December 23, 1996
Page 1
Exhibit 10.66
December 23, 1996
Ladies and Gentlemen:
This letter agreement (the "Agreement") is being entered into in
connection with the execution of an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of December 23, 1996, among GemStar International Group
Limited ("GemStar"), G/S Acquisition Subsidiary ("Sub") and StarSight Telecast,
Inc. (the "Company"), pursuant to which, among other things, Sub will merge with
and into the Company (the "Merger"), subject to the terms and conditions set
forth in the Merger Agreement. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Merger Agreement.
The purpose of this Agreement is to confirm our mutual understandings
and agreements with regard to the Employment Agreement between the Company and
Xxxxx X. Xxxxxxxxxx (the "Executive"), dated as of December 21, 1995 (the
"Employment Agreement"), as it relates to the Executive. The Company has
requested that, for the benefit of its shareholders (which will become
shareholders of GemStar after consummation of the Merger), the Executive enter
into this Agreement.
The Company agrees to pay on the Payment Date, and the Executive agrees
to accept payment of $350,000 (the "Total Accelerated Payments"). Such payments
shall be treated for tax withholding and reporting purposes as taxable
compensation to the Executive as of the Payment Date.
The Executive agrees, on his behalf and on behalf of his heirs,
assigns, executors, administrators and legal representatives, that upon the
Executive's receipt of such payments, the total amounts payable (or that will
become payable) under the Employment Agreement will be reduced by the Total
Accelerated Payments. The Company and the Executive agree that the receipt by
the Executive of the Total Accelerated Payment shall be without prejudice to any
other provision of the Employment Agreement, including, without limitation,
rights to payments due to the Executive (other than the Total Accelerated
Payments), the acceleration of Executive's options pursuant to Section 2 (e) of
the Employment Agreement and rights to continued employee benefits pursuant to
Section 2(d) of the Employment Agreement, and that nothing in this Agreement
shall have any effect whatsoever on the rights of the Executive to receive from
the Company reimbursement with respect to taxes as set forth in Section 5(b) of
the Employment Agreement.
December 23, 1996
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In the event that after payment of the Total Accelerated Payments the
Merger is not consummated pursuant to the Merger Agreement and the Merger
Agreement is terminated (for any reason), then:
(1) the Company shall notify the Executive of:
(a) the termination of the Merger Agreement,
(b) the amount of the Total Accelerated Payments that was
withheld by the Company to pay taxes (the "Withheld
Amount"), and
(c) the amount of the Total Accelerated Payments that was
actually paid to the Executive, net of the Withheld
Amount (the "Received Amount");
(2) the Executive shall, within five business days of receipt of such
notice, notify the Company of any taxes (other than the Withheld Amount) that
have been paid by the Executive with respect to the Total Accelerated Payments
or that the Executive reasonably expects to pay with respect to the Total
Accelerated Payments (the "Excess Tax Amount");
(3) the Executive shall, within five business days after receipt of the
Company's notice, reimburse the Company for the excess of the Received Amount
over the Excess Tax Amount; and
(4) the Company and the Executive shall use reasonable efforts in
seeking any available refund or reduction in tax liability with respect to the
Withheld Amount or the Excess Tax Amount, as the case may be; in the event that
the Executive receives a refund from any taxing authority or realizes a
reduction to the Executive's tax liability with respect to the Withheld Amount
or the Excess Tax Amount, the Executive shall promptly reimburse the Company in
the amount of the refund or reduction in tax liability, as applicable, net of
any taxes imposed thereon, and in any event not to exceed the aggregate amount
paid by the Company to the Executive hereunder.
Whether or not the Merger is consummated, in the event that the
Executive becomes liable for any taxes (including, without limitation, any
interest or penalties imposed with respect to such taxes or acceleration of the
timing of the Executive's payment of any such liability) as a result of the
Total Accelerated Payments being paid hereunder that would not have been payable
had such payments been made immediately after the consummation of the Merger, or
as a result of any payment made by the Executive to the Company pursuant to this
Agreement (in any such case, an "Executive Tax Liability"), the Company shall
indemnify the Executive on an after-tax basis so as to make the Executive whole
with respect to any such Executive Tax Liability.
In addition, whether or not the Merger is consummated, the Company
shall indemnify the Executive for reasonable expenses (including, without
limitation, reasonable attorneys', accountants' and expert witness fees)
incurred in connection with any action, suit, claim, liability or proceeding (a
December 23, 1996
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"Claim") arising by reason of this Agreement, including, without limitation, any
audit or other proceeding relating to the defense of an Executive Tax Liability,
and any and all Claims of the Company or third parties (including without
limitation any Claims against which the Company would not be permitted to
indemnify the Executive). The Company shall make any payments required pursuant
to this Agreement (other than the Withheld Amount and the Excess Tax Amount,
which shall be made as set forth above) within five days after it receives
written notice that any expense, judgment, fine, settlement or other amount,
including, without limitation, a Tax Liability or related expense, actually has
been incurred.
Except as expressly set forth herein, this Agreement shall not be
deemed to affect or modify any provision of the Employment Agreement.
This Agreement may not be amended or terminated without the prior
written consent of the Company and the Executive.
This Agreement may be executed in any number of counterparts which
together shall constitute but one agreement.
This Agreement may not be assigned by any party hereto and shall be
binding on and inure to the benefit of their respective successors and, in the
case of the Executive, heirs and other legal representatives.
December 23, 1996
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The Company and the Executive have caused this Agreement to be duly
executed as of the date first above written.
STARSIGHT TELECAST, INC.
By: /s/ Xxxxx X. Xxxxxxxx
_____________________________
Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxx X. Xxxxxxxxxx
___________________________________
Xxxxx X. Xxxxxxxxxx
