Exhibit 10.12
CONFIDENTIAL
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SEPARATION AND CONSULTING AGREEMENT
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This Separation and Consulting Agreement ("Separation and Consulting
Agreement"), is effective as of March 4, 2002 (the "Effective Date"), by and
between ▇▇▇▇▇▇ Partners, LLC, an Oklahoma limited liability company
("Consultant"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III ("▇▇▇▇▇▇"), and Gemstar-TV Guide
International, Inc., (the "Company").
WHEREAS, ▇▇▇▇▇▇ has been employed as Co-President, Co-Chief Operating
Officer and Member of the Office of the Chief Executive Officer of the Company,
pursuant to an Employment Agreement, entered into as of March 1, 1999 (the
"Employment Agreement");
WHEREAS, ▇▇▇▇▇▇ and the Company have mutually agreed to terminate their
employment relationship upon the terms set forth herein; and
WHEREAS, Consultant is willing to provide advice to and consult with the
Company and its affiliates, on a non-exclusive basis, as the Company may
reasonably request, subject to the terms and conditions contained herein, from
time to time on matters with which ▇▇▇▇▇▇ was familiar and/or about which ▇▇▇▇▇▇
acquired knowledge, expertise and/or experience during the time that ▇▇▇▇▇▇ was
employed by the Company or its subsidiaries.
NOW, THEREFORE, in consideration of the covenants undertaken and the
releases contained in this Separation and Consulting Agreement, including
Exhibits, Consultant, ▇▇▇▇▇▇ and the Company agree as follows:
I. RESIGNATION. ▇▇▇▇▇▇ hereby resigns as an officer, director, employee,
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and in any other capacity with the Company and any of its affiliated entities,
effective April 1, 2002 (the "Separation Date"). Concurrently with the execution
of this Separation and Consulting Agreement, ▇▇▇▇▇▇ shall execute the letters
attached as Exhibit A and Exhibit B hereto. The Company hereby accepts such
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resignation.
II. TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement shall
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terminate immediately prior to the Separation Date, provided, however, that
notwithstanding anything to the contrary in this Separation and Consulting
Agreement, Section 5, ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇(▇), (▇), (▇), (▇) and
(n) and Schedule II thereto shall continue to apply in accordance with their
terms. All payments due to Consultant and/or ▇▇▇▇▇▇ from the Company on or after
the Separation Date shall be determined under this Separation and Consulting
Agreement, and no payments shall be made under the Employment Agreement except
pursuant to Section 5 thereto. Schedule II of the Employment Agreement shall
also apply with respect to the Consulting Fee paid hereunder, and the
definitions used therein shall be modified accordingly (i.e., the term
"Employee" as used therein shall also be deemed to refer to Consultant, and the
term "this Agreement" shall also be deemed to refer to this Separation and
Consulting Agreement).
III. TRANSITION. From the Effective Date until the Separation Date, ▇▇▇▇▇▇
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shall be on paid vacation from the Company, which shall not be deducted from his
accrued vacation, and ▇▇▇▇▇▇ shall cooperate with the Company in the transition
of his duties, including but not limited
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to introducing his business contacts to the Company as reasonably requested by
the Company. To the extent ▇▇▇▇▇ ▇▇▇▇ requests ▇▇▇▇▇▇ to travel from the
Effective Date through the Separation Date, ▇▇▇▇▇▇ shall be entitled to the same
travel arrangements and accommodations as are presently provided to him
consistent with past practices. From the Effective date through the Separation
Date, ▇▇▇▇▇▇ will continue to sign all necessary and appropriate documents on
behalf of the Company as reasonably requested by the CEO of the Company,
including, but not limited to, board resolutions, financial reports and/or
Securities and Exchange Commission filings by the Company. As to any document
that has not been signed by the CEO at the time of presentation to ▇▇▇▇▇▇ for
signature, ▇▇▇▇▇▇ reserves the right to reasonably satisfy himself as to the
accuracy of the information contained therein. ▇▇▇▇▇▇'▇ check writing authority
and authorizations as an officer of the Company shall terminate as of the
Effective Date, and ▇▇▇▇▇▇ shall sign any and all such documents necessary to
transfer such power to a person designated by the CEO of the Company. Nothing
contained herein is intended to preclude ▇▇▇▇▇▇ from declining to sign any
document if he, at the Company's expense, provides to the Company a written
opinion of counsel setting forth the factual and legal bases why signing such
document may reasonably be expected to subject ▇▇▇▇▇▇ to liability or cause him
to violate any applicable law, provided, however, that prior to obtaining such
opinion, ▇▇▇▇▇▇ shall give written notice to the Company and provide the Company
with a reasonable period to either withdraw its request that ▇▇▇▇▇▇ sign such
document or resolve ▇▇▇▇▇▇'▇ objection to such document to his reasonable
satisfaction. ▇▇▇▇▇▇ shall comply with all applicable rules and regulations
applicable to directors, officers, and insiders, including but not limited to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and fiduciary duty obligations.
