Exhibit 10.27
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 28, 2002 between Marvel Enterprises,
Inc., a Delaware corporation (the "Company") and Xxxxxxx X. Xxxx (the
"Executive").
WHEREAS, the Company wishes to employ the Executive, and the Executive
wishes to accept such employment, on the terms and conditions set forth in this
Agreement.
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 services to the Company as Executive Vice
President and Chief Financial Officer of the Company or in such other executive
position as may be mutually agreed upon by the Company and the Executive. The
Executive shall report to the Company's Chief Executive Officer and the Board of
Directors and shall perform such other duties consistent with such position as
may be assigned to the Executive by the Company's Chief Executive Officer or
Board of Directors.
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. The
Executive agrees to devote the Executive's entire business time, energy and
skill to the Executive's employment under this Agreement and to use the
Executive's professional efforts, skill and ability to promote the Company's
interests. The Executive 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 therefore other
than that specified in this Agreement, if elected to any such position by the
shareholders 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 New York City, subject to
reasonable and customary travel requirements on behalf of the Company.
2. Term of Employment
2.1. The Term. The term of the Executive's employment under this Agreement (the
"Term") shall commence on May 28, 2002 (the "Effective Date") and shall end on
the close of business on May 27, 2005 (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 $225,000 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 and
may be increased, but not decreased. 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. 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 in
respect of year 2002 and thereafter, based 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 for the
year; provided that for 2002, Executive shall receive $56,250 or the amount to
which he may be entitled under the 2002 bonus program, whichever is greater (the
"2002 Bonus"). Each annual bonus, including the 2002 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 fiscal year.
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. Vacation time may be accrued or
carried over from one year to the next in accordance with the vacation policy.
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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, group insurance or other so-called "fringe" benefit plan
which the Company provides to its employees generally, 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 three consecutive months or (ii) for shorter periods aggregating three months
during any twelve month period, the Company may at any time after the last day
of the third consecutive months of disability or the day on which the shorter
periods of disability shall have equaled an aggregate of three 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 gross
neglect 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 the
Executive's receipt of such notice; (ii) breach by the Executive of any of his
obligations under Section 5 hereof; (iii) any willful and intentional acts of
the Executive or 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;(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; or (iv) the distribution of financial statements
of the Company to any third party as to which (x) Executive has
informed the Chairman of the Board of Directors and/or the Chairman of
the Audit Committee of the Board that Executive objects to the
presentation of any material matter contained in such financial
statements on the basis that it does not adequately conform to
generally accepted accounting principals, (y) the independent auditors
agree with the Executive's position, and (z) the financial statements
failed to clearly disclose Executive's objections, including the
effect thereon if complied with Executive position or (v) the
occurrence of a Third Party Change in Control (as defined in Section
4.5(d)) provided, however, that the Executive 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 thirty (30) days after the date the notice is given.
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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 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 2002
shall be determined solely by reference to the attainment of the
established performance goals 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 for a period of 18 months from the date of termination, (ii) if
termination occurs at any time after a bonus has been awarded under
Section 3.2 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 and
(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 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 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. 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 within 30 days after
the date of termination. 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 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 18 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 Section this 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.
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(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 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 Schedule I.
(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 shareholders 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 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 (i) 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 or
(ii) exists solely by virtue of the fact that the members of such
group are parties to the Stockholders' Agreement, dated as of October
1, 1998, by and among the Company, Xxxxx Xxxxxxxxxx, Xxx Xxxx, Xxxx
Xxxxxxxxx, The Chase Manhattan Bank, Xxxxxx Xxxxxxx & Co.
Incorporated, Whippoorwill Associates Incorporated and various other
stockholders of the Company, as that agreement may be amended from
time to time (the "Stockholders Agreement"). "Excluded Person" means
(i) while the Stockholders Agreement is in effect in substantially its
current form, any person or entity who or which is a party to the
Stockholders Agreement as of the Effective Date and any affiliate of
such a party to the Stockholders Agreement who becomes a party to the
Stockholders Agreement, and (ii) 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.
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(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.
(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.
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(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.
(f) Except as provided in this Section 4.5, pursuant to the
Marvel Enterprises, Inc. Stock Option 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
0.0.Xx 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:
(a) 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 prohibited from transmitting the information to the Executive by a
contractual, legal, fiduciary, or other obligation; and
(b) 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 or is otherwise in breach of this Agreement, the Executive shall
not, directly or indirectly, enter the employ of, or render any services to, any
person, firm or corporation engaged in any business competitive with the
business of the Company or of any of its subsidiaries or affiliates; 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 public
corporation or during such one (1) year period, taking a position with a
business the main business of which is the sale of retail products to customers.
5.3 If the Executive commits a breach, or threatens to commit a breach, of any
of the provisions of Sections 5.1 or 5.2 hereof, the Company shall have the
following rights and remedies:
(a) The right and remedy to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company; and
(b) 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 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 Sections 5.1 or 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.
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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 any state
within the geographical scope of such covenants. In the event that the courts of
any one or more of such states 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 any other states
within the geographical scope of such covenants as to breaches of such covenants
in such other respective jurisdictions, 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 Sections 5.1 and 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 (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. Inventions and Patents.
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.
7. Intellectual Property.
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.
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.
7
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):
If to the Company, to:
Marvel Enterprises, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
With a copy to: Executive Vice President, Business & Legal Affairs
If to the Executive, to:
Xxxxxxx X. Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 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 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 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.
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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.
MARVEL ENTERPRISES, INC.
By:/s/-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
EXECUTIVE:
/s/--------------------------------
Xxxxxxx X. Xxxx
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SCHEDULE I
Additional Benefits:
1. Automobile Allowance. The Executive shall be eligible for an automobile
allowance in the amount of $1000 per month in accordance with the Company's
policy.
2. Stock Option Plan. The Executive shall be eligible to participate in the
Marvel Enterprises, Inc. Stock Option Plan (the "Stock Option Plan") and to
receive 150,000 options to purchase shares (the "Shares") of the common stock,
par value $.01 per share ("Common Stock"), of the Company pursuant to the terms
of the Marvel Enterprises, Inc. Stock Option Plan (the "Stock Option Plan") and
related Stock Option Agreement subject to the terms and conditions approved by
the committee of the Board of Directors of the Company which administers the
Stock Option Plan. The options shall be scheduled to vest as to one-third of the
Shares on each of the first, second and third anniversaries of the date they are
granted, shall vest as to all of the Shares upon a Third Party Change in Control
and shall be subject to all other terms and conditions of the Stock Option Plan
and the related Stock Option Agreement between the Company and the Executive.
The Executive's participation in the Stock Option 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 stock option rights shall be
governed strictly in accordance with the Stock Option Plan and the related Stock
Option Agreement. In the event of any conflict between this Agreement and the
Stock Option Plan and the related Stock Option Agreement, or any ambiguity in
any such agreements, the Stock Option Plan and the related Stock Option
Agreement shall control.
3. Reimbursement of Legal Fees. The Executive shall be reimbursed for his
reasonable legal fees and expenses incurred in connection with the review and
negotiation of this Agreement.
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