Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (“Agreement”) is made and entered
into by and between Ian Aaron (“Aaron,” “You” or “Your”), on the one hand, and
Gemstar-TV Guide International, Inc. (the “Company”), on the other hand.

 

RECITALS:

 

A. The parties acknowledge and agree that Aaron’s employment will terminate on
March 11, 2005 (the “Termination Date”), after which date he shall perform no
further duties, functions or services on behalf of the Company.

 

B. Aaron and the Company want to settle fully and finally all potential disputes
or differences between them, including, but not limited to, all potential
disputes or differences which arise out of or relate to Aaron’s employment or
separation of employment with the Company.

 

NOW, THEREFORE, Aaron and the Company understand and agree as follows:

 

1. Payment By the Company.

 

The Company agrees that, within ten (10) business days of the Effective Date of
the Agreement as defined in paragraph 3 below, it will deliver a check payable
to Aaron in the amount of One Million Six Hundred Seventy-one Thousand Seven
Hundred Fifty Dollars ($1,671,750.00), less all appropriate withholdings and
deductions to the extent required by law (this amount shall be referred to
herein as the “Payment”). Aaron acknowledges that upon execution of this
Agreement, the Payment described herein shall constitute full and complete
satisfaction of any and all amounts properly due and owing to Aaron (including,
but not limited to, all forms of payments and/or compensation described in
paragraph 2 below) as a result of his employment with the Company and/or the
termination of that employment and that in the absence of this Agreement, Aaron
would not be entitled to the Payment as specified in this paragraph 1 and the
other consideration provided under this Agreement. Notwithstanding, the Payment
shall not be deemed to satisfy any outstanding expenses that were properly
submitted by Aaron to the Company on or before the Termination Date, for which
Aaron will be reimbursed in accordance with and subject to the Company’s
policies.

 

2. No Other Payments or Monies Owed.

 

You acknowledge, understand and agree that You have been or will be compensated
by the Company in full for all wages and other pay earned and accrued by You
through the Termination Date and that, except for the Payment described in
paragraph 1 above, no other wages, bonuses, vacation pay, or other payments or
compensation of any kind whatsoever are owed to You or will be paid to You by
the Company (with the sole exception of reimbursement for any outstanding
expenses that were properly submitted by You to the Company on or before the
Termination Date, which will be reimbursed in accordance with and subject to the
Company’s policies). You further acknowledge, understand and agree that except
for the Payment described in paragraph 1 above, You are not eligible to receive
and will not receive any

 

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other separation or severance pay from the Company in connection with Your
employment, the termination of Your employment or Your executing this Agreement.

 

3. Effective Date of Agreement.

 

This Agreement shall become effective only upon: (i) receipt by the Company of
an executed copy of this Agreement; and (ii) the expiration of the revocation
period described in subparagraph (b) of paragraph 10 below.

 

4. Company Benefits.

 

Except as set forth below and as mandated by applicable law, all
Company-sponsored employee benefits provided to You shall cease as of the close
of business on the Termination Date.

 

a. Health Benefits: Your eligibility to participate in the Company’s group
medical, dental and vision plans shall cease as of the last day of the calendar
month during which the Termination Date occurred. Thereafter, You will be
eligible to continue participation in the Company’s group health plans, at Your
sole expense, in accordance with and subject to the conditions and limitations
of the federal Consolidated Omnibus Reconciliation Act of 1986 (“COBRA”). The
Company shall reimburse You for any premiums that You pay for COBRA continuation
for ninety (90) days following the Termination Date, or until You become
eligible for group medical insurance with another employer, whichever comes
first.

