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EMPLOYMENT AGREEMENT

Employment Agreement

EMPLOYMENT AGREEMENT | Document Parties: GEMSTAR TV GUIDE INTERNATIONAL INC | J. Scott Crystal You are currently viewing:
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GEMSTAR TV GUIDE INTERNATIONAL INC | J. Scott Crystal

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Title: EMPLOYMENT AGREEMENT
Governing Law: New York     Date: 3/8/2006
Industry: Audio and Video Equipment     Sector: Consumer Cyclical

EMPLOYMENT AGREEMENT, Parties: gemstar tv guide international inc , j. scott crystal
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Exhibit 10.54

EMPLOYMENT AGREEMENT

This Employment Agreement (the “ Agreement ”) is entered into by and between TV Guide Magazine Group, Inc. (the “ Company ”) and J. Scott Crystal having a residential address at                     [address]                      (“ Employee ”), as of the 4 th day of October, 2005. This Agreement, when executed by both parties, will be binding and supersede any and all prior agreements, understandings, arrangements and/or communications, whether express or implied oral or written, between Employee and the Company and/or its affiliates relative to the Company’s employment of Employee including, but not limited to, that certain letter agreement dated April 9, 2003 between Employee and the Company (the “ Prior Agreement ”).

I. EMPLOYMENT .

A. The Company hereby employs Employee and Employee hereby accepts such employment, upon the terms and conditions hereinafter set forth, commencing October 17, 2005 (the “ Effective Date ”) through October 16, 2008, unless earlier terminated as provided herein (the “ Term ”). This Agreement may be renewed by mutual written agreement of the parties, but only by an express written agreement signed by both parties. Employee acknowledges and agrees that the Company has no obligation to renew this Agreement or to continue Employee’s employment after any termination of, or the expiration of, this Agreement, and expressly acknowledges that no promises or understandings to the contrary have been made or reached.

B. In the event that Employee continues in the employ of the Company after the expiration of the Term, Employee’s employment shall be solely on an “at will” basis and this Agreement shall no longer be in effect for any purpose except for those provisions that are expressly stated herein to survive the expiration or earlier termination of this Agreement.

C. Notwithstanding any other provision in this Agreement, the Company may terminate Employee’s employment or determine that Employee’s services are no longer needed or desired, at any time, for any or no reason, without prior written notice; provided, however, that if such termination or determination occurs during the Term, such termination or determination shall be subject to the provisions of Section IV below, and the continuing rights and obligations of the parties shall be as provided for therein.

II. DUTIES .

A. On the Effective Date and during the Term, Employee shall serve as President of TV Guide Publishing Group (“Publishing Group”) and in that position oversee the business and financial operations of that group, and have such other duties and responsibilities as the Company shall determine from time to time. Employee will not be responsible for overseeing the editorial functions of the Publishing Group; provided,


however, that the editorial functions of the Publishing Group will report to Employee on a “dotted line” basis for operational and financial (e.g., budget, financial planning and forecasting) purposes.

B. Employee shall render exclusive and full-time services to the Company and shall devote substantially all of Employee’s time, energy and ability necessary to fulfill the duties and responsibilities referenced above. Nothing herein shall prevent Employee, upon prior written approval of the governing body of the Company, from serving as a director or trustee of other corporations or businesses which are not in competition with the business of the Company or in competition with any affiliate of the Company. Nothing herein shall prevent Employee from (1) investing in real estate for Employee’s own account, (2) owning less than two percent (2%) of any publicly traded corporation whether or not in competition with the business of the Company or in competition with any affiliate of the Company, (3) owning less than ten percent (10%) of any privately held company not in competition with the business of the Company or in competition with any affiliate of the Company.

C. During the Term, Employee’s principal place of employment shall be at the principal offices of the Company in New York, NY, or such other greater New York, NY metropolitan area location as determined by the Company, subject to such travel as the rendering of Employee’s services may reasonably require.

III. COMPENSATION .

A. During the Term, Employee shall receive on regular pay dates as then in effect under applicable Company policy a base salary at the annualized rate of:

 

 

1.

$700,000 from October 17, 2005 through October 16, 2006;

 

 

2.

$740,000 from October 17, 2006 through October 16, 2007; and

 

 

3.

$780,000 from October 17, 2007 through October 16, 2008.

Any adjustments to Employee’s compensation, including but not limited to Employee’s base salary, following the Term of this Agreement shall be made at the Company’s sole discretion.

