-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WQfjAuW/d79Q8a0K/HLuIgEDd4AIjAWUzSa/LlRr9stFJqV1dX5qzGvlTwjautc4 ox1LMMuQsd5EYQeIcn05jA== 0000898430-02-004027.txt : 20021112 0000898430-02-004027.hdr.sgml : 20021111 20021112141254 ACCESSION NUMBER: 0000898430-02-004027 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20021107 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEMSTAR TV GUIDE INTERNATIONAL INC CENTRAL INDEX KEY: 0000923282 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651] IRS NUMBER: 954782077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24218 FILM NUMBER: 02816618 BUSINESS ADDRESS: STREET 1: 135 NORTH LOS ROBLES AVE STREET 2: STE 800 CITY: PASADENA STATE: CA ZIP: 91101 BUSINESS PHONE: 8187925700 MAIL ADDRESS: STREET 1: 135 N LOS ROBLES AVE STREET 2: STE 800 CITY: PASADENA STATE: CA ZIP: 91101 FORMER COMPANY: FORMER CONFORMED NAME: GEMSTAR INTERNATIONAL GROUP LTD DATE OF NAME CHANGE: 19940518 8-K 1 d8k.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ----------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 7, 2002 ----------------- GEMSTAR - TV GUIDE INTERNATIONAL, INC. (Exact Name of Registrant as Specified in Charter) DELAWARE 0-24218 95-4782077 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No.) 135 North Los Robles Avenue, Suite 800 Pasadena, California 91101 (Address of Principal Executive Offices and Zip Code) (626) 792-5700 Registrant's telephone number, including area code (Former Name or Former Address, if Changed Since Last Report) ----------------- ================================================================================ ITEM 5. OTHER EVENTS. On November 7, 2002, Gemstar-TV Guide International, Inc. (the "Company") effected a restructuring of the Company's management and corporate governance (the "Restucturing"). Each of the following definitive documents (the "Restructuring Documents") relating to the Restructuring was executed and is effective: Termination Agreement with Dr. Henry C. Yuen, Letter Agreement with Dr. Yuen, Termination Agreement with Ms. Elsie Ma Leung, Letter Agreement with Ms. Leung, Employment Agreement with Dr. Yuen, Employment Agreement with Ms. Leung, Patent Rights Agreement, Umbrella Agreement, Amendment No. 1 to Stockholders' Agreement, and Amended and Restated Bylaws. The Company announced that Jeff Shell has been named Chief Executive Officer and Paul Haggerty has been named acting Chief Financial Officer. A search for a permanent Chief Financial Officer is being undertaken. Following is a summary of the significant terms of the Restructuring. The summary set forth below does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the Restructuring Documents. IN GENERAL On October 8, 2002, the Company announced that its Board of Directors had reached an agreement in principle with Dr. Yuen and Ms. Leung, subject to completion of definitive documentation concerning the management restructuring. On November 7, 2002, the Company entered into definitive documentation in connection with the Restructuring. The definitive documents are described below: DR. YUEN TERMINATION AGREEMENT Pursuant to the Restructuring, the Company and Dr. Yuen entered into a Termination Agreement. Under the agreement, Dr. Yuen resigned as Chief Executive Officer of the Company, as President and Chief Executive Officer of Gemstar Development Corporation, from every office he holds with any subsidiary of the Company, as a member of the Board of Directors of each of the Company's subsidiaries and as a member of any committee of the Board of Directors of the Company and any subsidiary. The agreement also includes a mutual release of claims by Dr. Yuen and the Company. In addition, Dr. Yuen assigned to the Company all of the intellectual property he developed during his employment other than, generally, those developments that do not relate to the fields of interactive television or interactive program guides or other aspects of the Company's business. Dr. Yuen made certain representations regarding the Company's financial statements and other public disclosures. Dr. Yuen will receive a combination of cash payments, and restricted stock or stock units. The cash payments to be paid to Dr. Yuen consist of a termination fee in the amount of $22,452,640 and $7,030,778 in settlement for unpaid salary, bonuses and vacation due under his former employment agreement. In addition, Dr. Yuen will receive 5,274,519 shares of restricted stock or stock units and all of Dr. Yuen's stock options as of November 7, 2002, other than approximately 17,055,413 stock options which were cancelled, immediately vested. Pursuant to a letter agreement, the cash currently payable to Dr. Yuen will be held by the Company in a segregated 2 account for up to six months pending possible deposit of all or a portion of such cash into an escrow pursuant to the Sarbanes-Oxley Act. MS. LEUNG TERMINATION AGREEMENT Pursuant to the Restructuring, the Company and Ms. Leung entered into a Termination Agreement. Under the agreement, Ms. Leung resigned as Co-President, as Co-Chief Operating Officer, and as Chief Financial Officer of the Company, as Chief Operating Officer and Chief Financial Officer of Gemstar Development Corporation, from every office she holds with any subsidiary of the Company, as a member of the Board of Directors of the Company's subsidiaries and as a member of any committee of the Board of Directors of the Company and any subsidiary. The agreement also includes a mutual release of claims by Ms. Leung and the Company. In addition, Ms. Leung made certain representations regarding the Company's financial statements and other public disclosures. Ms. Leung will receive a combination of cash payments, stock options, and restricted stock or stock units. The cash payments to be paid to Ms. Leung consist of a termination fee in the amount of $6,957,953 and $1,209,695 in settlement for unpaid salary, bonuses and vacation due under her existing employment agreement. In addition, Ms. Leung will receive options to purchase 1,126,504 shares of common stock and 353,680 shares of restricted stock or stock units. All of Ms. Leung's stock options as of November 7, 2002, other than approximately 3,150,000 stock options which were cancelled, immediately vested. Pursuant to a letter agreement, the cash currently payable to Ms. Leung will be held by the Company in a segregated account for up to six months pending possible deposit of all or a portion of such cash into an escrow pursuant to the Sarbanes-Oxley Act. NEW DR. YUEN EMPLOYMENT AGREEMENT Pursuant to the Restructuring, the Company and Dr. Yuen entered into a new five year Employment Agreement, pursuant to which Dr. Yuen will serve as non-executive Chairman of the Company's Board of Directors and as head of an international business unit of the Company. Under the agreement, Dr. Yuen will assign to the Company all of the intellectual property he develops during his employment other than, generally, those developments that do not relate to the fields of interactive television or interactive program guides or other aspects of the Company's business. Also under the agreement, Dr. Yuen has agreed that during the term of the agreement and an additional one-year term thereafter, Dr. Yuen will not compete with the Company or solicit its employees. Dr. Yuen will be compensated under the agreement with a combination of salary, stock options, and restricted stock or stock units. Dr. Yuen's salary is $2,000,000 per year and he is entitled to receive during the term of the agreement, options to purchase 6,866,667 shares of common stock and 2,093,064 shares of restricted stock or stock units. In the event that Dr. Yuen is terminated other than for cause (as defined in the agreement), upon execution of a release, he will be entitled to receive, among other things, a lump sum payment in the amount of salary that he would have received from the date of termination through the fifth anniversary of the effective date of the agreement, up to a maximum of $10,000,000. NEW MS. LEUNG EMPLOYMENT AGREEMENT Pursuant to the Restructuring, the Company and Ms. Leung entered into a new three year Employment Agreement, pursuant to which Ms. Leung will serve as an employee in an 3 international business unit of the Company. Under the agreement, Ms. Leung will be compensated with a combination of salary, stock options, and restricted stock or stock units. Ms. Leung's salary is $500,000 per year and she is entitled to receive during the term of the agreement options to purchase 666,667 shares of common stock and 209,308 shares of restricted stock or stock units. In the event that Ms. Leung is terminated other than for cause (as defined in the agreement), upon execution of a release, she will be entitled to receive, among other things, a lump sum payment in an amount equal to the amount of salary that she would have received from the date of termination through the fifth anniversary of the effective date of the agreement, up to a maximum of $1,500,000. PATENT RIGHTS AGREEMENT The Patent Rights Agreement provides the Company with the option to acquire certain inventions made by Dr. Yuen relating to Interactive Program Guides or Interactive Television, each as defined in the Patent Rights Agreement, any time from the commencement of this agreement until November 7, 2009. The agreement commences on the earlier of (i) November 7, 2007 and (ii) the expiration or earlier termination of Dr. Yuen's employment agreement. This agreement requires that the Company grant Dr. Yuen a license to the inventions acquired by the Company from Dr. Yuen for fields other than Interactive Program Guides and Interactive Television. The Patent Rights Agreement also includes a covenant that Dr. Yuen will not compete with the Company in the fields of Interactive Program Guides and Interactive Television. Dr. Yuen will receive cash and options to purchase common stock. Payments to Dr. Yuen under the agreement include annual compensation of $250,000 per year, a fee ranging from a minimum of $1,250,000 to a maximum of $2,750,000 per year (based on the Company's revenues from the sale of specified products) and options to purchase 200,000 shares of common stock per year. UMBRELLA AGREEMENT The Umbrella Agreement is among the Company, Dr. Yuen, Ms. Leung and News Corporation. The Umbrella Agreement contains mutual releases among Dr. Yuen, Ms. Leung and News Corporation. The Umbrella Agreement also provides, among other things, that News Corporation will indemnify the Company for certain losses, including the liability for "gross up" tax payments and the loss of tax deductions, attributable to "excess parachute payments" associated with the Restructuring that are triggered upon a change of control of the Company (as described in Section 280(G)(b)(2)(A)(i) of the Internal Revenue Code) that is the result of affirmative actions taken by News Corporation or its affiliates in the future. The Umbrella Agreement also contains an agreement among News Corporation, Dr. Yuen and Ms. Leung to vote the shares of Company common stock owned by them in favor of an amendment to the Company's 1994 Stock Incentive Plan at the annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable after the date of the Umbrella Agreement. AMENDMENT TO STOCKHOLDERS' AGREEMENT A Stockholders' Agreement, entered into by Dr. Yuen, Liberty Media Corporation ("Liberty"), News Corporation and the Company, became effective upon the completion of the merger between a subsidiary of the Company and TV Guide, Inc. on July 12, 2000. In 4 connection with the sale of Liberty's shares of the Company to News Corporation effective May 2, 2001, Liberty assigned its right to appoint designees to Gemstar's Board to News Corporation. In connection with the Restructuring, Dr. Yuen, News Corporation and the Company adopted Amendment No. 1 to the original Stockholders' Agreement (the "Amendment"). The Amendment revised the voting arrangements in the original Stockholders' Agreement. Under the Amendment, News Corporation and Dr. Yuen agreed that, until the earlier of September 30, 2005 and such date as the Employment Agreement, dated as of November 7, 2002, between the Company and Dr. Yuen is terminated for any reason (the "Specified Period"), (i) Dr. Yuen is entitled to designate and renominate only himself as a director to the Board, (ii) if Dr. Yuen ceases to be a director for any reason, he shall not be entitled to designate a successor to fill his vacancy, and (iii) News Corporation shall vote, and cause its Controlled Related Parties (as defined in the Stockholders' Agreement) to vote (x) for the election of Dr. Yuen to the Board, (y) against Dr. Yuen's removal from the Board, and (z) for the election of Dr. Yuen as the non-executive Chairman of the Board. Until the later of July 12, 2005 or the expiration of the Specified Period, News Corporation is entitled to designate one director to the Board. During the Specified Period, Dr. Yuen has agreed to vote (i) for the election of News Corporation's designee to the Board, and (ii) against the removal of News Corporation's designee from the Board. The Amendment did not alter the non-competition covenants of the parties, except to provide an agreement by News Corporation that its covenant not to compete with the Company in the original Stockholders' Agreement would remain in full force and effect until July 12, 2005, regardless of whether any designee of News Corporation continues to serve on the Board of Directors of the Company. The Amendment also eliminated the transfer restrictions on Dr. Yuen's shares provided by the original Stockholders' Agreement. The Amendment did not alter News Corporation's registration rights granted in the original Stockholders' Agreement and did not change the standstill covenant which under the terms of the original Stockholders Agreement terminated the date Dr. Yuen ceased to be Chief Executive Officer of Gemstar. AMENDED AND RESTATED BYLAWS The Board has amended the Company's Bylaws in order to effectuate the agreements reached with respect to the Restructuring. Generally, the amendments to the Bylaws include the elimination of the Board structure that divided the twelve directors into six designees of Dr. Yuen and six designees of News Corporation; the removal of the "TVG" and "GS" director designations; the elimination of the corresponding committee composition requirements; the removal of Dr. Yuen's tie-breaking authority and the tie-breaking committee concept; the elimination of the term guarantee for Dr. Yuen's service as Chief Executive Officer; the separation of the Chairman of the Board and Chief Executive Officer positions; and the elimination of the seven director voting requirement for matters that were identified as "Fundamental Decisions." Certain provisions of the Bylaws (as amended) are summarized below: Directors. The Board consists of twelve directors. 5 Vacancies. Except as required by law, or as provided for in a resolution of the Board, vacancies on the Board may be filled by the majority of the directors then in office, although less than a quorum. Chairman. The Board may elect a Chairman from among the directors. The Board may determine that the Chairman shall be a non-executive of the Company. Quorum. A majority of the total number of Board members constitutes a quorum. Voting. Generally, directors present at any meeting at which a quorum is present may act by majority vote. However, any amendment of the Bylaws by the Board or action to increase or decrease the number of directors, requires the approval of at least nine of the twelve Board members. The November 7, 2002 press release related to the Restructuring is attached hereto as Exhibit 99.1. The Restructuring Documents are attached hereto as Exhibit 3.1, Exhibits 10.1 through 10.9 and are incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (C) EXHIBITS. 3.1 Amended and Restated By-laws of Gemstar-TV Guide International, Inc. 10.1 Umbrella Agreement, dated November 7, 2002, by and among The News Corporation Limited, Henry C. Yuen, Elsie Ma Leung and Gemstar-TV Guide International, Inc. 10.2* Termination Agreement, entered into on November 7, 2002, by and between Gemstar-TV Guide International, Inc., Gemstar Development Corporation, and Henry C. Yuen 10.3* Patent Rights Agreement, entered into on November 7, 2002, by and between Gemstar-TV Guide International, Inc. and Henry C. Yuen 10.4 Amendment No. 1 to the Stockholders' Agreement, entered into on November 7, 2002, by and among The News Corporation Limited, Henry C. Yuen, and Gemstar-TV Guide International, Inc. 10.5 Employment Agreement, entered into on November 7, 2002, by and between Gemstar - TV Guide International, Inc. and Henry C. Yuen 10.6 Letter Agreement, dated November 7, 2002, between Gemstar-TV Guide International, Inc. and Dr. Henry Yuen, regarding Retained Funds 6 10.7* Termination Agreement, entered into on November 7, 2002, by and between Gemstar - TV Guide International, Inc. and Elsie Ma Leung 10.8 Employment Agreement, entered into on November 7, 2002, by and between Gemstar - TV Guide International, Inc. and Elsie Ma Leung 10.9 Letter Agreement, dated November 7, 2002, between Gemstar-TV Guide International, Inc. and Ms. Elsie Ma Leung, regarding Retained Funds 99.1 Press Release, dated November 7, 2002 * Certain information in this exhibit has been omitted and filed separately with the Securities and Exchange Commission. Redacted portions of the exhibit are indicated by asterisks, and a legend appears on the appropriate pages. Confidential treatment has been requested with respect to the omitted portions. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: November 12, 2002 GEMSTAR -TV GUIDE INTERNATIONAL, INC. By: /s/ Jeff Shell ---------------------------------------- Name: Jeff Shell -------------------------------------- Title: Chief Executive Officer ------------------------------------- 8 3.1 Amended and Restated By-laws of Gemstar-TV Guide International, Inc. 10.1 Umbrella Agreement, dated November 7, 2002, by and among The News Corporation Limited, Henry C. Yuen, Elsie Ma Leung and Gemstar-TV Guide International, Inc. 10.2* Termination Agreement, entered into on November 7, 2002, by and between Gemstar-TV Guide International, Inc., Gemstar Development Corporation, and Henry C. Yuen 10.3* Patent Rights Agreement, entered into on November 7, 2002, by and between Gemstar-TV Guide International, Inc. and Henry C. Yuen 10.4 Amendment No. 1 to the Stockholders' Agreement, entered into on November 7, 2002, by and among The News Corporation Limited, Henry C. Yuen, and Gemstar-TV Guide International, Inc. 10.5 Employment Agreement, entered into on November 7, 2002, by and between Gemstar - TV Guide International, Inc. and Henry C. Yuen 10.6 Letter Agreement, dated November 7, 2002, between Gemstar-TV Guide International, Inc. and Dr. Henry Yuen, regarding Retained Funds 10.7* Termination Agreement, entered into on November 7, 2002, by and between Gemstar - TV Guide International, Inc. and Elsie Ma Leung 10.8 Employment Agreement, entered into on November 7, 2002, by and between Gemstar - TV Guide International, Inc. and Elsie Ma Leung 10.9 Letter Agreement, dated November 7, 2002, between Gemstar-TV Guide International, Inc. and Ms. Elsie Ma Leung, regarding Retained Funds 99.1 Press Release, dated November 7, 2002, regarding Gemstar Management Changes * Certain information in this exhibit has been omitted and filed separately with the Securities and Exchange Commission. Redacted portions of the exhibit are indicated by asterisks, and a legend appears on the appropriate pages. Confidential treatment has been requested with respect to the omitted portions. EX-3.1 3 dex31.txt AMENDED & RESTATED BY-LAWS EXHIBIT 3.1 GEMSTAR - TV GUIDE INTERNATIONAL, INC. A Delaware Corporation Amended and Restated By-laws ---------------------------- ARTICLE I STOCKHOLDERS Section 1.1 Annual Meeting. An annual meeting of stockholders for the purpose of electing those directors whose term of office expires at such meeting and of transacting such other business as may properly come before it shall be held each year at such date, time, and place in the United States, either within or without the State of Delaware, as may be specified by the Board of Directors in the notice of meeting. Section 1.2 Special Meetings. Except as otherwise provided in the terms of any class or series of preferred stock or unless otherwise provided by law, special meetings of stockholders of the Corporation, for any purpose or purposes, shall be called by the Secretary of the Corporation promptly (i) upon the written request of the holders of not less than a majority of the total voting power of the outstanding Voting Securities (as hereinafter defined) of the Corporation (such written request shall set forth the purpose or purposes for which the meeting is called, and in case of a special meeting called for the purpose of nominating directors of the Corporation, the information required by Section 1.9 hereof), or (ii) at the request of six of the twelve members of the Board of Directors then authorized. The Secretary of the Corporation shall immediately notify each member of the Board of Directors of the receipt of any such request. The term "Voting Securities" shall mean the Corporation's Common Stock, par value $.01 per share ("Common Stock"), and any class or series of preferred stock entitled to vote with the holders of Common Stock generally upon all matters which may be submitted to a vote of stockholders at any annual meeting or special meeting thereof. Special meetings of stockholders for any purpose or purposes may be held at such time and place in the United States either within or without the State of Delaware as may be stated in the notice of meeting. Section 1.3 Notice of Meetings. Written notice of stockholders meetings, stating the place, date, and hour thereof, and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given by the Chief Executive Officer, the President and Chief Operating Officer, any Vice President, the Secretary, or an Assistant Secretary, to each stockholder entitled to vote thereat at least ten days but not more than sixty days before the date of the meeting, unless a different period is prescribed by law or the Certificate of Incorporation of the Corporation, as amended from time to time (the "Certificate"). Section 1.4 Notice of Nominations for the Election of Directors and the Proposal of Business. 1.4.1 Annual Meetings of Stockholders. Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation's notice of meeting delivered pursuant to Section 1.3 of these By-laws, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation that has complied with all applicable requirements of Section 1.9 hereof. 1.4.2 Special Meetings of Stockholders. 2 Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting pursuant to Section 1.3 of these By-laws. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (a) by or at the direction of the Board of Directors as provided in Section 2.4 hereof or (b) by any stockholder of the Corporation that has complied with all applicable requirements of Section 1.9 hereof. 1.4.3 General. (a) Only persons who are nominated in accordance with the procedures set forth in these By-laws shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in these By-laws. Except as otherwise provided by law, the Certificate or these By-laws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in these By-laws and, if any proposed nomination or business is not in compliance with these By-laws, to declare that such defective proposal or nomination shall be disregarded. (b) Notwithstanding the foregoing or the provisions of Section 1.9 of these By-laws, a stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder with respect to the matters set forth in this Section 1.4 or Section 1.9 of these By-laws. Nothing in these By-laws shall be deemed to affect any rights of stockholders to request 3 inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. Section 1.5 Quorum. Subject to the rights of the holders of any class or series of preferred stock and except as otherwise provided by law or in the Certificate or elsewhere in these By-laws, at any meeting of stockholders, the holders of a majority in total voting power of the outstanding shares of stock entitled to vote at the meeting shall be present or represented by proxy in order to constitute a quorum for the transaction of any business. In the absence of a quorum, the holders of a majority in total voting power of the shares that are present in person or by proxy or the chairman of the meeting may adjourn the meeting from time to time in the manner provided in Section 1.6 of these By-laws until a quorum shall attend. Section 1.6 Adjournment. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the meeting is adjourned in a single adjournment for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.7 Calling of Meeting. The Chief Executive Officer or, in the absence of the Chief Executive Officer, the designee of the Chief Executive Officer (provided such designee is a Vice President), shall call 4 to order meetings of stockholders and shall act as chairman of such meetings. The Board of Directors or, if the Board of Directors fails to act, the stockholders, may appoint any stockholder, director, or officer of the Corporation to act as chairman of any meeting in the absence of all of the foregoing officers. The Secretary shall act as secretary of all meetings of stockholders, but, in the absence of the Secretary, the chairman of the meeting may appoint any other person to act as secretary of the meeting. Section 1.8 Voting. Subject to the rights of the holders of any class or series of preferred stock and except as otherwise provided by law, the Certificate or elsewhere in these By-laws and except for the election of directors, at any meeting duly called and held at which a quorum is present, the affirmative vote of a majority of the combined voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. At any meeting duly called and held for the election of directors at which a quorum is present, directors shall be elected by a plurality of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Section 1.9 Advance Notice; Nominations. At an annual or special meeting of stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before a meeting, business must be: (a) specified in the notice of meeting (or any supplement thereto) given pursuant to Section 1.3 hereof or (b) in the case of an annual meeting, (i) otherwise properly brought before the meeting by or at the direction of the Board of Directors, 5 or (ii) otherwise properly brought before the meeting by a stockholder of the Corporation. For business (other than the nomination of directors) to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. The Secretary shall immediately notify each member of the Board of Directors of the receipt of any such notice and the contents thereof. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any meeting except in accordance with the procedures set forth in these By-laws. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this By-law, and if he should so determine, he shall so declare to the meeting and any such 6 business not properly brought before the meeting shall not be transacted, and if purported to be transacted shall be void. At each annual meeting of stockholders, the stockholders shall elect directors in accordance with the Certificate. Only persons who are nominated in accordance with the procedures set forth in this By-law shall be eligible for election as directors at an annual meeting or at a special meeting called for such purpose pursuant to Section 1.3 of these By-laws. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors pursuant to Section 2.4 hereof or by any stockholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this By-law. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. The Secretary of the Corporation shall immediately notify each member of the Board of Directors of the receipt of any such notice and the contents thereof. To be timely, a stockholder's notice of nomination in the case of an annual meeting or a special meeting called for the election of directors shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, and, provided, further, that in the case of a special meeting called at the request of a stockholder or stockholders nominating persons for election to the Board of Directors, the notice of nomination by the stockholder(s) requesting such 7 meeting will be timely if received by the Corporation pursuant to Section 1.2 hereof. Such stockholder's notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including without limitation such persons' written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the Corporation's books, of such stockholder and (ii) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this By-law. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these By-laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. For purposes of this By-law, "public disclosure" shall mean disclosure in a press release reported by Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14, or 15(d) of the Exchange Act. 8 ARTICLE II BOARD OF DIRECTORS Section 2.1 Number and Term of Office. (a) The governing body of this Corporation shall be a Board of Directors. The Board of Directors shall be comprised of twelve (12) members. The Board of Directors, by resolution adopted by the affirmative vote of at least nine of the twelve members of the Board of Directors then authorized, may increase or decrease the number of directors. Directors need not be stockholders of the Corporation. No class or series of preferred stock shall be entitled to elect any additional directors, although the terms of any class or series of preferred stock may provide that the shares of such class or series are entitled to vote in elections of directors. (b) The Board of Directors shall be divided into three classes: Class I, Class II and Class III. Each class of directors shall consist of a number of directors equal as nearly as practicable to one-third of the then authorized number of members of the Board of Directors. The initial term of office of the Class I Directors shall expire at the annual meeting of stockholders in 2003; the initial term of office of the Class II Directors shall expire at the annual meeting of stockholders in 2002; and the initial term of office of the Class III Directors shall expire at the annual meeting of stockholders in 2001. At each annual meeting of stockholders of the Corporation, the successors of that class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of such election. The directors of each class will hold office until their respective death, resignation or removal and until their respective successors are elected and qualified. 9 Section 2.2 Resignations. Any director of the Corporation, or any member of any committee, may resign at any time by giving written notice or notice by electronic transmission to the Board of Directors. Any such resignation shall take effect at the time specified therein or, if the time be not specified therein, then upon receipt thereof. The acceptance of such resignation shall not be necessary to make it effective unless otherwise stated therein. Section 2.3 Removal of Directors. Directors may be removed from office with or without cause upon the affirmative vote of holders of not less than 66-2/3% of the total voting power of the then outstanding Voting Securities (as defined in Section 1.2), voting together as a single class at a meeting specifically called for such purpose. Section 2.4 Newly Created Directorships, Vacancies and Nominees. Except as required by law, or as provided for in a resolution of the Board of Directors, newly-created directorships and vacancies on the Board of Directors, resulting from death, resignation, removal, disqualification or other cause may be filled by a majority of the directors then in office, although less than a quorum. Any director so appointed shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, and until such director's successor shall have been elected and qualified. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. 10 Section 2.5 Chairman of the Board. The Board of Directors may elect a Chairman from among the directors. The Chairman shall possess and exercise such authority and powers and perform such duties as may be determined by these By-laws and the Board of Directors. The Board of Directors may determine that the Chairman shall be a non-executive of the Corporation, in which event he or she shall not be an officer of the Corporation. Section 2.6 Meetings. The annual meeting of the Board of Directors, for the election of officers and the transaction of such other business as may come before the meeting, shall be held without notice at the same place as, and immediately following, the annual meeting of the stockholders. Regular meetings of the Board of Directors (including such annual meeting) shall be held not less frequently than quarterly, at 10:00 a.m. local time on the last business day of each calendar quarter, at the executive offices of the Corporation or at such other time and place as shall be determined from time to time by the Board of Directors. Notice of each regular meeting shall be furnished in writing to each member of the Board of Directors not less than five business days in advance of said meeting, unless such notice requirement is waived in writing by each member. Special meetings of the Board of Directors shall be held at such time and place within the United States as shall be designated in the notice of the meeting. Special meetings of the Board of Directors may be called by the Chief Executive Officer and shall be called by the Secretary of the Corporation upon the written request of not less than six of the twelve members of the Board of Directors then authorized. 11 Section 2.7 Notice of Special Meetings. The Secretary, or in his or her absence or failure to give such notice, any other officer of the Corporation, shall give each director notice of the time and place of holding of special meetings of the Board of Directors by overnight courier, or by telegram, cable, facsimile transmission, electronic transmission or personal service at least three business days before the meeting unless such notice requirement is waived by each member. Unless otherwise stated in the notice thereof, any and all business may be transacted at any meeting without specification of such business in the notice. Section 2.8 Quorum and Organization of Meetings. A majority of the total number of members of the Board of Directors as constituted from time to time shall constitute a quorum for the transaction of business, but, if at any meeting of the Board of Directors (whether or not adjourned from a previous meeting) there shall be less than a quorum present, a majority of those present may adjourn the meeting to another time and place, and the meeting may be held as adjourned without further notice or waiver. Except as otherwise required by law or provided by the Certificate or these By-laws, directors present at any meeting at which a quorum is present for the transaction of business may by majority vote decide any question brought before such meeting. Meetings shall be presided over by the Chief Executive Officer, or in his or her absence, by his or her designee. The Board of Directors shall keep written minutes of its meetings. The Secretary of the Corporation shall act as secretary of the meeting, but in his or her absence the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 2.9 Indemnification. 12 The Corporation shall indemnify members of the Board of Directors and officers of the Corporation and their respective heirs, personal representatives and successors in interest for or on account of any action performed on behalf of the Corporation, to the fullest extent provided by the laws of the State of Delaware and the Certificate, as now or hereafter in effect. Section 2.10 Executive Committee of the Board of Directors. There shall be an executive committee of the Board of Directors. Subject to the limitations of the laws of the State of Delaware and except as otherwise provided in the Certificate or these By-laws, the Executive Committee shall have such duties and powers relating to the management of the business and affairs of the Corporation as may be delegated to it from time to time by the Board of Directors; provided, however, that the Executive Committee shall have all powers of the Board of Directors with respect to matters related to the operations of the Corporation and its subsidiaries between Board meetings, except as otherwise determined by the Board of Directors or delegated to the Compensation Committee or the Audit Committee pursuant to these By-laws or otherwise, or delegated by the Board to a different committee. The Executive Committee will not have decision-making authority with respect to any of the following matters and only the Board of Directors shall have authority to decide such matters: (1) any acquisition by the Corporation or any person controlled by the Corporation of any business or assets if the amount involved exceeds $25 million, (2) any sale, lease, exchange or other disposition, pledge or encumbrance of any assets (including any interest or participation in any person) or of all or a part of any business of the Corporation or any person controlled by the Corporation if the amount involved exceeds $25 million, and (3) the incurrence by the Corporation or any person controlled by the Corporation of indebtedness in excess of $50 million in any fiscal year. The Executive Committee shall act by the affirmative vote of a majority of 13 the members of such committee that are present at any duly called meeting of the Executive Committee at which a quorum for the transaction of business is present or by unanimous written consent. The presence of at least fifty percent of the members of the Executive Committee at any duly called meeting will constitute a quorum for the transaction of business at such meeting. Either the Chief Executive Officer or any two members of the Executive Committee may call a meeting of the Executive Committee. The Chief Executive Officer will be the chairman of the Executive Committee. The Executive Committee shall keep minutes of its meetings and shall report promptly after each of its meetings to the Board of Directors so as to keep the Board of Directors sufficiently apprised of the Executive Committee's meetings, actions and activities, and shall be responsible to the Board of Directors for the conduct of the enterprises and affairs entrusted to it. Section 2.11 Other Committees of the Board of Directors. (a) Compensation Committee. There shall be a compensation committee of the Board of Directors. Subject to the limitations of the laws of the State of Delaware and except as otherwise provided in the Certificate or these By-laws, the Compensation Committee will have the power to make all decisions with respect to the compensation and the terms of employment of any executive officer of the Corporation or any of its subsidiaries, or any other officer or employee of the Corporation or any of its subsidiaries, and will have such other powers as may be delegated by the Board to the Compensation Committee thereafter. Notwithstanding the foregoing, unless and until otherwise determined by the Board of Directors, the Compensation Committee's authority to grant stock options, stock appreciation rights, restricted stock awards or other stock based compensation or otherwise to obligate the Corporation to issue any equity security pursuant to a compensation plan or otherwise (collectively, "Compensatory 14 Awards"), shall be limited, on a cumulative basis from the Effective Time, as defined in the Certificate, to an aggregate number of shares of Common Stock equal to the product of the total number of shares of Common Stock outstanding on a fully diluted basis immediately following the Effective Time (the "Fully Diluted Share Number") times two percent (2%) (the "Available Stock Number"). Further, not more than 1% of the Fully Diluted Share Number may be granted, awarded or issued in the aggregate to officers of the Corporation or any person controlled by the Corporation who directly report to the Chief Executive Officer, and any such grant, award or issuance shall reduce the Available Stock Number. If a Compensatory Award that reduced the Available Stock Number thereafter expires unexercised or otherwise terminates without a payment in cash, stock, property or otherwise, the shares of Common Stock subject to the unexercised or terminated portion of such Compensatory Award shall be added back to the Available Stock Number. All numbers of shares calculated in accordance with this paragraph shall be appropriately adjusted on a consistent basis for stock-splits, stock dividends, stock combinations and similar events following the Effective Time. The adoption or amendment of any stock option, stock appreciation rights or other stock incentive plan for the Corporation or any person controlled by the Corporation shall be subject to the approval of the Board of Directors. The Compensation Committee shall act by the affirmative vote of a majority of all of the members of the Compensation Committee or by unanimous written consent. Any member of the Compensation Committee who is an employee of the Corporation or its subsidiaries will not be present during the deliberations with respect to, and shall abstain from and not be present during any vote on, matters related to such employee's own compensation or Compensatory Awards. The Compensation Committee shall keep minutes of its meetings and shall report to the 15 Board of Directors promptly after each of its meetings so as to keep the Board of Directors sufficiently apprised of the Compensation Committee's meetings, actions and activities. (b) Audit Committee. There shall be an audit committee of the Board of Directors. Subject to the limitations of the laws of the State of Delaware and except as otherwise provided in the Certificate or these By-laws, the Audit Committee will have all powers normally accorded to the audit committee of a U.S. public company. The Audit Committee shall act by the affirmative vote of a majority of all members of the Audit Committee or by unanimous written consent. The Audit Committee shall keep minutes of its meetings, shall report to the Board of Directors promptly after each of its meetings so as to keep the Board of Directors sufficiently apprised of the Audit Committee's meetings, actions, and activities, and shall be responsible to the Board of Directors for the conduct of the matters entrusted to it. (c) Other Committees. The Board of Directors may by resolution establish other committees in addition to the Executive Committee, Compensation Committee and Audit Committee, and shall specify with particularity the powers and duties of any such committee. Subject to the limitations of the laws of the State of Delaware and, except as provided in the Certificate or these By-laws, any such committee shall exercise all powers and authority specifically granted to it by the Board of Directors. Such committees shall serve at the pleasure of the Board of Directors; keep minutes of their meetings; and have such names as the Board of Directors by resolution may determine and shall be responsible to the Board of Directors for the conduct of the enterprises and affairs entrusted to them. The Board of Directors at any time may remove, with or without cause, any members of any such other committee and may, with or without cause, disband any such other committee. Section 2.12 Committees Generally. 16 Subject to any requirements of these By-laws, each committee that may be established by the Board of Directors pursuant to these By-laws will consist of members appointed by the Board of Directors and may fix its own rules and procedures. Notice of meetings of committees, other than of regular meetings provided for by such rules, shall be given to committee members at least one business day (and not less than 24 hours in advance of the scheduled time of the meeting) prior to any such meeting to be held at any office of the Corporation located in the continental United States. Longer notice periods shall be provided for meetings at other locations. Section 2.13 Directors' Compensation. Directors shall receive such compensation for attendance at any meetings of the Board and any expenses incidental to the performance of their duties, as the Board of Directors shall determine by resolution. Such compensation may be in addition to any compensation received by the members of the Board of Directors in any other capacity. Section 2.14 Action Without Meeting. Nothing contained in these By-laws shall be deemed to restrict the power of members of the Board of Directors or any committee designated by the Board to take any action required or permitted to be taken by them without a meeting. Section 2.15 Telephone Meetings. Nothing contained in these By-laws shall be deemed to restrict the power of members of the Board of Directors, or any committee designated by the Board of Directors, to participate in a meeting of the Board of Directors, or committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. 17 ARTICLE III OFFICERS Section 3.1 Executive Officers. The officers of the Corporation shall be a Chief Executive Officer, a President and Chief Operating Officer, a Chief Financial Officer, a General Counsel, who may be an Executive Vice President, one or more Vice Presidents, and a Secretary, each of whom shall be elected by the Board of Directors, and such other officers, including a Treasurer and a Controller, as may from time to time be determined by the Board of Directors and elected or appointed by the Board of Directors. A person may hold more than one of the foregoing offices. Subject to Section 3.3, each officer shall hold office until the first meeting of the Board of Directors following the next annual meeting of stockholders following their respective election. Section 3.2 Powers and Duties of Officers. The officers of the Corporation shall have the authority and shall exercise the powers and perform the duties specified below, and as may be determined from time to time by the Board of Directors or specified in these By-laws (and in all cases where the duties of any officer are not prescribed by the By-laws or the Board of Directors, such officer shall follow the orders and instructions of the Chief Executive Officer), except that in any event each officer shall exercise such powers and perform such duties as may be required by law: (a) Chief Executive Officer. The Chief Executive Officer shall, subject to the direction and supervision of the Board of Directors, (i) have general and active control of the Corporation's affairs and business and general supervision of its officers, agents and employees; (ii) preside at all meetings of the stockholders and the Board of Directors; (iii) see that all orders and resolutions of the Board of Directors are carried into effect; and (iv) 18 perform all other duties incident to the office of Chief Executive Officer and as from time to time may be assigned to the Chief Executive Officer by the Board of Directors. Unless otherwise authorized and directed by the Board of Directors or provided in these By-laws, only the Chief Executive Officer or his or her designee shall execute on behalf of the Corporation all material contracts which implement policies established by the Board of Directors. (b) President and Chief Operating Officer. The President and Chief Operating Officer shall, subject to the direction and supervision of the Board of Directors and the Chief Executive Officer, perform all duties incident to the office of President and Chief Operating Officer as from time to time may be assigned to him or her by the Board of Directors or the Chief Executive Officer. At the request of the Chief Executive Officer or, in the event of his disability, legal incapacity or refusal to act, at the request of the Board of Directors, the President and Chief Operating Officer shall perform the duties of the Chief Executive Officer in his capacity as an officer of the Corporation, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chief Executive Officer in his capacity as an officer of the Corporation. The President and Chief Operating Officer shall report to the Chief Executive Officer of the Corporation. (c) Executive Vice President; General Counsel. The Executive Vice President and General Counsel shall be responsible for the legal affairs of the Corporation and shall have such additional powers and perform such additional duties as may be assigned to him or her by the Chief Executive Officer or by the Board of Directors. (d) Vice President. The Vice President, if any (or if there is more than one, then each Vice President), shall assist the Chief Executive Officer and the Presidents and Chief Operating Officers and shall perform such duties as may be assigned to the Vice President 19 by the Chief Executive Officer or by the Board of Directors. Assistant vice presidents, if any, shall have the powers and perform the duties as may be assigned to them by the Chief Executive Officer or by the Board of Directors. (e) Chief Financial Officer; Treasurer. The Chief Financial Officer or, in the absence of a Chief Financial Officer, the Treasurer shall: (i) be the principal financial officer of the Corporation and have the care and custody of all funds, securities, evidences of indebtedness and other personal property of the Corporation and deposit the same in accordance with the instructions of the Board of Directors; (ii) unless assigned to the Controller, receive and give receipts and acquittance for moneys paid in on account of the Corporation, and pay out of the funds on hand all bills, payrolls and other debts of the Corporation of whatever nature upon maturity; (iii) unless there is a Controller, be the principal accounting officer of the Corporation and as such prescribe and maintain the methods and systems of accounting to be followed, keep complete books and records of account, prepare and file all local, state and federal tax returns, prescribe and maintain an adequate system of internal audit and prepare and furnish to the Chief Executive Officer, the Audit Committee and the Board of Directors statements of account showing the financial position of the Corporation and the results of its operations; (iv) upon request of the Board of Directors or the Audit Committee, make such reports to it as may be required at any time; and (v) perform all other duties incident to such office and such other duties as from time to time may be assigned to the Chief Financial Officer by the Board of Directors or the Chief Executive Officer. The Chief Financial Officer and the Treasurer shall report to the Chief Executive Officer. Assistant treasurers, if any, shall have the same powers and duties, subject to the supervision of the Chief Financial Officer or Treasurer. If there is no Chief 20 Financial Officer or Treasurer, these duties shall be performed by the Secretary or the Chief Executive Officer or other person appointed by the Board of Directors. (f) Secretary. The Secretary shall: (i) keep the minutes of the proceedings of the stockholders, the Board of Directors and any committees of the Board of Directors, which shall at all reasonable times be open to the examination of any director; (ii) see that all notices are duly given in accordance with the provisions of these By-laws or as required by law; (iii) be custodian of the corporate records, which shall at all reasonable times be open to the examination of any director, and of the seal of the Corporation; (iv) keep at the Corporation's registered office or principal place of business a record containing the names and addresses of all stockholders and the number and class of shares held by each, unless such a record shall be kept at the office of the Corporation's transfer agent or registrar; (v) have general charge of the stock books of the Corporation, unless the Corporation has a transfer agent; and (vi) in general, perform all other duties incident to the office of Secretary, including certifying the record of proceedings of the meetings of the stockholders or of the Board of Directors or resolutions adopted at such meetings, signing or attesting certificates, statements or reports required to be filed with governmental bodies or officials, signing acknowledgments of instruments, and performing such other duties as from time to time may be assigned to the Secretary by the Board of Directors, the Chief Executive Officer or the President and Chief Operating Officer. The Secretary shall report to the Chief Executive Officer. Assistant secretaries, if any, shall have the same duties and powers, subject to supervision by the Secretary. (g) Surety Bonds. The Board of Directors may require any officer or agent of the Corporation to execute to the Corporation a bond in such sums and with such sureties as shall be satisfactory to the Board of Directors, conditioned upon the faithful 21 performance of his duties and for the restoration to the Corporation of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation. (h) Budget. At the regular meeting of the Board of Directors, occurring during the third calendar quarter in any calendar year, the Chief Executive Officer shall present to the Board of Directors for its approval a draft budget for the Corporation's ensuing fiscal year. The budget shall contain information customarily included for corporations having a size and type of business similar to that of the Corporation (the "Draft Budget"). If the Draft Budget is approved by the Board of Directors, then the Draft Budget shall be the budget for the Corporations' next succeeding fiscal year (the "Budget"). If the Draft Budget is not so approved by the Board of Directors, then the Draft Budget shall be amended by the Chief Executive Officer to reflect any changes requested by the Board of Directors and shall be presented, together with all such amendments, to the Board of Directors for its approval at the last regular meeting of the Board of Directors in such calendar year. Upon the approval by the Board of Directors of such amended Draft Budget, such budget shall be the Budget. Section 3.3 Resignations; Removals. (a) Any officer of the Corporation may resign at any time, subject to any rights or obligations under any then existing contracts between such officer and the Corporation, by giving written notice or notice by electronic transmission to the Board of Directors, the Chief Executive Officer or the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein or, if the time be not specified therein, then upon receipt thereof. The acceptance of such resignation shall not be necessary to make it effective unless otherwise stated therein. 22 (b) The Board of Directors, at any time, may remove with or without cause from office or terminate the employment of any officer, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. (c) Any vacancy in the office of any officer through death, resignation, removal, disqualification, or other cause may be filled at any time by the Board of Directors. Section 3.4 Proxies. Unless otherwise provided in the Certificate or directed by the Board of Directors, the Chief Executive Officer, or his or her designee, shall have full power and authority on behalf of the Corporation to attend and to vote upon all matters and resolutions at any meeting of stockholders of any corporation in which this Corporation may hold stock, and may exercise on behalf of this Corporation any and all of the rights and powers incident to the ownership of such stock at any such meeting, whether regular or special, and at all adjournments thereof, and shall have power and authority to execute and deliver proxies and consents on behalf of this Corporation in connection with the exercise by this Corporation of the rights and powers incident to the ownership of such stock, with full power of substitution or revocation. ARTICLE IV CAPITAL STOCK Section 4.1 Stock Certificates. Each stockholder of the Corporation shall be entitled to a certificate certifying the class and number of shares represented thereby and in such form, not inconsistent with the law of the State of Delaware or the Certificate, as the Board of Directors may from time to time prescribe. 23 The certificates of stock shall be signed by the President or Vice President and by the Secretary or Assistant Secretary or Treasurer or Assistant Treasurer. Any such signature may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any certificate shall have ceased to be such before the certificate is issued, it may be issued by the Corporation with the same effect as if such officer, transfer agent or registrar had not ceased to be such at the time of its issue. Section 4.2 Transfer of Shares. (a) Shares of the capital stock of the Corporation may be transferred on the books of the Corporation only by the holder of such shares or by his duly authorized attorney, upon the surrender to the Corporation or its transfer agent of the certificate representing such stock properly endorsed. (b) The person in whose name shares of stock stand on the books of the Corporation shall be deemed by the Corporation to be the owner thereof for all purposes, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. Section 4.3 Lost Certificates. The Board of Directors or any transfer agent of the Corporation may direct a new certificate or certificates representing stock of the Corporation to be issued in place of any certificate or certificates theretofore issued by the Corporation, alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors (or any transfer agent of the Corporation authorized to do so by a resolution 24 of the Board of Directors) may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as the Board of Directors (or any transfer agent so authorized) shall direct to indemnify the Corporation against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of such new certificates, and such requirement may be general or confined to specific instances. Section 4.4 Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and one or more registrars and may require all certificates for shares to bear the manual or facsimile signature or signatures of any of them. Section 4.5 Regulations. The Board of Directors shall have power and authority to make all such rules and regulations as it may deem expedient concerning the issue, transfer, registration, cancellation, and replacement of certificates representing stock of the Corporation. ARTICLE V GENERAL PROVISIONS Section 5.1 Offices. The Corporation shall maintain a registered office in the State of Delaware as required by law. The Corporation may also have offices in such other places, either within or without the State of Delaware, as the Board of Directors may from time to time designate or as the business of the Corporation may require. Section 5.2 Corporate Seal. 25 The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization, and the words "Corporate Seal" and "Delaware". Section 5.3 Fiscal Year. The fiscal year of the Corporation shall end on December 31 of each calendar year. Section 5.4 Notices and Waivers Thereof. Whenever any notice whatever is required by law, the Certificate or these By-laws to be given to any stockholder, director or officer, such notice, except as otherwise provided by law, may be given personally, or, in the case of stockholders, by mail, or, in the case of directors or officers, by telegram, cable or electronic transmission, addressed to such address as appears on the books of the Corporation. Whenever any notice is required to be given by law, the Certificate, or these By-laws, a written waiver thereof, signed by the person entitled to such notice, or by a waiver by electronic transmission, whether before or after the meeting or the time stated therein, shall be deemed equivalent in all respects to such notice to the full extent permitted by law. Section 5.5 Amendments. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors, by action taken by the affirmative vote of not less than nine of the twelve members of the Board of Directors then authorized, is hereby expressly authorized and empowered to adopt, amend or repeal any provision of the By-laws of this Corporation. Subject to the rights of the holders of any class or series of preferred stock, these By-laws may be adopted, amended or repealed by the affirmative vote of the holders of not less 26 than 66-2/3% of the total voting power of the Voting Securities of the Corporation entitled to vote thereon; provided, however, that this paragraph shall not apply to, and no vote of the stockholders of the Corporation shall be required to authorize, the adoption, amendment or repeal of any provision of the By-laws by the Board of Directors in accordance with the preceding paragraph. 27 EX-10.1 4 dex101.txt UMBRELLA AGREEMENT, DATED NOVEMBER 7, 2002 Exhibit 10.1 Execution Copy UMBRELLA AGREEMENT This UMBRELLA AGREEMENT (this "Agreement") is entered into on November 7, 2002, by and among The News Corporation Limited, a South Australia, Australia corporation ("News Corp."), Henry C. Yuen ("Yuen"), Elsie Ma Leung ("Leung," and, collectively with News Corp. and Yuen, the "Proponents") and Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"). WITNESSETH: WHEREAS, the Proponents have presented to the Board of Directors of the Company (the "Board") as a joint proposal, a comprehensive plan to restructure the management of the Company and Gemstar Development Corporation, a California corporation ("GDC") (the "Restructuring"); WHEREAS, the Restructuring includes: (a) the termination of Yuen's existing employment arrangements with the Company and GDC pursuant to the terms of a Termination Agreement among the Company, GDC and Yuen executed as of the date hereof (including the equity awards to be granted thereunder, the "Yuen Termination Agreement"); (b) the termination of Leung's existing employment arrangements with the Company and GDC pursuant to the terms of a Termination Agreement among the Company, GDC and Leung executed as of the date hereof (including the equity awards to be granted thereunder, the "Leung Termination Agreement"); (c) the entry by Yuen into a new Employment Agreement with the Company executed as of the date hereof (including the equity awards to be granted thereunder, the "New Yuen Employment Agreement"); (d) the entry by Leung into a new Employment Agreement with the Company executed as of the date hereof (including the equity awards to be granted thereunder, the "New Leung Employment Agreement"); (e) the entry by News Corp., Yuen and the Company into Amendment No. 1 to the Stockholders' Agreement executed as of the date hereof (the "Stockholders' Agreement Amendment" and collectively, with the Stockholders' Agreement dated as of October 4, 1999, the "Stockholders' Agreement"); (f) the entry by Yuen and the Company into a patent rights agreement executed as of the date hereof (the "Patent Rights Agreement" and, together with the Yuen Termination Agreement, the Leung Termination Agreement, the New Yuen Employment Agreement, the New Leung Employment Agreement and the Stockholders' Agreement Amendment, the "Restructuring Agreements"); and (g) the amendment and restatement of the Company's bylaws as of the date hereof (the "Bylaw Amendment"); WHEREAS, the Board has approved the Restructuring, the Restructuring Agreements and the Bylaw Amendment; and WHEREAS, the parties desire to enter into this Agreement to provide for certain additional agreements among themselves subject to the consummation of the Restructuring; NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree that, subject to the execution of the Restructuring Agreements, the following agreements and covenants immediately shall become effective and binding among them: 1. Public Announcements and Press Releases. The Company, News Corp., Yuen and Leung shall each have the right to review and approve, such approval not to be unreasonably withheld or delayed, any press release or other public announcement made by any party more or less contemporaneously with the execution of the Restructuring Agreements and Bylaw Amendment and relating to the matters addressed by this Agreement. 2. [Reserved] 3. Letter to Yuen. At or immediately following the effectiveness of this Agreement, News Corp. shall deliver to Yuen a letter in the form previously provided to Yuen. 4. Non-Disparagement. (a) News Corp., on behalf of itself and its Subsidiaries, will direct its and their respective directors and executive officers to not publicly disparage, denigrate or ridicule Yuen or Leung, in respect of their integrity or business practices, performance, skills, acumen, experience or success, or concerning Yuen or Leung personally; provided, however, that nothing in this Section 4(a) shall prohibit News Corp., any of its Subsidiaries or any director or executive officer of News Corp. or any of its Subsidiaries from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. News Corp. shall only be responsible for, and bear any and all liability, for, any breach of this Section 4(a) by any director or executive officer of News Corp. or its Subsidiaries, if such breach is knowingly and willfully committed by any such director or executive officer in connection with such director's or executive officer's duties to News Corp. or its Subsidiaries and involves a material public disparagement of Yuen or Leung. (b) Yuen will not publicly disparage, denigrate or ridicule News Corp., any of its Subsidiaries or its or any of their respective directors or executive officers in respect of their integrity or business practices, performance, skills, acumen, experience or success or concerning any directors or executive officers personally; provided, however, that nothing in this Section 4(b) shall prohibit Yuen from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. Yuen shall only be responsible for, and bear any and all liability, for, any breach of this Section 4(b) if such breach is knowingly and willfully committed and involves a material public disparagement of News Corp., any of its Subsidiaries or its or any of their respective directors or executive officers. (c) Leung will not publicly disparage, denigrate or ridicule News Corp., any of its Subsidiaries or its or any of their respective directors or executive officers in respect of their integrity or business practices, performance, skills, acumen, experience or success or concerning any directors or executive officers personally; provided, however, that nothing in this Section 4(c) shall prohibit Leung from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. Leung shall only be responsible for, and bear any and all liability, for, any breach of this Section 4(c) if such breach is knowingly and willfully 2 committed and involves a material public disparagement of News Corp., any of its Subsidiaries or its or any of their respective directors or executive officers. (d) Notwithstanding the foregoing, the Proponents shall not be entitled to terminate, rescind, repudiate or seek judicial invalidation of this Agreement or any other Restructuring Agreement as a remedy for any breach or alleged breach of this Section 4. 