 

b. 401(k) Plan: You shall retain all vested benefits that You have accrued in
the Company’s 401(k) Plan through the Termination Date. Your rights with respect
to any such vested benefits shall be exclusively governed by the terms and
provisions of the applicable 401(k) Plan documents, as they may be amended from
time to time, and interpreted by the plan’s administrators. You understand and
agree that no additional or accelerated rights or vesting are being conferred as
a result of the termination of Your employment or Your execution of this
Agreement. This Agreement does not, and is not intended to, grant to You any
different or additional rights in connection with Your participation in the
401(k) Plan. You expressly understand and agree that the Company has not made
and does not make any representation of any kind or nature whatsoever regarding
the past, current or future value of Your benefits, if any, under the 401(k)
Plan and You further understand and agree that any claim arising on or before
the date on which You execute this Agreement concerning the value of any such
benefits is hereby released and waived pursuant to paragraph 10(a) of this
Agreement.

 

c. Stock Options: In accordance with Your Employment Agreement, (i) You shall
retain all unexercised stock options, if any, that have been granted to You and
which vested on or before the Termination Date, (ii) the stock options granted
to You pursuant to Your Employment Agreement with the Company, and any other
options granted to You by the Company during Your employment, to the extent they
are outstanding and not previously vested, shall vest in full on the Termination
Date, and (iii) all such vested stock options shall continue to be exercisable
for a period of three (3) years after the Termination Date in accordance with
and subject to the terms of the controlling stock option plan(s) and stock
option agreement(s). All of

 

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the applicable stock options granted to You are summarized in the Stock Options
Award Schedule attached to this Agreement as Attachment “A.” This Agreement is
not intended to nor shall amend the terms of the controlling stock option
plan(s) and/or stock option agreement(s). You expressly understand and agree
that the Company has not made and does not make any representation of any kind
or nature whatsoever regarding the past, current or future value of any stock
options that may have been granted to You under the stock option plan and You
further understand and agree that any claim arising on or before the date on
which You execute this Agreement concerning the value of any such stock options
is hereby released and waived pursuant to paragraph 10(a) of this Agreement.

 

5. Return of Company Property.

 

You represent and agree that You have returned to the Company any and all
Company property in Your possession, custody or control, and/or in the
possession, custody or control of Your agents or representatives, including all
originals and all copies of files, records, documents, computer disks, computer
files, contact lists, and all of the Company’s equipment, including telephones,
pagers and computers.

 

6. Confidentiality.

 

You acknowledge that in the course of Your employment with the Company, You had
access to confidential and proprietary information concerning the Company, its
operations, its future plans and its method of doing business, including, by way
of example, but by no means limited to, highly proprietary information about the
Company’s customers, product development, financial matters, marketing, pricing,
costs and compensation (hereinafter “Confidential Information”), all of which
information You understand and agree would be extremely damaging to the Company
if disclosed to a competitor of the Company or any other person or entity. As
used herein, the term “competitor” includes, but is not limited to, any person
or entity engaged in a business similar to that of the Company or any of its
subsidiary or affiliated companies. You understand and agree that such
information has been divulged to You in confidence, and that, at all times, You
will not disclose or communicate Confidential Information or any other secret or
confidential information to anyone, if such information is not publicly
available. You further agree to keep the terms and contents of this Agreement
completely confidential, except to consult with Your legal, tax or other
financial advisors or immediate family members, or as otherwise required by law.

 

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7. Assignment of Rights.

 

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

 

2870. Employment agreements; assignment of rights

 

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

 

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

 

(b) result from any work performed by the employee for the employer.

 

ii To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.

 

Aaron acknowledges that all original works of authorship which are made by him
(solely or jointly with others) within the scope of his employment and which are
protectable by copyright are “works made for hire,” as that term is defined in
the United States Copyright Act (17 U.S.C., Section 101).

 

From time to time, as and when requested by the Company, Aaron will execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions, as such the Company may reasonably deem necessary or desirable to
effectuate or evidence the assignment(s) contemplated by this paragraph 7,
including, without limitation, executing and delivering to the Company or its
designee such further assignments and other instruments, in each case as the
Company may reasonably request for such purpose.