B. Bonuses/Stock Options . During the Term, Employee shall be eligible to earn a bonus under the Company’s bonus plan then in effect. Bonuses, if any, will be paid at the Company’s sole discretion and, to the extent paid, shall be based upon such factors or criteria as the Company and/or its parent determines in its or their sole discretion which may include, but are not limited to, the performance of the Company, its parent, the Publishing Group, and the Employee’s performance. The targeted amount of the bonus for Employee is fifty percent (50%) of Employee’s annualized base salary; provided, however, notwithstanding the foregoing, the payment of any bonus and the amount of any such payment shall be entirely at the discretion of the Company and/or its parent and provided further that the targeted bonus percentage shall be commensurate with the bonus percentages paid to other comparable executives of the Company. Notwithstanding the foregoing, Employee’s annual bonus in respect of calendar year 2005, shall be in an amount which is not less than the annual bonus that Employee received in respect of calendar year 2004.

 

 

 

 

 

 

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Also during the Term, Employee shall also be eligible to be considered for grants of non-qualified stock options under the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended and/or restated from time to time, or under any successor plan as may thereafter be in effect and applicable to Employee (the “ Plan ”). Employee’s eligibility for participation in such plans shall be commensurate with other comparable executives of the Company.

Additionally, on the Effective Date, Employee shall receive a one-time grant of nonqualified stock options (the “Options”) under the Plan to acquire one hundred thousand (100,000) shares of Common Stock (“Common Shares”) of the Company’s parent, Gemstar-TV Guide International, Inc. (“Gemstar”). Each Option shall represent the right to acquire one (1) Common Share. Subject to earlier termination of the Options as described below, the Options shall vest in equal installments of twenty percent (20%) on each anniversary of the Effective Date over a five (5) year period. The Options shall expire on the first to occur of (i) the close of business on the last business day of Gemstar coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date, (ii) the termination of the Options pursuant to Section 4.2 and/or other provisions of the Plan, or (iii) the termination of the Options in connection with a termination of Employee’s employment with the Company as contemplated by the “Option Agreement” (as defined below). The exercise price per Common Share under each Option shall equal the closing price for a Common Share on the NASDAQ National Market Reporting System (or successor system) on the Effective Date. Any grant of Options shall be subject to Employee’s execution and delivery of Gemstar’s written stock option agreement (the “Option Agreement”) and shall be subject to the terms and conditions set forth in the Plan and the Option Agreement.

C. Welfare Benefit Plans . During the Term, Employee shall be eligible for all employee benefits applicable to the Company’s comparable executives from time to time, which may include but are not limited to, paid holidays, medical and dental health insurance, 401(k) plan, life insurance, and long-term disability insurance.

D. Expenses . The Company shall pay or reimburse Employee for all reasonable business expenses actually incurred or paid by Employee in the scope of employment in connection with the performance of Employee’s services hereunder upon the presentation of such supporting documentation as the Company requires. Payment or reimbursement of such expenses shall be subject to all Company policies regarding the reporting of and payment of business expenses as in effect generally from time to time with respect to other comparable executives of the Company.

E. Car Allowance . During the Term, the Company shall provide Employee with a car allowance of eight hundred dollars ($800.00) per month to be used for the purchase, lease and maintenance of an appropriate automobile for Employee’s use during the Term of the Agreement.

F. Club Dues . During the Term, subject to applicable law and policies as may from time to time be established by or in effect for the Company, the Company (or a designated affiliate) will pay or reimburse you for all reasonable business expenses actually

 

 

 

 

 

 

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incurred or paid by you while you are employed by the Company in connection with your membership in no more than two (2) country, dining or social clubs, including the business portion of the monthly dues for such clubs, up to an aggregate amount of $800.00 per month. Payment of such expenses shall be subject to all Company and /or its parent’s policies regarding the reporting of and payment of business expenses.

G. Vacation . During the Term, Employee shall be entitled to four (4) weeks paid vacation per calendar year in accordance with the plans, practices, programs and policies then in effect for the Company with respect to other comparable executives of the Company; provided, however, since vacation time for Employee is not accrued, Employee shall not be eligible to receive payment, or be paid, for any unused vacation time and no unused vacation time shall be carried over from one year to the next or otherwise accumulated.

H. Sign-on Bonus . The Company shall pay Employee a one-time special bonus in the amount of $100,000, to be paid to Employee within thirty (30) days following the execution of this Agreement by Employee and the Company; provided, that in the event Employee’s employment by the Company is terminated prior to the first anniversary of the Effective Date by the Company pursuant to Section IV(B) hereof, Employee shall repay such amount to the Company not later than five business days following the effective date of such termination.

