Ex 10.7
April 26, 2002
Xx. Xxxxxx Xxxxx, Xx.
Universal Studios, Inc.
0000 Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Dear Xx. Xxxxx, Jr.:
Universal Studios, Inc. ("Universal" or the "Company")
agrees to employ you and you agree to accept employment upon the
terms and conditions set forth in this agreement (the "Agreement").
1. Term. The term of this Agreement will commence on May
1, 2003 and continue until April 30, 2005 (the "Term"), or unless
earlier terminated pursuant to the provisions of Paragraph 4.
You agree and acknowledge that Universal has no obligation
RGJ to extend the Term or to continue your employment after expiration
------------ of the Term, and you expressly acknowledge that no promises or
Initials of understandings to the contrary have been made or reached. You also
employee agree and acknowledge that, should Universal choose to continue
your employment for any period of time following the expiration of
the Term (including any extensions thereof), your employment with
Universal will be "at will;" in other words, during any time
following the expiration of the Term, Universal may terminate your
employment at any time, with or without reason and with or without
notice, and you may resign at any time, with or without reason and
with or without notice.
2. Duties. You agree to be employed and perform your
exclusive services for the Company or one of its affiliates upon
the terms and conditions of this Agreement. You will commence your
services hereunder as President and Chief Operating Officer,
Universal Orlando for the Universal Studios Recreation Group and
you will perform the services requested from time to time by the
Board of Directors of Universal (the "Board") or its duly
authorized officers.
3. Compensation and Related Matters.
(a) Base Salary. For all services rendered under this
Agreement, commencing May 1, 2003, Universal will pay you base
salary at an annual rate of Four Hundred Eighty Two Thousand Three
Hundred and 00/100 Dollars ($482,300.00), payable in accordance
with Universal's applicable payroll practices ("Base Salary"). Any
higher Base Salary paid to you subsequently will be deemed the
annual rate for the purposes of this Agreement and will commence on
the date determined by the Board or its duly authorized officers.
Universal is not obligated to actually utilize your
services, and payment as described in Paragraphs 4(a) and 4(c) will
discharge the Company's obligation under this Agreement.
Page 1
(b) Bonus Compensation. You will be eligible to participate at a level
appropriate to your position in Universal's Annual Incentive Plan or any plan
adopted in replacement thereof as determined by the Board of Directors of
Universal and in accordance with the plan's terms and conditions. Effective
retroactive to January 1, 2002, your target bonus for each fiscal year will be
Two Hundred Thousand and 00/100 Dollars ($200,000.00) and will be based upon a
measurement of performance against objectives in accordance with the AIP, as the
same may be amended from time to time.
(c) Long Term Incentive Plan. You will be eligible to participate at a
level appropriate to your position in the Universal Xxxxxxx Xxxx-Term Growth
Plan or any plan adopted in replacement thereof as determined by the Board of
Directors of the Company and in accordance with the plan's terms and conditions.
(d) Benefits. You will be entitled to participate in the benefit plans
generally available to employees of Universal so long as the Company provides
such plans and programs and subject to their terms and conditions, except that
you will not participate in any severance plan of Universal. Instead, subject to
the requirements of this Paragraph, upon an involuntary termination of
employment, as described in Paragraph 4(c), you will receive the greater of (i)
the amounts payable pursuant to Paragraph 4(c) or (ii) the basic amounts payable
pursuant to the Company's severance plan or policy. If the amount described in
clause (ii) above is greater than the amount described in clause (i) above, in
addition to the amounts payable under Paragraph 4(c), you will receive, in
exchange for a release acceptable to the Company, a lump sum payment calculated
by the Company in its sole discretion equal to the difference between the
amounts described in clauses (i) and (ii) of the previous sentence. You will
receive this lump sum payment as soon as practical after the release has been
fully executed by you and the Company. In addition, you will be entitled to
participate in the Universal Flexible Perquisite Allowance and the Executive
Auto Allowance Program on the same terms and conditions and only so long as
Universal provides such plans and programs and in accordance with the plan's
terms and conditions.
(e) Expense Reimbursements/Deductions. During your employment,
Universal will reimburse you for your reasonable and necessary business expenses
in accordance with its then prevailing policy for similarly situated employees
(which will include appropriate itemization and substantiation of expenses
incurred). The Company is entitled to deduct from monies payable and
reimbursable to you by the Company, all sums that you owe the Company or any of
its affiliates at any time.
(f) Withholding. The Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as will be required to
be withheld pursuant to any applicable laws or regulation.
