EXHIBIT 10.7
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated as of May 3, 2005, between Marvel
Enterprises, Inc., a Delaware corporation (the "Company") and Xxxxx Xxxxxx (the
"Executive").
WHEREAS, the Company and the Executive are parties to an
employment agreement, dated as of December 11, 2003, which they now wish to
amend and restate hereby.
NOW, THEREFORE, in consideration of the mutual promises and
covenants made herein and the mutual benefits to be derived herefrom, the
parties hereto agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment, Duties. The Company hereby employs the
Executive for the Term (as defined in Section 2.1), to render exclusive and
full-time services to the Company as President and Chief Operating Officer of
Marvel Studios or in such other executive position as may be mutually agreed
upon in writing by the Company and the Executive. The Executive shall report to
the Chairman and Chief Executive Officer of Marvel Studios and shall perform
such other duties consistent with such positions as may be assigned to the
Executive by the Chairman and Chief Executive Officer of Marvel Studios or the
Company's Board of Directors. Notwithstanding the foregoing, the Company shall
have the right, subject to the Executive's reasonable approval, to assign to the
Executive duties other than those of the positions described above, including
duties involving business strategy, corporate development and investor relations
or other senior executive duties that are consistent with Executive's past
business experience, to change the Executive's title accordingly and, if
appropriate, to change the Executive's line of reporting so that the Executive
shall report to the Chief Executive Officer of the Company.
1.2 Acceptance. The Executive hereby accepts such employment
and agrees to render the services described above. During the Term, the
Executive agrees to serve the Company faithfully and to the best of the
Executive's ability, to devote the Executive's entire business time, energy and
skill to such employment and to use the Executive's professional efforts, skill
and ability to promote the Company's interests. The Executive further agrees to
accept election, and to serve during all or any part of the Term, as an officer
or director of the Company and of any subsidiary or affiliate of the Company,
without any compensation therefor other than that specified in this Agreement,
if elected to any such position by the stockholders or by the Board of Directors
of the Company or of any subsidiary or affiliate, as the case may be.
1.3 Location. The duties to be performed by the Executive
hereunder shall be performed primarily at the offices of the Company in Los
Angeles, subject to customary travel requirements on behalf of the Company,
including periodic trips to the Company's headquarters in New York City.
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2. Term of Employment
2.1 The Term. The term of the Executive's employment under
this Agreement (the "Term") shall commence as of January 1, 2005 (the "Effective
Date") and shall end on January 12, 2009 (the "Expiration Date"). The Term shall
end earlier than the Expiration Date if sooner terminated pursuant to Section 4
hereof.
3. Compensation; Benefits.
3.1 Salary. As compensation for all services to be rendered
pursuant to this Agreement, the Company agrees to pay the Executive during the
Term a base salary, payable bi-weekly in arrears, at the annual rate of Five
Hundred Thousand Dollars ($500,000) less such deductions or amounts to be
withheld as required by applicable law and regulations and deductions authorized
by the Executive in writing. The Executive's base salary shall be reviewed no
less frequently than annually by the Board of Directors and may be increased,
but not decreased, by the Board of Directors. The Executive's base salary as in
effect from time to time is referred to in this Agreement as the "Base Salary".
3.2 Bonus. (a) In addition to the amounts to be paid to the
Executive pursuant to Section 3.1 hereof, the Executive will be entitled to
receive a cash bonus based in whole or in part upon the attainment of
performance goals set by the Board of Directors (the "Bonus Performance Goals").
The Executive's target annual bonus amount shall be 50% of his Base Salary
received for the year. Each annual bonus shall be paid when annual bonuses are
paid generally to the Company's other senior executive officers but in no event
later than the ninetieth day of the next calendar year.
(b) In addition to the amounts to be paid to the
Executive pursuant to Section 3.1 and 3.2(a) hereof, the Executive will be
entitled to receive a cash bonus of $2,000,000 based upon the achievement of the
performance goals and conditions set forth in a separate award letter, dated as
of the date of this agreement, and paid in accordance with the terms of that
letter.