IV. BENEFIT CONTINUATION. For a period of sixty (60) months following the
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Separation Date the Company shall continue to provide medical, dental, life, and
disability insurance coverage and other benefits required to be provided under
Section 3(d) of the Employment Agreement, at no cost to ▇▇▇▇▇▇, at a level
commensurate with the coverage provided to ▇▇▇▇▇▇ as of the Separation Date.
V. STOCK OPTIONS. Upon ▇▇▇▇▇▇'▇ execution of the Supplemental Release
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attached hereto as Exhibit C, all unvested stock options previously granted to
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▇▇▇▇▇▇ by TV Guide, Inc., TV Guide International, Inc. and/or the Company shall
immediately vest in full and shall become fully exercisable for their full term,
and all previously vested stock options shall remain fully exercisable for their
full term as forth in the Schedule attached hereto as Exhibit ▇. ▇▇▇▇▇▇ agrees
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that from the Effective Date through July 1, 2002, unless and until a Releasing
Event (as defined below) occurs, ▇▇▇▇▇▇ shall not sell more than 10% of the
total number of shares of Company stock or options beneficially owned by ▇▇▇▇▇▇
as of the date hereof unless and until the market price for the Company's stock
reaches $25.00 per share. "Releasing Event" means the occurrence of one of the
following: (i) ▇▇▇▇▇ ▇▇▇▇ ceases to be Chairman and Chief Executive Officer of
the Company or (ii) ▇▇▇▇▇ ▇▇▇▇ publicly announces his intention to resign as
Chairman and Chief Executive Officer of the Company. Upon the occurrence of a
Releasing Event, ▇▇▇▇▇▇ shall not be precluded by this agreement from selling
any and all shares of the Company's stock without restriction. To the extent
▇▇▇▇▇▇'▇ stock option agreements permit the transfer of such options for estate
planning purposes (to the extent provided in Section 7.2(e) of the TVG Equity
Incentive Plan), the Company represents it will recommend that the
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Compensation Committee of the Company approve a resolution in the form attached
hereto as Exhibit F. The Company shall use best efforts to obtain unanimous
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consent to such resolution within five (5) business days of ▇▇▇▇▇▇'▇ execution
of this Separation and Consulting Agreement. If such unanimous consent cannot be
obtained within five (5) business days of ▇▇▇▇▇▇'▇ execution of this Separation
and Consulting Agreement, the Company shall notice a meeting of the Compensation
Committee to occur within fifteen (15) business days after ▇▇▇▇▇▇'▇ execution of
this Separation and Consulting Agreement to consider such resolution, and the
Company shall use best efforts to obtain approval from the Compensation
Committee at such meeting.
VI. NON-DISPARAGEMENT. Consultant and ▇▇▇▇▇▇ agree that each shall not
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directly or indirectly, make or ratify any public statement, oral or written, to
any person that disparages the Company, its subsidiaries or its officers and
employees, past and present, and each of them.
The Company agrees that it shall not, and shall cause its
subsidiaries, officers and employees not to, directly or indirectly, make or
ratify any public statement, oral or written, to any person that disparages,
either professionally or personally, ▇▇▇▇▇▇ or Consultant.
VII. RELEASES. Except for those obligations created by or arising out of
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this Separation and Consulting Agreement or out of the Employment Agreement as
it has been modified hereby, for which receipt or satisfaction has not been
acknowledged herein, ▇▇▇▇▇▇ on behalf of himself, his descendants, dependents,
heirs, executors, administrators, assigns, and successors, and each of them,
hereby covenants not to ▇▇▇ and fully releases and discharges the Company, and
its parents, subsidiaries and affiliates, past and present, and each of them, as
well as its and their trustees, directors, officers, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, and successors,
past and present, and each of them, hereinafter together and collectively
referred to as "the Company Releasees," with respect to and from any and all
claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now owns or holds
or he has at any time heretofore owned or held or may in the future hold as
against said Company Releasees, arising out of or in any way connected with his
service as an officer, director, or employee of any the Company Releasee, his
separation from his position as an officer, director, and employee of any the
Company Releasee, or any other transactions, occurrences, acts or omissions or
any loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Company Releasees,
or any of them, committed or omitted prior to the Effective Date including,
without limiting the generality of the foregoing, any claim under Title VII of
the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family
and Medical Leave Act of 1993, the California Fair Employment and Housing Act,
the California Family Rights Act, or any claim for severance pay, bonus, sick
leave, holiday pay, vacation pay, life insurance, health or medical insurance or
any other fringe benefit, workers' compensation or disability.
Except for those obligations created by or arising out of this Separation and
Consulting Agreement, or the Employment Agreement as it has been modified
hereby, for which receipt or
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satisfaction has not been acknowledged herein, the Company, on its own behalf
and on behalf of its parents, subsidiaries, officers, directors, employees, and
affiliates, assigns and successors, and each of them, hereby acknowledges full
and complete satisfaction of and releases and discharges, and covenants not to
▇▇▇, ▇▇▇▇▇▇, as well as his trustees, agents, attorneys, insurers, employees,
representatives, assigns, and successors, past and present, and each of them,
hereinafter together and collectively referred to as "the ▇▇▇▇▇▇ Releasees,"
from and with respect to and from any and all claims, demands, rights, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
debts, costs, expenses, attorneys' fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, whether now
known or unknown, suspected or unsuspected, and whether or not concealed or
hidden, which it now owns or holds or it has at any time heretofore owned or
held or may in the future hold as against ▇▇▇▇▇▇ arising out of or in any way
connected with ▇▇▇▇▇▇'▇ service as an officer, director, employee and/or agent
of any Company Releasee, his separation from his position as an officer,
director, employee and/or agent of any Company Releasee, or any other
transactions, occurrences, acts or omissions or any loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of said ▇▇▇▇▇▇ Releasees committed or omitted prior
to the Effective Date.
