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                                                                   EXHIBIT 10.26

                              EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT is entered into as of July 1st, 1996 by and
between VideoGide, Inc., a Delaware corporation ("Company") and Douglas B.
Macrae ("Employee").

                                   WITNESSETH:

        WHEREAS, the Employee has served Company in various capacities, most
recently as PRESIDENT/C.E.O and Company desires to obtain the benefit of
continued service by Employee, and Employee declare to render services to
Company;

        WHEREAS, the Board of Directors of Company (the "Board") has determined
that because of Employee's substantial experience and business relationships in
connection with the business of Company and Employee's familiarity with
technologies used and exploited by Company, it is in Company's best interest and
that of its shareholder, Gemstar International Group Limited, a British Virgin
Islands corporation ("GIGL"), to secure the services of Employee and to provide
Employee certain additional benefits; and

        WHEREAS, Company and Employee desire to set forth in this Agreement the
terms and conditions of Employee's employment with Company.

        NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:

        1.      Term and Renewals.

                (a)     Initial Term.

                Company agrees to employ Employee and Employee agrees to serve
        Company, in accordance with the terms of this Agreement, for an initial
        term commencing July 1, 1996 and ending June 30, 2001 (the "Initial
        Term"), unless this Agreement is earlier terminated in accordance with
        the provisions which follow.

                (b)     Renewal.

                Upon expiration of the Initial Term, this Agreement shall be
        automatically renewed for consecutive terms of one additional year each
        (each a "Renewal Term"), unless either party gives notice, in writing,
        at least one (1) month prior to the expiration of the Initial Term or
        any Renewal Term of its desire to terminate this Agreement.

                If Company fails to acknowledge the commencement of a Renewal
        Term and thereby terminates this Agreement without first providing
        Employee with the advance

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        notice required by the this Section 1(b), such termination shall be
        treated as a termination Without Cause pursuant to Section 4(d) of this
        Agreement.

                (c)     Compensation Period, Current Term

                Each year of the term of this Agreement shall be a distinct and
        separate compensation period ("Compensation Period"). The current term
        of this Agreement, whether it is the Initial Term or a Renewal Term,
        shall be known as the "Current Term".

        2.      Specific Position: Duties and Responsibilities. Company and
Employee agree that, subject to the provisions of this Agreement, Company will
employ Employee and Employee will serve Company as PRESIDENT/C.E.O, and Employee
shall have such other additional duties reasonably consistent with his position
and responsibilities as the Board of Directors of Company shall determine from
time to time.

        Employee agrees to devote substantially all of his work-related time,
energy and ability to the business of Company. Nothing herein shall prevent
Employee, upon approval of the Board of Directors of Company, in its sole and
absolute discretion, from serving as a director or trustee of other corporations
or businesses which are not in competition with the business of Company or in
competition with any affiliate of Company. Nothing herein shall prevent Employee
from passively investing in real estate for his own account or from becoming a
partner or a shareholder in any corporation, partnership or other venture not in
competition with the business of Company or in competition with any affiliate of
Company.

        Employee will be based in the Boston, Massachusetts area, but
acknowledges that in fulfilling his duties and responsibilities under this
Agreement, Company may require Employee to travel within and outside the United
States and to render services or attend meetings during evenings and weekends.

        3.      Compensation.

                (a)     Compensation

                During the term of this Agreement, Company agrees to pay
        Employee a salary at the rate of $ 15,584 per month; provided however,
        the Company in its sole and absolute discretion shall have the right to
        limit Employee's duties, responsibilities and time commitments to the
        Company accompanied by a proportionate reduction in salary as reasonably
        determined by the Company; provided further, however, that in no event
        shall the compensation in any Compensation Period be less than $10,000.
        Such salary shall be earned monthly and shall be payable in periodic
        installments no less frequently than monthly in accordance with
        Company's customary practices. Amounts payable shall be reduced by
        standard withholding and other authorized deductions.

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                At the commencement of the second Compensation Period and each
        Compensation Period thereafter during the term, the salary shall be
        adjusted by adding to the salary for the previous Compensation Period
        the amount obtained by multiplying the salary for the previous
        Compensation Period by the positive percentage, if any, equal to the
        COLA Percentage; provided, however, that in no event shall the salary
        increase by more than 5% over the salary for the previous Compensation
        Period.

                For purposes of this subsection 3(a), the "COLA Percentage"
        means the percentage by which the level of the Consumer Price Index for
        the Los Angeles - Long Beach - Anaheim Metropolitan Area, as reported by
        the Bureau of Labor Statistics of the United States Department of Labor
        as of the last day of the previous Compensation Period, has increased
        from its level as of the prior anniversary of the effective date of this
        Agreement.

