EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of October 15, 2003, between Marvel
Enterprises, Inc., a Delaware corporation (the "Company") and Xxxxx Xxxxxxxx
(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 exclusive and full-time services to
the Company as President, International 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 Board of Directors
(except with respect to licensing, where the Executive shall report to the
Company's President, Consumer Products Group and the Board of Directors) and
shall perform such other duties consistent with such positions as may be
reasonably assigned to the Executive by the Company's Chief Executive Officer or
the Board of Directors. The Executive will be responsible for all of the
Company's activities and operations in European markets and in such other
international markets as the Company's Chief Executive Officer or the Board of
Directors may designate. The Company intends to establish a company in the
United Kingdom, and the Executive will be a member of the Board of Directors of
that 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 London, England, subject
to reasonable travel requirements on behalf of the Company.
1.4 Hours. The Executive's business hours shall be the hours between 9:00
a.m. and 5:30 p.m., Monday to Friday (excluding bank and other public holidays
in England), and such further time as shall be necessary for the proper
performance by the Executive of his duties under this Agreement. The Executive
acknowledges and agrees that he is exempt from the Working Time Regulations 1998
on account of his duties and powers.
1.5 Disciplinary Procedures. There are no formal disciplinary
rules specific to the Executive's employment. If the Executive is dissatisfied
with any disciplinary decision or if he has any grievance relating to his
employment he should submit a written memorandum giving particulars of such
dissatisfaction or grievance to the Company's Board of Directors and the matter
shall be dealt with by discussion and a majority decision of the directors
present at the next convened meeting of the Board of Directors.
1.5 Particulars of Employment. This Agreement contains the particulars
required to be given under Section 1 of the U.K. Employment Rights Act 1996
("ERA") to the intent that, as at the date of this Agreement, the Company shall
not be required to deliver to the Executive a separate written statement
pursuant to Section 1 of the ERA.
2. Term of Employment
2.1 The Term. The Executive will commence employment under this Agreement
as soon as he is legally free to do so (the first date of such employment being
the "Effective Date"); provided, that (i) the Executive shall use all reasonable
efforts to become legally free to commence employment as soon as possible, and
(ii) if, on May 1, 2004, the Executive has not yet commenced employment under
this Agreement, then this Agreement shall immediately, automatically terminate
and neither party shall have any further responsibility to the other hereunder.
The term of the Executive's employment under this Agreement (the "Term") shall
end on the date that is two years after the Effective Date (the "Expiration
Date"). The Term shall end earlier than the Expiration Date if sooner terminated
pursuant to Section 4 hereof. The Expiration Date shall be automatically
postponed for one year, and the Term shall be automatically extended by one
year, unless either party provides the other with written notice, not later than
sixty (60) days prior to the Expiration Date, of its election not to permit the
Term to be so extended. Thereafter, on each subsequent anniversary of the
Effective Date, the Expiration Date shall be automatically postponed for one
additional year, and the Term shall be automatically extended by one additional
year, unless either party provides the other with written notice, not later than
sixty (60) days prior to such anniversary, of its election not to permit the
Term to be so extended.
2.2 The Executive's period of continuous employment with the Company shall
be deemed to have commenced on the Effective Date.
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 three hundred
seventy thousand dollars ($370,000) less such deductions or amounts to be
withheld as required by applicable law and regulations and deductions authorized
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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. Any increase shall take effect on
January 1 of the year in question, the first increase to take effect on January
1, 2005. The Executive's base salary as in effect from time to time is referred
to in this Agreement as the "Base Salary". The Base Salary, and all other cash
payments by Company hereunder, shall be made to Executive in United States
Dollars unless the Executive notifies the Company, at least one week before any
given payment, that he wishes for that payment to be in pounds sterling. Any
payment in pounds sterling shall be made at the interbank conversion rate from
United States Dollars used by the Company's bank on the date of payment, free of
any and all charges.
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 calendar year 2003 and thereafter based 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 for the year; provided that for calendar year 2003, Executive shall
receive the amount to which he may be entitled under the 2003 bonus program on
the assumption that he has been employed for the entire year or one hundred
eighty-five thousand dollars ($185,000), whichever is greater, but reduced, in
either case, by any amounts that the Executive receives from his current
employer as a 2003 bonus (the "2003 Bonus"). Each annual bonus, including the
2003 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.
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 five (5) 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, unless the Company
agrees otherwise.
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, together with
executive medical benefits for the Executive, as from time to time in effect for
executive employees of the Company generally. In the event of such benefits
being limited (by law or otherwise) to residents of the United States of
America, the Company shall provide Executive with comparable benefits. In any
event, specifically, during the Term:
(a) The Company will not provide any pension scheme or other pension
arrangements for the Executive. At the request of Executive, the Company, each
month, shall pay directly to a private pension scheme nominated by the Executive
a lump sum equivalent to ten percent (10%), or any lower percentage specified by
the Executive, of his then current monthly salary.
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(b) There is no contracting-out certificate in force under the
U.K.Pensions Xxxxxxx Xxx 0000 in respect of the Executive's employment with the
Company.
