------------------------------
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