|
Exhibit
10.3
TRANSITION AND CONSULTING
AGREEMENT
This Transition and
Consulting Agreement (this “ Agreement ”) is
entered into between Michael Ramsay, an individual (“
Executive ”), and TiVo Inc., (the “
Company ”), effective as of August 30, 2007 (the
“ Effective Date ”).
WHEREAS, the Company and the
Executive previously entered into an Employment Transition
Agreement effective as of July 29, 2005 (the “ Prior
Agreement ”); and
WHEREAS, the Company and
Executive now wish to supersede, amend and restate the Prior
Agreement in its entirety.
NOW, THEREFORE, in
consideration of the mutual promises herein contained, the parties
agree as follows:
1. Definitions . As
used in this Agreement, the following terms shall have the
following meanings:
(a) Board . “
Board ” means the board of directors of the
Company.
(b) Cause . “
Cause ” means, unless Executive fully corrects the
circumstances constituting Cause (provided such circumstances are
capable of correction) prior to the Date of Termination,
(a) Executive’s willful and continued failure to
substantially perform his duties or services to the Company (other
than any such failure resulting from Executive’s incapacity
due to physical or mental illness or any such actual or anticipated
failure after his issuance of a Notice of Termination (as defined
below) for Good Reason), after a written demand for substantial
performance is delivered to Executive by the Board, which demand
specifically identifies the manner in which the Board believes that
Executive has not substantially performed his duties or services to
the Company, (b) Executive’s willful and continued
failure to substantially follow and comply with the specific and
lawful directives of the Chief Executive Officer of the Company or
the Board, as reasonably determined by the Board (other than any
such failure resulting from Executive’s incapacity due to
physical or mental illness or any such actual or anticipated
failure after his issuance of a Notice of Termination for Good
Reason), after a written demand for substantial performance is
delivered to Executive by the Board, which demand specifically
identifies the manner in which the Board believes that Executive
has not substantially performed his duties or services to the
Company, (c) Executive’s willful commission of an act of
fraud or dishonesty resulting in material economic or financial
injury to the Company, (d) Executive’s conviction of, or
entry by Executive of a guilty or no contest plea to, the
commission of a felony involving moral turpitude, or
(e) Executive’s breach of the non-competition or
non-solicitation provisions of Section 6 or the
non-disparagement provisions of Section 8 of this Agreement or
any material breach of his confidential or proprietary information
obligations to the Company. For purposes of this Section 1(b),
no act, or failure to act, on Executive’s part shall be
deemed “willful” unless done, or omitted to be done, by
him not in good faith. In the event of the proposed termination of
Executive’s consultancy for Cause arising under clause
(e) above as a result of Executive’s breach of the
non-competition provisions of Section 6 that is not willful,
the Executive shall have at least 60 days to correct such
breach
following the Company’s
notice of its intent to terminate Executive’s consultancy for
Cause, during which time Executive shall be entitled to present to
the Board with the assistance of his legal counsel the basis, if
any, for his belief and conclusion that he has not breached such
non-competition provisions.
(c) Change of Control
. “ Change of Control ” means, in one or a
series of related transactions, (i) a sale, lease or other
disposition of all or substantially all of the assets of the
Company, (ii) a sale by the stockholders of the Company of the
voting stock of the Company to another corporation and/or its
subsidiaries or other person or group that results in the ownership
by such corporation and/or its subsidiaries or other person or
group (the “ Acquiring Entity ”) of eighty
percent (80%) or more of the combined voting power of all
classes of the voting stock of the Company entitled to vote;
provided , however , that a sale by the stockholders
of the Company of voting stock that results in the ownership by
such Acquiring Entity of less than eighty percent (80%) of the
combined voting power of all classes of the voting stock of the
Company entitled to vote shall nonetheless constitute a Change of
Control if it results in the Acquiring Entity having the ability to
appoint a majority of the members of the Board, (iii) a merger
or consolidation in which the Company is not the surviving
corporation, or (iv) a reverse merger in which the Company is
the surviving corporation but less than fifty-one percent
(51%) of the shares of the Company’s common stock
outstanding immediately after the merger are beneficially owned by
the Company’s stockholders (as determined immediately before
the merger).