I. Company Right to Modify Plans . The Company and/or its parent reserves the right to modify, suspend or discontinue any and all of the above plans, practices, policies and programs at any time without advance notice (except as mandated by applicable law) or recourse by Employee so long as such action is taken with respect to other comparable executives of the Company and does not single out Employee.

IV. TERMINATION .

A. Death or Disability . Employee’s employment shall terminate automatically upon Employee’s death. If a “Disability” of Employee has occurred (pursuant to the definition of Disability set forth below), the Company may give to Employee written notice of its intention to terminate Employee’s employment. In such event, Employee’s employment with the Company shall terminate effective on the 120th day after receipt of such notice by Employee, provided that, within the one hundred twenty (120) days after such receipt, Employee shall not have returned to full-time performance of Employee’s duties. For purposes of this Agreement, “Disability” shall mean the earlier to occur of either (i) a physical or mental impairment which substantially limits a major life activity of Employee and which renders Employee unable to perform the essential functions of Employee’s position, even with reasonable accommodation which does not impose an undue hardship on the Company for an aggregate of one hundred twenty (120) days in any twelve-month period or (ii) Employee becomes eligible to receive benefits under any long term disability insurance provided by the Company or its parent. The determination of Disability under subsection (i) of the preceding sentence shall be based upon information supplied by Employee and/or Employee’s medical personnel, as well as information from medical personnel (or others) selected by the Company or its insurers. In the event Employee’s

 

 

 

 

 

 

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health care provider and the Company do not agree as to whether Employee has a Disability, Employee and the Company shall appoint a third-party qualified physician who shall evaluate Employee and provide a determination of whether Employee has a Disability.

B. Cause . The Company may terminate Employee’s employment for Cause. For purposes of this Agreement, “Cause” shall mean that Employee has engaged in or committed: willful misconduct; gross negligence; theft or fraud; any illegal conduct involving financial matters or any felony;; any willful act that is likely to and/or which does in fact have the effect of injuring the reputation, business or a business relationship of the Company; or breach of any material term of this Agreement. In the event the Company determines that Cause for termination exists based upon any of the foregoing grounds and such ground is curable, Employee shall be given thirty (30) days to cure such ground for Cause. After the expiration of any such cure period, the Company shall make a determination as to whether Employee has cured such ground for termination for Cause.

C. Good Reason . Employee may terminate employment for Good Reason. For purposes of this Agreement, “ Good Reason ” shall mean any of the following: (i) the Company requires Employee to relocate his principal office more than fifty (50) miles of New York, New York without Employee’s consent; (ii) the Company substantially diminishes Employee’s duties or responsibilities as relates to the print publications operations (which shall not, for purposes of this Agreement, include the business and operations of TV Guide Online, TV Guide Data Solutions and SkyMall) within the Publishing Group, or the Company eliminates the word “President” from Employee’s title, in either case without Employee’s consent; or (iii) the regularly scheduled frequency of publication for TV Guide magazine is reduced without Employee’s consent. Before terminating his employment for Good Reason under subsections (i), (ii) or (iii), Employee shall give the Company written notice of his intent to terminate for Good Reason and the basis therefor, and the Company shall have thirty (30) days to cure (the “ Cure Period ”). If the Company fails to cure the Good Reason within the Cure Period, Employee may terminate his employment and this Agreement upon an additional ten (10) days’ written notice. For all purposes under this Agreement, any termination by Employee with Good Reason shall be treated as if a determination had been made by the Company that Employee’s services are no longer needed or desired under Section IV-D-3 of this Agreement, and Employee shall be entitled to the payments and benefits set forth in Section IV-D-3 pursuant to its terms; provided, however, if the Employee properly terminates this Agreement for Good Reason under IV(C), then (except as provided in the proviso set forth below) Employee shall also be entitled to receive a payment in respect of his target bonus for the year in which the termination for Good Reason becomes effective as follows: (a) if such termination for Good Reason becomes effective in 2005, Employee shall be entitled to the full bonus for 2005 as provided for in Section III(B) hereof, and (b) if such termination for Good Reason becomes effective in any year after 2005, Employee shall be entitled to a pro rata bonus (based on the number of days elapsed) for the calendar year during which such termination for Good Reason becomes effective; provided further, however, if the Employee properly terminates this Agreement for Good Reason under subsection IV(C)(iii) hereof and Employee elects within ten (10) days of the effective date of such termination to settle with the Company under “Option #2 – Lump-Sum Payment/Settlement” of the Contract Payout Status Policy, then the lump sum payment contemplated thereby shall be in

 

 

 

 

 

 

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an amount equal to the balance of base salary payments remaining to be paid through October 16, 2008 and Employee shall not be entitled to receive any bonus in respect of the year in which the termination for Good Reason becomes effective notwithstanding any other provision of this Agreement to the contrary.

