Key Employee Agreement - Macrovision Corp. and Matthew Christiano
MACROVISION CORPORATION
KEY EMPLOYEE AGREEMENT
for
MATTHEW CHRISTIANO
Macrovision Corporation, a Delaware corporation, and Matthew Christiano, as of
this 31st day of August, 2000, hereby agree as follows:
This Agreement sets forth the terms of your employment with Macrovision
Corporation, a Delaware corporation ("MVSN"), and Globetrotter Software, Inc., a
wholly-owned Delaware subsidiary of MVSN ("Globetrotter"). MVSN and Globetrotter
are each herein referred to as a "Company" and collectively as the "Companies".
8) Duties. During the term of your employment under this Agreement, and
subject to the terms and conditions contained in this Agreement, you
will be employed as a Vice President of the Globetrotter division of
Macrovision Corporation, and an officer of Macrovision Corporation,
splitting your responsibilities between the Globetrotter division VP
function for product strategy, software development and technology
liaison with senior executives of major Globetrotter customers, and
the Macrovision CTO function for architecting, directing, and
integrating the Companies' various software development activities.
Notwithstanding the above, you will not be required to relocate your
principal office to any location outside a 20-mile radius from your
current principal office located at 1530 Meridian Avenue, San Jose,
California.
9) Term. Unless sooner terminated in accordance with the applicable
provisions of this Agreement, your employment under the terms of
this Agreement shall be for the period (the "Employment Period")
commencing on the day of the Effective Time (as defined in that
certain Agreement and Plan of Merger, dated June 19, 2000 by and
among Globetrotter, GSI Acquisition Corp, MVSN, Matthew Christiano,
and Sallie Calhoun (the "Merger Agreement"))(the "Commencement
Date") and ending three years following the Commencement Date. This
Agreement shall not take effect until the Effective Time and shall
be null and void if the Effective Time has not occurred on or before
August 31, 2000.
10) Time to Be Devoted to Employment. During the Employment Period, you
will devote substantially all of your working energies, efforts,
interest, abilities and time during normal business hours
exclusively to the business and affairs of the Companies. You will
not engage in any other business or activity which, in the
reasonable judgment of the MVSN Board of Directors would conflict or
interfere, in any material respect, with the performance of your
duties as set forth herein, whether or not such activity is pursued
for gain, profit or other pecuniary advantage. During your first
year of employment with MVSN, your employment performance will be
formally assessed at the end of each six months as part of the MVSN
employee review program.
11) Base Salary; Bonus; Benefits.
(a) During the Employment Period, you shall receive an annual base
salary (the "Base Salary") of $180,000 (or a prorated portion
thereof for partial years) payable by Globetrotter in such
installments (but not less often than twice monthly) as is
generally the policy of MVSN with respect to the payment of
regular compensation to its executive officers. The Base
Salary may be increased from time to time in the sole
discretion of MVSN Board of Directors' Compensation
<PAGE>
Committee. During the Employment Period, you will also be
entitled to participate, to the extent eligible, in medical,
dental, disability, vacation, 401(k), life insurance, and
other fringe benefits comparable to those currently provided
by MVSN to its senior executives.
(b) In addition to the Base Salary and benefits set forth in
paragraph (a) above, during the Employment Period you will be
entitled to receive an annual bonus in conjunction with MVSN's
then current bonus plan applicable to its senior executives,
if any is earned or awarded, with respect to each calendar
year occurring during the Employment Period, commencing with
the calendar year ending December 31, 2000, such bonus to be
paid in a lump sum following the end of the calendar year with
respect to which such bonus is payable (such payment to be
made at the same time performance bonuses are paid to the
other senior managers of MVSN and its subsidiaries) and to be
pro-rated with respect to calendar year 2000 based upon the
portion of the year this Agreement is in effect. If your
employment with the Companies is terminated for any reason
other than without "cause" pursuant to Section 6(b), the
Companies will not pay you a bonus with respect to the
calendar year in which your employment is terminated or
thereafter. If your employment with the Companies is
terminated without "cause" pursuant to Section 6(b) below, you
will be entitled to receive that portion of the bonus payable
for the calendar year during which such termination occurs pro
rated through the date of such termination based on the number
of days elapsed in the Employment Period for such year through
the termination date over 365 days, payable in accordance with
the first sentence of this Section 4(b).
