Opinion ID: 789650
Heading Depth: 3
Heading Rank: 3

Heading: The accrued unpaid salary

Text: 75 The unpaid salary component of the settlement amount is, like the bonus payment component, directly dependent upon Gemstar's reported 2001 financial statements that are under investigation by the Commission. Yuen and Leung's employment agreements included a formula for the annual adjustment of their base salary. Under that formula, if consolidated revenues or consolidated net earnings increase, then Yuen and Leung's base salary is increased by a proportional amount. ( Id., Ex. 2, at 18 (Yuen Employment Agreement, ¶ 3(a)); Ex. 4, at 55 (Leung Employment Agreement ¶ 3(a))). 76 The calculation of the catch-up salary based upon allegedly fraudulent financial statements is, again, exactly the type of reward about which Section 1103 is concerned. Gemstar has restated hundreds of millions of dollars of revenues from multiple transactions since Yuen and Leung entered into the Termination Agreements. To the extent Gemstar's reported financial results have been overstated for a number of years (as indicated by the restatements), Yuen and Leung's compensation and bonuses are terminally infected with those overstatements.