5. SIP Amendment. The Proponents agree to vote all shares of Common Stock, par value $.01 per share, of the Company beneficially owned by it, her or him for the approval of the SIP Amendment (as defined in the New Yuen Employment Agreement and the New Leung Employment Agreement) at the annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable following the date hereof. 6. Mutual Releases. (a) Yuen, on behalf of himself and his heirs, executors, administrators, successors and assigns, hereby knowingly, voluntarily and irrevocably releases and discharges News Corp. and each of its Subsidiaries (other than the Company and its Subsidiaries) (the News Corp. Subsidiaries released by this Section 6(a) are referred to below as the "News Subsidiaries"), current and former officers, employees, agents, directors, legal representatives, attorneys and any successor or assign or predecessor of any of the foregoing, from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the date of this Agreement based upon any matter, cause or thing whatsoever related to or arising out of (i) the Stockholders' Agreement (or any other agreement or arrangement between Yuen and any such released person arising out of or related to the subject matter of the Stockholders' Agreement (other than the Stockholders' Agreement Amendment)), (ii) Yuen's employment with the Company, GDC or any other Subsidiary of the Company or of any predecessor entity through the date of this Agreement, (iii) Yuen's service as a director of the Company, GDC or any other Subsidiary of the Company or of any predecessor entity through the date of this Agreement, (iv) the termination of certain of Yuen's positions with the Company, GDC or any other Subsidiary of the Company or of any predecessor entity in connection with the Restructuring or (v) the events leading to the execution of, or the execution of, any of the Restructuring Agreements; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims Yuen may have under this Agreement, or the Stockholders' Agreement Amendment, or that arise from, or that are based on, events that occur after the date of this Agreement. (b) Leung, on behalf of herself and her heirs, executors, administrators, successors and assigns, hereby knowingly, voluntarily and irrevocably releases and discharges News Corp. and the News Subsidiaries and any and all of their respective current and former officers, employees, agents, directors, legal representatives, attorneys and any successor or assign or predecessor of any of the foregoing, from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the date of this Agreement based upon any matter, cause or thing whatsoever related to or arising out of (i) Leung's employment with the Company, GDC or any other Subsidiary of the Company or of any predecessor entity through the date of this Agreement, (ii) her service as a director of the Company, GDC or any other Subsidiary of the Company or of any 3 predecessor entity through the date of this Agreement, (iii) the termination of certain of her positions with the Company, GDC or any other Subsidiary of the Company or of any predecessor entity in connection with the Restructuring or (iv) the events leading to the execution of, or the execution of, any of the Restructuring Agreements; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims Leung may have under this Agreement, or that arise from, or that are based on, events that occur after the date of this Agreement. (c) News Corp., on behalf of itself and each of the News Subsidiaries, and any successor or assign or predecessor of any of the foregoing, hereby knowingly, voluntarily and irrevocably releases and discharges Yuen and Leung, each of their respective estates, legal representatives, agents, attorneys, heirs, executors, successors and assigns, from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the date of this Agreement based upon any matter, cause or thing whatsoever related to or arising out of (i) the Stockholders' Agreement (or any other agreement or arrangement between News Corp. and Yuen arising out of or related to the subject matter of the Stockholders' Agreement (other than the Stockholders' Agreement Amendment)), (ii) Yuen's and Leung's employment with the Company, GDC or any other Subsidiary of the Company or of any predecessor entity through the date of this Agreement, (iii) Yuen's and Leung's service as directors of the Company, GDC or any other Subsidiary of the Company or of any predecessor entity through the date of this Agreement, (iv) the termination of certain of Yuen's and Leung's positions with the Company, GDC or any other Subsidiary of the Company or of any predecessor entity in connection with the Restructuring or (v) the events leading to the execution of, or the execution of, any of the Restructuring Agreements; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims News Corp. may have under this Agreement, under the Stockholders' Agreement Amendment or that arise from, or that are based on, events that occur after the date of this Agreement. 7. Waiver. The Proponents expressly waive and relinquish all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and do so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, the parties expressly acknowledge that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims which either party does not know or suspect to exist in such party's favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. 4 The parties acknowledge and agree that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 8. Covenant Not to Sue. Each of the Proponents represents and covenants that such party has not filed any complaints, charges or lawsuits, nor commenced any arbitration or similar proceedings, against any other Proponent with respect to any claim or potential claim released hereunder, and covenants that such party will not do so at any time hereafter, it being understood that this Section 8 shall not prohibit any party from commencing appropriate proceedings for the purpose of enforcing any claims not released hereunder. Nothing in this Agreement shall in any way be construed as an admission by any party that it or any affiliated entity has acted wrongfully or that any party in fact has any rights whatsoever against any other party. 9. Resolutions of Disputes. In the event of any dispute, controversy, claim or disagreement between or among the parties hereto with respect to any alleged breach of this Agreement, the interpretation of this Agreement, or the rights or obligations of any party under this Agreement, the parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a solution satisfactory to both parties. If they do not resolve the dispute, controversy, claim or disagreement within a period of 30 days, or such longer period as they may mutually agree, then such dispute, controversy, claim or disagreement shall be resolved pursuant to confidential binding arbitration in New York, New York by a panel of three neutral arbitrators. The arbitration shall be conducted in accordance with the Commercial Rules of the American Arbitration Association then in effect. Within 15 days after the initiation of arbitration, the parties shall select three neutral arbitrators, all of whom shall be members of a state bar actively engaged in the practice of law for at least 10 years. Either party may seek interim or preliminary relief from the arbitrators until an arbitration award is rendered or the controversy is otherwise resolved. Either party also may, prior to the establishment of the arbitral tribunal, and without waiving any remedy under this Agreement, seek interim or provisional relief that is necessary to protect the rights or property of that party. The arbitration award shall be made as promptly as practicable and in any event within nine months of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment; provided, however, that this time limit may be extended by agreement of the parties or by the arbitrators if necessary. The award of the arbitrators shall be in writing, shall be signed by a majority of the arbitrators, and shall include findings of fact and the reasons for the disposition of each claim. In the award, the arbitrators shall allocate all of the costs of the arbitration, including the fees of the arbitrators and the reasonable attorneys' fees of the prevailing party, against the non-prevailing party. This Section 9 shall not be construed to limit either party's right to obtain equitable relief with respect to any dispute and, pending a final arbitration by the arbitrators with respect to any such disputes, either party shall be entitled to obtain any such relief by direct application to state, federal or other applicable court, without being required to first arbitrate such dispute. Except as may required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to the party or the arbitrator, neither the parties nor the arbitrators may disclose the existence, content or results of any arbitration hereunder without the prior written consent of all of the parties. Judgment on the award may be entered in any court having jurisdiction thereof. 5 10. Representations and Warranties. News Corp. and the Company, severally and not jointly, each hereby represents and warrants on behalf of itself to the other parties that this Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. Yuen hereby represents and warrants to News Corp. and the Company that (i) he has all necessary legal capacity to enter into this Agreement and each of the Restructuring Agreements to which he is a party, (ii) Yuen has duly executed and delivered this Agreement, (iii) this Agreement and, upon the execution and delivery of each of the Restructuring Agreements to which he is a party, each such Restructuring Agreement will constitute the legal, valid and binding obligation of Yuen, enforceable against him in accordance with its terms. Leung hereby represents and warrants to News Corp. and the Company that (x) she has all necessary legal capacity to enter into this Agreement and each of the Restructuring Agreements to which she is a party, (y) Leung has duly executed and delivered this Agreement and (z) this Agreement and, upon the execution and delivery of each of the Restructuring Agreements to which she is a party, each such Restructuring Agreement will constitute the legal, valid and binding obligation of Leung, enforceable against her in accordance with its terms. 11. Indemnification and Change in Control. In the event (i) a transaction described in Section 280G(b)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the "Code"), occurs after the date of this Agreement (excluding transactions specifically directed by this Agreement) with respect to the Company, and (ii) the transaction is a result of affirmative actions taken by News Corp. or affiliates of News Corp. (excluding acts by affiliates of News Corp. on the Company's Board taken to fulfill their fiduciary duties to the Company) after the date of this Agreement (excluding acts specifically directed by this Agreement), News Corp. shall indemnify the Company and hold the Company harmless for (a) gross up Code Section 4999 payments made by the Company to Yuen (pursuant to Section 2(c) of the Yuen Termination Agreement and Section 4(i) of the New Yuen Employment Agreement) or Leung (pursuant to Section 2(d) of the Leung Termination Agreement and Section 4(i) of the New Leung Employment Agreement), (b) any Tax Cost, with respect to any payments made to Yuen or Leung, incurred by the Company as a result of Code Section 280G, and (c) any other losses, claims, liabilities, judgments, fines, penalties, costs and expenses incurred as a result of the application of Section 280G of the Code to Yuen, Leung or the Company. For purposes of this Section 11, the term "Tax Cost" shall mean, for any year, any increase of the liability for taxes, either through the increase of a tax liability or the reduction of a tax loss, deduction or credit, which increase is actually realized and would not have been realized but for the application of Code Section 280G. Payments by News Corp. pursuant to this Section 11 shall be increased to account for the amount of any Tax Cost incurred by the Company arising from receipt of such payments (grossed up for such increase). 12. Miscellaneous. (a) Notices. Any notice or other communication provided for in this Agreement shall be in writing and sent, 6 (i) If to News Corp., to it at: c/o News America Incorporated 1211 Avenue of the Americas New York, New York 10036 Attention: Arthur M. Siskind Senior Executive Vice President and Group General Counsel Telephone: (212) 852-7007 Facsimile: (212) 768-2029 with a copy to: Hogan & Hartson L.L.P. 551 Fifth Avenue New York, New York 10176 Attention: Ira S. Sheinfeld Telephone: (212) 661-6500 Facsimile: (212) 697-6686 (ii) if to Yuen or Leung, to his or her attention at: 135 North Los Robles Avenue Suite 800 Pasadena, California 91101 Telephone: (626) 792-5700 Facsimile: (626) 792-2462 with a copy to: Riordan & McKinzie 600 Anton Boulevard, Suite 1800 Costa Mesa, California 92626 Attention: James W. Loss Telephone: (714) 433-2626 Facsimile: (714) 549-3244 (iii) if to the Company, to it at: Suite 800 135 North Los Robles Ave. Pasadena, California 91101 Attention: General Counsel Telephone: (818) 792-5700 Facsimile: (818) 792-4051 7 with a copy to: O'Melveny & Myers LLP 610 Newport Center Drive 17th Floor Newport Beach, CA 92660 Attention: David Krinsky Telephone: (949) 760-9600 Facsimile: (949) 823-6994 or at such other address as such party may from time to time in writing designate to the other parties. Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section 12(a) and an appropriate answerback is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address. (b) Certain Defined Terms. As used in this Agreement, the following terms have the respective meanings set forth below: (i) "person" means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity, including a governmental body. (ii) "Subsidiary" means with respect to any person (the "Parent"), any corporation or other person of which securities or other interests having the power to elect a majority of that corporation's or other person's board of directors or similar governing body, or otherwise having the power to direct the business and policies of that corporation or other person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred), are held by the Parent or one or more of its Subsidiaries. (c) Entire Agreement; Amendments. This Agreement and the Restructuring Agreements contain the entire agreement of the parties relating to the subject matter hereof and thereof and supersede any prior agreements, undertakings, commitments and practices relating to the subject matter hereof and thereof. No amendment or modification of the terms of this Agreement shall be valid unless made in writing and signed by each party. (d) Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right. (e) Choice of Law. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in 8 accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. (f) Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law. (g) Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (h) Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. (i) Successors and Assigns. No rights or obligation of any party under this Agreement may be assigned or transferred without the prior written consent of each other party to this Agreement, except that the respective rights or obligations of News Corp. or the Company may be assigned or transferred pursuant to a merger or consolidation in which News Corp. or the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the business and assets of News Corp. or the Company, provided that the assignee or transferee is the successor to all or substantially all of the business and assets of News Corp. or the Company and assumes the liabilities, obligations and duties of News Corp. or the Company under this Agreement, either contractually or as a matter of law. In the event of any disposition of its business and assets described in the preceding sentence, News Corp. or the Company shall take whatever action it can in order to cause such assignee or transferee expressly to assume the liabilities, obligations and duties of the selling party hereunder. To the extent applicable, this Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, beneficiaries, devisees, heirs, next of kin, executors and administrators of Yuen and Leung. In the event of the death of Yuen or Leung or a judicial determination of his or her incompetence, references in this Agreement to Yuen or Leung, as the case may be, shall be deemed to refer, where appropriate, to his or her legal representative, or, where appropriate, to his or her beneficiary or beneficiaries. (j) Facsimile Signatures. This Agreement may be executed by delivery of a facsimile copy of an executed signature page with the same force and effect as the delivery of an originally executed signature page. In the event any party delivers a facsimile copy of a signature page to any document or agreement, such party shall deliver an originally executed signature page within three (3) business days of delivering such facsimile signature page or at any time thereafter upon request; provided, however, that the failure to deliver any such originally executed signature page shall not affect the validity of the signature page delivered by facsimile, which has and shall continue to have the same force and effect as the originally executed signature page. 9 (k) Representation by Counsel; Interpretation. Each party hereto acknowledges that he, she or it has been represented by counsel in connection with this Agreement and the matters contemplated by this Agreement. Accordingly, any rule of law, including but not limited to Section 1654 of the California Civil Code, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. [The remainder of this page has been intentionally left blank - Signature page follows] 10 [Signature page to Umbrella Agreement] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. THE NEWS CORPORATION LIMITED By: /s/ Lachlan K. Murdoch --------------------------------- Name: Lachlan K. Murdoch ------------------------------- Title: Director ------------------------------ /s/ Henry C. Yuen ------------------------------------ HENRY C. YUEN /s/ Elsie Ma Leung ------------------------------------ ELSIE MA LEUNG GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: /s/ Jeff Shell --------------------------------- Jeff Shell Co-President EX-10.2 5 dex102.txt TERMINATION AGREEMENT - HENRY C. YUEN Exhibit 10.2 REDACTED VERSION Execution Copy TERMINATION AGREEMENT *** Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by an asterisk and has been filed separately in accordance with the Securities and Exchange act of 1934, as amended, and the Commission's rules and regulations promulgated under the Freedom of Information Act, pursuant to a request for confidential treatment. *** This TERMINATION AGREEMENT (this "Agreement") is entered into on November 7, 2002 (the "Effective Date") by and between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), Gemstar Development Corporation, a California corporation ("GDC"), and Henry C. Yuen ("Employee"). WITNESSETH: WHEREAS, the Company (as successor in interest to Gemstar International Group Limited, a British Virgin Islands corporation), Employee and GDC are parties to that certain Amended and Restated Employment Agreement dated as of January 7, 1998, as amended (the "Current Employment Agreement"), pursuant to which Employee is currently employed as Chief Executive Officer and Chairman of the Board of the Company and as President and Chief Executive Officer of GDC; and WHEREAS, the Company, GDC and Employee have agreed that Employee will (i) relinquish the titles of Chief Executive Officer of the Company and the titles of President and Chief Executive Officer of GDC, (ii) terminate the Current Employment Agreement on the terms and conditions set forth herein, including providing for the mutual releases set forth herein, and (iii) enter into a new employment agreement with the Company (the "New Employment Agreement") pursuant to which Employee will serve as the non-executive Chairman of the Board of the Company and as head of a business unit of the Company focused on developing new international markets ("Gemstar International"). NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows: 1. Resignations and Termination of Current Employment Agreement. Subject to the payment by the Company of the amounts required to be paid to Employee on the Effective Date as provided in Section 2 hereof and the performance by the Company of its other obligations to be performed on the Effective Date as provided herein, (a) Employee hereby resigns, effective as of the Effective Date, (i) as Chief Executive Officer of the Company, (ii) as President and Chief Executive Officer of GDC, (iii) from each and every office that he may hold with any direct or indirect Subsidiary (as such term is defined below), (iv) as a member of the Board of Directors of any Subsidiary of which he may be a director, including without limitation, the Board of Directors of GDC, (v) as a member of any committee of the Board of Directors of the Company and any Subsidiary of which he may be a member, (vi) as a trustee or member of any committee in connection with any employee benefit or compensation plan, fund or program, of the Company or any Subsidiary of which he may be a trustee or committee member and (vii) from any and all other titles, capacities, or functions with the Company, GDC and their respective Subsidiaries and affiliates other than as a member of the Board of Directors of the Company and as the head of "Gemstar International" (as defined in and as contemplated by the New Employment Agreement) and (b) as of the Effective Date, the Current Employment Agreement shall terminate in its entirety and shall be of no further force or effect. As used in this Agreement, the term "Subsidiary" means any corporation, limited liability company, partnership, business trust, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity of which securities (or other interests) having the power to elect a majority of that entity's board of directors or similar governing body, or otherwise having the power to direct the business and policies of that entity (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Company or one or more of its Subsidiaries. 2. Payments and Other Benefits. (a) The Company shall pay to Employee by wire transfer on the Effective Date, subject in each case to any required tax and similar withholdings, (i) a termination fee of $22,452,640 and (ii) $7,030,778 (in full and complete settlement for all unpaid salary, bonuses and unused vacation days due under the Current Employment Agreement or otherwise). (b) In addition to the foregoing, and notwithstanding any other provision of this Agreement, the Company shall reimburse Employee pursuant to Sections 3(e), 3(g), 5, and 7 of the Current Employment Agreement for any amounts due and owing (or required to be reimbursed) under such Sections through the Effective Date, such reimbursement to be made in accordance with the terms of such Sections; provided, however, that no request for reimbursement pursuant to Section 3(e), 3(g) or 5 of the Current Employment Agreement shall be permitted after the Effective Date with respect to any expense incurred prior to January 1, 2002; and provided further, that any and all requests for reimbursement pursuant to Section 3(e), 3(g) or 5 of the Current Employment Agreement must be submitted by Employee no later than thirty (30) business days after the Effective Date; and provided further, that no request for reimbursement shall be permitted after the Effective Date for any expenses described in clause (A) of the second sentence of Section 3(e) of the Current Employment Agreement, it being understood that all such expenses are to be reimbursed pursuant to, and subject to the limitations set forth in, Section 4 of this Agreement. (c) Employee and the Company acknowledge that, pursuant to the Current Employment Agreement, the Company entered into split dollar life insurance agreements with the trustee of a trust of which Employee is a trustor pursuant to which the Company is required to pay all of the premiums with respect to, and otherwise to maintain in full force and effect, one or more life insurance policies on the life of Employee, which policies provide, in the aggregate, death benefits minus the aggregate of all premiums paid by the Company, of at least $20,000,000 (the "Existing Split Dollar Life Insurance Arrangements"). Employee and the Company further acknowledge that uncertainty exists as to the continued permissibility of the Existing Split Dollar Life Insurance Arrangements because of the Sarbanes-Oxley Act of 2002, and any rules or regulations arising thereunder, as it may be amended from time to time (the "Sarbanes- 2 Oxley Act"). Pending resolution of that uncertainty, as provided below, the premiums required to maintain the Existing Split Dollar Life Insurance Arrangements shall be paid out of the cash value of the policies, and if the cash value of a particular policy shall be insufficient to pay the premium on that policy, such premium may be paid out of the cash value of any other policy. In no event shall the Company have any obligation to pay any amount under the policies (with respect to premiums or otherwise) regardless of whether the result is that the policy will lapse on account of non-payment of the premium. The permissibility of the Existing Split Dollar Life Insurance Arrangements under the Sarbanes-Oxley Act shall be deemed resolved when the Board of Directors of the Company determines that governing Federal authority has specifically resolved the issue. If it is determined by the Board of Directors of the Company that the Existing Split Dollar Life Insurance Arrangements are permissible, the Company shall resume paying the premiums with respect to policies still in force, and the Existing Split Dollar Life Insurance Arrangements shall continue with respect thereto, including the Company's obligations to reimburse Employee with respect to certain tax costs. If it is determined by the Board of Directors of the Company that the Existing Split Dollar Life Insurance Arrangements are not permissible: (i) the Existing Split Dollar Life Insurance Arrangements shall be deemed to be terminated; (ii) the Company shall not be obligated to pay any additional premiums or other amounts with respect to the Existing Split Dollar Life Insurance Arrangements; (iii) the Company shall be entitled to receive the premiums that it has paid on the policies; and (iv) Employee shall be entitled to receive the remaining interest in the policies, if any. (d) To the extent that any Payment (as such term is defined in Schedule II to the Current Employment Agreement) made on or prior to the Effective Date is or was determined (as provided in the following sentence) to be subject to the Excise Tax (as such term is defined in Schedule II to the Current Employment Agreement) imposed by Section 4999 (as such term is defined in Schedule II to the Current Employment Agreement), Employee shall be entitled to the benefits and protections set forth in Schedule II of the Current Employment Agreement, which is incorporated herein by this reference to the same extent as if set forth in this Agreement in its entirety. Notwithstanding any provision in Schedule II to the Current Employment Agreement to the contrary, the determination that any Payment made on or prior to the Effective Date is or was subject to the Excise Tax shall be established only by a final determination by the Internal Revenue Service ("IRS") that such Payment is or was subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), and that such Payment was actually made by the Employee. Further, Employee agrees to provide written notice of such IRS determination (and other IRS actions related hereto) to the Company within ten (10) days of receipt, and the Company, in its discretion, may challenge such IRS determination. If the Company determines to challenge such IRS determination, Employee agrees to provide full cooperation with the Company in order to effectuate such challenge. 3. Current Stock Options and other Equity Awards. (a) On the Effective Date, Employee will surrender to the Company for cancellation and without any additional consideration all options to purchase shares of the Company's Common Stock ("Common Shares") that were granted to Employee by the Company (or its predecessor) at any time from and after May 31, 1998 (collectively, the "Cancelled Stock Options"). The Company and Employee agree that, prior to such cancellation, the Cancelled Stock Options represent the right to acquire, subject to the terms and conditions thereof, an 3 aggregate of seventeen million fifty-five thousand four hundred thirteen (17,055,413) Common Shares. (b) As of the Effective Date, and without any further action required on the part of the Company or Employee, all stock options held by Employee as of the Effective Date other than the Cancelled Stock Options shall immediately vest in full and shall become fully exercisable for their full term. (c) Subject to receiving the requisite stockholder approval, the Company shall cause the Company's 1994 Stock Incentive Plan (the "SIP") to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit A. The Company will schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable following the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. On the date of the Stockholder Meeting or as soon as reasonably practicable thereafter, the Company shall either issue restricted stock or grant Stock Units (as such term is defined under the SIP) to Employee as follows (the date of such issuance or grant is referred to herein as the "Share Grant Date"): (i) if the SIP Amendment is approved by the requisite vote of the Company stockholders at the Stockholder Meeting, the Company shall issue five million two hundred seventy-four thousand five hundred and nineteen (5,274,519) shares of restricted stock under the SIP to the Employee in accordance with the terms and conditions set forth in the Termination Restricted Stock Agreement attached hereto as Exhibit B, such shares to be issued in certificates of such denominations as Employee may request; or (ii) If the SIP Amendment is not approved by the requisite vote of the Company stockholders at the Stockholder Meeting, the Company shall grant to Employee under the SIP (i) five million two hundred seventy-four thousand five hundred and nineteen (5,274,519) Stock Units and (ii) Dividend Equivalent Rights (as such term is defined under the SIP) representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to five million two hundred seventy-four thousand five hundred and nineteen (5,274,519) shares of the Company's Common Stock, in each case in accordance with the terms and conditions set forth in the Termination Stock Unit Agreement attached hereto as Exhibit C. The Company represents and warrants that, as of the date hereof, there are sufficient Common Shares available under the SIP to permit either of the grants described in (i) or (ii) above. Additionally, the Company represents and warrants that, as of the Share Grant 4 Date, there will be sufficient Common Shares available under the SIP to permit either of the grants described in (i) or (ii) above. (d) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted in Section 3(c)(i) above for which Employee makes a valid election within 30 days after the Share Grant Date under Section 83(b) of the Code (the "83(b) Shares"), the Company shall pay Employee, within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal income tax rate for state ordinary income applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date). The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(d) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to the Section 83(b) election above prior to paying the 83(b) Payment, the 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as 5 provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the 83(b) Payment is made to Employee. If the 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the 83(b) Payment would have been made (if not for the deduction of the prior sentence). (e) If the SIP Amendment is not approved by the Company stockholders, the Company shall pay Employee, on each Stock Unit vesting date, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholdings) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is the number of Stock Units that vest on the applicable Stock Unit vesting date pursuant to the Termination Stock Unit Agreement attached hereto as Exhibit C; Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal income tax rate for state ordinary income applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(e) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(e) are accelerated due to Employee's employment terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New 6 Employment Agreement, such payments shall be contingent on Employee (or, if deceased, his estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit D. (f) The number and type of shares set forth above with respect to any restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Sections 3(d) and 3(e), shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. (g) Notwithstanding any provision herein or in the Termination Restricted Stock Agreement, Termination Stock Unit Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of the New Employment Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined in the New Employment Agreement) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) material breach by Employee of Section 12 of this Agreement, (ii) breach by Employee of any representation or warranty contained in Section 15 of this Agreement, or (iii) material breach by Employee of Sections 6, 8, 10(h) or 10(i) of the New Employment Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in his capacity as a Company Board member, he shall not vote on such a determination nor shall he vote on any Company Board determination that a Breach Event (as such term is defined in Elsie Leung's termination agreement with the Company of even date hereof) has occurred with respect to Elsie Leung. Any disputes related to this Section 3(g) shall be resolved pursuant to Section 10(f) of the New Employment Agreement. (h) Subject to Section 3(g) above, if Employee's employment under the New Employment Agreement terminates under Sections 4(a), 4(b), 4(d) or 4(f) thereof prior to the granting of any Equity Awards required to be granted hereunder, such Equity Awards not yet 7 granted shall be granted to the Employee as provided in Section 3(c) and shall be immediately vested in full upon grant. (i) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall govern. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (j) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the granting of such Equity Award, to the extent required by applicable law, shall be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (k) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. 4. Expenses. The Company shall reimburse Employee for (or pay directly at Employee's request) any and all fees, costs and other expenses incurred in connection with the events leading to and the negotiation of this Agreement (and the termination of the Current Employment Agreement as provided herein), the New Employment Agreement, that certain Amendment No. 1 to the Stockholders' Agreement of even date herewith by and among the Company, Employee and a stockholder of the Company (the "Stockholders' Agreement Amendment") (which amends the Stockholders' Agreement among the Company, Employee and certain stockholders of the Company dated October 4, 1999), or that certain Patent Rights Agreement of even date herewith between Employee and the Company (the "Patent Rights Agreement") or any other agreement referred to herein or therein; provided, however, that in no event shall the aggregate amount paid by the Company pursuant to this Section 4, plus the amount paid pursuant to Section 4 of that certain Termination Agreement between the Company and Elsie Ma Leung, exceed $1,000,000, it being understood that any amount not paid as a result of such limitation shall be allocated between Employee and Ms. Leung in proportion to their respective requests for reimbursement. 5. Public Announcements and Press Releases. Employee shall have the right to review and approve, such approval not to be unreasonably withheld or delayed, any press release or other public announcement made by the Company or any Subsidiary more or less contemporaneously with the execution hereof and relating to the matters addressed by this Agreement; provided, however, that the press release in the form of Exhibit E attached to this Agreement is hereby approved for joint public release by each of the parties to this Agreement. 6. Non-Disparagement. 8 (a) The Company will direct its directors and executive officers to not publicly disparage, denigrate or ridicule Employee in respect of Employee's integrity or business practices, performance, skills, acumen, experience or success, or concerning Employee personally; provided, however, that nothing in this Section 6(a) shall prohibit the Company or any director or executive officer of the Company from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. The Company shall only be responsible for, and bear any and all liability, for, any breach of this Section 6(a) by any of its directors or executive officers (other than Elsie Ma Leung), if such breach is knowingly and willfully committed by any such director or executive officer in connection with such director's or executive officer's duties to the Company and involves a material public disparagement of Employee. (b) Employee will not publicly disparage, denigrate or ridicule the Company or its directors or executive officers in respect of their integrity or business practices, performance, skills, acumen, experience or success or concerning any directors or executive officers personally; provided, however, that nothing in this Section 6(b) shall prohibit Employee from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. Employee shall only be responsible for, and bear any and all liability, for, any breach of this Section 6(b) if such breach is knowingly and willfully committed and involves a material public disparagement of the Company or its directors or executive officers. (c) Notwithstanding the foregoing, Employee shall not be entitled to terminate, rescind, repudiate or seek judicial invalidation of this Agreement or any other agreement with the Company as a remedy for any breach or alleged breach of Section 6(a); provided, however, that, Employee shall be entitled to the remedy specified in Section 4(f) of the New Employment Agreement. 7. Mutual Releases. (a) Employee, on behalf of himself and his heirs, executors, administrators, successors and assigns, hereby knowingly, voluntarily and irrevocably releases and discharges the Company and each Subsidiary, and any and all of their respective current and former officers, employees, agents, directors, legal representatives, attorneys and any successor or assign or predecessor of any of the foregoing, from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the Effective Date based upon any matter, cause or thing whatsoever related to or arising out of (1) Employee's employment with the Company, GDC or any other Subsidiary or any predecessor entity prior to the Effective Date, (2) Employee's service as a director of the Company, GDC or any other Subsidiary or any predecessor entity through the Effective Date, (3) any such released person's service to the Company, GDC or any other Subsidiary or any predecessor entity through the Effective Date, (4) the termination of certain of Employee's positions with the Company, GDC or any other Subsidiary or any predecessor entity as of or prior to the Effective Date as contemplated by this Agreement, (5) the events leading to the execution of, or the execution of, any of the Restructuring Agreements (as such term is defined in the Umbrella Agreement (as defined below)), or (6) except for 9 agreements and arrangements specified in the proviso to this sentence, any agreement or arrangement between Employee and any of the Company, GDC or any other Subsidiary or predecessor entity; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims Employee may have (i) under this Agreement (or any Equity Award issued pursuant hereto), (ii) under the New Employment Agreement (or any equity award issued pursuant thereto), (iii) under the Stockholders' Agreement Amendment, (iv) under the Patent Rights Agreement, (v) under that certain Umbrella Agreement of even date herewith among Employee, Elsie Ma Leung and The News Corporation Limited (the "Umbrella Agreement"), (vi) under the Company's, GDC's or any other Subsidiary's Certificate of Incorporation or Bylaws (or similar organizational documents), as such exist as of the date hereof, (vii) under any applicable insurance policy, (viii) for contribution as permitted by law in the event of entry of judgment against Employee as a result of any act or failure to act for which Employee and any other person are jointly liable, (ix) that arise from, or that are based on, events that occur after the Effective Date, (x) under any stock option, deferred compensation or other similar compensation plan, program, agreement or arrangement, or (xi) under any pension, retirement or welfare benefit plan, program, agreement or arrangement, all of which rights shall be preserved. (b) Except as set forth herein, the Company and GDC, on behalf of themselves and each other Subsidiary, and any successor or assign of any of the foregoing, hereby knowingly, voluntarily and irrevocably release and discharge Employee, his family, estate, legal representatives, agents, attorneys, heirs, executors, successors and assigns, and any entity controlled by Employee from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the Effective Date based upon any matter, cause or thing whatsoever related to or arising out of (1) Employee's employment with the Company, GDC or any other Subsidiary or any predecessor entity prior to the Effective Date, (2) Employee's service as a director of the Company, GDC or any other Subsidiary or any predecessor entity through the Effective Date, (3) the termination of certain of Employee's positions with the Company, GDC or any other Subsidiary or any predecessor entity as of or prior to the Effective Date as contemplated by this Agreement, (4) the events leading to the execution of, or the execution of, any of the Restructuring Agreements, or (5) except for agreements and arrangements specified in the proviso to this sentence, any agreement or arrangement between Employee and any of the Company, GDC or any other Subsidiary or predecessor entity; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims the Company, GDC or any Subsidiary may have (i) under this Agreement (or any Equity Award issued pursuant hereto), (ii) under the New Employment Agreement (or any equity award issued pursuant thereto), (iii) under the Stockholders' Agreement Amendment, (iv) under the Patent Rights Agreement, (v) under the Umbrella Agreement, (vi) for contribution as permitted by law in the event of entry of judgment against the Company, GDC or any other Subsidiary as a result of any act or failure to act for which the Company or any such Subsidiary and any other person are jointly liable, or (vii) that arise from, or that are based on, events that occur after the Effective Date, all of which rights shall be preserved. Nothing in this Agreement shall be construed to release or discharge any rights or claims the Company has or may have against Employee arising under the Sarbanes-Oxley Act. 8. Waiver. 10 The parties expressly waive and relinquish all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and do so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, the parties expressly acknowledge that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims which either party does not know or suspect to exist in such party's favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. The parties acknowledge and agree that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 9. Covenant Not to Sue. Each party represents and covenants that such party has not filed any complaints, charges or lawsuits, nor commenced any arbitration or similar proceedings, against any other party with respect to any claim or potential claim released hereunder, and covenants that such party will not do so at any time hereafter, it being understood that this Section 9 shall not prohibit any party from commencing appropriate proceedings for the purpose of enforcing any claims not released hereunder. Nothing in this Agreement shall in any way be construed as an admission by any party that it or any affiliated entity has acted wrongfully or that any party in fact has any rights whatsoever against any other party. 10. Indemnification. (a) To the maximum extent permitted by applicable law, the Company and GDC shall, and shall cause each other Subsidiary to, indemnify Employee, defend Employee and hold Employee harmless from and against any and all: (i) claims, liabilities, injuries, judgments, fines, interest, legal expenses, penalties, costs and expenses (including, without limitation, attorneys' fees, costs of investigation and experts, and court reporter fees), settlements and other amounts incurred or suffered by Employee in connection with or relating to the defense or resolution of any threatened, pending or completed action, suit, proceeding or investigation (and in connection with any appeal with respect thereto), whether civil or criminal, administrative or investigative (including, without limitation, actions, suits, proceedings and investigations brought by or in the name of the Company or related person or entity or stockholder), or otherwise ("Expenses"), arising by reason of Employee's status, action or inaction, including, without limitation, actual or alleged errors or omissions, as an officer, director, employee, agent or stockholder of the Company, 11 GDC, any other Subsidiary or any other affiliate of the Company prior to the Effective Date, so long as (A) Employee's conduct was in good faith, (B) Employee reasonably believed such conduct to be in or not opposed to the best interests of the Company, and (C) Employee's conduct was not in violation of the representations and warranties set forth in Section 15 below; or (ii) legal expenses and costs (including, without limitation, attorneys' fees, costs of investigation and experts and court reporter fees) and other amounts incurred or suffered by Employee in connection with or relating to the defense or resolution of any threatened, pending or completed action, suit, proceeding or investigation (and in connection with any appeal with respect thereto), whether civil or criminal, administrative or investigative (including, without limitation, actions, suits, proceedings and investigations (a) brought by or in the name of the Company or related person or entity or stockholder or (b) pursuant to the Sarbanes-Oxley Act), or otherwise, arising as a result of the execution of this Agreement (or any equity award issued pursuant hereto) or the execution of the New Employment Agreement (or any equity award issued pursuant thereto), the Stockholders' Agreement Amendment and the Patent Rights Agreement. (b) To the maximum extent permitted by applicable law, the Company shall promptly advance to Employee any and all expenses actually incurred by Employee in defending any and all actions, suits, proceedings or investigations or in preparing to defend any threatened action, suit, proceeding or investigation, in each case for which Employee is indemnified by the Company pursuant to Section 10(a). The advances to be made hereunder shall be paid by the Company to Employee within ten (10) days following delivery of a written request for payment therefor by Employee to the Company. Employee shall have a right to select attorneys to defend him in any actual or threatened action, suit, proceeding or investigation, subject to the Company's approval, which shall not be unreasonably withheld. Without limiting the generality of the foregoing, in (i) the class action lawsuits pending against Employee, the Company and others as of the Effective Date, (ii) any future stockholder lawsuits are brought naming Employee as a defendant, and (iii) any investigation, inquiry or request for information, formal or informal, by the Securities and Exchange Commission or any other governmental entity or any self-regulatory organization, including without limitation, NASD, the Company shall, to the extent (1) permitted by applicable law and (2) Employee is indemnified by the Company pursuant to Section 10(a), directly pay or cause a Subsidiary to pay (rather than advance to Employee or reimburse Employee for) all expenses, including the fees and expenses of separate counsel for Employee, regardless of whether counsel for the Company or for any other party has agreed or offered to, or is in fact, representing Employee in such lawsuit. (c) [Reserved] (d) The Company shall maintain a directors' and officers' liability insurance policy (or policies) providing coverage until the later of (x) the sixth anniversary of the date on which Employee ceases to be a director or employee of the Company and (y) the date on which all claims against Employee that would otherwise be covered by such policy (or policies) become fully time-barred, providing coverage to Employee that is no less favorable to him in any respect (including, without limitation, with respect to scope, exclusions, amounts, and deductibles) than 12 the coverage then being provided to any other present or former senior executive or director of the Company. (e) The indemnification, defense and hold harmless provided pursuant to this Section 10 shall continue even after Employee has ceased to be an officer, director, employee, agent or stockholder of the Company, and the rights and benefits thereof shall inure to the benefit of Employee's heirs, executors and administrators. Employee shall not be responsible for reimbursement of any expenses paid, reimbursed or advanced pursuant to this Section 10 except to the extent required by applicable law. (f) The parties acknowledge that, in addition to the rights provided in this Section 10, Employee has certain indemnification, defense and hold harmless rights as well as certain rights to be reimbursed for, or have the Company or a Subsidiary advance or pay, certain costs and expenses under other agreements and instruments, including, without limitation, the Certificates of Incorporation and Bylaws (or similar organizational documents) of the Company and certain of its Subsidiaries, the New Employment Agreement, the Stockholders' Agreement Amendment and the Patent Rights Agreement. Such rights are intended to be cumulative and the existence of any such right shall not limit or restrict in any way any other such right, and Employee shall have the right to pursue his rights of indemnification, defense, and hold harmless or seek reimbursement for, or advances or payment of, costs and expenses under any or all of such agreements and instruments and shall be entitled to the maximum benefits provided under such agreements and instruments. (g) Notwithstanding any other provision, this Section 10 shall not apply to disputes between Employee and the Company with respect to any alleged breach of, or seeking an interpretation of, or a determination of the rights or obligations of either party under, this Agreement, the New Employment Agreement, the Patent Rights Agreement or the Umbrella Agreement, which shall be resolved (i) as provided in Section 13 in the case of this Agreement and (ii) by the terms of such agreement, in the case of the New Employment Agreement, the Patent Rights Agreement and the Umbrella Agreement. 11. Wire Transfers; No Offset. All payments to be made to Employee hereunder shall be made by wire transfer in accordance with such wire transfer instructions as Employee may provide to the Company (or if Employee has not provided wire transfer instructions to the Company prior to the date any payment is due, by corporate check). The Company may not make any offset against amounts due to Employee under this Agreement, on account of any claim the Company may have against him. 12. Inventions and Patents. (a) As used in this Section 12, the following terms have the meanings indicated: (i) "Assigned Intellectual Property" means, collectively, all Developed Inventions and all Developed Intellectual Property other than Employee Intellectual Property. 13 (ii) "Developed Inventions" means all inventions (whether or not patentable) and all embodiments of such inventions, developments, concepts, know-how, technology, ideas, methods, techniques, products or processes, which Employee solely or jointly made, conceived of or reduced to practice (as those terms have been interpreted by the Federal Courts in connection with the Patent Act (35 U.S.C. Sections 101 et. seq.)) prior to the Effective Date and any works of authorship that Employee authored prior to the Effective Date. (iii) "Developed Intellectual Property" means (x) all patents or patent applications or other proprietary rights arising from any Developed Inventions, (y) any other proprietary or intellectual property rights with respect to which Employee is an inventor, creator or author prior to the Effective Date, and (z) all other proprietary or intellectual property rights owned or controlled as of the Effective Date by Employee directly or indirectly through an entity owned or controlled by Employee. (iv) "Employee Intellectual Property" means, collectively, the Developed Inventions and the Developed Intellectual Property that Employee (x) specifically identifies by patent number, patent application serial number or other information sufficient to uniquely identify the intellectual property right on Schedule B hereto or (y) can establish does not relate in whole or in part to the Restricted Fields or other aspects of the Company's business as conducted prior to or as of the Effective Date. (v) "Restricted Fields" means the fields of Interactive Television or Interactive Program Guides (as such terms are defined in the Patent Rights Agreement). (b) The Company and Employee agree that the U.S. and foreign patents, patent applications, and invention disclosures listed on Schedule A hereto are Assigned Intellectual Property. All Assigned Intellectual Property shall belong exclusively to the Company, and, to the extent not previously conveyed and assigned to the Company, Employee agrees to assign, and hereby conveys and assigns to the Company all of Employee's right, title and interest in and to all Assigned Intellectual Property, together with the right to sue for past infringement or misappropriation thereof, including, without limitation, all of Employee's right, title and interest in and to the U.S. and foreign patents, patent applications, and invention disclosures listed in Schedule A attached hereto. The Company shall have the exclusive right to direct and control all future prosecution of any patent or other applications or registrations, domestic and foreign, for protection of any and all Assigned Intellectual Property, including that which is not the subject of an application or registration for intellectual property protection as of the Effective Date. (c) Employee believes that the Developed Inventions and the Developed Intellectual Property listed in Schedule B attached hereto are Employee Intellectual Property. Schedule B shall be supplemented from time to time with such additional Developed Inventions and such additional Developed Intellectual Property as may be identified by Employee from time to time which Employee is able to establish do not relate in whole or in part to the Restricted Fields. Nothing in this Agreement shall be construed as acknowledgment or acquiescence by the Company that any Developed Inventions and Developed Intellectual Property identified in Schedule B are Employee Intellectual Property. Schedule B is not binding on the Company and the Company shall have the right to challenge the inclusion of any Developed Inventions or any 14 Developed Intellectual Property listed therein. Any disputes relating to the contents of Schedule B shall be resolved in accordance with the dispute resolution procedures of Section 14. (d) As soon as practicable after the Effective Date and in any event within thirty days following the Effective Date, Employee shall identify and disclose to the Company any Developed Inventions and any Developed Intellectual Property that have not previously been disclosed to the Company, such written disclosure to be in as much detail as is reasonably necessary to identify such Developed Inventions and Developed Intellectual Property. All such disclosures shall be made solely on a "need to know" basis to such legal and other professional advisors reasonably identified by the Company as may be necessary to determine the proper allocation of Developed Inventions and the Developed Intellectual Property between Assigned Intellectual Property and Employee Intellectual Property, provided such legal and other professional advisors reasonably identified by the Company have first executed a nondisclosure agreement reasonably acceptable to Employee. Employee shall continue to be obligated to disclose to the Company any Developed Inventions and any Developed Intellectual Property even after the expiration of such thirty day period, such follow-up disclosures being provided to the Company as promptly as reasonably possible upon such information being available to Employee. The disclosure to the Company of Developed Inventions and Developed Intellectual Property pursuant to the this Section 12(d) shall be for the sole and exclusive purpose of determining the Company's rights therein, if any, pursuant to this Agreement, and the Company shall not use any such disclosure for any other purpose whatsoever. (e) Employee shall consult with the Company as reasonably necessary to confirm that all Developed Inventions are disclosed to the Company in sufficient detail to enable one of ordinary skill in the art to practice any inventions, developments, concepts, know-how, technology, ideas, methods, techniques, products or processes contained therein. From and after the Effective Date, Employee shall (i) take all actions reasonably requested by the Company and make all further assurances reasonably warranted to confirm that the Company is the exclusive owner of all Assigned Intellectual Property, all at the Company's sole cost and expense, and (ii) shall provide all reasonable assistance in obtaining, perfecting or enforcing the Assigned Intellectual Property or any legal rights in and to the same in any administrative agency or court, domestic or foreign including, but not limited to, reviewing and signing all lawful declarations, oaths, affidavits and other documents in connection with any of the foregoing, all at the Company's sole cost and expense. (f) Employee acknowledges hereby receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Employee) does not apply to an Developed Intellectual Property that qualifies fully under California Labor Code Section 2870. (g) Employee represents and warrants that (i) except for the disclosures to be made as provided in Section 12(d), (x) there are no U.S. or foreign patents, patent applications or invention disclosures included in the Developed Intellectual Property and related to the business of the Company that have not been disclosed to the Company, and (y) to Employee's knowledge, there are no Developed Inventions or other Developed Intellectual Property material to the business of the Company that have not been disclosed to the Company, (ii) he has not previously conveyed any rights in the Assigned Intellectual Property to any third party, including any 15 ownership rights or rights to use the Assigned Intellectual Property, (iii) there are no agreements to which he or his property are bound that are inconsistent with this Agreement or that would limit his ability to assign the Assigned Intellectual Property to the Company free and clear of any liens or encumbrances of any kind, (iv) the Assigned Intellectual Property is free and clear of any liens or encumbrances (other than liens created by the Company and its subsidiaries) and (v) except as set forth in Schedule A or Schedule B, all U.S. and foreign patents, patent applications and invention disclosures included in the Developed Inventions and Developed Intellectual Property have been previously assigned to the Company. 13. Resolutions of Disputes. In the event of any dispute, controversy, claim or disagreement between Employee and the Company with respect to any alleged breach of this Agreement, the interpretation of this Agreement, or the rights or obligations of either party under this Agreement, the parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a solution satisfactory to both parties. If they do not resolve the dispute, controversy, claim or disagreement within a period of 30 days, or such longer period as they may mutually agree, then such dispute, controversy, claim or disagreement shall be resolved pursuant to confidential binding arbitration in New York, New York by a panel of three neutral arbitrators. The arbitration shall be conducted in accordance with the Commercial Rules of the American Arbitration Association then in effect. Within 15 days after the initiation of arbitration, the parties shall select three neutral arbitrators, all of whom shall be members of a state bar actively engaged in the practice of law for at least 10 years. Either party may seek interim or preliminary relief from the arbitrators until an arbitration award is rendered or the controversy is otherwise resolved. Either party also may, prior to the establishment of the arbitral tribunal, and without waiving any remedy under this Agreement, seek interim or provisional relief that is necessary to protect the rights or property of that party. The arbitration award shall be made as promptly as practicable and in any event within nine months of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment; provided, however, that this time limit may be extended by agreement of the parties or by the arbitrators if necessary. The award of the arbitrators shall be in writing, shall be signed by a majority of the arbitrators, and shall include findings of fact and the reasons for the disposition of each claim. In the award, the arbitrators shall allocate all of the costs of the arbitration, including the fees of the arbitrators and the reasonable attorneys' fees of the prevailing party, against the non-prevailing party. This Section 13 shall not be construed to limit either party's right to obtain equitable relief with respect to any dispute and, pending a final arbitration by the arbitrators with respect to any such disputes, either party shall be entitled to obtain any such relief by direct application to state, federal or other applicable court, without being required to first arbitrate such dispute. Except as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to the party or arbitrator, neither the parties nor the arbitrators may disclose the existence, content or results of any arbitration hereunder without the prior written consent of all of the parties. Judgment on the award may be entered in any court having jurisdiction thereof. In connection with any dispute as to whether any Developed Invention or any Developed Intellectual Property is Employee Intellectual Property or Assigned Intellectual Property, as such terms are defined in Section 12, discovery shall be on an expedited basis, the 16 decision of the arbitration panel shall be final and there shall be no right of appeal or right to petition to vacate such award. 