(d) Date of
Termination . “ Date of Termination ” means
(i) if Executive’s service to the Company under this
Agreement is terminated due to his death, the date of his death;
(ii) if Executive’s service to the Company is terminated
for Disability, thirty (30) days after Notice of Termination
is given (provided that Executive shall not have returned to the
full time performance of his duties or services to the Company
under this Agreement during such thirty (30) day period); and
(iii) if Executive’s service to the Company under this
Agreement is terminated for any reason other than death or
Disability, the date specified in the Notice of Termination (which,
in the case of a termination by the Company without Cause shall not
be less than thirty (30) days from the date such Notice of
Termination is given, and in the case of a termination by Executive
for Good Reason or by the Company for Cause shall not be less than
fifteen (15) nor more than thirty (30) days from the date
such Notice of Termination is given).
(e) Disability .
“ Disability ” means Executive’s absence
from the full-time performance of his duties or services to the
Company with the Company for six (6) consecutive months by
reason of Executive’s physical or mental illness.
(f) Good Reason .
“ Good Reason ” means the occurrence of any one
or more of the following events without Executive’s prior
written consent, unless the Company fully corrects the
circumstances constituting Good Reason (provided such circumstances
are capable of correction) prior to the Date of
Termination:
(i) the Company’s
reduction of Executive’s consulting fees as provided for in
this Agreement;
(ii) the relocation of the
Company’s offices at which Executive is providing services
such that Executive’s one-way daily commute from his
principal residence to the Company’s offices at which he is
providing services is increased by more than fifty
(50) miles;
(iii) the Company’s
failure to pay to Executive any portion of his then current
compensation under Section 4 below within seven (7) days
of the date such compensation is due;
(iv) the Company’s
failure to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in
Section 12(b)(i) hereof;
(v) any purported termination
of Executive’s service under this Agreement that is not
effected pursuant to a Notice of Termination satisfying the
requirements of Section 1(h) hereof (and, if applicable, the
requirements of Section 1(b) hereof), which purported
termination shall not be effective for purposes of this Agreement;
or
(vi) the Company’s
breach of the non-disparagement provisions of Section 8 of
this Agreement.
Executive’s right to
terminate his service to the Company pursuant to this
Section 1(g) shall not be affected by his incapacity due to
physical or mental illness. Executive’s continued service
shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder. Executive
expressly acknowledges and agrees that the amendment and
restatement of the Prior Agreement to reflect the terms herein and
the cancellation of certain provisions set forth in the Prior
Agreement does not constitute Good Reason hereunder.
(g) Notice of
Termination . Any purported termination of Executive’s
service to the Company by the Company or by Executive (other than
termination due to Executive’s death, which shall terminate
Executive’s service automatically), shall be communicated by
a written Notice of Termination to the other party hereto in
accordance with Section 12(g). For purposes of this Agreement,
“ Notice of Termination ” shall mean a notice
that shall indicate the specific termination provision in this
Agreement (if any) relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of Executive’s services under the provision so
indicated.
(h) Stock Awards .
“ Stock Awards ” means all stock options, stock
appreciation rights, restricted stock and such other awards granted
pursuant to the Company’s stock option and equity incentive
award plans or agreements and any shares of stock issued upon
exercise thereof.
2. Transition Period
.
(a) Transition Periods
. Commencing as of the Effective Date, Executive shall provide
services to the Company in the status of a consultant pursuant to
the terms hereof for a period extending through the date of the
Company’s calendar year 2009 annual stockholders meeting (the
“ Initial Transition Period ”). Following the
end of the Initial Transition Period, Executive may continue to
provide consulting services to the Company for additional six month
periods as shall be mutually agreed upon by Executive and the Chief
Executive Officer of the Company (each a “ Subsequent
Transition Period ,” and together with the Initial
Transition Period (the “ Transition Period ”).