                (b)     Additional Benefits.

                Employee shall also be entitled to all rights and benefits for
        which Employee is otherwise eligible under any bonus, incentive,
        participation, stock option or extra compensation plan, pension plan,
        profit-sharing plan, life, medical, dental, disability, or insurance
        plan or policy or other plan or benefit that Company its subsidiaries or
        affiliates may provide for Employee or (provided Employee is eligible to
        participate therein) for employees of Company generally, as from time to
        time in effect, during the term of this Agreement (collectively,
        "Additional Benefits"). The Additional Benefits shall be provided at the
        level commensurate with the office held at the time and shall recognize
        for vesting and eligibility purposes (but not for purposes of
        calculating Employee's age or for benefit accrual purposes) Employee's
        prior service with Company to the extent (if any) that such prior
        service is recognized under any such plans.

                Notwithstanding the foregoing, this Agreement shall not be
        deemed to amend or otherwise affect the provisions of any other
        compensation, retirement or other benefit program or plan of Company or
        its subsidiaries or affiliates, but in no event shall Employee be
        entitled to benefits under both a Company (or affiliate) plan and a
        comparable plan of any other entity and in no event shall Employee be
        entitled to duplicative benefits under any plans of Company and/or its
        affiliates or such other entities.

                (c)     Vacation.

                Employee shall be entitled to 4 weeks of paid vacation each
        Compensation Period.

                (d)     Other Benefits.

                Employee will, from time to time, receive such other benefits as
        he may reasonably request which are commensurate with Employee's
        position and facilitate performance of his duties under this Agreement.

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        4.      Termination. The compensation and other benefits provided to
Employee pursuant to this Agreement, and the employment of Employee by Company,
shall be terminated prior to expiration of the term of this Agreement only as
provided in this Section 4:

                (a)     Disability.

                In the event that Employee shall fail, because of illness,
        incapacity or injury which is determined to be total permanent by a
        physician selected by Company or its insurers and acceptable to Employee
        or Employee's legal representative (such agreement as to acceptability
        not to be withheld unreasonably) to render for one consecutive month or
        for shorter periods aggregating 45 or more business days in any twelve
        (12)-month period, the services contemplated by this Agreement,
        Employee's employment hereunder may be terminated by written notice of
        termination from Company to Employee.

                (b)     Death.

                In the event of Employee's death during the term, Company shall
        pay to such person or persons as Employee shall have directed in writing
        or, in the absence of a designation, the estate of Employee (the
        "Beneficiary") all of Employee's previously earned salary and Additional
        Benefits. This Agreement in all other respects will terminate upon the
        death of Employee except as otherwise expressly provided.

                (c)     For Cause.

                Employee's employment hereunder shall be terminated and all of
        his unearned rights to receive salary and (subject to the terms of any
        plans relating thereto) Additional Benefits hereunder in respect of any
        period after such terminations, shall immediately terminate upon a
        determination by Company, acting in good faith based upon actual
        knowledge at such time, that Employee (i) 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 Company, (ii)
        has repeatedly and willfully refused to perform his significant duties
        hereunder after notice, (iii) has habitually abused any substance (such
        as narcotics or alcohol) and such abuse has had a material adverse
        effect on the performance of his duties or (iv) has been convicted of,
        or plead guilty to, an act constituting a felony.

        5.      Business Expenses. During the term of this Agreement, Company
shall reimburse Employee promptly for reasonably business expenditures upon
provision of appropriate receipts.

        6.      Inventions and Patents. All inventions, designs, improvements,
patents, copyrights, and discoveries conceived by Employee during the term of
this Agreement which may be competitive with or related to existing products or
services of Company or its affiliates or products or services under development
by Company or its affiliates, shall be the property of Company. Employee will
promptly and fully disclose to Company all such inventions, designs,

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improvements, and discoveries (whether developed individually or with other
persons) and shall take all steps necessary and reasonably required to assure
Company's ownership thereof and to assist Company in protecting or defending
Company's proprietary rights therein. All other inventions, designs,
improvements, patents, copyrights, and discoveries conceived by Employee during
the term of this Agreement shall be the property of Employee.

        7.      MISCELLANEOUS.

                (a) Succession; Survival.