4. Compensation Upon Certain Termination Events.
(a) Compensation Payable. Should your employment with Universal
terminate, you will be entitled to the amounts and benefits shown on the
following table, subject to Paragraphs 4(b) through 4(e). In the event
Page 2
of such termination, and except for payments noted in this Paragraph 4,
Universal will have no further obligations to you under this Agreement.
----------------------------------------------------------------------------------------------------
Termination For Cause Involuntary Disability Death
Termination
----------------------------------------------------------------------------------------------------
Payment of (1) any Same as for Same as for termination Payment of (1) any accrued
accrued but unpaid termination for for Cause except that but unpaid Base Salary due
Base Salary due you Cause except that your Base Salary will you through your date of
through termination, your Base Salary continue until the death, and (2) other
and (2) other unpaid and benefits earliest of (1) the unpaid amounts then due
amounts then due you (other than 180th day following the you under Company benefit
under Company benefit benefits provided start of your disability plans or programs, except
plans or programs. under (1) any absence, or (2) your that those payments will
plan qualified death and will be be made to your estate or
under Section reduced by other legal representative, and
401(a) of the Company-provided your death benefits
Internal Revenue disability benefits payable due to your death
Code, (2) any available to you. under Company employee
nonqualified benefit plans or programs
pension plan and will also be paid.
(3) any stock or
incentive based
plan) will also
continue through
the expiration of
the Term, provided
you meet the
requirements in
Paragraph 5 and
subject to the
terms and
conditions of each
benefit plan.
----------------------------------------------------------------------------------------------------
(b) Termination for Cause. The Company may terminate your employment
for cause at any time without advance notice. "Cause" will include, but not be
limited to:
(i) your material failure to perform your duties or your material
breach of the terms of this Agreement;
(ii) your material failure to comply with Company policies,
including, without limitation those set forth in the Universal Studios Group
Code of Conduct and the Universal Discrimination and Sexual Harassment Policy,
as such code of conduct and policies may be amended
Page 3
from time to time, copies of which are attached as Schedule 1 to this Agreement;
or
(iii) your conviction of a felony or crime of moral turpitude.
(c) Involuntary Termination. Universal may terminate your employment
other than for Cause or on account of Disability, as defined in Paragraph 4(d),
in which case you will receive continuation of Base Salary and benefits as
specified in Paragraph 4(a); provided the Company will retain a right of offset
against the amounts payable to you under this Paragraph and will be entitled to
reduce the amount of any compensation and benefits payable to you under this
Agreement by the amount of compensation and benefits of any kind earned or
received by you from any third party from the date of termination through the
end of the payment term pursuant to this Paragraph. You agree that you will have
no rights or remedies in the event of your termination without Cause other than
those set forth in this Agreement.
(d) Termination for Disability. The Company may terminate your
employment on account of a Disability and the payments required by Paragraph
4(a) will be made. You will be deemed to have a "Disability" if you are
incapacitated by a physical or mental condition, illness or injury which has
prevented you from being able to perform the essential duties of your position
under this Agreement in a satisfactory fashion for all of a consecutive 180-day
period.
(e) Death. If you die while employed under this Agreement, the payments
required by Paragraph 4(a) will be made.
5. Covenants.
(a) Acknowledgment. You acknowledge that you currently possess or will
acquire secret, confidential, or proprietary information or trade secrets
concerning the operations, future plans, or business methods of the Company or
its affiliates. You agree that the Company would be severely damaged if you
misused or disclosed this information. To prevent this harm, you are making the
promises set forth in this Paragraph. You acknowledge that the provisions of
this Paragraph are reasonable and necessary to protect the legitimate interests
of the Company and that any violation of such provisions would result in
irreparable injury to the Company. In the event of a violation of the provisions
of this Paragraph, you further agree that the Company will, in addition to all
other remedies available to it, be entitled to seek equitable relief by way of
injunction and any other legal or equitable remedies.
(b) Promise Not to Disclose. You will hold in a fiduciary capacity, for
the benefit of the Company, all confidential or proprietary information,
knowledge and data of the Company which you may acquire, learn, obtain or
develop during your employment by the Company. Further, you will not, during the
Term or at any time thereafter, directly or indirectly use, communicate or
divulge for your own benefit or for the benefit of another any such information,
knowledge or data other than (i) as required by the Company or (ii) as required
by law or as ordered by a court or (iii) with respect to matters that are
generally known to the public. You make the same commitments with respect to the
secret,
Page 4
confidential or proprietary information, knowledge and data of affiliates,
customers, contractors and others with whom the Company has a business
relationship or to whom the Company or its affiliates owe a duty of
confidentiality. The information covered by this protection includes, but is not
limited to, matters of a business or strategic nature such as information about
costs and profits, projections, personnel information, reengineering, records,
customer lists, contact persons, customer data, software, sales data, possible
new business ventures and/or expansion plans or matters of a creative nature,
including without limitation, matters regarding ideas of a literary, creative,
musical or dramatic nature, or regarding any form of product produced,
distributed or acquired by the Company ("Company Information"). Company
Information will be considered and kept as the private, proprietary and
confidential information of the Company except within the Company as required to
perform services, and may not be divulged (A) without the express written
authorization of the Company or (B) unless required by law or ordered by a court
or (C) unless the Company Information is generally known to the public. You
further agree that you will neither publicly disclose the terms of this
Agreement nor publicly discuss the Company in a manner that tends to portray the
Company in an unfavorable light.