The parties expressly acknowledge that the Chief Executive Officer
may determine that there will be no Subsequent Transition Periods
following the Initial or any prior Subsequent Transition Period
under this Agreement. Ninety (90) days following
Executive’s cessation of service as a member of the Board,
Executive shall cease to be subject to the Company’s insider
trading policy.
(b) Status as Independent
Contractor . During the Transition Period, Executive shall
perform his obligations under this Agreement as an independent
contractor and not as the agent or employee of Company. Executive
will be solely responsible for all matters relating to payment of
social security, withholding and all other federal, state and local
laws, rules and regulations governing such matters; and Executive
will be responsible for Executive’s own acts during the
performance of Executive’s obligations under this Agreement.
Subject to Section 5, the Company and Executive acknowledge
that Executive’s provision of services under this Agreement
may be terminated by either party at any time for any or no reason,
with or without notice.
3. Duties and Services
.
(a) Scope of Services
During Transition Period . Executive shall devote such
percentage of his business time and effort to the performance of
his services hereunder as may be mutually agreed upon by the Chief
Executive Officer of the Company and Executive, not exceeding ten
hours per business week. Executive shall, upon the request or
direction of the Board or the Chief Executive Officer of the
Company, provide such additional information, advice and assistance
concerning matters that are within the scope of Executive’s
knowledge and expertise. The scope of Executive’s services
during the Transition Period shall include, but is not necessarily
limited to, providing advice and assistance that reasonably falls
within Executive’s knowledge and expertise. During the
Transition Period, Executive shall continue to be provided with
office space, voicemail access, email access and such other support
as the Company may determine in good faith is necessary for
Executive’s satisfactory performance of his services
hereunder.
(b) Availability .
Executive shall be available to provide services under this
Agreement during normal business hours (“normal business
hours” being 9:00 a.m. to 5:00 p.m. Pacific Time on any day
excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of California or is a day on which
banking institutions located in California are authorized or
required by law or other governmental action to close). If
requested by the Board or the Chief Executive Officer of the
Company, Executive shall provide the services in person at the
principal executive offices of Company or at another location to
be
mutually agreed by Executive
and the Chief Executive Officer of the Company, unless Executive is
on a scheduled vacation. The Company shall reasonably accommodate
Executive’s schedule when requesting Executive’s
assistance pursuant to this Section 3(b). The Company
acknowledges and agrees that Executive’s service during the
Transition Period will be on a limited, part-time basis, and the
Company agrees to not make unreasonable demands on
Executive’s time during the Transition Period.
(c) Board Membership .
On or prior to the Effective Date, Executive shall have resigned,
in writing, from the Board.
4. Compensation
.
(a) Transition Periods
. During the Transition Period Executive shall be entitled to
receive the following compensation and benefits from the
Company:
(i) The Company shall pay
Executive a lump sum payment of $30,000 as soon as practicable
following the Effective Date;
(ii) The Company shall pay
Executive a monthly consulting fee of $6,250 per month, payable
monthly in accordance with the Company’s standard payroll
practices; and
(iii) The Company shall pay
applicable premiums under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”) for
Executive and those of his dependents covered immediately prior to
the Effective Date under the Company’s group healthcare plan,
assuming the Executive timely elects COBRA continuation coverage,
for eighteen months or the duration of Executive’s applicable
COBRA continuation coverage period, if shorter. Executive agrees
that during the term of this Agreement, except as provided in the
immediately preceding sentence he shall not be eligible for
participation in any of the Company’s welfare benefit plans,
and without limitation he shall not be eligible for and shall waive
any right to additional vacation accruals under the Company’s
vacation policy.
(b) Expenses . The
Company shall reimburse Executive for reasonable out-of-pocket
business expenses incurred in connection with the performance of
his services hereunder, subject to (i) such written policies
as the Company may from time to time establish, and
(ii) Executive furnishing the Company with evidence in the
form of receipts satisfactory to the Company substantiating the
claimed expenditures.
(c) Stock Awards .