12) Reimbursement of Expenses. During the Employment Period, the
Companies shall reimburse you in accordance with their policies for
all reasonable and necessary traveling expenses and other
disbursements incurred by you for or on behalf of the Companies in
connection with the performance of your duties hereunder upon
presentation of appropriate receipts or other documentation
therefor, in accordance with all applicable policies of the
Companies.
13) Termination.
(a) MVSN may terminate your employment hereunder at any time for
"cause" by giving you written notice of such termination, with
reasonable specificity of the grounds therefor. For purposes
of this Section 6, "cause" shall mean any of the following
(whether occurring before or after the date hereof): (i)
willful misconduct with respect to the business and affairs of
the Companies or any of their respective subsidiaries, (ii)
willful neglect of your duties or the failure to follow the
lawful and reasonable directions of the MVSN President or your
immediate superior, including, without limitation, the
violation of any material written policy (or oral policy of
which you are aware) of the Companies or any of their
respective subsidiaries applicable to you, and, if such
neglect or failure is capable of being cured, your failure to
cure the same as soon as practicable, but in any event within
10 days of receipt of written notice thereof from MVSN, (iii)
the material breach of any of the provisions of this
Agreement, and, if such breach is capable of being cured, your
failure to cure such breach as soon as practicable, but in any
event within 10 days of receipt of written notice thereof from
MVSN (iv) the conviction of a felony, (v) the commission of an
act of fraud or financial dishonesty with respect to any of
the Companies or their respective subsidiaries or affiliates
or (vi) any conviction for a crime involving moral turpitude
or fraud. A termination pursuant to this Section 6(a) shall
take effect immediately upon the giving of notice contemplated
hereby (subject to any applicable cure period).
(b) MVSN may terminate your employment hereunder at any time
without "cause" by giving you written notice of such
termination, which termination shall be effective as of the
date set forth in such notice, provided that such date shall
not be earlier than the date of such notice (provided that you
shall be afforded a reasonable period of time after such
termination to remove your personal effects from the
Companies' premises). Any material breach of Section 1 or
Section 4 of this Agreement by any of the Companies that
remains uncured for more than 10 days after your delivery to
the Companies of written notice of such breach shall be deemed
to be a termination without "cause" for purposes of this
Agreement. For purposes of the immediately preceding sentence,
a substantial reduction of your duties, responsibilities and
status set forth in Section 1 of
<PAGE>
this Agreement shall be deemed to be a "material breach" of
such Section 1, unless such substantial reduction is by mutual
consent.
(c) If, during the Employment Period, you are incapacitated or
disabled by accident, sickness or otherwise so as to render
you mentally or physically incapable of performing
substantially all of the services required to be performed by
you under this Agreement for an aggregate of 210 days in any
period of 360 consecutive days (hereinafter, a "Disability"),
the Companies may, at any time thereafter, at their option,
terminate your employment under this Agreement immediately
upon giving you written notice to that effect, provided,
however, that the Companies have fully complied with the
Americans with Disabilities Act. In the event of your death,
your employment will be deemed terminated as of the date of
your death.
14) Effect of Termination.