VIII. 1542 WAIVER. It is the intention of ▇▇▇▇▇▇ and the Company in
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executing this instrument that the same shall be effective as a bar to each and
every claim, demand and cause of action hereinabove specified. In furtherance of
this intention, ▇▇▇▇▇▇ and the Company hereby expressly waive any and all rights
and benefits conferred upon them by the provisions of SECTION 1542 OF THE
CALIFORNIA CIVIL CODE and expressly consent that this Separation and Consulting
Agreement shall be given full force and effect according to each and all of its
express terms and provisions, including those related to unknown and unsuspected
claims, demands and causes of action, if any, as well as those relating to any
other claims, demands and causes of action hereinabove specified. SECTION 1542
provides:
"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."
▇▇▇▇▇▇ and the Company acknowledge that they may hereafter discover claims or
facts in addition to or different from those which ▇▇▇▇▇▇ and the Company now
know or believe to exist with respect to the subject matter of this Separation
and Consulting Agreement and which, if known or suspected at the time of
executing this Separation and Consulting Agreement, may have materially affected
this settlement. Nevertheless, ▇▇▇▇▇▇ and the Company hereby waive any right,
claim or cause of action that might arise as a result of such different or
additional claims or facts. ▇▇▇▇▇▇ and the Company acknowledge that they
understand the significance and consequence of such release and such specific
waiver of Section 1542.
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IX. SUPPLEMENTAL RELEASES. On the Separation Date, ▇▇▇▇▇▇ and the
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Company shall execute the Supplemental Releases attached hereto as Exhibit C
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covering the period from the Effective Date through the Separation Date.
X. CONFIDENTIALITY. Company, Consultant and ▇▇▇▇▇▇ agree that the terms
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and conditions of this Separation and Consulting Agreement shall remain
confidential and that they shall not (except as required by law), disclose them
to any other person other than their respective attorneys, accountants and
advisors. In the event that the Company is required by regulation or rule of the
Securities and Exchange Commission or any self-regulatory organization to
include this Separation and Consulting Agreement in any publicly available
filing, the Company shall seek to redact or otherwise treat as confidential its
terms and conditions to the maximum extent permitted by such regulations and
rules. Except with respect to Liberty Media Corporation as set forth below,
neither Company, Consultant nor ▇▇▇▇▇▇ will respond to or in any way participate
in or contribute to any public discussion, notice or other publicity concerning,
or in any way relating to, execution of this Separation and Consulting Agreement
or the events (including any negotiations) which led to its execution, except as
materially consistent with the agreed upon statement attached as Exhibit G
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hereto. Without limiting the generality of the foregoing, Consultant and ▇▇▇▇▇▇
agree that they shall not disclose the detailed terms and conditions of this
Separation and Consulting Agreement to any current or former employee of the
Company. ▇▇▇▇▇▇ shall be permitted to discuss his departure from the Company
with Liberty Media Corporation prior to public announcement of such departure,
provided, however, that ▇▇▇▇▇▇ shall inform Liberty Media that such information
shall be deemed inside information unless and until a public announcement is
made by the Company. The parties hereby agree that disclosure of any of the
terms and conditions of the Separation and Consulting Agreement in violation of
the foregoing shall constitute and be treated as a material breach of this
Separation and Consulting Agreement.
XI. NO TRANSFERRED CLAIMS. ▇▇▇▇▇▇ and the Company each warrant and
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represent that they have not heretofore assigned or transferred to any person
not a party to this Separation and Consulting Agreement any released matter or
any part or portion thereof and each shall defend, indemnify and hold harmless
the others from and against any claim (including the payment of attorneys' fees
and costs actually incurred whether or not litigation is commenced) based on or
in connection with or arising out of any such assignment or transfer made,
purported or claimed.
XII. CONSULTING ENGAGEMENT. The Company hereby engages Consultant and
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Consultant hereby accepts such engagement, upon the terms and conditions
hereinafter set forth, for a three (3) year period commencing on April 2, 2002,
unless earlier terminated by mutual agreement of the parties.
