Exhibit 10.40
October 12, 2004
Mr. Robert Gault,
Jr.
Vivendi Universal Entertainment LLLP
1000 Universal Studios Plaza
Orlando, FL 32819
Dear Mr. Gault:
Vivendi Universal Entertainment LLLP
(“VUE” 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, 2005 and continue until
April 30, 2008 (the “Term”), or unless earlier
terminated pursuant to the provisions of Paragraph 4.
You agree and acknowledge that the
Company has no obligation to extend the Term or to continue your
employment after expiration of the Term, and you expressly
acknowledge that no promises or understandings to the contrary have
been made or reached. You also agree and acknowledge that, should
the Company choose to continue your employment for any period of
time following the expiration of the Term (including any extensions
thereof), your employment with the Company will be “at
will;” in other words, during any time following the
expiration of the Term, the Company 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 &
Chief Executive Officer, Universal Orlando and you will perform the
services requested from time to time by the Board of Directors of
the Company or a duly authorized officer of the Company (the
“Board”).
3. Compensation and Related
Matters .
(a) Base Salary . For all
services rendered under this Agreement, commencing May 1,
2005, the Company will pay you base salary at an annual rate of
Four Hundred Ninety Six Thousand Eight Hundred and 00/100 Dollars
($496,800.00), payable in accordance with the Company’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.
The Company 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.
(b) Bonus Compensation . You
will be eligible to participate at a level appropriate to your
position in the VUE Annual Incentive Plan or any plan adopted in
replacement thereof (“AIP”) as determined by the Board
and in accordance with the plan’s terms and conditions.
Your
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target amount 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. You
understand that AIP bonuses are not guaranteed
compensation.
(c) Long Term Incentive Plan
. You will be eligible to participate at a level appropriate to
your position in the Universal Orlando Long-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 the Company 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 the Company.
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 VUE Executive Auto Allowance Program only so
long as VUE provides such plans and programs and in accordance with
the plans terms and conditions.
(e) Expense
Reimbursements/Deductions . During your employment, the Company
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 the Company 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 of such
termination, and except for payments noted in this Paragraph 4, the
Company will have no further obligations to you under this
Agreement.
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Involuntary
Termination
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Disability
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Death
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Payment of
(1) any accrued but unpaid Base Salary due you through
termination, and (2) other unpaid amounts then due you under
Company benefit plans or programs.
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Same as for
termination for Cause except that your Base Salary and benefits
(other than benefits provided under (1) any plan qualified under
Section 401(a) of the Internal Revenue Code, (2) any nonqualified
pension plan and (3) any stock or cash 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.
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Same as for
termination for Cause except that your Base Salary will continue
until the earliest of (1) the 180 th day following the start of your
disability absence, or (2) your death and will be reduced by other
Company-provided disability benefits available to you.
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Payment of (1)
any accrued but unpaid Base Salary due you through your date of
death, and (2) other unpaid amounts then due you under Company
benefit plans or programs, except that those payments will be made
to your estate or legal representative, and your death benefits
payable due to your death under Company employee benefit plans or
programs will also be paid.
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(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, as such policies may be amended from time to
time, including, without limitation, the General Electric Integrity
Policies contained in The Spirit and the Letter of Our
Commitment , a copy of which is enclosed herewith (a copy of
the Personal Commitment Acknowledgement Form is also attached
hereto as Schedule 1 for your signature), the NBC Universal Policy
on Harassment and the Employment Data Protection Standards, copies
of which are attached as Schedule 2 to this Agreement;
or
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(iii) your conviction of a felony or
crime of moral turpitude.
(c) Involuntary Termination .
The Company 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
inter