14. [Reserved] 15. Employee Representation and Warranties. Employee represents and warrants that: (a) Since January 1, 2002, to the best of Employee's knowledge and belief and except as set forth in Exhibit 1 attached hereto: (i) each material form, report and document filed by the Company with the Securities and Exchange Commission (the "SEC") (together with the amendments and supplements to such filings filed prior to the date of this Agreement, the "Company SEC Documents"), as of its filing date (or if amended, as of the date of its last amendment) complied as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be; (ii) no Company SEC Document filed pursuant to the Securities Act, as of the date such document or amendment became effective (or if amended or supplemented, as of the date of its last amendment or supplement), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (iii) no Company SEC Document filed pursuant to the Exchange Act, as of its filing date (or if amended, as of the date of its last amendment), contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (iv) each of the consolidated balance sheets and consolidated financial statements (including the notes thereto) included in the Company SEC Documents (collectively, the "Company Financial Statements"): (A) presented fairly, in all material respects, the financial position of the Company as of the respective dates thereof; (B) presented fairly, in all material respects, the results of operations and cash flows of the Company for the respective periods set forth therein; (C) complied in all material respects with the then applicable accounting requirements and the published rules and regulations of the SEC with respect thereto; and (D) were prepared in conformity with accounting principles generally accepted in the United States applied on a consistent basis during the periods or as of the respective dates involved (except as otherwise noted therein and subject, in the case of unaudited interim financial statements, to normal year-end adjustments). In making the foregoing representations and warranties, Employee has also relied, in part, to the extent reasonable, upon information provided to Employee by other directors, 17 officers, employees, and agents of the Company and advice provided by attorneys and other professional advisors to the Company. (b) To the best of Employee's knowledge and belief, the information that Employee provided to the Company's Audit Committee and to the Company's Board of Directors in connection with the Audit Committee's investigation of the accounting treatment of the matters set forth and designated in Exhibit 1 as being subject to the Audit committee's investigation was true, complete and accurate in all material respects. (c) Employee has not knowingly violated or participated in, or consented to, any violation of, or directed any employee or agent of the Company to violate or participate in, any violation of any law, governmental regulation, stock exchange requirement, accounting standard (except, in the case of any accounting standard, to the extent of the qualifications to Employee's representations and warranties in subsection (a) above) or Company policy, the violation of which could reasonably be expected to have a material adverse effect upon the Company. (d) Since April 1, 2002, Employee has not received any grant of options from the SIP, or any other arrangement, to purchase Common Shares, other than pursuant to this Agreement or the New Employment Agreement. 16. Miscellaneous. (a) Notices. Any notice or other communication provided for in this Agreement shall be in writing and sent, if to the Company or to GDC, to its office at: Gemstar - TV Guide International, Inc. Suite 800 135 North Los Robles Ave. Pasadena, California 91101 Facsimile: (818) 792-4051 Attention: General Counsel or at such other address as the Company may from time to time in writing designate, and, if to Employee, at such address as Employee may from time to time in writing designate (or Employee's business address of record in the absence of such designation). Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section and an appropriate answerback is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address. (b) Entire Agreement; Amendments. This Agreement, the Stockholders' Agreement Amendment, the Patent Rights Agreement, the Umbrella Agreement, the New Employment Agreement, and the other 18 agreements referred to herein and therein or entered into in connection therewith contain the entire agreement of the parties relating to the subject matter hereof and thereof and supersede any prior agreements, undertakings, commitments and practices relating to Employee's employment (or termination thereof) by the Company, GDC or any Subsidiary or any of their respective affiliates except for any and all other agreements necessary to give effect to the provisions of this Agreement, including, without limitation, stock option agreements, life insurance agreements, and agreements relating to Additional Benefits (as such term is defined in the New Employment Agreement). No amendment or modification of the terms of this Agreement shall be valid unless made in writing and signed by Employee and, on behalf of the Company and GDC, by senior executive officers of the Company and GDC after approval thereof by the respective Board of Directors of the Company and GDC. (c) Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right. (d) Choice of Law. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. (e) Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law. (f) Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (g) Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. (h) Successors and Assigns. 19 No rights or obligations of any party under this Agreement may be assigned or transferred by any party without the prior written consent of the other parties hereto; provided, however, that the Company or GDC may assign or transfer their rights and obligations hereunder in whole, but not in part, pursuant to a merger or consolidation in which the Company or GDC, as the case may be, is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the business and assets of the Company or GDC, as the case may be, provided that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company or GDC and assumes the liabilities, obligations and duties of the Company or GDC, as the case may be, under this Agreement, either contractually or as a matter of law. In the event of any disposition of its business and assets described in the preceding sentence, the Company or GDC shall take whatever action it can in order to cause such assignee or transferee expressly to assume the liabilities, obligations and duties of the selling party hereunder. To the extent applicable, this Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, beneficiaries, devisees, heirs, next of kin, executors and administrators of Employee. In the event of Employee's death or a judicial determination of his incompetence, references in this Agreement to Employee shall be deemed to refer, where appropriate, to his legal representative, or, where appropriate, to his beneficiary or beneficiaries. (i) Facsimile Signatures. This Agreement may be executed by delivery of a facsimile copy of an executed signature page with the same force and effect as the delivery of an originally executed signature page. In the event any party delivers a facsimile copy of a signature page to any document or agreement, such party shall deliver an originally executed signature page within three (3) business days of delivering such facsimile signature page or at any time thereafter upon request; provided, however, that the failure to deliver any such originally executed signature page shall not affect the validity of the signature page delivered by facsimile, which has and shall continue to have the same force and effect as the originally executed signature page. [The remainder of this page has been intentionally left blank - Signature page follows] 20 [SIGNATURE PAGE TO TERMINATION AGREEMENT] IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. GEMSTAR-TV GUIDE INTERNATIONAL, INC. EMPLOYEE By: /s/ Jeff Shell /s/ Henry C. Yuen --------------------------- --------------------- Jeff Shell, Co-President HENRY C. YUEN GEMSTAR DEVELOPMENT CORPORATION By: /s/ Jonathan B. Orlick --------------------------- Jonathan B. Orlick Executive Vice President 21 Exhibit A DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit B GEMSTAR-TV GUIDE INTERNATIONAL, INC. TERMINATION RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of ________, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) five million two hundred seventy four thousand five hundred nineteen (5,274,519) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, five million two hundred seventy four thousand five hundred nineteen (5,274,519) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of himself and on behalf of his beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or his beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of his death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) one million seven hundred fifty eight thousand one hundred seventy three (1,758,173) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) one million seven hundred fifty eight thousand one hundred seventy three (1,758,173) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) one million seven hundred fifty eight thousand one hundred seventy three (1,758,173) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit D of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 6 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 7 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: ------------------------------------- Title: ---------------------------------- EMPLOYEE ---------------------------------------- Henry C. Yuen ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 8 CONSENT OF SPOUSE In consideration of the execution of the foregoing Termination Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ____________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Termination Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ------------------------- Signature of Spouse 9 Exhibit C GEMSTAR-TV GUIDE INTERNATIONAL, INC. TERMINATION STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, _____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) five million two hundred seventy four thousand five hundred nineteen (5,274,519) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to five million two hundred seventy four thousand five hundred nineteen (5,274,519) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, five million two hundred seventy four thousand five hundred nineteen (5,274,519) Stock Units (the "Grant 1 Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) one million seven hundred fifty eight thousand one hundred seventy three (1,758,173) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) one million seven hundred fifty eight thousand one hundred seventy three (1,758,173) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) one million seven hundred fifty eight thousand one hundred seventy three (1,758,173) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit D of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Termination Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, ______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Termination Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ---------------------------- Signature of Spouse 7 Exhibit D SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement . 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement ), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. ss. 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: -------------------------------- Name: -------------------------------- Date: Title: ----------------------- -------------------------------- Date: -------------------------------- -4- REDACTED VERSION EXHIBIT 1 *** *** Confidential treatment has been requested pursuant to Section IV.3 of the request for confidential treatment dated November 12, 2002. SCHEDULE A ASSIGNED INTELLECTUAL PROPERTY 1. Patent Application. TITLE: *** APPLICATION NO *** FILED: *** Foreign Applications: *** 2. Patent Application. TITLE: *** APPLICATION NO *** FILED: *** 3. Patent Application. TITLE: *** APPLICATION NO: *** FILED: *** 4. Patent Application. TITLE: *** APPLICATION NO *** FILED: *** 5. Patent Application. TITLE: *** APPLICATION NO *** FILED: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 1 Schedule A- Assigned Intellectual Property 6. Patent Application. TITLE: *** APPLICATION NO *** FILED: *** 7. Patent Application. TITLE: *** APPLICATION NO *** FILED: *** 8. Patent Application. TITLE: *** APPLICATION NO *** 9. Patent Application. TITLE: *** APPLICATION NO. *** FILED: *** 10. Patent. TITLE: METHOD AND APPARATUS FOR PORTABLE STORAGE AND USE OF DATA TRANSMITTED BY TELEVISION SIGNAL APPLICATION NO.: 08/048,761 FILING DATE: 04/16/1993 STATUS: U.S. Patent No. 5,523,794; Issued on 06/04/1996. 11. Patent. TITLE: APPARATUS AND METHOD FOR TRACKING THE PLAYING OF VCR PROGRAMS APPLICATION NO.: 08/122,794 FILING DATE: 09/16/1993 (CIP of 08/066,666, filed 5/27/93, abandoned 1/2/97) *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 2 Schedule A- Assigned Intellectual Property STATUS: U.S. Patent No. 5,488,409; Issued on 01/30/1996. 12. Patent. TITLE: APPARATUS AND METHODS FOR AVOIDING LOSS OF CLOSED CAPTION DATA WHEN USING EXTENDED DATA SERVICES APPLICATION NO.: 08/265,709 FILING DATE: 06/24/1994 STATUS: U.S. Patent No. 5,543,852; Issued on 08/06/1996. 13. Patent. TITLE: STILL FRAME VIDEO IN INDEX APPLICATION NO.: 08/480,485 FILING DATE: 06/07/1995 STATUS: U.S. Patent No. 5,621,579; Issued on 04/15/1997; Maintenance Due 10/15/04 *** FOREIGN CASES: *** 14. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: **** STATUS: *** FOREIGN CASES: *** 15. Patent Application *** TITLE: *** APPLICATION NO.: *** FILING DATE: *** STATUS: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 3 Schedule A- Assigned Intellectual Property FOREIGN CASES: *** 16. Patent TITLE: ENHANCING OPERATIONS OF VIDEO TAPE CASSETTE PLAYERS APPLICATION NO.: 08/773,612 FILING DATE: 12/30/1996 STATUS: U.S. Patent No. 6,091,884; Issued 7/1/00. FOREIGN CASES: *** 17. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** STATUS: *** 18. Patent TITLE: STILL FRAME VIDEO IN INDEX APPLICATION NO.: 08/839,458 FILING DATE: 04/14/1997 STATUS: U.S. Patent No. 6,240,241; Issued 5/29/01. 19. Patent TITLE: COMBINATION OF VCR INDEX AND EPG APPLICATION NO.: 08/952,530 FILING DATE: 04/24/98 (Based on provisional 60/013371, filed 3/15/96 [I148:29064] and 30480-PCT) STATUS: U.S. Patent No. 6,147,715; Issued 11/14/00; Maintenance fee due 5/14/04 *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 4 Schedule A- Assigned Intellectual Property FOREIGN CASES: *** Issued: AUS, JPN, SIN, MEX 20. Patent Application TITLE: *** APPLICATION NO.:*** FILING DATE: *** STATUS: *** FOREIGN CASES: *** 21. Patent TITLE: SYSTEM AND METHOD FOR GRAZING TELEVISION CHANNELS FROM AN ELECTRONIC PROGRAM GUIDE APPLICATION NO.: 08/952,382 FILING DATE: 11/12/1997 (Based on provisional 60/024598, filed 8/29196 [I148:29636] and 30554-PCT) (Continuation to 36034) STATUS: U.S. Patent No. 6,154,203; Issued 11/28/00 FOREIGN CASES: *** Issued: AUS, SIN 22. Patent TITLE: TELEVISION SYSTEM AND METHOD FOR SUBSCRIPTION OF INFORMATION SERVICE APPLICATION NO.: 08/853,702 FILING DATE: 05/13/1997 (Based on provisional 60/006585, filed 11/13/95 [I148:28600] and 60/024965, filed 8/30/96 [I148:29539] and 29974-PCT) STATUS: U.S. Patent No. 5,995,092; Issued 11/30199 FOREIGN CASES: *** 23. Patent TITLE: TWO-WAY INTERACTIVE TELEVISION SYSTEM INCORPORATING PAGER TRANSMITTER AND RECEIVER FOR CONDUCTING MESSAGING WITH INFORMATION PROVIDER APPLICATION NO.: 08/879,146 *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 5 Schedule A- Assigned Intellectual Property FILING DATE: 06/19/1997 (Based on provisional 60/012146, filed 2/23/96 [I148:28943] and 60/028555, filed 10/15/96 [I148:29677] and 29868-PCT) STATUS: U.S. Patent No. 5,812,931, Issued 09/22/98; Maintenance fee due 03/22/06 FOREIGN CASES: *** 24. Patent TITLE: CORDLESS PHONE BACK LINK FOR INTERACTIVE TELEVISION SYSTEM APPLICATION NO.: 08/914,336 FILING DATE: 07/14/1997 (Based on provisional applications 60/012,303, filed 2/26/96 [I148:28987], 60/012,968, filed 3/7/96 [I148:29034] and 60/027,671, filed 10/7/96 [I148:29835] and 29678-PCT) STATUS: U.S. Patent No. 5,898,919; Issued 4/27/99; Maintenance fee due 10/27/02 FOREIGN CASES: *** 25. Patent TITLE: METHOD OF ADDING TITLES TO A DIRECTORY OF TELEVISION PROGRAMS RECORDED ON VIDEO TAPE APPLICATION NO.: 08/916,618 FILING DATE: 08/22/1997 (Based on provisional application 60/025218, filed 8/23/96 [I148:29619]) STATUS: U.S. Patent No. 6,125,231; Issued 9/26/00; Maintenance fee due 3/26/04 FOREIGN CASES: *** 26. Patent TITLE: METHOD AND APPARATUS FOR TRANSMITTING AND DOWNLOADING SETUP APPLICATION NO.: 08/913,145 FILING DATE: 03/09/98 STATUS: U.S. Patent No. 6,252,634; Issued 6/26/01 FOREIGN CASES: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 6 Schedule A- Assigned Intellectual Property 27. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 28. Patent TITLE: SYSTEMS AND METHODS FOR DISPLAYING AND RECORDING CONTROL INTERFACE WITH TELEVISION PROGRAMS, VIDEO, ADVERTISING INFORMATION AND PROGRAM SCHEDULING INFORMATION APPLICATION NO.: 09/120,488 FILING DATE: 7/21/98 (Based on provisional applications 60/053330, filed 7/21/97 [31154], 60/05237, filed 8/12/97 [31273], 60/055,761, filed 8/14/97 [31304], 60/061119, filed 10/6/97 [31534], 60/068,375, filed 12/22/97 [31920], 60/071811, filed 1/20/98 [32568], 60/071812, filed 1/20/98 [32569], 60/071882, filed 1/20/98 [32570] and CIP of US97/23852, filed 12/19/97 [31912-PCT]); PCT published 1/28/99 STATUS: U.S. Patent No. 6,177,931; Issued 1/23/01 FOREIGN CASES: *** 29. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** 30. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 31. Patent Application *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 7 Schedule A- Assigned Intellectual Property TITLE: *** APPLICATION NO.:*** FILING DATE: *** STATUS: *** FOREIGN CASES: *** 32. Patent Application TITLE: *** APPLICATION NO.:*** FILING DATE: *** FOREIGN CASES: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 8 Schedule A- Assigned Intellectual Property 33. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 34. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 35. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 36. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 9 Schedule A- Assigned Intellectual Property 37. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 38. Patent Application TITLE: *** APPLICATION NO: *** FILING DATE: *** FOREIGN CASES: *** 39. Patent Application TITLE: *** APPLICATION NO: *** FILING DATE: *** FOREIGN CASES: *** 40. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 41. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 10 Schedule A- Assigned Intellectual Property FOREIGN CASES: *** 42. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 43. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 44. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES. *** 45. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** F0REIGN CASES: *** 46. Patent Application TITLE: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 11 Schedule A- Assigned Intellectual Property APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 47. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 48. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 49. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 50. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 12 Schedule A- Assigned Intellectual Property 51. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 52. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 53. Patent TITLE: APPARATUS AND METHOD USING COMPRESSED CODES FOR RECORDER PRE-PROGRAMMING APPLICATION NO.: 07/676,934 FILING DATE: 03/27/1991 STATUS: U.S. Patent No. 5,335,079; Issued 08/02/1994 FOREIGN CASES: ***Issued: IND, MAY, NZL, PRC; *** Issued: AUR, AUS, AUS(01), BEL, BRA, CAN, ENG, FRA, GER, HOL, ITA, KOR, LUX, RUS, SPA(01), SIN, SWE, SWI*** 54. Patent TITLE: APPARATUS AND METHOD USING COMPRESSED CODES FOR TELEVISION PROGRAM RECORD SCHEDULING APPLICATION NO.: 07/829,412 FILING DATE: 02/03/1992 STATUS: U.S. Patent No. 5,307,173; Issued 04/26/1994 *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 13 Schedule A- Assigned Intellectual Property FOREIGN CASES: Issued: BEL, CAN, DEN, ENG, FRA, GER, HOL, ITA, MAY, NZL, PHI, PRC, SPA, TAI *** 55. Patent TITLE: SYSTEM AND METHOD FOR AUTOMATICALLY RECORDING TELEVISION PROGRAMS IN TELEVISION SYSTEMS WITH TUNERS EXTERNAL TO VIDEO RECORDERS APPLICATION NO.: 08/072,764 FILING DATE: 06/02/1993 STATUS: U.S. Patent No. 5,515,173; Issued 05/07/1996. FOREIGN CASES: Issued: ENG, FRA, GER, EPO *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 14 Schedule A- Assigned Intellectual Property 56. Patent TITLE: APPARATUS AND METHODS FOR USNG COMPRESSED CODES FOR MONITORING TELEVISION PROGRAM VIEWING APPLICATION NO.: 08/122,146 FILING DATE: 09/16/1993 STATUS: U.S. Patent No. 5,532,732; Issued 07/02/1996 FOREIGN CASES: *** 57. Patent TITLE: APPARATUS AND METHOD USING COMPRESSED CODES FOR RECORDER PREPROGRAMMING APPLICATION NO.: 08/284,371 FILING DATE: 08/01/1994 STATUS: U.S. Patent No. 6,091,882; Issued 07/18/00 FOREIGN CASES: *** 58. Patent TITLE: APPARATUS AND METHODS FOR PROVIDING INITIALIZING SETTINGS FOR AN APPLIANCE APPLICATION NO.: 08/237,506 FILING DATE: 05/03/1994 STATUS: U.S. Patent No. 5,600,711; Issued 02/04/1997 FOREIGN CASES: *** 59. Patent TITLE: REMOTE CONTROLLER FOR CONTROLLING TURNING APPLIANCES ON AND OFF APPLICATION NO.: 08/310,937 FILING DATE: 09/22/1994 STATUS: U.S. Patent No. 5,539,391; Issued 07/23/1996 *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 15 Schedule A- Assigned Intellectual Property 60. Patent TITLE: REMOTE CONTROL MOUNTING STAND APPLICATION NO.: 08/263,771 FILING DATE: 06/22/1994 STATUS: U.S. Patent No. 5,475,382; Issued 12/12/1995 FOREIGN CASES: *** 61. Patent TITLE: BAR CODE MATRIX TELEVISION CALENDAR APPLICATION NO.: 08/279,628 FILING DATE: 07/25/1994 (Continuation of 07/780,639, filed 10/23/91 [G207:23927]) STATUS: U.S. Patent No. 6,137,950; Issued 10/24/00 FOREIGN CASES: ***Issued: PRC, TAI *** 62. Patent TITLE: APPARATUS AND METHODS FOR A TELEVISION ON-SCREEN GUIDE APPLICATION NO.: 08/368,340 FILING DATE: 12/30/1994 STATUS: U.S. Patent No. 5,659,367; Issued 08/19/1997; FOREIGN CASES: *** 63. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** STATUS: *** FOREIGN CASES: *** 64. Patent *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 16 Schedule A- Assigned Intellectual Property TITLE: APPARATUS AND METHOD FOR USING COMPRESSED CODES FOR RECORDER PREPROGRAMMING APPLICATION NO.: 08/404,939 FILING DATE: 03/15/1995 STATUS: U.S. Patent No. 6,049,652; Issued 4/11/00 FOREIGN CASES: *** 65. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** STATUS: *** FOREIGN CASES: *** 66. Patent TITLE: METHOD AND SYSTEM FOR SIMULTANEOUSLY DISPLAYING TELEVISION PROGRAM AND INFORMATION ABOUT THE PROGRAM APPLICATION NO.: 08/475,395 FILING DATE: 06/07/1995 (CIP of 08/424,863, filed 4/17/95, abandoned [I148:27659]) STATUS: U.S. Patent No. 6,239,794; Issued 5/29/01 FOREIGN CASES: *** Issued. BEL, ENG, EPO, FRA, GER, ITA, SPA, TAI *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 17 Schedule A- Assigned Intellectual Property 67. Patent TITLE: SYSTEM AND METHOD FOR AUTOMATICALLY RECORDING TELEVISION PROGRAMS IN TELEVISION SYSTEMS WITH TUNERS EXTERNAL TO VIDEO RECORDERS APPLICATION NO.: 08/647,443 FILING DATE: 05/07/1996 STATUS: U.S. Patent No. 5,987,213; Issued 11/16/99 FOREIGN CASES: *** 68. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 69. Patent TITLE: APPARATUS AND METHOD USING COMPRESSED CODES FOR RECORDER PREPROGRAMMING APPLICATION NO.: 08/679,652 FILING DATE: 07/11/1996 STATUS: U.S. Patent No. 5,673,089; Issued 09/30/97 FOREIGN CASES: *** Issued: EPO, JPN 70. Patent TITLE: APPARATUS AND METHOD FOR IMPROVED PARENTAL CONTROL OF TELEVISION USE APPLICATION NO.: 08/684,678 FILING DATE: 07/19/1996 STATUS: U.S. Patent No. 5,949,471; Issued 9/7/99 FOREIGN CASES: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 18 Schedule A- Assigned Intellectual Property 71. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** 72. Patent TITLE: METHOD AND APPARATUS FOR DISPLAYING TELEVISION PROGRAMS AND RELATED TEXT APPLICATION NO.: 08/728,614 FILING DATE: 10/10/1996 (CIP of 08/475,395, filed 6/7/95 [G207:27971]) STATUS: U.S. Patent 6,028,599; Issued 2/22/00 FOREIGN CASES: *** 73. Patent TITLE: TELEVISION GUIDE READER AND PROGRAMMER APPLICATION NO.: 08/706,132 FILING DATE: 08/30/1996 STATUS: U.S. Patent No. 5,870,150; issued 2/9/99 FOREIGN CASES: *** 74. Patent TITLE: APPARATUS AND METHODS FOR A TELEVISION ON-SCREEN GUIDE APPLICATION NO.: 08/862,199 FILING DATE: 05/23/1997 (CIP of 08/368,340, filed 12/30/94 and issued on 08/19/1997, U.S. Patent 5,659,367 [G207:27114]) STATUS: U.S. Patent No. 6,341,195; Issued 1/22/02 FOREIGN CASES: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 19 Schedule A- Assigned Intellectual Property 75. Patent TITLE: TELEVISION CALENDAR AND METHOD FOR CREATING SAME APPLICATION NO.: 08/834,468 FILING DATE: 04/11/1997 STATUS: U.S. Patent No. 5,970,206; Issued 10/19/99 FOREIGN CASES: *** 76. Patent TITLE: APPARATUS AND METHOD USING COMPRESSED CODES FOR SCHEDULING BROADCAST INFORMATION RECORDING APPLICATION NO.: 08/848,533 FILING DATE: 04/28/1997 (Continuation of 08/327,140, filed 10/20/94 [G207:27338], which is a continuation of 07/806,152, filed 12/11/91 [G207:23285]) STATUS: U.S. Patent No. 5,974,222; Issued 10/26/99; FOREIGN CASES: *** Issued: AUR, BEL, DEN, ENG, EPO, FRA, GER, HOL, ITA, MEX, SIN, SPA, TAI *** 77. Patent TITLE: METHODS FOR CHANNEL SCANNING APPLICATION NO.: 08/889,786 FILING DATE: 07/08/97 STATUS: U.S. Patent No. 5,886,746; Issued 3/23/99; FOREIGN CASES: *** Issued: EPO, JPN 78. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 20 Schedule A- Assigned Intellectual Property FOREIGN CASES: *** 79. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 80. Patent TITLE: SYSTEM FOR IMPROVED PARENTAL CONTROL OF TELEVISION USE APPLICATION NO.: 09/344,634 FILING DATE: 6/25/99 (Cont of 08/684,678, filed 7/19/96 [G207:29493]) STATUS: U.S. Patent No. 6,072,520; Issued 06/06/00; FOREIGN CASES: *** 81. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** STATUS: *** FOREIGN CASES: *** Issued: AUR, BEL, DEN, ENG, EPO, FRA, GER, HOL, ITA, MEX, SIN, SPA, TAI *** 82. Patent TITLE: SYSTEM FOR IMPROVED PARENTAL CONTROL OF TELEVISION USE APPLICATION NO.: 09/558,536 *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 21 Schedule A- Assigned Intellectual Property FILING DATE: 04/26/00 (Cont of 09/344,634, filed 06/25/99 [G207:34873]; Cont of 08/684,678, filed 7/19/96 [G207:29493]) STATUS: U.S. Patent No. 6,321,381; Issued 11/20/01 FOREIGN CASES: *** 83. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 84. Patent Application TITLE: *** APPLICATION NO: *** FILING DATE: *** FOREIGN CASES: *** 85. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 86. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 87. Patent Application TITLE: *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 22 Schedule A- Assigned Intellectual Property APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 88. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 89. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 90. Patent Application TITLE: *** APPLICATION NO. *** FILING DATE: *** FOREIGN CASES: *** 91. Patent Application TITLE: *** APPLICATION NO. *** FILING DATE: *** FOREIGN CASES: *** 92. Patent Application *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 23 Schedule A- Assigned Intellectual Property TITLE: *** APPLICATION NO. *** FILING DATE: *** FOREIGN CASES: *** 93. Patent Application TITLE: *** APPLICATION NO. *** FILING DATE: *** FOREIGN CASES: *** 94. Patent Application TITLE: *** APPLICATION NO. *** FILING DATE: *** FOREIGN CASES: *** 95. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 96. Patent Application TITLE: *** APPLICATION NO.: *** FILING DATE: *** FOREIGN CASES: *** 97. Patent *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 24 Schedule A- Assigned Intellectual Property TITLE: APPARATUS AND METHOD FOR CONTROLLING EDUCATIONAL AND AMUSEMENT USE OF A TELEVISION APPLICATION NO. 540,749 FILING DATE: 10/11/95 STATUS: U.S. Patent No. 5,716,273 issued 02/10/98 FOREIGN CASES; *** *** Confidential treatment has been requested pursuant to Section IV.1 of the request for confidential treatment dated November 12, 2002. 25 SCHEDULE B EMPLOYEE INTELLECTUAL PROPERTY 1. Patent No. 5,903,868, "Audio Recorder With Retroactive Storage," issued May 11, 1999. *** Abstract: *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 1 2. *** Status: *** Abstract: *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 2 3. *** Status: *** Abstract: *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 3 4. *** Status: *** Abstract: *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 4 5. *** Status: *** Abstract: *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 5 6. *** Status: *** Abstract: *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 6 7. *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 7 8. *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 8 9. *** *** Confidential treatment has been requested pursuant to Section IV.2 of the request for confidential treatment dated November 12, 2002. 9 EX-10.3 6 dex103.txt PATENT RIGHTS AGREEMENT - HENRY C. YUEN Exhibit 10.3 REDACTED VERSION Execution Copy PATENT RIGHTS AGREEMENT *** Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by an asterisk and has been filed separately in accordance with the Securities and Exchange Act of 1934, as amended, and the Commission's rules and regulations promulgated under the Freedom of Information Act, pursuant to a request for confidential treatment. *** This Patent Rights Agreement (this "Agreement"), is entered into on November 7, 2002 (the "Effective Date"), by and between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company") and Henry C. Yuen, an individual ("Yuen"). The Company and Yuen may at times be referred to individually as a "Party" or collectively as the "Parties." WITNESSETH: WHEREAS, Yuen and the Company are, concurrently herewith, entering into certain agreements, including without limitation (i) that certain Termination Agreement of even date herewith relating to the termination of Yuen's employment with Company under his current employment agreement (the "Termination Agreement") and (ii) that certain Employment Agreement of even date herewith (the "Employment Agreement"), pursuant to which Yuen, among other things, is agreeing to assign to the Company all right, title and interest in certain inventions as more fully described therein; WHEREAS, Yuen may from time to time after the expiration of the term of the Employment Agreement develop certain Inventions relating to the fields of Interactive Program Guides or Interactive Television (as such terms are defined below); WHEREAS, Yuen recognizes that such Inventions are likely to arise from or relate to confidential information of the Company, developed or learned by Yuen in the course of his prior employment by the Company, and that the nature of such Inventions are global in application; WHEREAS, the Company desires to acquire from Yuen, and Yuen desires to grant to the Company, an option to acquire all right, title and interest in and to such Inventions conceived or made by Yuen, whether individually or jointly, after the Commencement Date and prior to the end of the Term (as such terms are defined below) that relate in whole or in part to the fields of Interactive Program Guides or Interactive Television, in accordance with the terms and conditions set forth herein; and WHEREAS, the Company desires to have Yuen consult with the Company with respect to such Inventions made during the Term of this Agreement, and Yuen is willing to consult with the Company on the terms set forth herein; WHEREAS, Yuen desires to acquire from the Company, and the Company desires to grant to Yuen, a license-back of certain exclusive rights in certain Acquired Inventions (as defined below) in accordance with the terms and conditions set forth herein. WHEREAS, by virtue of Yuen's background and experience, the personal services called for hereunder are special, unique, unusual, extraordinary and intellectual; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows: 1. Definitions. (a) "Disclosure" shall mean a disclosure made pursuant to the provisions of Section 2(a) or 2(f). (b) "Commencement Date" shall mean the earlier of the fifth anniversary of the Effective Date or the day of expiration or earlier termination of the Employment Agreement. (c) "Fee-Bearing Products" shall mean products, services, means, processes or functions within the fields of Interactive Program Guides and Interactive Television. (d) "Interactive Television" shall mean any means, product, system, or process: *** (e) "Interactive Program Guide" shall mean any means, product, system or process *** (f) "Viewer means one who receives, whether at the time of transmission or at a later time, Television Content or Digital Radio Content; an "iTV Viewer" means one who receives, whether at the time of transmission or at a later time, Television Content. (g) "Television Content" means information transmitted in an analog or digital television signal or information transmitted in substantially the same form from a single source to many recipients, irrespective of the means of transmission or the apparatus used to reproduce such content; and "Digital Radio Content" means information concurrently transmitted in substantially the same form from a single source to many recipients as Digital Radio; provided, however, that "transmission" for purposes of these definitions shall not include (x) the distribution of physical media (e.g., CD's, DVD's, video cassettes and other physical media of any type) having copies of audio or video content stored on the physical media; or (y) transmission of information using systems such as telephone-based conferencing systems. For illustrative purposes only, Television Content or Digital Radio Content transmitted via over-the-air broadcast, cable, telephone lines or satellite, or downloaded directly to a recipient for storage on a personal video recorder or recordable CD or DVD, would be included within the scope of these definitions of "Television Content" and "Digital Radio Content," respectively. (h) "Digital Radio" shall mean the communication of an audio signal in digital format by transmission of the signal from a transmitter to a receiver, where the receiver processes the received signal using digital signal processing techniques. *** Confidential treatment has been requested pursuant to Section IV.4 of the request for confidential treatment dated November 12, 2002. 2 (i) "Inventions" shall mean inventions (whether or not patentable) including all embodiments of such inventions, developments, concepts, know-how, technology, ideas, methods, techniques, products or processes. (j) The following principles shall be used to apply the definitions of "Interactive Television" and "Interactive Program Guide": (i) Living Definitions. For the purpose of determining whether an Invention is within or outside of the fields of Interactive Television and Interactive Program Guide, the above definitions are intended to be "living definitions" in that, as used in these definitions, while the term "television" shall mean television in all forms generally known as of the Effective Date, it is intended to include the future evolution of television, taking into account improvements, enhancements and developments therein, and the convergence of television with personal computers and the Internet. (ii) Inventions Intended to Improve, Evolve or Further Develop Interactive Television and/or Interactive Program Guide. An Invention intended to improve, evolve or further develop any means, product, system or process within the definitions of Interactive Television and/or Interactive Program Guide shall be deemed to be included within the fields of Interactive Television and Interactive Program Guide for the purpose of Section 2 of this Agreement, even though at the time of conception of the Invention, the Invention may not fall within the then applicable definitions of Interactive Television and Interactive Program Guide. (iii) Inventions Not Intended to Improve, Evolve or Further Develop Interactive Television and Interactive Program Guide. If an Invention which is not intended to improve, evolve or further develop any means, product, system or process within the definitions of Interactive Television and/or Interactive Program Guide, and which is outside of the fields of Interactive Television and Interactive Program Guide at the time Yuen's obligation to disclose under Section 2 arises, but which later becomes applicable to the fields of Interactive Television and/or Interactive Program Guide after the Commencement Date and during the Term of this Agreement due to the effect of the "Living Definitions" of these terms, then Yuen shall be obligated to disclose and grant to the Company an option to acquire such Invention pursuant to Section 2 hereof. (iv) Definition Conferral Process. On the second anniversary of the Effective Date, and every two (2) years thereafter during the Term, the Parties shall meet and confer in good faith regarding the applicability of the definitions of Interactive Television and Interactive Program Guide to the business of the Company and the evolution of television, and modify such definitions as appropriate in accordance with the intentions of the Parties under the Living Definitions. Any disagreements between the Parties regarding the modifications of such definitions shall be resolved by the arbitration process set forth below. (j) "Inventions" shall mean inventions (whether or not patentable) and all embodiments of such inventions, developments, concepts, know-how, technology, ideas, methods, techniques, products or processes. 3 2. Disclosure and Option. (a) Obligation to Disclose. Yuen shall promptly provide a written disclosure to the Company of any Inventions related in whole or part to the fields of Interactive Program Guides or Interactive Television (as such terms are defined at the time of Yuen's disclosure) that he solely or jointly conceives, makes, or reduces to practice, or with respect to which he acquires ownership or control directly or indirectly through an entity owned or controlled by him ("Disclosure") during the period beginning on the Commencement Date and ending upon expiration of the Term. The disclosure required hereunder shall contain a reasonably detailed and complete written description of all Inventions then known to Yuen relating to the subject matter of the Disclosure, in as much detail as Yuen can reasonably provide. The provision to the Company of Disclosures as required herein shall be for the sole purpose of determining the Company's rights hereunder as set forth in this Section 2. Yuen's disclosure obligations pursuant to this Section 2(a) shall continue during the Term (and potentially beyond the Term as provided herein), and in the event that an Invention solely or jointly conceived, made or developed by Yuen during the Term does not at the time it is conceived, made or developed relate in whole or in part to the fields of Interactive Program Guides or Interactive Television, but due to the evolution of such fields relates in whole or in part to such fields at a later date, such Invention shall be subject to a disclosure (a "Subsequent Disclosure"), subject to all rights and obligations of the Parties' hereunder at the date of such Subsequent Disclosure, including without limitation the provisions of this Section 2, except as provided herein. (b) Grant of Option. Yuen hereby grants to the Company an exclusive option, exercisable as provided below, to acquire all right, title and interest in and to i) any Disclosure related in whole or in part to the fields of Interactive Program Guides or Interactive Television, and all intellectual property and proprietary rights arising from any Invention disclosed in any such Disclosure; and ii) any improvement to such an Invention disclosed in any Disclosure, to the extent that he solely or jointly conceives, makes, or reduces to practice such improvement during the Term; and iii) any Subsequent Disclosure related in whole or in part to the fields of Interactive Program Guides or Interactive Television (as such definitions exist at such time), and all intellectual property and proprietary rights arising from any Invention disclosed in any such Subsequent Disclosure. (c) Exercise of Option. The Company shall, as promptly as practicable and in no event later than ninety (90) days after receipt of any Disclosure or Subsequent Disclosure, deliver written notice to Yuen of the Company's election to exercise, or its election not to exercise, its option in connection with such Disclosure or Subsequent Disclosure (an "Election Notice"). Any such Inventions acquired by the Company hereunder may be referred to herein from time to time as the "Acquired Inventions." Upon receipt by Yuen of an Election Notice containing an election by the Company not to exercise its option in any Disclosure or any Subsequent Disclosure which is the subject of such Election Notice, or if Yuen does not receive such an Election Notice within 4 the ninety (90) day period described above (in which case the Company shall be deemed to have elected not to exercise its option in connection with such Disclosure or such Subsequent Disclosure), Yuen shall be free to use, exploit and license any and all such Inventions, subject to the provisions of Article 10 hereof. Yuen hereby covenants not to assert any patent rights or other intellectual property rights which arise from any Inventions retained by Yuen by reason of the Company's failure to exercise its option with respect to any such Disclosure or any such Subsequent Disclosure against the Company or its customers or licensees (in their capacities as such), mediate or immediate, for activities within the fields of Interactive Program Guides or Interactive Television. Such covenant shall be permanent, irrevocable, binding on Yuen's successors and assigns, and shall run with the patents, including any extensions thereof, and any other intellectual property rights arising from any such Disclosure or any such Subsequent Disclosure. In the event that the Company, after the provision to Yuen of an Election Notice containing an election by the Company not to exercise its option in the Disclosure which is the subject of such Election Notice, or Yuen's failure to receive an Election Notice for such Disclosure within the ninety (90) day period, later determines that it desires to acquire such rights as may be available in such Disclosure due to the evolution of the fields of Interactive Television and Interactive Program Guides (a "Reclaimed Disclosure"), Company shall provide written notice to Yuen of such desire, and the Parties' rights and obligations set forth herein shall apply with respect to such Disclosure; provided, however, that the assignment by Yuen as set forth in Section 2(d) below shall be subject to any rights conveyed by Yuen in any Inventions described in the Reclaimed Disclosure prior to receipt of the notice, and such Reclaimed Disclosure shall be added to Schedule A hereto. (d) Assignment. Upon Yuen's receipt of the Company's notice that it wishes to exercise its option in a Disclosure, a Subsequent Disclosure or a Reclaimed Disclosure pursuant to Section 2(c), Yuen shall promptly execute an assignment in a form reasonably acceptable to the Company assigning to the Company all right, title and interest in such Disclosure and any Inventions disclosed therein. Yuen shall at all times thereafter (i) take all actions reasonably requested by the Company and make all further assurances reasonably warranted to confirm that the Company is the exclusive owner of all Acquired Inventions, subject to the limitations provided above as to any Reclaimed Disclosures, in each of the foregoing cases all at the Company's sole cost and expense; and, (ii) shall provide all reasonable assistance in obtaining, perfecting and enforcing the Acquired Inventions or any legal rights in and to the same in any administrative agency or court, domestic or foreign including, but not limited to, reviewing and signing all lawful declarations, oaths, affidavits and other documents in connection with any of the foregoing, in each of the foregoing cases all at the Company's sole cost and expense including, without limitation, reasonable compensation for Yuen's time expended in connection with such assistance. (e) Patent Prosecution and Cooperation. The Company shall have the right to file for patent protection in its own name, to the extent allowable by applicable law, for any Inventions acquired by the Company hereunder. The decision to seek patent protection, and prosecution of any patent applications, shall be at the Company's sole expense and control. Yuen shall cooperate at the Company's reasonable request and at the Company's sole cost and 5 expense, in the prosecution of all patent applications, reissues, reexaminations, divisionals, continuations and continuations-in-part relating to such Inventions, including but not limited to reviewing and signing all lawful declarations, oaths, affidavits and other documents in connection with any of the foregoing. The Company shall reimburse Yuen for any reasonable out-of-pocket costs he incurs in providing such cooperation and shall reasonably compensate Yuen for his time expended in connection with such cooperation. (f) Failure to Disclose. If Yuen fails to disclose any Invention related to the fields of Interactive Program Guides or Interactive Television that he solely or jointly conceives or makes during the Term, such failure shall not affect the Company's option to acquire such Invention. Upon discovery that such Invention has not been disclosed to the Company, Yuen shall promptly make a Disclosure as set out in Section 2(a) (a "Late Disclosure") and shall use his reasonable best efforts to avoid prejudice to the Company's rights under the remainder of this Article 2. (g) Third Party Material. If disclosure of any Invention required under this Article 2 would require disclosure of third-party trade secrets or other confidential information that Yuen is legally or contractually prohibited from disclosing to the Company, the parties will negotiate in good faith with each other and, if necessary, with any such third party, an approach that will allow the Company to determine whether it wishes to acquire such Invention hereunder and to allow the Company to acquire such Invention if it wishes to do so. Yuen shall not knowingly include any third party trade secrets, proprietary material or other confidential information in a Disclosure or Subsequent Disclosure without identifying same to the Company therein. Each Disclosure and each Subsequent Disclosure shall further identify i) any third-party patent rights that Yuen knows relate to one or more Inventions described therein ; and ii) any third parties who are joint inventors, authors or creators of the material contained therein or any portion thereof, including a description of the contribution of each such third party thereto. (h) No Retained Rights. Yuen shall have no retained rights in any Acquired Inventions other than as provided in Section 2(k), and the Company shall be the sole and exclusive owner of the Acquired Inventions and any patents or other intellectual property rights arising therefrom with the right to grant licenses, sue for infringement and recover damages without accounting to Yuen therefor, except as expressly provided herein. (i) Protection Prior to Disclosure. Yuen shall protect as Confidential Information, pursuant to the provisions of Article 13, any Inventions that he would be obligated to disclose under Section 2(a) until the termination of any option the Company may have to acquire such Inventions. (j) No License to Company Intellectual Property. Except as set forth in Section 2(k), no license, express or implied, is being granted to Yuen hereunder, and Yuen shall have no rights whatsoever under any patent or other intellectual property rights of the Company. 6 (k) Grant Back of License Rights in Other Fields of Use. (i) The Company agrees to grant, and the Company hereby conveys and grants as of the Commencement Date, to Yuen an exclusive, royalty-free, non-transferable (except as provided in Section 7) worldwide right and license, with the full and complete right to sub-license, in and to all Acquired Inventions and all intellectual property rights arising therefrom that are later identified on Schedule A as set forth below, in all fields of use other than for use in connection with Interactive Television or Interactive Program Guides ("Licensed Inventions"); provided, however, that such license shall be taken subject to any grant of rights or other encumbrances to third parties under such Acquired Inventions existing prior to the time such Licensed Invention is added to Schedule A. Such license shall be permanent, irrevocable, binding on the Company's successors and assigns. Licensed Inventions shall be added to Schedule A during the Term and after the Commencement Date at Yuen's request, and in response to Yuen's demonstration during the Term that an Acquired Invention has a not immaterial application outside the fields of Interactive Television and Interactive Program Guides, as evolved at the time of such demonstration (a "Mixed Use Invention"). (ii) In the event that, during the Term, the Company knowingly conveys rights to a third party under any Acquired Invention that is not included on Schedule A (but subject to Yuen's rights hereunder) for the purpose of exploiting such Acquired Invention in a field that the Company knows is outside the fields of Interactive Television and Interactive Program Guides under any reasonable interpretation at the time of the conveyance, the Company hereby covenants not to assert any patent rights or other intellectual property rights which arise from such Acquired Invention against Yuen, or any of his customers or licensees, mediate or immediate, based on activities of any of the foregoing in fields other than Interactive Television and Interactive Program Guides, provided, that Yuen has requested that such Acquired Invention be added to Schedule A during the Term and establishes during the Term that such Acquired Invention is a Mixed Use Invention. Any such third party conveyance shall be subject to such covenant, which shall be permanent, irrevocable, binding on the Company's successors and assigns, and shall run with the patents, including any extensions thereof, and any other intellectual property rights arising from such Acquired Invention. (iii) In the event the Company elects to pursue patent protection for a Licensed Invention, the Company and Yuen shall share equally in the costs of preparation, filing, and maintenance of all patents, renewals, and extensions arising from such Licensed Invention (other than a Reclaimed Disclosure) after the date on which such Licensed Invention is added to Schedule A, and the Company shall make commercially reasonable efforts to procure patent claims relating to applications outside the fields of Interactive Television and Interactive Program Guides at Yuen's reasonable direction. Yuen shall have the right to license and enforce the Licensed Inventions in fields outside the fields of Interactive Television and Interactive Program Guides and at his sole cost and expense. Yuen may not institute any action to enforce a patent for a Licensed Invention without the Company's consent, which consent shall not be unreasonably withheld or delayed. The Company shall reasonably cooperate in any enforcement action to which it consents, including joining as a party as required by law subject to (i) reimbursement by Yuen of Company's expenses incurred in connection with such action and (ii) payment by Yuen of Company's reasonable compensation for its employees' time expended in connection with such matter. Yuen shall fully and vigorously defend any challenges raised with 7 respect to the validity and/or enforceability of any patents so enforced. Yuen may not settle or compromise any such action without the Company's express written consent, which consent shall not be unreasonably withheld; provided, however, that Yuen may settle or compromise an action for which consent is not received from Company within a reasonable amount of time (given the circumstances then applicable to such proposed compromise or settlement) following notice by Yuen of the terms of such proposed compromise or settlement. Any license fees, damages recovery, settlement amounts, or other compensation received for infringement or authorized use of such patent shall be belong solely to Yuen. (l) Failure to Maintain or Prosecute by Yuen. Should Yuen at any time elect not to, or otherwise fail to, share the costs to maintain or prosecute any particular patent or patent application in accordance with the terms of this provision, Company shall provide Yuen with a written notice thereof. Yuen shall have thirty (30) days after receipt of such written notice of any such alleged failure to remedy the alleged failure set forth in such notice. If Yuen fails to remedy such alleged failure within such period of time, the Company shall have a claim for damages and/or a right of set-off for such amounts which are then actually due and owing (plus interest as provided for herein) against monies which are then or thereafter otherwise owing to Yuen hereunder, and Company shall have no further obligations to pursue patent claims relating to applications outside the fields of Interactive Television and Interactive Program Guides unless Yuen has paid all amounts then due and owing, and provided further assurances of his obligation to pay future expenses, by the time the Company is required to incur additional expense to maintain such patent claims. Nothing in this paragraph shall be deemed to abrogate any of the Company's rights under this Agreement. (m) Patent Identification. Yuen shall have a duty to mark, and shall use commercially reasonable efforts to cause his licensees to mark, including without limitation including a provision in all licenses obligating such licensees to mark, all products and literature concerning any Licensed Invention in a form which complies with the law of the jurisdiction in which the products are manufactured, used, sold and distributed, and shall also comply with the provisions of 35 U.S.C. Section 287. (n) Consultation. During the Term hereof, Yuen shall consult with the Company and provide assistance as reasonably requested in connection with the Company's use and exploitation of Acquired Inventions, all at the Company's sole cost and expense including, without limitation, reasonable compensation for Yuen's time expended in connection with such assistance. Such consultation shall be in addition to the cooperation and assistance provided by Yuen pursuant to Section 2(d). (o) Covenant Not to Sue on Acquired Inventions. Yuen hereby covenants not to assert any patents or other intellectual property rights relating in whole or in part to the fields of Interactive Program Guides or Interactive Television, for which Yuen acquires ownership or control during the Term, whether directly or indirectly through an entity owned or controlled by him, against the Company or the Company's customers and licensees (in their capacities as such), mediate and immediate, for activities within the fields of Interactive Program Guides or Interactive Television. 8 3. Term. This term of this Agreement (the "Term") shall commence upon the Commencement Date, and shall remain in force until the date which is seven (7) years from the Effective Date unless otherwise terminated as provided herein (the "Initial Term"). At the end of the Initial Term, the Agreement shall terminate unless the Company and Yuen mutually agree in writing to extend the Agreement, in which case the Agreement shall continue in effect for an additional seven (7) year period. Thereafter, the Agreement shall continue in effect for additional seven (7) year periods (each seven (7) year period that the Agreement is in effect following the Initial Term, a "Subsequent Term") upon the Company's and Yuen's mutual written agreement to effect such extensions upon the expiration of a Subsequent Term. (The Initial Term, and any and all Subsequent Terms, are collectively referred to herein as the "Term.") Notwithstanding the foregoing, (i) the Term shall terminate upon the death of Yuen, and (ii) the Company may, in its sole discretion, (1) terminate the Initial Term as of the third anniversary of the Commencement Date and (2) terminate any Subsequent Term as of the third anniversary of the first day of such Subsequent Term, in each case by written notice from the Company to Yuen delivered at least sixty (60) days in advance of the applicable anniversary date on which such termination would be effective. 4. Representations and Warranties. (a) The Company's Representations and Warranties. The Company hereby represents and warrants to Yuen as of the Effective Date that: (i) the execution, delivery and performance of this Agreement by the Company: (1) are within the corporate power and authority of the Company; (2) have been duly authorized by all necessary or proper corporate action; (3) are not in contravention of any provision of the certificate of incorporation or bylaws of the Company; and (4) will not violate the terms of any agreement, or other instrument to which the Company is a party or by which the Company or any of its property is bound; (ii) this Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other laws affecting creditors' rights generally or by the availability of equitable remedies; and (iii) except as otherwise specifically set forth in this Agreement, the license granted to Yuen in the Licensed Inventions is free and clear of any encumbrances and liens except those arising from (A) acts, omissions or legal obligations of Yuen and (B) any pre-existing grants of rights under such Licensed Inventions. (b) Yuen's Representations and Warranties. Yuen hereby represents and warrants to the Company as of the Effective Date that: (i) the execution, delivery and performance of this Agreement by Yuen and the granting of options and assignments made herein will not violate the terms of any agreement or other instrument to which Yuen is a party or by which Yuen or any of his property is bound; and (ii) this Agreement constitutes a legal, valid and binding obligation of Yuen, enforceable against Yuen in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other laws affecting creditors' rights generally or by the availability of equitable remedies; and (iii) except as otherwise specifically set forth in this Agreement, the rights assignable to Company at its option pursuant to this Agreement are free and clear of any encumbrances and liens. 9 (c) Representations and Warranties with Respect to Disclosures. Yuen represents and warrants as of the date of each Disclosure that, except to the extent explicitly set forth in a Disclosure, such Disclosure does not, to the best of his knowledge, include any material which was made by any third party or covered by any third party patent or other intellectual property rights. (d) No Inconsistent Agreements. Each of Yuen and the Company covenants to the other that it will not enter into any agreement, make any commitment, or otherwise take any action that is inconsistent with the provisions of this Agreement or the rights granted and promised to be granted hereunder. (e) No Other Representations or Warranties. There are no representations, promises, warranties, covenants or undertakings with respect to the subject matter hereof other than those contained in this Agreement. 5. Indemnification; Limitation of Liability. (a) The Company shall indemnify and hold Yuen harmless from and against all losses, claims, damages, liabilities, demands, proceedings and costs (including actual legal costs incident thereto) (collectively, "Claims") of any type whatsoever relating to or arising out of Company's use of, and/or Company's exercise of dominion over, the Inventions acquired by the Company from Yuen pursuant to this Agreement except to the extent the Claims relate to (1) third-party rights of which Yuen was aware and failed to disclose to the Company in a Disclosure containing the relevant Inventions; or (2) Yuen's knowing and undisclosed failure to convey sole and exclusive title in such Inventions to the Company. Yuen shall notify the Company of any Claims for which he believes he is entitled to seek indemnification promptly after first receiving notice of the Claim, providing all information in his possession relating to the Claim, and any other cooperation and assistance as may be necessary for Company to evaluate the Claim. The Company shall have the right to assume and control the defense of any such Claims. Yuen shall not settle or compromise any Claims for which he believes he is entitled to seek indemnification without first (i) providing notice, cooperation and assistance as described above; (ii) allowing Company a reasonable amount of time to evaluate the Claim and assume the defense; and (iii) disclosing the proposed settlement terms to Company and allowing Company a reasonable amount of time (given the circumstances then applicable to such proposed compromise or settlement) following notice by Yuen of the terms of such proposed compromise or settlement to consent to settlement on such terms. (b) YUEN'S LIABILITY TO THE COMPANY FOR ALL DAMAGES, INCLUDING ACTUAL, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, OR LOST OR IMPUTED PROFITS AND/OR ROYALTIES ARISING OUT OF THIS AGREEMENT OR ITS TERMINATION OR EXPIRATION, WHETHER FOR BREACH (OR ALLEGED BREACH) OF A REPRESENTATION OR WARRANTY OR ANY OBLIGATION UNDER THIS AGREEMENT AND WHETHER LIABILITY IS ASSERTED IN CONTRACT OR TORT AND IRRESPECTIVE OF WHETHER YUEN HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, SHALL BE LIMITED TO THE GREATER OF (i) THE COMPENSATION RECEIVED BY YUEN UNDER THIS AGREEMENT DURING THE TWELVE MONTH PERIOD PRIOR TO THE 10 DATE ON WHICH SUCH LIABILITY AROSE OR (ii) THE ACTUAL BENEFIT RECEIVED BY YUEN AS A RESULT OF THE BREACH; PROVIDED, HOWEVER, THAT IF SUCH DAMAGES AROSE OUT OF ANY KNOWING BREACH OF THIS AGREEMENT, YUEN'S LIABILITY TO THE COMPANY FOR ALL SUCH DAMAGES SHALL BE LIMITED TO THE GREATER OF (i) THE ACTUAL BENEFIT RECEIVED BY YUEN AS A RESULT OF THE BREACH, OR (ii) TWENTY-TWO MILLION ONE HUNDRED SEVENTY-FIVE THOUSAND FIVE HUNDRED DOLLARS ($22,175,500). THE COMPANY HEREBY WAIVES ANY CLAIM THAT THESE EXCLUSIONS DEPRIVE IT OF ANY ADEQUATE REMEDY. 6. Protection of Licensed Patent Rights; Infringements. Yuen shall promptly notify Company of any apparently unauthorized use or infringement of any Acquired Inventions by a third party as promptly as is reasonably practicable after such unauthorized use or infringement comes to the Yuen's attention. Neither Party will license or enforce any patents arising from the Acquired Inventions in violation of any laws. 7. Assignability/Binding Effect. No rights or obligation of the Company under this Agreement may be assigned or transferred by the Company without Yuen's prior written consent, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the business and assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company and assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. In the event of any disposition of its business and assets described in the preceding sentence, the Company shall take whatever action it can in order to cause such assignee or transferee expressly to assume the liabilities, obligations and duties of the Company hereunder. Yuen acknowledges that this Agreement is personal and may not be assigned by him; provided, however, that he shall have the right to (i) assign any right or rights to receive payments hereunder, during his lifetime, by sending written notice to the Company or, upon his death, by will or the laws of descent and distribution, (ii) assign any of his rights under the license granted to him pursuant to Section 2(k)(i) and all rights under the covenant not to sue granted to him pursuant to Section 2(k)(ii) (the "Permanent Irrevocable Rights") to one or more legal entities and/or trusts owned or controlled by him (each, a "Transferee") for the purpose of exploiting the Permanent Irrevocable Rights, provided, that (A) he promptly notifies the Company of any such assignment and provides the Company with a copy of the documentation effecting such assignment and evidence reasonably satisfactory to the Company that he owns or controls such Transferee, (B) such Transferee is prohibited from any further transfers except to a Transferee to whom (or to which) Yuen would have been permitted to transfer such Permanent Irrevocable Rights directly pursuant to this Section 7, (C) each such assignment is expressly made permanently and irrevocably subject to all of the terms, conditions, and limitations attaching to the Permanent Irrevocable Rights set forth herein, (D) such assignment is subject to the condition that such Transferee continues to be owned or controlled by Yuen or by persons or trusts acquiring such ownership or control upon his death, and (E) any such legal entity or trust executes and delivers to the Company a written undertaking for the 11 benefit of the Company (1) acknowledging and accepting all of Yuen's obligations and covenants to the Company with respect to such Permanent Irrevocable Rights, (2) providing that such rights may not be further transferred or assigned without the Company's prior written consent and will terminate upon any other transfer or assignment or in the event that Yuen (or persons or trusts acquiring such ownership or control of such entity or trust upon his death) no longer owns or controls such entity or trust and (3) indicating that such assignment or transfer complies with the requirements of this Section 7; and (iii) transfer any Permanent Irrevocable Rights and/or his ownership interests in any Transferee that is a legal entity to his beneficiaries by will or by the laws of descent and distribution, provided, that any further transfers by any such beneficiary shall be subject to the limitations of this Section 7 to the same extent as if such beneficiary were Yuen; provided, that any such beneficiaries enter into a written agreement with the Company acknowledging and accepting all of Yuen's obligations and covenants to the Company with respect to such Permanent Irrevocable Rights and providing that such rights may not be transferred or assigned and will terminate upon transfer or assignment. Any other purported assignment by Yuen of any rights under this Agreement without the Company's written consent shall be void and of no effect. To the extent applicable, this Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, beneficiaries, devisees, heirs, next of kin, executors and administrators of Yuen. In the event of Yuen's death or a judicial determination of his incompetence, references in this Agreement to Yuen shall be deemed to refer, where appropriate, to his legal representative, or, where appropriate, to his beneficiary or beneficiaries. Breach. (a) If either Party materially defaults under this Agreement, the non-defaulting Party may send notice of default and, if the defaulting Party has not substantially cured the default within sixty (60) days, the non-defaulting Party shall have the right to terminate this Agreement by sending written notice to the defaulting Party in addition to any other remedies that may be available. (b) Notwithstanding any expiration or termination of this Agreement, the provisions of Sections 2 (except 2(n)) 4(c), 4(d), 5, 6 (the last sentence only), 8(b), 8(c), 8(d), 9 (to the extent earned thereunder at the time of termination or expiration under any of subsections (a), (b), (d) and (f)) and 12-21 shall remain in full force and effect. (c) Termination of this Agreement in whole or in part pursuant to any of the provisions hereof shall be without prejudice to any rights which either Party may have against the other Party hereto. (d) In the event that, at the end of the Initial Term or any Subsequent Term, Yuen does not agree with the Company to extend the Agreement for a new Subsequent Term, then, notwithstanding the provisions of any other agreement between Yuen and the Company that provide for a longer exercise period, Yuen's right to exercise any then outstanding options granted to him pursuant to Section 9(c) of this Agreement shall continue for a period of one hundred and eighty (180) days following the termination of this Agreement (or such shorter period as the terms of the applicable option agreement or any other applicable agreement 12 between Yuen and the Company otherwise provide), after which such options shall be terminated and forfeited. 