(c) Promise Not to Engage In Certain Activities. You will not at any
time during your employment by the Company or the period of payment pursuant to
Paragraph 4 be or become (i) interested or engaged in any manner, directly or
indirectly, either alone or with any person, firm or corporation now existing or
hereafter created, in any business which is or may be competitive with the
business of the Company and its affiliates or (ii) directly or indirectly a
stockholder or officer, director, agent, consultant or employee of, or in any
manner associated with, or aid or abet, or give information or financial
assistance to, any such business. The provisions of this Paragraph will not be
deemed to prohibit your purchase or ownership, as a passive investment, of not
more than five percent (5%) of the outstanding capital stock of any corporation
whose stock is publicly traded.
(d) Promise to Return Property. All records, files, lists, drawings,
documents, models, equipment, property, computer, software or intellectual
property relating to the Company's business in whatever form (including
electronic) will be returned to the Company upon the termination of your
employment, whether such termination is at your or the Company's request.
(e) Promise Not to Solicit. You will not during (i) the period of your
employment by the Company, (ii) the period of payment pursuant to Paragraph 4 or
(iii) the period ending one (1) year after the later of the periods described in
the previous clauses (i) or (ii) induce or attempt to induce any employees,
consultants, contractors or representatives of the Company (or those of any of
its affiliates) to stop working for, contracting with or representing the
Company or any of its affiliates or to work for, contract with or represent any
of the Company's (or its affiliates') competitors.
(f) Universal Ownership. The results and proceeds of your services
hereunder, including, without limitation, any works of authorship resulting from
your services during your employment with Universal and/or any of Universal's
affiliates and any works in progress, will be works-made-for hire and Universal
will be deemed the
Page 5
sole owner throughout the universe of any and all rights of whatsoever nature
therein, whether or not now or hereafter known, existing, contemplated,
recognized or developed, with the right to use the same in perpetuity in any
manner Universal determines in its sole discretion without any further payment
to you whatsoever. If, for any reason, any of such results and proceeds will not
legally be a work-for-hire and/or there are any rights which do not accrue to
Universal under the preceding sentence, then you hereby irrevocably assign and
agree to assign any and all of your right, title and interest thereto,
including, without limitation, any and all copyrights, patents, trade secrets,
trademarks and/or other rights of whatsoever nature therein, whether or not now
or hereafter known, existing, contemplated, recognized or developed, to
Universal, and Universal will have the right to use the same in perpetuity
throughout the universe in any manner Universal determines without any further
payment to you whatsoever. You will, from time to time, as may be requested by
Universal, do any and all things which Universal may deem useful or desirable to
establish or document Universal's exclusive ownership of any and all rights in
any such results and proceeds, including, without limitation, the execution of
appropriate copyright and/or patent applications or assignments. To the extent
you have any rights in the results and proceeds of your services that cannot be
assigned in the manner described above, you unconditionally and irrevocably
waive the enforcement of such rights. This Paragraph is subject to and will not
be deemed to limit, restrict, or constitute any waiver by Universal of any
rights of ownership to which Universal may be entitled by operation of law by
virtue of Universal being your employer.
(g) Prior Restrictions. You represent that you are free to enter into
this Agreement and are not restricted in any manner from performing under this
Agreement by any prior agreement, commitment, or understanding with any third
party. If you have acquired confidential or proprietary information in the
course of your prior employment or as a consultant, you will fully comply with
any duties not to disclose such information then applicable to you during the
Term.
6. Services Unique. You recognize that your services hereunder are of a
special, unique, unusual, extraordinary and intellectual character, giving them
a peculiar value, the loss of which the Company cannot be reasonably or
adequately compensated for in damages. In the event of a breach of this
Agreement by you (particularly, but without limitation, with respect to the
provisions hereof relating to the exclusivity of your services), the Company
will, in addition to all other remedies available to it, be entitled to seek
equitable relief by way of injunction and any other legal or equitable remedies.