XIII. CONSULTING SERVICES.
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A. Consultant shall perform consulting services subject to the terms
and conditions provided for herein during the course of his engagement under
this Separation and Consulting Agreement on a non-exclusive basis which shall
include providing advice to and consultation with the Company and its
subsidiaries as Company (and/or its subsidiaries) may
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reasonably request from time to time at mutually convenient times on matters
with which ▇▇▇▇▇▇ was familiar and/or about which ▇▇▇▇▇▇ acquired knowledge,
expertise and/or experience during the time that ▇▇▇▇▇▇ was employed by the
Company or its subsidiaries, provided, however, that Consultant shall not be
required to perform any services that (1) differ materially from the duties
▇▇▇▇▇▇ performed for the Company prior to the date of this Agreement or (2) are
materially inconsistent with Consultant's or ▇▇▇▇▇▇'▇ duties for a subsequent
employer or entity to which consulting or other services are rendered. The
Company shall for a period of six months from the Separation Date (1) maintain
and provide ▇▇▇▇▇▇ remote and other access to his current e-mail address and (2)
maintain and provide ▇▇▇▇▇▇ remote and other access to his voice mailbox.
B. Consultant agrees to devote reasonable time and energy up to 10
hours per month to the business of the Company to accomplish the projects
assigned from time to time, subject to any time restrictions imposed by any new
employer of (or entity to which consulting or other services are rendered by)
Consultant or ▇▇▇▇▇▇. Consultant shall report to ▇▇▇▇▇ ▇▇▇▇ a summary of all
consulting activity performed hereunder including without limitation any
business contacts made on behalf of the Company reasonably promptly after such
activity has been performed, and if reasonably requested by ▇▇▇▇▇ ▇▇▇▇, such
summary shall be reduced to a writing.
C. For the term of this Separation and Consulting Agreement,
Consultant shall report only to ▇▇▇▇▇ ▇▇▇▇, the Chief Executive Officer of the
Company ("CEO") and shall not initiate any business-related contact with other
employees of the Company unless requested by the CEO. In addition, from the
Effective Date and for the term of this Separation and Consulting Agreement,
▇▇▇▇▇▇ shall minimize contact with the Company and refer any business-related
questions from employees of the Company to ▇▇▇▇▇ ▇▇▇▇. From the Effective Date
and for the term of this Separation and Consulting Agreement, Consultant and
▇▇▇▇▇▇ shall not initiate communication with any analysts regarding ▇▇▇▇▇▇'▇
resignation or the Company's business. If communication is initiated by any
analyst, Consultant and/or ▇▇▇▇▇▇ shall only communicate with any such analyst
regarding ▇▇▇▇▇▇'▇ resignation in a manner that is materially consistent with
the Agreed Statement and, with respect to communications initiated by any such
analyst regarding the Company's business, Consultant and/or ▇▇▇▇▇▇ shall refer
such analyst to ▇▇▇▇▇ ▇▇▇▇ or his designee.
D. Notwithstanding anything to the contrary in this Separation and
Consulting Agreement, in the event of the death or Disability (as that term is
defined in the Employment Agreement) of ▇▇▇▇▇▇, Consultant will have no further
obligations under this Section XIII or under Section XXII.E, and Consultant will
be entitled to retain the full amount of the Consulting Fee.
XIV. CONSULTING COMPENSATION. As full compensation for any consulting
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services that Consultant provides during the term of this Separation and
Consulting Agreement, the Company shall pay Consultant by wire transfer (a) upon
execution of this Agreement, the gross sum of $1,729,870, and (b) upon ▇▇▇▇▇▇'▇
execution of the Supplemental Release set forth in Exhibit C, the gross sum of
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$3,227,697, ((a) and (b) together, the "Consulting Fee.") Consultant agrees that
it will be solely responsible for any taxes due as a result of the payment of
such Consulting Fee, and Consultant and ▇▇▇▇▇▇ will defend and indemnify the
Company from and
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against any and all losses or liabilities, including defense costs, arising out
of Consultant's failure to pay any taxes due with respect to such Consulting
Fee. If the Company determines that applicable law requires that taxes should be
withheld from the Consulting Fee, the Company reserves the right to withhold, as
legally required, and to notify Consultant accordingly. Promptly upon the
receipt of an invoice therefor, the Company shall pay directly to Christensen,
Miller, Fink, Jacobs, ▇▇▇▇▇▇, Weil & ▇▇▇▇▇▇▇ $28,500 for legal services to
▇▇▇▇▇▇ and Consultant in the negotiation and preparation of this Separation and
Consulting Agreement. Any fees incurred by ▇▇▇▇▇▇ with KPMG in relation to the
negotiation and documentation of this Separation and Consulting Agreement shall
be submitted by ▇▇▇▇▇▇ and paid by the Company pursuant to Section 3(d) of the
Employment Agreement.
XV. EXPENSES. Consultant shall be entitled to receive prompt
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reimbursement for all reasonable expenses incurred by it in performance of the
services under this Separation and Consulting Agreement upon the presentation of
documentary evidence of such expenses. Expenses and travel arrangements,
including without limitation travel and accommodation expenses, shall be deemed
reasonable if they are in accordance with the expense policies and travel
arrangements presently applicable to ▇▇▇▇▇▇. Consultant's air travel shall be
coordinated by ▇▇▇▇▇ ▇▇▇▇'▇ assistant. All expenses incurred by Consultant in
connection with its consulting duties hereunder shall be reimbursed by the
Company in a reasonably prompt manner, but not to exceed 10 business days.
