Exhibit 10.1
Execution Version
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (this
“ Agreement ”) is entered into by and between
TiVo Inc., a Delaware corporation (the “ Company
”), and Thomas S. Rogers (“ Executive ”),
and shall be effective as of July 1, 2005 (the “ Effective
Date ”).
WHEREAS, the Company desires to
employ Executive to provide personal services to the Company and
wishes to provide Executive with certain compensation and benefits
in return for Executive’s services; and
WHEREAS, Executive wishes to be
employed by the Company and provide personal services to the
Company in return for certain compensation and benefits.
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 (i) Executive’s willful and
continued failure to substantially perform his duties with 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 Executive’s
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, (ii) Executive’s
willful and continued failure to substantially follow and comply
with such specific and lawful directives of the Board that are not
inconsistent with Executive’s position as President and Chief
Executive Officer of 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
Executive’s 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, (iii) Executive’s
willful commission of an act of fraud or dishonesty resulting in
material economic or financial injury to the Company, or (iv)
Executive’s conviction of, or entry by Executive of a guilty
or no contest plea to, the commission of a felony involving moral
turpitude. 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
Executive not in good faith.
(c) Change of Control .
“ Change of Control ” means (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) 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 removal of Executive from
his position as Chief Executive Officer or President of the Company
for any reason other than for Cause or Executive’s
Disability;
(ii) a material reduction in the
nature or scope of Executive’s responsibilities, or the
assignment to Executive of duties that are materially inconsistent
with Executive’s position (in each case as compared to
Executive’s responsibilities, duties or position on the
Effective Date);
(iii) the Company’s reduction
of Executive’s annual base salary or bonus opportunity, each
as in effect on the Effective Date or as the same may be increased
from time to time;
(iv) the Company’s failure to
maintain a suitable and appropriate office for Executive in New
York, New York or the Company’s failure to reimburse
Executive for first class air travel for travel between New York,
New York and the Company’s offices in Alviso,
California;
(v) the Company’s failure to
pay to Executive any portion of his then current compensation or
any portion of an installment of deferred compensation under any
deferred compensation program of the Company, in each case within
seven (7) days of the date such compensation is due;
(vi) the Company’s failure to
continue in effect compensation and benefit plans which provide
Executive with benefits which are no less favorable on an aggregate
basis, both in terms of the amount of benefits provided and the
level of Executive’s participation relative to other
participants, to the benefits provided to Executive under the
Company’s compensation and benefit plans and practices on the
Effective Date;
(vii) the Company’s failure to
obtain a satisfactory agreement from any successor to assume and
agree to perform this Agreement, as contemplated in Section
10(b)(i) hereof;
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(viii) the Company requiring
Executive to relocate his primary residence from New
York;
(ix) the Company’s purported
modification of this Agreement or any termination of this Agreement
by the Company for any reason other than for Cause or
Executive’s Disability;
(x) the Company’s providing
notice to Executive, as contemplated by Section 1 thereof, that it
does not wish to extend the term of Executive’s Change of
Control Agreement (as defined below); or
(xi) the Company’s material
breach of any provision of this Agreement.
Executive’s right to terminate
his employment pursuant to this Section 1(d) shall not be affected
by his incapacity due to physical or mental illness.
Executive’s continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder.
(e) Date of Termination .
“ Date of Termination ” means (i) if
Executive’s employment is terminated due to his death, the
date of Executive’s death, (ii) if Executive’s
employment 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 during
such thirty (30) day period), and (iii) if Executive’s
employment 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 shall not be less than fifteen (15) nor more than
thirty (30) days from the date such Notice of Termination is
given).
(f) Disability .
Executive’s “ Disability ” means his
absence from the full-time performance of his duties with the
Company for one hundred eighty (180) consecutive days by reason of
his physical or mental illness.
(g) Notice of Termination .
Any purported termination of Executive’s employment by the
Company or by Executive (other than termination due to
Executive’s death, which shall terminate Executive’s
employment automatically) shall be communicated by a written Notice
of Termination to the other party hereto in accordance with Section
10(g). “ Notice of Termination ” means 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 employment 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.
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2. Employment Period .
Subject to the provisions for earlier termination hereinafter
provided, this Agreement shall commence on the Effective Date and
shall continue in effect until Executive’s employment with
the Company is terminated (the “ Employment Period
”).
3. Services to Be Rendered
.
(a) Duties and
Responsibilities . Executive shall serve as a member of the
Board and as President and Chief Executive Officer of the Company.
