Exhibit 10.06

MACROVISION CORPORATION

EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT

THIS EXECUTIVE SEVERANCE AND ARBITRATION AGREEMENT (the “Agreement”) is made and entered into as of August 6, 2007 by and between Macrovision Corporation, a Delaware corporation (the “Company”) and James Budge (“Executive”).

WHEREAS, the Board of Directors (the “Board”) of the Company has recommended and authorized the Company to enter into a severance agreement in the form hereof with Executive; and

WHEREAS, the Board has determined that, in the event of a possible threatened or pending sale or other change in control of the Company, it is imperative that the Company and the Board be able to rely upon Executive to continue in Executive’s position, and that the Company be able to receive and rely upon Executive’s advice, if requested, as to the best interests of the Company and its stockholders without concern that Executive might be distracted by the personal uncertainties and risks created by any such possible transactions; and

WHEREAS, in connection with the foregoing, Executive may, in addition to Executive’s regular duties, be called upon to assist in the assessment of any such possible transactions, advise management and the Board as to whether such proposals would be in the best interests of the Company and its stockholders, and to take such other actions as the Board might determine to be appropriate;

NOW, THEREFORE, to assure the Company that it will have the continued dedication of Executive and the availability of Executive’s advice and counsel through the occurrence of any Change in Control (as defined in Section 1(b) below) of the Company, and to induce Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and Executive agree as follows:

1. Payment of Severance Benefit.

(a) In the event that a Change in Control (as hereinafter defined) occurs and, within the period beginning ninety (90) days before the date of the Change in Control and ending twelve (12) months thereafter, (a) Executive’s employment is terminated by the Company or a Subsidiary (as hereinafter defined) without Cause (as hereinafter defined) or (b) Executive voluntarily terminates his/her employment with Company and its Subsidiaries with Good Reason (as hereinafter defined), then the Company shall pay to Executive severance pay under this Agreement. Transfer of Executive’s employment from the Company to a Subsidiary (or to an entity of which the Company is a Subsidiary) or from a Subsidiary to the Company or to another Subsidiary (or to an entity of which the Company is a Subsidiary), by itself shall not be considered a termination of Executive’s employment. Such severance pay shall be in the form of salary continuation of Executive’s regular base pay in effect ninety (90) days before the time of the Change in Control or at the time of the termination of his employment, whichever is greater. The Company shall pay such severance pay during the twelve (12) month period immediately following the date on which Executive’s employment with the Company terminates; provided, however, that, if Executive commences new employment within such twelve (12) month period, such severance pay shall cease on the later of (i) the date six (6) months after Executive’s employment with the Company terminates or (ii) the date Executive commences new employment.

(b) “Change in Control” means any of the following events: (i) any “person” or “group” (as defined in or pursuant to Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) other than the Company, is or becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly (including by holding securities which are exercisable for or convertible into shares of capital stock of the Company), of securities of the Company

representing 50% or more of the voting power of the outstanding shares of capital stock of the Company entitled to vote generally in the election of directors; (ii) the Company sells or exchanges, through merger, assignment or otherwise, in one or more transactions, other than in the ordinary course of business, assets which provided at least seventy percent (70%) of the revenues or pre-tax net income of the Company and its Subsidiaries on a consolidated basis during the most recently completed fiscal year; or (iii) Continuing Directors cease to constitute at least a majority of the Board. “Continuing Directors” are (A) each director serving on the Board on July 1, 2007, and (B) any successor to any such director whose nomination or selection was approved by a majority of the directors in office at the time of the director’s nomination or selection. Notwithstanding the foregoing, the following events shall not constitute a Change in Control: any acquisition of beneficial ownership pursuant to (i) a reclassification, however effected, of the Company’s authorized common stock, or (ii) a corporate reorganization involving the Company or a Subsidiary which does not result in a material change in the ultimate ownership by the stockholders of the Company (through their ownership of the Company or its successor resulting from the reorganization) of the assets of the Company and its Subsidiaries, but only if such reclassification or reorganization has been approved by the Board.

(c) “Cause” means the occurrence of any one or more of the following: (i) conviction of any felony or any act of fraud, misappropriation or embezzlement which has an immediate and materially adverse effect on the Company or a Subsidiary; (ii) engaging in a fraudulent act to the material damage or prejudice of the Company or a Subsidiary or engaging in conduct or activities materially damaging to the property, business or reputation of the Company or a Subsidiary; (iii) failure to comply in any material respect with the terms of any applicable employment agreement or any written policies or directives of the Board which have an immediate and materially adverse effect on the Company or a Subsidiary and which has not been corrected within 30 days after written notice from the Company of such failure; (iv) any material act or omission involving malfeasance or negligence in the performance of employment duties which has an immediate and materially adverse effect on the Company or a Subsidiary and which has not been corrected within 30 days after written notice from the Company; or (v) material breach of any other agreement with t