Fired Gemstar exec Yuen entitled to $30 mln (for destroying the company)
Monday April 21, 12:35 pm ET
By Ben Berkowitz
biz.yahoo.com
LOS ANGELES, April 21 (Reuters) - Former Gemstar-TV Guide International Inc. Chief Executive Henry Yuen, fired last week by the company from his advisory role after regulators sought to jail him for contempt of court, is still entitled to cash severance of nearly $30 million, Gemstar said on Monday.
In a report filed with the U.S. Securities and Exchange Commission (News - Websites), Gemstar (NasdaqNM:GMST - News) said Yuen, despite being fired, was still eligible to collect termination fees and unpaid bonuses and vacation time of more than $29.5 million that were part of the package he received after stepping down as CEO.
Gemstar's largest shareholder, with more than 40 percent of its stock, is News Corp. Ltd. (Australia:NCP.AX - News). Sources familiar with the matter said last year that Yuen was forced aside by News Corp. after a series of legal setbacks and accounting questions battered the company and its stock.
Yuen was fired by Gemstar from his role heading up an international business development unit and removed from the company's board of directors, Gemstar said late Friday, one day after the SEC filed contempt of court charges against him and asked a federal judge in Los Angeles to jail and fine the company's founder.
Gemstar is under formal SEC investigation, and Yuen was subpoenaed to testify in those proceedings. The SEC went to court in March for an order to force Yuen to honor the subpoena, and filed the contempt motion on Thursday after he missed some agreed testimony dates this month.
Yuen has a suit pending against the SEC, and a hearing on that suit is scheduled in federal court in Los Angeles on Monday morning. His attorney Stanley Arkin was not immediately to comment.
On Monday, Gemstar said the only part of Yuen's severance package he was no longer eligible to collect was an award of 5.27 million shares of restricted stock or stock units that were to have been awarded subject to an amendment to the company's option plan.
RIGHT TO APPEAL
Under the terms of the employment agreement Yuen reached with Gemstar after stepping aside as CEO, Yuen has the right to appeal his termination.
If an arbitrator rules in his favor, Gemstar said, he would be entitled to receive options for 6,866,667 shares of stock and 2,093,064 shares of restricted stock or stock units, vesting immediately. He would also be eligible for up to $10 million in salary he would have received under his deal.
Gemstar also said that under Yuen's agreement, the company is obligated to pay him his salary and certain expenses until any dispute is resolved.
Gemstar said Yuen's termination triggered a patent deal between the two sides. The deal, which lasts until November 2009, gives Gemstar the right to acquire certain of Yuen's inventions and mandates that he not compete with the company.
Under the terms of that agreement, Yuen is entitled to a base payment of $250,000 a year, fees of $1.25 million to $2.75 million per year related to the revenue generated from certain products, and options on 200,000 shares of stock a year.
Also fired last Friday was Elsie Leung, Gemstar's former chief financial officer. She too was forced aside in October and given a job in Yuen's unit at a salary of $500,000. She also serves on the board of directors, and will remain on the board until her term ends May 20.
Gemstar said that if Leung appeals her termination and is successful, she would be entitled to 666,667 shares of common stock, 209,308 shares of restricted stock or stock units and salary of up to $1.5 million. She also would continue to collect her salary during a dispute.
Leung's agreement after stepping aside last year also included significant cash payments for severance and unpaid vacation and bonuses, totaling around $8.2 million, the company said in Monday's SEC filing.
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that would be the bonus-for-destroying-the-company bonus |