XVI. RELATIONSHIP. Consultant shall operate at all times as an independent
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contractor of the Company. This Separation and Consulting Agreement does not
authorize Consultant or ▇▇▇▇▇▇ to act for the Company as its agent or to make
commitments on behalf of the Company. Consultant and the Company intend that an
independent contractor relationship be created by this Separation and Consulting
Agreement, and nothing herein shall be construed as creating an
employer/employee relationship, partnership, joint venture, or other business
group or concerted action. Neither Consultant nor ▇▇▇▇▇▇ at any time shall hold
itself or himself out as an agent of the Company for any purpose, including
reporting to any governmental authority or agency, and shall have no authority
to bind the Company to any obligation whatsoever.
XVII. NONCOMPETITION.
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A. Notwithstanding anything to the contrary in any agreement between
▇▇▇▇▇▇ and the Company (including its subsidiaries), Consultant and ▇▇▇▇▇▇ agree
that, during the term of Consultant's consulting engagement, Consultant and
▇▇▇▇▇▇ will not, directly or indirectly, without the prior written consent of
the CEO of the Company, provide consultative service with or without pay, own,
manage, operate, join, control, participate in, or be connected as a
stockholder, general partner, or otherwise with any entity or any subsidiary or
controlled entity of any entity set forth in Exhibit E hereto. Nothing in this
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section is intended to prevent Consultant or ▇▇▇▇▇▇ from owning up to five
percent (5%) of the publicly traded stock of any company. In the event of any
inconsistency or conflict between this Section XVII and any other prior
agreement between ▇▇▇▇▇▇ and the Company (including its subsidiaries), the terms
of this Section XVII shall control.
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B. It is expressly agreed that the Company will or would suffer
irreparable injury if Consultant or ▇▇▇▇▇▇ were to provide consultative service
with or without pay, own, manage, operate, join, control, participate in, or be
connected as a stockholder, general partner, or otherwise with, any entity or
any subsidiary or controlled entity of any entity set forth in Exhibit E hereto
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in violation of this Separation and Consulting Agreement and that the Company
would by reason of such violation be entitled to injunctive relief in a court of
appropriate jurisdiction. In the event of any such breach, Consultant and ▇▇▇▇▇▇
consent and stipulates to the entry of such injunctive relief in such a court
prohibiting him from providing consultative service with or without pay, owning,
managing, operating, joining, controlling, participating in, or being connected
as a stockholder, general partner, or otherwise with, any entity or any
affiliate of any entity or any subsidiary or controlled entity of any entity set
forth in Exhibit E hereto in violation of this Separation and Consulting
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Agreement.
XVIII. SOLICITING EMPLOYEES. Consultant and ▇▇▇▇▇▇ promises and agrees that
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neither will, from the Effective Date and for a period of one year following the
term of this Separation and Consulting Agreement, directly or indirectly solicit
any employees of the Company or its subsidiaries that earn greater than $100,000
per year as of the Effective Date to work for any business, individual,
partnership, firm, or corporation without first giving 10 days prior written
notice to the CEO of the Company.
XIX. CONFIDENTIAL INFORMATION. Consultant and ▇▇▇▇▇▇ agree to not make
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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 its products, employees, services, practices or
policies) of the Company or any of its subsidiaries of which Consultant and/or
▇▇▇▇▇▇ may learn or be aware as a result of Consultant's engagement during the
term of this Separation and Consulting Agreement or prior thereto as
shareholder, employee, officer or director of or consultant to Company and its
predecessors, except to the extent such use or disclosure is (i) necessary to
the performance of this Separation and Consulting 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 or
(iv) relates to information which is publicly available.
XX. SERP. In connection with the TV Guide, Inc. SERP Deferred
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Compensation Plan (the "SERP"), the Company acknowledges that ▇▇▇▇▇▇ shall be
deemed to be 100% vested with respect to amounts credited and/or to be credited
to his Matching Contribution Account (capitalized terms used and not otherwise
defined in this Section XX have the meanings attributed to them in the SERP).
Upon the execution of this Agreement by ▇▇▇▇▇▇, the Company shall credit an
additional $1,497,827 to ▇▇▇▇▇▇'▇ Matching Contribution Account, which credit is
derived from the deferral and matching amounts set forth on Exhibit H attached
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hereto. The Company and ▇▇▇▇▇▇ agree that the SERP is hereby amended as follows
with respect to ▇▇▇▇▇▇: (1) ▇▇▇▇▇▇'▇ SERP benefit shall become payable upon
▇▇▇▇▇▇'▇ attainment of age 40 and such benefit shall be paid in annual
distributions from the ▇▇▇▇▇▇ accounts in ratable amounts over a five-year term
such that all amounts credited to all ▇▇▇▇▇▇ accounts are distributed in full by
the completion of the five-year term with the first payment to ▇▇▇▇▇▇ to be made
not later than sixty days after ▇▇▇▇▇▇ attaining age 40; (2) ▇▇▇▇▇▇ shall have
the right to request immediate
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distribution, in whole or in part, of vested amounts credited to ▇▇▇▇▇▇ accounts
in the event of an unforeseeable financial hardship or emergency, subject to
reasonable approval by the compensation Committee; (3) ▇▇▇▇▇▇ shall have the
right to request immediate distribution of vested amounts credited to his
accounts at any time, provided that in the event of such request and
distribution that such amounts be reduced by ten percent (10%) withdrawal
penalty which shall be forfeited to Company; (4) all amounts credited to
▇▇▇▇▇▇'▇ accounts shall be distributed immediately after the occurrence of any
of (i) a Change of Control (as that term is defined in the Employment Agreement)
of the Company, (ii) a change in the Chief Executive Officer of the Company,
(iii) a material default by the Company on any debt agreement or similar
arrangement, or (iv) a restatement of Company net earning for any fiscal year
which results in a reduction of net earnings by greater than five (5%) of the
net earnings of the Company as originally stated for such fiscal year. ▇▇▇▇▇▇
and Consultant agree that the Consulting Fee shall not be Compensation for
purposes of the SERP.