During the Transition Period all of Executive’s unexercised
Stock Awards shall continue to vest and be exercisable, if
applicable, pursuant to the terms of the Company equity plan(s) and
stock award agreements pursuant to which they were granted;
provided , however , that the Executive and the
Company agree that the vesting of Executive’s stock options
to purchase 250,000 shares of the Company’s common stock
granted on March 11, 2005 (the “ CEO Stock
Options ”), which, pursuant to the Prior Agreement, have
been adjusted so that (A) the vesting period of such CEO Stock
Options was extended to twice the length of the remaining vesting
period as of the effective date of the Prior Agreement,
and
(B) the number of shares of
the Company’s common stock subject to such CEO Stock Options
vesting on each vesting date during the extended vesting period was
proportionately adjusted to reflect such extension, shall be
further adjusted as of the Effective Date to reinstate the original
vesting schedule for the duration of the Transition Period (i.e.,
the same number of shares per month will vest, subject to
Executive’s continued consulting relationship, as prior to
the effective date of the Prior Agreement). Notwithstanding the
foregoing, following the Effective Date, Executive shall not be
entitled to any additional grants of Stock Awards.
5. Termination and
Severance . Executive shall be entitled to receive benefits
upon termination of his consultancy by the Company during the
Transition Period only as set forth in this
Section 5:
(a) Termination . If
Executive’s consultancy to the Company during the Transition
Period terminates for any reason Executive shall not be entitled to
any payments, benefits, damages, awards or compensation other than
as provided in this Agreement. This Agreement shall automatically
terminate upon the death of Executive.
(b) Payments and Benefits
Upon Termination of Consultancy.
(i) Termination For Cause,
Voluntary Resignation Without Good Reason or Expiration of Initial
or Subsequent Transition Periods . If Executive’s
consultancy to the Company during the Transition Period is
terminated (x) by the Company for Cause, (y) by Executive
other than for Good Reason, or (z) as a result of the
expiration of the Initial Transition Period or a Subsequent
Transition Period without renewal of the Transition Period, the
Company shall pay Executive (or his estate) all amounts due and
payable under Section 4 above up to and including the Date of
Termination, and the Company shall have no further obligations to
Executive (or his estate) under this Section 5(b). All of
Executive’s outstanding Stock Awards shall cease to vest as
of his Date of Termination. In the event Executive’s
consultancy to the Company is terminated as a result of the
expiration of the Initial Transition Period or a Subsequent
Transition Period without renewal of the Transition Period,
provided Executive complies with Section 6 hereof,
Executive’s outstanding Stock Awards shall remain
exercisable, to the extent vested as of the Date of Termination,
until the earlier of the expiration of their original maximum term
or one (1) year following the date of the expiration of the
Initial Transition Period or a Subsequent Transition Period, as
applicable. The foregoing shall be in addition to, and not in lieu
of, any and all other rights and remedies which may be available to
the Company under the circumstances, whether at law or in
equity.
(ii) Termination Without
Cause or for Good Reason During the Initial Transition Period .
If Executive’s consultancy to the Company during the Initial
Transition Period is terminated (x) by the Company other than
for Cause or Disability or (y) by Executive for Good Reason,
then, subject to Section 7, Executive shall be entitled to
receive the benefits provided below:
(A) the Company shall pay to
Executive all amounts due and payable under Section 4 above up
to and including the Date of Termination;
(B) the Company shall pay to
Executive all consulting fees which would be payable to Executive
pursuant to Section 4 for the period commencing on the Date of
Termination and ending on the date of the Company’s 2009
annual stockholders meeting (the “Severance Period”),
payable to Executive at the same times and in the same manner as
such amounts would be payable to Executive had his employment not
been terminated;
(C) Executive will be
eligible for continued payment of COBRA premiums as described in
Section 4(a)(ii) above; and
(D) the vesting and/or
exercisability of each of Executive’s outstanding Stock
Awards shall be automatically accelerated on the Date of
Termination as to the number of Stock Awards that would have vested
over the period equal to the Severance Period plus an additional
six-month period had Executive remained a consultant to the Company
during such period. In addition, provided Executive complies with
Section 6 hereof, Executive’s Stock Awards shall remain
exercisable by Executive for a period equal to the lesser of
(i) their original maximum term, or, (ii) one
(1) year following the date of the Company’s 2009 annual
stockholders meeting.