D. Obligations of the Company Upon Certain Events .

1. Death or Disability . If Employee’s employment is terminated by reason of Employee’s death or Disability, this Agreement shall terminate without further obligations to Employee or Employee’s legal representatives under this Agreement, other than for (a) payment of the sum of (i) Employee’s annual base salary through the date of termination to the extent not theretofore paid and (ii) Employee’s pro rata bonus (based on the number of days elapsed) for the calendar year during which Employee’s death or Disability occurs (the sum of the amounts described in clauses (i) and (ii) shall be hereinafter referred to as the “ Accrued Obligations ”), which shall be paid to Employee or Employee’s estate or beneficiary, as applicable, in a lump sum in cash within thirty (30) days of the date of termination; and (b) payment to Employee or Employee’s estate or beneficiary, as applicable, any amounts due pursuant to the terms of any applicable welfare benefit plans.

2. Cause . If Employee’s employment is terminated by the Company for Cause, this Agreement shall terminate without further obligations to Employee other than for the timely payment of Accrued Obligations. If it is subsequently determined that the Company did not have Cause for termination under this Section IV-D-2, then the Company’s decision to terminate shall be deemed instead to have been a determination that Employee’s services are no longer needed or desired under Section IV-D-3 and the amounts payable thereunder shall be the only amounts Employee may receive.

3. Other than Cause or Death or Disability . If the Company determines that it no longer needs or desires the services of Employee during the Term for other than Cause or Employee’s death or Disability, Employee’s employment shall be subject to, and the Company shall have no further obligations to Employee except as provided in, the Contract Payout Status Policy attached hereto as Exhibit A.

4. Exclusive Remedy . In consideration of the making of this Agreement, as well as of the other consideration stated herein, Employee expressly agrees that any contract, agreement or understanding between Employee and the Company and/or its affiliates with respect to severance or termination pay, notice of severance or termination, or pay in lieu of notice of severance or termination previously extended to Employee, whether by way of contract, letter, or any termination or severance policy, program , practice or arrangement, is hereby rescinded and waived. Employee agrees that the payments contemplated by this Agreement shall constitute the exclusive and

 

 

 

 

 

 

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sole remedy for any termination of Employee’s employment and Employee covenants not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment. If Employee violates this Agreement by bringing or maintaining any charges, claims, grievances, or lawsuits contrary to this provision, Employee shall pay all costs and expenses of the Company and/or related persons or affiliated entities in defending against such charges, claims or actions brought by Employee or on Employee’s behalf, including but not limited to reasonable attorneys’ fees, in addition to all damages suffered or incurred by the Company and/or its affiliates.

V. ARBITRATION .

Any Dispute between Employee and Company shall be resolved exclusively and finally by arbitration administered by the National Arbitration Forum (NAF) and conducted under its rules, except as otherwise provided below. Employee and Company will agree on another arbitration forum if NAF ceases operations. The term “Dispute”, for purposes of this provision, shall mean any dispute, controversy, or claim arising out of or relating to (i) this Agreement, its enforcement, interpretation, termination, applicability or validity thereof, (ii) an alleged breach, default, or misrepresentation in connection with any of its provisions, or (iii) Employee’s employment, including, but not limited to, any state or federal statutory claims. The arbitration shall be conducted before a single arbitrator and will be limited solely to the Dispute between Employee and the Company. The arbitration, or any portion of it, shall not be consolidated with any other arbitration and shall not be conducted on a class-wide or class action basis. The arbitration shall be held in New York, New York and shall be conducted in accordance with the NAF rules for the resolution of Employment Disputes as the exclusive forum for the resolution of such Dispute; provided, however, that provisional injunctive relief may, but need not, be sought by either party to this Agreement 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. This arbitration agreement shall be enforceable pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-14 et seq., and final resolution of any dispute through arbitration may include any remedy or relief that the Arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes. At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted by the Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction. Except as specifically provided for herein, should either party bring a Dispute in a forum other than the NAF, the arbitrator may award the other party its reasonable costs and expenses, including attorneys fees, incurred in staying or dismissing such other proceedings or in otherwise enforcing compliance with this dispute resolution provision. The parties acknowledge, agree and understand that they are hereby unequivocally waiving any rights to litigate disputes through a court, including the right to litigate claims on a class-wide or class action basis, and that they have expressly and knowingly waived those rights and agree to resolve any Disputes through binding arbitration in accordance with the provisions of this paragraph. Employee and Company further agree that in any proceeding to enforce the terms

 

 

 

 

 

 

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of this Agreement, the prevailing party shall be entitled to its or her reasonable attorneys’ fees and costs (including forum costs associated with the arbitration) incurred by it or her in connection with resolution of the dispute in addition to any other relief granted. Information may be obtained from the NAF on line at www.arb-forum.org, by calling 800-474-2371, or writing to P.O. Box 50191, Minneapolis, MN, 55405.