(a) Upon the effective date of a termination of your employment
under this Agreement for any reason other than a termination
without cause pursuant to Section 6(b), neither you nor your
beneficiaries or estate shall have any further rights under
this Agreement or any claims against the Companies or any of
their respective subsidiaries or affiliates arising out of
this Agreement, except the right to receive the following as
soon as reasonably practicable following the effective date of
such termination (but in any event within the applicable time
period (if any) mandated by applicable law):
(i) the unpaid portion of the Base Salary payable pursuant
to Section 4, computed on a pro rata basis to the
effective date of such termination;
(ii) reimbursement for any expenses for which you shall not
have theretofore been reimbursed, as provided in Section
5; and
(iii) the unpaid portion of any amounts earned by you prior to
the effective date of such termination pursuant to any
benefit program in which you participated during the
Employment Period; provided, however, that you shall not
be entitled to receive any benefits under any benefit
program that have accrued during any period if the terms
of such program require that the beneficiary be employed
by a Company as of the end of such period.
(b) Upon termination of your employment under this Agreement
pursuant to Section 6(b), neither you nor your beneficiaries
or estate shall have any further rights under this Agreement
or any claims against the Companies or any of their respective
subsidiaries or affiliates arising out of this Agreement,
except the right to receive the following, as soon as
reasonably practicable following the effective date of such
termination (but in any event within the applicable time
period (if any) mandated by applicable law in the case of
amounts due pursuant to clause (i) below, and at such other
times as provided in clauses (ii) and (iii) below in the case
of amounts due thereunder):
(i) the payments, if any, referred to in Section 7(a) above,
to the extent not covered by clause (ii) of this Section
7(b);
(ii) the right to continue to receive the Base Salary from
the effective date of such termination for a period of
six months following such date, payable during such
period in such manner as the Base Salary is payable
pursuant to Section 4(a); and
(iii) the right to receive any bonus payable in accordance
with Section 4(b) with respect to the calendar year in
which such termination occurs.
<PAGE>
(c) Notwithstanding anything contained in this Agreement to the
contrary, your beneficiaries or estate will be entitled to
continue to receive all payments specified in Section 7(b) if
you die after the date of a termination without "cause,"
pursuant to Section 6(b) hereof.
15) Disclosure of Information.
(a) From and after the date hereof, you shall not at any time use
or disclose to any person or entity (other than any officer,
director, employee, affiliate or representative of the
Companies), except as required in connection with the
performance of your duties under and in compliance with this
Agreement and as required by law and judicial process, any
Confidential Information (as hereinafter defined) heretofore
acquired, or acquired during the Employment Period, for any
reason or purpose whatsoever, nor shall you make use of any of
the Confidential Information for your own purposes or for the
benefit of any person or entity except the Companies or their
respective subsidiaries.
(b) For purposes of this Agreement, "Confidential Information"
shall mean (i) the Intellectual Property Rights (as
hereinafter defined) of the Companies and their respective
subsidiaries and affiliates and (ii) all other information of
a proprietary or confidential nature relating to the Companies
or their respective subsidiaries and affiliates, or the
business or assets of the Companies or their respective
subsidiaries and affiliates, including, without limitation,
books, records, agent and independent contractor lists and
related information, customer lists and related information,
vendor lists and related information, supplier lists and
related information, distribution channels, pricing
information, cost information, marketing plans, strategies,
forecasts, financial statements, budgets and projections,
other than, with respect to both clauses (i) and (ii), (x)
information which is generally available to the public on the
date hereof, or which becomes generally available to the
public after the date hereof without action by you, or (y)
information which you receive from a third party who does not
have any independent obligation to any of the Companies or
their respective subsidiaries or affiliates to keep such
information confidential.
(c) As used herein, the term "Intellectual Property Rights" means
all industrial and intellectual property rights, including,
without limitation, patents, patent applications, patent
rights, trademarks, trademark applications, trade names,
service marks, service mark applications, copyrights,
copyright applications, know-how, trade secrets, certificates
of public convenience and necessity, franchises, licenses,
trade secrets, proprietary processes and formulae, inventions,
development tools, marketing materials, instructions,
confidential information, trade dress, logos and designs and
all documentation and media constituting, describing or
relating to the foregoing, including, without limitation,
manuals, memoranda and records.
16) Noncompetition Covenant.