3.3 Business Expenses. The Company shall pay for or reimburse
the Executive for all reasonable expenses actually incurred by or paid by the
Executive during the Term in the performance of the Executive's services under
this Agreement, upon presentation of expense statements or vouchers or such
other supporting information as the Company customarily may require of its
officers.
3.4 Vacation. During the Term, the Executive shall be entitled
to a vacation period or periods of four (4) weeks per year taken in accordance
with the vacation policy of the Company during each year of the Term. Vacation
time not used by the end of a calendar year shall be forfeited.
3.5 Fringe Benefits. During the Term, the Executive shall be
entitled to all benefits for which the Executive shall be eligible under any
qualified pension plan, 401(k) plan,
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group insurance or other so-called "fringe" benefit plan which the Company
provides to its employees generally, together with executive medical benefits
for the Executive, as from time to time in effect for executive employees of the
Company generally.
3.6 Additional Benefits. During the Term, the Executive shall
be entitled to such other benefits as are specified in Schedule I to this
Agreement.
4. Termination.
4.1 Death. If the Executive shall die during the Term, the
Term shall terminate immediately.
4.2 Disability. If during the Term the Executive shall become
physically or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's principal services hereunder for
(i) a period of four consecutive months or (ii) for shorter periods aggregating
six months during any twelve month period, the Company may at any time after the
last day of the four consecutive months of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six months, by
written notice to the Executive (but before the Executive has recovered from
such disability), terminate the Term.
4.3 Cause. The Term may be terminated by the Company upon
notice to the Executive upon the occurrence of any event constituting "Cause" as
defined herein. As used herein, the term "Cause" means: (i) the Executive's
willful and intentional failure or refusal to perform or observe any of his
material duties, responsibilities or obligations set forth in this Agreement;
provided, however, that the Company shall not be deemed to have Cause pursuant
to this clause (i) unless the Company gives the Executive written notice that
the specified conduct has occurred and making specific reference to this Section
4.3(i) and the Executive fails to cure the conduct within thirty (30) days after
receipt of such notice; (ii) material breach by the Executive of any of his
obligations under Section 5 hereof; (iii) any willful and intentional acts of
the Executive involving fraud, theft, misappropriation of funds, embezzlement or
material dishonesty affecting the Company or willful misconduct by the Executive
which has, or could reasonably be expected to have, a material adverse effect on
the Company; or (iv) the Executive's conviction of, or plea of guilty or nolo
contendre to, an offense which is a felony in the jurisdiction involved.
4.4 Permitted Termination by the Executive. (a) The Term may
be terminated by the Executive upon notice to the Company of any event
constituting "Good Reason" as defined herein. As used herein, the term "Good
Reason" means the occurrence of any of the following, without the prior written
consent of the Executive: (i) assignment of the Executive to duties materially
inconsistent with the Executive's positions as described in Section 1.1 hereof,
or any significant diminution in the Executive's duties or responsibilities,
other than in connection with the termination of the Executive's employment for
Cause or disability or by the Executive other than for Good Reason; (ii) any
material breach of this Agreement by the Company which is continuing; or (iii) a
change in the location of the Executive's principal place of employment to a
location other than as specified in Section 1.3 hereof; provided, however, that
the Executive
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shall not be deemed to have Good Reason pursuant to clauses (i) and (ii) above
unless the Executive gives the Company written notice that the specified conduct
or event has occurred and making specific reference to this Section 4.4 and the
Company fails to cure such conduct or event within thirty (30) days of receipt
of such notice.
(b) The Term may be terminated by the Executive at any time by
giving the Company a notice of termination specifying a termination date no less
than sixty (60) days after the date the notice is given.
4.5 Severance. (a) If the Term is terminated pursuant to
Section 4.1, 4.2 or 4.3 hereof, or by the Executive other than pursuant to
Section 4.4(a), the Executive shall be entitled to receive his Base Salary,
benefits and reimbursements provided hereunder at the rates provided in Sections
3.1, 3.5 and 3.6 hereof to the date on which such termination shall take effect.