XXI. INDEMNIFICATION. To the maximum extent permitted by applicable law,
---------------
the Company shall indemnify Consultant and ▇▇▇▇▇▇ and hold them 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
Consultant or ▇▇▇▇▇▇ in connection with the defense of any action, suit or
proceeding, and in connection with any appeal thereon) incurred by Consultant or
▇▇▇▇▇▇ 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
Consultant's or ▇▇▇▇▇▇'▇ status, actions or inaction as a consultant or agent of
the Company or of an affiliate of the Company so long as their conduct was in
good faith. Company shall promptly advance to Consultant upon request any and
all expenses incurred by Consultant in defending any and all such actions,
suits, or proceedings to the maximum extent permitted by law.
XXII. MISCELLANEOUS
-------------
A. SUCCESSORS.
----------
1. This Separation and Consulting Agreement is personal to
Consultant and shall not, without the prior written consent of the Company, be
assignable by Consultant. Consultant shall be obligated to provide the services
of ▇▇▇▇▇▇ to fulfill its consulting obligations hereunder.
2. This Separation and Consulting Agreement shall inure to the
benefit of and be binding upon the Company and its successors and any such
successor shall be deemed substituted for the Company under the terms of this
Separation and Consulting Agreement for all purposes. As used herein,
"successor" shall include any person, firm, corporation or other business entity
which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires the stock of the Company.
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CONFIDENTIAL
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B. WAIVER. No waiver of any breach of any term or provision of this
------
Separation and Consulting Agreement shall be construed to be, nor shall be, a
waiver of any other breach of this Separation and Consulting Agreement. No
waiver shall be binding unless in writing and signed by the party waiving the
breach.
C. MODIFICATION. This Separation and Consulting Agreement may not be
------------
amended or modified other than by a written agreement executed by Consultant,
▇▇▇▇▇▇ and an authorized officer of the Company.
D. COMPLETE AGREEMENT. This Separation and Consulting Agreement and
------------------
the Employment Agreement as modified hereby constitutes and contains the entire
agreement and final understanding concerning Consultant's and ▇▇▇▇▇▇'▇
relationship with the Company and the other subject matters addressed herein
between the parties, and supersedes and replaces all prior negotiations and all
agreements proposed or otherwise, whether written or oral, concerning the
subject matters hereof. Any representation, promise or agreement not
specifically included in this Separation and Consulting Agreement or the
Employment Agreement as modified hereby shall not be binding upon or enforceable
against either party. This is an integrated agreement.
E. LITIGATION AND INVESTIGATION ASSISTANCE. In addition to the
---------------------------------------
consulting services described in Section XIII, Consultant agrees to reasonably
cooperate (subject to the time commitments Consultant and/or ▇▇▇▇▇▇ has to any
entity to which either is rendering consulting or other services), at no expense
to Consultant, at mutually convenient times, in the Company's 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 the term of ▇▇▇▇▇▇'▇ employment with the Company. Consultant
shall provide up to thirty (30) full days of such services at no charge to the
Company for such services, other than the reimbursement of Consultant's expenses
in accordance with Section XV. Thereafter, in addition to expense reimbursement,
Consultant will be paid a daily rate of $4,318 for each full day of consulting
services provided pursuant to this Section. From and after the Separation Date,
except as requested by the Company or as required by law, neither Consultant nor
▇▇▇▇▇▇ shall not comment upon any (i) threatened or pending litigation
(including investigations or arbitrations) involving the Company or any of its
subsidiaries or (ii) threatened or pending government investigation involving
the Company or any of its subsidiaries. If Consultant or ▇▇▇▇▇▇ receives
inquiries regarding any such matters, Consultant and/or ▇▇▇▇▇▇ shall refer such
inquiries to ▇▇▇▇▇ ▇▇▇▇ or his designee.
F. OFFICE EQUIPMENT AND FURNITURE. The Company shall transfer to
------------------------------
Consultant, at no expense to Consultant, title to his office equipment and his
office furniture on the Separation Date. Prior to the transfer to Consultant,
the Company shall have the right to remove from any such office equipment any
files or programs relating to the business of the Company.
G. SEVERABILITY. If any provision of this Separation and Consulting
------------
Agreement or the application thereof is held invalid, the invalidity shall not
affect other provisions or applications of this Separation and Consulting
Agreement which can be given effect without the
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CONFIDENTIAL
------------
invalid provisions or applications and to this end the provisions of this
Separation and Consulting Agreement are declared to be severable.