                This Agreement shall inure to the benefit of and shall be
        binding upon Company, its successors and assigns, but without the prior
        written consent of Employee this Agreement may not be assigned other
        than to an affiliate of Company or in connection with a merger or sale
        of substantially all the assets of Company or a similar transaction in
        which the successor or assignee assumes (whether by operation of law or
        express assumption) all obligations of Company hereunder. The
        obligations and duties of Employee hereunder are personal and otherwise
        not assignable. Employee's obligations and representations under
        subsections 7(f) and 7(g) of this Agreement will survive the termination
        of Employee's employment, regardless of the manner of such termination.

                (b) Notices.

                Any notice or other communication provided for in this Agreement
        shall be in writing and sent, if to Company, to its office at:

                VideoGuide, Inc.
                209 Burlington Road
                Bedford, Massachusetts 01730
                Facsimile: (617) 276-8917
                Attention: HUMAN RESOURCES

                with a copy to:

                Gemstar Development Corporation
                Suite 800
                135 North Los Robles Ave.
                Pasadena, California 91101
                Facsimile: (818) 792-4051
                Attention: General Counsel

        or at such other address as 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

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        transmitted to the applicable number so specified in (or pursuant to)
        this Section 7(b) and an appropriate answer back 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 contains the entire agreement of the parties
        relating to the subject matter hereof and it supersedes any prior
        agreements, undertakings, commitments and practices relating to
        Employee's employment by Company or its affiliates. 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 Company, by a senior
        executive officer after approval thereof by the Board of Directors.

                (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 o? 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 Delaware, applicable to
        contracts made and performed in such State and without regard to
        conflicts of law doctrines, to the extent permitted by law.

                (f) 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 its products, employees, services, practices or policies) of
        Company or any of its affiliates 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 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
        Company's best interests, (ii) required by applicable law, (iii)
        lawfully obtainable from other sources, or (iv) authorized in writing by
        Company. The provisions of this subsection (g) shall survive the
        expiration, suspension or termination, for any reason, of this
        Agreement.

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                (g) Trade Secrets.

                Employee, prior to and during the term of employment, 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, which are owned
        by Company or by its affiliates and regularly used in the operation of
        their respective businesses and which may give 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 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 of this Agreement or at any
        time thereafter, except as required in the course of employment by
        Company and for its benefit.

                All records, files, documents, drawings, specifications,
        software, equipment, and similar items relating to the business of
        Company or its affiliates, 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 Company or such affiliates and shall not be removed from the
        premises of Company or its affiliates under any circumstances whatsoever
        without the prior consent of a senior executive officer of Company. Upon
        termination of employment, Employee agrees to promptly deliver to
        Company all Documents in the possession or under the control of
        Employee.

                (h) Noncompetition.

                Employee agrees that, during the term of this Agreement or
        renewal in accordance with section 1.(b) above, or for a period of three
        years thereafter, he will not, directly or indirectly, without the prior
        written consent of the Board of Directors of the Company given after
        termination or expiration of this Agreement, provide consultative
        service with or without pay, own, manage, operate, join, control,
        participate in, or be connected as a stockholder, partner, or otherwise
        with, any business, individual, partner, firm, corporation, or other
        entity which is then in competition or competitive with, in any manner
        whatsoever, the business of the Company or any of its affiliates, or any
        present affiliate of the Company. It is expressly agreed that the
        Company will or would suffer irreparable injury if Employee were to
        compete with the business of the Company or any subsidiary or affiliate
        of the Company in violation of this Agreement and that the Company would
        by reason of such competition be entitled to injunctive relief in a
        court of appropriate jurisdiction. Employee consents and stipulates to
        the entry of such injunctive relief in such a court prohibiting him from
        competing with the Company or any subsidiary or affiliate of the Company
        in violation of this Agreement.

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                (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) 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.

                (l) Counterparts.

                This Agreement and any amendment hereto may be executed in one
        or more 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.

                (m) Representation By Counsel; Interpretation.

                Employee acknowledges that he either has been represented by
        counsel, or has elected not to be so represented notwithstanding
        Company's suggestion that Employee be so represented, in connection with
        this Agreement and the matters contemplated by this Agreement.
        Accordingly, any rule of law, 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.

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                IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.



                                             "Company"

                                             VIDEOGUIDE, INC.


                                             /s/ Thomas E. Ward
                                             ---------------------------------
                                             By: Thomas E. Ward
                                                ------------------------------
                                             Its: Vice President
                                                 -----------------------------


                                             "Employee"


                                             /s/ Douglas B. Macrae
                                             ---------------------------------
                                             Douglas B. Macrae

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