In addition, if the Term is terminated pursuant to Section 4.1 or 4.2, the
Executive shall also be entitled to receive any bonus which has been awarded
under Section 3.2(a) in respect of a previously completed fiscal year but which
has not yet been paid and a pro rata portion (based on time) of the annual bonus
for the year in which the termination date occurs (a "Pro Rata Bonus"). The Pro
Rata Bonus to which the Executive is entitled, if any, for each year other than
2003 shall be determined by reference to the attainment of the performance goals
referred to in Section 3.2 as of the end of the fiscal year in which termination
of employment occurs and shall be paid when bonuses in respect of that year are
generally paid to the Company's other executives but in no event later than the
ninetieth day of the next fiscal year.
(b) Except as provided in Section 4.5(c), if the Term is
terminated by the Executive pursuant to clauses (i), (ii) or (iii) of Section
4.4(a) or by the Company other than pursuant to Section 4.1, 4.2 or 4.3, the
Company shall continue thereafter to provide the Executive (i) payments of Base
Salary in the manner and amounts specified in Section 3.1 until the twelve (12)
month anniversary of the date of termination, (ii) if termination occurs at any
time after a bonus has been awarded under Section 3.2(a) in respect of a
previously completed fiscal year and prior to the time that the bonus has been
paid, the amount of that bonus, (iii) a Pro Rata Bonus for the year in which
termination occurs, (iv) fringe benefits in the manner and amounts specified in
Section 3.5 until the earlier of the Expiration Date, the period ending on the
date the Executive begins work as an employee or consultant for any other entity
or twelve (12) months after the date of termination, and (v) upon the attainment
of the performance goals and the satisfaction of the conditions set forth in the
award letter referred to in Section 3.2(b), the bonuses contemplated by the
award letter shall be paid on the dates provided in the award letter. In
addition, all equity arrangements provided to the Executive hereunder or under
any employee benefit plan of the Company shall continue to vest for the period
specified in clause (iv) of this Section 4.5(b) (unless vesting is accelerated
upon the occurrence of a Third Party Change in Control as described in Section
4.5(d)) and shall remain exercisable for ninety days after the end of that
period, but in no event after the expiration of the original exercise term.
Bonuses payable pursuant to this Section 4.5(b), other than the Pro Rata Bonus,
shall be payable in the manner described in Section 3.2. The Pro Rata Bonus to
which the Executive is entitled, if any, shall be paid within the time period
provided in Section 4.5(a). The Executive shall have no duty or obligation to
mitigate the amounts or benefits required to be provided pursuant to this
Section 4.5(b), nor shall any such amounts or benefits be reduced or offset by
any other amounts to
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which Executive may become entitled; provided, that if the Executive becomes
employed by a new employer or self-employed prior to the earlier of the
Expiration Date or twelve (12) months after the date of termination, the Base
Salary payable to the Executive pursuant to this Section 4.5(b) shall be reduced
by an amount equal to the amount earned from such employment with respect to
that period (and the Executive shall be required to return to the Company,
without interest, any amount by which such payments pursuant to this Section
4.5(b) exceed the Base Salary to which the Executive is entitled after giving
effect to that reduction) and, if the Executive becomes eligible to receive
medical or other welfare benefits under another employer provided plan, the
corresponding medical and other welfare benefits provided under this Section
4.5(b) shall be terminated. As a condition to the Executive receiving the
payments under Section 4.5(b), the Executive agrees to permit verification of
his employment records and Federal income tax returns by an independent attorney
or accountant, selected by the Company but reasonably acceptable to the
Executive, who agrees to preserve the confidentiality of the information
disclosed by the Executive except to the extent required to permit the Company
to verify the amount received by Executive from other active employment.