(iii) Termination Without
Cause or for Good Reason During a Subsequent Transition Period
. If Executive’s consultancy to the Company during a
Subsequent Transition Period is terminated (x) by the Company
other than for Cause or Disability or (y) by Executive for
Good Reason, then, subject to Section 7, the vesting and/or
exercisability of each of Executive’s outstanding Stock
Awards shall be automatically accelerated on the Date of
Termination as to the number of Stock Awards that would have vested
over the period ending six-months following the date of the
Company’s 2009 annual stockholders meeting had Executive
remained a consultant to the Company during such period, unless
such Stock Awards had already vested to such extent. In addition,
Executive’s Stock Awards shall remain exercisable by
Executive for a period equal to the greater of (i) one
(1) year following the date of the Company’s 2009 annual
stockholders meeting, or (ii) the time specified in the
applicable Stock Award agreement, but in no event longer than the
original maximum term of the Stock Award.
(iv) Termination Due to
Death or Disability . If Executive’s consultancy to the
Company during the Transition Period is terminated due to
Executive’s death or Disability, then Executive’s Stock
Awards shall remain exercisable by Executive (or his estate or
personal representative) for a period equal to the lesser of
(i) their original maximum term, or, (ii) one
(1) year following the Date of Termination.
(c) Change of Control
. In the event of a Change of Control prior to the termination of
Executive’s service as a consultant during the Transition
Period, the vesting and/or exercisability of each of
Executive’s outstanding Stock Awards shall be automatically
accelerated on the effective date of the Change of Control as to a
number of Stock Awards equal to the number of Stock Awards that
would vest over the nine (9) month period following the
effective date of the Change of Control pursuant to the vesting
schedule applicable to such Stock Awards. In addition,
Executive’s Stock Awards shall remain exercisable by
Executive for a period of the earlier of one (1) year
following the date of his termination of consultancy or the tenth
anniversary of each Stock Award’s original date of grant. In
the event that Executive
continues to be a consultant
to the Company following the effective date of the Change of
Control, Executive’s Stock Awards shall continue to vest
following the effective date of such Change of Control pursuant to
the vesting schedules applicable to such Stock Awards after giving
effect to the foregoing acceleration so long as Executive continues
to serve as an employee or consultant to the Company (i.e., the
shares that would otherwise vest last shall accelerate and the
Stock Awards shall continue monthly vesting at the same rate as
prior to the acceleration.
(d) Exclusive Remedy .
Except as otherwise expressly required by law (e.g., COBRA) or as
specifically provided herein, all of Executive’s rights to
severance, benefits, and other amounts hereunder (if any) accruing
after the termination of Executive’s service to the Company
shall cease upon such termination. In the event of a termination of
Executive’s consultancy to the Company during the Transition
Period, Executive’s sole remedy shall be to receive the
payments and benefits described in this Section 5.
(e) Return of the
Company’s Property . If Executive’s service to the
Company is terminated for any reason, the Company shall have the
right, at its option, to require Executive to vacate his offices
prior to or on the effective Date of Termination and to cease all
activities on the Company’s behalf. Upon the termination of
his service to the Company in any manner, as a condition to the
Executive’s receipt of any post-termination benefits
described in this Agreement, Executive shall promptly surrender to
the Company all lists, books and records containing Confidential
Information (as defined below) and all other property belonging to
the Company, it being distinctly understood that all such lists,
books and records containing Confidential Information are the
property of the Company.
(f) Retirement of Email
Address . Following the Date of Termination, the Company shall
permanently retire Executive’s email address
(mike@tivo.com).
6. Certain Covenants
.
(a) Noncompetition .