8. Payment Terms; Additional Consideration; Audit. (a) During the Term, Yuen shall be paid annual compensation of $250,000 per year, payable in monthly installments, and shall be entitled to receive health benefits to the same extent as provided pursuant to the Employment Agreement as of the date of its termination. (b) As soon as practicable but no later than forty-five (45) days after the end of each full or partial fiscal quarter during the Term (each such fiscal quarter period, a "Fee Period"), Company shall (i) deliver to Yuen a statement (the "Quarterly Fee Statement") signed by its Chief Executive Officer or Chief Financial Officer setting forth: (x) Company's calculation of the total dollar amount of Company's net revenues from the Company's use, sale, distribution or licensing of Fee-Bearing Products (including without limitation any such amounts for licensing, advertising, t-commerce and transaction and other recurring revenue) during the preceding Fee Period (in each of the foregoing cases less deductions for or on account of any present or future sales taxes, duties, levies or freight charges; any uncollectable invoices ; or any similar reductions) (the results of such calculation, the "Quarterly Revenue"); and, (y) Company's calculation of the amount equal to two percent (2%) of the Quarterly Revenue for such Fee Period (such amount for each such Fee Period, a "Fee Payment") and (ii) make payment to Yuen of the applicable Fee Payment for the most recent Fee Period by means of a wire transfer to the bank account designated by Yuen. In no event shall the cumulative Fee Payment paid over the course of any fiscal year (or partial fiscal year) of the Company during the Term (each, a "Fee Year") be less than one million, two hundred fifty thousand dollars ($1,250,000) (the "Floor") nor more than two million seven hundred fifty thousand dollars ($2,750,000) (the "Ceiling"), as such amounts are adjusted from time to time pursuant hereto for each full fiscal year during the Term or an appropriately reduced (on a prorated basis) Floor and Ceiling for each partial fiscal year during the Term. All dollar amounts to be determined herein shall be calculated in accordance with United States generally accepted accounting principles consistently applied. If two percent (2%) of the aggregate Quarterly Revenue for any given Fee Year is less than the Floor, Company shall pay the difference between the cumulative Fee Payment attributable to such Fee Year (or portion thereof, if this Agreement should expire or terminate prior to the end of any Fee Year) and the Floor (or pro-rated portion thereof, if this Agreement should expire or terminate prior to the end of any Fee Year) within forty-five (45) days of the end of the applicable Fee Year. The Floor and Ceiling shall be adjusted on each anniversary of the Commencement Date in accordance with any increase in the Consumer Price Index for the Los Angeles area for such prior period. If this Agreement expires or is terminated in accordance herewith on a date other than the last day of a fiscal quarter, the Fee Payment for the partial fiscal quarter period from the end of the full fiscal quarter immediately preceding such expiration or termination through the date of such expiration or termination shall be paid no later than forty-five (45) days from the date of such expiration or termination. If the Company so elects prior to the beginning of any Fee Year, it may make a payment of the Ceiling (as adjusted) for the Fee Year in quarterly installments within forty-five (45) days after the end of each fiscal quarter, in which case it shall not be required to submit any Quarterly Fee Statements for such Fee Year. The Company may offset against all payments described in this Section 9(b) any damages suffered by the Company due to a breach by Yuen of any provision of Sections 6, 8, 13 10(h) or 10(i) of the Employment Agreement; any representation or warranty contained in Section 15 of the Termination Agreement; and/or any provision of Section 12 of the Termination Agreement or Sections 2 or 10 of this Agreement; provided, however, that the Company, prior to offsetting any such payments, has invoked the provisions of Section 10(f) of the Employment Agreement, Section 13 of the Termination Agreement or Section 20 of this Agreement, as applicable, with respect to any claim for damages suffered by the Company due to a breach by Yuen of the above referenced provisions; provided further, that in the event that it is determined pursuant to such proceedings that the Company is not entitled to all or any portion of such offset payments, the Company shall immediately pay over to Yuen all amounts that had been offset to which the Company was not entitled. (c) In addition to the compensation, benefits and Fee Payment described above and as additional consideration for entering into this Agreement and for the benefits to the Company hereunder, the Company shall grant and issue to Yuen on each anniversary date of the Effective Date during the Term, unless this Agreement is terminated as of such anniversary date pursuant to Section 3, options to acquire two hundred thousand (200,000) shares of the common stock of the Company (such number of shares to be adjusted proportionately by the Company to the extent, if any, necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding common stock to the extent paid in the form of common stock or other equity securities, or any recapitalization, stock split, including a stock split in the form of a stock dividend, reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of common stock or similar extraordinary event , in each case to the extent such event affects the outstanding common stock); provided, however, that, (i) if the Term begins after the fourth anniversary of the Effective Date, then such grants shall be made only on the sixth and seventh anniversaries of the Effective Date, (ii) the foregoing notwithstanding, if this Agreement is terminated as of the seventh anniversary of the Effective Date pursuant to Section 3, no grant shall be made as of the seventh anniversary of the Effective Date and (iii) subject to the foregoing provisos, if any such grant date is not a business day, such grant shall be made on the first business day after such grant date. Notwithstanding anything herein to the contrary, no stock options shall be granted and any right to receive such stock options shall be forfeited in the event of any (i) Breach Event (as such term is defined and determined under the Employment Agreement) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period (as such term is defined under the Employment Agreement) or (ii) material breach by Yuen of Sections 2 or 10 of this Agreement. Such options shall (i) be fully vested and immediately exercisable in full as of the date of such grant, (ii) shall be in the form attached hereto as Exhibit 1, with such changes to such form as may be necessary to comply with changes in law or changes in the Company's stock option plans; provided, however, that no change shall be required pursuant to any change in the Company's stock option plans that is economically and materially adverse to Yuen without Yuen's prior written consent except to the extent that such change in the plans is required by law, regulations, listing standards or changes necessary to preserve the accounting treatment, (iii) have an exercise price equal to the Fair Market Value (as such term is defined in the Company's 1994 Stock Incentive Plan as in effect on the Effective Date (the "SIP")) of one share of the Company's common stock on the date of the grant, and (iv) be granted under the SIP (or any other a stock option plan) of the Company pursuant to which such grants may be made. If the Company at any time prior to the date of a required option grant does not have an effective stock option plan with adequate 14 available options necessary to grant and issue to Yuen the number of options contemplated hereby, then the Parties shall work together in good faith to determine an alternative method of compensation of appropriate value and liquidity such that Yuen is compensated under this paragraph in a manner substantially consistent with the intent hereof. If the Company at any time prior to the date of a required option grant under this paragraph merges, consolidates, reorganizes or exchanges its shares of common stock with any other person such that Company is not the surviving entity following such transaction (or ceases to be a public company but becomes a subsidiary of a public company), then the surviving entity (or the parent public company, as the case may be) shall be required to grant the options provided for herein and references to options to purchase shares of Company's common stock hereunder shall be deemed to refer to options to purchase an equivalent number of shares of such surviving entity's (or public parent's) equivalent class of capital stock. In the event of a Change in Control Event (as defined in the Stock Option Agreements attached to the Employment Agreement as Exhibits A and B), the Company shall grant any award of stock options required under this Agreement (and not already granted) on the later of (i) the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, (ii) the date of the Change in Control Event, or (iii) the Commencement Date, but only if the Company (or a successor thereto) has failed to provide for the cash-out of such grants, or the continuation of such grants in an economically equivalent amount (as provided in Section 7 of the Stock Option Agreements attached to the Employment Agreement as Exhibits A and B). (d) The Company, as additional consideration for entering into this Agreement and for the benefits to Company hereunder, shall pay to Yuen a one-time acquisition fee for each Disclosure whose Inventions are acquired by the Company hereunder. Such fee will be in addition to the other payment obligations of the Company hereunder, shall be due and payable within forty-five (45) days of the Company's acquisition of the Inventions disclosed in such Disclosure under Section 2, and shall be in an amount equal to two hundred fifty thousand dollars ($250,000) per Disclosure, payable via wire transfer to such account as Yuen may designate. Each Disclosure shall contain a complete description of all Inventions then known to Yuen relating to the subject matter of the Disclosure and otherwise comply with the requirements of Section 2(a)(i) of this Agreement, and Yuen shall not submit multiple, fractional disclosures relating to the same subject matter. (e) Yuen shall, at Yuen's expense except as provided herein, have the right, and Company shall grant Yuen and its representatives the opportunity, to have an independent certified public accountant, on thirty (30) days advance notice to the Company and not more than once for any Fee Year, examine and make copies of the books and records of Company related to the preparation of the Quarterly Fee Statement and calculation of the Quarterly Revenue and the Fee Payment. If any such examination discloses a deficiency in any payments made by Company to Yuen of more than three percent (3%) of such payment, the Company shall reimburse Yuen for all of the reasonable expenses connected with such examination in addition to the payment of the amount of any such deficiency. Such independent certified public accountant will maintain as confidential all information obtained in connection with any such examination, in accordance with such auditor's legal and professional obligations; provided, that, such certified public accountant may: (i) provide to Yuen a report on amounts due to Yuen and the basis for determination thereof in accordance with the ordinary professional standards applicable to such certified public accountant; and (ii) use the results of such examination as 15 reasonably necessary to assist Yuen in making and/or pursuing any claims regarding such amounts or the payment thereof. This audit right shall not apply with respect to any Fee Year in which the Company has paid the Ceiling for such Fee Year. (f) The Parties agree that interest will accrue at a rate equal to the lesser of (A) the maximum rate allowable by law and (B) one and one-half percent (1-1/2%) per month or portion thereof, in each case compounded daily, and will be applied to any unpaid amounts from the date on which payment was due until the date such payment is received. Limitations on Yuen's Activities. (a) As used in this Section 10, the following terms shall have the following meanings: (i) "associated with", when used in the context of "associated with any Business" or "associated with any ITV / IPG Business", shall mean being a full or part time employee of, a consultant or other advisor to, an agent or representative of, a director or manager of, a shareholder or other owner of, a lender to, an investor in, a partner in, a promoter of, a licensee or licensor of, or otherwise associated with, any Business, or any ITV / IPG Business, respectively, but shall not include being the owner of an equity interest of not more than five percent in any Business or any ITV / IPG Business whose equity securities are publicly traded. (ii) "Business" shall mean any business, whether conducted by a corporation, partnership, limited liability company or any other legal entity or conducted by Yuen as a sole proprietorship other than the Company or any subsidiary of the Company. (iii) "ITV / IPG Business" shall mean any Business, a principal business activity which involves the development, sale or licensing of products, services, technology or intellectual property in the fields of Interactive Television or Interactive Program Guides. (iv) "Limitations Period" shall mean the period beginning on the Commencement Date and ending on the last day of the Term. (iv) "Personal Services in the Fields of Interactive Television or Interactive Program Guides" shall mean providing advice to, consulting with, or disclosing information directly or indirectly materially relevant to, the fields of Interactive Television or Interactive Program Guides. (b) During the Limitations Period, if the Company is engaged in the ITV/IPG Business at such time, Yuen shall not, without the prior written consent of the Company, (i) be associated with any ITV / IPG Business or (ii) directly or indirectly provide Personal Services in the Fields of Interactive Television or Interactive Program Guides to any Business. Neither the immediately preceding sentence nor any other provision of this Agreement shall at any time, whether during the Limitations Periods or thereafter, prevent Yuen from being associated with any Business, other than an ITV / IPG Business during the Limitations Period as provided above, so long as Yuen does not provide any Personal Services in the Fields of Interactive Television or Interactive Program Guides to such Business during the Limitations Period. The parties acknowledge that it is their intention that this Section 10 is intended only to ensure that, during 16 the Limitations Period, Yuen does not use his substantial knowledge and experience in the fields of Interactive Television and Interactive Program Guides to benefit any Business, including but not limited to any ITV / IPG Business, and is not in any way intended to limit any other business activities of Yuen at any time. 9. No Joint Venture. Nothing herein contained shall be construed to place the Parties in the relationship of partners or joint venturers, and neither Company nor Yuen shall become bound by any representation, act or omission of the other. 10. Waivers. None of the terms of this Agreement can be waived or modified except by an express agreement in writing signed by all the Parties hereto. The failure of any Party to enforce, or the delay by any Party in enforcing, any of its rights under this Agreement shall not be deemed a continuing waiver or a modification thereof and any Party may, within the time provided by applicable law, commence an appropriate proceeding to enforce any and all such rights. 11. Confidential Information. (a) Yuen and the Company agree to maintain in strict confidence, and not to disclose to others or use for any purposes other than as reasonably needed to exercise their rights under this Agreement, the terms of this Agreement, the content of each Disclosure, and any non-public technical or financial information they obtain from each other pursuant to this Agreement (hereinafter "Confidential Information"). (b) Information disclosed by either Party shall not be Confidential Information to the extent that such information (i) is available to members of the public or becomes publicly available through no unauthorized act of the receiving Party, (ii) is known to the receiving Party prior to the date of this Agreement, except, with respect to Yuen, Confidential Information of the Company known to him; (iii) is subsequently given to the receiving Party by a third party having a right to do so, or (iv) is independently developed by Yuen or employees of the Company without access to or knowledge of the other Party's Confidential Information, as evidenced by written documents in its possession. Each Party's obligation not to disclose Confidential Information shall continue for so long as such information remains Confidential Information as defined herein. Such obligation of confidentiality shall not apply to the extent that either Party is required to disclose such Confidential Information by any governmental authority, court or agency, domestic or foreign, or makes use of such Confidential Information in any dispute with the other Party over the terms or performance of this Agreement in any court of law or equity and then only under a protective order of the court, provided, that, the Party holding the information sought in such circumstances must provide notice to the other Party at least ten (10) days in advance of the disclosure of such information in order to enable the Party claiming the information is confidential to seek to intervene to protect its confidentiality. 17 (c) Upon the Company's provision of an Election Notice, and payment therefor is made to Yuen under Section 9(c) for the Inventions contained in a Disclosure, the Company's obligation of confidentiality and non-use with respect to such Disclosure shall immediately cease, but Yuen's obligation of confidentiality and non-use with respect to such Disclosure shall continue in perpetuity, notwithstanding any termination or expiration of this Agreement. Upon the provision to Yuen of an Election Notice containing an election by the Company not to exercise its option in the Disclosure which is the subject of such Election Notice, or Yuen's failure to receive an Election Notice for such Disclosure within the ninety (90) day period, Yuen's obligation of confidentiality and non-use with respect to such Disclosure shall immediately cease, but the Company's obligation of confidentiality and non-use with respect to such Disclosure shall continue in perpetuity, notwithstanding any termination or expiration of this Agreement. Notwithstanding the foregoing, neither Party's confidentiality obligations hereunder shall cease with respect to any trade secrets or other Confidential Information relating to any Licensed Inventions; provided, however, that nothing in this Agreement shall be construed as preventing the Company from seeking patent protection for any Licensed Inventions at its sole discretion. (d) Yuen has had, prior to the Commencement Date, and will have, during the Term, access to, and has, prior to the Commencement Date, and will continue to, during the Term, become acquainted with various trade secrets and other confidential information of the Company, consisting of software, plans, formulas, patterns, devices, secret inventions, processes, business plans, strategic plans, financial information, customer lists, contracts, and compilations of information, records and specifications that are owned by the Company or by its subsidiaries and regularly used in the operation of their respective businesses and that may give the Company an opportunity to obtain an advantage over competitors who do not know or use such trade secrets. Yuen agrees and acknowledges that Yuen has been granted access to these valuable trade secrets only by virtue of the confidential relationship created by this Agreement and Yuen's prior relationship to, interest in and fiduciary relationships to the Company and its predecessors. Yuen further agrees and acknowledges that Inventions conceived, made or reduced to practice during the Term, and related in whole or in part to the fields of Interactive Program Guides or Interactive Television, may be based in part on such trade secrets and confidential information of the Company. Yuen shall not disclose any of the aforesaid trade secrets, directly or indirectly, or use them in any way, either during the Term or at any time thereafter, except as required in the course of performing services under this Agreement for the benefit of the Company. 12. Severability. In the event that any term or provision of this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein; unless the deletion of such term or provision shall cause this Agreement to become materially adverse to either Party, in which event the Parties shall use reasonable best efforts to arrive at an accommodation that best preserves for the Parties the benefits and obligations of the offending term or provision. 18 13. Integration. This Agreement, the Employment Agreement and the Termination Agreement represent the entire understanding between the Parties hereto with respect to the subject matter hereof and this Agreement, the Employment Agreement and the Termination Agreement supersede all previous representations, understandings or agreements, oral or written, or contemporaneous oral agreements, between the Parties with respect to the subject matter hereof and cannot be modified except by a written instrument signed by the Parties hereto. 14. Notices. Any notice or other communication required or permitted to be given by the Parties hereto shall be in writing and sent, if to Yuen, at such address as Yuen may designate in writing from time to time (or Yuen's business address of record in the absence of such designation), and, if to Company, to its office at: Gemstar-TV Guide International, Inc. Suite 800 135 North Los Robles Ave. Pasadena, CA 91101 Facsimile No.: (818) 792-4051 Attention: General Counsel or at such other address as Company may designate in writing from time to time. Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this paragraph and an appropriate confirmation-back is received, with confirmation by a nationally-recognized overnight courier; (ii) if given by first class mail, return receipt requested, three (3) days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address. 15. Captions. The captions used in connection with the paragraphs and subparagraphs of this Agreement are inserted only for purpose of reference. Such captions shall not be deemed to govern, limit, modify or in any other manner affect the scope, meaning or intent of the provisions of this Agreement or any part thereof, nor shall such captions otherwise be given any legal effect. 16. Disclaimed Warranties. (a) Nothing contained in this Agreement shall be construed as a warranty or representation by any of the Parties to this Agreement as to the validity, scope or enforceability of any of the Inventions or any patents issued or patent applications filed with respect thereto. (b) Subject to Section 2(g), nothing contained in this Agreement shall be construed as a warranty or representation that any manufacture, sale, offer for sale, lease, import, use or other disposition of any Fee-Bearing Product hereunder will be free from infringement of 19 patents, or utility models, copyrights, mask work rights, trade secrets, trademarks, trade names, or the like, of third parties. (c) Company shall not be required by anything contained in this Agreement to file in any country an application for patent on any invention, or to secure any patent, or once having filed an application for patent or obtained a patent, to maintain the patent application or patent in force. 17. Governing Law. This Agreement, the legal relations between the Parties and any action, whether contractual or non-contractual, instituted by any Party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the Parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 18. Arbitration; Injunctive Relief. (a) In the event of any dispute, controversy, claim or disagreement between the Parties with respect to any alleged breach of this Agreement, the interpretation of this Agreement, or the rights or obligations of either Party under this Agreement, the Parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a solution satisfactory to both Parties. If they do not resolve the dispute, controversy, claim or disagreement within a period of 30 days, or such longer period as they may mutually agree, then such dispute, controversy, claim or disagreement shall be finally resolved pursuant to confidential binding arbitration in New York, New York by a panel of three neutral arbitrators. The arbitration shall be conducted in accordance with the Commercial Rules of the American Arbitration Association then in effect. Within 15 days after the initiation of arbitration, the Parties shall select three neutral arbitrators, all of whom shall be members of a state bar actively engaged in the practice of law for at least 10 years. Either Party may seek interim or preliminary relief from the arbitrators until an arbitration award is rendered or the controversy is otherwise resolved. Either Party also may, prior to the establishment of the arbitral tribunal, and without waiving any remedy under this Agreement, seek interim or provisional relief that is necessary to protect the rights or property of that party. The arbitration award shall be made as promptly as practicable and in any event within nine months of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment; proved, however, that this time limit may be extended by agreement of the Parties or by the arbitrators if necessary. The award of the arbitrators shall be in writing, shall be signed by a majority of the arbitrators, and shall include findings of fact and the reasons for the disposition of each claim. In the award, the arbitrators shall allocate all costs of the arbitration, including the fees of the arbitrators and reasonable attorneys' fees of the prevailing Party, against the non-prevailing Party. This Section 20(a) shall not be construed to limit either Party's right to obtain equitable relief with respect to any dispute and, pending a final arbitration by the arbitrators with respect to any such dispute, either Party shall be entitled to obtain any such relief by direct application to state, federal or other applicable court, without being first required to arbitrate such dispute. Except as may be required by law, or by judicial or 20 administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to the party or arbitrator, neither the Parties nor the arbitrators may disclose the existence, content or results of any arbitration hereunder without the prior written consent of all the Parties. Judgment on the award may be entered in any court having jurisdiction thereof. (b) In addition to the provisions of the foregoing Section 20(a), in connection with any dispute as to Section 2 of this Agreement, discovery shall be on an expedited basis, the decision of the arbitration panel shall be final and there shall be no right of appeal or right to petition to vacate such award. Each of the Parties acknowledges that the other Party would be irreparably damaged, and there would be no adequate remedy at law, for a breach of this Agreement, and accordingly, the terms of this Agreement may be specifically enforced by a Party. 19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. [The remainder of this page has been intentionally left blank; the signature page follows.] 21 Execution Copy [SIGNATURE PAGE TO PATENT RIGHTS AGREEMENT] IN WITNESS WHEREOF, Yuen and the Company have caused this instrument to be duly executed as of the day and year first above written. /s/ Henry C. Yuen -------------------------------------- HENRY C. YUEN GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: /s/ Jeff Shell ---------------------------------- Jeff Shell, Co-President Exhibit 1 GEMSTAR-TV GUIDE INTERNATIONAL, INC. PATENT RIGHTS STOCK OPTION AGREEMENT THIS AGREEMENT dated as of _______, ____, between Gemstar-TV Guide International, Inc., a Delaware Corporation (the "Company"), and Henry C. Yuen ("Yuen"). W I T N E S S E T H WHEREAS, Yuen is a consultant or advisor who (directly or through an entity with which he is associated) renders or has rendered bona fide services to the Company; and WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Yuen effective as of ______, ____ (the "Grant Date") two hundred thousand (200,000) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Yuen dated as of _________, 2002. "Patent Rights Agreement" shall mean the patent rights agreement between the Company and Yuen dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Yuen and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Yuen, subject to the restrictions set forth below, of two hundred thousand (200,000) stock options (the "Options") under the SIP. Each Option shall represent the right to 1 acquire one (1) Common Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date or (ii) the termination of the Options pursuant to Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest on the Grant Date. To the extent Yuen does not purchase all or any part of the Common Shares under the Options exercisable and to which Yuen is entitled, Yuen has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Yuen (or Yuen's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Yuen consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Yuen's ability to exercise an Option using a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Yuen, provided, however, that the Committee may in its absolute discretion limit Yuen's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Yuen for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Yuen (or Yuen's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 2 5. No Employment Commitment. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, confers upon Yuen any right to employment by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Yuen's consulting relationship with the company, or affects the right of the Company or any Subsidiary to increase or decrease Yuen's other compensation. 6. Reserved. 7. Reserved. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Yuen under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Yuen at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Yuen is no longer an Eligible Person, any notice to Yuen shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11. Plan. The Options and all rights of Yuen thereunder are subject to, and Yuen agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and of the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Patent Rights Agreement, the terms and conditions of this Agreement shall govern. Yuen acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Yuen, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Patent Rights Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with 3 respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Yuen, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Yuen will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Yuen. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Yuen and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 4 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Yuen has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ------------------------------ YUEN ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 5 CONSENT OF SPOUSE In consideration of the execution of the foregoing Patent Rights Stock Option Agreement by Gemstar-TV Guide International, Inc., I, _____________________________________, the spouse of the Yuen herein named, do hereby join with my spouse in executing the foregoing Patent Rights Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ------------------------- Signature of Spouse 6 EX-10.4 7 dex104.txt AMENDMENT NO. 1 TO THE STOCKHOLDERS' AGREEMENT EXHIBIT 10.4 Execution Copy AMENDMENT NO. 1 TO THE STOCKHOLDERS' AGREEMENT THIS AMENDMENT NO. 1 TO THE STOCKHOLDERS' AGREEMENT (this "First Amendment"), entered into on November 7, 2002, is by and among The News Corporation Limited, a South Australia, Australia corporation ("News Corp."), Henry C. Yuen ("Yuen") and Gemstar-TV Guide International, Inc., a Delaware corporation (the "Corporation"). The parties listed above, excluding the Corporation, will be referred to herein as the "Stockholders." Capitalized terms not otherwise defined herein will have the meanings ascribed to them in the Stockholders' Agreement, dated as of October 4, 1999, among the Stockholders, Liberty Media Corporation, a Delaware corporation ("Liberty") and the Corporation (as the same has been amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Stockholders' Agreement"). RECITALS A. The Stockholders, Liberty and the Corporation previously entered into the Stockholders' Agreement. B. In connection with Liberty's transfer of its ownership in certain shares of Common Stock to News Corp., on May 2, 2001, Liberty and News Corp. entered into a Letter Agreement regarding the Stockholders' Agreement. C. The remaining Stockholders and the Corporation desire by this instrument to amend the Stockholders' Agreement in the manner set forth herein. Therefore, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties agree to amend the Stockholders' Agreement as follows: SECTION 1. AMENDMENTS TO STOCKHOLDERS' AGREEMENT 1.1. The following definition in Section 1.1 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "Specified Period: except as used in Section 3.1 of the Stockholder's Agreement, the period beginning at the Effective Time and ending on the first to occur of (i) September 30, 2005 and (ii) such date as the Employment Agreement, dated as of _____, 2002 (the "Employment Agreement"), between the Corporation and Yuen is terminated for any reason; as used in Section 3.1 of the Stockholders' Agreement the term "Specified Period" shall mean the period beginning at the Effective Time and ending on the first to occur of (i) the fifth anniversary of the Effective Time and (ii) such date as Yuen ceases to be Chief Executive Officer of the Corporation other than as a result of termination of such employment by the Corporation "Without Cause" (as such term is defined in the Yuen Employment Agreement)." 1.2. The following definitions in the Stockholders' Agreement, and any and all references thereto are hereby deleted: (i) "Cause"; (ii) "Closing Price"; (iii) "GS Director"; (iv) "GS Independent Directors"; (v) "Immediate Family"; (vi) "Independent Director"; (vii) "Minimum Ownership Condition"; (viii) "Permitted Pledge"; (ix) "Permitted Transfer"; (x) "Trading Day"; (xi) "TVG Director"; and (xii) "TVG Independent Directors." 1.3. Section 1.3 of the Stockholders' Agreement is deleted in its entirety and replaced with "[Intentionally Omitted]." 1.4. Section 2.1 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "2.1. Composition. (a) During the Specified Period, Yuen will be entitled to designate himself as a director to the Corporation's Board (in such capacity, Yuen is referred to as an "HY Designee"). Until the later of July 12, 2005 or the expiration of the Specified Period, the News Stockholder will be entitled to designate one director (the "News Designee"). During the Specified Period, Yuen will have the right to re-nominate the HY Designee for election at the expiration of his term. Yuen will not have the right to designate a successor to any such HY Designee, whether to fill a vacancy during the term of such directorship (including as a result of the death, resignation or removal of any such director) or as a replacement nominee at the expiration of the term of such directorship. (b) During the Specified Period, each Stockholder agrees to vote and to cause its Controlled Related Parties to vote all shares of Common Stock beneficially owned by it or him for the election to the Board of the Persons designated to be directors in accordance with this Agreement. The Stockholders agree to use their best efforts to cause the respective HY Designee and News Designee to vote in favor of the nomination by the Board for election by stockholders or, if applicable, for the appointment by the Board, of the Persons designated to be directors in accordance with this Agreement. (c) In the event that shares of Common Stock are Transferred by the Liberty Group to the News Group or by the News Group to the Liberty Group, then the right to designate, remove or replace the Liberty Designees (as such term was defined in Section 2.1(a) of the Stockholders' Agreement) and the News Designee as contemplated by this Agreement shall be allocated between the Liberty Stockholder and the News Stockholder as they may agree (thereby increasing or decreasing the number of Liberty Designees and correspondingly increasing or decreasing the number of News Designee, accordingly). Subject to receiving 2 notice thereof, all other parties to this Agreement shall fully support such allocation, whether by the voting of shares or otherwise." 1.5. All references in the Stockholders' Agreement to the capitalized terms "HY Designees" and "News Designees" are hereby deleted and the capitalized terms "HY Designee" and "News Designee," respectively, are hereby substituted therefor. 1.6. Section 2.3 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "2.3. Vacancies. If the HY Designee ceases to be a director for any reason, whether as a result of death, disability, retirement, resignation, removal or otherwise, Yuen will have no right to designate another individual to fill such vacancy and to serve as a director of the Corporation." 1.7. Section 2.4 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "2.4 Board of Directors and Stockholder Vote. During the Specified Period, each Stockholder agrees to vote and to cause its Controlled Related Parties to vote all shares of Common Stock beneficially owned by it or him, and to use his or its best efforts to cause the respective HY Designee and News Designee to vote against any proposal to remove any director designated pursuant to this Agreement prior to the expiration of his or her term except for cause or pursuant to Section 2.2." 1.8. Section 2.5 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "2.5. Non-executive Chairman of the Board. During the Specified Period each Stockholder agrees to and to cause its Controlled Related Parties to, and to use his or its best efforts to cause the HY Designee and the News Designee to vote in favor of Yuen's election as the non-executive Chairman of the Board and vote against his removal from such position." 1.9. Section 2.7 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "2.7. Termination of Voting Obligations. The obligations of the parties pursuant to this Section 2 will terminate upon the first to occur of (i) the expiration of the Specified Period or (ii) such date as Yuen ceases to be an employee of the Corporation, for any reason." 1.10. Section 3.2 of the Stockholders' Agreement is deleted in its entirety and replaced with "[Intentionally Omitted]." 1.11. Section 4 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: 3 "SECTION 4. CERTAIN CONSENTS. Notwithstanding anything to the contrary contained herein, in the event that the Corporation and News Corp. agree to modify Section 3, Section 5 or Section 8 of the Stockholders' Agreement (other than in a manner that would increase Yuen's obligations thereunder), Yuen's consent shall not be required." 1.12. Section 6 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "SECTION 6. LEGEND. Each certificate evidencing any of the shares of Common Stock beneficially owned by a News Stockholder shall bear a legend substantially as follows: "The shares represented by this certificate are subject to the terms and conditions of a certain Stockholders' Agreement, effective as of July 12, 2000, as such may be amended from time to time, a copy of the Stockholders' Agreement and any amendments thereto will be furnished by the Corporation to the holder of this certificate upon request and without charge." Upon surrender to the Corporation of certificates evidencing shares of Common Stock transferred in compliance with this Agreement, other than to a Stockholder or another Person who or that in accordance with the terms of this Agreement shall be bound by this Agreement in whole or in part, the Corporation shall reissue such certificates to the owner thereof without such legend. Upon termination of this Agreement and surrender to the Corporation of certificates evidencing shares of Common Stock, the Corporation shall reissue such certificates to the owner thereof without such legend." 1.13. Section 8 of the Stockholders' Agreement is amended by adding the following language at the end of the paragraph: "Notwithstanding the foregoing or anything to the contrary contained in this Agreement, News Corp. hereby covenants and agrees with and for the sole benefit of the Corporation that this Section 8 shall remain in full force and effect until July 12, 2005, regardless of whether any News Designee continues to serve on the Board." 1.14. Section 9.6 of the Stockholders' Agreement is amended and restated in its entirety to read as follows: "9.6. Notices. All notices and other communications hereunder shall be in writing and shall be delivered personally, telecopied (if receipt of which is confirmed by the person to whom sent), sent by a nationally recognized overnight delivery service or mailed by registered or certified mail (if return receipt is requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice) (notice shall be deemed given upon 4 receipt, if delivered personally, by overnight delivery service or by telecopy, or on the third business day following mailing, if mailed): (a) If to News Corp., to it at: c/o News America Incorporated 1211 Avenue of the Americas New York, New York 10036 Attention: Arthur M. Siskind Senior Executive Vice President and Group General Counsel Telephone: (212) 852-7007 Telecopier: (212) 768-2029 with a copy to: Hogan & Hartson L.L.P. 551 Fifth Avenue New York, New York 10176 Attention: Ira S. Sheinfeld Telephone: (212) 661-6500 Telecopier: (212) 697-6686 (b) if to Yuen, to him at: 135 North Los Robles Avenue Suite 800 Pasadena, California 91101 Telephone: (626) 792-5700 Telecopier: (626) 792-2462 with a copy to: Riordan & McKinzie 600 Anton Boulevard, Suite 1800 Costa Mesa, California 92626 Attention: James W. Loss Telephone: (714) 433-2626 Telecopier: (714) 433-2700 (c) if to the Corporation, to it at 135 North Los Robles Avenue Suite 800 Pasadena, California 91101 Attention: General Counsel 5 Telephone: (626) 792-5700 Telecopier: (626) 792-2462 with a copy to: O'Melveny & Myers LLP 610 Newport Center Drive Suite 1700 Newport Beach, CA 92660 Attention: David Krinsky Telephone: (949) 823-7902 Telecopier: (949) 823-6994 SECTION 2. REPRESENTATIONS AND WARRANTIES Each of the parties to this First Amendment hereby represents and warrants to each other party to this First Amendment as follows: 2.1. If such party is not a natural person, such party is duly incorporated or organized and validly existing under the laws of its jurisdiction of incorporation or organization and is duly authorized to do business and is in good standing under the laws of its jurisdiction of incorporation or organization. If such party is a natural person, such party has the capacity to enter into this First Amendment. 2.2. Such party has full legal right, power and authority to execute and deliver this First Amendment and to carry out the transactions contemplated hereby. If such party is not a natural person, all corporate and other actions required to be taken by such party to authorize the execution, delivery and performance of this First Amendment and all transactions contemplated hereby have been duly and properly taken. No other approval on the part of such party or any of its shareholders, as the case may be, is necessary to authorize the execution, delivery and performance of this First Amendment and all transactions contemplated hereby. 2.3. This First Amendment has been duly executed and delivered by such party and constitutes the legal, valid and binding obligation of such party, enforceable against it in accordance with its respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other applicable laws affecting creditor's rights generally. 2.4. The execution and delivery by such party of this First Amendment does not, and the performance by it of its respective obligations under this First Amendment will not, result in a violation of, or result in the breach of any provision of, or conflict with, or result in the creation of any Lien upon any of its assets pursuant to, or cause any acceleration, default or similar adverse effect under any material agreements to which such party is a party; nor will such execution, delivery and performance by such party require any Governmental Approval or third party approval, except for those which have been obtained. SECTION 3. REAFFIRMATION 6 The Stockholders and the Corporation hereby expressly reaffirm and assume all of their respective rights and obligations as set forth in the Stockholders' Agreement, as amended by this First Amendment, and the Stockholders and the Corporation agree to be bound by and comply fully with all of the terms, conditions, provisions, agreements, representations and warranties contained in the Stockholders' Agreement, in so far as such rights and obligations may be modified or amended by this First Amendment, as though such Stockholders' Agreement, as amended by this First Amendment were being re-executed on the date hereof. SECTION 4. MISCELLANEOUS 4.1. This First Amendment will be governed by the laws of the State of Delaware applied to contracts made and wholly performed in such State, without regard to principles governing conflicts of law which would apply the laws of a jurisdiction other than the State of Delaware. Any action to enforce any provision of this First Amendment may be brought only in a court in the State of Delaware or in the United States District Court in the District of Delaware. Each party agrees to submit to the general jurisdiction of such courts and to accept service of process at its address for notices pursuant to this First Amendment in any such action or proceeding brought in any such court and hereby waives any claim that such action or proceeding brought in any such court has been brought in an inconvenient forum. 4.2. This First Amendment may be executed in any number of counterparts. 4.3. On or after the date first written above, each reference in the Stockholders' Agreement to this "Agreement," "hereof" or words of like import, and all references in any other agreements to the Stockholders' Agreement, will, unless the context otherwise requires, be deemed to refer to the Stockholders' Agreement as amended hereby. 4.4. This First Amendment is binding upon, and inures to the benefit of, the Stockholders and the Corporation, their successors and permitted assigns. [Remainder of page left intentionally blank] 7 [Signature Page to Amendment No. 1 to the Stockholders' Agreement] IN WITNESS WHEREOF, the undersigned have executed this First Amendment as of the date first written above. THE NEWS CORPORATION LIMITED By: /s/ Peter Chernin ------------------------- Name: Peter Chernin Title: Director GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: /s/ Jeff Shell ------------------------- Jeff Shell Co-President /s/ Henry C. Yuen ---------------------------- HENRY C. YUEN EX-10.5 8 dex105.txt EMPLOYMENT AGREEMENT - HENRY C. YUEN EXHIBIT 10.5 Execution Copy EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into on November 7, 2002 (the "Effective Date") by and between Gemstar - TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). WITNESSETH: WHEREAS, the Company (as successor in interest to Gemstar International Group Limited, a British Virgin Islands corporation), Employee and Gemstar Development Corporation, a California corporation ("GDC"), are parties to that certain Amended and Restated Employment Agreement dated as of January 7, 1998, as amended (the "Prior Employment Agreement"); WHEREAS, the Company, GDC and Employee have agreed to terminate the Prior Employment Agreement as provided in that certain Termination Agreement by and among the Company, GDC and Employee (the "Termination Agreement") entered into as of the Effective Date; WHEREAS, the Company and Employee acknowledge the unique nature of Employee's services and the global application of those services to the Company's business; and WHEREAS, the Company and Employee desire to enter into this Agreement to set forth the terms and conditions on which Employee will be employed by the Company from and after the Effective Date. NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows: 1. Term. The Company agrees to employ Employee, and Employee agrees to serve the Company, in accordance with the terms of this Agreement for a five year term commencing on the Effective Date and ending on the fifth anniversary of the Effective Date, unless this Agreement is earlier terminated in accordance with the provisions of this Agreement. The actual term of Employee's employment under this Agreement is referred to herein as the "Term." 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. 2. Specific Position; Duties and Responsibilities. (a) The Company and Employee agree that, subject to the provisions of this Agreement, during the Term, the Company will employ Employee and Employee will serve the Company as a non-executive Chairman of the Board of Directors of the Company (the "Company Board") and as head of a business unit of the Company (which may be organized as a division of the Company or of a subsidiary of the Company or as a separate subsidiary of the Company) focused on developing new international markets ("Gemstar International"). Employee shall perform all duties attendant to the head of a Company business unit, and shall make reasonable efforts to further the business interests of Gemstar International. In addition, Employee shall use reasonable efforts to enhance and improve the Company's existing technologies, and to develop new technologies, related to the fields of Interactive Program Guides and Interactive Television (as such terms are defined in the Patent Rights Agreement of even date herewith between the Company and Employee), or that are otherwise useful to the Company's Interactive Television or Interactive Program Guide businesses. Employee shall participate in and assist the Company with the defense and prosecution of claims and litigation (including, without limitation, lawsuits, arbitrations, mediations and other forms of dispute resolution) to such extent as the Company shall reasonably request from time to time. Employee agrees to fully and reasonably cooperate with respect to any transition of the Company's auditors and preparation of the quarterly financial statements for the second and third quarters of 2002 and the 2002 annual report (and the subsequent filing of such statements and reports with the appropriate regulatory agencies); provided, however, that such cooperation shall not include the execution of any additional management letters or similar letters requiring Employee to make representations concerning the Company or its financial position or results of operations with respect to any period after the Effective Date. Although it is expected that Employee will devote a substantial portion of his business time and attention to his duties under this Agreement, it is agreed and understood that the nature of Employee's duties does not require Employee's presence at the Company's facilities on a daily basis, and does not require Employee to devote a specific number of hours per week to his duties under this Agreement. Employee shall have such other additional duties and responsibilities befitting the foregoing position, if any, as the Company and Employee shall mutually agree from time to time. The Company also agrees that Employee shall serve as a director of the Company during the Term. Employee acknowledges and agrees that other subsidiaries and/or divisions of the Company (whether or not currently in existence) may engage in the same business activities as Gemstar International, without the involvement of Employee. During the Term, Employee shall report to the Company Board, which, consistent with the foregoing, shall (i) establish such policies concerning the scope of Employee's authority as the Company Board shall from time to time deem appropriate in its sole and absolute discretion, (ii) determine the scope of Employee's responsibilities from time to time in its sole and absolute discretion, provided, however, that the Company Board may not materially increase Employee's responsibilities beyond those described herein and in the resolutions adopted by the Company Board concurrently with the approval of this Agreement without Employee's written consent, and (iii) determine the staffing, budget and support of Gemstar International in its sole and absolute discretion, provided, however, that the staffing, budget and support of Gemstar International shall initially be as set forth in the resolutions adopted by the Company Board concurrently with the approval of this Agreement and shall not be reduced except as provided in subsequent resolutions adopted by the Company Board. Notwithstanding anything to the contrary contained herein, during the Term, without the express written consent of the Company Board, Employee shall not engage in any policy making activity, or otherwise engage in any activity, that would 2 result in his treatment as an "executive officer" under the executive compensation disclosure rules promulgated under the Securities Exchange Act of 1934, as amended. (b) During the Term, Employee may (i) upon approval of the Company Board, serve as a director, consultant or trustee of any other corporation or business; provided, however, that Employee may not become a director, consultant or trustee of any corporation or business that competes with (A) the Company or any subsidiary of the Company or (B) the business activities of any affiliate of the Company in the fields of Interactive Television or Interactive Program Guides (as such terms are defined in the Patent Rights Agreement of even date herewith between the Company and Employee) (any such corporation or business described in this proviso is referred to herein as a "Competitor"), (ii) accept any part-time academic position, (iii) invest in real estate for his own account, (iv) become a partner or a shareholder in any privately-held corporation, partnership or other venture that is not a Competitor or (v) become a partner or a shareholder with an equity interest of not more than five percent (5%) in any corporation, partnership or other venture whose equity securities are publicly traded, whether or not such corporation, partnership or other venture is a Competitor. 3. Compensation. (a) Base Compensation and Adjustments. During the Term, the Company agrees to pay Employee a base salary at the rate of Two Million Dollars (US $2,000,000.00) per year (as in effect from time to time, the "Base Salary"). Such salary shall be earned monthly and shall be payable in periodic installments no less frequently than monthly in accordance with the Company's customary practices. Amounts payable shall be reduced by standard withholding and other authorized deductions. During the Term, the Company Board shall review the Base Salary at least annually and may, but need not, increase the Base Salary in its sole and absolute discretion. Under no circumstances may the Base Salary as in effect at any time be reduced. (b) Bonuses. During the Term, Employee shall be entitled to receive such bonuses as the Company Board may, but need not, from time to time grant to Employee in its sole and absolute discretion. (c) Stock Options and other Equity Awards. (i) As of the first anniversary of the Effective Date, the Company shall grant to Employee three million three hundred thirty-three thousand three hundred and thirty-four (3,333,334) nonqualified stock options under the Company's 1994 Stock Incentive Plan, as amended (the "SIP"), in accordance with the terms and conditions set forth in the Initial Stock Option Agreement attached hereto as Exhibit A. (ii) As of the second anniversary of the Effective Date, the Company shall grant to Employee three million three hundred thirty-three thousand three hundred and thirty-three (3,333,333) nonqualified stock options under the SIP in accordance with the terms and conditions set forth in the Second Stock Option Agreement attached hereto as Exhibit B. 3 (iii) Notwithstanding anything herein to the contrary, the Company and Employee agree that the Company shall not (A) grant to Employee any stock options under the SIP or under any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day or (B) accelerate any stock option grant contemplated by this Agreement or any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day. Employee hereby represents that he has not received any grant of options or other equity-based compensation within the 6 month period preceding the Effective Date. Nothing in this Section 3(c)(iii) shall prevent the vesting of stock options contemplated by Section 3(b) of the Termination Agreement nor shall the vesting of such stock options violate this Section 3(c)(iii). (iv) Subject to receiving the requisite stockholder approval, the Company shall cause the SIP to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit C. The Company shall schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable after the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. On the date of the Stockholder Meeting or as soon as reasonably practicable thereafter, the Company shall either issue restricted stock or grant Stock Units (as such term is defined under the SIP) to Employee as follows (the date of such issuance or grant is referred to as the "Share Grant Date"): (1) if the SIP Amendment is approved by the Company stockholders, the Company shall issue two million ninety-three thousand sixty-four (2,093,064) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Employment Restricted Stock Agreement attached hereto as Exhibit D, such shares to be issued in certificates of such denominations as Employee may request; or (2) if the SIP Amendment is not approved by the Company stockholders, the Company shall grant to Employee under the SIP (i) two million ninety-three thousand sixty-four (2,093,064) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock (the "Common Shares") generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million ninety-three thousand sixty-four (2,093,064) Common Shares, in each case in accordance with the terms and conditions set forth in the Employment Stock Unit Agreement attached hereto as Exhibit E. (v) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted in Section 3(c)(iv) 4 above for which Employee makes a valid election within 30 days after the Share Grant Date under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (the "83(b) Shares"), the Company shall pay Employee within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date). The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(v) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to the Section 83(b) election above prior to paying the 83(b) Payment, the 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the 83(b) Payment is made to Employee. If the 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the 83(b) Payment would have been made (if not for the deduction of the prior sentence). 5 (vi) If the SIP Amendment is not approved by the Company stockholders at the Stockholder Meeting, the Company shall pay Employee, on each Stock Unit vesting date, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is number of Stock Units that vest on the applicable Stock Unit vesting date; Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(vi) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(c)(vi) are accelerated due to Employee's employment under this Agreement terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f), such payments shall be contingent on Employee (or, if deceased, his estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F. (vii) As of the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, the Company shall grant to 6 Employee two hundred thousand (200,000) nonqualified stock options under the SIP in accordance with the terms and conditions set forth in the Third Stock Option Agreement attached hereto as Exhibit G. (viii) The number and type of shares set forth above with respect to any stock option awards, restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Section 3(c)(v) and 3(c)(vi), shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares, or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. (ix) The Company represents and warrants that (i) as of the date hereof, there are sufficient Common Shares available under the SIP to permit the options under Sections 3(c)(i), 3(c)(ii) and 3(c)(vii) to be issued thereunder and (ii) as of the Share Grant Date, there will be sufficient Common Shares available under the SIP to permit the grants of restricted stock or Stock Units, as the case may be, under Section 3(c)(iv) to be issued thereunder. (x) Notwithstanding any provision herein or in the Initial Stock Option Agreement, Second Stock Option Agreement or SIP to the contrary, if Employee's employment under this Agreement terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any stock option awards under Section 3(c)(i) or 3(c)(ii), such stock option awards not yet granted shall be granted to the Employee on the later of (i) the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, or (ii) the date of Employee's termination of employment. (xi) Notwithstanding any provision herein or in the Initial Stock Option Agreement, Second Stock Option Agreement, Employment Restricted Stock Agreement, Employment Stock Unit Agreement, Third Stock Option Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of this Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined herein) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c), any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) material breach by Employee of 7 Section 12 of the Termination Agreement, (ii) breach by Employee of any representation or warranty contained in Section 15 of the Termination Agreement, or (iii) material breach by Employee of Sections 6, 8, 10(h) or 10(i) of this Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in his capacity as a Company Board member, he shall not vote on such a determination nor shall he vote on any Company Board determination that a Breach Event (as such term is defined in Elsie Leung's employment agreement with the Company of even date hereof) has occurred with respect to Elsie Leung. Any disputes related to this Section 3(c)(xi) shall be resolved pursuant to Section 10(f). (xii) Subject to Section 3(c)(xi) above, if Employee's employment terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any restricted stock or Stock Units required under Section 3(c)(iv) of this Agreement, such restricted stock or Stock Units not yet granted shall be granted to Employee as provided in Section 3(c)(iv) and shall be immediately vested in full upon grant. (xiii) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall govern. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (xiv) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the grant of such Equity Award shall, to the extent required by applicable law, be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (xv) In the event of a Change in Control Event, as defined under Section 7 of the Stock Option Agreements attached hereto as Exhibits A, B and G, the Company shall grant any award of stock options required under this Agreement (and not already granted) on the later of (i) the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, or (ii) the date of the Change in Control Event, but only if the Company (or a successor thereto) has failed to provide for the cash-out of such grants, or the continuation of such grants in an economically equivalent amount (as provided in Section 7 of the Stock Option Agreements). (xvi) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. 