H. CHOICE OF LAW. This Separation and Consulting Agreement shall be
-------------
deemed to have been executed and delivered within the State of California, and
the rights and obligations of the parties hereunder shall be construed and
enforced in accordance with, and governed by, the laws of the State of
California without regard to principles of conflict of laws.
I. COOPERATION IN DRAFTING. Each party has cooperated in the
-----------------------
drafting and preparation of this Separation and Consulting Agreement. Hence, in
any construction to be made of this Separation and Consulting Agreement, the
same shall not be construed against any party on the basis that the party was
the drafter.
J. COUNTERPARTS. This Separation and Consulting Agreement may be
------------
executed in counterparts, and each counterpart, when executed, shall have the
efficacy of a signed original. Photographic copies of such signed counterparts
may be used in lieu of the originals for any purpose.
K. ARBITRATION. Any controversy arising out of or relating to this
-----------
Separation and Consulting Agreement, its enforcement or interpretation, or
because of an alleged breach, default, or misrepresentation in connection with
any of its provisions, shall be submitted to final and binding and
non-appealable arbitration before a single JAMS/Endispute arbitrator. Such
arbitration shall be held in Los Angeles County, California in accordance with
California Civil Procedure Code (S)(S) 1280-1288.8, provided, however, that
provisional injunctive relief may, but need not, be sought in a court of law
while arbitration proceedings are pending, and any provisional injunctive relief
granted by such court shall remain effective until the matter is finally
determined by the Arbitrator. In the event either party institutes arbitration
under this Separation and Consulting Agreement, the party prevailing in any such
proceeding shall be entitled, in addition to all other relief, to reasonable
attorneys' fees relating to such arbitration. The nonprevailing party shall be
responsible for all costs of the arbitration, including but not limited to, the
arbitration fees, court reporter fees, etc.
L. ADVICE OF COUNSEL. In entering this Separation and Consulting
-----------------
Agreement, the parties represent that they have relied upon the advice of their
attorneys, who are attorneys of their own choice, and that the terms of this
Separation and Consulting Agreement have been completely read and explained to
them by their attorneys, and that those terms are fully understood and
voluntarily accepted by them.
M. SUPPLEMENTARY DOCUMENTS. All parties agree to cooperate fully and
-----------------------
to execute any and all supplementary documents and to take all additional
actions that may be necessary or appropriate to give full force to the basic
terms and intent of this Separation and Consulting Agreement and which are not
inconsistent with its terms.
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CONFIDENTIAL
------------
N. HEADINGS. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
I have read the foregoing Separation and Consulting Agreement and I
accept and agree to the provisions it contains and hereby execute it voluntarily
with full understanding of its consequences.
EXECUTED this 4th day of March 2002, at Tulsa County, Oklahoma.
"▇▇▇▇▇▇"
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
EXECUTED this 4th day of March 2002, at Tulsa County, Oklahoma.
"CONSULTANT"
▇▇▇▇▇▇ Partners, LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Its Managing Member
---------------------------
EXECUTED this 4th day of March 2002, at Los Angeles County,
California.
"COMPANY"
Gemstar-TV Guide International, Inc.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Its Senior Vice President
---------------------------
-12-
EXHIBIT A
To: Chairman of the Gemstar-TV Guide International, Inc. Board of Directors
From: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
I hereby resign as an employee, officer, and in any other capacity
with Gemstar-TV Guide, International, Inc., and any of its affiliates,
effective April 1, 2002.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
A-1
EXHIBIT B
To: Chairman of the Gemstar-TV Guide International, Inc. Board of Directors
From: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
I hereby resign as a director of Gemstar-TV Guide, International, Inc.,
and any of its affiliates, effective April 1, 2002.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
B-1
EXHIBIT C
SUPPLEMENTAL RELEASE
1. Except for those obligations created by or arising out of the February
__, 2002 Separation and Consulting Agreement to which this Supplemental Release
is an Exhibit (the "Separation and Consulting Agreement") or out of the
Employment Agreement (as defined in the Separation and Consulting Agreement) as
it has been modified thereby, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III on behalf of himself, his
descendants, dependents, heirs, executors, administrators, assigns, and
successors, and each of them, hereby covenants not to ▇▇▇ and fully releases and
discharges Company Releasees (as defined in Section __ of the Separation and
Consulting Agreement) with respect to and from any and all claims, wages,
demands, rights, liens, agreements, contracts, covenants, actions, suits, causes
of action, obligations, debts, costs, expenses, attorneys' fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden, which he now owns or holds or he has at any time
heretofore owned or held or may in the future hold as against said the Company
Releasees, arising out of or in any way connected with any transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or
unknown, suspected or unsuspected, resulting from any act or omission by or on
the part of said Company Releasees, or any of them, committed or omitted after
the execution of the Separation and Consulting Agreement and prior to the date
of this Supplemental Release.