(c) Subject to the Executive complying with all terms and conditions
from time to time imposed by the medical insurance provider chosen by the
Company (as may be varied from time to time), the Company shall maintain at its
cost, private medical insurance at the London A scale (BUPA) arranged with such
insurance provider for the Executive and his wife and dependent children under
the age of 18. In lieu of the foregoing, the Executive may, at his option, be
reimbursed for his own provision of medical insurance provided that the Company
shall not be required to incur greater expense than had the Executive
participated in the Company's scheme.
(d) The Company shall provide the Executive with, or, at the
Executive's option, will reimburse the Executive for the cost of his directly
obtaining, permanent health insurance cover, which in the event of serious
illness, will provide the Executive, after six months' absence, with financial
support. The Company intends for this support to be in the range of 75% of the
Executive's Base Salary or at any other level typical of executives in London,
but cannot commit to the particulars of the terms before consulting with an
insurance provider.
(e) The Company shall provide the Executive with life assurance cover
of three times the Executive's Base Salary, subject to any customary terms
imposed by the insurance provider.
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.
3.7 Sick Pay. If the Executive is absent from work because of illness or
accident, the Company will pay to the Executive his Base Salary for up to an
aggregate of one hundred and eighty (180) working days in any period of twelve
(12) months. Any sums payable to the Executive under this Section shall be
inclusive of any Statutory Sick Pay payable.
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 six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any twelve (12) month period, the Company may at any time after
the last day of the six consecutive months of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of six (6) months,
by written notice to the Executive (but before the Executive has recovered from
such disability), terminate the Term.
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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 to, any
criminal offence other than a minor motoring offence.
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 position 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 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
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.
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(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 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 and Section 3.6 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. 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
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 produce such
documentation or evidence as the Company may reasonably request 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 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
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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 and Section 3.6
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 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, any spouse or any
lineal descendants of Messrs. Xxxxxxxxxx or Arad, and any trust established
solely for the benefit of, and any charitable trust or foundation established
by, Messrs. Xxxxxxxxxx or Arad or their spouses or lineal descendants and each
of their respective affiliates.
(e) 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:
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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 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 six (6) months 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) 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 that is
both (i) competitive with the business of the Company or any of its subsidiaries
or affiliates and (ii) a business with which the Executive was materially
involved in the twelve (12) months before the cessation of the Executive's
employment hereunder; 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. In the event
that, after the six-month period described in the foregoing sentence, the
Executive engages in any of the activities prohibited during such period by such
sentence, all obligations of the Company to the Executive under Section 4.5
hereof shall immediately and automatically cease.
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 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.
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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 the
United Kingdom or any other state or country where the Executive resides or
where the breach of the covenant is occurring. In the event that the courts of
any one or more of such jurisdictions 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 jurisdiction 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 jurisdiction being for this purpose severable
into diverse and independent covenants.
5.7 In the event that any action, suit or other proceeding for injunctive
relief is brought to enforce the covenants contained in Section 5.1 or Section
5.2 hereof, each party shall pay all of its own expenses (including attorneys'
fees) in such action, suit or other proceeding, notwithstanding any prevailing
practice to the contrary in the jurisdiction in question.
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.
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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.
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 by Executive 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.
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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 (including legal costs, travel costs to New York City, and
accommodation costs in New York City) 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, Xxx Xxxx 00000
XXX
Attention: President
If to the Executive, to:
Xxxxx Xxxxxxxx
00 Xxxxxx Xxxxx
0 Xxxxx Xxxxxx
Xxxxxx X0 0XX
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, U.S.A. applicable to
agreements made and to be performed entirely in New York, without regard to the
conflict of law principles of such state.
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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.
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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPANY:
MARVEL ENTERPRISES, INC. EXECUTIVE:
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxx Xxxxxxxx
-------------------------- --------------------------
Xxxxx X. Xxxxxx Xxxxx Xxxxxxxx
President and Chief Executive Officer
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SCHEDULE I
Additional Benefits:
1. Legal Fee Reimbursement. The costs incurred by Executive, prior to the
execution of this Agreement, for review and negotiation of this Agreement
by Executive's lawyer shall be reimbursed by Company up to a maximum of six
thousand two hundred and fifty dollars $6,250.
2. Automobile Allowance. The Executive shall be eligible for an automobile
allowance in the amount of $1,200 per month, paid monthly, in accordance
with the Company's policy.
3. Stock Incentive Plan. The Executive shall be eligible to participate in the
Marvel Enterprises, Inc. 1998 Stock Incentive Plan (the "Stock Incentive
Plan") and to receive options to purchase one hundred twenty-five thousand
(125,000) shares (the "Shares") of the common stock, par value $.01 per
share ("Common Stock"), of the Company pursuant to the terms of the Stock
Incentive 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 Incentive Plan, and such other grants
as may be determined from time to time by such committee. The options for
125,000 shares shall be granted on the Effective Date and the exercise
price of the options shall be the Common Stock's Fair Market Value (as
defined in the Stock Incentive Plan) on such date. 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 Incentive Plan and
the related Stock Option Agreement between the Company and the Executive.
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 stock option
rights shall be governed strictly in accordance with the Stock Incentive
Plan and the related Stock Option Agreement. In the event of any conflict
between this Agreement and the Stock Incentive Plan and the related Stock
Option Agreement, or any ambiguity in any such agreements, the Stock
Incentive Plan and the related Stock Option Agreement shall control.
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