(c) If the Term is terminated by the Executive pursuant to
Section 4.4(a), or by the Company other than pursuant to Section 4.1, 4.2 or
4.3, and, in any such event, the termination shall occur upon or within twelve
(12) months following the occurrence of a Third Party Change in Control (as
defined in Section 4.5(d)) or in contemplation of a Third Party Change in
Control, the Company shall thereafter provide the Executive (i) an amount equal
to two (2) times the sum of (x) the then current Base Salary and (y) the average
of the two most recent annual bonuses paid (treating any annual bonus which is
not paid as a result of the Executive's failure to attain the Bonus Performance
Goals as having been paid in an amount equal to zero) to the Executive during
the Term (or if only one annual bonus has been paid, the amount of that annual
bonus, to be paid in a lump sum within 30 days after the date of termination),
and (ii) benefits in the manner and amounts specified in Section 3.5 until
twelve (12) months after the date of termination or, with respect to medical and
other welfare benefits, when the Executive becomes eligible to receive medical
or other welfare benefits under another employer provided plan if sooner than
twelve (12) months after the date of termination. In addition, all equity
arrangements provided to the Executive hereunder or under any employee benefit
plan of the Company shall continue to vest until twelve (12) months after the
date of termination unless vesting is accelerated upon the occurrence of the
Third Party Change in Control as described in subparagraph (d) below.
(d) For purposes of this Agreement, a Third Party Change in
Control shall be deemed to have occurred if (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), other than an Excluded Person or
Excluded Group (as defined below) (hereinafter, a "Third Party"), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote in the election of directors of the
Company, (ii) the Company is a party to any merger, consolidation or similar
transaction as a result of which the stockholders of the Company immediately
prior to such transaction beneficially own securities of the surviving entity
representing less than fifty percent (50%) of the combined voting power of the
surviving entity's outstanding securities
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entitled to vote in the election of directors of the surviving entity or (iii)
all or substantially all of the assets of the Company are acquired by a Third
Party. "Excluded Group" means a "group" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) that includes one or more Excluded Persons;
provided that the voting power of the voting stock of the Company "beneficially
owned" (as such term is used in Rule 13d-3 promulgated under the Exchange Act)
by such Excluded Persons (without attribution to such Excluded Persons of the
ownership by other members of the "group") represents a majority of the voting
power of the voting stock "beneficially owned" (as such term is used in Rule
13d-3 promulgated under the Exchange Act) by such group. "Excluded Person" means
Xxxxx Xxxxxxxxxx and Xxx Xxxx or any of their affiliates.
(e) (i) If any payment or benefit (within the meaning of
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the
"Code")), to the Executive or for the Executive's benefit paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise in connection with, or arising out of, the Executive's employment with
the Company or a change in ownership or effective control of the Company or of a
substantial portion of its assets (a "Parachute Payment" or "Parachute
Payments"), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), then the
Executive will be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties, other than interest and penalties imposed
by reason of the Executive's failure to file timely a tax return or pay taxes
shown to be due on the Executive's return), including any Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Parachute Payments.
(ii) An initial determination as to whether a Gross-Up
Payment is required pursuant to this Agreement and the amount of such Gross-Up
Payment shall be made at the Company's expense by the Company's regular outside
auditors (the "Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed supporting
calculations and documentation to the Company and the Executive within ten days
of the Termination Date if applicable, or promptly upon request by the Company
or by the Executive (provided the Executive reasonably believes that any of the
Parachute Payments may be subject to the Excise Tax) and if the Accounting Firm
determines that no Excise Tax is payable by the Executive with respect to a
Parachute Payment or Parachute Payments, it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise Tax will be
imposed with respect to any such Parachute Payment or Parachute Payments. Within
ten days of the delivery of the Determination to the Executive, the Executive
shall have the right to dispute the Determination (the "Dispute"). The Gross-Up
Payment, if any, as determined pursuant to this Section 4.5(e)(ii) shall be paid
by the Company to the Executive within ten days of the receipt of the accounting
Firm's determination notwithstanding the existence of any Dispute. If there is
no Dispute, the Determination shall be binding, final and conclusive upon the
Company and the Executive subject to the application of Section 4.5(e)(iii)
below. The Company and the Executive shall resolve any Dispute in accordance
with the terms of this Agreement.