2. Except for those obligations created by or arising out of the Separation
and Consulting Agreement or out of the Employment Agreement (as defined in the
Separation and Consulting Agreement) as it has been modified thereby, the
Company, on its own behalf and own behalf if its parents, subsidiaries,
officers, directors and affiliates, assigns and successors, and each of them,
hereby acknowledges full and complete satisfaction of and releases and
discharges, and covenants not to ▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, as well as his
trustees, agents, attorneys, insurers, employees, representatives, assigns and
successors, past and present, and each of them, herein after together
collectively referred to as "the ▇▇▇▇▇▇ Releasees" from and with respect to and
from any and all claims, demands, rights, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys' fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden, which
it now owns or holds or it has at any time heretofore owned or held or may in
the future hold as against ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III arising out of or in any way
connected with any transactions, occurrences, acts or omissions or any loss,
damage or injury whatever, known or unknown, suspected or unsuspected, resulting
from any act or omission by or on the part of said ▇▇▇▇▇▇ Releasees committed or
omitted after the execution of the Separation and Consulting Agreement and prior
to the date of this Supplemental Release.
Dated: April 1, 2002. ___________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
C-1
Dated: April 1, 2002. Gemstar-TV-Guide International, Inc.
By _________________________
Its __________________________
-2-
EXHIBIT D
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
STOCK OPTION SCHEDULE
--------------------------------------------------------------------------------
Document Date of Grant No. of Options Exercise Price Expiration Date
--------------------------------------------------------------------------------
NQSO 10-18-94 474,539 $3.90 10-17-2004
--------------------------------------------------------------------------------
NQSO 4-24-96 348,159 8.66 4-23-2006
--------------------------------------------------------------------------------
NQSQ 5-1-97 226,111 6.00 4-30-2007
--------------------------------------------------------------------------------
NQSO 2-9-98 262,920 12.65 2-08-2008
--------------------------------------------------------------------------------
ISO 3-1-99 21,028 19.02 2-28-2009
--------------------------------------------------------------------------------
NQSO 3-1-99 373,348 19.02 2-28-2009
--------------------------------------------------------------------------------
NQSO 3-1-99 4 19.02 2-28-2009
--------------------------------------------------------------------------------
ISO 10-1-99 5,992 33.37 9-30-2009
--------------------------------------------------------------------------------
NQSO 10-1-99 994,008 33.37 9-30-2009
================================================================================
2,706,109
--------------------------------------------------------------------------------
Incentive Stock Option ("ISO")
Non-Qualified Stock Option ("NQSO")
D-1
CONFIDENTIAL
------------
EXHIBIT E
NONCOMPETITION
EchoStar Technologies Corp.
EchoStar Communications Corporation
EchoStar Satellite Corp.
Thomson Multimedia, Inc.
Scientific-Atlanta, Inc.
Pioneer Corporation
Pioneer Digital Technologies, Inc.
Pioneer North America, Inc.
Pioneer New Media Technologies, Inc.
TiVo, Inc.
SCI Systems, Inc.
E-1
CONFIDENTIAL
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EXHIBIT F
FORM OF COMPENSATION COMMITTEE RESOLUTION
The Committee hereby approves any proposed transfer of options by ▇▇▇▇▇
▇. ▇▇▇▇▇▇ III ("▇▇▇▇▇▇") under Section 7.2(e) of the TVG Equity Incentive Plan
(the "Plan") to any permitted transferee under Section 7.2(e) provided that any
such proposed transfer by ▇▇▇▇▇▇ is consistent with the Company's reliance on a
form S-8 registration statement with respect to the issuance of securities upon
the exercise of such options.
F-1
CONFIDENTIAL
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EXHIBIT G
AGREED STATEMENT
1. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III has resigned as officer, director, and member of
the Office of the Chief Executive Officer of Gemstar-TV Guide International,
Inc., effective April 1st as we approach the 2nd anniversary of the merger
between TV Guide, Inc., and ▇▇▇▇.
▇. It is with mixed emotions that ▇▇▇▇▇▇ resigns after approximately 8
years helping build the company into what it is today.
3. ▇▇▇▇▇▇ is very proud of his accomplishments in the two short years
post closing, including but not limited to, signing the MOT agreement, over 125
long term IPG licensing agreements with MSO's including Charter, Comast, ▇▇▇▇,
and Adlephia. Additionally, the company is extremely well positioned with TV
Games Network and its ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ is confident that this foundation will
allow GMST to prosper in the future.
4. ▇▇▇▇▇▇ looks forward to spending more time with his family and will
announce his next steps at some point in the future.
5. ▇▇▇▇▇▇ will remain a consultant to ▇▇. ▇▇▇▇ during this important
transition.
6. ▇▇▇▇▇▇ remains confident in GMST's future and in particular the
strength of its IPG patent portfolio.
G-1
CONFIDENTIAL
------------
EXHIBIT H
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
SERP SCHEDULE
COMPENSATION ▇▇▇▇▇▇ DEFERRAL COMPANY 4% MATCH
Salary Difference 3/00-2/28/01 $ 175,250 $ 7,010
Salary Difference 3/01-3/31/02 $ 189,854 $ 7,594
2001 Bonus $ 300,000 $12,000
2002 Pro-rated Bonus $ 118,750 $ 4,750
Accrued But Unused Vacation $ 656,364 $26,255
TOTAL $1,440,218 $57,609 $1,497,827
H-1