8 (d) Alternative Equity Awards. If, after being requested to determine whether or not the stock option grants contemplated by Section 3(c) of this Agreement will result in variable accounting, the Company's independent auditors are unable to advise the Company that the stock option grants contemplated by Section 3(c) of this Agreement will not result in variable accounting, the Special Committee of the Company Board or the Company Board may, by providing (or directing the Company to provide) written notice to Employee before the Notification Deadline (as defined herein), commit to granting restricted stock or Stock Units rather than stock options, by replacing Section 3(c) and its related Exhibits (the "Replaced Equity Provisions") with a new Section 3(c) and its related Exhibits (the "New Equity Provisions") attached hereto as Appendix A. Such written notice shall state that the Company's independent auditors have been unable to advise the Company that the stock option grants contemplated by Section 3(c) of this Agreement will not result in variable accounting. Such written notice shall be provided in accordance with Section 10(b) and shall be effective as of the date delivered to Employee. Until such written notice is provided to Employee, the New Equity Provisions shall have no effect and Employee shall have no rights or obligations under the terms and conditions of the New Equity Provisions. If the New Equity Provisions become effective, Employee shall have no rights or obligations under the terms and conditions of the Replaced Equity Provisions, and the terms and conditions set forth in the New Equity Provisions shall govern as of the Effective Date. All other provisions of the Agreement shall remain in effect. The "Notification Deadline" shall refer to the earlier of (i) the date the Stockholder Meeting occurs or (ii) the date that is six months after the Effective Date. (e) Additional Benefits. From and after the Effective Date and through the termination of Employee's employment, Employee shall be entitled to all rights and benefits for which Employee is otherwise eligible under any life, medical, dental, disability or insurance plan or policy (except that the split-dollar life insurance arrangements referred to in Section 2(c) of the Termination Agreement shall be governed by that provision and are not covered by this section), or other plan or benefit that the Company, its subsidiaries or affiliates may provide for Employee or (provided Employee is eligible to participate therein) for executives and employees of the Company generally (other than stock option, stock purchase or other equity-based incentive plans, and other than bonus and other incentive compensation plans), as from time to time may be in effect (collectively, the "Additional Benefits"). The Additional Benefits shall be provided at the level generally available to other employees of the Company at the time and shall recognize for vesting and eligibility purposes Employee's prior service with the Company to the extent (if any) that such prior service is recognized under any such plans. To the extent Additional Benefits are to be provided under Sections 4(a), 4(d), 4(f) or 4(g) from and after the termination of Employee's employment through the fifth anniversary of the Effective Date, Employee shall be entitled to Additional Benefits; provided, however, that Employee shall not accrue any benefits under any pension plans, 401(k) or profit sharing plans, or supplemental executive retirement plans after such termination and that benefits under such 9 pension plans, 401(k) or profit sharing plans, or supplemental executive retirement plans shall be payable to Employee in accordance with their terms. (f) Vacation. Employee shall not earn any vacation during the Term. From time to time during the Term, Employee may take time off in reasonable amounts, it being understood that time off totaling seven weeks or less during each year of the Term shall be deemed reasonable. (g) Organizations. During the Term, the Company shall promptly reimburse Employee for the membership fees and dues reasonably incurred by Employee to maintain a membership in, or to belong to, one social or country club. (h) Automobile Allowance. The Company shall provide Employee with a car allowance of one thousand dollars (US $1,000.00) per month to be used for the purchase, lease and maintenance of an appropriate automobile for his use during the Term. If the Company leases or purchases an automobile for Employee's use, Employee shall have the ability to assume the lease at the end of the term thereof or purchase the automobile at its residual or depreciated value upon termination of his employment. 4. Termination. Employee's employment by the Company may be terminated prior to the fifth anniversary of the Effective Date only as provided in this Section 4: (a) Disability. Employee's employment hereunder may be terminated by the Company due to his disability (as defined below). In the event of a termination due to Employee's disability, and provided that he executes a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F, he shall be entitled to the following: (i) payment of his Base Salary from the date of such termination through the fifth anniversary of the Effective Date; (ii) payment of the pro-rated portion of the annual bonus, if any, previously determined by the Company Board to be due to Employee for the fiscal year in which termination due to disability occurs, payable promptly after the end of the fiscal year ending after the date of such termination; and (iii) all Additional Benefits through the fifth anniversary of the Effective Date. 10 For purposes of this Agreement, "disability" shall mean Employee's inability to substantially perform his duties and responsibilities under this Agreement for (i) a period of 120 consecutive days or (ii) an aggregate of 180 days during any twelve month period. (b) Death. Employee's employment hereunder shall terminate as a result of his death. In the event of such a termination due to Employee's death, his estate or his beneficiaries, as the case may be, shall be entitled to: (i) a lump sum payment equal to the lesser of (A) the amount of Base Salary that Employee would have received from the date of his death through the fifth anniversary of the Effective Date and (B) two times Employee's Base Salary; and (ii) payment of the pro-rated portion of the annual bonus, if any, previously determined by the Company Board to be due to Employee for the fiscal year in which Employee's death occurs, payable promptly after the end of the fiscal year ending after the date of death. (c) For Cause. Employee's employment hereunder may be terminated by the Company for Cause. For the purposes of this Agreement, "Cause" shall mean: (i) Employee is engaging or has engaged in acts of fraud, material dishonesty or other acts of willful misconduct that have had a material adverse effect on the business of the Company; (ii) Employee has habitually abused any substance (such as narcotics or alcohol) and such abuse has had a material adverse effect on the business of the Company; (iii) Employee has been convicted of, or plead guilty to, an act constituting a felony that has a material adverse effect on the business of the Company; (iv) Employee has not obtained prior approval of the Company Board (or any committee designated by the Company Board for such purpose) prior to causing or permitting the Company or any subsidiary of the Company to enter into or otherwise be bound by any material contract; or (v) Employee has materially breached Sections 6, 8, 10(h), or 10(i) of this Agreement, or breached any of the representations and warranties contained in Section 15 of the Termination Agreement and (if capable of cure), has failed to fully cure such breach and all effects thereof within thirty (30) days after receipt of written notice from the Company of such breach. A termination for Cause shall not be effective unless and until (i) Employee has received written notice of a proposed termination for Cause setting forth the facts and circumstances claimed to provide a basis for termination of Employee's employment for Cause 11 and Employee has had an opportunity to be heard before at least a majority of the members of the Company Board and (ii) the Company Board has confirmed in writing the termination for Cause, indicating any additional or different facts and circumstances that the Company Board believes provide a basis for such termination. Employee shall be deemed to have had such opportunity if given written notice by any director acting on behalf of the Company Board at least seventy two (72) hours in advance of a meeting, if scheduled in California, or ninety six (96) hours in advance of a meeting, if such meeting is scheduled outside California. Any actions or proceedings by the Company pursuant to this subparagraph 4(c) shall be conducted in a confidential manner and all steps shall be taken to prevent any harm to Employee's reputation. In the event Employee commences proceedings pursuant to Section 10(f) to dispute the Company's right to terminate his employment for Cause within 30 days from the date he receives the written notice from the Company Board confirming his termination for Cause (the "Termination Date"), the Company shall (i) continue to pay Employee's Base Salary and to provide Additional Benefits to Employee until such dispute has been resolved and (ii) pay all costs reasonably incurred by Employee in preparing for and in pursuing such proceedings, including all professional fees and expenses. If Employee is the nonprevailing party in such proceedings, Employee shall reimburse the Company for all costs, fees and expenses paid by the Company on Employee's behalf and shall reimburse the Company for any Base Salary and Additional Benefits paid to Employee since the Termination Date. The term "For Cause Determination Period" shall refer to the period of time from when Employee receives written notice of a proposed termination for Cause until the Resolution Date (as defined herein). The term "Resolution Date" shall refer to the Termination Date or the date the Company Board determines no termination for Cause has occurred; provided, however, that, if Employee commences proceedings pursuant to Section 10(f) as provided in the immediately preceding paragraph, the term "Resolution Date" shall refer to the date such proceedings are finally resolved. If Employee is terminated for Cause, he shall only be entitled to benefits continuation and accrued wages as required under applicable law (subject to the benefits and compensation continuation during a dispute as described above). (d) Without Cause. Employee's employment hereunder may be terminated by the Company without Cause. If the Company terminates Employee's employment for any reason other than those specified in Sections 4(a), (b) or (c) above, he shall be entitled to receive the following, provided that he signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F: (i) a lump sum payment equal to the amount of Base Salary that Employee would have received from the date of such termination through the fifth anniversary of the Effective Date; (ii) payment of the pro-rated portion of the annual bonus, if any, previously determined by the Company Board to be due to Employee for the fiscal year in which 12 termination without Cause occurs, payable promptly after the end of the fiscal year ending after the date of such termination without Cause; and (iii) all Additional Benefits through the fifth anniversary of the Effective Date. Employee agrees to accept the severance provided in this Section 4(d) and in any Equity Award upon the termination of his employment pursuant to this Section 4(d) or pursuant to Section 4(f) as liquidated damages in lieu of any other damages or severance benefits to which he might be entitled as a result of the termination of his employment with the Company pursuant to this Section 4(d) or pursuant to Section 4(f). All amounts paid to Employee pursuant to this Section 4(d) or pursuant to Section 4(f) shall be paid without regard to whether Employee has taken or takes actions to mitigate damages. (e) Limited Succession of Additional Benefits Upon Termination. If Employee's services are terminated hereunder pursuant to Sections 4(a) or 4(d) and Employee is no longer eligible for Additional Benefits under the terms of any plans relating thereto because of such termination, Employee shall be entitled to, and the Company shall provide benefits substantially equivalent to, those benefits in the nature of health and welfare type benefits to which Employee was entitled immediately prior to such termination for the period (if any) during which Employee is entitled to receive Additional Benefits pursuant to such Sections. (f) Constructive Termination. A Constructive Termination (defined below) shall be treated as a termination without Cause pursuant to Section 4(d) of this Agreement. For purposes of this Agreement, "Constructive Termination" means (i) the removal of Employee from any of the positions of non-executive Chairman of the Board of the Company or head of Gemstar International or from his position as a director of the Company (other than pursuant to Section 4(j) below), (ii) assignment to Employee of material additional duties or responsibilities inconsistent with such positions, (iii) a material violation by the Company of Section 6 of the Termination Agreement, or (iv) requiring Employee to report to any other person or entity other than the full Company Board, in any case other than as a result of grounds for termination under Sections 4(a), 4(b), 4(c) or 4(g). If the Employee provides written notice to the Company of the occurrence of conditions which would constitute a Constructive Termination ("Notice of Potential Constructive Termination") within 30 days after the Employee has knowledge of such circumstances, the Company fails to correct such circumstances within 30 days after receipt of such notice, and Employee gives his 30 day notice of resignation within 60 days after he gave the Notice of Potential Constructive Termination, then a Constructive Termination shall be deemed to have occurred. (g) Termination by Employee. Employee shall have the right, in his sole and absolute discretion, to terminate his employment under this Agreement at any time for any reason. If Employee provides the Company with notice, in writing, at least thirty (30) days prior to the effective date of his 13 termination of employment and also signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F, he shall be entitled to receive all Additional Benefits through the fifth anniversary of the Effective Date. (h) Calculation of Bonus. For purposes of Sections 4(a), 4(b) and 4(d), the pro-rated portion of the annual bonus referenced in such sections, if any, shall be determined by multiplying such annual bonus by a fraction, the numerator of which shall be the number of days during such fiscal year that Employee was employed and the denominator of which shall be 365. (i) Certain Payments. To the extent that any Payment (as such term is defined in Schedule II to the Prior Employment Agreement) made in connection with the termination of Employee's employment pursuant to Section 4(d) (without Cause) or Section 4(f) (Constructive Termination) is determined (as provided in the following sentence) to be subject to the Excise Tax (as such term is defined in Schedule II to the Prior Employment Agreement) imposed by Section 4999 (as such term is defined in Schedule II to the Prior Employment Agreement), Employee shall be entitled to the benefits and protections set forth in Schedule II of the Prior Employment Agreement, which is incorporated herein by this reference to the same extent as if set forth in this Agreement in its entirety. Notwithstanding any provision in Schedule II to the Prior Employment Agreement to the contrary, the determination that any Payment made on or prior to the Effective Date is or was subject to the Excise Tax shall be only established by a final determination by the Internal Revenue Service ("IRS") that such Payment is or was subject to the excise tax imposed by Section 4999 of the Code, and that such Payment was actually made by the Employee. Further, Employee agrees to provide notice of such IRS determination (and other IRS actions related hereto) to the Company within ten (10) days of receipt, and the Company, in its discretion, may challenge such IRS determination. If the Company determines to challenge such IRS determination, Employee agrees to provide full cooperation with the Company in order to effectuate such challenge. (j) Board Membership In Case of Termination. In the event of termination of Executive's employment with the Companies for any reason, Employee agrees to resign, and shall automatically be deemed to have resigned, with no further action required, from his membership on the Company Board and any committees thereof, effective as of the date of such termination of employment or effective at such later date selected by the Company Board. 5. Business Expenses. The Company shall reimburse Employee promptly for, or pay directly, all reasonable business expenditures incurred by Employee during the Term in connection with his performance of his duties hereunder (including, without limitation, the reasonable costs and expenses of establishing and maintaining an office in his home as set forth below), upon proper presentation of expense statements or vouchers or such other supporting information as the Company shall reasonably require. During the Term, Employee shall have the right to use the 14 Company airplane for appropriate business purposes in accordance with Company policy as in effect from time to time. The Company will reimburse the Employee for the expenses (not to exceed $50,000 (U.S. Dollars) per year and subject to the substantiation requirements above) incurred from time to time during the Term to acquire, upgrade or replace home office equipment and services (including computer, printer, monitor, internet connections and telephone lines) reasonably required for Employee to perform his duties under this Agreement. 6. Inventions and Patents. (a) All inventions (whether or not patentable), developments, concepts, know-how, technology, ideas, methods, techniques, products or processes, that Employee solely or jointly makes, conceives of or reduces to practice (as those terms have been interpreted by the Federal Courts in connection with the Patent Act (35 U.S.C. sections 101 et. seq.)) during the Term and any works of authorship that Employee authors during the Term (collectively, "Developed Inventions"), and any patents or patent applications or other proprietary rights arising from the foregoing and any other proprietary or intellectual property rights with respect to which Employee is an inventor, creator or author during the Term (collectively, the "Developed Intellectual Property") shall belong exclusively to and be the exclusive property of the Company; provided, however, that, any Developed Invention or any Developed Intellectual Property that Employee identifies and thereafter can establish does not relate in whole or in part to the fields of Interactive Television or Interactive Program Guides (as such terms are defined in the Patent Rights Agreement of even date herewith between the Company and Employee) or other aspects of the Company's business, and did not result from any work performed by Employee for the Company, shall belong exclusively to and be the exclusive property of Employee (the "Employee Intellectual Property"). Employee agrees to assign, and hereby conveys and assigns, to the Company all of Employee's right, title and interest in and to all Developed Inventions and Developed Intellectual Property, together with the right to sue for past infringement or misappropriation thereof, other than the Employee Intellectual Property (collectively, "Assigned Intellectual Property"). The Company shall have the exclusive right to direct and control prosecution of any patent or other applications or registrations, domestic and foreign, for protection of the Assigned Intellectual Property. (b) Promptly following the creation thereof, Employee shall disclose Developed Inventions and Developed Intellectual Property not previously disclosed to the Company in written form in as much detail as Employee can reasonably provide. Employee shall consult with the Company as reasonably requested to provide such information as may be available to Employee to enable one of ordinary skill in the art to practice any inventions, developments, concepts, know-how, technology, ideas, methods, techniques, products or processes contained in any Developed Invention or Developed Intellectual Property and to disclose to the Company any Developed Inventions and Developed Intellectual Property not theretofore disclosed to the Company. 15 (c) Employee shall (i) take all actions reasonably requested by the Company and make all further assurances reasonably warranted to confirm that the Company is the exclusive owner of all Assigned Intellectual Property, all at the Company's sole cost and expense, and (ii) provide all reasonable assistance in obtaining, perfecting or enforcing the Assigned Intellectual Property or any legal rights in and to the same in any administrative agency or court, domestic or foreign including, but not limited to, reviewing and signing all lawful declarations, oaths, affidavits and other documents in connection with any of the foregoing, all at the Company's sole cost and expense. (d) Employee acknowledges hereby receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Employee) does not apply to Developed Inventions and Developed Intellectual Property that qualifies fully under California Labor Code Section 2870. 7. Indemnity. To the maximum extent permitted by applicable law, the Company shall indemnify Employee, defend Employee and hold Employee harmless from and against any and all claims, liabilities, judgments, fines, penalties, costs and expenses (including, without limitation, reasonable attorneys' fees, costs of investigation and experts, settlements and other amounts actually incurred by Employee in connection with the defense of any action, suit or proceeding, and in connection with any appeal thereon) reasonably incurred by Employee in any and all threatened, pending or completed actions, suits or proceedings, whether civil, criminal, administrative or investigative (including, without limitation, actions, suits or proceedings brought by or in the name of the Company), arising, directly or indirectly, by reason of Employee's status, actions or inaction, including, without limitation, actual or alleged errors or omissions, as a director, officer, employee or agent of the Company or of an affiliate of the Company after the Effective Date so long as (i) Employee's conduct was in good faith, (ii) Employee reasonably believed such conduct to be in or not opposed to the best interests of the Company, and (iii) Employee's conduct was not in violation of the representations and warranties set forth in Section 15 of the Termination Agreement; provided, however, this Section 7 shall not apply to any claim (a) pursuant to the Sarbanes-Oxley Act, and any rules or regulations arising thereunder, as it may be amended from time to time, or (b) arising as a result of the execution of this Agreement, the Umbrella Agreement, the Termination Agreement, the Patent Rights Agreement, any ancillary agreement (including without limitation any equity grant) to any such agreement, or Amendment No. 1 to the Stockholders' Agreement of even date herewith among the Company, Employee and The News Corporation Limited, as all such claims described in the foregoing clauses (a) and (b) shall be subject to indemnification in accordance with Section 10(a)(ii) of the Termination Agreement. The Company shall advance to Employee upon request any and all expenses reasonably incurred by Employee in defending any and all such actions, suits or proceedings to the maximum extent permitted by applicable law. The advances to be made hereunder shall be paid by the Company to Employee within ten (10) days following delivery of a written request for payment therefor by Employee to the Company. Employee shall have a right to select attorneys to defend him in any actual or threatened action, suit, proceeding or investigation, subject to the Company's approval, which shall not be unreasonably withheld. Notwithstanding any other provision of this Agreement, the provisions 16 of this Section 7 shall survive the expiration, suspension or termination, for any reason, of this Agreement and shall survive the termination of Employee's employment with the Company. Notwithstanding the foregoing, this Section 7 shall not apply to any dispute between the Company and Employee with respect to any alleged breach of, or seeking an interpretation of, or a determination of the rights or obligations of either party under, this Agreement, the Umbrella Agreement, the Termination Agreement, the Patent Rights Agreement, or any ancillary agreement (including without limitation any equity grant) to any such agreement. 8. Noncompetition and Nonsolicitation. During the Term, except to the extent the Company provides prior written approval, Employee shall not, in any manner, directly or indirectly, engage in any business that is a Competitor, and, except as expressly permitted by clause (iv) of Section 2(b), will not, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed by, or connected in any manner with any corporation, firm or business that is a Competitor. Employee acknowledges that the Company and all of its affiliates and subsidiaries by nature of their respective businesses have a legitimate and protectable interest in their clients, customers and employees with whom they have established significant relationships as a result of a substantial investment of time and money, and but for Employee's employment hereunder, Employee would not have had contact with such clients, customers and employees. Employee agrees that during the Term and for one additional year thereafter (the "Non-Solicitation Period"), without the prior written approval of the Company (which approval may be granted or withheld in the Company's sole and absolute discretion), Employee will not (except as necessary to perform Employee's duties as an employee of the Company): (i) directly or indirectly, for Employee's own account, or as an agent, executive, director, owner, partner, or consultant of any corporation, firm, partnership, joint venture, syndicate, sole proprietorship or other business (whether as a principal, division, subsidiary, affiliate, related entity, or otherwise) solicit or induce any client or customer of the Company (and with respect to the Company's subsidiaries, any client or customer of such subsidiaries with whom Employee had contact, or who was identified to Employee, during Employee's employment with the Company) (a) to not do business or to alter in any adverse manner its relationship with the Company or any of its subsidiaries, or (b) to obtain services or goods from Employee or any business with which Employee is then affiliated, if such services or goods are comparable to those provided by Employee during his employment with the Company and the Company continues to provide such services or goods; or (ii) solicit or induce any executive or employee of the Company (and with respect to the Company's subsidiaries, any executive or employee of such subsidiaries with whom Employee had contact, or who was identified to Employee, during Employee's employment with the Company) to terminate his or her employment relationship with the Company or any of its subsidiaries and commence an employment relationship with any Competitor or with any business or entity owned by, controlled by or affiliated with Employee. 17 9. [Reserved] 10. Miscellaneous. (a) Succession; Survival. This Agreement shall inure to the benefit of and shall be binding upon the Company and the Company's successors and assigns, but without the prior written consent of Employee this Agreement may not be assigned other than in connection with a merger or sale of substantially all the assets of the Company or a similar transaction in which the successor or assignee assumes (whether by operation of law or express assumption) all obligations of the Company hereunder. The obligations and duties of Employee hereunder are personal and otherwise not assignable. (b) Notices. Any notice or other communication provided for in this Agreement shall be in writing and sent, if to the Company, to its office at: Gemstar - TV Guide International, Inc. Suite 800 135 North Los Robles Ave. Pasadena, California 91101 Facsimile: (818) 792-4051 Attention: General Counsel or at such other address as the Company may from time to time in writing designate, and, if to Employee, at such address as Employee may from time to time in writing designate (or Employee's business address of record in the absence of such designation). Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section 10(b) and an appropriate answerback is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address. (c) Entire Agreement; Amendments. This Agreement, the Termination Agreement, the Umbrella Agreement (as defined in the Termination Agreement), the Patent Rights Agreement of even date herewith between Employee and the Company, and the Amendment No. 1 to the Stockholders' Agreement of even date herewith among the Company, Employee and The News Corporation Limited, together with the ancillary agreements referred to in (or otherwise entered into in connection with) any of the foregoing agreements, contain the entire agreement of the parties relating to the subject matter hereof and supersede any prior agreements, undertakings, commitments and practices relating to Employee's employment by the Company or its subsidiaries except for any and all other agreements necessary to give effect to the provisions of this Agreement, including, without limitation, stock option agreements, life insurance agreements, and agreements relating 18 to Additional Benefits. No amendment or modification of the terms of this Agreement shall be valid unless made in writing and signed by Employee and, on behalf of the Company, by senior executive officers after approval thereof by the Company Board. (d) Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right. (e) Choice of Law. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. (f) Resolution of Disputes Generally. In the event of any dispute, controversy, claim or disagreement between Employee and the Company with respect to any alleged breach of this Agreement, the interpretation of this Agreement, or the rights or obligations of either party under this Agreement, the parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a solution satisfactory to both parties. If they do not resolve the dispute, controversy, claim or disagreement within a period of 30 days, or such longer period as they may mutually agree, then such dispute, controversy, claim or disagreement shall be resolved pursuant to confidential binding arbitration in New York, New York by a panel of three neutral arbitrators. The arbitration shall be conducted in accordance with the Commercial Rules of the American Arbitration Association then in effect. Within 15 days after the initiation of arbitration, the parties shall select three neutral arbitrators, all of whom shall be members of a state bar actively engaged in the practice of law for at least 10 years. Either party may seek interim or preliminary relief from the arbitrators until an arbitration award is rendered or the controversy is otherwise resolved. Either party also may, prior to the establishment of the arbitral tribunal, and without waiving any remedy under this Agreement, seek interim or provisional relief that is necessary to protect the rights or property of that party. The arbitration award shall be made as promptly as practicable and in any event within nine months of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment; provided, however, that this time limit may be extended by agreement of the parties or by the arbitrators if necessary. The award of the arbitrators shall be in writing, shall be signed by a majority of the arbitrators, and shall include findings of fact and the reasons for the disposition of each claim. In the award, the arbitrators shall allocate all of the costs of the arbitration, including the fees of the arbitrators and the reasonable attorneys' fees of the prevailing party, against the non-prevailing party. This Section 10(f) shall not be construed to limit either party's right to obtain equitable relief with respect to any dispute and, pending a final arbitration by the arbitrators with respect to any such disputes, either party shall be entitled 19 to obtain any such relief by direct application to state, federal or other applicable court, without being required to first arbitrate such dispute. Except as may be required by law or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to the party or arbitrator, neither the parties nor the arbitrators may disclose the existence, content or results of any arbitration hereunder without the prior written consent of all of the parties. Judgment on the award may be entered in any court having jurisdiction thereof. In connection with any dispute as to whether any Developed Invention or any Developed Intellectual Property is Employee Intellectual Property or Assigned Intellectual Property, as such terms are defined in Section 6, discovery shall be on an expedited basis, the decision of the arbitration panel shall be final and there shall be no right of appeal or right to petition to vacate such award. (g) Reserved. (h) Confidentiality, Proprietary Information. Employee agrees to not make use of, divulge or otherwise disclose, directly or indirectly, any trade secret or other confidential or proprietary information concerning the business (including, but not limited to, confidential or proprietary information concerning its products, employees, services, practices or policies) of the Company or any of its subsidiaries of which Employee may learn or be aware as a result of Employee's employment during the Term or prior thereto as shareholder, employee, officer or director of or consultant to the Company and its predecessors, except to the extent such use or disclosure is (i) necessary to the performance of this Agreement and in furtherance of the Company's best interests, (ii) required by applicable law, (iii) lawfully obtainable from other sources, or (iv) authorized in writing by the Company. The provisions of this Section 10(h) shall survive the expiration, suspension or termination, for any reason, of this Agreement. (i) Trade Secrets. Employee, prior to and during the Term, has had and will have access to and become acquainted with various trade secrets, consisting of software, plans, formulas, patterns, devices, secret inventions, processes, customer lists, contracts, and compilations of information, records and specifications that are owned by the Company or by its subsidiaries and regularly used in the operation of their respective businesses and that may give the Company an opportunity to obtain an advantage over competitors who do not know or use such trade secrets. Employee agrees and acknowledges that Employee has been granted access to these valuable trade secrets only by virtue of the confidential relationship created by Employee's employment and Employee's prior relationship to, interest in and fiduciary relationships to the Company and its predecessors. Employee shall not disclose any of the aforesaid trade secrets, directly or indirectly, or use them in any way, either during the Term or at any time thereafter, except as required in the course of employment by the Company and for its benefit. All records, files, documents, drawings, specifications, software, equipment, and similar items relating to the business of the Company or its subsidiaries, including without limitation all records relating to customers (the "Documents"), whether prepared by Employee or otherwise coming into Employee's possession, shall remain the exclusive property of the 20 Company or such subsidiaries and shall not be removed from the premises of the Company or its subsidiaries under any circumstances whatsoever without the prior consent of a senior executive officer of the Company. Upon termination of employment, Employee agrees to promptly deliver to the Company all Documents in the possession or under the control of Employee. (j) Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law. (k) Withholding; Deductions. All compensation payable hereunder, including salary and other benefits, shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions. (l) Cooperation. Employee agrees that during the Term and thereafter he will cooperate in the Company's and its subsidiaries' defense against any threatened or pending litigation or in any investigation or proceeding by any governmental agency or body that relates to any events or actions which occurred during or prior to the Term. The Company agrees to reimburse Employee for any reasonable and necessary out-of-pocket costs incurred by Employee in providing such assistance. (m) Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (n) Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. (o) Representation By Counsel; Interpretation. Each party hereto acknowledges that it or he has been represented by counsel in connection with this Agreement and the matters contemplated by this Agreement. Accordingly, any rule of law, including but not limited to Section 1654 of the California Civil Code, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. 21 [The remainder of this page has been intentionally left blank - signature page follows] 22 [Signature Page to Employment Agreement] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. "The Company" GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: /s/ Jeff Shell --------------------------------- Jeff Shell, Co-President By: /s/ Jonathan B. Orlick --------------------------------- Jonathan B. Orlick, Executive Vice President "Employee" /s/ Henry C. Yuen ------------------------------------ HENRY C. YUEN 23 Exhibit A GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL STOCK OPTION AGREEMENT THIS AGREEMENT dated as of __________, ____, between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of __________, ____ (the "Grant Date") three million three hundred thirty-three thousand three hundred thirty-four (3,333,334) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Employee, subject to the vesting provisions and restrictions set forth below, of three million three hundred thirty-three thousand three hundred thirty-four (3,333,334) nonqualified stock options (the "Options") under the SIP. Each Option shall represent the right to acquire one 1 (1) Common Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date or (ii) the termination of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest as follows: (i) one million one hundred eleven thousand one hundred twelve (1,111,112) Options shall vest on the Grant Date, (ii) one million one hundred eleven thousand one hundred eleven (1,111,111) Options shall vest on the first anniversary of the Grant Date, and (iii) one million one hundred eleven thousand one hundred eleven (1,111,111) Options shall vest on the second anniversary of the Grant Date; provided, however, that no Options shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Options shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Options scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Options shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Options scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Options shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. Subject to the execution of the aforementioned release, in the event of 2 termination due to Section 4(b) of the New Employment Agreement, Employee's estate or Beneficiaries, as the case may be, shall be entitled to exercise all Options held by Employee at the time of his death for the balance of their term. To the extent Employee does not purchase all or any part of the Common Shares under the Options exercisable and to which Employee is entitled, Employee has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Employee (or Employee's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Employee consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option that is paid by a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Employee, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Employee for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Employee (or Employee's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 5. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Options and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes 3 in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 6. Forfeiture. All Options then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Options that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 7. Change in Control Event. All Options referred to in this Agreement shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Options at their then fair market value, or (B) the continuation of such Options in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Options immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or 4 certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11. Plan. The Options and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's 5 capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Stock Option Agreement by Gemstar-TV Guide International, Inc., I, ___________________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Initial Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 8 Exhibit B GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND STOCK OPTION AGREEMENT THIS AGREEMENT dated as of ______, ____, between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of _____, ____ (the "Grant Date") three million three hundred thirty-three thousand three hundred thirty-three (3,333,333) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Employee, subject to the vesting provisions and restrictions set forth below, of three million three hundred thirty-three thousand three hundred thirty-three (3,333,333) nonqualified stock options (the "Options") under the SIP. Each Option shall represent the right to 1 acquire one (1) Common Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date or (ii) the termination of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest as follows: (i) one million one hundred eleven thousand one hundred eleven (1,111,111) Options shall vest on the Grant Date, (ii) one million one hundred eleven thousand one hundred eleven (1,111,111) Options shall vest on the first anniversary of the Grant Date, and (iii) one million one hundred eleven thousand one hundred eleven (1,111,111) Options shall vest on the second anniversary of the Grant Date; provided, however, that no Options shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, however, that no Options shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Options scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Options shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Options scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Options shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. Subject to the execution of the aforementioned release, in the event of 2 termination due to Section 4(b) of the New Employment Agreement, Employee's estate or Beneficiaries, as the case may be, shall be entitled to exercise all Options held by Employee at the time of his death for the balance of their term. To the extent Employee does not purchase all or any part of the Common Shares under the Options exercisable and to which Employee is entitled, Employee has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Employee (or Employee's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Employee consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option that is paid by a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Employee, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Employee for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Employee (or Employee's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 5. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Options and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes 3 in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 6. Forfeiture. All Options then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Options that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 7. Change in Control Event. All Options referred to in this Agreement shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Options at their then fair market value, or (B) the continuation of such Options in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Options immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or 4 certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11. Plan. The Options and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's 5 capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Stock Option Agreement by Gemstar-TV Guide International, Inc., I, ____________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Second Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 8 Exhibit C DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit D GEMSTAR-TV GUIDE INTERNATIONAL, INC. EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _______, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two million ninety three thousand sixty four (2,093,064) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million ninety three thousand sixty four (2,093,064) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of himself and on behalf of his beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or his beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of his death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ----------------------------- Signature of Spouse 8 Exhibit E GEMSTAR-TV GUIDE INTERNATIONAL, INC. EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of _______, _____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two million ninety three thousand sixty four (2,093,064) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million ninety three thousand sixty four (2,093,064) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million ninety 1 three thousand sixty four (2,093,064) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Third Stock Option Agreement by Gemstar-TV Guide International, Inc., I, _____________________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Third Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------- Signature of Spouse 7 Exhibit F SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement. 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement ), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. Section 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: -------------------------------- Name: -------------------------------- Date: Title: ------------------- -------------------------------- Date: -------------------------------- -4- Exhibit G GEMSTAR-TV GUIDE INTERNATIONAL, INC. THIRD STOCK OPTION AGREEMENT THIS AGREEMENT dated as of ___________, ____, between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). WITNESSETH WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of ___________, ____ (the "Grant Date") two hundred thousand (200,000) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Employee, subject to the vesting provisions and restrictions set forth below, of two hundred thousand (200,000) nonqualified stock options (the "Options") under the SIP. Each Option shall represent the right to acquire one (1) Common Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the 1 Grant Date or (ii) the termination of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest on the Grant Date. In the event of termination due to Section 4(b) of the New Employment Agreement, Employee's estate or Beneficiaries, as the case may be, shall be entitled to exercise all Options held by Employee at the time of his death for the balance of their term. To the extent Employee does not purchase all or any part of the Common Shares under the Options exercisable and to which Employee is entitled, Employee has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Employee (or Employee's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Employee consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option that is paid by a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Employee, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Employee for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Employee (or Employee's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 2 5. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Options and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 6. Forfeiture. All Options then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Options that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 7. Reserved. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 3 11. Plan. The Options and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and of the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 4 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Third Stock Option Agreement by Gemstar-TV Guide International, Inc., I, _____________________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Third Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------- Signature of Spouse 7 APPENDIX A The terms and conditions provided under this Appendix A (including, without limitation, the Section 3(c) and related exhibits) shall have no effect unless and until as provided for under Section 3(d) of the Agreement. (c) Equity Awards. (i) Subject to receiving the requisite stockholder approval, the Company shall cause the SIP to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit A. The Company shall schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable after the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. (ii) If the SIP Amendment is approved by the Company stockholders, the Company shall issue: (1) on the date of the Stockholder Meeting or as soon as reasonably practicable thereafter (the "Initial Grant Date"), two million ninety-three thousand sixty-four (2,093,064) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Initial Employment Restricted Stock Agreement attached hereto as Exhibit B; (2) on the date that is six months and one day after the Effective Date or as soon as reasonably practicable thereafter, one hundred twenty-five thousand three hundred twenty-four (125,324) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Second Employment Restricted Stock Agreement attached hereto as Exhibit C; (3) on the first anniversary of the Effective Date or as soon as reasonably practicable thereafter, two million twenty-eight thousand four hundred eighty-one (2,028,481) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Third Employment Restricted Stock Agreement attached hereto as Exhibit D; and (4) on the second anniversary of the Effective Date or as soon as reasonably practicable thereafter, two million twenty-eight thousand four hundred eighty (2,028,480) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Fourth Employment Restricted Stock Agreement attached hereto as Exhibit E. Such shares of restricted stock shall be issued in certificates of such denominations as Employee may request. (iii) If the SIP Amendment is not approved by the Company stockholders, the Company shall grant: 2 (1) on the date of the Stockholder Meeting or as soon as reasonably practicable thereafter (the "Initial Grant Date"), to Employee under the SIP (i) two million ninety-three thousand sixty-four (2,093,064) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock (the "Common Shares") generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million ninety-three thousand sixty-four (2,093,064) Common Shares, in each case in accordance with the terms and conditions set forth in the Initial Employment Stock Unit Agreement attached hereto as Exhibit F; (2) on the date that is six months and one day after the Effective Date or as soon as reasonably practicable thereafter, to Employee under the SIP (i) one hundred twenty-five thousand three hundred twenty-four (125,324) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Common Shares generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to one hundred twenty-five thousand three hundred twenty-four (125,324) Common Shares, in each case in accordance with the terms and conditions set forth in the Second Employment Stock Unit Agreement attached hereto as Exhibit G; (3) on the first anniversary of the Effective Date or as soon as reasonably practicable thereafter, to Employee under the SIP (i) two million twenty-eight thousand four hundred eighty-one (2,028,481) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Common Shares generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million twenty-eight thousand four hundred eighty-one (2,028,481) Common Shares, in each case in accordance with the terms and conditions set forth in the Third Employment Stock Unit Agreement attached hereto as Exhibit H; and (4) on the second anniversary of the Effective Date or as soon as reasonably practicable thereafter, to Employee under the SIP (i) two million twenty-eight thousand four hundred eighty (2,028,480) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Common Shares generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million twenty-eight thousand four hundred eighty (2,028,480) Common Shares, in each case in accordance with the terms and conditions set forth in the Fourth Employment Stock Unit Agreement attached hereto as Exhibit I. (iv) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted under Sections 3(c)(ii)(1) or 3(c)(ii)(2) or 3(c)(ii)(3) or 3(c)(ii)(4), as the case may be, for which Employee 3 makes a valid election within 30 days after the applicable Share Grant Date (as defined herein) under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (the "83(b) Shares"), the Company shall pay Employee within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares with respect to such Share Grant Date; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of such Share Grant Date); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of such Share Grant Date). The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date or Stock Unit Grant Date, as the case may be. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(iv) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to a Section 83(b) election (with respect to those shares of restricted stock granted under Sections 3(c)(ii)(1) or 3(c)(ii)(2) or 3(c)(ii)(3) or 3(c)(ii)(4), as the case may be) above prior to paying the applicable 83(b) Payment, such 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until such 83(b) Payment is made to Employee. If such 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an 4 amount in cash equal to the amount of deficiency on such date such 83(b) Payment would have been made (if not for the deduction of the prior sentence). The term "Share Grant Date" shall mean the date such shares of restricted stock are granted to Employee. The term "Intended Grant Date" shall mean: (i) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(1), the Effective Date; (ii) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(2), the earlier of the date that is six months and one day after the Effective Date or the date such shares are granted; (iii) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(3), the earlier of the first anniversary of the Effective Date or the date such shares are granted; and (iv) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(4), the earlier of the second anniversary of the Effective Date or the date such shares are granted. Notwithstanding anything herein to the contrary, no 83(b) Payment shall be made with respect to shares of restricted stock granted to Employee under Sections 3(c)(ii)(2) or 3(c)(ii)(3) or 3(c)(ii)(4) if (i) the applicable Share Grant Date is the same as the corresponding Intended Grant Date for such shares of restricted stock or (ii) such shares of restricted stock are granted after the Initial Grant Date. (v) If the SIP Amendment is not approved by the Company stockholders at the Stockholder Meeting, the Company shall pay Employee, on each Stock Unit vesting date, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is number of Stock Units that vest on the applicable Stock Unit vesting date; Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). 5 The term "Stock Unit Grant Date" shall refer to the date the applicable Stock Units are granted to Employee. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(v) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(c)(v) are accelerated due to Employee's employment under this Agreement terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f), such payments shall be contingent on Employee (or, if deceased, his estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J. (vi) The number and type of shares set forth above with respect to any restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Sections 3(c)(iv) and 3(c)(v), shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares, or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. (vii) The Company represents and warrants that, as of the dates that grants of restricted stock or Stock Units, as the case may be, are made under this Section 3(c), there will be sufficient Common Shares available under the SIP to permit such grants to be issued thereunder. (viii) Notwithstanding any provision herein or in the Initial Employment Restricted Stock Agreement, Second Employment Restricted Stock Agreement, Third Employment Restricted Stock Agreement, Fourth Employment Restricted Stock Agreement, Initial Employment Stock Unit Agreement, Second Employment Stock Unit Agreement Stock, Third Employment Stock Unit Agreement, Fourth Employment Stock Unit Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of this Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure 6 Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined herein) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c), any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) material breach by Employee of Section 12 of the Termination Agreement, (ii) breach by Employee of any representation or warranty contained in Section 15 of the Termination Agreement, or (iii) material breach by Employee of Sections 6, 8, 10(h) or 10(i) of this Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in his capacity as a Company Board member, he shall not vote on such a determination nor shall he vote on any Company Board determination that a Breach Event (as such term is defined in Elsie Leung's employment agreement with the Company of even date hereof) has occurred with respect to Elsie Leung. Any disputes related to this Section 3(c)(viii) shall be resolved pursuant to Section 10(f). (ix) Subject to Section 3(c)(viii) above, if Employee's employment terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any Equity Awards required under Sections 3(c)(ii)(1) or 3(c)(iii)(1) of this Agreement, such Equity Awards not yet granted shall be granted to Employee as provided in such Sections and shall be immediately vested in full upon grant. (x) Subject to Section 3(c)(viii) above, if Employee's employment terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any Equity Awards required under Sections 3(c)(ii)(2), 3(c)(ii)(3), 3(c)(ii)(4), 3(c)(iii)(2), 3(c)(iii)(3) or 3(c)(iii)(4) of this Agreement, such Equity Awards not yet granted shall be granted to Employee on the later of (i) the Initial Grant Date or (ii) the date of termination of Employee's employment, and shall be immediately vested in full upon grant. (xi) Subject to Section 3(c)(viii) above, in the event of a Change in Control Event, as defined under Section 6 of the Initial Employment Restricted Stock Agreement, the Company shall grant any Equity Award required under Sections 3(c)(ii)(2), 3(c)(ii)(3), 3(c)(ii)(4), 3(c)(iii)(2), 3(c)(iii)(3) or 3(c)(iii)(4) of this Agreement (and not already granted) on the later of (i) Initial Grant Date, or (ii) the date of the Change in Control Event, but only if the Company (or a successor thereto) has failed to provide for the cash-out of such grants, or the continuation of such grants in an economically equivalent amount (as provided under Section 6 of the Initial Employment Restricted Stock Agreement). (xii) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall govern. In the event of a conflict or inconsistency between the terms and conditions of this 7 Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (xiii) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the grant of such Equity Award shall, to the extent required by applicable law, be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (xiv) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. (xv) The Company and Employee agree that the Company shall not (A) grant to Employee any stock options under the SIP or under any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day or (B) accelerate any stock option grant contemplated by any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day. Employee hereby represents that he has not received any grant of options or other equity-based compensation within the 6 month period preceding the Effective Date. Nothing in this Section 3(c)(xv) shall prevent the vesting of stock options contemplated by Section 3(b) of the Termination Agreement nor shall the vesting of such stock options violate this Section 3(c)(xv). 8 Exhibit A DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit B GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _______, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two million ninety-three thousand sixty-four (2,093,064) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million ninety-three thousand sixty-four (2,093,064) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of himself and on behalf of his beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or his beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of his death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred ninety-seven thousand six hundred-eighty eight (697,688) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) six hundred ninety-seven thousand six hundred eighty-eight (697,688) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) six hundred ninety-seven thousand six hundred eighty-eight (697,688) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Initial Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ----------------------------- Signature of Spouse 8 Exhibit C GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _______, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) one hundred twenty-five thousand three hundred twenty-four (125,324) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, one hundred 1 twenty-five thousand three hundred twenty-four (125,324) shares of restricted stock (the "Grant Shares") under the SIP. On behalf of himself and on behalf of his beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or his beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon 2 the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of his death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest on the Grant Date. 4. No Employment Commitment. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. [Reserved] 6. [Reserved] 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 3 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's 4 capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Second Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ----------------------------- Signature of Spouse 7 Exhibit D GEMSTAR-TV GUIDE INTERNATIONAL, INC. THIRD EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _______, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) two million twenty-eight thousand four hundred eighty-one (2,028,481) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million 1 twenty-eight thousand four hundred eighty-one (2,028,481) shares of restricted stock (the "Grant Shares") under the SIP. On behalf of himself and on behalf of his beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or his beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon 2 the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of his death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred seventy-six thousand one hundred sixty-one (676,161) Grant Shares shall vest on the Grant Date, (ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); 3 provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's 4 stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely 5 affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Third Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Third Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ----------------------------- Signature of Spouse 8 Exhibit E GEMSTAR-TV GUIDE INTERNATIONAL, INC. FOURTH EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _______, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) two million twenty-eight thousand four hundred eighty (2,028,480) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million 1 twenty-eight thousand four hundred eighty (2,028,480) shares of restricted stock (the "Grant Shares") under the SIP. On behalf of himself and on behalf of his beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or his beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon 2 the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of his death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the Grant Date, (ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); 3 provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's 4 stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely 5 affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Fourth Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Fourth Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ----------------------------- Signature of Spouse 8 Exhibit F GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of _______, _____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two million ninety three thousand sixty four (2,093,064) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million ninety three thousand sixty four (2,093,064) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million ninety 1 three thousand sixty four (2,093,064) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) six hundred ninety seven thousand six hundred eighty eight (697,688) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Initial Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 7 Exhibit G GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of _______, _____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) one hundred twenty-five thousand three hundred twenty-four (125,324) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to one hundred twenty-five thousand three hundred twenty-four (125,324) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 1 2. Grant of Stock Units. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, one hundred twenty-five thousand three hundred twenty-four (125,324) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest on the Grant Date. 4. No Employment Commitment. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. [Reserved] 6. [Reserved] 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 2 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 3 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 4 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 5 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Second Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 6 Exhibit H GEMSTAR-TV GUIDE INTERNATIONAL, INC. THIRD EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of _______, _____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) two million twenty-eight thousand four hundred eighty-one (2,028,481) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million twenty-eight thousand four hundred eighty-one (2,028,481) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 1 2. Grant of Stock Units. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million twenty-eight thousand four hundred eighty-one (2,028,481) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred seventy-six thousand one hundred sixty-one (676,161) Grant Shares shall vest on the Grant Date, (ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 2 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 3 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 4 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Third Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Third Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 7 Exhibit I GEMSTAR-TV GUIDE INTERNATIONAL, INC. FOURTH EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of _______, _____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Henry C. Yuen ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) two million twenty-eight thousand four hundred eighty (2,028,480) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two million twenty-eight thousand four hundred eighty (2,028,480) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 1 2. Grant of Stock Units. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two million twenty-eight thousand four hundred eighty (2,028,480) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the Grant Date, (ii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) six hundred seventy-six thousand one hundred sixty (676,160) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New 2 Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, his estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit J of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 3 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 4 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Henry C. Yuen ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Fourth Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Fourth Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 7 Exhibit J SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement . 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. section. 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: -------------------------------- Name: ------------------------------ Date: Title: ----------------------- ----------------------------- Date: ------------------------------ -4- EX-10.6 9 dex106.txt LETTER AGREEMENT - HENRY C. YUEN EXHIBIT 10.6 November 7, 2002 Gemstar-TV Guide International, Inc. 135 North Los Robles Ave. Suite 800 Pasadena, California 91101 Gentlemen: Notwithstanding anything to the contrary contained in the Restructuring Agreements (as defined in the Umbrella Agreement (the "Umbrella Agreement") of even date herewith among Dr. Henry Yuen, Ms. Elsie Ma Leung, The News Corporation Limited and Gemstar-TV Guide International, Inc. (the "Company")), Dr. Yuen and the Company agree that: 1. The Company will retain, in a segregated interest bearing account (the "Segregated Account"), the termination fee and all amounts to be paid in settlement of Dr. Yuen's unpaid salary, bonuses and unused vacation days (collectively, the "Retained Funds") due to Dr. Yuen on the Effective Date pursuant to Section 2(a) of the Yuen Termination Agreement (as defined in the Umbrella Agreement), and upon doing so, the Company will be deemed to have performed all of its payment obligations as of the Effective Date under the Restructuring Agreements, and, except as otherwise contemplated by this paragraph, all other actions (including Dr. Yuen's resignation and the termination of Dr. Yuen's existing employment agreement) required to take place on the Effective Date will be deemed to have been performed as of such time. The Retained Funds will be retained by the Company and remain Company property until, with respect to any portion of the Retained Funds, the earlier of (a) the disbursement of such Retained Funds in accordance with the terms of an agreement reached between the Securities and Exchange Commission (the "SEC") and Dr. Yuen and (b) the disbursement of any remaining Retained Funds to Dr. Yuen on May 6, 2003 (the "Release Date"). On the Release Date, the Company will transfer the balance of the Retained Funds, as well as all interest earned thereon, to Dr. Yuen in accordance with clause (a) or (b) as the case may be. Notwithstanding the prior sentences and, provided that the SEC does not object in either of the following cases, (i) upon receipt of proper substantiation of the amounts requested, the funds due under Section 4 of the Yuen Termination Agreement shall be paid directly by wire transfer to Arkin Kaplan LLP promptly after the date hereof, and (ii) any restricted stock, stock options, or stock units granted pursuant to the Restructuring Agreements (collectively, the "Equity Awards") on the Effective Date, or any date thereafter, shall be issued directly to Dr. Yuen in accordance with the terms of the Restructuring Agreements. If, prior to the date of issuance, a court order prohibiting any such issuance or requiring the escrow (or other similar arrangement) of any of the Equity Awards has not been obtained and remain in force, such November 7, 2002 Page 2 Equity Awards will be issued to Dr. Yuen on the later of (a) the Release Date and (b) such later date on which any such Equity Award is to be issued pursuant to the Restructuring Agreements. Dr. Yuen hereby acknowledges that the Company will not have any obligation under this letter agreement or under any of the Restructuring Agreements to make any disbursement of any portion of the Retained Funds or to issue any of the Equity Awards to the extent that a court order prohibiting any such disbursement or issuance, or requiring the escrow (or other similar arrangement) of such Retained Funds or Equity Awards has been obtained and remains in force. 2. As soon as reasonably practicable after the date hereof (but in no event later than seven business days hereafter), the Company's outside legal counsel and/or counsel to the Special Committee of the Board of Directors, along with counsel to Dr. Yuen, will arrange to meet with the SEC for the purpose of jointly seeking the SEC's concurrence to release to Dr. Yuen from the Segregated Account those funds to which Dr. Yuen is entitled pursuant to his existing employment agreement. 3. Notwithstanding the terms of the New Yuen Employment Agreement (as defined in the Umbrella Agreement) and the Yuen Termination Agreement, (i) until December 31, 2002, the Company will continue to pay Dr. Yuen at the annualized salary of $5,006,649 per annum, such salary being that which was effective immediately prior to the date hereof (the "Current Salary"), and (ii) the termination fee set forth in Section 2(a) of the Yuen Termination Agreement will be decreased to equal $21,999,583. 4. For all purposes under the Restructuring Agreements, the "Effective Date" shall mean November 7, 2002 and the Restructuring Agreements shall be effective as of such date. [The remainder this page has been intentionally left blank - Signature page follows] November 7, 2002 Page 3 [Signature page to Gemstar Side Letter Dated November 7, 2002] Approved and Agreed to: /s/ Henry C. Yuen - --------------------- Dr. Henry C. Yuen /s/ Jeff Shell - ------------------------------------- Gemstar-TV Guide International, Inc. By: Jeff Shell ------------------------ Title: Co-President --------------------- EX-10.7 10 dex107.txt TERMINATION AGREEMENT - ELSIE MA LEUNG EXHIBIT 10.7 Redacted Version Execution Copy TERMINATION AGREEMENT *** Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by an asterisk and has been filed separately in accordance with the Securities and Exchange Act of 1934, as amended, and the Commission's rules and regulations promulgated under the Freedom of Information Act, pursuant to a request for confidential treatment. *** This TERMINATION AGREEMENT (this "Agreement") is entered into on November 7, 2002 (the "Effective Date") by and between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), Gemstar Development Corporation, a California corporation ("GDC"), and Elsie Ma Leung ("Employee"). WITNESSETH: WHEREAS, the Company, (as successor in interest to Gemstar International Group Limited, a British Virgin Islands corporation), Employee and GDC are parties to that certain Amended and Restated Employment Agreement dated as of March 31, 1998, as amended (the "Current Employment Agreement"), pursuant to which Employee is currently employed as Chief Financial Officer of the Company and as Chief Operating Officer and Chief Financial Officer of GDC; and WHEREAS, the Company, GDC and Employee have agreed that Employee will (i) relinquish the title of Chief Financial Officer of the Company and the titles of Chief Operating Officer and Chief Financial Officer of GDC, (ii) terminate the Current Employment Agreement on the terms and conditions set forth herein, including providing for the mutual releases set forth herein, and (iii) enter into a new employment agreement with the Company (the "New Employment Agreement") pursuant to which Employee will serve as the non-executive Vice Chairman of the Board of the Company and as an employee of a business unit of the Company focused on developing new international markets ("Gemstar International"). NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows: 1. Resignations and Termination of Current Employment Agreement. Subject to the payment by the Company of the amounts required to be paid to Employee on the Effective Date as provided in Section 2 hereof and the performance by the Company of its other obligations to be performed on the Effective Date as provided herein, (a) Employee hereby resigns, effective as of the Effective Date, (i) as Chief Financial Officer of the Company, (ii) as Chief Operating Officer and Chief Financial Officer of GDC, (iii) from each and every office that she may hold with any direct or indirect Subsidiary (as such term is defined below), (iv) as a member of the Board of Directors of any Subsidiary of which she may be a director, including without limitation, the Board of Directors of GDC, (v) as a member of any committee of the Board of Directors of the Company and any Subsidiary of which she may be a member, (vi) as a trustee or member of any committee in connection with any employee benefit or compensation plan, fund or program, of the Company or any Subsidiary of which she may be a trustee or committee member and (vii) from any and all other titles, capacities, or functions with the Company, GDC and their respective Subsidiaries and affiliates other than as a member of the Board of Directors of the Company and as an employee of "Gemstar International" (as defined in and as contemplated by the New Employment Agreement) and (b) as of the Effective Date, the Current Employment Agreement shall terminate in its entirety and shall be of no further force or effect. As used in this Agreement, the term "Subsidiary" means any corporation, limited liability company, partnership, business trust, limited liability partnership, joint stock company, trust, unincorporated association, joint venture or other entity of which securities (or other interests) having the power to elect a majority of that entity's board of directors or similar governing body, or otherwise having the power to direct the business and policies of that entity (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Company or one or more of its Subsidiaries. 2. Payments and Other Benefits. (a) The Company shall pay to Employee by wire transfer on the Effective Date, subject in each case to any required tax and similar withholdings, (i) a termination fee of $6,957,953, and (ii) $1,209,695 (in full and complete settlement for all unpaid salary, bonuses and unused vacation days due under the Current Employment Agreement or otherwise). (b) In addition to the foregoing, and notwithstanding any other provision of this Agreement, the Company shall reimburse Employee pursuant to Sections 3(d), 3(f), 5, and 7 of the Current Employment Agreement for any amounts due and owing (or required to be reimbursed) under such Sections through the Effective Date, such reimbursement to be made in accordance with the terms of such Sections; provided, however, that no request for reimbursement pursuant to Section 3(d), 3(f) or 5 of the Current Employment Agreement shall be permitted after the Effective Date with respect to any expense incurred prior to January 1, 2002; and provided further, that any and all requests for reimbursement pursuant to Section 3(d), 3(f) or 5 of the Current Employment Agreement must be submitted by Employee no later than thirty (30) business days after the Effective Date; and provided further, that no request for reimbursement shall be permitted after the Effective Date for any expenses described in clause (A) of the second sentence of Section 3(d) of the Current Employment Agreement, it being understood that all such expenses are to be reimbursed pursuant to, and subject to the limitations set forth in, Section 4 of this Agreement. (c) To the extent that any Payment (as such term is defined in Schedule II to the Current Employment Agreement) made on or prior to the Effective Date is or was determined (as provided in the following sentence) to be subject to the Excise Tax (as such term is defined in Schedule II to the Current Employment Agreement) imposed by Section 4999 (as such term is defined in Schedule II to the Current Employment Agreement), Employee shall be entitled to the benefits and protections set forth in Schedule II of the Current Employment Agreement, which is incorporated herein by this reference to the same extent as if set forth in this Agreement in its entirety. Notwithstanding any provision in Schedule II to the Current Employment Agreement to the contrary, the determination that any Payment made on or prior to the Effective Date is or was subject to the Excise Tax shall be established only by a final determination by the Internal Revenue Service ("IRS") that such Payment is or was subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), and that such Payment was actually made by the Employee. Further, Employee agrees to provide written notice of such IRS determination (and other IRS actions related hereto) to the Company within ten (10) days of receipt and the Company, in its discretion, may challenge such IRS 2 determination. If the Company determines to challenge such IRS determination, Employee agrees to provide full cooperation with the Company in order to effectuate such challenge. 3. Current Stock Options and other Equity Awards. (a) On the Effective Date, Employee will surrender to the Company for cancellation and without any additional consideration all options to purchase shares of the Company's Common Stock ("Common Shares") that were granted to Employee by the Company (or its predecessor) on or after April 13, 2000 (collectively, the "Cancelled Stock Options"). The Company and Employee agree that, prior to such cancellation, the Cancelled Stock Options represent the right to acquire, subject to the terms and conditions thereof, an aggregate of three million one hundred fifty thousand (3,150,000) Common Shares. (b) As of the Effective Date, and without any further action required on the part of the Company or Employee, all stock options held by Employee as of the Effective Date other than the Cancelled Stock Options shall immediately vest in full and shall become fully exercisable for their full term. (c) As of the date that is six months and a day after the date this Agreement is executed, or if such day is not a business day, on the next succeeding business day (the "Option Grant Date"), the Company shall grant to Employee one million one hundred twenty-six thousand five hundred and four (1,126,504) nonqualified stock options under the Company's 1994 Stock Incentive Plan, as amended (the "SIP"), in accordance with the terms and conditions set forth in the Termination Stock Option Agreement attached hereto as Exhibit A. (d) Subject to receiving the requisite stockholder approval, the Company shall cause the SIP to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit B. The Company will schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable following the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. On the date of the Stockholder Meeting or as soon as reasonably practicable thereafter, the Company shall either issue restricted stock or grant Stock Units (as such term is defined under the SIP) to Employee as follows (the date of such issuance or grant is referred to herein as the "Share Grant Date"): (i) if the SIP Amendment is approved by the requisite vote of the Company stockholders at the Stockholder Meeting, the Company shall issue three hundred fifty-three thousand six hundred eighty (353,680) shares of restricted stock under the SIP to the Employee in accordance with the terms and conditions set forth in the Termination Restricted Stock Agreement attached hereto as Exhibit C, such shares to be issued in certificates of such denominations as Employee may request; or 3 (ii) if the SIP Amendment is not approved by the requisite vote of the Company stockholders at the Stockholder Meeting, the Company shall grant to Employee under the SIP (i) three hundred fifty-three thousand six hundred eighty (353,680) Stock Units and (ii) Dividend Equivalent Rights (as such term is defined under the SIP) representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to three hundred fifty-three thousand six hundred eighty (353,680) shares of the Company's Common Stock, in each case in accordance with the terms and conditions set forth in the Termination Stock Unit Agreement attached hereto as Exhibit D. The Company represents and warrants that, as of the date hereof, there are sufficient Common Shares available under the SIP to permit either of the grants described in (i) or (ii) above. Additionally, the Company represents and warrants that, as of the Share Grant Date, there will be sufficient Common Shares available under the SIP to permit either of the grants described in (i) or (ii) above. (e) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted in Section 3(d) above for which Employee makes a valid election within 30 days after the Share Grant Date under Section 83(b) of the Code (the "83(b) Shares"), the Company shall pay Employee, within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal income tax rate for state ordinary income applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date). 4 The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(e) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to the Section 83(b) election above prior to paying the 83(b) Payment, the 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the 83(b) Payment is made to Employee. If the 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the 83(b) Payment would have been made (if not for the deduction of the prior sentence). (f) If the SIP Amendment is not approved by the Company stockholders, the Company shall pay Employee, on each Stock Unit vesting date, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholdings) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is the number of Stock Units that vest on the applicable Stock Unit vesting date pursuant to the Termination Stock Unit Agreement attached hereto as Exhibit D; Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal income tax rate for state ordinary income applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax 5 laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(f) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(f) are accelerated due to Employee's employment terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, such payments shall be contingent on Employee (or, if deceased, her estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit E. (g) The number and type of shares set forth above with respect to any stock option awards, restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Section 3(e), shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. (h) Notwithstanding any provision herein or in the Termination Stock Option Agreement, Termination Restricted Stock Agreement, Termination Stock Unit Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of the New Employment Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity 6 Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined in the New Employment Agreement) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) breach by Employee of any representation or warranty contained in Section 13 of this Agreement or (ii) material breach by Employee of Sections 6, 8, 10(g) or 10(h) of the New Employment Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in her capacity as a Company Board member, she shall not vote on such a determination nor shall she vote on any Company Board determination that a Breach Event (as such term is defined in Henry Yuen's termination agreement with the Company of even date hereof) has occurred with respect to Henry Yuen. Any disputes related to this Section 3(h) shall be resolved pursuant to Section 10(f) of the New Employment Agreement. (i) Subject to Section 3(h) above, if Employee's employment under the New Employment Agreement terminates under Sections 4(a), 4(b), 4(d) or 4(f) thereof prior to the granting of any Equity Awards required to be granted hereunder, such Equity Awards not yet granted shall be granted to the Employee as provided in Sections 3(b) or 3(c), as the case may be, and shall be immediately vested in full upon grant. (j) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall govern. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (j) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the grant of such Equity Award, to the extent required by applicable law, shall be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (k) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. 3A. Alternative Equity Awards. If, after being requested to determine whether or not the stock option grants contemplated by Section 3 of this Agreement will result in variable accounting, the Company's independent auditors are unable to advise the Company that the stock option grants contemplated by Section 3 of this Agreement will not result in variable accounting, the Special Committee of the Company Board or the Company Board may, by providing (or directing the Company to provide) written notice to Employee before the Notification Deadline (as defined herein), commit to granting restricted stock or Stock Units rather than stock options, by replacing Section 3 and its related Exhibits (the "Replaced Equity Provisions") with a new Section 3 and its related Exhibits (the "New Equity Provisions") attached hereto as Appendix A. Such written notice 7 shall state that the Company's independent auditors have been unable to advise the Company that the stock option grants contemplated by Section 3 of this Agreement will not result in variable accounting. Such written notice shall be provided in accordance with Section 10(b) and shall be effective as of the date delivered to Employee. Until such written notice is provided to Employee, the New Equity Provisions shall have no effect and Employee shall have no rights or obligations under the terms and conditions of the New Equity Provisions. If the New Equity Provisions become effective, Employee shall have no rights or obligations under the terms and conditions of the Replaced Equity Provisions and the terms and conditions set forth in the New Equity Provisions shall govern as of the Effective Date. All other provisions of the Agreement shall remain in effect. The "Notification Deadline" shall refer to the earlier of (i) the date the Stockholder Meeting occurs or (ii) the date that is six months after the Effective Date. 4. Expenses. The Company shall reimburse Employee for (or pay directly at Employee's request) any and all fees, costs and other expenses incurred in connection with the events leading to and the negotiation of this Agreement (and the termination of the Current Employment Agreement as provided herein), the New Employment Agreement or any other agreement referred to herein or therein; provided, however, that in no event shall the aggregate amount paid by the Company pursuant to this Section 4, plus the amount paid pursuant to Section 4 of that certain Termination Agreement between the Company and Henry C. Yuen, exceed $1,000,000, it being understood that any amount not paid as a result of such limitation shall be allocated between Employee and Mr. Yuen in proportion to their respective requests for reimbursement. 5. Public Announcements and Press Releases. Employee shall have the right to review and approve, such approval not to be unreasonably withheld or delayed, any press release or other public announcement made by the Company or any Subsidiary more or less contemporaneously with the execution hereof and relating to the matters addressed by this Agreement; provided, however, that the press release in the form of Exhibit F attached to this Agreement is hereby approved for joint public release by each of the parties to this Agreement. 6. Non-Disparagement. (a) The Company will direct its directors and executive officers to not publicly disparage, denigrate or ridicule Employee in respect of Employee's integrity or business practices, performance, skills, acumen, experience or success, or concerning Employee personally; provided, however, that nothing in this Section 6(a) shall prohibit the Company or any director or executive officer of the Company from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. The Company shall only be responsible for, and bear any and all liability, for, any breach of this Section 6(a) by any of its directors or executive officers (other than Henry Yuen), if such breach is knowingly and 8 willfully committed by any such director or executive officer in connection with such director's or executive officer's duties to the Company and involves a material public disparagement of Employee. (b) Employee will not publicly disparage, denigrate or ridicule the Company or its directors or executive officers in respect of their integrity or business practices, performance, skills, acumen, experience or success or concerning any directors or executive officers personally; provided, however, that nothing in this Section 6(b) shall prohibit Employee from disclosing such information as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to such person. Employee shall only be responsible for, and bear any and all liability, for, any breach of this Section 6(b) if such breach is knowingly and willfully committed and involves a material public disparagement of the Company or its directors or executive officers. (c) Notwithstanding the foregoing, Employee shall not be entitled to terminate, rescind, repudiate or seek judicial invalidation of this Agreement or any other agreement with the Company as a remedy for any breach or alleged breach of Section 6(a); provided, however, that, Employee shall be entitled to the remedy specified in Section 4(f) of the New Employment Agreement. 7. Mutual Releases. (a) Employee, on behalf of herself and her heirs, executors, administrators, successors and assigns, hereby knowingly, voluntarily and irrevocably releases and discharges the Company and each Subsidiary, and any and all of their respective current and former officers, employees, agents, directors, legal representatives, attorneys and any successor or assign or predecessor of any of the foregoing, from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the Effective Date based upon any matter, cause or thing whatsoever related to or arising out of (1) Employee's employment with the Company, GDC or any other Subsidiary or any predecessor entity prior to the Effective Date, (2) Employee's service as a director of the Company, GDC or any other Subsidiary or any predecessor entity through the Effective Date, (3) any such released person's service to the Company, GDC or any other Subsidiary or any predecessor entity through the Effective Date, (4) the termination of certain of Employee's positions with the Company, GDC or any other Subsidiary or any predecessor entity as of or prior to the Effective Date as contemplated by this Agreement, (5) the events leading to the execution of, or the execution of, any of the Restructuring Agreements (as such term is defined in the Umbrella Agreement (as defined below)), or (6) except for agreements and arrangements specified in the proviso to this sentence, any agreement or arrangement between Employee and any of the Company, GDC or any other Subsidiary or predecessor entity; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims Employee may have (i) under this Agreement (or any Equity Award issued pursuant hereto), (ii) under the New Employment Agreement (or any equity award issued pursuant thereto), (iii) under that certain Umbrella Agreement of even date herewith among Employee, Henry Yuen and The News Corporation Limited (the "Umbrella Agreement"), (iv) under the Company's, GDC's or any other Subsidiary's Certificate of Incorporation or Bylaws (or similar organizational documents), as such exist as of the date hereof, (v) under any 9 applicable insurance policy, (vi) for contribution as permitted by law in the event of entry of judgment against Employee as a result of any act or failure to act for which Employee and any other person are jointly liable, (vii) that arise from, or that are based on, events that occur after the Effective Date, (viii) under any stock option, deferred compensation or other similar compensation plan, program, agreement or arrangement, or (ix) under any pension, retirement or welfare benefit plan, program, agreement or arrangement, all of which rights shall be preserved. (b) Except as set forth herein, the Company and GDC, on behalf of themselves and each other Subsidiary, and any successor or assign of any of the foregoing, hereby knowingly, voluntarily and irrevocably release and discharge Employee, her family, estate, legal representatives, agents, attorneys, heirs, executors, successors and assigns, and any entity controlled by Employee from any and all claims, charges, actions or causes of action any of them may have against any such released person, whether known or unknown, from the beginning of time through the Effective Date based upon any matter, cause or thing whatsoever related to or arising out of (1) Employee's employment with the Company, GDC or any other Subsidiary or any predecessor entity prior to the Effective Date, (2) Employee's service as a director of the Company, GDC or any other Subsidiary or any predecessor entity through the Effective Date, (3) the termination of certain of Employee's positions with the Company, GDC or any other Subsidiary or any predecessor entity as of or prior to the Effective Date as contemplated by this Agreement, (4) the events leading to the execution of, or the execution of, any of the Restructuring Agreements, or (5) except for agreements and arrangements specified in the proviso to this sentence, any agreement or arrangement between Employee and any of the Company, GDC or any other Subsidiary or predecessor entity; provided, however, that this release shall not limit in any way or constitute a waiver of any rights or claims the Company, GDC or any Subsidiary may have (i) under this Agreement (or any Equity Award issued pursuant hereto), (ii) under the New Employment Agreement (or any equity award issued pursuant thereto), (iii) under the Umbrella Agreement, (iv) for contribution as permitted by law in the event of entry of judgment against the Company, GDC or any other Subsidiary as a result of any act or failure to act for which the Company or any such Subsidiary and any other person are jointly liable, or (v) that arise from, or that are based on, events that occur after the Effective Date, all of which rights shall be preserved. Nothing in this Agreement shall be construed to release or discharge any rights or claims the Company has or may have against Employee arising under the Sarbanes-Oxley Act of 2002, and any rules or regulations arising thereunder, as it may be amended from time to time (the "Sarbanes-Oxley Act"). 8. Waiver. The parties expressly waive and relinquish all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and do so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE 10 MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, the parties expressly acknowledge that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims which either party does not know or suspect to exist in such party's favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. The parties acknowledge and agree that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 9. Covenant Not to Sue. Each party represents and covenants that such party has not filed any complaints, charges or lawsuits, nor commenced any arbitration or similar proceedings, against any other party with respect to any claim or potential claim released hereunder, and covenants that such party will not do so at any time hereafter, it being understood that this Section 9 shall not prohibit any party from commencing appropriate proceedings for the purpose of enforcing any claims not released hereunder. Nothing in this Agreement shall in any way be construed as an admission by any party that it or any affiliated entity has acted wrongfully or that any party in fact has any rights whatsoever against any other party. 10. Indemnification. (a) To the maximum extent permitted by applicable law, the Company and GDC shall, and shall cause each other Subsidiary to, indemnify Employee, defend Employee and hold Employee harmless from and against any and all: (i) claims, liabilities, injuries, judgments, fines, interest, legal expenses, penalties, costs and expenses (including, without limitation, attorneys' fees, costs of investigation and experts, and court reporter fees), settlements and other amounts incurred or suffered by Employee in connection with or relating to the defense or resolution of any threatened, pending or completed action, suit, proceeding or investigation (and in connection with any appeal with respect thereto), whether civil or criminal, administrative or investigative (including, without limitation, actions, suits, proceedings and investigations brought by or in the name of the Company or related person or entity or stockholder), or otherwise ("Expenses"), arising by reason of Employee's status, action or inaction, including, without limitation, actual or alleged errors or omissions, as an officer, director, employee, agent or stockholder of the Company, GDC, any other Subsidiary or any other affiliate of the Company prior to the Effective Date, so long as (A) Employee's conduct was in good faith, (B) Employee reasonably believed such conduct to be in or not opposed to the best interests of the Company, and (C) Employee's conduct was not in violation of the representations and warranties set forth in Section 15 below; or (ii) legal expenses and costs (including, without limitation, attorneys' fees, costs of investigation and experts and court reporter fees) and other amounts incurred or suffered by Employee in connection with or relating to the defense or resolution of any threatened, pending 11 or completed action, suit, proceeding or investigation (and in connection with any appeal with respect thereto), whether civil or criminal, administrative or investigative (including, without limitation, actions, suits, proceedings and investigations (a) brought by or in the name of the Company or related person or entity or stockholder or (b) pursuant to the Sarbanes-Oxley Act), or otherwise, arising as a result of the execution of this Agreement (or any equity award issued pursuant hereto) or the execution of the New Employment Agreement (or any equity award issued pursuant thereto). (b) To the maximum extent permitted by applicable law, the Company shall promptly advance to Employee any and all expenses actually incurred by Employee in defending any and all actions, suits, proceedings or investigations or in preparing to defend any threatened action, suit, proceeding or investigation, in each case for which Employee is indemnified by the Company pursuant to Section 10(a). The advances to be made hereunder shall be paid by the Company to Employee within ten (10) days following delivery of a written request for payment therefor by Employee to the Company. Employee shall have a right to select attorneys to defend her in any actual or threatened action, suit, proceeding or investigation, subject to the Company's approval, which shall not be unreasonably withheld. Without limiting the generality of the foregoing, in (i) the class action lawsuits pending against Employee, the Company and others as of the Effective Date, (ii) any future stockholder lawsuits are brought naming Employee as a defendant, and (iii) any investigation, inquiry or request for information, formal or informal, by the Securities and Exchange Commission or any other governmental entity or any self-regulatory organization, including without limitation, NASD, the Company shall, to the extent (1) permitted by applicable law and (2) Employee is indemnified by the Company pursuant to Section 10(a), directly pay or cause a Subsidiary to pay (rather than advance to Employee or reimburse Employee for) all expenses, including the fees and expenses of separate counsel for Employee, regardless of whether counsel for the Company or for any other party has agreed or offered to, or is in fact, representing Employee in such lawsuit. (c) [Reserved] (d) The Company shall maintain a directors' and officers' liability insurance policy (or policies) providing coverage until the later of (x) the sixth anniversary of the date on which Employee ceases to be a director or employee of the Company and (y) the date on which all claims against Employee that would otherwise be covered by such policy (or policies) become fully time-barred, providing coverage to Employee that is no less favorable to her in any respect (including, without limitation, with respect to scope, exclusions, amounts, and deductibles) than the coverage then being provided to any other present or former senior executive or director of the Company. (e) The indemnification, defense and hold harmless provided pursuant to this Section 10 shall continue even after Employee has ceased to be an officer, director, employee, agent or stockholder of the Company, and the rights and benefits thereof shall inure to the benefit of Employee's heirs, executors and administrators. Employee shall not be responsible for reimbursement of any expenses paid, reimbursed or advanced pursuant to this Section 10 except to the extent required by applicable law. 12 (f) The parties acknowledge that, in addition to the rights provided in this Section 10, Employee has certain indemnification, defense and hold harmless rights as well as certain rights to be reimbursed for, or have the Company or a Subsidiary advance or pay, certain costs and expenses under other agreements and instruments, including, without limitation, the Certificates of Incorporation and Bylaws (or similar organizational documents) of the Company and certain of its Subsidiaries and the New Employment Agreement. Such rights are intended to be cumulative and the existence of any such right shall not limit or restrict in any way any other such right, and Employee shall have the right to pursue her rights of indemnification, defense, and hold harmless or seek reimbursement for, or advances or payment of, costs and expenses under any or all of such agreements and instruments and shall be entitled to the maximum benefits provided under such agreements and instruments. (g) Notwithstanding any other provision, this Section 10 shall not apply to disputes between Employee and the Company with respect to any alleged breach of, or seeking an interpretation of, or a determination of the rights or obligations of either party under, this Agreement, the New Employment Agreement or the Umbrella Agreement, which shall be resolved (i) as provided in Section 12 in the case of this Agreement and (ii) by the terms of such agreement, in the case of the New Employment Agreement and the Umbrella Agreement. 11. Wire Transfers; No Offset. All payments to be made to Employee hereunder shall be made by wire transfer in accordance with such wire transfer instructions as Employee may provide to the Company (or if Employee has not provided wire transfer instructions to the Company prior to the date any payment is due, by corporate check). The Company may not make any offset against amounts due to Employee under this Agreement or otherwise, on account of any claim the Company may have against her. 12. Resolutions of Disputes. In the event of any dispute, controversy, claim or disagreement between Employee and the Company with respect to any alleged breach of this Agreement, the interpretation of this Agreement, or the rights or obligations of either party under this Agreement, the parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a solution satisfactory to both parties. If they do not resolve the dispute, controversy, claim or disagreement within a period of 30 days, or such longer period as they may mutually agree, then such dispute, controversy, claim or disagreement shall be resolved pursuant to confidential binding arbitration in New York, New York by a panel of three neutral arbitrators. The arbitration shall be conducted in accordance with the Commercial Rules of the American Arbitration Association then in effect. Within 15 days after the initiation of arbitration, the parties shall select three neutral arbitrators, all of whom shall be members of a state bar actively engaged in the practice of law for at least 10 years. Either party may seek interim or preliminary relief from the arbitrators until an arbitration award is rendered or the controversy is otherwise resolved. Either party also may, prior to the establishment of the arbitral tribunal, and without waiving any remedy under this Agreement, seek interim or provisional relief that is necessary to protect the rights or property of that party. The arbitration award shall be made as promptly as practicable and in any event within nine months of the filing 13 of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment; provided, however, that this time limit may be extended by agreement of the parties or by the arbitrators if necessary. The award of the arbitrators shall be in writing, shall be signed by a majority of the arbitrators, and shall include findings of fact and the reasons for the disposition of each claim. In the award, the arbitrators shall allocate all of the costs of the arbitration, including the fees of the arbitrators and the reasonable attorneys' fees of the prevailing party, against the non-prevailing party. This Section 12 shall not be construed to limit either party's right to obtain equitable relief with respect to any dispute and, pending a final arbitration by the arbitrators with respect to any such disputes, either party shall be entitled to obtain any such relief by direct application to state, federal or other applicable court, without being required to first arbitrate such dispute. Except as may be required by law, or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to the party or arbitrator, neither the parties nor the arbitrators may disclose the existence, content or results of any arbitration hereunder without the prior written consent of all of the parties. Judgment on the award may be entered in any court having jurisdiction thereof. 13. Employee Representation and Warranties. Employee represents and warrants that: (a) Since January 1, 2002, to the best of Employee's knowledge and belief and except as set forth in Exhibit 1 attached hereto: (i) each material form, report and document filed by the Company with the Securities and Exchange Commission (the "SEC") (together with the amendments and supplements to such filings filed prior to the date of this Agreement, the "Company SEC Documents"), as of its filing date (or if amended, as of the date of its last amendment) complied as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be; (ii) no Company SEC Document filed pursuant to the Securities Act, as of the date such document or amendment became effective (or if amended or supplemented, as of the date of its last amendment or supplement), contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (iii) no Company SEC Document filed pursuant to the Exchange Act, as of its filing date (or if amended, as of the date of its last amendment), contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (iv) each of the consolidated balance sheets and consolidated financial statements (including the notes thereto) included in the Company SEC Documents (collectively, 14 the "Company Financial Statements"): (A) presented fairly, in all material respects, the financial position of the Company as of the respective dates thereof; (B) presented fairly, in all material respects, the results of operations and cash flows of the Company for the respective periods set forth therein; (C) complied in all material respects with the then applicable accounting requirements and the published rules and regulations of the SEC with respect thereto; and (D) were prepared in conformity with accounting principles generally accepted in the United States applied on a consistent basis during the periods or as of the respective dates involved (except as otherwise noted therein and subject, in the case of unaudited interim financial statements, to normal year-end adjustments). In making the foregoing representations and warranties, Employee has also relied, in part, to the extent reasonable, upon information provided to Employee by other directors, officers, employees and agents of the Company and advice provided by attorneys and other professional advisors to the Company. (b) To the best of Employee's knowledge and belief, the information that Employee provided to the Company's Audit Committee and to the Company's Board of Directors in connection with the Audit Committee's investigation of the accounting treatment of the matters set forth and designated in Exhibit 1 as being subject to the Audit committee's investigation was true, complete and accurate in all material respects. (c) Employee has not knowingly violated or participated in, or consented to, any violation of, or directed any employee or agent of the Company to violate or participate in, any violation of any law, governmental regulation, stock exchange requirement, accounting standard (except, in the case of any accounting standard, to the extent of the qualifications to Employee's representations and warranties in subsection (a) above) or Company policy, the violation of which could reasonably be expected to have a material adverse effect upon the Company. (d) Since April 1, 2002, and except for the June 20, 2002 grant of stock options (representing 750,000 options) and any grant of stock options pursuant to this Agreement or the New Employment Agreement, Employee has not received any grant of options from the SIP, or any other arrangement, to purchase Common Shares, other than pursuant to this Agreement or the New Employment Agreement. 15 14. [Reserved] 15. Miscellaneous. (a) Notices. Any notice or other communication provided for in this Agreement shall be in writing and sent, if to the Company or to GDC, to its office at: Gemstar - TV Guide International, Inc. Suite 800 135 North Los Robles Ave. Pasadena, California 91101 Facsimile: (818) 792-4051 Attention: General Counsel or at such other address as the Company may from time to time in writing designate, and, if to Employee, at such address as Employee may from time to time in writing designate (or Employee's business address of record in the absence of such designation). Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section and an appropriate answerback is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address. (b) Entire Agreement; Amendments. This Agreement, the Umbrella Agreement, the New Employment Agreement and the other agreements referred to herein and therein or entered into in connection therewith contain the entire agreement of the parties relating to the subject matter hereof and thereof and supersede any prior agreements, undertakings, commitments and practices relating to Employee's employment (or termination thereof) by the Company, GDC or any Subsidiary or any of their respective affiliates except for any and all other agreements necessary to give effect to the provisions of this Agreement, including, without limitation, stock option agreements, life insurance agreements and agreements relating to Additional Benefits (as such term is defined in the New Employment Agreement). No amendment or modification of the terms of this Agreement shall be valid unless made in writing and signed by Employee and, on behalf of the Company and GDC, by senior executive officers of the Company and GDC after approval thereof by the respective Board of Directors of the Company and GDC. (c) Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right. (d) Choice of Law. 16 This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. (e) Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law. (f) Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (g) Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. (h) Successors and Assigns. No rights or obligations of any party under this Agreement may be assigned or transferred by any party without the prior written consent of the other parties hereto; provided, however, that the Company or GDC may assign or transfer their rights and obligations hereunder in whole, but not in part, pursuant to a merger or consolidation in which the Company or GDC, as the case may be, is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the business and assets of the Company or GDC, as the case may be, provided that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company or GDC and assumes the liabilities, obligations and duties of the Company or GDC, as the case may be, under this Agreement, either contractually or as a matter of law. In the event of any disposition of its business and assets described in the preceding sentence, the Company or GDC shall take whatever action it can in order to cause such assignee or transferee expressly to assume the liabilities, obligations and duties of the selling party hereunder. To the extent applicable, this Agreement shall be binding upon, and inure to the benefit of, the successors and assigns, beneficiaries, devisees, heirs, next of kin, executors and administrators of Employee. In the event of Employee's death or a judicial determination of her incompetence, references in this Agreement to Employee shall be deemed to refer, where appropriate, to her legal representative, or, where appropriate, to her beneficiary or beneficiaries. 17 (i) Facsimile Signatures. This Agreement may be executed by delivery of a facsimile copy of an executed signature page with the same force and effect as the delivery of an originally executed signature page. In the event any party delivers a facsimile copy of a signature page to any document or agreement, such party shall deliver an originally executed signature page within three (3) business days of delivering such facsimile signature page or at any time thereafter upon request; provided, however, that the failure to deliver any such originally executed signature page shall not affect the validity of the signature page delivered by facsimile, which has and shall continue to have the same force and effect as the originally executed signature page. [The remainder of this page has been intentionally left blank - Signature page follows] 18 [Signature page to Termination Agreement] IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. GEMSTAR-TV GUIDE INTERNATIONAL, INC. EMPLOYEE By: /s/ Jeff Shell /s/ Elsie Ma Leung -------------------------------------- ------------------------- Jeff Shell, Co-President ELSIE MA LEUNG GEMSTAR DEVELOPMENT CORPORATION By: /s/ Jonathan B. Orlick --------------------------- Jonathan B. Orlick Executive Vice President 19 Exhibit A GEMSTAR-TV GUIDE INTERNATIONAL, INC. TERMINATION STOCK OPTION AGREEMENT THIS AGREEMENT dated as of ________, ____, between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H - - - - - - - - - - WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the _______, ____ (the "Grant Date") one million one hundred twenty-six thousand five hundred four (1,126,504) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Employee, subject to the vesting provisions and restrictions set forth below, of one million one hundred twenty-six thousand five hundred four (1,126,504) nonqualified stock options (the "Options") under the SIP. Each Option shall represent the right to acquire one (1) 1 Common Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date or (ii) the termination of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest as follows: (i) three hundred seventy five thousand five hundred two (375,502) Options shall vest on the Grant Date, (ii) three hundred seventy five thousand five hundred one (375,501) Options shall vest on the first anniversary of the Grant Date, and (iii) three hundred seventy five thousand five hundred one (375,501) Options shall vest on the second anniversary of the Grant Date; provided, however, that no Options shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Options shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Options scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Options shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Options scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Options shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit E of the Termination Agreement. Subject to the execution of the aforementioned release, in the event of termination due 2 to Section 4(b) of the New Employment Agreement, Employee's estate or Beneficiaries, as the case may be, shall be entitled to exercise all Options held by Employee at the time of her death for the balance of their term. To the extent Employee does not purchase all or any part of the Common Shares under the Options exercisable and to which Employee is entitled, Employee has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Employee (or Employee's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Employee consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option that is paid by a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Employee, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Employee for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Employee (or Employee's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 5. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Options and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes 3 in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 6. Forfeiture. All Options then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Options that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 7. Change in Control Event. All Options referred to in this Agreement shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Options at their then fair market value, or (B) the continuation of such Options in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Options immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or 4 certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11. Plan. The Options and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's 5 capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Termination Stock Option Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Termination Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ------------------------------------ Signature of Spouse 8 Exhibit B DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit C GEMSTAR-TV GUIDE INTERNATIONAL, INC. TERMINATION RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _________, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H - - - - - - - - - - WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) three hundred fifty three thousand six hundred eighty (353,680) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, three hundred fifty three thousand six hundred eighty (353,680) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) one hundred seventeen thousand eight hundred ninety four (117,894) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) one hundred seventeen thousand eight hundred ninety three (117,893) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) one hundred seventeen thousand eight hundred ninety three (117,893) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit E of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Termination Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Termination Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____, ______. ------------------------------ Signature of Spouse 8 Exhibit D GEMSTAR-TV GUIDE INTERNATIONAL, INC. TERMINATION STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H - - - - - - - - - - WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) three hundred and fifty-three thousand six hundred eighty (353,680) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to three hundred and fifty-three thousand six hundred eighty (353,680) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, three hundred and fifty- 1 three thousand six hundred eighty (353,680) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) one hundred seventeen thousand eight hundred ninety-four (117,894) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) one hundred seventeen thousand eight hundred ninety-three (117,893) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) one hundred seventeen thousand eight hundred ninety-three (117,893) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit E of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: --------------------------------- EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Termination Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, ______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Termination Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ------------------------------ Signature of Spouse 7 Exhibit E SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement. 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement ), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. ss. 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: ------------------------------ Name: ------------------------------ Date: _____________________ Title: ------------------------------ Date: ______________________________ -4- REDACTED VERSION EXHIBIT 1 *** *** Confidential treatment has been requested pursuant to Section IV.3 of the request for confidential treatment dated November 12, 2002. APPENDIX A The terms and conditions provided under this Appendix A (including, without limitation, the Section 3 and related exhibits) shall have no effect unless and until as provided for under Section 3(d) of the Agreement. 3. Current Stock Options and other Equity Awards. (a) On the Effective Date, Employee will surrender to the Company for cancellation and without any additional consideration all options to purchase shares of the Company's Common Stock ("Common Shares") that were granted to Employee by the Company (or its predecessor) on or after April 13, 2000 (collectively, the "Cancelled Stock Options"). The Company and Employee agree that, prior to such cancellation, the Cancelled Stock Options represent the right to acquire, subject to the terms and conditions thereof, an aggregate of three million one hundred fifty thousand (3,150,000) Common Shares. (b) As of the Effective Date, and without any further action required on the part of the Company or Employee, all stock options held by Employee as of the Effective Date other than the Cancelled Stock Options shall immediately vest in full and shall become fully exercisable for their full term. (c) Subject to receiving the requisite stockholder approval, the Company shall cause the SIP to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit A. The Company shall schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable after the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. (d) If the SIP Amendment is approved by the Company stockholders, the Company shall issue: (i) on the date of the Stockholder Meeting or as soon as reasonably practicable thereafter (the "Initial Grant Date"), three hundred fifty-three thousand six hundred eighty (353,680) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Initial Termination Restricted Stock Agreement attached hereto as Exhibit B; and (ii) on the date that is six months and one day after the Effective Date or as soon as reasonably practicable thereafter, six hundred eighty-five thousand five hundred thirty-four (685,534) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Second Termination Restricted Stock Agreement attached hereto as Exhibit C; Such shares of restricted stock shall be issued in certificates of such denominations as Employee may request. (e) If the SIP Amendment is not approved by the Company stockholders, the Company shall grant: 2 (i) on the date of the Stockholder Meeting or as soon as reasonably practicable thereafter (the "Initial Grant Date"), to Employee under the SIP (i) three hundred fifty-three thousand six hundred eighty (353,680) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock (the "Common Shares") generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to three hundred fifty-three thousand six hundred eighty (353,680) Common Shares, in each case in accordance with the terms and conditions set forth in the Initial Termination Stock Unit Agreement attached hereto as Exhibit D; and (ii) on the date that is six months and one day after the Effective Date or as soon as reasonably practicable thereafter, to Employee under the SIP (i) six hundred eighty-five thousand five hundred thirty-four (685,534) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Common Shares generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to six hundred eighty-five thousand five hundred thirty-four (685,534) Common Shares, in each case in accordance with the terms and conditions set forth in the Second Termination Stock Unit Agreement attached hereto as Exhibit E; (f) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted under Sections 3(d)(i) or 3(d)(ii), as the case may be, for which Employee makes a valid election within 30 days after the applicable Share Grant Date (as defined herein) under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (the "83(b) Shares"), the Company shall pay Employee within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares with respect to such Share Grant Date; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any 3 applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of such Share Grant Date); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of such Share Grant Date). The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date or Stock Unit Grant Date, as the case may be. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(f) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to a Section 83(b) election (with respect to those shares of restricted stock granted under Sections 3(d)(i) or 3(d)(ii), as the case may be) above prior to paying the applicable 83(b) Payment, such 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until such 83(b) Payment is made to Employee. If such 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date such 83(b) Payment would have been made (if not for the deduction of the prior sentence). The term "Share Grant Date" shall mean the date such shares of restricted stock are granted to Employee. The term "Intended Grant Date" shall mean: (i) with respect to shares of restricted stock granted to Employee under Section 3(d)(i), the Effective Date; and (ii) with respect to shares of restricted stock granted to Employee under Section 3(d)(ii), the earlier of the date that is six months and one day after the Effective Date or the date such shares are granted. Notwithstanding anything herein to the contrary, no 83(b) Payment shall be made with respect to shares of restricted stock granted to Employee under Section 3(d)(ii) if (i) the applicable Share Grant Date is the same as the corresponding Intended Grant Date for such shares of restricted stock or (ii) such shares of restricted stock are granted after the Initial Grant Date. (g) If the SIP Amendment is not approved by the Company stockholders at the Stockholder Meeting, the Company shall pay Employee, on each Stock Unit vesting date, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is number of Stock Units that vest on the applicable Stock Unit vesting date; 4 Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). The term "Stock Unit Grant Date" shall refer to the date the applicable Stock Units are granted to Employee. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(g) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(g) are accelerated due to Employee's employment under this Agreement terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f), such payments shall be contingent on Employee (or, if deceased, his estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F. (h) The number and type of shares set forth above with respect to any restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Sections 3(f) and 3(g), shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. 