(a) You acknowledge and recognize that during the Employment
Period you will be privy to Confidential Information. You
further acknowledge and recognize that the relationships with
vendors, agents and customers of the Companies and their
respective subsidiaries that you have developed prior to the
date hereof and those that you will maintain or develop during
the Employment Period with the use and assistance of the
Companies and their respective subsidiaries, and their
respective properties and assets, are of special and unique
value to the Companies and their affiliates and that the
Companies would find it extremely difficult to replace you. In
addition, you acknowledge and agree that this Agreement is
being executed and delivered in connection with, and as a
mutual condition to the respective obligations of the parties
at the closing of the Merger Agreement; provided, however,
that the Companies agree that a breach by you of this Section
9 shall not constitute a breach under the Merger Agreement. As
a material inducement to MVSN to enter into and perform its
obligations under the Merger Agreement, and in consideration
of the payments and other benefits (including the further
experience and expertise to be gained during your employment
hereunder) to be received by you under this Agreement
(including, without limitation, the severance compensation
described in Section 7(b)(ii) if applicable), you shall not,
without the prior written consent of the Companies, at any
time during the Employment Period and the period
<PAGE>
beginning on the effective date of any termination of your
employment with the Companies and their respective
subsidiaries or affiliates and ending on the later of (i) the
first anniversary thereof and (ii) the fifth anniversary of
the Commencement Date, (a) directly or indirectly engage in,
represent in any way, or be connected with, any Competing
Business (as defined below), whether such engagement shall be
as an officer, director, owner, employee, partner, affiliate
or other participant in any Competing Business, (b) assist
others in engaging in any Competing Business in any manner
described in clause (a) above, (c) induce other employees of
the Companies or any of their respective subsidiaries or
affiliates to terminate their employment with any of the
Companies or any of their respective subsidiaries or
affiliates or to engage in any Competing Business or in any
manner described in clause (a) above, or (d) induce any
customer, vendor or agent or any other person or entity with
which any of the Companies or their respective subsidiaries or
affiliates has a business relationship to terminate or alter
such business relationship. This covenant is considered an
integral part of this Agreement. The foregoing restriction
shall not apply to your ownership of publicly traded
securities which represent less than 4% of the ownership
interests of the issuer.
(b) You understand that the foregoing restrictions may limit your
ability to earn a livelihood in a business similar to the
business of any of the Companies or any subsidiary or
affiliate thereof, but you nevertheless believe that you have
received and will receive sufficient consideration under the
Merger Agreement and as an employee of the Companies and under
the terms of this Agreement to justify clearly such
restrictions which, in any event (given your education, skills
and ability), you do not believe would prevent you from
earning a living.
(c) As used herein, the term "Competing Business" shall mean any
business engaged in providing any of the following services or
products to third party customers:
(i) The supply of electronic licensing, license management,
electronic software distribution, or software metering
technology for B2B or B2C applications to software
vendors; and
(ii) The supply of software asset management products to
corporate end users.
(d) Anything contained in the immediately preceding sentence to
the contrary notwithstanding, any entity which has separate
divisions or business units, one or more of which are engaged
in a business described in the immediately preceding sentence,
will not be deemed to be a Competing Business with respect to
those separate divisions or business units of such entity that
are not engaged in a business described in the immediately
preceding sentence so long as your association with any such
separate division or business unit (fully taking into account
your functions and the nature of your work at such division or
business unit) does not relate in any material respect to such
portion of such business which would be a Competing Business
hereunder;
17) Inventions Assignment. During the Employment Period, you shall
promptly disclose, grant and assign to the Companies for their sole
use and benefit any and all inventions, technical information,
strategies, plans or ideas and other suggestions reasonably relating
to the business of the Companies or any of their respective
subsidiaries or affiliates (collectively, the "Inventions") which
you may develop or acquire during the Employment Period (whether or
not during usual working hours), together with all patent
applications, letters patent, copyrights and reissues thereof that
may at any time be granted for or with respect to the Inventions. In
connection therewith (a) you shall, at the expense of the Companies
(including a reasonable payment (based on your last per diem
earnings) for the time involved if you are not then in the employ of
any of the Companies or receiving severance payments from the
Companies pursuant to Section 7(b)(11)), promptly execute and
deliver such applications, assignments, descriptions and other
instruments as may be necessary or proper in the opinion of the
Companies to vest title to the Inventions and any patent
applications, patents, copyrights, reissues or other proprietary
rights related thereto in the Companies and to enable them to obtain
and maintain the entire right and title thereto throughout the
world; and (b) you shall render to the Companies, at their expense
(including a reasonable payment (based on your last per diem
earnings) for the time involved if you are not then in the employ of
any of the Companies or receiving severance payments from the
Companies pursuant to
<PAGE>
Section 7(b)(ii)), such reasonable assistance as they may require in
the prosecution of applications for said patents, copyrights,
reissues or other proprietary rights, in the prosecution or defense
of interferences which may be declared involving any said
applications, patents, copyrights or other proprietary rights and in
any litigation in which any of the Companies may be involved
relating to the Inventions.