Except as may otherwise be approved by the Board, during the term
of Executive’s service to the Company under this Agreement,
Executive shall not have any ownership interest (of record or
beneficial) in, or have any interest as an employee, salesman,
consultant, officer or director in, or otherwise aid or assist in
any manner, any firm, corporation, partnership, proprietorship or
other business that engages in any county, city or part thereof in
the United States and/or any foreign country in a business which
competes directly with the Company’s business in such county,
city or part thereof, so long as the Company, or any successor in
interest of the Company to the business and goodwill of the
Company, remains engaged in such business in such county, city or
part thereof or continues to solicit customers or potential
customers therein; provided , however , that
Executive may own, directly or indirectly, solely as an investment,
securities of any entity if Executive (x) is not a controlling
person of, or a member of a group which controls, such entity; or
(y) does not, directly or indirectly, own (A) five
percent (5%) or more of any class of securities of any such
entity which is traded on any national securities exchange, or
(B) one percent (1%) or more of any class of securities
of any such entity that is not traded on any national securities
exchange (so long as Executive is not an officer, director,
employee or consultant of or to such entity).
(b) Confidentiality .
Executive hereby agrees that, during the term of this Agreement and
thereafter, he shall not, directly or indirectly, disclose or make
available to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, any Confidential
Information (as defined below). Executive further agrees that, upon
termination of his employment by or service to the Company, all
Confidential Information in his possession that is in written or
other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the Company
and shall not be retained by Executive or furnished to any third
party, in any form except as provided herein; provided ,
however , that, this Section 6(b) shall not apply to
Confidential Information that (i) was publicly known at the
time of disclosure to Executive, (ii) becomes publicly known
or available thereafter other than by any means in violation of
this Agreement or any other duty owed to the Company by Executive,
(iii) is lawfully disclosed to Executive by a third party,
(iv) is required to be disclosed by law or by any court,
arbitrator, mediator or administrative or legislative body
(including any committee thereof) with actual or apparent
jurisdiction to order Executive to disclose or make accessible any
information, or (v) is related to any litigation, arbitration
or mediation between the parties, including, but not limited to,
the enforcement of this Agreement. As used in this Agreement, the
term “ Confidential Information ” means:
confidential information disclosed to Executive or known by
Executive as a consequence of or through Executive’s
relationship with the Company about the customers, employees,
business methods, public relations methods, organization,
procedures or finances, including, without limitation, information
of or relating to customer lists, product lists, product road maps,
technology specifications or other information related to the
products and services of the Company and its affiliates. Nothing
herein shall limit in any way any obligation Executive may have
relating to Confidential Information under any other agreement with
or promise to the Company.
(c) Non-Solicitation .
Executive hereby agrees that, during the term of this Agreement and
for the twelve (12) month period immediately following the
termination of the Transition Period, Executive shall not, either
on his own account or jointly with or as a manager, agent, officer,
employee, consultant, partner, joint venturer, owner or shareholder
or otherwise on behalf of any other person, firm or corporation,
directly or indirectly solicit or attempt to solicit away from the
Company any of its officers or employees or offer employment to any
person who, on or during the six (6) months immediately
preceding the date of such solicitation or offer, is or was an
officer or employee of the Company; provided ,
however , that a general advertisement to which an employee
of the Company responds shall in no event be deemed to result in a
breach of this Section 6(c).
(d) Special
Enforcement . Executive acknowledges that Executive’s
obligations under the covenants contained in this Section 6
(collectively, “ Covenants ”) constitute
material obligations, and that Executive’s breach of such
obligations shall constitute a material breach of this Agreement.
It is expressly agreed that monetary damages would be inadequate to
compensate the Company for any breach of the Covenants and in the
event of Executive’s breach or threatened breach,
notwithstanding Section 9 below, the Company will be entitled
to seek and obtain preliminary and permanent injunctive relief,
without posting a bond, in any court of competent jurisdiction, in
addition to any other remedies at law or in equity to which the
Company may be entitled. Executive also acknowledges that the
Company may publish this Agreement to any third party with which
the Executive has accepted employment, or otherwise entered into a
business relationship, that the Company contends violates the
Covenants, if
|