5 (i) The Company represents and warrants that, as of the dates that grants of restricted stock or Stock Units, as the case may be, are made under this Section 3, there will be sufficient Common Shares available under the SIP to permit such grants to be issued thereunder. (j) Notwithstanding any provision herein or in the Initial Termination Restricted Stock Agreement, Second Termination Restricted Stock Agreement, Initial Termination Stock Unit Agreement, Second Termination Stock Unit Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of the New Employment Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined in the New Employment Agreement) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) breach by Employee of any representation or warranty contained in Section 13 of this Agreement or (ii) material breach by Employee of Sections 6, 8, 10(g) or 10(h) of the New Employment Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in her capacity as a Company Board member, she shall not vote on such a determination nor shall she vote on any Company Board determination that a Breach Event (as such term is defined in Henry Yuen's termination agreement with the Company of even date hereof) has occurred with respect to Henry Yuen. Any disputes related to this Section 3(j) shall be resolved pursuant to Section 10(f) of the New Employment Agreement. (k) Subject to Section 3(j) above, if Employee's employment under the New Employment Agreement terminates under Sections 4(a), 4(b), 4(d) or 4(f) thereof prior to the granting of any Equity Awards required under Sections 3(d)(i) or 3(e)(i) of this Agreement, such Equity Awards not yet granted shall be granted to the Employee as provided in Sections 3(d)(i) or 3(e)(i), as the case may be, and shall be immediately vested in full upon grant. (l) Subject to Section 3(j) above, if Employee's employment under the New Employment Agreement terminates under Sections 4(a), 4(b), 4(d) or 4(f) thereof prior to the granting of any Equity Awards required under Sections 3(d)(ii) or 3(e)(ii) of this Agreement, such Equity Awards not yet granted shall be granted to Employee on the later of (i) the Initial Grant Date or (ii) the date of termination of Employee's employment, and shall be immediately vested in full upon grant. 6 (m) Subject to Section 3(j) above, in the event of a Change in Control Event, as defined under Section 6 of the Initial Termination Restricted Stock Agreement, the Company shall grant any Equity Award required under Sections 3(d)(ii) and 3(e)(ii) of this Agreement (and not already granted) on the later of (i) Initial Grant Date, or (ii) the date of the Change in Control Event, but only if the Company (or a successor thereto) has failed to provide for the cash-out of such grants, or the continuation of such grants in an economically equivalent amount (as provided under Section 6 of the Initial Termination Restricted Stock Agreement). (n) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall govern. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (o) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the grant of such Equity Award, to the extent required by applicable law, shall be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (p) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. 7 Exhibit A DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit B GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL TERMINATION RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _________, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) three hundred fifty three thousand six hundred eighty (353,680) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, three hundred fifty three thousand six hundred eighty (353,680) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) one hundred seventeen thousand eight hundred ninety four (117,894) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) one hundred seventeen thousand eight hundred ninety three (117,893) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) one hundred seventeen thousand eight hundred ninety three (117,893) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i)a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Termination Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Initial Termination Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ________, ______. ------------------------------------ Signature of Spouse 8 Exhibit C GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND TERMINATION RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of _________, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) six hundred eighty-five thousand five hundred thirty-four (685,534) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, six hundred eighty-five thousand five hundred thirty-four (685,534) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) two hundred twenty-eight thousand five hundred twelve (228,512) Grant Shares shall vest on the Grant Date, (ii) two hundred twenty-eight thousand five hundred eleven (228,511) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) two hundred twenty-eight thousand five hundred eleven (228,511) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Termination Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Second Termination Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ------------------------- Signature of Spouse 8 Exhibit D GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL TERMINATION STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) three hundred fifty-three thousand six hundred eighty (353,680) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to three hundred fifty-three thousand six hundred eighty (353,680) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Breach Event" shall have the meaning assigned to it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, three hundred fifty- 1 three thousand six hundred eighty (353,680) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) one hundred seventeen thousand eight hundred ninety-four (117,894) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) one hundred seventeen thousand eight hundred ninety-three (117,893) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) one hundred seventeen thousand eight hundred ninety-three (117,893) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Termination Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, ______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Initial Termination Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ------------------------------------ Signature of Spouse 7 Exhibit E GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND TERMINATION STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H - - - - - - - - - - WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) six hundred eighty-five thousand five hundred thirty-four (685,534) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to six hundred eighty-five thousand five hundred thirty-four (685,534) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the Termination Agreement. "Breach Event" shall have the meaning assigned to 1`it under the Termination Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, six hundred eighty-five 1 thousand five hundred thirty-four (685,534) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) two hundred twenty-eight thousand five hundred twelve (228,512) Grant Shares shall vest on the Grant Date, (ii) two hundred twenty-eight thousand five hundred eleven (228,511) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) two hundred twenty-eight thousand five hundred eleven (228,511) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the Termination Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the Termination Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Termination Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Second Termination Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. --------------------------------- Signature of Spouse 7 Exhibit F SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement. 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement ), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. ss. 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: ------------------------------ Name: ------------------------------ Date: Title: -------------------- ------------------------------ Date: ------------------------------ -4- EX-10.8 11 dex108.txt EMPLOYMENT AGREEMENT - ELSIE MA LEUNG EXHIBIT 10.8 Execution Copy EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into on November 7, 2002 (the "Effective Date") by and between Gemstar - TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). WITNESSETH: WHEREAS, the Company (as successor in interest to Gemstar International Group Limited, a British Virgin Islands corporation), Employee and Gemstar Development Corporation, a California corporation ("GDC"), are parties to that certain Amended and Restated Employment Agreement dated as of March 31, 1998, as amended (the "Prior Employment Agreement"); WHEREAS, the Company, GDC and Employee have agreed to terminate the Prior Employment Agreement as provided in that certain Termination Agreement by and among the Company, GDC and Employee (the "Termination Agreement") entered into as of the Effective Date; and WHEREAS, the Company and Employee desire to enter into this Agreement to set forth the terms and conditions on which Employee will be employed by the Company from and after the Effective Date. NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties agree as follows: 1. Term. The Company agrees to employ Employee, and Employee agrees to serve the Company, in accordance with the terms of this Agreement for a three year term commencing on the Effective Date and ending on the third anniversary of the Effective Date, unless this Agreement is earlier terminated in accordance with the provisions of this Agreement. The actual term of Employee's employment under this Agreement is referred to herein as the "Term." 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. 2. Specific Position; Duties and Responsibilities. (a) The Company and Employee agree that, subject to the provisions of this Agreement, during the Term, the Company will employ Employee and Employee will serve the Company as an employee of a business unit of the Company (which may be organized as a division of the Company or of a subsidiary of the Company or as a separate subsidiary of the Company) focused on developing new international markets ("Gemstar International"). During the Term, Employee shall report to the head of Gemstar International. Employee shall make reasonable efforts to further the business interests of Gemstar International. Employee shall participate in and assist the Company with the defense and prosecution of claims and litigation (including, without limitation, lawsuits, arbitrations, mediations and other forms of dispute resolution) to such extent as the Company shall reasonably request from time to time. Employee agrees to fully and reasonably cooperate with respect to any transition of the Company's auditors and preparation of the quarterly financial statements for the second and third quarters of 2002 and the 2002 annual report (and the subsequent filing of such statements and reports with the appropriate regulatory agencies); provided, however, that such cooperation shall not include the execution of any additional management letters or similar letters requiring Employee to make representations concerning the Company or its financial position or results of operations with respect to any period after the Effective Date. Although it is expected that Employee will devote a substantial portion of her business time and attention to her duties under this Agreement, it is agreed and understood that the nature of Employee's duties does not require Employee's presence at the Company's facilities on a daily basis, and does not require Employee to devote a specific number of hours per week to her duties under this Agreement. Employee shall have such other additional duties and responsibilities befitting the foregoing position, if any, as the Company and Employee shall mutually agree from time to time. Employee acknowledges and agrees that other subsidiaries and/or divisions of the Company (whether or not currently in existence) may engage in the same business activities as Gemstar International, without the involvement of Employee. Employee further acknowledges and agrees that the Company may, from time to time and in its sole and absolute discretion, reduce the scope of Gemstar International's duties and purposes within the Company's organization in any manner whatsoever and may determine the staffing, budget, and support of Gemstar International in its sole and absolute discretion. Notwithstanding anything to the contrary contained herein, during the Term, without the express written consent of the Board of Directors of the Company (the "Company Board"), Employee shall not engage in any policy making activity or otherwise engage in any activity, that would result in her treatment as an "executive officer" under the executive compensation disclosure rules promulgated under the Securities Exchange Act of 1934, as amended. (b) During the Term, Employee may (i) upon approval of the Company Board, which approval will not be unreasonably withheld, serve as a director, consultant, trustee or part-time employee of any other corporation or business; provided, however, that Employee may not become a director, consultant, trustee or part-time employee of any corporation or business that competes with (A) the Company or any subsidiary of the Company or (B) the business activities of any affiliate of the Company in the fields of Interactive Television or Interactive Program Guides (as such terms are defined in that certain Patent Rights Agreement of even date herewith between the Company and Henry C. Yuen) (any such corporation or business described in this proviso is referred to herein as a "Competitor"), (ii) accept any part-time academic position, (iii) invest in real estate for her own account, (iv) become a partner or a shareholder in any privately-held corporation, partnership or other venture that is not a Competitor or (v) become a partner or a shareholder with an equity interest of not more than five percent (5%) in any corporation, partnership or other venture whose equity securities are publicly traded, whether or not such corporation, partnership or other venture is a Competitor. (c) At the end of Employee's current term as a director of the Company Board (such term is anticipated to end in 2003), Employee agrees to resign, and shall automatically be 2 deemed to have resigned, with no further action required, from any directorship and committee memberships Employee holds with the Company. 3. Compensation. (a) Base Compensation and Adjustments. During the Term, the Company agrees to pay Employee a base salary at the rate of Five Hundred Thousand Dollars (US $500,000.00) per year (as in effect from time to time, the "Base Salary"). Such salary shall be earned monthly and shall be payable in periodic installments no less frequently than monthly in accordance with the Company's customary practices. Amounts payable shall be reduced by standard withholding and other authorized deductions. During the Term, the Company Board shall review the Base Salary at least annually and may, but need not, increase the Base Salary in its sole and absolute discretion. Under no circumstances may the Base Salary as in effect at any time be reduced. (b) Bonuses. During the Term, Employee shall be entitled to receive such bonuses as the Company Board may, but need not, from time to time grant to Employee in its sole and absolute discretion. (c) Stock Options and other Equity Awards. (i) As of the first anniversary of the Effective Date, the Company shall grant to Employee three hundred thirty-three thousand three hundred thirty-four (333,334) nonqualified stock options under the Company's 1994 Stock Incentive Plan, as amended (the "SIP"), in accordance with the terms and conditions set forth in the Initial Stock Option Agreement attached hereto as Exhibit A. (ii) As of the second anniversary of the Effective Date, the Company shall grant to Employee three hundred thirty-three thousand three hundred thirty-three (333,333) nonqualified stock options under the SIP in accordance with the terms and conditions set forth in the Second Stock Option Agreement attached hereto as Exhibit B. (iii) Notwithstanding anything herein to the contrary, the Company and Employee agree that the Company shall not (A) grant to Employee any stock options under the SIP or under any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, or (B) accelerate any stock option grant contemplated by this Agreement or any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day. Employee hereby represents that, except for the June 20, 2002 grant of stock options (representing 750,000 options), she has not received any grant of options or other equity-based compensation within the 6 month period preceding the Effective Date. Nothing in this Section 3(c)(iii) shall prevent the vesting of stock options contemplated by Section 3(b) of the Termination Agreement nor shall the vesting of such stock options violate this Section 3(c)(iii). 3 (iv) Subject to receiving the requisite stockholder approval, the Company shall cause the SIP to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit C. The Company shall schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable after the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. On the date of the Stockholder Meeting or as soon as reasonably practicable thereafter, the Company shall either issue restricted stock or grant Stock Units (as such term is defined under the SIP) to Employee as follows (the date of such issuance or grant is referred to as the "Share Grant Date"): (1) if the SIP Amendment is approved by the Company stockholders, the Company shall issue two hundred nine thousand three hundred eight (209,308) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Employment Restricted Stock Agreement attached hereto as Exhibit D, such shares to be issued in certificates of such denominations as Employee may request; or (2) if the SIP Amendment is not approved by the Company stockholders, the Company shall grant to Employee under the SIP (i) two hundred nine thousand three hundred eight (209,308) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock (the "Common Shares") generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred nine thousand three hundred eight (209,308) Common Shares, in each case in accordance with the terms and conditions set forth in the Employment Stock Unit Agreement attached hereto as Exhibit E. (v) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted in Section 3(c)(iv) above for which Employee makes a valid election within 30 days after the Share Grant Date under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (the "83(b) Shares"), the Company shall pay Employee, within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z, divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; 4 Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws) (this calculation shall be determined using those rates applicable in the year of the Share Grant Date); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Share Grant Date). The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(v) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to the Section 83(b) election above prior to paying the 83(b) Payment, the 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the 83(b) Payment is made to Employee. If the 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the 83(b) Payment would have been made (if not for the deduction of the prior sentence). (vi) If the SIP Amendment is not approved by the Company stockholders at the Stockholder Meeting, the Company shall pay Employee, on each Stock Unit vesting date, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is number of Stock Units that vest on the applicable Stock Unit vesting date; Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; 5 Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws) (this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(vi) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(c)(vi) are accelerated due to Employee's employment under this Agreement terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f), such payments shall be contingent on Employee (or, if deceased, her estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F. (vii) The number and type of shares set forth above with respect to any stock option awards, restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Sections 3(c)(v) and 3(c)(vi), shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares, or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. (viii) The Company represents and warrants that (i) as of the date hereof, there are sufficient Common Shares available under the SIP to permit the options under Section 3(c)(i) and 3(c)(ii) to be issued thereunder and (ii) as of the Share Grant Date, there will be sufficient 6 Common Shares available under the SIP to permit the grants of restricted stock or Stock Units, as the case may be, under Section 3(c)(iv) to be issued thereunder. (ix) Notwithstanding any provision herein or in the Initial Stock Option Agreement, Second Stock Option Agreement, or SIP to the contrary, if Employee's employment under this Agreement terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any stock option awards under Section 3(c)(i) or 3(c)(ii), such stock option awards not yet granted shall be granted to the Employee on the later of (i) the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, or (ii) the date of Employee's termination of employment. (x) Notwithstanding any provision herein or in the Initial Stock Option Agreement, Second Stock Option Agreement, Employment Restricted Stock Agreement, Employment Stock Unit Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of this Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined herein) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c), any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) breach by Employee of Employee of Section 13 of the Termination Agreement or (ii) material breach by Employee of Sections 6, 8, 10(g) or 10(h) of this Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in her capacity as a Company Board member, she shall not vote on such a determination nor shall she vote on any Company Board determination that a Breach Event (as such term is defined in Henry Yuen's employment agreement with the Company of even date hereof) has occurred with respect to Henry Yuen. Any disputes related to this Section 3(c)(x) shall be resolved pursuant to Section 10(f). (xi) Subject to Section 3(c)(x) above, if Employee's employment terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any restricted stock or Stock Units required under Section 3(c)(iv) of this Agreement, such restricted stock or Stock Units not yet granted shall be granted to Employee as provided in Section 3(c)(iv) and shall be immediately vested in full upon grant. (xii) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall 7 govern. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (xiii) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the grant of such Equity Award shall, to the extent required by applicable law, be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (xiv) In the event of a Change in Control Event, as defined under Section 7 of the Stock Option Agreements attached hereto as Exhibits A and B, the Company shall grant any award of stock options required under this Agreement (and not already granted) on the later of (i) the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, or (ii) the date of the Change in Control Event, but only if the Company (or a successor thereto) has failed to provide for the cash-out of such grants, or the continuation of such grants in an economically equivalent amount (as provided in Section 7 of the Stock Option Agreements). (xv) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. (d) Alternative Equity Awards. If, after being requested to determine whether or not the stock option grants contemplated by Section 3(c) of this Agreement will result in variable accounting, the Company's independent auditors are unable to advise the Company that the stock option grants contemplated by Section 3(c) of this Agreement will not result in variable accounting, the Special Committee of the Company Board or the Company Board may, by providing (or directing the Company to provide) written notice to Employee before the Notification Deadline (as defined herein), commit to granting restricted stock or Stock Units rather than stock options, by replacing Section 3(c) and its related Exhibits (the "Replaced Equity Provisions") with a new Section 3(c) and its related Exhibits (the "New Equity Provisions") attached hereto as Appendix A. Such written notice shall state that the Company's independent auditors have been unable to advise the Company that the stock option grants contemplated by Section 3(c) of this Agreement will not result in variable accounting. Such written notice shall be provided in accordance with Section 10(b) and shall be effective as of the date delivered to Employee. Until such written notice is provided to Employee, the New Equity Provisions shall have no effect and Employee shall have no rights or obligations under the terms and conditions of the New Equity Provisions. If the New Equity Provisions become effective, Employee shall have no rights or obligations under the terms and conditions of the Replaced Equity Provisions and the terms and conditions set forth in the New Equity Provisions shall govern as of the Effective Date. All other provisions of the Agreement shall remain in effect. 8 The "Notification Deadline" shall refer to the earlier of (i) the date the Stockholder Meeting occurs or (ii) the date that is six months after the Effective Date. (e) Additional Benefits. From and after the Effective Date and through the termination of Employee's employment, Employee shall be entitled to all rights and benefits for which Employee is otherwise eligible under any life, medical, dental, disability or insurance plan or policy (including, without limitation, the disability and life insurance policies provided for in Sections 3(i) and 3(j) of this Agreement) or other plan or benefit that the Company, its subsidiaries or affiliates may provide for Employee or (provided Employee is eligible to participate therein) for executives and employees of the Company generally (other than stock option, stock purchase or other equity-based incentive plans, and other than bonus and other incentive compensation plans), as from time to time may be in effect (collectively referred to herein as the "Additional Benefits"). The Additional Benefits shall be provided at the level generally available to other employees of the Company at the time and shall recognize for vesting and eligibility purposes Employee's prior service with the Company to the extent (if any) that such prior service is recognized under any such plans. To the extent Additional Benefits are to be provided under Sections 4(a), 4(d), 4(f) or 4(g) from and after the termination of Employee's employment through the fifth anniversary of the Effective Date, Employee shall be entitled to Additional Benefits; provided, however, that Employee shall not accrue any benefits under any pension plans, 401(k) or profit sharing plans, or supplemental executive retirement plans after such termination and that benefits under such pension plans, 401(k) or profit sharing plans, or supplemental executive retirement plans shall be payable to Employee in accordance with their terms. (f) Vacation. Employee shall not earn any vacation during the Term. From time to time during the Term, Employee may take time off in reasonable amounts, it being understood that time off totaling seven weeks or less during each year of the Term shall be deemed reasonable. (g) Organizations. During the Term, the Company shall promptly reimburse Employee for the membership fees and dues reasonably incurred by Employee to maintain a membership in, or to belong to, one social or country club. (h) Automobile Allowance. The Company shall provide Employee with a car allowance of seven hundred and fifty dollars (US $750.00) per month to be used for the purchase, lease and maintenance of an appropriate automobile for her use during the Term. If the Company leases or purchases an automobile for Employee's use, Employee shall have the ability to assume the lease at the end of 9 the term thereof or purchase the automobile at its residual or depreciated value upon termination of her employment. (i) Disability Insurance. During the Term, the Company agrees to purchase and keep in effect, or to reimburse Employee for the cost of, one or more policies of disability insurance reasonably satisfactory to Employee and the Company, with maximum annual premiums not to exceed twenty-two thousand dollars (US $22,000.00). Such policy or policies will contain a feature permitting Employee to continue the policy or policies at her cost (subject to other provisions in this Agreement requiring the Company to fund such amounts following termination of employment) following any termination of Employee's employment. (j) Life Insurance. During the Term, the Company agrees to purchase and keep in effect, or to reimburse Employee for the cost of, a policy of life insurance reasonably satisfactory to Employee and the Company, with maximum annual premiums not to exceed ten thousand dollars (US $10,000.00). Such policy will contain a feature permitting Employee to continue the policy at her cost (subject to other provisions in this Agreement requiring the Company to fund such amounts following termination of employment) following any termination of Employee's employment. 4. Termination. Employee's employment by the Company may be terminated prior to the third anniversary of the Effective Date only as provided in this Section 4: (a) Disability. Employee's employment hereunder may be terminated by the Company due to her disability (as defined below). In the event of a termination due to Employee's disability, provided that she executes a general release of claims in a form provided by the Company, which shall be substantially similar to Exhibit F, she shall be entitled to the following: (i) payment of her Base Salary from the date of such termination through the third anniversary of the Effective Date; (ii) payment of the pro-rated portion of the annual bonus, if any, previously determined by the Company Board to be due to Employee for the fiscal year in which termination due to disability occurs, payable promptly after the end of the fiscal year ending after the date of such termination; and (iii) all Additional Benefits through the fifth anniversary of the Effective Date. For purposes of this Agreement, "disability" shall mean Employee's inability to substantially perform her duties and responsibilities under this Agreement for (i) a period of 120 consecutive days or (ii) an aggregate of 180 days during any twelve month period. 10 (b) Death. Employee's employment hereunder shall terminate as a result of her death. In the event of such a termination due to Employee's death, her estate or her beneficiaries, as the case may be, shall be entitled to: (i) a lump sum payment equal to the lesser of (A) the amount of Base Salary that Employee would have received from the date of her death through the third anniversary of the Effective Date and (B) two times Employee's Base Salary; and (ii) payment of the pro-rated portion of the annual bonus, if any, previously determined by the Company Board to be due to Employee for the fiscal year in which Employee's death occurs, payable promptly after the end of the fiscal year ending after the date of death. (c) For Cause. Employee's employment hereunder may be terminated by the Company for Cause. For the purposes of this Agreement, "Cause" shall mean: (i) Employee is engaging or has engaged in acts of fraud, material dishonesty or other acts of willful misconduct that have had a material adverse effect on the business of the Company; (ii) Employee has habitually abused any substance (such as narcotics or alcohol) and such abuse has had a material adverse effect on the business of the Company; (iii) Employee has been convicted of, or plead guilty to, an act constituting a felony that has a material adverse effect on the business of the Company; (iv) Employee has not obtained prior approval of the Company Board (or any committee designated by the Company Board for such purpose) prior to causing or permitting the Company or any subsidiary of the Company to enter into or otherwise be bound by any material contract; or (v) Employee has materially breached Sections 6, 8, 10(g), or 10(h) of this Agreement, or breached any of the representations and warranties contained in Section 13 of the Termination Agreement and (if capable of cure), has failed to fully cure such breach and all effects thereof within thirty (30) days after receipt of written notice from the Company of such breach. A termination for Cause shall not be effective unless and until (i) Employee has received written notice of a proposed termination for Cause setting forth the facts and circumstances claimed to provide a basis for termination of Employee's employment for Cause and Employee has had an opportunity to be heard before at least a majority of the members of the Company Board and (ii) the Company Board has confirmed in writing the termination for Cause, indicating any additional or different facts and circumstances that the Company Board believes provide a basis for such termination. Employee shall be deemed to have had such 11 opportunity if given written notice by any director acting on behalf of the Company Board at least seventy two (72) hours in advance of a meeting, if scheduled in California, or ninety six (96) hours in advance of a meeting, if such meeting is scheduled outside California. Any actions or proceedings by the Company pursuant to this subparagraph 4(c) shall be conducted in a confidential manner and all steps shall be taken to prevent any harm to Employee's reputation. In the event Employee commences proceedings pursuant to Section 10(f) to dispute the Company's right to terminate her employment for Cause within 30 days from the date she receives the written notice from the Company Board confirming her termination for Cause (the "Termination Date"), the Company shall (i) continue to pay Employee's Base Salary and to provide Additional Benefits to Employee until such dispute has been resolved and (ii) pay all costs reasonably incurred by Employee in preparing for and in pursuing such proceedings, including all professional fees and expenses. If Employee is the nonprevailing party in such proceedings, Employee shall reimburse the Company for all costs, fees and expenses paid by the Company on Employee's behalf and shall reimburse the Company for any Base Salary and Additional Benefits paid to Employee since the Termination Date. The term "For Cause Determination Period" shall refer to the period of time from when Employee receives written notice of a proposed termination for Cause until the Resolution Date (as defined herein). The term "Resolution Date" shall refer to the Termination Date or the date the Company Board determines no termination for Cause has occurred; provided, however, that, if Employee commences proceedings pursuant to Section 10(f) as provided in the immediately preceding paragraph, the term "Resolution Date" shall refer to the date such proceedings are finally resolved. If Employee is terminated for Cause, she shall only be entitled to benefits continuation and accrued wages as required under applicable law (subject to the benefits and compensation continuation during a dispute as described above). (d) Without Cause. Employee's employment hereunder may be terminated by the Company without Cause. If the Company terminates Employee's employment for any reason other than those specified in Sections 4(a), (b) or (c) above, she shall be entitled to receive the following, provided that she signs a general release of claims, in a form provided by the Company which shall be substantially similar to Exhibit F: (i) a lump sum payment equal to the amount of Base Salary that Employee would have received from the date of such termination through the third anniversary of the Effective Date; (ii) payment of the pro-rated portion of the annual bonus, if any, previously determined by the Company Board to be due to Employee for the fiscal year in which termination without Cause occurs, payable promptly after the end of the fiscal year ending after the date of such termination without Cause; and (iii) all Additional Benefits through the fifth anniversary of the Effective Date. 12 Employee agrees to accept the severance provided in this Section 4(d) and in any Equity Award upon the termination of his employment pursuant to this Section 4(d) or pursuant to Section 4(f) as liquidated damages in lieu of any other damages or severance benefits to which she might be entitled as a result of the termination of her employment with the Company pursuant to this Section 4(d) or pursuant to Section 4(f). All amounts paid to Employee pursuant to this Section 4(d) or pursuant to Section 4(f) shall be paid without regard to whether Employee has taken or takes actions to mitigate damages. (e) Limited Succession of Additional Benefits Upon Termination. If Employee's services are terminated hereunder pursuant to Sections 4(a) or 4(d) and Employee is no longer eligible for Additional Benefits under the terms of any plans relating thereto because of such termination, Employee shall be entitled to, and the Company shall provide benefits substantially equivalent to, those benefits in the nature of health and welfare type benefits to which Employee was entitled immediately prior to such termination for the period (if any) during which Employee is entitled to receive Additional Benefits pursuant to such Sections. (f) Constructive Termination. A Constructive Termination (defined below) shall be treated as a termination without Cause pursuant to Section 4(d) of this Agreement. For purposes of this Agreement, "Constructive Termination" means (i) the removal of Employee from her position as a director of the Company (other than as provided by Section 2(c)), (ii) assignment to Employee of material additional duties or responsibilities inconsistent with Employee's position with Gemstar International, (iii) relocation of Employee's principal office to another geographic location without Employee's written consent, (iv) a material violation by the Company of Section 6 of the Termination Agreement, or (v) requiring Employee to report to any other person or entity other than head of Gemstar International as of the Effective Date, in any case other than as a result of grounds for termination under Sections 4(a), 4(b), 4(c) or 4(g). If the Employee provides written notice to the Company of the occurrence of conditions which would constitute a Constructive Termination ("Notice of Potential Constructive Termination") within 30 days after the Employee has knowledge of such circumstances, the Company fails to correct such circumstances within 30 days after receipt of such notice, and Employee gives her 30 day notice of resignation within 60 days after she gave the Notice of Potential Constructive Termination, then a Constructive Termination shall be deemed to have occurred. 13 (g) Termination by Employee. Employee shall have the right, in her sole and absolute discretion, to terminate her employment under this Agreement at any time for any reason. If Employee provides the Company with notice, in writing, at least thirty (30) days prior to the effective date of Employee's termination of employment and also signs a general release of claims in a form provided by the Company, which shall be substantially similar to Exhibit F, she shall be entitled to receive all Additional Benefits through the fifth anniversary of the Effective Date. (h) Calculation of Bonus. For purposes of Sections 4(a), 4(b) and 4(d), the pro-rated portion of the annual bonus referenced in such sections, if any, shall be determined by multiplying such annual bonus by a fraction, the numerator of which shall be the number of days during such fiscal year that Employee was employed and the denominator of which shall be 365. (i) Certain Payments. To the extent that any Payment (as such term is defined in Schedule II to the Prior Employment Agreement) made in connection with the termination of Employee's employment pursuant to Section 4(d) (without Cause) or Section 4(f) (Constructive Termination) is determined (as provided in the following sentence) to be subject to the Excise Tax (as such term is defined in Schedule II to the Prior Employment Agreement) imposed by Section 4999 (as such term is defined in Schedule II to the Prior Employment Agreement), Employee shall be entitled to the benefits and protections set forth in Schedule II of the Prior Employment Agreement, which is incorporated herein by this reference to the same extent as if set forth in this Agreement in its entirety. Notwithstanding any provision in Schedule II to the Prior Employment Agreement to the contrary, the determination that any Payment made on or prior to the Effective Date is or was subject to the Excise Tax shall be only established by a final determination by the Internal Revenue Service ("IRS") that such Payment is or was subject to the excise tax imposed by Section 4999 of the Code, as amended, and that such Payment was actually made by the Employee. Further, Employee agrees to provide notice of such IRS determination (and other IRS actions related hereto) to Company within ten (10) days of receipt, and the Company, in its discretion, may challenge such IRS determination. If the Company determines to challenge such IRS determination, Employee agrees to provide full cooperation with the Company in order to effectuate such challenge. 5. Business Expenses. The Company shall reimburse Employee promptly for, or pay directly, all reasonable business expenditures incurred by Employee during the Term in connection with her performance of her duties hereunder (including, without limitation, the reasonable costs and expenses of establishing and maintaining an office in her home), upon proper presentation of expense statements or vouchers or such other supporting information as the Company shall reasonably require. 14 6. Inventions and Patents. Subject to exceptions under Section 2870 of the California Labor Code, all inventions, designs, improvements, patents, copyrights, and discoveries conceived by Employee during the term of this Agreement which are competitive with or related to existing products or services of the Company or its subsidiaries or products or services under active development by the Company or its subsidiaries shall be assigned to the Company. Employee will promptly and fully disclose to the Company all such inventions, designs, improvements, and discoveries (whether developed individually or with other persons) and shall take all reasonable steps necessary and required to assure the Company's ownership thereof and to assist the Company in protecting or defending the Company's proprietary rights therein. Employee acknowledges hereby receipt of written notice from the Company pursuant to California Labor Code Section 2872 that this Agreement (to the extent it requires an assignment or offer to assign rights to any invention of Employee) does not apply to an invention that qualifies fully under California Labor Code Section 2870. 7. Indemnity. To the maximum extent permitted by applicable law, the Company shall indemnify Employee, defend Employee and hold Employee harmless from and against any and all claims, liabilities, judgments, fines, penalties, costs and expenses (including, without limitation, reasonable attorneys' fees, costs of investigation and experts, settlements and other amounts actually incurred by Employee in connection with the defense of any action, suit or proceeding, and in connection with any appeal thereon) reasonably incurred by Employee in any and all threatened, pending or completed actions, suits or proceedings, whether civil, criminal, administrative or investigative (including, without limitation, actions, suits or proceedings brought by or in the name of the Company), arising, directly or indirectly, by reason of Employee's status, actions or inaction, including, without limitation, actual or alleged errors or omissions, as a director, officer, employee or agent of the Company or of an affiliate of the Company after the Effective Date so long as (i) Employee's conduct was in good faith, (ii) Employee reasonably believed such conduct to be in or not opposed to the best interests of the Company, and (iii) Employee's conduct was not in violation of the representations and warranties set forth in Section 13 of the Termination Agreement; provided, however, this Section 7 shall not apply to any claim (a) pursuant to the Sarbanes-Oxley Act of 2002, and any rules or regulations arising thereunder, as it may be amended from time to time, or (b) arising as a result of the execution of this Agreement, the Umbrella Agreement, the Termination Agreement, or any ancillary agreement (including without limitation any equity grant) to any such agreement, as all such claims described in the foregoing clauses (a) and (b) shall be subject to indemnification in accordance with Section 10(a)(ii) of the Termination Agreement. The Company shall advance to Employee upon request any and all expenses reasonably incurred by Employee in defending any and all such actions, suits or proceedings to the maximum extent permitted by applicable law. The advances to be made hereunder shall be paid by the Company to Employee within ten (10) days following delivery of a written request for payment therefor by Employee to the Company. Employee shall have a right to select attorneys to defend him in any actual or threatened action, suit, proceeding or investigation, subject to the Company's approval, which shall not be unreasonably withheld. Notwithstanding any other provision of this Agreement, the provisions 15 of this Section 7 shall survive the expiration, suspension or termination, for any reason, of this Agreement and shall survive the termination of Employee's employment with the Company. Notwithstanding the foregoing, this Section 7 shall not apply to any dispute between the Company and Employee with respect to any alleged breach of, or seeking an interpretation of, or a determination of the rights or obligations of either party under this Agreement, the Umbrella Agreement, the Termination Agreement, or any ancillary agreement (including without limitation any equity grant) to any such agreement. 8. Noncompetition and Nonsolicitation. During the Term, except to the extent the Company provides prior written approval, Employee shall not, in any manner, directly or indirectly, engage in any business that is a Competitor, and, except as expressly permitted by clause (iv) of Section 2(b), will not, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of, or be employed by, or connected in any manner with any corporation, firm or business that is a Competitor. Employee acknowledges that the Company and all of its affiliates and subsidiaries by nature of their respective businesses have a legitimate and protectable interest in their clients, customers and employees with whom they have established significant relationships as a result of a substantial investment of time and money, and but for Employee's employment hereunder, Employee would not have had contact with such clients, customers and employees. Employee agrees that during the Term and for one additional year thereafter (the "Non-Solicitation Period"), without the prior written approval of the Company (which approval may be granted or withheld in the Company's sole and absolute discretion), Employee will not (except as necessary to perform Employee's duties as an employee of the Company): (i) directly or indirectly, for Employee's own account, or as an agent, executive, director, owner, partner, or consultant of any corporation, firm, partnership, joint venture, syndicate, sole proprietorship or other business (whether as a principal, division, subsidiary, affiliate, related entity, or otherwise) solicit or induce any client or customer of the Company (and with respect to the Company's subsidiaries, any client or customer of such subsidiaries with whom Employee had contact, or who was identified to Employee, during Employee's employment with the Company) (a) to not do business or to alter in any adverse manner its relationship with the Company or any of its subsidiaries, or (b) to obtain services or goods from Employee or any business with which Employee is then affiliated, if such services or goods are comparable to those provided by Employee during her employment with the Company and the Company continues to provide such services or goods; or (ii) solicit or induce any executive or employee of the Company (and with respect to the Company's subsidiaries, any executive or employee of such subsidiaries with whom Employee had contact, or who was identified to Employee, during Employee's employment with the Company) to terminate his or her employment relationship with the Company or any of its subsidiaries and commence an employment relationship with any Competitor or with any business or entity owned by, controlled by or affiliated with Employee. 16 9. [Reserved] 10. Miscellaneous. (a) Succession; Survival. This Agreement shall inure to the benefit of and shall be binding upon the Company and the Company's successors and assigns, but without the prior written consent of Employee this Agreement may not be assigned other than in connection with a merger or sale of substantially all the assets of the Company or a similar transaction in which the successor or assignee assumes (whether by operation of law or express assumption) all obligations of the Company hereunder. The obligations and duties of Employee hereunder are personal and otherwise not assignable. (b) Notices. Any notice or other communication provided for in this Agreement shall be in writing and sent, if to the Company, to its office at: Gemstar - TV Guide International, Inc. Suite 800 135 North Los Robles Ave. Pasadena, California 91101 Facsimile: (818) 792-4051 Attention: General Counsel or at such other address as the Company may from time to time in writing designate, and, if to Employee, at such address as Employee may from time to time in writing designate (or Employee's business address of record in the absence of such designation). Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section 10(b) and an appropriate answerback is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address. (c) Entire Agreement; Amendments. This Agreement, the Umbrella Agreement and the Termination Agreement, together with the ancillary agreements referred to in (or otherwise entered into in connection with) any of the foregoing agreements, contain the entire agreement of the parties relating to the subject matter hereof and supersede any prior agreements, undertakings, commitments and practices relating to Employee's employment by the Company or its subsidiaries except for any and all other agreements necessary to give effect to the provisions of this Agreement, including, without limitation, stock option agreements, life insurance agreements, and agreements relating to Additional Benefits. No amendment or modification of the terms of this Agreement shall be valid unless made in writing and signed by Employee and, on behalf of the Company, by senior executive officers after approval thereof by the Company Board. 17 (d) Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right. (e) Choice of Law. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. (f) Resolution of Disputes. 18 In the event of any dispute, controversy, claim or disagreement between Employee and the Company with respect to any alleged breach of this Agreement, the interpretation of this Agreement, or the rights or obligations of either party under this Agreement, the parties shall consult and negotiate with each other in good faith and, recognizing their mutual interests, attempt to reach a solution satisfactory to both parties. If they do not resolve the dispute, controversy, claim or disagreement within a period of 30 days, or such longer period as they may mutually agree, then such dispute, controversy, claim or disagreement shall be resolved pursuant to confidential binding arbitration in New York, New York by a panel of three neutral arbitrators. The arbitration shall be conducted in accordance with the Commercial Rules of the American Arbitration Association then in effect. Within 15 days after the initiation of arbitration, the parties shall select three neutral arbitrators, all of whom shall be members of a state bar actively engaged in the practice of law for at least 10 years. Either party may seek interim or preliminary relief from the arbitrators until an arbitration award is rendered or the controversy is otherwise resolved. Either party also may, prior to the establishment of the arbitral tribunal, and without waiving any remedy under this Agreement, seek interim or provisional relief that is necessary to protect the rights or property of that party. The arbitration award shall be made as promptly as practicable and in any event within nine months of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment; provided, however, that this time limit may be extended by agreement of the parties or by the arbitrators if necessary. The award of the arbitrators shall be in writing, shall be signed by a majority of the arbitrators, and shall include findings of fact and the reasons for the disposition of each claim. In the award, the arbitrators shall allocate all of the costs of the arbitration, including the fees of the arbitrators and the reasonable attorneys' fees of the prevailing party, against the non-prevailing party. This Section 10(f) shall not be construed to limit either party's right to obtain equitable relief with respect to any dispute and, pending a final arbitration by the arbitrators with respect to any such disputes, either party shall be entitled to obtain any such relief by direct application to state, federal, or other applicable court, without being required to first arbitrate such dispute. Except as may be required by law or by judicial or administrative process or order or the rules of any securities exchange or similar self-regulatory organization applicable to the party or arbitrator, neither the parties nor the arbitrators may disclose the existence, content or results of any arbitration hereunder without the prior written consent of all of the parties. Judgment on the award may be entered in any court having jurisdiction thereof. (g) Confidentiality, Proprietary Information. Employee agrees to not make use of, divulge or otherwise disclose, directly or indirectly, any trade secret or other confidential or proprietary information concerning the business (including, but not limited to confidential or proprietary information concerning its products, employees, services, practices or policies) of the Company or any of its subsidiaries of which Employee may learn or be aware as a result of Employee's employment during the Term or prior thereto as shareholder, employee, officer or director of or consultant to the Company and its predecessors, except to the extent such use or disclosure is (i) necessary to the performance of this Agreement and in furtherance of the Company's best interests, (ii) required by applicable law, (iii) lawfully obtainable from other sources, or (iv) authorized in writing by the Company. The provisions of this Section 10(g) shall survive the expiration, suspension or termination, for any reason, of this Agreement. 19 (h) Trade Secrets. Employee, prior to and during the Term, has had and will have access to and become acquainted with various trade secrets, consisting of software, plans, formulas, patterns, devices, secret inventions, processes, customer lists, contracts, and compilations of information, records and specifications that are owned by the Company or by its subsidiaries and regularly used in the operation of their respective businesses and that may give the Company an opportunity to obtain an advantage over competitors who do not know or use such trade secrets. Employee agrees and acknowledges that Employee has been granted access to these valuable trade secrets only by virtue of the confidential relationship created by Employee's employment and Employee's prior relationship to, interest in and fiduciary relationships to the Company and its predecessors. Employee shall not disclose any of the aforesaid trade secrets, directly or indirectly, or use them in any way, either during the Term or at any time thereafter, except as required in the course of employment by the Company and for its benefit. All records, files, documents, drawings, specifications, software, equipment, and similar items relating to the business of the Company or its subsidiaries, including without limitation all records relating to customers (the "Documents"), whether prepared by Employee or otherwise coming into Employee's possession, shall remain the exclusive property of the Company or such subsidiaries and shall not be removed from the premises of the Company or its subsidiaries under any circumstances whatsoever without the prior consent of a senior executive officer of the Company. Upon termination of employment, Employee agrees to promptly deliver to the Company all Documents in the possession or under the control of Employee. (i) Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances, to the fullest extent permitted by law. (j) Withholding; Deductions. All compensation payable hereunder, including salary and other benefits, shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions. (k) Cooperation. Employee agrees that during the Term and thereafter she will cooperate in the Company's and its subsidiaries' defense against any threatened or pending litigation or in any investigation or proceeding by any governmental agency or body that relates to any events or actions which occurred during or prior to the Term. The Company agrees to reimburse Employee for any reasonable and necessary out-of-pocket costs and for any loss of income incurred by Employee in providing such assistance. 20 (l) Section Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (m) Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. (n) Representation By Counsel; Interpretation. Each party hereto acknowledges that it or she has been represented by counsel in connection with this Agreement and the matters contemplated by this Agreement. Accordingly, any rule of law, including but not limited to Section 1654 of the California Civil Code, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of the parties. [The remainder of this page has been intentionally left blank - signature page follows] 21 [SIGNATURE PAGE TO EMPLOYMENT AGREEMENT] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. "The Company" GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: /s/ Jeff Shell ----------------------------------------------- Jeff Shell, Co-President By: /s/ Jonathan B. Orlick ------------------------------------------------ Jonathan B. Orlick, Executive Vice President "Employee" /s/ Elsie Ma Leung --------------------------------------------------- ELSIE MA LEUNG 22 Exhibit A GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL STOCK OPTION AGREEMENT THIS AGREEMENT dated as of ____________, ____, between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of _____________, ____, (the "Grant Date") three hundred thirty-three thousand three hundred thirty-four (333,334) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Employee, subject to the vesting provisions and restrictions set forth below, of 1 three hundred thirty-three thousand three hundred thirty-four (333,334) nonqualified stock options (the "Options") under the SIP. Each Option shall represent the right to acquire one (1) Common Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date or (ii) the termination of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest as follows: (i) one hundred eleven thousand one hundred twelve (111,112) Options shall vest on the Grant Date, (ii) one hundred eleven thousand one hundred eleven (111,111) Options shall vest on the first anniversary of the Grant Date, and (iii) one hundred eleven thousand one hundred eleven (111,111) Options shall vest on the second anniversary of the Grant Date; provided, however, that no Options shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Options shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Options scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Options shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Options scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Options shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a 2 form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. Subject to the execution of the aforementioned release, in the event of termination due to Section 4(b) of the New Employment Agreement, Employee's estate or Beneficiaries, as the case may be, shall be entitled to exercise all Options held by Employee at the time of her death for the balance of their term. To the extent Employee does not purchase all or any part of the Common Shares under the Options exercisable and to which Employee is entitled, Employee has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Employee (or Employee's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Employee consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option that is paid by a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Employee, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Employee for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Employee (or Employee's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 5. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Options and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. 3 Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 6. Forfeiture. All Options then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Options that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 7. Change in Control Event. All Options referred to in this Agreement shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Options at their then fair market value, or (B) the continuation of such Options in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Options immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if 4 Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11. Plan. The Options and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the 5 Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: ------------------------------------- Title: ---------------------------------- EMPLOYEE ---------------------------------------- Elsie Ma Leung ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Stock Option Agreement by Gemstar-TV Guide International, Inc., I, _________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Initial Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of _____________, ______. ------------------------ Signature of Spouse 8 Exhibit B GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND STOCK OPTION AGREEMENT THIS AGREEMENT dated as of ______________, ____, between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the ___________, ____ (the "Grant Date") three hundred thirty-three thousand three hundred thirty-three (333,333) nonqualified stock options to purchase authorized but unissued or treasury shares of the Company's Common Shares, $.01 par value, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Common Share" shall have the meaning assigned to it under the Termination Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Option. Effective as of the Grant Date, this Agreement evidences the Company's grant to Employee, subject to the vesting provisions and restrictions set forth below, of three hundred thirty-three thousand three hundred thirty-three (333,333) nonqualified stock options (the "Options") under the SIP. Each Option shall represent the right to acquire one (1) Common 1 Share. The number, type and exercise price of the Options are subject to adjustment pursuant to Section 4.2 of the SIP. The Options shall expire on the first to occur of (i) the close of business on the last business day of the Company coinciding with or immediately preceding the day before the tenth anniversary of the Grant Date or (ii) the termination of the Options pursuant to Section 6 of this Agreement or Section 4.2 of the SIP. The exercise price per Common Share under each Option shall equal the Fair Market Value of a Common Share on the Grant Date (or as of the last trading day preceding the Grant Date if the Grant Date is not a trading day). The Options are intended to be non-qualified stock options and not incentive stock options under Code Section 422. 3. Exercisability of Options. The Options shall vest as follows: (i) one hundred eleven thousand one hundred eleven (111,111) Options shall vest on the Grant Date, (ii) two hundred twenty-two thousand two hundred twenty-two (222,222) Options shall vest on the first business day immediately preceding the first anniversary of the Grant Date, and provided, however, that no Options shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Options shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Options scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Options shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Options scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Options shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. Subject to the execution of the aforementioned release, in the event of termination due to Section 4(b) of the New Employment Agreement, Employee's estate or Beneficiaries, as the case may be, shall be entitled to exercise all Options held by Employee at the time of her death for the balance of their term. 2 To the extent Employee does not purchase all or any part of the Common Shares under the Options exercisable and to which Employee is entitled, Employee has the right cumulatively thereafter to purchase any Common Shares not so purchased and such right shall continue until the Option terminates or expires. Fractional Common Share interests shall be disregarded, but may be cumulated. No fewer than 50 Common Shares may be purchased at any one time, unless the number purchased is the total number at the time available for purchase under the Option. 