18) Assistance in Litigation.
(a) At all times during the Employment Period, and thereafter upon
reasonable notice from the or the President/COO of MVSN you
shall furnish such information and assistance to the Companies
as any of them may reasonably require in connection with the
actions entitled Elan/Rainbow Corporation v. Globetrotter
Software, Inc. et. al. (Case No. 98-20419JF), and any
associated actions, as any such action may be amended,
modified, restated or refiled, whether by the plaintiffs or
one or more other parties against one or more of the Companies
asserting claims based on the facts alleged in the
Elan/Rainbow action or associated actions cited above. Such
information and assistance shall include, but not be limited
to, appearing from time to time at the offices of the
Companies or Companies' counsel for conferences and interviews
and in general providing the officers of the Companies, the
Companies and Companies' counsel with the full benefit of your
knowledge with respect to such actions. The Companies shall
pay or reimburse you for all reasonable out-of-pocket expense
incurred by you in connection with your furnishing such
information and assistance upon presentation of appropriate
receipts or other documentation therefor.
(b) At all times during the Employment Period, and thereafter upon
reasonable notice from your immediate superior or the MVSN
President/COO and at the expense of the Companies (including a
reasonable payment (based on your last per diem earnings) for
the time involved if you are not then in the employ of any of
the Companies or collecting payments pursuant to Section
7(b)), you shall furnish such information and assistance to
the Companies as any of them may reasonably require in
connection with any issue, claim or litigation in which any of
the Companies may be involved (excluding the matters covered
by Section 11(a) above). Such information and assistance shall
include, but not be limited to, appearing from time to time at
the offices of the Companies or Companies' counsel for
conferences and interviews and in general providing the
officers of the Companies, the Companies and Companies'
counsel with the full benefit of your knowledge with respect
to such issue, claim or litigation.
19) Entire Agreement; Amendment and Waiver. This Agreement embodies the
entire agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any
and all prior and contemporaneous understandings, agreements,
arrangements or representations by or among the parties, written or
oral, which may relate to the subject matter hereof in any way.
Other than this Agreement, there are no other agreements continuing
in effect relating to the subject matter hereof (except that the
parties acknowledge the existence of the separate and independent
provisions contained in Sections 8.4, 8.6, and 9.2(g) of the Merger
Agreement). No waiver, amendment or modification of any provision of
this Agreement shall be effective unless in writing and signed by
each party hereto. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or
be construed as a waiver of any subsequent breach by such other
party.