So long as Executive is serving as the President and Chief
Executive Officer of the Company, he will be nominated to, and if
elected by the stockholders of the Company, be a member of, the
Board. In the performance of such duties, Executive shall report
directly to the Board, shall be the senior-most executive officer
of the Company and shall have the duties and responsibilities
consistent with the positions set forth above in a company the size
and nature of the Company. Executive hereby consents to serve as an
officer and/or director of the Company or any subsidiary or
affiliate thereof without any additional salary or compensation, if
so requested by the Board. Executive shall be employed by the
Company on a full time basis. Executive shall perform his duties at
the Company’s offices in Alviso, California and at the
offices maintained by the Company for Executive in New York, New
York. Executive shall be subject to and comply with the policies
and procedures generally applicable to senior executives of the
Company or such other policies and procedures that apply to
Executive particularly, in each case to the extent the same are not
inconsistent with any term of this Agreement. While Executive
serves as President and Chief Executive Officer of the Company, the
Board shall consult with him regarding any appointments to the
offices of Chairman of the Board and Vice Chairman of the
Board.
(b) Exclusive Services .
Executive agrees to devote substantially all of Executive’s
business time, attention and energies to the business of the
Company. Subject to the terms of Section 6, this shall not preclude
Executive from devoting time to personal and family investments or
serving on advisory boards, community and civic boards or the
corporate boards on which Executive currently serves, or
participating in industry associations, provided such activities do
not materially interfere with his duties to the Company. Executive
agrees that he will not join any additional corporate boards
without the prior approval of the Board, which approval shall not
be unreasonably withheld or delayed.
(c) Support Services .
Executive shall be entitled to all of the administrative,
operational and facility support customary for a similarly-situated
executive. This support shall include an executive assistant
selected by Executive exclusively assigned to him and the
non-exclusive services of an administrative assistant located in
the Company’s Alviso, California offices.
4. Compensation and Benefits
. The Company shall pay or provide, as the case may be, to
Executive the compensation and other benefits and rights set forth
in this Section 4.
(a) Base Salary . The Company
shall pay to Executive a base salary of $750,000 per fiscal year,
payable in accordance with the Company’s usual pay practices
(and in any event no less frequently than monthly).
Executive’s base salary shall be subject to review annually
by and at the sole discretion of the Compensation Committee of the
Board.
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(b) Bonus . In addition to
the base salary described above, for each fiscal year ending during
the Employment Period, Executive shall have the opportunity to earn
an annual performance bonus based on reasonable criteria
established by the Compensation Committee of the Board in good
faith no later than ninety (90) days following the start of each
fiscal year. Upon full attainment of the aforementioned criteria
established by the Compensation Committee of the Board,
Executive’s annual bonus will be equal to $500,000, but for
less than full achievement of such aforementioned criteria,
Executive’s annual bonus shall be a lesser amount in
accordance with a specific formula determined by the Compensation
Committee of the Board, in its discretion, no later than ninety
(90) days following the start of each fiscal year. Notwithstanding
the foregoing, for fiscal year 2005, Executive shall be paid a
bonus equal to no less than a pro-rated portion of his target
annual bonus based upon the actual number of days worked by
Executive during such fiscal year. The annual bonus shall be
determined in good faith by the Compensation Committee of the Board
as soon as practicable after the end of the fiscal year with
respect to which it is payable, and shall be paid to Executive in a
lump sum promptly thereafter and in no event later than April 15
immediately following the end of such fiscal year, subject to all
withholding with respect thereto as is required by applicable law.
The Compensation Committee of the Board will consider and shall
have the discretion to exclude extraordinary items in good faith
when determining Executive’s annual bonus, it being
understood that the final determination shall be within the
discretion of the Compensation Committee of the Board.
(c) Benefits . Executive
shall be entitled to participate in benefits under the
Company’s benefit plans and arrangements, including, without
limitation, any employee benefit plan or arrangement made available
in the future by the Company to its senior executives, subject to
and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. The Company shall
have the right to amend or delete any such benefit plan or
arrangement made available by the Company to its senior executives
and not otherwise specifically provided for herein. The Company
shall also pay directly or reimburse Executive or TRget Media LLC
for the premiums payable with respect to the long-term disability
and life insurance policies maintained by Executive or TRget Media
LLC as of the Effective Date; provided , however ,
that upon Executive’s request, the Company shall provide
comparable replacement long-term disability and/or life insurance
coverage to the extent the available replacement coverage will not
result in a material increase to the Company in the aggregate cost
of such coverage for Executive. Executive shall also be entitled to
such supplemental benefits as are agreed upon by Executive and the
Company from time to time.