4. Method of Exercise of Options. The Options shall be exercisable by the delivery to the Company of a written exercise notice in the form to be provided by Company, which shall state the number of Common Shares to be purchased pursuant to the Options. The purchase price of any Common Shares purchased on exercise of an Option shall be paid by Employee (or Employee's Personal Representative or Beneficiary, as the case may be) in full at the time of each purchase in one or a combination of the following methods: (i) in money, including by electronic funds transfer; (ii) by check payable to the order of the Company; (iii) to the extent permitted by applicable law, by a promissory note of Employee consistent with the requirements of Section 1.8 of the SIP, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option that is paid by a promissory note; or (iv) to the extent permitted by and consistent with the Company's Certificate of Incorporation (as amended) and applicable law, by notice and third party payment in such manner as may be authorized by the Committee or by the delivery of Common Shares already owned by Employee, provided, however, that the Committee may in its absolute discretion limit Employee's ability to exercise an Option by delivering such Common Shares. Common Shares that are permitted to be used to satisfy the exercise price of an Option shall be valued at their Fair Market Value on the date of exercise and shall have been beneficially owned by Employee for at least six months prior to such delivery. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, exercise, payment or disposition of any Options, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. Employee (or Employee's Beneficiary or Personal Representative) shall furnish any written statements required pursuant to Section 4.4 of the SIP. 5. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Options and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 3 6. Forfeiture. All Options then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Options that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 7. Change in Control Event. All Options referred to in this Agreement shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Options at their then fair market value, or (B) the continuation of such Options in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Options immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 8. Termination of Options Under Certain Events. As contemplated by Section 4.2 of the SIP, the Options may be terminated or rendered non-exercisable (to the extent they were not previously exercised) in certain circumstances, as described therein. 9. Non-Transferability of Options. The Options and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP. The Common Shares issuable on exercise of the Options are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 10. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 11. Plan. The Options and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, 4 incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 12. Entire Agreement. This Agreement, the Termination Agreement, the New Employment Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 13. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 14. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 15. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any Common Shares not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 16. No Restriction on Corporate Powers. The existence of the SIP and/or the Options shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 17. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions 5 precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 18. Execution. The grant of Options hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 19. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ----------------------------------- Elsie Ma Leung ----------------------------------- (Address) ----------------------------------- (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Stock Option Agreement by Gemstar-TV Guide International, Inc., I, ________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Second Stock Option Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. --------------------------- Signature of Spouse 8 Exhibit C DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit D GEMSTAR-TV GUIDE INTERNATIONAL, INC. EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of ___________, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two hundred nine thousand three hundred eight (209,308) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred nine thousand three hundred eight (209,308) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty-nine thousand seven hundred seventy (69,770) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) sixty-nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) sixty-nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------- Title: ------------------------------ EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____________, ______. ------------------------- Signature of Spouse 8 Exhibit E GEMSTAR-TV GUIDE INTERNATIONAL, INC. EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, _____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two hundred nine thousand three hundred eight (209,308) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred nine thousand three hundred eight (209,308) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred nine 1 thousand three hundred eight (209,308) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty nine thousand seven hundred seventy (69,770) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) sixty nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) sixty nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit F of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: -------------------------------- Title: ----------------------------- EMPLOYEE ------------------------------------ Elsie Ma Leung ------------------------------------ (Address) ------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ------------------------ Signature of Spouse 7 Exhibit F SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement. 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement ), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. Section 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: --------------------------- Name: --------------------------- Date: Title: --------------------------- --------------------------- Date: --------------------------- -4- APPENDIX A The terms and conditions provided under this Appendix A (including, without limitation, the Section 3(c) and related exhibits) shall have no effect unless and until as provided for under Section 3(d) of the Agreement. (c) Equity Awards. (i) Subject to receiving the requisite stockholder approval, the Company shall cause the SIP to be amended (the "SIP Amendment") to provide for awards of restricted stock, such amendment to be substantially in the form attached hereto as Exhibit A. The Company shall schedule an annual or special stockholders' meeting of the Company to occur as soon as reasonably practicable after the Effective Date (the "Stockholder Meeting"); provided, however, the parties acknowledge that the SIP Amendment will not be submitted for stockholder approval at the informational stockholder meeting expected to be scheduled in either November or December of 2002. At the Stockholder Meeting, the Company shall submit the SIP Amendment for stockholder approval. (ii) If the SIP Amendment is approved by the Company stockholders, the Company shall issue: (1) on the date of the Stockholder Meeting or as soon as reasonably practicable thereafter (the "Initial Grant Date"), two hundred nine thousand three hundred eight (209,308) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Initial Employment Restricted Stock Agreement attached hereto as Exhibit B; (2) on the first anniversary of the Effective Date or as soon as reasonably practicable thereafter, two hundred three thousand eight hundred forty-six (203,846) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Second Employment Restricted Stock Agreement attached hereto as Exhibit C; and (3) on the second anniversary of the Effective Date or as soon as reasonably practicable thereafter, two hundred three thousand eight hundred forty-five (203,845) shares of restricted stock under the SIP to Employee in accordance with the terms and conditions set forth in the Third Employment Restricted Stock Agreement attached hereto as Exhibit D. Such shares of restricted stock shall be issued in certificates of such denominations as Employee may request. (iii) If the SIP Amendment is not approved by the Company stockholders, the Company shall grant: (1) on the date of the Stockholder Meeting or as soon as reasonably practicable thereafter (the "Initial Grant Date"), to Employee under the SIP two hundred nine thousand three hundred eight (209,308) Stock Units and Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Company's Common Stock (the "Common Shares") generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred nine 2 thousand three hundred eight (209,308) Common Shares, in each case in accordance with the terms and conditions set forth in the Initial Employment Stock Unit Agreement attached hereto as Exhibit E; (2) on the first anniversary of the Effective Date or as soon as reasonably practicable thereafter, to Employee under the SIP (i) two hundred three thousand eight hundred forty-six (203,846) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Common Shares generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred three thousand eight hundred forty-six (203,846) Common Shares, in each case in accordance with the terms and conditions set forth in the Second Employment Stock Unit Agreement attached hereto as Exhibit F; and (3) on the second anniversary of the Effective Date or as soon as reasonably practicable thereafter, to Employee under the SIP (i) two hundred three thousand eight hundred forty-five (203,845) Stock Units and (ii) Dividend Equivalent Rights representing the right to receive, if, when and as ordinary cash dividends are paid on the Common Shares generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred three thousand eight hundred forty-five (203,845) Common Shares, in each case in accordance with the terms and conditions set forth in the Third Employment Stock Unit Agreement attached hereto as Exhibit G. (iv) If the SIP Amendment is approved by the Company stockholders at the Stockholder Meeting, with respect to those shares of restricted stock granted under Sections 3(c)(ii)(1) or 3(c)(ii)(2) or 3(c)(ii)(3), as the case may be, for which Employee makes a valid election within 30 days after the applicable Share Grant Date (as defined herein) under Section 83(b) of the Internal Revenue Code of 1986, as amended (the "Code"), (the "83(b) Shares"), the Company shall pay Employee within five business days after the Company's receipt from Employee of evidence of such valid election, or as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "83(b) Payment"), where: X is the number of 83(b) Shares with respect to such Share Grant Date; Y is the excess, if any, of the Maximum Share Price (as defined herein) over the Company Share Price (as defined herein) on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of such Share Grant Date); and 3 W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of such Share Grant Date). The "Company Share Price" on any date shall be the Fair Market Value (as such term is defined in the SIP) for one Common Share on such date. The "Trading Period" shall be the period beginning on the Effective Date until the close of business on the thirtieth Trading Day (as defined herein) following the Effective Date. The term "Trading Day" shall mean any day on which the Company's Common Stock is traded on a national securities exchange on which such Company Common Stock is listed or admitted to trade; provided, however, that if the Company's Common Stock is not listed or admitted to trade on any national securities exchange, the term "Trading Day" shall mean any business day. The "Maximum Share Price" shall be the lesser of (i) the highest Company Share Price of any date within the Trading Period or (ii) the Company Share Price on the applicable Share Grant Date or Stock Unit Grant Date, as the case may be. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(iv) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent Company makes any payments to satisfy any tax withholding obligation relating to a Section 83(b) election (with respect to those shares of restricted stock granted under Sections 3(c)(ii)(1) or 3(c)(ii)(2) or 3(c)(ii)(3), as the case may be) above prior to paying the applicable 83(b) Payment, such 83(b) Payment (to the extent possible) shall be reduced by such payments made by the Company to satisfy such tax withholding obligation, and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until such 83(b) Payment is made to Employee. If such 83(b) Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date such 83(b) Payment would have been made (if not for the deduction of the prior sentence). The term "Share Grant Date" shall mean the date such shares of restricted stock are granted to Employee. The term "Intended Grant Date" shall mean: (i) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(1), the Effective Date; (ii) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(2), the earlier of the first anniversary of the Effective Date or the date such shares are granted; and (iii) with respect to shares of restricted stock granted to Employee under Section 3(c)(ii)(3), the earlier of the second anniversary of the Effective Date or the date such shares are granted. Notwithstanding anything herein to the contrary, no 83(b) Payment shall be made with respect to shares of restricted stock granted to Employee under Sections 3(c)(ii)(2) or 3(c)(ii)(3) if (i) the applicable Share Grant Date is the same as the corresponding Intended Grant Date for such shares of restricted stock or (ii) such shares of restricted stock are granted after the Initial Grant Date. (v) If the SIP Amendment is not approved by the Company stockholders at the Stockholder Meeting, the Company shall pay Employee, on each Stock Unit vesting date, or 4 as soon as reasonably practicable thereafter, an amount in cash (subject to applicable withholding) equal to X multiplied by Y multiplied by Z divided by W (the "Stock Unit Payment"), where: X is number of Stock Units that vest on the applicable Stock Unit vesting date; Y is the excess, if any, of the Maximum Share Price over the Company Share Price on the Effective Date; Z is equal to the difference between (i) the lowest Federal long term capital gain rate and (ii) the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question); and W is equal to (i) one (1) minus (ii) the amount equal to the sum of the highest marginal Federal income tax rate and highest marginal state income tax rate applicable to a California resident (adjusted for any applicable state tax deduction available under Federal income tax laws)(this calculation shall be determined using those rates applicable in the year of the Stock Unit vesting date in question). The term "Stock Unit Grant Date" shall refer to the date the applicable Stock Units are granted to Employee. Notwithstanding anything herein to the contrary, no payment shall be made under this Section 3(c)(v) if the Company Share Price on the Effective Date exceeds the Maximum Share Price. To the extent that the Company has any tax withholding obligation relating to the Stock Units (or payment of such Stock Units) that vest on the applicable Stock Unit vesting date, the Company may reduce (to the extent possible) the Stock Unit Payment to the extent of such tax withholding obligation and, except as provided in the immediately following sentence, in no event shall Employee be required to reimburse the Company for such tax withholding obligation until the Stock Unit Payment is made to Employee. If the Stock Unit Payment is insufficient to repay such payments made by the Company to satisfy such tax withholding obligation, Employee shall pay the Company an amount in cash equal to the amount of deficiency on such date the Stock Unit Payment would have been made (if not for the deduction of the prior sentence). To the extent any payments to be made under this Section 3(c)(v) are accelerated due to Employee's employment under this Agreement terminating as provided in Sections 4(a), 4(b), 4(d) or 4(f), such payments shall be contingent on Employee (or, if deceased, his estate's legal representative) signing a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H. (vi) The number and type of shares set forth above with respect to any restricted stock, Stock Units or Dividend Equivalent Rights (the "Equity Awards") provided under this Section 3, and applicable share prices for purposes of Sections 3(c)(iv) and 3(c)(v), 5 shall be proportionately adjusted by the Company to the extent (if any) necessary to account for, and preserve the intended level of benefits following, any extraordinary dividend or other extraordinary distribution in respect of the outstanding Common Shares (to the extent paid in the form of Common Shares, or other equity securities), or any recapitalization, stock split (including a stock split in the form of a stock dividend), reverse stock split, reorganization, merger, combination, consolidation, split-up, spin-off, exchange of Common Shares, or similar extraordinary event, in each case to the extent such event affects the outstanding Common Shares. (vii) The Company represents and warrants that, as of the dates that grants of restricted stock or Stock Units, as the case may be, are made under this Section 3(c), there will be sufficient Common Shares available under the SIP to permit such grants to be issued thereunder. (viii) Notwithstanding any provision herein or in the Initial Employment Restricted Stock Agreement, Second Employment Restricted Stock Agreement, Third Employment Restricted Stock Agreement, Initial Employment Stock Unit Agreement, Second Employment Stock Unit Agreement Stock, Third Employment Stock Unit Agreement or SIP to the contrary, no Equity Awards shall be granted under this Section 3 after any (i) termination of Employee's employment pursuant to Sections 4(c) or 4(g) of this Agreement prior to the grant of such Equity Awards, or (ii) occurrence of any Breach Event (as defined below) which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within thirty (30) days after receipt of written notice from the Company of such Breach Event (the "Breach Cure Period"); provided, however, no Equity Awards shall be granted during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any Equity Awards scheduled to be granted during such Breach Cure Periods shall be deemed to have been granted as of the scheduled grant date); provided, further, no Equity Awards shall be granted during any For Cause Determination Period (as defined herein) (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c), any Equity Awards scheduled to be granted during such For Cause Determination Period shall be deemed to have been granted as of the scheduled grant date). The term "Breach Event" shall mean any (i) breach by Employee of Employee of Section 13 of the Termination Agreement or (ii) material breach by Employee of Sections 6, 8, 10(g) or 10(h) of this Agreement. The determination that a Breach Event has occurred shall be made by the Company Board and following such determination, written notice of such Breach Event shall be provided to Employee by the Company Board or any proper officer of the Company. Employee agrees that, in her capacity as a Company Board member, she shall not vote on such a determination nor shall she vote on any Company Board determination that a Breach Event (as such term is defined in Henry Yuen's employment agreement with the Company of even date hereof) has occurred with respect to Henry Yuen. Any disputes related to this Section 3(c)(viii) shall be resolved pursuant to Section 10(f). (ix) Subject to Section 3(c)(viii) above, if Employee's employment terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any Equity Awards required under Sections 3(c)(ii)(1) or 3(c)(iii)(1) of this Agreement, such Equity Awards not yet granted shall be granted to Employee as provided in such Sections and shall be immediately vested in full upon grant. 6 (x) Subject to Section 3(c)(viii) above, if Employee's employment terminates under Sections 4(a), 4(b), 4(d) or 4(f) prior to the granting of any Equity Awards required under Sections 3(c)(ii)(2), 3(c)(ii)(3), 3(c)(iii)(2), or 3(c)(iii)(3) of this Agreement, such Equity Awards not yet granted shall be granted to Employee on the later of (i) the Initial Grant Date or (ii) the date of termination of Employee's employment, and shall be immediately vested in full upon grant. (xi) Subject to Section 3(c)(viii) above, in the event of a Change in Control Event, as defined under Section 6 of the Initial Employment Restricted Stock Agreement, the Company shall grant any Equity Award required under Sections 3(c)(ii)(2), 3(c)(ii)(3), 3(c)(iii)(2), or 3(c)(iii)(3) of this Agreement (and not already granted) on the later of (i) Initial Grant Date, or (ii) the date of the Change in Control Event, but only if the Company (or a successor thereto) has failed to provide for the cash-out of such grants, or the continuation of such grants in an economically equivalent amount (as provided under Section 6 of the Initial Employment Restricted Stock Agreement). (xii) In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the agreement evidencing any Equity Award, the terms and conditions of the agreement evidencing such Equity Award shall govern. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern. (xiii) Notwithstanding any provisions herein to the contrary, to the extent any Equity Award required hereunder is made on a post-employment basis (such basis being with respect to Employee), the grant of such Equity Award shall, to the extent required by applicable law, be contingent upon the recipient making a valid representation that such recipient is an accredited investor under Regulation D of the Securities Act of 1933, as amended. (xiv) With respect to any Equity Awards issued to Employee pursuant to this Agreement, to the extent the Company is eligible to file a Registration Statement on Form S-8, the Company shall take all steps reasonably necessary to maintain the effectiveness of the Company's current Registration Statements on Form S-8. (xv) The Company and Employee agree that the Company shall not (A) grant to Employee any stock options under the SIP or under any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day, or (B) accelerate any stock option grant contemplated by any other arrangement prior to the date that is six months and one day after the Effective Date, or if such day is not a business day, on the next succeeding business day. Employee hereby represents that, except for the June 20, 2002 grant of stock options (representing 750,000 options), she has not received any grant of options or other equity-based compensation within the 6 month period preceding the Effective Date. Nothing in this Section 3(c)(xv) shall prevent the vesting of stock options contemplated by Section 3(b) of the Termination Agreement nor shall the vesting of such stock options violate this Section 3(c)(xv). 7 Exhibit A DRAFT AMENDMENT TO THE 1994 STOCK INCENTIVE PLAN Delete the last sentence of Section 1.9 and replace with: Except to the extent required by Sections 1.10 and 4.4 or by the Committee in the Award Agreement, the restrictions set forth herein shall not apply to (i) shares of Common Stock actually issued on exercise of any Options, (ii) shares of Common Stock actually issued as payment for Stock Units or DERs, or (iii) Restricted Stock awards that have vested and otherwise satisfied the conditions that may be imposed by the Committee pursuant to Section 3.3. Delete the last sentence of Section 3.2 and replace with: DERs shall be payable in cash, shares of Common Stock or other Awards and (to the extent permitted by law) may be subject to such conditions, not inconsistent with Section 162(m) of the Code (in the case of Options or other Awards intended to satisfy its conditions with respect to deductibility), as may be determined by the Committee. Add new Section 3.3: 3.3 Restricted Stock Awards. Restricted Stock represents awards made in Common Stock in which the shares granted may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, except upon passage of time, or upon satisfaction of other conditions, or both, in every case as provided by the Committee in its sole discretion (including, without limitation, Awards that may vest immediately). The Committee, in its sole discretion, shall determine the specific terms, conditions and provisions relating to each grant of Restricted Stock (including, without limitation, the extent to which the recipient of the Restricted Stock Award may have dividend and/or voting rights with respect to the shares subject to the Award prior to the time such shares become vested) as set forth in duly adopted rules or specific Award Agreements. Delete the last sentence of Section 4.7 and replace with: Except as otherwise expressly authorized by the Committee or this Plan, no adjustment will be made for dividends or other shareholder rights for which a record date is prior to such date of delivery. Delete Section 5.1(a) and replace with: (a) "Award" shall mean an award of any Option, Stock Unit, Restricted Stock award, or DER, or any combination thereof, whether alternative, sequential, or cumulative, authorized or granted under this Plan. Add Section 5.1(gg): (gg) "Restricted Stock" means an award of Common Stock, the vesting of which is subject to vesting or other conditions pursuant to Section 3.3. *********************************************** Exhibit B GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of ___________, ____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two hundred nine thousand three hundred eight (209,308) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred nine thousand three hundred eight (209,308) shares of restricted stock (the "Grant Shares") under the SIP. 1 On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the 2 Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty-nine thousand seven hundred seventy (69,770) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) sixty-nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) sixty-nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or 3 Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: ---------------------------------------- Title: -------------------------------------- EMPLOYEE ---------------------------------------- Elsie Ma Leung ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Initial Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____________, ______. ------------------------------ Signature of Spouse 8 Exhibit C GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of ___________, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) two hundred three thousand eight hundred forty-six (203,846) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred 1 three thousand eight hundred forty-six (203,846) shares of restricted stock (the "Grant Shares") under the SIP. On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon 2 the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty-seven thousand nine hundred forty-nine (67,949) Grant Shares shall vest on the Grant Date, (ii) sixty-seven thousand nine hundred forty-nine (67,949) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) sixty-seven thousand nine hundred forty-eight (67,948) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); 3 provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's 4 stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely 5 affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: ---------------------------------- Title: -------------------------------- EMPLOYEE ---------------------------------------- Elsie Ma Leung ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Second Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____________, ______. ------------------------------ Signature of Spouse 8 Exhibit D GEMSTAR-TV GUIDE INTERNATIONAL, INC. THIRD EMPLOYMENT RESTRICTED STOCK AGREEMENT THIS AGREEMENT dated as of ___________, ____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) two hundred three thousand eight hundred forty-five (203,845) shares of restricted stock under the SIP and (ii) the right to receive dividends on such restricted stock, if, when and as dividends are paid on the shares of Common Stock generally, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred 1 three thousand eight hundred forty-five (203,845) shares of restricted stock (the "Grant Shares") under the SIP. On behalf of herself and on behalf of her beneficiaries, estate and permitted assigns, Employee agrees: (i) to the terms, provisions and restrictions provided by this Agreement on any Restricted Property (as defined below) received with respect to the Grant Shares; and (ii) that Employee (or her beneficiaries, estate and permitted assigns) will not vote (nor assign, pledge or transfer the right to vote to any other party in any manner) with respect to the Grant Shares until such Grant Shares are vested. Employee shall have the right to receive ordinary cash dividends (if, when and as ordinary cash dividends are paid on shares of Common Stock generally) with respect to any unforfeited Grant Shares held under this Agreement. Employee shall have the right to receive any securities or other property (if, when and as such securities or properties are paid on shares of Common Stock generally) as a result of any dividend or other distribution (other than ordinary cash dividends), conversion or exchange with respect to any unforfeited Grant Shares held under this Agreement (such securities or other property shall be referred to herein as "Restricted Property"); provided, however, that such Restricted Property received with respect to such Grant Shares shall be subject to the terms and conditions of this Agreement. To the extent Restricted Property is received with respect of the Grant Shares, the Restricted Property will be subject to the restrictions set forth in this Agreement to the same extent as the Grant Shares to which such securities or other property relate and shall be held and accumulated for the benefit of Employee, but subject to such risks (including, but not limited to, the risk of forfeiture). The Company shall issue a certificate or certificates for the Grant Shares, registered in the name of Employee, which certificate(s) shall be held by the Company until such Grant Shares shall have become vested or forfeited in accordance with this Agreement. The certificate(s) representing Grant Shares forfeited in accordance with this Agreement and any shares accumulated thereon and any other cash, rights or property (including Restricted Property) accumulated in respect thereof shall, upon such forfeiture, automatically revert to the Company. The certificate(s) representing Grant Shares (before such shares shall have become vested) shall bear the following legends and/or any other appropriate or required legends under applicable laws: "OWNERSHIP OF THIS CERTIFICATE AND THE SHARES EVIDENCED BY THIS CERTIFICATE AND ANY INTEREST THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER APPLICABLE LAW AND UNDER AN AGREEMENT WITH THE CORPORATION, INCLUDING RESTRICTIONS ON SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION, A COPY OF WHICH IS AVAILABLE FOR REVIEW AT THE OFFICE OF THE SECRETARY OF THE CORPORATION." To the extent that a certificate evidencing the Grant Shares or any related Restricted Property is delivered to Employee prior to the vesting of such Grant Shares, Employee shall promptly redeliver such certificate(s) to the Company to be held by the Company pursuant to the terms hereof. Upon 2 the occurrence of any forfeiture of Grant Shares (including any related Restricted Property), such forfeited Grant Shares (and related Restricted Property) shall be automatically transferred to the Company, without any other action by Employee, or Employee's Personal Representative or Beneficiary, as the case may be. The Company may take any other action necessary or advisable to evidence such transfer. Employee, or Employee's Personal Representative or Beneficiary, as the case may be, shall deliver any additional documents of transfer that the Company may reasonably request to confirm such transfer. Without limiting the generality of the foregoing, Employee, by execution of this Agreement, shall be deemed to appoint the Company and each of its authorized representatives as Employee's attorney(s)-in-fact to effect any such transfer of unvested Grant Shares (and any related Restricted Property) and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer. Promptly after the vesting of the Grant Shares in accordance with the terms hereof, a certificate or certificates evidencing the number of Grant Shares that have vested shall be delivered to Employee (or, in the event of her death or disability, Employee's Personal Representative or Beneficiary). Employee or such other person shall deliver to the Company any representations or other documents or assurances required pursuant to Section 4.4 of the SIP. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares or any Restricted Property in respect thereof until such Grant Shares are vested. Any sale or transfer, or purported sale or transfer, shall be null and void. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty-seven thousand nine hundred forty-nine (67,949) Grant Shares shall vest on the Grant Date, and (ii) one hundred thirty-five thousand eight hundred ninety-six (135,896) Grant Shares shall vest on the first business day immediately preceding the first anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New 3 Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraph, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 4 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. Unvested Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 5 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties' under this Agreement. 13. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. No Restriction on Corporate Powers. The existence of the SIP and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 15. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 16. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 17. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: ------------------------------------ Title: ----------------------------------- EMPLOYEE ---------------------------------------- Elsie Ma Leung ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 7 CONSENT OF SPOUSE In consideration of the execution of the foregoing Third Employment Restricted Stock Agreement by Gemstar-TV Guide International, Inc., I, ________________________________, the spouse of Employee herein named, do hereby join with my spouse in executing the foregoing Third Employment Restricted Stock Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____________, ______. ---------------------------- Signature of Spouse 8 Exhibit E GEMSTAR-TV GUIDE INTERNATIONAL, INC. INITIAL EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, _____ between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the date hereof (i) two hundred nine thousand three hundred eight (209,308) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred nine thousand three hundred eight (209,308) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 2. Grant of Stock Units. Effective as of the date hereof, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred nine 1 thousand three hundred eight (209,308) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty nine thousand seven hundred seventy (69,770) Grant Shares shall vest on the first anniversary of the Effective Date, (ii) sixty nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the second anniversary of the Effective Date, and (iii) sixty nine thousand seven hundred sixty-nine (69,769) Grant Shares shall vest on the third anniversary of the Effective Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control 3 Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement 4 which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the date hereof. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------------- Title: ------------------------------------ EMPLOYEE ---------------------------------------- Elsie Ma Leung ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Initial Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Initial Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------------- Signature of Spouse 7 Exhibit F GEMSTAR-TV GUIDE INTERNATIONAL, INC. SECOND EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, _____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) ) two hundred three thousand eight hundred forty six (203,846) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred three thousand eight hundred forty six (203,846) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 1 2. Grant of Stock Units. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred three thousand eight hundred forty six (203,846) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty-seven thousand nine hundred forty nine (67,949) Grant Shares shall vest on the Grant Date, (ii) sixty-seven thousand nine hundred forty nine (67,949) Grant Shares shall vest on the first anniversary of the Grant Date, and (iii) sixty-seven thousand nine hundred forty eight (67,948) Grant Shares shall vest on the second anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New 2 Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). 3 The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 4 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: ------------------------------------ Title: ---------------------------------- EMPLOYEE ---------------------------------------- Elsie Ma Leung ---------------------------------------- (Address) ---------------------------------------- (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Second Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Second Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. ----------------------- Signature of Spouse 7 Exhibit G GEMSTAR-TV GUIDE INTERNATIONAL, INC. THIRD EMPLOYMENT STOCK UNIT AGREEMENT THIS AGREEMENT dated as of ______, _____ (the "Grant Date") between Gemstar-TV Guide International, Inc., a Delaware corporation (the "Company"), and Elsie Ma Leung ("Employee"). W I T N E S S E T H WHEREAS, pursuant to the Gemstar-TV Guide International, Inc. 1994 Stock Incentive Plan, as amended (the "SIP"), the Company has granted to Employee effective as of the Grant Date (i) ) two hundred three thousand eight hundred forty-five (203,845) Stock Units and (ii) Dividend Equivalent Rights ("DERs") representing the right to receive, if, when and as ordinary cash dividends are paid on the shares of Common Stock generally, an amount (of cash or other property) equal to the ordinary cash dividends that would be paid with respect to two hundred three thousand eight hundred forty five (203,845) shares of Common Stock, in each case, upon and subject to the terms and conditions set forth herein and in the SIP. NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties agree as follows: 1. Defined Terms. Capitalized terms shall have the meaning assigned to them herein. Where capitalized terms are not defined herein they shall have the meaning assigned to them in the SIP. For purposes of this Agreement: "Breach Cure Period" shall have the meaning assigned to it under the New Employment Agreement. "Breach Event" shall have the meaning assigned to it under the New Employment Agreement. "Effective Date" shall have the meaning assigned to it under the New Employment Agreement. "For Cause Determination Period" shall have the meaning assigned to it under the New Employment Agreement. "New Employment Agreement" shall mean the employment agreement between the Company and Employee dated as of _________, 2002. "Termination Agreement" shall mean the termination agreement between the Company, Employee and Gemstar Development Corporation, a California corporation, dated as of _______, 2002. 1 2. Grant of Stock Units. Effective as of the Grant Date, the Company hereby grants to Employee, subject to the vesting provisions and restrictions set forth below, two hundred three thousand eight hundred forty-five (203,845) Stock Units (the "Grant Shares") under the SIP. The number and type of Grant Shares are subject to adjustment pursuant to Section 4.2 of the SIP. Employee shall be eligible for payment of Grant Shares at or following the vesting of such Grant Shares. The form of payment of Grant Shares shall only be in Company Common Stock and Employee shall be paid one share of Common Stock for each Grant Share. Employee shall have no voting rights with respect to the Grant Shares until such Grant Shares are vested. Employee shall not sell, transfer, pledge, assign or otherwise alienate or hypothecate the Grant Shares. Any sale or transfer, or purported sale or transfer, shall be null and void. If, when and as ordinary cash dividends are paid on shares of Common Stock generally, Employee shall be paid DERs equivalent to the ordinary cash dividends that would be paid with respect to Z shares of Common Stock where "Z" is the number of the unvested (and unforfeited) Grant Shares at the time of such ordinary cash dividend payment. Any DERs provided under this Agreement shall be paid in cash, shares of Common Stock or other Awards as may be determined by the Committee. In the event that the Company determines that the Company (or any affiliate or subsidiary of Company) is required to withhold any tax as a result of the issuance, vesting, payment or disposition of any Grant Shares, the tax withholding obligation shall be satisfied in accordance with the provisions and terms of Section 4.5 of the SIP. 3. Vesting of Grant Shares. The Grant Shares shall vest as follows: (i) sixty-seven thousand nine hundred forty-nine (67,949) Grant Shares shall vest on the Grant Date, (ii)one hundred thirty-five thousand eight hundred ninety-six (135,896) Grant Shares shall vest on the first business day preceding the first anniversary of the Grant Date; provided, however, that no Grant Shares shall vest after any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period; provided, further, that no Grant Shares shall vest during any Breach Cure Period (but if all Breach Events are cured during the corresponding Breach Cure Periods, any unvested Grant Shares scheduled to vest during such Breach Cure Periods shall be deemed to have vested as of the scheduled vesting date); provided, further, no Grant Shares shall vest during any For Cause Determination Period (but, in the event that the Company Board determines no termination for Cause has occurred or Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any Grant Shares scheduled to vest during such For Cause Determination Period shall be deemed to have vested as of the scheduled vesting date); and 2 provided, further, and subject to the foregoing paragraphs, that if Employee's employment under the New Employment Agreement terminates as provided in Sections 4(a), 4(b), 4(d) or 4(f) of the New Employment Agreement, the Grant Shares shall be vested at such termination provided Employee (or, if deceased, her estate's legal representative) signs a general release of claims in a form provided by the Company which shall be substantially similar to Exhibit H of the New Employment Agreement. 4. Continuance of Employment Required; No Employment Commitment. The vesting schedule requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Grant Shares and the rights and benefits under this Agreement. Service for less than the full portion of any vesting period, even if substantial, will not entitle Employee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided herein or under the SIP. Nothing contained in this Agreement or the SIP constitutes an employment commitment by the Company, affects the termination provisions of Section 4 of the New Employment Agreement, confers upon Employee any right to remain employed by the Company or any Subsidiary, interferes in any way with the right of the Company or any Subsidiary at any time to terminate Employee's employment, or affects the right of the Company or any Subsidiary to increase or decrease Employee's other compensation. 5. Forfeiture. All Grant Shares then unvested shall be automatically terminated and forfeited upon any (i) termination of Employee's employment pursuant to Section 4(c) or Section 4(g) of the New Employment Agreement, or (ii) occurrence of any Breach Event which (if capable of cure) has not (together with all effects thereof) been fully cured by Employee within the Breach Cure Period. Notwithstanding anything herein to the contrary, in the event that Employee is successful in challenging any purported termination under Section 4(c) of the New Employment Agreement, any unvested Grant Shares that terminated due to such purported termination shall be deemed reinstated and vested upon the conclusion of such successful challenge. 6. Change in Control Event. All Grant Shares shall be subject to immediate vesting upon the occurrence of: (i) a Change in Control Event (as defined below); and (ii) the Company has not provided for either (A) the cash-out of such Grant Shares at their then fair market value, or (B) the continuation of such Grant Shares in an economically equivalent amount (e.g. replacement shares of restricted stock, options or stock units, based on a successor company's stock, provided that such replacement award will have substantially similar terms and conditions as the Grant Shares immediately prior to the Change in Control Event). The term "Change in Control Event" shall have the meaning assigned to such term under SIP Section 5; provided, however, that the measurement period for determining a "Change in Control Event" under SIP Section 5.1(f)(5) shall not include the one-year period after the Effective Date and such measurement period shall only commence upon the first anniversary of the Effective Date. 3 7. Termination of Grant Shares Under Certain Events. As contemplated by Section 4.2 of the SIP, the Grant Shares may be terminated in certain circumstances, as described therein. 8. Non-Transferability of Grant Shares. The Grant Shares and any other rights of Employee under this Agreement or the SIP are nontransferable and subject to extensive restrictions under Section 1.9 of the SIP and as set forth herein. The Common Stock issuable on the Grant Shares are also subject to restrictions on transfer under Section 1.10 of the SIP and to any and all repurchase or redemption rights of the Company that may be provided under its Certificate of Incorporation and Bylaws, as amended from time to time. 9. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office and to Employee at the addresses given beneath their respective signatures hereon, or at such other address as either party may hereafter designate in writing to the other. Any such notice shall be deemed given only when received, but if Employee is no longer an Eligible Person, any notice to Employee shall be deemed to have been duly given when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. 10. Plan. The Grant Shares, DERs and all rights of Employee thereunder are subject to, and Employee agrees to be bound by, all of the terms and conditions of the provisions of the SIP, incorporated herein by this reference. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the SIP, the terms and conditions of the SIP shall govern except as expressly set forth herein. In the event of a conflict or inconsistency between the terms and conditions of this Agreement, and the terms and conditions of the New Employment Agreement, the terms and conditions of this Agreement shall govern. Employee acknowledges receipt of a copy of the SIP, which is made a part hereof by this reference, and agrees to be bound by the terms thereof. Unless otherwise expressly provided in other Sections of this Agreement, provisions of the SIP that confer discretionary authority on the Committee do not (and shall not be deemed to) create any rights in Employee, unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Committee so conferred by appropriate action of the Committee under the SIP after the date hereof. 11. Entire Agreement. This Agreement, the New Employment Agreement, the Termination Agreement and the SIP together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. The SIP and this Agreement may be amended pursuant to Section 4.6 of the SIP. Such amendment must be in writing and signed by the Company. The Company may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of Employee, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof. 12. Severability. If a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken, and all portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, it is the parties' intent that any court order striking any portion of this Agreement should modify the 4 terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement. 13. California Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California. 14. Privileges of Stock Ownership. Except as otherwise expressly authorized by the Committee or the SIP, Employee will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by Employee. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 15. No Restriction on Corporate Powers. The existence of the SIP, DERs and/or the Grant Shares shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company's capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Company's capital stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. 16. Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party's benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. 17. Execution. The grant of Grant Shares hereunder shall be rendered ineffective if Employee and spouse fail to execute this Agreement (with Consent of Spouse) and return the executed Agreement (with Consent of Spouse) to the Company within 30 days of the Grant Date. 18. Counterparts. This Agreement and any amendment hereto may be executed in several counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party. [Remainder of page intentionally left blank.] 5 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and Employee has hereunto set his or her hand. GEMSTAR-TV GUIDE INTERNATIONAL, INC. By: --------------------------------------- Title: ------------------------------------- EMPLOYEE ------------------------------------------ Elsie Ma Leung ------------------------------------------ (Address) ------------------------------------------ (City, State, Zip Code) 6 CONSENT OF SPOUSE In consideration of the execution of the foregoing Third Employment Stock Unit Agreement by Gemstar-TV Guide International, Inc., I, _______________________________, the spouse of the Employee herein named, do hereby join with my spouse in executing the foregoing Third Employment Stock Unit Agreement and do hereby agree to be bound by all the terms and provisions thereof and of the SIP. Dated as of the ____ of ____, ____. -------------------------- Signature of Spouse 7 Exhibit H SEPARATION AGREEMENT AND RELEASE This Separation Agreement and Release (hereinafter this "Agreement") is made and entered into by and between ___________ (hereinafter, "Employee") and Gemstar - TV Guide International, Inc., a Delaware corporation (hereinafter, the "Company"). 1. Employee's employment by the Company has terminated [or will terminate] on __________________ (hereinafter, the "Termination Date"). 2. Pursuant to the terms of that certain Employment Agreement dated as of November __, 2002 between the Company and Employee (hereinafter, the "Employment Agreement"), Employee is required to execute this Agreement in order to obtain certain benefits under the Employment Agreement . 3. To the fullest extent permitted by law, Employee hereby RELEASES and COVENANTS NOT TO SUE the Company, its parents, subsidiaries, affiliates, predecessors, successors, assigns, its or their employee benefit plans, trustees, fiduciaries and administrators, and any and all of its and their respective past or present officers, directors, partners, insurers, agents, representatives, attorneys and employees (all collectively included in the term the "Company" for purposes of this Agreement ), from any and all claims, demands or causes of action, known or unknown, based on any events or circumstances relating to his employment at the Company or any subsidiary of the Company and arising or occurring prior to and including the date of Employee's execution of this Agreement, which Employee, his heirs, executors, administrators, agents, attorneys, representatives or assigns (all collectively included in the term "Employee" for purposes of this release and covenant not to sue), has, had or may have against the Company under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans With Disabilities Act, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, Executive Order No. 11246, 42 U.S.C. Section. 1981, and all other federal, state and local statutes or ordinances,, any claims that his employment was unlawfully terminated, any rights to severance pay or benefits (other than as provided for in the Employment Agreement or that certain Termination Agreement dated as of November __ 2002 between the Company, Gemstar Development Corporation and Employee), and any rights of continued employment, reinstatement or reemployment by the Company, PROVIDED, HOWEVER, Employee is not waiving, releasing or giving up any rights Employee may have (i) to test the knowing and voluntary nature of this Agreement under The Older Workers Benefit Protection Act, (ii) to workers' compensation benefits, (iii) to vested benefits under any qualified pension or savings plan, (iv) to continued benefits in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, or (v) to unemployment insurance. 4. Employee agrees and acknowledges that he was hereby informed by the Company in writing to consult with an attorney and that he had at least 21 days to consider this Agreement; that he has entered into this Agreement knowingly and voluntarily with full understanding of its terms and after having had the opportunity to seek and receive advice from counsel of his choosing; and that he has had a reasonable period of time within which to consider this Agreement. Employee represents that he has not filed a complaint, charge or claim with any court or governmental agency against the Company with respect to any claim released hereby and has not assigned any such claim against the Company to any person or entity. 5. Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California with respect to the releases provided herein, and does so understanding and acknowledging the significance of such specific waiver of Section 1542. Section 1542 of the Civil Code of the State of California states as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." Thus, notwithstanding the provisions of Section 1542, and for the purpose of implementing the releases provided herein, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation other than the express limitations set forth herein, all claims of the kind released hereby even if he does not know or suspect such claim to exist in his favor at the time of execution hereof, and that this Agreement contemplates the extinguishment of any such claims. Employee acknowledges and agrees that the foregoing waiver of the provisions of Section 1542 has been expressly bargained for by each of the parties in the negotiation of this Agreement. 6. [This Section 6 is intentionally left blank] 7. Employee may accept this Agreement by delivering an executed copy of this Agreement on or after the Termination Date and on or before _______________________, in the manner described in Section 10(b), "Notices," of the Employment Agreement. 8. Employee may revoke this Agreement within seven (7) days after it is executed by Employee by delivering a written notice of revocation in the manner described in Section 10(b), "Notices," of the Employment Agreement, no later than the close of business on the seventh (7th) calendar day after this Agreement was signed by Employee. This Agreement will not become effective or enforceable until the eighth (8th) calendar day after Employee signs. If Employee revokes this Agreement, the parties shall have no obligations under this Agreement. 9. This Agreement does not constitute and shall not be construed as an admission by the Company that it has violated any law, interfered with any rights, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to Employee, and the Company expressly denies that it has engaged in any such conduct. 10. If any provision, section, subsection or other portion of this Agreement shall be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable -2- in whole or in part, and such determination shall become final, such provision or portion shall be deemed to be severed or limited, but only to the extent required to render the remaining provisions and portion of this Agreement enforceable. This Agreement as thus amended shall be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified. 11. Employee hereby agrees and acknowledges that he has carefully read this Agreement, fully understands what this Agreement means, and is signing this Agreement knowingly and voluntarily, and that Employee has not relied on any statement by anyone associated with the Company that is not contained in this Agreement in deciding to sign this Agreement. 12. This Agreement, the legal relations between the parties and any action, whether contractual or non-contractual, instituted by any party with respect to matters arising under or growing out of or in connection with or in respect of this Agreement, the relationship of the parties or the subject matter hereof shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines. 13. All disputes arising under this Agreement shall be resolved pursuant to Section 10(f) of the Employment Agreement. [Remainder of page intentionally left blank] -3- WHEREFORE, the parties have executed this Agreement on the date or dates set forth below. EMPLOYEE: GEMSTAR - TV GUIDE INTERNATIONAL, INC. [_____________________] By: ------------------------------ Name: ------------------------------- Date: Title: --------------------- ------------------------------ Date: ------------------------------ -4- EX-10.9 12 dex109.txt LETTER AGREEMENT - ELSIE MA LEUNG EXHIBIT 10.9 November 7, 2002 Gemstar-TV Guide International, Inc. 135 North Los Robles Ave. Suite 800 Pasadena, California 91101 Gentlemen: Notwithstanding anything to the contrary contained in the Restructuring Agreements (as defined in the Umbrella Agreement (the "Umbrella Agreement") of even date herewith among Ms. Elsie Ma Leung, Dr. Henry Yuen, The News Corporation Limited and Gemstar-TV Guide International, Inc. (the "Company")), Ms. Leung and the Company agree that: 1. The Company will retain, in a segregated interest bearing account (the "Segregated Account"), the termination fee and all amounts to be paid in settlement of Ms. Leung's unpaid salary, bonuses and unused vacation days (collectively, the "Retained Funds") due to Ms. Leung on the Effective Date pursuant to Section 2(a) of the Leung Termination Agreement (as defined in the Umbrella Agreement), and upon doing so, the Company will be deemed to have performed all of its payment obligations as of the Effective Date under the Restructuring Agreements, and, except as otherwise contemplated by this paragraph, all other actions (including Ms. Leung's resignation and the termination of Ms. Leung's existing employment agreement) required to take place on the Effective Date will be deemed to have been performed as of such time. The Retained Funds will be retained by the Company and remain Company property until, with respect to any portion of the Retained Funds, the earlier of (a) the disbursement of such Retained Funds in accordance with the terms of an agreement reached between the Securities and Exchange Commission (the "SEC") and Ms. Leung and (b) the disbursement of any remaining Retained Funds to Ms. Leung on May 6, 2003 (the "Release Date"). On the Release Date, the Company will transfer the balance of the Retained Funds, as well as all interest earned thereon, to Ms. Leung in accordance with clause (a) or (b) as the case may be. Notwithstanding the prior sentences and, provided that the SEC does not object in either of the following cases, (i) upon receipt of proper substantiation of the amounts requested, the funds due under Section 4 of the Leung Termination Agreement shall be paid directly by wire transfer to Arkin Kaplan LLP promptly after the date hereof, and (ii) any restricted stock, stock options, or stock units granted pursuant to the Restructuring Agreements (collectively, the "Equity Awards") on the Effective Date, or any date thereafter, shall be issued directly to Ms. Leung in accordance with the terms of the Restructuring Agreements. If, prior to the date of issuance, a court order prohibiting any such issuance or requiring the escrow (or other similar arrangement) of any of the Equity Awards has not been obtained and remain in force, such November 7, 2000 Page 2 Equity Awards will be issued to Ms. Leung on the later of (a) the Release Date and (b) such later date on which any such Equity Award is to be issued pursuant to the Restructuring Agreements. Ms. Leung hereby acknowledges that the Company will not have any obligation under this letter agreement or under any of the Restructuring Agreements to make any disbursement of any portion of the Retained Funds or to issue any of the Equity Awards to the extent that a court order prohibiting any such disbursement or issuance, or requiring the escrow (or other similar arrangement) of such Retained Funds or Equity Awards has been obtained and remains in force. 2. As soon as reasonably practicable after the date hereof (but in no event later than seven business days hereafter), the Company's outside legal counsel and/or counsel to the Special Committee of the Board of Directors, along with counsel to Ms. Leung, will arrange to meet with the SEC for the purpose of jointly seeking the SEC's concurrence to release to Ms. Leung from the Segregated Account those funds to which Ms. Leung is entitled pursuant to her existing employment agreement. 3. Notwithstanding the terms of the New Leung Employment Agreement (as defined in the Umbrella Agreement) and the Leung Termination Agreement, (i) until December 31, 2002, the Company will continue to pay Ms. Leung at the annualized salary of $1,360,145 per annum, such salary being that which was effective immediately prior to the date hereof (the "Current Salary"), and (ii) the termination fee set forth in Section 2(a) of the Leung Termination Agreement will be decreased to equal $6,828,343. 4. For all purposes under the Restructuring Agreements, the "Effective Date" shall mean November 7, 2002 and the Restructuring Agreements shall be effective as of such date. [The remainder this page has been intentionally left blank - Signature page follows] November 7, 2002 Page 3 [Signature page to Gemstar Side Letter Dated November 7, 2002] Approved and Agreed to: /s/ Elsie Ma Leung - --------------------------- Elsie Ma Leung /s/ Jeff Shell - --------------------------- Gemstar-TV Guide International, Inc. By: Jeff Shell ------------------------ Title: Co-President --------------------- EX-99.1 13 dex991.txt PRESS RELEASE EXHIBIT 99.1 [LOGO OF GEMSTAR TV GUIDE INTERNATIONAL, INC. COMPANY] NEWS RELEASE 135 North Los Robles Avenue, Suite 800 Pasadena, California 91101-4501 FOR IMMEDIATE RELEASE November 7, 2002 GEMSTAR MANAGEMENT CHANGES COMPLETED Pasadena, CA - Gemstar-TV Guide International, Inc. (NASDAQ: GMSTE) ("Gemstar-TV Guide" or the "Company") today announced that definitive documents referred to in a news release issued on October 8, 2002 have been signed and are now effective. Dr. Henry Yuen has resigned his position as Chief Executive Officer, and Elsie Leung has resigned as Chief Financial Officer. Effective immediately, Jeff Shell, the Company's Chief Operating Officer since April 2002, will become the Chief Executive Officer, while Paul Haggerty will be Acting Chief Financial Officer. A search for a permanent Chief Financial Officer is being undertaken. As previously outlined, Dr. Yuen will remain Chairman of the Board of Directors in a non-executive capacity and will head a new international business development unit. Ms. Leung will remain a member of the Board and will work with Dr. Yuen to develop international business opportunities. The parties have agreed that the cash currently payable under the terms of the restructuring agreement will be held by the Company in a segregated account for up to six months pending the possible deposit of all or a portion of such cash into an escrow pursuant to the recently enacted Sarbanes-Oxley Act. *** Except for historical information contained herein, the matters discussed in this news release contain forward-looking statements that involve risks and uncertainties. Actual results may differ from our current expectations. These forward-looking statements include the risk that the management changes described above may not result in the expected benefits and improvements; and the other risks detailed from time to time in the company's SEC reports, including the most recent reports on Forms 10-K, 8-K, and 10-Q, each as it may be amended from time to time. CONTACT INFORMATION: ANALYSTS: Michael Benevento 212/852-7337 NEWS MEDIA: Lauren Snyder 212/852-7585 -----END PRIVACY-ENHANCED MESSAGE-----