 

8. Further Cooperation.

 

You agree that You shall cooperate fully with the Company, if so requested, with
respect to any internal or external investigation or inquiry as well as any
issues, claims or litigation (whether or not currently pending) involving the
Company, or any other entity released herein, or any of those entities’
employees, including providing information and assistance and being reasonably
available upon reasonable notice for both pre-trial discovery and trial
proceedings at no cost to the Company other than that required under statute.
You further agree to participate in any such investigation, inquiry, proceedings
or action and to provide truthful and accurate testimony, documents, records and
any other information requested. In addition, You agree to meet with attorneys
or representatives of the Company, upon reasonable notice and for reasonable
time periods, in connection with any such investigation, inquiry, proceedings or
action. If, pursuant to the Company’s request, You are required to spend more
than an aggregate of three (3) days providing information and assistance to the
Company pursuant to this

 

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Paragraph, the Company shall compensate You for each additional day spent
providing such cooperation at a daily rate of $1,700. In addition, the Company
will reimburse You for all your reasonably incurred out-of-pocket expenses
incurred by You in connection with providing such cooperation.

 

9. No Lawsuits.

 

Aaron promises never to file a lawsuit, administrative complaint, or charge of
any kind with any court, governmental or administrative agency or arbitrator
against the Company or its officers, directors, agents or employees, asserting
any claims that are released in this Agreement. Aaron represents and agrees
that, prior to signing this Agreement, he has not filed or pursued any
complaints, charges or lawsuits of any kind with any court, governmental or
administrative agency or arbitrator against the Company or its officers,
directors, agents or employees, asserting any claims that are released in this
Agreement.

 

10. Complete Release.

 

(a) In consideration of the mutual covenants and promises contained herein, and
subject to the consideration set forth above in Paragraph 1, and subject to the
rights and claims reserved in Paragraph 10(c), Aaron hereby knowingly and
voluntarily releases, absolves and discharges the Company and, as applicable,
its officers, partners, attorneys, agents, officers, administrators, directors,
employees, affiliates, representatives, and/or assigns and successors, past and
present (collectively, the “Releasees”) from all rights, claims, demands,
obligations, damages, losses, causes of action and suits of all kinds and
descriptions, legal and equitable, known and unknown, that Aaron may have or
ever have had against the Releasees from the beginning of time to the date of
execution of this Agreement, including, but not limited to, any such rights,
claims, demands, obligations, damages, losses, causes of action and suits
arising out of, but not limited to, any right of Aaron or of any person arising
under any law, statute, duty, contract, covenant, or order, or any liability for
any act of age discrimination or other impermissible form of harassment or
discrimination by the Company against Aaron or any other person, as prohibited
by any state or federal statute or common law, including, but not limited to,
Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, the Americans With
Disabilities Act, 42 U.S.C. §§ 12101 et seq., the Age Discrimination in
Employment Act, 29 U.S.C. §§ 623 et seq., the California Fair Employment and
Housing Act, Cal. Gov’t Code §§ 12940 et seq., the California Workers’
Compensation Act, Cal. Lab. Code §§ 3600 et seq., the Fair Labor Standards Act,
29 U.S.C. §§ 201 et seq., and the laws established by the California Department
of Labor Standards Enforcement, e.g., Cal. Lab. Code §§ 200-272. This includes,
but is not limited to, claims for employment discrimination, wrongful
termination, constructive termination, violation of public policy, breach of any
express or implied contract, breach of any implied covenant, fraud, intentional
or negligent misrepresentation, emotional distress, or any other claims relating
to Aaron’s relationship with the Company. The matters that are the subject of
the releases referred to in this Paragraph shall be referred to collectively as
the “Released Matters.”

 

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(b) Aaron further understands and acknowledges that:

 

(1) This Agreement constitutes a voluntary waiver of any and all rights and
claims he has against the Releasees as of the date of the execution of this
Agreement, including rights or claims arising under the Age Discrimination in
Employment Act;

 

(2) He has waived rights or claims pursuant to this Agreement in exchange for
consideration, the value of which exceeds the payment or remuneration to which
he was already entitled;

 

(3) He is hereby advised that he may consult with an attorney of his choosing
concerning this Agreement prior to executing it;

 