(d) Expenses . The Company
shall reimburse Executive for reasonable business entertainment
expenses and any other out-of-pocket business expenses incurred in
connection with the performance of his duties hereunder, subject to
(i) such 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. Executive shall be reimbursed for first class air
travel for travel between New York, New York and the
Company’s offices in Alviso, California. Executive shall be
reimbursed pursuant to the Company’s standard travel policies
for other business travel, provided that Executive shall be
reimbursed for first class air travel if Executive determines
reasonably and in good faith that such travel is appropriate. The
Company shall also: (i) lease, furnish and maintain an apartment
reasonably acceptable to Executive within fifteen (15)
miles
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of the Company’s Alviso,
California offices, (ii) lease and maintain at no cost to Executive
an automobile for Executive’s use while working out of the
Company’s Alviso, California offices, and (iii) pay or
reimburse Executive for the costs associated with Executive’s
non-business related meals while working out of the Company’s
offices in Alviso, California, not to exceed $5,000 per
year.
(e) Paid Time Off; Vacation .
Executive shall be entitled to such periods of paid time off
(“ PTO ”) each year as provided under the
Company’s PTO policy and as otherwise provided for senior
executive officers, which shall in any event be no less than four
(4) weeks per year.
(f) Stock Awards .
(i) On the Effective Date, the
Company shall grant to Executive stock options to purchase
1,000,000 shares of the Company’s common stock (the “
Stock Options ”) pursuant to the TiVo Inc. 1999 Equity
Incentive Plan (the “ Plan ”). Any Stock Options
granted pursuant to this Section 4(f)(i) shall have a per share
exercise price equal to the then-current fair market value of a
share of the Company’s common stock (as determined pursuant
to the Plan) on the date the grant is approved by the Board or the
Compensation Committee of the Board, which shall be no later than
the Effective Date. Such Stock Options shall be incentive stock
options to the extent permitted under Section 422 of the Internal
Revenue Code of 1986, as amended (the “ Code ”).
Subject to Sections 4(f)(iv) and 5, such Stock Options shall vest
in forty-eight (48) equal monthly installments commencing on the
first monthly anniversary of the Effective Date, subject to
Executive’s continued employment or service with the Company
on each such date. Such Stock Options shall have a ten (10) year
term and shall be subject to the terms and conditions of the Plan
and the stock option agreement pursuant to which such Stock Options
are granted to the extent such provisions are not less favorable to
Executive than the applicable provisions of this
Agreement.
(ii) On the Effective Date, the
Company shall grant to Executive 1,000,000 stock appreciation
rights (the “ Stock Appreciation Rights ”)
pursuant to the Plan. Any Stock Appreciation Rights granted
pursuant to this Section 4(f)(ii) shall have a per share exercise
price equal to the then-current fair market value of a share of the
Company’s common stock (as determined pursuant to the Plan)
on the date the grant is approved by the Board or the Compensation
Committee of the Board, which shall be no later than the Effective
Date. The Stock Appreciation Rights will be settled in shares of
the Company’s common stock. Subject to Sections 4(f)(iv) and
5, such Stock Appreciation Rights shall vest in forty-eight (48)
equal monthly installments commencing on the first monthly
anniversary of the Effective Date, subject to Executive’s
continued employment or service with the Company on each such date.
Such Stock Appreciation Rights shall have a ten (10) year term and
shall be subject to the terms and conditions of the Plan and the
stock appreciation right agreement pursuant to which such Stock
Appreciation Rights are granted to the extent such provisions are
not less favorable to Executive than the applicable provisions of
this Agreement.
(iii) On the Effective Date, the
Company shall grant to Executive 350,000 shares of the
Company’s common stock (the “ Restricted Stock
”) pursuant to the Plan. The applicable number of shares of
Restricted Stock will be subject to forfeiture in the
event
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Executive’s employment with
the Company terminates prior to the vesting of the shares in
accordance with the terms of this Agreement. The restrictions on
such Restricted Stock shall lapse in four (4) equal annual
installments commencing on the first anniversary of the Effective
Date, subject to Executive’s continued employment or service
with the Company on each such date. Subject to Sections 4(f)(iv)
and 5, such Restricted Stock shall be subject to the terms and
conditions of the Plan and the restricted stock award agreement
pursuant to which such Restricted Stock is granted to the extent
such provisions are not less favorable to Executive than the
applicable provisions of this Agreement.
