from the Here's your hat what's your hurry Dept.
Gemstar former CEO Yuen gets $30 mln to leave
Tuesday November 12, 4:40 pm ET
LOS ANGELES, Nov 12 (Reuters) - Television program guide provider Gemstar-TV Guide International Inc. (NasdaqNM:GMSTE - News), which ousted Henry Yuen as chief executive officer in October, will pay him nearly $30 million in severance payments and pay him $2 million a year in his new position, the company said in a regulatory filing on Tuesday.
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Pasadena, California-based Gemstar said in a filing with the U.S. Securities and Exchange Commission it will pay Yuen a termination fee of $22.5 million and about $7 million to settle unpaid salary, bonuses and vacation time.
The company, which is 42.5 percent-owned by Rupert Murdoch's News Corp. (Australia:NCP.AX - News), said the cash will be held in a segregated account for six months pending the deposit of some or all of the cash into an escrow account under securities laws.
Yuen will receive a salary of $2 million a year for his new role as head of an international business unit under a five-year contract, Gemstar said.
Yuen resigned as CEO and agreed to serve as chairman of the board in a non-executive capacity under a management shake-up in October as News Corp., which has taken write-downs of nearly $2 billion this year to cover the loss in value of its Gemstar holdings, moved to take control.
Gemstar has been reeling under a string of legal setbacks concerning patents for television program guides and revealed in August it would reverse $20 million in 2001 sales and review its accounting.
Gemstar, which is under formal investigation by the SEC, is expected to file nearly three years' worth of restated results sometime in the next few days to change accounting treatments for a number of deals.
Under his five-year contract, Yuen will also receive options to purchase about 6.9 million shares of common stock and 2.1 million shares of restricted stock.
Former Chief Financial Officer Elsie Leung, who was also ousted in October, will receive a termination fee of about $7 million plus $1.2 million for salary and vacation time. Her payments will also be set aside pending placement in escrow.
In addition, Gemstar said that if Yuen is terminated for a reason other than cause before his new five-year contract expires, he will receive all of the salary he would have paid through the end of the agreement as a lump sum.
In return, Yuen agreed to assign all of his intellectual property in the interactive television and interactive programming guide fields to the company, and he also signed a six-year non-compete clause.
Under the patent rights agreement with Gemstar, assigning his intellectual property, Yuen would receive $250,000 a year, plus a fee of $1.25 million to $2.75 million per year, depending on Gemstar's revenue from the sale of certain products, and 200,000 stock options a year.
The agreement will begin either on Nov. 7, 2007, or when Yuen is terminated from Gemstar, whichever comes first. It runs through Nov. 7, 2009.
Leung received a three-year deal to work in the international business unit, which will pay her $500,000 a year, plus the right to acquire 666,667 shares of common stock and 209,308 shares of restricted stock. She will also get her salary in a lump sum if she is terminated.
Gemstar shares closed up 21 cents, or 5.5 percent, at $4.00 on Nasdaq on Tuesday. For the year, the shares have plunged more than 85 percent.
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