20) Notices. All notices or other communications pursuant to this
Agreement shall be in writing and shall be deemed to be sufficient
if delivered personally, telecopied, sent by nationally recognized,
overnight courier or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice):
if to any Company, to:
Macrovision Corporation
1341 Orleans Drive
<PAGE>
Sunnyvale, CA 94089
Main Phone: 408-743-8600
Fax: (408) 743-8610
email domain: ihalifax@macrovision.com
Attention: Ian Halifax
Chief Financial Officer
Facsimile No.: (408) 743-8610
with a copy to:
Manatt, Phelps & Phillips, LLP
1001 Page Mill Road, Building 2
Palo Alto, California 94304-1006
Main Phone: (650) 812-1300
email domain: dherbst@manatt.com
Attention: David W. Herbst
If to Mr. Christiano, to:
21120 Wardell Road
Saratoga, CA 95070
email domain: matt@globes.com
with a copy to:
Morrison & Foerster
Attention: Chip Lion, Esq.
email domain: plion@mofo.com
or to such other persons or addresses as may be designated in writing by the
party to receive such notice. Nothing in this section shall be deemed to
constitute consent to the manner and address for service of process in
connection with any legal proceeding (including litigation arising out of or in
connection with this Agreement), which service shall be effected as required by
applicable law.
21) Headings. The section headings in this Agreement are for convenience
only and shall not control or affect the meaning of any provision of
this Agreement.
22) Severability. In the event that any provision of this Agreement is
determined to be partially or wholly invalid, illegal or
unenforceable in any jurisdiction, then such provision shall, as to
such jurisdiction, be modified or restricted to the extent necessary
to make such provision valid, binding and enforceable, or if such
provision cannot be modified or restricted, then such provision
shall, as to such jurisdiction, be deemed to be excised from this
Agreement; provided, however, that the binding effect and
enforceability of the remaining provisions of this Agreement, to the
extent the economic benefits conferred upon the parties by virtue of
this Agreement remain substantially unimpaired, shall not be
affected or impaired in any manner and any such invalidity,
illegality or unenforceability with respect to such provisions shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
23) Remedies. You acknowledge and understand that the provisions of this
Agreement are of a special and unique nature, the loss of which
cannot be adequately compensated for in damages by
<PAGE>
an action at law, and thus, the breach or threatened breach of the
provisions of this Agreement would cause the Companies irreparable
harm. You further acknowledge that in the event of a breach of any
of the covenants contained in Section 8, 9, or 10, the Companies
shall be entitled to immediate relief enjoining such violations in
any court or before any judicial body having jurisdiction over such
a claim. All remedies hereunder are cumulative, are in addition to
any other remedies provided for by law and may, to the extent
permitted by law, be exercised concurrently or separately, and the
exercise of any one remedy shall not be deemed to be an election of
such remedy or to preclude the exercise of any other remedy.
24) Representation.
(a) You hereby represent and warrant to MVSN that (i) the
execution, delivery and performance of this Agreement by you
does not breach, violate or cause a default under any
agreement, contract or instrument to which you are a party or
any judgment, order or decree to which you are subject, and
(ii) you are not a party to or bound by any employment
agreement, consulting agreement, noncompete agreement,
confidentiality agreement or similar agreement regarding your
employment or retention with or by any other person or entity.
(b) MVSN hereby represents and warrants to you that the execution,
delivery and performance of this Agreement by MVSN does not
breach, violate or cause a default under any agreement,
contract or instrument to which MVSN is a party or any
judgment, order or decree to which MVSN is subject.
25) Benefits of Agreement, Assignment. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns,
representatives, heirs and estate, as applicable. Anything contained
herein to the contrary notwithstanding, this Agreement shall not be
assignable by any party hereto without the consent of the other
parties hereto.
26) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall
constitute but one agreement.
27) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California without
giving effect to any choice or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other
than the State of California.
28) Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY
DOCUMENTS RELATED HERETO.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have execute this Agreement.
MACROVISION CORPORATION
By/s/ William A. Krepick
--------------------------------
Name: William A. Krepick
Title: President and Chief Operating
Officer
/s/ Matthew Christiano
--------------------------------
Matthew Christiano
ACCEPTED AND AGREED TO:
GLOBETROTTER SOFTWARE, INC.
By /s/ Sallie J. Calhoun
---------------------------
Name: Sallie J. Calhoun
Title: Secretary