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(iii) As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, the parties acknowledge that
it is possible that a Gross-Up Payment (or a portion thereof) will be paid which
should not have been paid (an "Excess Payment") or a Gross-Up Payment (or a
portion thereof) which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred (i) upon
notice (formal or informal) to the Executive from any governmental taxing
authority that the Executive's tax liability (whether in respect of the
Executive's current taxable year or in respect of any prior taxable year) may be
increased by reason of the imposition of the Excise Tax on a Parachute Payment
or Parachute Payments with respect to which the Company has failed to make a
sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by
reason of determination by the Company (which shall include the position taken
by the Company, together with its consolidated group, on its federal income tax
return) or (iv) upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing authority has
requested payment, pay to the Executive an additional Gross-Up Payment equal to
the amount of the Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's failure to file
timely a tax return or pay taxes shown to be due on the Executive's return)
imposed on the Underpayment. An Excess Payment shall be deemed to have occurred
upon a "Final Determination" (as hereinafter defined) that the Excise Tax shall
not be imposed upon a Parachute Payment or Parachute Payments (or portion
thereof) with respect to which the Executive had previously received a Gross-Up
Payment. A "Final Determination" shall be deemed to have occurred when the
Executive has received from the applicable government taxing authority a refund
of taxes or other reduction in the Executive's tax liability by reason of the
Excise Payment and upon either (x) the date a determination is made by, or an
agreement is entered into with, the applicable governmental taxing authority
which finally and conclusively binds the Executive and such taxing authority, or
in the event that a claim is brought before a court of competent jurisdiction,
the date upon which a final determination has been made by such court and either
all appeals have been taken and finally resolved or the time for all appeals has
expired or (y) the statute of limitations with respect to the Executive's
applicable tax return has expired. If an Excess Payment is determined to have
been made, the amount of the Excess Payment shall be treated as a loan by the
Company to the Executive and the Executive shall pay to the Company on demand
(but not less than 10 days after the determination of such Excess Payment and
written notice has been delivered to the Executive) the amount of the Excess
Payment plus interest at an annual rate equal to the Applicable Federal Rate
provided for in Section 1274(d) of the Code from the date the Gross-Up Payment
(to which the Excess Payment relates) was paid to the Executive until the date
of repayment to the Company.
(iv) Notwithstanding anything contained in this
Agreement to the contrary, in the event that, according to the Determination, an
Excise Tax will be imposed on any Parachute Payment or Parachute Payments, the
Company shall pay to the applicable government taxing authorities as Excise Tax
withholding, the amount of the Excise Tax that the Company has actually withheld
from the Parachute Payment or Parachute Payments or the Gross Up Payment.
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(f) Except as provided in this Section 4.5, pursuant to the
Marvel Enterprises, Inc. Stock Incentive Plan as provided in Schedule I to this
Agreement and as required by law, the Company shall have no further obligation
to the Executive after termination of the Term.
5. Protection of Confidential Information; Non-Competition
5.1 In view of the fact that the Executive's work for the
Company will bring the Executive into close contact with many confidential
affairs of the Company not readily available to the public, as well as plans for
future developments by the Company, the Executive agrees:
5.1.1 To keep and retain in the strictest confidence
all confidential matters of the Company, including, without limitation, "know
how", trade secrets, customer lists, pricing policies, operational methods,
technical processes, formulae, inventions and research projects, and other
business affairs of the Company ("Confidential Information"), learned by the
Executive heretofore or hereafter, and not to use or disclose them to anyone
outside of the Company, either during or after the Executive's employment with
the Company, except in the course of performing the Executive's duties hereunder
or with the Company's express written consent; provided, however, that the
restrictions of this Section 5.1.1 shall not apply to that part of the
Confidential Information that the Executive demonstrates is or becomes generally
available to the public other than as a result of a disclosure by the Executive
or is available, or becomes available, to the Executive on a non-confidential
basis, but only if the source of such information is not known by the Executive
to be prohibited from transmitting the information to the Executive by a
contractual, legal, fiduciary, or other obligation; and
5.1.2 To deliver promptly to the Company on
termination of the Executive's employment by the Company, or at any time the
Company may so request, all memoranda, notes, records, reports, manuals,
drawings, blueprints and other documents (and all copies thereof) relating to
the Company's business and all property associated therewith, which the
Executive may then possess or have under the Executive's control.
