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Exhibit 10.1
MACROVISION CORPORATION
EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT
THIS EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT (the
"Agreement") is
made and entered into as of February 3, 2005 by and between
Macrovision
Corporation, a Delaware corporation (the "Company") and James
Wickett
("Executive").
WHEREAS, the Board of Directors (the "Board") of the Company
has
recommended and authorized the Company to enter into a severance
agreement in
the form hereof with Executive; and
WHEREAS, the Board has determined that, in the event of a
possible
threatened or pending sale or other change in control of the
Company, it is
imperative that the Company and the Board be able to rely upon
Executive to
continue in Executive's position, and that the Company be able
to receive and
rely upon Executive's advice, if requested, as to the best
interests of the
Company and its stockholders without concern that Executive
might be distracted
by the personal uncertainties and risks created by any such
possible
transactions; and
WHEREAS, in connection with the foregoing, Executive may, in
addition to
Executive's regular duties, be called upon to assist in the
assessment of any
such possible transactions, advise management and the Board as
to whether such
proposals would be in the best interests of the Company and its
stockholders,
and to take such other actions as the Board might determine to
be appropriate;
NOW, THEREFORE, to assure the Company that it will have the
continued
dedication of Executive and the availability of Executive's
advice and counsel
through the occurrence of any Change in Control (as defined in
Section 1(b)
below) of the Company, and to induce Executive to remain in the
employ of the
Company, and for other good and valuable consideration, the
Company and
Executive agree as follows:
1. PAYMENT OF SEVERANCE BENEFIT.
(a) In the event that a Change in Control (as hereinafter
defined) occurs and, within the period beginning ninety (90)
days before the
date of the Change in Control and ending twelve (12) months
thereafter, (a)
Executive's employment is terminated by the Company or a
Subsidiary (as
hereinafter defined) without Cause (as hereinafter defined) or
(b) Executive
voluntarily terminates his/her employment with Company and its
Subsidiaries with
Good Reason (as hereinafter defined), then the Company shall pay
to Executive
severance pay under this Agreement. Transfer of Executive's
employment from the
Company to a Subsidiary (or to an entity of which the Company is
a Subsidiary)
or from a Subsidiary to the Company or to another Subsidiary (or
to an entity of
which the Company is a Subsidiary), shall not be considered a
termination of
Executive's employment. Such severance pay shall be in the form
of salary
continuation of Executive's regular base pay in effect ninety
(90) days before
the time of
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the Change in Control or at the time of the termination of his
employment,
whichever is greater. The Company shall pay such severance pay
during the twelve
(12) month period immediately following the date on which
Executive's employment
with the Company terminates; provided, however, that, if
Executive commences new
employment within such twelve (12) month period, such severance
pay shall cease
on the later of (i) the date six (6) months after Executive's
employment with
the Company terminates or (ii) the date Executive commences new
employment.
(b) "CHANGE IN CONTROL" means any of the following events:
(i) any "person" or "group" (as defined in or pursuant to
Sections 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"))
other than the Company, is or becomes the "beneficial owner" (as
defined in Rule
13d-3 promulgated under the Exchange Act), directly or
indirectly (including by
holding securities which are exercisable for or convertible into
shares of
capital stock of the Company), of securities of the Company
representing 50% or
more of the voting power of the outstanding shares of capital
stock of the
Company entitled to vote generally in the election of directors;
(ii) the
Company sells or exchanges, through merger, assignment or
otherwise, in one or
more transactions, other than in the ordinary course of
business, assets which
provided at least seventy percent (70%) of the revenues or
pre-tax net income of
the Company and its Subsidiaries on a consolidated basis during
the most
recently completed fiscal year; or (iii) Continuing Directors
cease to
constitute at least a majority of the Board. "Continuing
Directors" are (A) each
director serving on the Board on January 1, 2005, and (B) any
successor to any
such director whose nomination or selection was approved by a
majority of the
directors in office at the time of the director's nomination or
selection.
