Exhibit 10.14
MACROVISION CORPORATION
EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT
THIS
EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT is made and entered
into as of April 24, 2002 by and between Macrovision Corporation, a
Delaware corporation (the “Company”) and Brian McPhail
(“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 shareholders 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 shareholders, 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
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 the Change in Control or at the time of the
termination of his employment, whichever is greater. The
Company shall pay such severance
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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; or, (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 in office on January 1, 2002, 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 shareholders 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 employee 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” and (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 Ben