5.2 For a period of one (1) year after he ceases to be
employed by the Company under this Agreement or otherwise, if such cessation
arises pursuant to Section 4.3, or as a result of termination by the Executive
which is not pursuant to Section 4.4(a), the Executive shall not, directly or
indirectly, enter the employ of, or render any services to, any comic-book
company (including but not limited to DC Comics) and the Executive shall not
provide services to any person or entity in connection with entertainment
projects based on comic-book or other fantasy characters; the Executive shall
not engage in such business on the Executive's own account; and the Executive
shall not become interested in any such business, directly or indirectly, as an
individual, partner, shareholder, director, officer, principal, agent, employee,
trustee, consultant, or in any other relationship or capacity; provided,
however, that nothing contained in this Section 5.2 shall be deemed to prohibit
the Executive from acquiring, solely as an investment, up to five percent (5%)
of the outstanding shares of capital stock of any corporation whose stock is
publicly traded.
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5.3 If the Executive commits a breach, or threatens to commit
a breach, of any of the provisions of Section 5.1 or Section 5.2 hereof, the
Company shall have the following rights and remedies:
5.3.1 The right and remedy to seek to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction, as any such breach or threatened breach may cause irreparable
injury to the Company and money damages will not provide an adequate remedy to
the Company; and
5.3.2 The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively "Benefits") derived or
received by the Executive as the result of any transactions constituting a
material breach of any of the provisions of Section 5.2 hereof, and the
Executive hereby agrees to account for and pay over such Benefits to the
Company. Each of the rights and remedies enumerated above shall be independent
of the other, and shall be severally enforceable, and all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
5.4 If any of the covenants contained in Section 5.1 or
Section 5.2 hereof, or any part thereof, hereafter are construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.
5.5 If any of the covenants contained in Sections 5.1 or 5.2
hereof, or any part thereof, are held to be unenforceable because of the
duration of such provision or the area covered thereby, the parties hereto agree
that the court making such determination shall have the power to reduce the
duration and/or area of such provision and, in its reduced form, said provision
shall then be enforceable.
5.6 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1 and 5.2 hereof
upon the courts of New York State and of any other state within the geographical
scope of such covenants where the Executive maintains his principal office at
the time of enforcement. In the event that the courts of either such state shall
hold such covenants wholly unenforceable by reason of the breadth of such
covenants or otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the Company's right to the relief
provided above in the courts of the other such state as to breaches of such
covenants in such other state , the above covenants as they relate to each state
being for this purpose severable into diverse and independent covenants.
5.7 In the event that any action, suit or other proceeding in
law or in equity is brought to enforce the covenants contained in Section 5.1 or
Section 5.2 hereof or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses
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(including reasonable attorneys' fees) of the Executive in such action, suit or
other proceeding shall (on demand of the Executive) be paid by the Company.
6. Prior Restrictions; Promise Not to Solicit.
(a) The Executive represents that he is free to enter into
this Agreement is not restricted in any manner from performing under this
Agreement by any prior agreement, commitment, or understanding with any third
party. If Executive has acquired confidential or proprietary information in the
course of his prior employment or as a consultant, he will fully comply with any
duties not to disclose such information then applicable to him during the Term.
(b) Unless otherwise agreed by the Company, the Executive will
not, during the Term and for a period of one year from the last payment to
Executive hereunder, induce or attempt to induce any employee of the Company or
its subsidiaries to stop working for the Company or its subsidiaries or to work
for any competitor of the Company or its subsidiaries.