(4) He has been afforded a period of at least 21 days to consider the terms of
this Agreement, and in the event he should decide to execute this Agreement in
fewer than 21 days, he has done so with the express understanding that he has
been given and declined the opportunity to consider this Agreement for a full 21
days; and

 

(5) He may revoke this subparagraph 10(b) of the Agreement at any time during
the seven (7) days following the date of execution of this Agreement by
delivering a written notice to Stephen H. Kay, Esq., Gemstar-TV Guide
International, Inc., 6922 Hollywood Blvd., 12th Floor, Los Angeles, California
90028, which notice must be delivered within seven (7) calendar days of Your
execution of this Agreement. This subparagraph 10(b) of the Agreement shall not
become effective or enforceable until such revocation period has expired (the
“Effective Date”).

 

(c) You and the Company further agree and acknowledge that, by virtue of this
Agreement, You are not waiving or releasing any rights or claims for defense or
indemnification that You may have against the Company whether under Your
Employment Agreement or otherwise.

 

(d) In consideration of the mutual covenants and promises contained herein, and
subject to the consideration set forth above in Paragraph 1, and subject to the
rights and claims reserved in Paragraph 10(e), the Company hereby knowingly and
voluntarily releases, absolves and discharges Aaron from all known rights,
claims, demands, obligations, damages, losses, causes of action and suits of all
kinds and descriptions, legal and equitable that the Company may have or ever
have had against Aaron from the beginning of time to the date of execution of
this Agreement, including, but not limited to, any such rights, claims, demands,
obligations, damages, losses, causes of action and suits arising out of, but not
limited to, any right of the Company arising under any law, statute, duty,
contract, covenant, or order.

 

(e) Aaron and the Company agree and acknowledge that, by virtue of this
Agreement, the Company is not waiving or releasing: (i) any rights or claims
that the Company may have against Aaron that are unknown to the Company or
unanticipated by the Company at the time of the execution of this Agreement; and
(ii) any claims that the Company may have now or at any time in the future
against Aaron for criminal activities, embezzlement, malfeasance or fraud.

 

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11. Unknown Claims.

 

Aaron acknowledges that there is a risk that subsequent to the execution of this
Agreement, he will incur or suffer damage, loss or injury to persons or property
that is in some way caused by or connected with Aaron’s employment or the
resignation/termination therefrom, but that is unknown or unanticipated at the
time of the execution of this Agreement. Aaron does hereby specifically assume
such risk and agrees that this Agreement and the releases contained herein shall
and do apply to all unknown or unanticipated results of any and all matters
caused by or connected with Aaron’s employment or the resignation/ termination
therefrom, as well as those currently known or anticipated. Accordingly, Aaron
acknowledges that he has read the provisions of California Civil Code Section
1542, which provides 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 to him must have materially affected his settlement with the debtor”

 

and that he expressly waives, relinquishes and forfeits all rights and benefits
accorded by the provisions of California Civil Code Section 1542, and
furthermore waives any rights that he might have to invoke said provisions now
or in the future with respect to the Released Matters.

 

12. Ownership Of Claims.

 

Aaron represents and warrants that no portion of any of the Released Matters and
no portion of any recovery or settlement to which Aaron might be entitled has
been assigned or transferred to any other person, firm, entity or corporation
not a party to this Agreement, in any manner, including by way of subrogation or
operation of law or otherwise. If any claim, action, demand or suit should be
made or instituted against the Releasees or any of them because of any such
purported assignment, subrogation or transfer, Aaron agrees to indemnify and
hold harmless the Releasee(s) against such claim, action, suit or demand,
including necessary expenses of investigation, attorneys’ fees and costs.

 

13. No Representations.

 

Aaron represents and agrees that no promises, statements or inducements have
been made to him which caused him to sign this Agreement other than those
expressly stated in this Agreement.

 

14. Goodwill And Reputation Of The Company.

 

Aaron agrees that he will refrain from taking actions or making statements,
written or oral, which disparage or defame the goodwill or reputation of the
Company, and/or its directors, officers, executives and employees.