(iv) In the event that, following
the second anniversary of the Effective Date, Executive elects to
have the Company engage a full-time replacement Chief Executive
Officer so that Executive may be elected Chairman of the Board, the
vesting of Executive’s Stock Awards described in Sections
4(f)(i), (ii) and (iii) shall be automatically adjusted so that (A)
the vesting period of such Stock Awards shall be extended to twice
the length of the remaining vesting period at the time of such role
conversion and (B) the number of Stock Awards vesting on each
vesting date during the extended vesting period shall be
proportionately adjusted to reflect such extension, it being
understood that such changes shall be implemented so that one
hundred percent (100%) of the Stock Awards will vest by the end of
the revised vesting schedule. Except as set forth in the
immediately preceding sentence, Executive’s change in status
from President and Chief Executive Officer shall have no adverse
effect on his Stock Awards provided Executive continues to be a
member of the Board.
(v) In addition to the Stock Awards
described in this Section 4(f), Executive shall be entitled to
participate in any equity or other employee benefit plan that is
generally available to senior executive officers, as distinguished
from general management, of the Company and shall be eligible to be
considered for annual grants of equity awards. Except as otherwise
provided in this Agreement, Executive’s participation in and
benefits under any such plan shall be on the terms and subject to
the conditions specified in the governing document of the
particular plan.
(g) New York Office . The
Company shall maintain an office in New York, New York for
Executive’s use in connection with his performance of
services for the Company pursuant to this Agreement. As of the
Effective Date, the Company and Executive have agreed on the
initial location of such office. Following the Effective Date, the
New York office may be relocated by the Company to any location
reasonably satisfactory to Executive.
(h) Media Equipment . The
Company shall reimburse Executive up to $15,000 for media equipment
purchased by Executive for his home office. In addition, the
Company shall reimburse Executive up to $6,000 annually for home
media expenses, which reimbursements may be made at any time during
such year. Executive shall also be reimbursed approximately $5,000
annually for home office expenses, with any significant deviation
from such amount to be mutually agreed by the Company and
Executive, which reimbursements may be made at any time during such
year.
(i) Family Travel Expenses .
The Company shall reimburse Executive for business class airfare
for his immediate family for travel no more frequently than once
each fiscal quarter between New York, New York and the San
Francisco Bay Area. In addition, the
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Company shall reimburse Executive
for the reasonable cost of hotel accommodations incurred by
Executive’s immediate family during such trips to the extent
such hotel accommodations are necessary as a result of an absence
of sufficient accommodations for Executive’s family in his
Company-provided apartment.
(j) Executive Assistant .
During the Employment Period, the Company shall either pay directly
or reimburse Executive or TRget Media LLC for the reasonable costs
of providing Executive administrative support through the services
of his current executive assistant as of the Effective Date,
including without limitation reimbursement for coach class airfare
for such executive assistant for travel between New York, New York
and Alviso, California, as well as the reasonable cost of hotel
accommodations incurred by such executive assistant during such
trip or as needed in New York, New York, at such hotels as may be
mutually agreed upon be the Company and Executive. The parties
agree that the current compensation and benefits costs of
Executive’s executive assistant are reasonable.
5. Termination and Severance
. Executive shall be entitled to receive benefits upon termination
of employment only as set forth in this Section 5:
(a) At-Will Employment;
Termination . The Company and Executive acknowledge that
Executive’s employment is and shall continue to be at-will,
as defined under applicable law, and that Executive’s
employment with the Company may be terminated by either party at
any time for any or no reason, with or without notice. If
Executive’s employment terminates for any reason, Executive
shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided in this Agreement.
Executive’s employment under this Agreement shall be
terminated immediately on the death of Executive.
(b) Termination by Death, For
Cause or Disability, Voluntary Resignation Without Good Reason
. If Executive’s employment with the Company is terminated by
reason of Executive’s death, by the Company for Cause or
Disability, or by Executive other than for Good Reason, the
Corporation shall pay Executive (or his estate) his full base
salary, when due, through the Date of Termination, at the rate in
effect at the time Notice of Termination is given, plus all other
amounts to which Executive is entitled under any compensation plan
or practice of the Company at the time such payments are due
(including, without limitation, all accrued and unused vacation),
and the Company shall have no further obligations to Executive (or
his estate) under this Agreement. In addition, if Executive’s
employment with the Company is terminated by the Company for Cause,
or by Executive other than for Good Reason, all vesting of
Executive’s unvested Stock Awards previously granted to him
by the Company shall cease and none of such unvested Stock Awards
shall be exercisable following the Date of Termination. If
Executive’s employment with the Company is terminated by
reason of Executive’s death or by the Company for Disability,
then the greater of (i) fifty percent (50%) of Executive’s
unvested Stock Awards as of the Date of Termination, or (ii) such
number of Executive’s Stock Awards as would vest pursuant to
Section 5(c)(i)(D) as of the Date of Termination if such Section
were applicable, shall immediately vest and remain exercisable for
the balance of their original term. 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.
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