[Letterhead]
June 5, 1996
Mr. Victor Viegas
99 James Avenue
Atherton, California 94027
Dear Vic:
We are pleased to offer you the position of Vice President, Finance/CFO at
Macrovision Corporation reporting directly to me and on a dotted line basis
to John Ryan with regard to IPO issues and merger and acquisition
opportunities. In this capacity, you will be responsible for overall
management of the Company's administrative, MIS, HR, contracts, legal and
financial/accounting operations. As you are aware, Bob Netter, our current
CFO, has agreed to stay with the Company through October 3, 1996 and assist
with the IPO and the management transition. Bob's title will be changed to
VP Finance/Administration.
Your annual compensation will be $135,000 and a recommendation will be made
to the Board of Directors on June 7th for grant upon your commencement of
employment a 105,000 share stock option grant (at $1.50 per share) under
Macrovision's Stock Option Plan, representing approximately one percent
ownership of Macrovision stock. A form of stock option is attached.
Alternatively, in lieu of stock options, at your election the Board will be
asked to approve a sale to you of 105,000 shares of Macrovision common stock,
immediately upon the commencement of your employment, for $1.50 per share
payable with a full recourse promissory note from you to Macrovision due five
years from the date of grant or upon earlier termination of employment with a
minimum interest rate necessary to avoid imputed interest. Such stock
options will become exercisable, or such purchased shares will vest,
according to the schedule generally applied to stock options granted under
the Company's Employee Stock Option Plan including full vesting upon an offer
by University National Bank & Trust, Trustee under Stock and Convertible Note
Purchase Agreement dated May 24, 1991 as described in Section 3 of the
Company's Stock Option Agreement. As of this date, the Company's total shares
of fully diluted outstanding stock (including preferred stock, option grants
and nongranted options) is 10,559,244. In addition to Macrovision stock or
stock options, you will be granted a 1.3% (one and three-tenths of one
percent) percentage of ownership in Command Audio Corporation (CAC) stock
options if Macrovision spins off its ownership in CAC on the same terms and
conditions at the fair market value of date of such spinoff.
In the event that the Company terminates your employment as CFO without cause
or your employment is constructively terminated within three months before or
one year following a change in control of the Company, any Macrovision stock
that you have
June 5, 1996
Page Two
purchased, but which otherwise would not then be vested, shall immediately
vest upon such termination of employment. For this purpose, 'change in
control' shall mean any merger, corporate acquisition or other similar
transaction in which the persons who are shareholders of Macrovision
immediately prior to the transaction own less than 50% of the equity
interests in the resulting entity immediately after the transaction. With
respect to the above, 'Constructive termination' shall mean:
a. there is a material adverse change in executive's position causing it
to be of less stature or of less responsibility
b. a change in the position to whom executive reports
c. a reduction of more than 20% of executive's base compensation, AND
d. within 30 days immediately following such material adverse change or
reduction, executive elects to terminate his employment voluntarily.
'cause' shall mean:
a. willful and repeated failure to comply with the lawful written
direction of the Company's Board of Directors
b. gross negligence or willful misconduct in the performance of duties to
the Company and/or its subsidiaries
c. commission of any act of fraud with respect to the Company and/or its
subsidiaries
d. conviction of a felony or a crime involving moral turpitude causing
material harm to the standing and reputation of the Company and/or
its subsidiaries in each case as determined in good faith by the
Company's Board of Directors.
The Company also agrees to provide, the day after its initial public
offering, if any, an option for you to acquire 40,000 shares of Macrovision
common stock by stock option grant in the same manner as described above with
vesting rights according to the schedule generally applied to stock options
granted under the Company's Employee Stock Option Plan at the closing price
of the first day's trade.
You will participate in the Company's Executive Incentive Program on a
pro-rated basis for the remainder of 1996.
As an employee, you will receive the standard benefits including medical and
dental benefits, as well as life, long-term and short-term disability
coverage and enrollment into our flexible spending plan. A brief description
of our benefits is attached; however, feel free to call Kim with any
questions.