7. Inventions and Patents; Intellectual Property.
(a) The Executive agrees that all processes, technologies and
inventions, including new contributions, improvements, ideas and discoveries,
whether patentable or not, conceived, developed, invented or made by him during
his employment by the Company or for one year thereafter (collectively,
"Inventions") shall belong to the Company, provided that such Inventions grew
out of the Executive's work with the Company or any of its subsidiaries or
affiliates, are related to the business (commercial or experimental) of the
Company or any of its subsidiaries or affiliates or are conceived or made on the
Company's time or with the use of the Company's facilities or materials. The
Executive shall promptly disclose such Inventions to the Company and shall,
subject to reimbursement by the Company for all reasonable expenses incurred by
the Executive in connection therewith, (a) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (b) sign all papers necessary to carry out
the foregoing; and (c) give testimony in support of the Executive's
inventorship.
(b) The Company shall be the sole owner of all the products
and proceeds of the Executive's services hereunder, including, but not limited
to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Executive may acquire, obtain, develop or create in connection with and during
his employment, free and clear of any claims by the Executive (or anyone
claiming under the Executive) of any kind or character whatsoever (other than
the Executive's right to receive payments hereunder). The Executive shall, at
the request of the Company, execute such assignments, certificates or other
instruments as the Company may from time to time deem necessary or desirable to
evidence, establish, maintain, perfect, protect, enforce or defend its right,
title or interest in or to any such properties.
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8. Indemnification.
To the fullest extent permitted by applicable law, Executive
shall be indemnified and held harmless for any action or failure to act in his
capacity as an officer or employee of the Company or any of its affiliates or
subsidiaries. In furtherance of the foregoing and not by way of limitation, if
Executive is a party or is threatened to be made a party to any suit because he
is an officer or employee of the Company or such affiliate or subsidiary, he
shall be indemnified against expenses, including reasonable attorney's fees,
judgments, fines and amounts paid in settlement if he acted in good faith and in
a manner reasonably believed to be in or not opposed to the best interest of the
Company, and with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful. Indemnification under this
Section 8 shall be in addition to any other indemnification by the Company of
its officers and directors. Expenses incurred by Executive in defending an
action, suit or proceeding for which he claims the right to be indemnified
pursuant to this Section 8 shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of Executive to repay such amount in the event that it shall
ultimately be determined that he is not entitled to indemnification by the
Company. Such undertaking shall be accepted without reference to the financial
ability of Executive to make repayment. The provisions of this Section 8 shall
apply as well to the Executive's actions and omissions as a trustee of any
employee benefit plan of the Company, its affiliates or subsidiaries.
9. Arbitration; Legal Fees
Except with respect to injunctive relief under Section 5 of
this Agreement, any dispute or controversy arising out of or relating to this
Agreement shall be resolved exclusively by arbitration in New York City in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. Judgment on the award may be entered in any court
having jurisdiction thereof. The Company shall reimburse the Executive's
reasonable costs and expenses incurred in connection with any arbitration
proceeding pursuant to this Section 9 if the Executive is the substantially
prevailing party in that proceeding.
10. Notices.
All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, sent by overnight
courier or mailed first class, postage prepaid, by registered or certified mail
(notices mailed shall be deemed to have been given on the date mailed), as
follows (or to such other address as either party shall designate by notice in
writing to the other in accordance herewith):
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If to the Company, to:
Marvel Enterprises, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive, to:
Xxxxx Xxxxxx
0000 Xxxxxxx Xxxxxxxxx, Xxx 000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000
11. General.
11.1 This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in New York, without regard to the
conflict of law principles of such state.
11.2 The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
11.3 This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth. This Agreement expressly supersedes all
agreements and understandings between the parties regarding the subject matter
hereof and any such agreement is terminated as of the date first above written.
11.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder (i) to any affiliate
(provided, that the Company shall not be relieved thereby of any of its
obligations hereunder) or (ii) to third parties in connection with any sale,
transfer or other disposition of all or substantially all of its business or
assets; in any event the obligations of the Company hereunder shall be binding
on its successors or assigns, whether by merger, consolidation or acquisition of
all or substantially all of its business or assets.