This provision will not be construed as a waiver of the rights which the Company
may have for damages under this Agreement or otherwise, and all of the Company's
rights and remedies will be unrestricted.
7. Notices. All notices and other communications hereunder will be in
writing and will be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
Page 6
If to Employee:
At the address indicated on the first page hereof.
If to Universal:
Universal Studios, Inc.
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Executive Vice President, Human Resources
or to such other address as either party will have furnished to the other in
writing. Notice and communications will be effective when actually received by
the addressee.
8. Assignment/Affiliated Corporations. Universal will have the right to
assign this Agreement to any affiliate or successor of Universal. You
acknowledge and agree that all of your covenants and obligations to Universal,
as well as the rights of Universal hereunder, will run in favor of and will be
enforceable by Universal, its affiliates and their successors.
9. Arbitration of Disputes.
(a) Arbitrable Disputes. You and the Company agree to use final and
binding arbitration to resolve any dispute each party may have with the other or
any affiliate relating to this Agreement or your employment with and/or
termination from Universal (an "Arbitrable Dispute"). An Arbitrable Dispute
includes any dispute about the validity, interpretation, or effect of this
Agreement, or alleged violations of it, and further including any and all claims
arising out of any alleged discrimination, harassment, or retaliation,
including, but not limited to, those covered by the California Fair Employment
and Housing Act (or similar state statute), the 1964 Civil Rights Act, 42 U.S.C.
Section 2000e et seq., the Age Discrimination in Employment Act, and the
Americans With Disabilities Act.
(b) Injunctive Relief. Notwithstanding Paragraph 9(a), due to the
irreparable harm that would result from certain actual or threatened violations
of this Agreement, where either party is seeking only injunctive relief (e.g., a
temporary restraining order, temporary injunction or permanent injunction), such
party may file suit or bring an application for such injunctive relief in any
federal or state court of competent jurisdiction without violating this
Agreement and such suit for injunctive relief will not be considered an
Arbitrable Dispute.
(c) The Arbitration. Arbitration will take place in Orlando, Florida
before a single experienced employment arbitrator licensed to practice law in
Florida and selected in accordance with the Employment Dispute Resolution Rules
of the American Arbitration Association. The arbitrator may not modify or change
this Agreement in any way. At the conclusion of the arbitration, the arbitrator
shall issue a written ruling setting forth the essential findings of fact and
conclusions of law on which the arbitration award is based.
(d) Fees and Expenses. Each party will pay the fees of their respective
attorneys, the expenses of their witnesses, cost of any record
Page 7
or transcript of the arbitration, and any other expenses connected with the
arbitration that such party might be expected to incur had the dispute been
subject to resolution in court, but all costs of the arbitration which would not
be incurred by the parties if the dispute were litigated in court, including the
fees of the arbitrator and any arbitration association administrative fees, will
be paid by the Company.
(e) Exclusive Forum. Arbitration in this manner will be the exclusive
forum for any Arbitrable Dispute. Should you or the Company attempt to resolve
an Arbitrable Dispute by any method other than arbitration pursuant to this
Paragraph, the responding party will be entitled to recover from the initiating
party all damages, expenses, and attorneys' fees incurred as a result of that
breach.
10. Miscellaneous. No provisions of this Agreement may be amended,
modified, waived, or discharged except by a written document signed by you and a
duly authorized officer of the Company. A waiver of any conditions or provisions
of this Agreement in a given instance will not be deemed a waiver of such
conditions or provisions at any other time. The validity, interpretation,
construction, and performance of this Agreement will be governed by the laws of
the State of Florida without regard to its conflicts of law principles. This
Agreement will be binding upon, and will inure to the benefit of, you and your
estate and the Company and any successor thereto, but neither this Agreement nor
any rights arising under it may be assigned or pledged by you.
11. Validity. The invalidity or unenforceability of any provisions of
this Agreement will not affect the validity or enforceability of any other
provisions of this Agreement, which will remain in full force and effect.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all of which
together will constitute the same instrument.
13. Entire Agreement. This Agreement sets forth the entire
understanding between us; all oral or written agreements or representations,
express or implied, with respect to the subject matter of this Agreement are set
forth in this Agreement except that the terms of any applicable stock option
agreement still apply. All prior employment agreements, understandings and
obligations (whether written, oral, express or implied) between us, if any, are
terminated as of the commencement date of the Term and are superseded by this
Agreement.
Very truly yours,
Universal Studios, Inc.
By: /s/ Xxxxxxx Xxxxx
-----------------
Name :
Title:
ACCEPTED AND AGREED:
/s/ Xxxxxx Xxxxx, Xx.
---------------------
XXXXXX XXXXX, XX.
Page 8