As Macrovision's relationships with employees is at-will, either you or
Macrovision may terminate the employment relationship at any time for any
reason, with or without notice. Also, any dispute arising out of or relating
to your employment with Macrovision, including, but not limited to, the
manner in which that employment is terminated, or any claims that
June 5, 1996
Page Three
Macrovision has violated any state or federal law, shall be settled by final
and binding arbitration in Santa Clara County, California, in accordance with
the then-existing rules of the American Arbitration Association and judgment
upon the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof; provided, however, that the law applicable to
any controversy shall be the law of California, regardless of its or any
jurisdiction's choice of law principles. Notwithstanding the foregoing, you
are entitled to a special provision of the Company's severance plan
applicable to stock options or stock purchases and severance pay which is
attached.
It is understood that with respect to the at-will employment relationship and
the binding arbitration provision stated above, that this constitutes the
full, complete and final expression of the agreement with Macrovision
Corporation, and that it may not be modified, altered or amended, either
expressly or implied, unless in writing signed by the President of
Macrovision. As a condition of employment, all employees must sign a
Proprietary Information, Inventions and Ethics Agreement (a copy of which is
enclosed).
If the foregoing meets with your approval, please indicate by signing below
and returning a copy of this letter as soon as possible. Vic, we all look
forward to having you join our team and assist us in achieving our growth
objectives.
Sincerely,
/s/ Bill Krepick
William A. Krepick
President and COO
Agreed and Accepted: /s/ Victor Viegas
---------------------------------
Victor Viegas
Date: June 6, 1996
---------------------------------
MACROVISION CORPORATION
BENEFITS - BRIEF SUMMARY
Medical: Blue Cross Prudent Buyer Plan or Kaiser Permanente effective
the first day of the month following date of hire. Entire
employee premium paid by Macrovision with 75% contribution
toward dependent premiums.
Dental: Blue Cross (Wellpoint) Insurance effective first day of the
month following date of hire. Same payment coverage as medical.
Life Insurance: Two policies totaling $15,000 over two times employee's annual
salary. Policy includes long-term disability with payment at
66% of salary, short-term disability and accidental death & dismemberment. Employer paid -- eligibility date contingent
upon proof of health.
Flexible Contribution of monies by Macrovision into a cafeteria
Spending: plan to be used by employee for medical expenses. Effective
as of date of hire.
401(k): Salary reduction plan with 18 possible investment options.
Current employer match of 20% of salary reduction. Enrollment
after 90 days of date of hire.
Stock Option Macrovision Corporation and/or Command Audio Corporation stock
Plan: options or stock purchases granted upon Board approval as
outlined in cover letter.
Stock Option or Stock Grant
Exercise/Vesting Schedule:
Exercise/Vesting of Options and
Service Following Stock Grant
Grant Date (fraction of outstanding grant)
----------------------- ---------------------------------
Less than 1 year 0
After 1 year but less than 1/6
2 years
After 2 years but less than 1/2
3 years
After 3 years 100%
Special Exercise/ Stock options and stock grants
Vesting Provision will become exercisable/vested
Upon Termination according to the following
By Company with- schedule:
out Cause or upon
a Constructive
Termination:
Exercise/Vesting of Options and
Service Following Stock Grant
Grant Date (fraction of outstanding grant)
----------------------- ---------------------------------
Less than 1 year 1/6
Greater than 1 year but
less than 2 years 1/2
Greater than 2 years 100%
Tuition Reimbursement up to $5,250 per year of educational
Reimbursement: expenses for approved courses of study or degree programs.
Vacation: First through third years of employment accrues monthly at
the rate of 6.67 hours (10 days per year) beginning on date
of hire.
Sick Time: Maximum 10 days, accrued at the monthly rate of 6.67 hours.
Effective as of date of hire.
Severance: If length of service is less than 3 years, payment is two
weeks salary plus 1 week for every $10K of base salary
(salary rounded to nearest $10K increment). For length of
service over 3 years, payment is four weeks salary plus 1
week for every $10K of base salary, to a maximum of six
months salary (salary rounded to nearest $10K increment).
Employment Agreement - Macrovision Corp. and Victor Viegas
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