 

15. Non-Admission Of Discrimination Or Wrongdoing.

 

This Agreement shall not in any way be construed as an admission that the
Company or any individual has any liability to or acted wrongfully in any way
with respect to Aaron or any other person. The Company specifically denies that
it has any liability to or that it has done any

 

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wrongful, harassing and/or discriminatory acts against Aaron or any other person
on the part of itself, or its officers, employees and/or agents.

 

16. Successors.

 

This Agreement shall be binding upon Aaron and upon his heirs, administrators,
representatives, executors, successors and assigns, and shall inure to the
benefit of the Company and to its heirs, administrators, representatives,
executors, successors and assigns.

 

17. Arbitration.

 

(a) Any claim or controversy arising out of or relating to this Agreement or any
breach thereof between Aaron and the Company shall be submitted to arbitration
in Los Angeles County, California, before an experienced employment arbitrator
licensed to practice law in California and selected in accordance with the JAMS
Employment Arbitration Rules and Procedures, as the exclusive remedy for such
claim or controversy. Either party desiring to arbitrate shall give written
notice to the other party within a reasonable period of time after the party
becomes aware of the need for arbitration. The decision of the arbitrator shall
be final and binding. Judgment on any award rendered by such arbitrator may be
entered in any court having jurisdiction over the subject matter of the
controversy. The prevailing party shall receive an award of costs and expenses
related to the arbitration, including attorneys’ fees. The fees and costs of the
arbitrator shall be shared equally by the parties.

 

(b) Should Aaron or the Company institute any legal action or administrative
proceeding with respect to any claim waived by this Agreement or pursue any
dispute or matter covered by this paragraph by any method other than said
arbitration, the responding party shall be entitled to recover from the other
party all damages, costs, expenses and attorneys’ fees incurred as a result of
such action.

 

18. Severability And Governing Law.

 

(a) Should any of the provisions in this Agreement be declared or be determined
to be illegal or invalid, all remaining parts, terms or provisions shall be
valid, and the illegal or invalid part, term or provision shall be deemed not to
be a part of this Agreement.

 

(b) This Agreement is made and entered into in the State of California and shall
in all respects be interpreted, enforced and governed under the laws of
California.

 

19. Proper Construction.

 

(a) The language of all parts of this Agreement shall in all cases be construed
as a whole according to its fair meaning, and not strictly for or against any of
the parties.

 

(b) As used in this Agreement, the term “or” shall be deemed to include the term
“and/or” and the singular or plural number shall be deemed to include the other
whenever the context so indicates or requires.

 

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(c) The paragraph headings used in this Agreement are intended solely for
convenience of reference and shall not in any manner amplify, limit, modify or
otherwise be used in the interpretation of any of the provisions hereof.

 

20. Entire Agreement.

 

This Agreement constitutes the entire agreement between and among the parties
pertaining to the subject matter hereof and the final, complete and exclusive
expression of the terms and conditions of their agreement. Any and all prior
agreements, representations, negotiations and understandings made by the
parties, oral and written, express or implied, are hereby superseded and merged
herein, except for those provisions in that certain Employment Agreement dated
April 16, 2003, between You and the Company (“Employment Agreement”) which
expressly extend or survive beyond the term of that Employment Agreement or Your
employment with the Company and which are not expressly and specifically
superseded by this Agreement, including, but not limited to, the provisions in
that Employment Agreement regarding Antisolicitation and Soliciting Employees.

 

21. Execution In Counterparts.

 

This Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one agreement.

 

Executed at                     , California, this              day of
                    , 2005.

 

Ian Aaron  

Ian Aaron

 

Executed at                     , California, this              day of
                    , 2005.

 

Gemstar-TV Guide International, Inc.

By:

   

Its:

   

 

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Attachment A

 

 

Ian Aaron

 

Stock Options Award Schedule

 

 

 

Grant Date

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   No. of Options

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   Exercise Price

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   Expiration Date

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5/16/2003

   425,000    $ 4.05    5/15/2013

1/22/2004

   104,127      5.67    1/21/2014

2/25/2005

   98,855      4.65    2/25/2015