Notwithstanding the foregoing, the following events shall not
constitute a
Change in Control: any acquisition of beneficial ownership
pursuant to (i) a
reclassification, however effected, of the Company's authorized
common stock, or
(ii) a corporate reorganization involving the Company or a
Subsidiary which does
not result in a material change in the ultimate ownership by the
stockholders of
the Company (through their ownership of the Company or its
successor resulting
from the reorganization) of the assets of the Company and its
Subsidiaries, but
only if such reclassification or reorganization has been
approved by the Board.
(c) "CAUSE" means the occurrence of any one or more of the
following: (i) conviction of any felony or any act of fraud,
misappropriation or
embezzlement which has an immediate and materially adverse
effect on the Company
or a Subsidiary; (ii) engaging in a fraudulent act to the
material damage or
prejudice of the Company or a Subsidiary or in conduct or
activities materially
damaging to the property, business or reputation of the Company
or a Subsidiary;
(iii) failure to comply in any material respect with the terms
of any applicable
employment agreement or any written policies or directives of
the Board which
have an immediate and materially adverse effect on the Company
or a Subsidiary
and which has not been corrected within 30 days after written
notice from the
Company of such failure; (iv) any material act or omission
involving malfeasance
or negligence in the performance of employment duties which has
an immediate and
materially adverse effect on the Company or a Subsidiary and
which has not been
corrected within 30 days after written notice from the Company;
or (v) material
breach of any other agreement with the Company, which has an
immediate and
materially adverse effect on the Company or a Subsidiary and
which has not been
cured within 30 days after written notice from the Company of
such breach.
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(d) "GOOD REASON" means the occurrence of any of the
following without the Executive's consent: (i) a substantial
diminution in the
Executive's status, position or responsibilities, or the
assignment to the
Executive of any duties or responsibilities that are
inconsistent with the
Executive's status, position or responsibilities; (ii) a
reduction in the
Executive's base salary; or (iii) a relocation of the
Executive's principal
place of employment to a new work site requiring an increase in
one-way commute
from Executive's residence of more than thirty-five (35)
miles.
(e) "SUBSIDIARY" means (i) any corporation, foreign or
domestic, in which the Company directly or indirectly owns 50%
or more of the
issued and outstanding voting stock on an "as converted basis"
or (ii) any
partnership, foreign or domestic, in which the Company owns a
direct or indirect
interest equal to 50% or more of the outstanding equity
interests.
2. WELFARE BENEFITS.
(a) During the period that Company is obligated to pay
Executive severance pay pursuant to Section 1(a) above, or, if
sooner, until
Executive is entitled to Welfare Benefits (as defined below)
under any plan
maintained by any entity employing Executive after Executive's
employment with
the Company terminates, Company shall provide to Executive (and
his/her spouse
and other qualified dependents) all Welfare Benefits that
Company provided to
Executive (and his/her spouse and qualified dependents)
immediately prior to the
Change in Control. For purposes of this Agreement, the term
"Welfare Benefits"
shall include, without limitation, all life, dental, health,
accident and
disability benefit plans, other similar welfare plans, and any
equivalent
successor policy, plan, program or arrangement that may now
exist or be adopted
hereafter by the Company or a Subsidiary. Notwithstanding the
foregoing, with
respect to any Welfare Benefits provided through an insurance
policy, the
Company's obligation to provide such Welfare Benefits following
a Change in
Control shall be limited by the terms of such policy; provided,
however, that
(i) the company shall make reasonable efforts to amend such
policy to provide
the continued coverage described in this Section 2(a) and (ii)
if such policy is
not amended to provide the continued benefits described in this
Section 2(a),
the Company shall pay Executive's cost of comparable replacement
coverage.
(b) If prior to the Change in Control Executive was required
to contribute towards the cost of a Welfare Benefit as a
condition of receiving
such Welfare Benefit, the Executive may be required to continue
contributing
towards the cost of such Welfare Benefit under the same terms
and conditions as
applied to the Executive immediately prior to the Change in
Control in order to
recei
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