11.5 This Agreement may be amended, modified, superseded,
canceled, renewed or extended and the terms or covenants hereof may be waived,
only by a written instrument executed by both of the parties hereto, or in the
case of a waiver, by the party waiving compliance. The failure of either party
at any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by either
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
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construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
11.6 This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
12. Subsidiaries and Affiliates.
As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
Company or other business entity in question, and the term "affiliate" shall
mean and include any corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the Company or other
business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY:
MARVEL ENTERPRISES, INC. EXECUTIVE:
By: /s/ Xxxx Xxxxxxxx /s/ Xxxxx Xxxxxx
------------------------- -----------------------
Xxxx Xxxxxxxx Xxxxx Xxxxxx
Executive Vice President
SCHEDULE I
Additional Benefits:
1. Automobile Allowance. The Executive shall be eligible for an automobile
allowance in the amount of $1,100 per month in accordance with the Company's
policy.
2. Stock Incentive Plan.
The Executive shall be eligible to participate in the Company's 1998
Stock Incentive Plan or its successor (the "Stock Incentive Plan"). The
Executive's participation in the Stock Incentive Plan shall not be, or be deemed
to be, a fringe benefit or additional benefit for purposes of Section 4.5(b)(iv)
of this Agreement, and the Executive's rights in connection with any grant under
the Stock Incentive Plan shall be governed strictly in accordance with the Stock
Incentive Plan and the related agreement memorializing the grant.
(a) The Executive has already been made entitled to receive options to
purchase 375,000 shares (as adjusted for the Company's 2004 stock split) of the
common stock, par value $.01 per share of the Company ("Common Stock"). Those
options have already vested with respect to 20% of the underlying stock. The
vesting of those stock options shall, as of the date hereof, be revised to be as
follows: All of the options shall vest as to 33.3% of the underlying stock on
each of December 11, 2004, December 11, 2005 and December 11, 2006, including a
retroactive vesting, to take place one week after the execution hereof, as to
13.3% of the underlying stock. In addition, in the event that Executive has been
terminated other than pursuant to Section 4.1, 4.2 or 4.3 or Executive has ended
his employment pursuant to Section 4.4(a)), on the last business day immediately
prior to the twelve (12) month anniversary of the date of termination, the
Executive shall vest in a number of stock options (rounded to the nearest whole
share) equal to the total number of stock options scheduled to vest on December
11, 2006 multiplied by a fraction the numerator of which is the number of days
elapsed between December 11, 2005 and that last business day (up to a maximum of
365) and the denominator of which is 365 and such options shall be exercisable
for a period of 90 days thereafter.
(b) The Executive has already been made entitled to receive
150,000 shares (as adjusted for the Company's 2004 stock split) of Common Stock.
None of those shares of restricted stock have yet vested. The vesting of those
shares of restricted stock shall, as of the date hereof, be revised to be as
follows: 33.3% of the shares shall vest on each of January 12, 2005, January 12,
2006 and January 12, 2007, including a retroactive vesting, to take place one
week after the execution hereof, as to 33.3% of the shares. In addition, in the
event that Executive has been terminated other than pursuant to Section 4.1, 4.2
or 4.3 or Executive has ended his employment pursuant to Section 4.4(a)) on the
last business day immediately prior to the twelve (12) month anniversary of the
date of termination, the Executive shall vest in a number of shares of
restricted stock (rounded to the nearest whole share) equal to the total number
of shares of restricted stock scheduled to vest on January 12, 2007 multiplied
by a
fraction the numerator of which is the number of days elapsed between January
12, 2005 and that last business day (up to a maximum of 365) and the denominator
of which is 365.
3. Directors and Officers Insurance. In the event that the Executive
serves as an officer or director of the Company or any subsidiary or affiliate
of the Company in accordance with Section 1.2 hereof, the Executive shall be
covered by the Company's directors' and officers' insurance policy(ies) in place
at the time.
