EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of March 1, 1999, between Marvel
Enterprises, Inc., a Delaware corporation (the "Company") and Xxxx Fine (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 and Chief Executive Officer of the
Company's Toy Biz Division or in such other executive position as may be
mutually agreed upon by the Company and the Executive. The Executive shall
report solely to the Company's Chief Executive Officer and Board of Directors
and shall perform such other duties consistent with such positions 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, 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 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 principal executive office of the
Company in New York City, subject to reasonable and customary travel
requirements on behalf of the Company.
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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 on March 1, 1999 and shall end on March 1,
2001 (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 hereto provides the
other party 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, and
the Expiration Date shall thereafter be automatically postponed for one
additional year and the Term shall thereafter be automatically extended by one
additional year, on each subsequent anniversary of the date of this Agreement,
unless either party provides the other party with written notice, not later than
sixty (60) days prior to such subsequent anniversary of the date of this
Agreement, of its election not to permit the Term to be so extended.
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
$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 "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 eligible to receive a
bonus (the "Bonus") with respect to each fiscal year of the Term based upon the
attainment of performance goals set by the Board. The Bonus shall be paid
one-half in cash and one-half in common stock of the Company valued at the
average of the average daily high and low sale prices (or of the closing bid and
asked price if high and low sale prices are not published) for such stock as
quoted on the principal securities exchange on which such stock is listed for
trading for the last twenty trading days of the fiscal year for which the Bonus
is awarded. The issuance of any shares of Common Stock of the Company to the
Executive pursuant to this Section 3.2 shall be registered under the Securities
Act of 1933, as amended (the "Securities Act").
3.3 Business Expenses. The Company shall pay for or reimburse the
Executive for all reasonable first-class travel and other expenses actually
incurred by or paid by the Executive during the Term in the performance of the
Executive's services under this Agreement, including the cost and expense
associated with the use (including related personal use) of a cellular
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telephone, 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 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, group insurance or other so-called "fringe"
benefit plan which the Company provides to its executive 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 six 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 six 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) breach by the
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Executive of any of his obligations under Section 5 hereof; (iii) any willful
and intentional acts of the Executive involving malfeasance, fraud, theft,
misappropriation of funds, embezzlement or material dishonesty affecting 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 Good Reason. 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 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 the Company fails to cure such conduct or event within thirty
(30) days of receipt of such notice.
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,
the Executive shall be entitled to receive his Base Salary, Bonus and any
additional benefits provided hereunder at the rates provided in Sections 3.1 and
3.6 hereof to the date on which such termination shall take effect.
(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 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 first
anniversary of the date of termination, (ii) if termination occurs at any time
after a Bonus has been awarded under Section 3.2 and prior to the time that the
Bonus has been paid, the amount of that Bonus, (iii) a pro rata portion (based
on time) of the Bonus for the current fiscal year determined in the manner
described in Section 4.5(f) (a "Pro Rata Bonus") and (iv) fringe benefits in the
manner and amounts specified in Section 3.5 until the earlier of the first
anniversary of the date of termination or the date the Executive begins work as
an employee or consultant for any
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other entity. In addition, all equity arrangements provided to the Executive
hereunder or under any employee benefit plan of the Company shall continue to
vest in accordance with the terms of those plans until the earlier of the first
anniversary of the date of termination or the date Executive begins work as an
employee or consultant for any other entity. The Pro Rata Bonus to which the
Executive is entitled, if any, pursuant to this Section 4.5(b) 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. One-half of Pro Rata Bonus, if
any, shall be paid in common stock of the Company and one-half in cash as
provided in Section 3.2. 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 twelve
(12) months after the date of termination, up to one-half of 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 this
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, or by the Company other than pursuant to Section 4.1, 4.2 or 4.3, and 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
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
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been paid, the amount of that annual Bonus, and if that termination occurs prior
to the time at which the Bonus for 1999 is paid, $500,000), to be paid in a lump
sum within 30 days after the date of termination, and (ii) fringe 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 Xxxxx Manhattan Bank, Xxxxxx Xxxxxxx & Co. Incorporated,
Whippoorwill Associates Incorporated and various other stockholders of the
Company, as that agreement may be
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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.
(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
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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
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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.
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 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,
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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:
5.3.1 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
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 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
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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 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
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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
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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):
If to the Company, to:
Marvel Enterprises, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
If to the Executive, to:
Xxxx Fine
000 Xxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 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
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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.
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,
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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.
By:/s/ XXXXXXX X. XXXXXX
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: EVP
EXECUTIVE:
/s/ XXXX FINE
---------------------------
Xxxx Fine
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SCHEDULE I
Additional Benefits:
1. Automobile Allowance. The Executive shall be eligible for an
automobile allowance in the amount of $1,000 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 an additional grant of 200,000 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 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.
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