VI. NON-SOLICITATION/EMPLOYER INTERESTS .

Employee promises and agrees that during Employee’s employment and for twelve (12) months following the termination of Employee’s employment, for any reason whatsoever, Employee will not (1) influence or attempt to influence customers of the Company or any of its affiliates, either directly or indirectly, to divert their business to any individual, partnership, firm, corporation or other entity then in competition with the business of the Company, or any affiliate of the Company; or (2) take any action which is intended, or would reasonably be expected to, adversely affect the Company and/or its affiliates, or adversely affect the businesses, reputation, or relationship the Company and/or its affiliates with its or their customers, business partners, or vendors.

VII. SOLICITING EMPLOYEES .

Employee promises and agrees that during Employee’s employment and for twelve (12) months following the termination of Employee’s employment, for any reason whatsoever, Employee will not directly or indirectly solicit any employees of the Company or its affiliates to work for any business, individual, partnership, firm, corporation, or other entity; provided, however, that this provision shall not prohibit Employee from employing personnel from the Company or its affiliates who respond (without other solicitation of any kind whatsoever) to general solicitations of employment directed to the public at large.

VIII. CONFIDENTIAL INFORMATION .

A. Employee, in the performance of Employee’s duties on behalf of the Company, shall have access to, receive and be entrusted with confidential information, including but in no way limited to development, marketing, organizational, financial, management, administrative, production, distribution and sales information, data, specifications and processes presently owned or at any time in the future developed, by the Company or its affiliates, or its or their agents or consultants, or used presently or at any time in the future in the course of its business that is not otherwise part of the public domain (collectively, the “Confidential Material”). All such Confidential Material is considered secret and will be available to Employee in confidence. Except in the performance of duties on behalf of the Company, Employee shall not, directly or indirectly for any reason whatsoever, disclose or use any such Confidential Material, unless such Confidential Material ceases (through no fault of Employee’s) to be confidential because it has become part of the public domain. All records, files, drawings, documents, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to the Company’s business, which Employee prepares, uses or encounters, shall be and remain the Company’s sole and exclusive property and shall be included in the Confidential Material. Upon termination of this Agreement by any means, or whenever

 

 

 

 

 

 

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requested by the Company, Employee shall promptly deliver to the Company any and all of the Confidential Material, not previously delivered to the Company, that may be or at any previous time has been in Employee’s possession or under Employee’s control; provided, however, that Employee may retain in his possession any Confidential Material that reflects the terms of his employment with the Company or the terms or amount of his compensation and benefits.

B. Employee hereby acknowledges that the sale or unauthorized use or disclosure of any of the Company’s Confidential Material by any means whatsoever and any time before, during or after Employee’s employment with the Company shall constitute unfair competition. Employee agrees that Employee shall not engage in unfair competition either during the time employed by the Company or any time thereafter. The parties acknowledge and agree that a disclosure by Employee of the continuing obligations he is subject to under this Agreement to a new employer, or prospective new employer, in connection with Employee’s acceptance of, or application for, a position of employment shall not constitute a breach of this Agreement.

C. Until this Agreement ceases (through no fault of Employee’s) to be confidential because it has become part of the public domain, Employee further agrees to keep the terms and contents of this Agreement completely confidential, except to consult with Employee’s legal, tax or other financial advisors or immediate family members, or as otherwise required by law.

IX. ASSIGNMENT OF RIGHTS .

Employee hereby assigns to the Company, to the extent not previously assigned to the Company and/or its affiliates, all of Employee’s rights, title and interest in and to any and all inventions (and all proprietary rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by Employee, either alone or jointly with others, during the period of Employee’s employment with the Company or its affiliates. Employee recognizes that this Agreement does not require assignment of any invention demonstrated by Employee to qualify fully for protection under Section 2870 of the California Labor Code, the text of which is substantially set forth below:

2870. Employment agreements; assignment of rights

i Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(a) relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

 

 

 

 

 

 

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(b) result from any work performed by the employe


 
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