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Employment Agreement - Marvel Enterprises Inc. and Stan Lee

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                            MARVEL ENTERPRISES, INC.
                                685 THIRD AVENUE
                            NEW YORK, NEW YORK 10017

                                                        As of November 1, 1998
Mr. Stan Lee

                                                     Re: Employment Agreement

Dear Stan:

         Confirming  the  various   discussions  between  your  attorney  Arthur
Lieberman and Tuck Hardie of Marvel,  this letter when accepted and agreed to by
you  constitutes  an agreement  between you and Marvel  Enterprises,  Inc. ("the
Company"), the parent company of Marvel Characters, Inc. ("Marvel"), represented
by us to be the survivor after bankruptcy of Marvel Entertainment Group, Inc.

1.   You will serve as an employee of Company,  or one of its  affiliates as may
     be designated by the Company, based in Los Angeles for a term commencing as
     of the date  hereof and  terminating  on your death.  Notwithstanding  such
     death,  the  compensation  provided for in Section 4 hereof shall  continue
     until the last to occur of (i) your  death  (ii) the death of your  present
     wife,  Joan Lee  (provided  that she is still your wife upon your death) or
     (iii) five years  after the death of both you and Joan Lee,  provided  that
     your daughter Joan C. Lee survives both of you.

2.   Your services shall be non-exclusive but your work for Marvel shall be on a
     preferential basis. You shall not, however, be required to put in more time
     on  Marvel's  behalf than you have  averaged  in the last two years,  which
     shall be  approximately  10-15  hours per week.  Any time in excess of that
     shall be at your option but without additional  compensation.  It is agreed
     that you can engage in and be compensated for any activities  outside those
     performed  for  the  Company  or  Marvel  including   activities  that  are
     competitive  to those of the  company  or its  affiliates,  so long as that


     competition  does not  violate  any of the  intellectual  property or other
     rights of the Company or Marvel or result from the unauthorized  disclosure
     of the Company's  proprietary or  confidential  information,  if you are so
     advised of the proprietary or confidential  nature of such  information (at
     the time of disclosure) in writing. Your services to Marvel will consist of
     the  following:

     (a)  Serve generally as a spokesman for Marvel,  including  giving speeches
          and interviews and visiting  conventions on Marvel's behalf, as Marvel
          may from time to time reasonably request;

     (b)  Conferring  on a regular  basis with the  creative  staff at  Marvel's
          various  operations,  guiding  and  advising  the  editorial  and  art
          personnel and the like in existing Marvel characters; and

     (c)  Work with motion picture and television  producers and distributors to
          stimulate their licensing of Marvel characters and supervise movie and
          television  projects of Marvel  Characters  on Marvel's  behalf and be
          named executive producer or co-executive producer of such productions.

3.   You will  continue to serve as Publisher of Marvel Comics and your name and
     likeness shall be  non-exclusively  licensed to Marvel in the manner it has
     traditionally  appeared on Marvel Comics as more specifically  provided for
     in  paragraph 5 below.  At your  option,  Marvel shall name you as Chairman
     Emeritus  of the movie or  television  company  as listed in the  Hollywood
     Creative Directory and/or Publisher or Publisher Emeritus of Marvel Comics,
     a division of the Company.

4.   As compensation to you for your life  notwithstanding any disability,  Joan
     Lee, your current wife, and Joan C. Lee, your daughter,  the Company agrees



     to provide the  following  compensation:

     (a)  Base Salary

          (i)  from the date hereof,  through  October 31,  2002,  you are to be
               paid a base salary (the "Base Salary") of $810,000 per year;

          (ii) from  November 1, 2000  through  October 31, 2001 the Base Salary
               shall be $850,000;

          (iii)from November 1, 2001 through  October 31, 2002,  the Base Salary
               shall be $900,000; and

          (iv) from  November 1, 2002 until death the Base Salary  shall be $1.0
               million dollars.

     All  amounts of Base  Salary  shall be paid in  accordance  with  customary
payroll policy on a biweekly or semi-monthly basis. You may elect to have all or
any portion of the Base Salary  paid to S.L.  Productions  or any company you so
designate in lieu of making the payments to you individually.

     (b)  Survivor Payments

          (i)  Upon your death, your current wife Joan Lee (provided she is your
               wife at the time of your death) shall be entitled to receive, for
               the  balance  of her  life,  an  amount  equal to 50% of the Base
               Salary in effect on the date of your  death.  Such  amounts to be
               paid in accordance  with customary  payroll policy as provided in
               paragraph (a) above.

          (ii) Upon your death and Joan Lee's, Joan C. Lee, your daughter, shall
               be entitled to  receive,  for a period of five years,  the sum of
               $100,000  (payable in accordance  with  customary  Marvel payroll
               practices)  provided that Joan C. Lee does not predecease  either
               you or your wife Joan Lee. In such case,  no amounts would be due
               by the Company.



     (c)  Stock Options

                  (1)The Company agrees to issue to you, in accordance  with the
            Company's  1995 Stock Option Plan (the  "Plan"),  a total of 150,000
            options to  purchase  shares of the  Company's  common  stock.  Such
            options  shall be, if possible be within the employee  plan and are,
            granted as follows:  (I) 100,000 options shall be granted at a price
            equal to the market bid price as of the date of grant, such grant to
            be made as  promptly  as  practicable  following  execution  on this
            Letter Agreement,  but not later than November 20, 1998; (II) 25,000
            options shall be granted not later than the first anniversary of the
            execution  of this  Letter  Agreement  at a price  then equal to the
            market  bid price and (III)  25,000  options  shall be  granted at a
            price  then  equal to the market bid price not later than the second
            anniversary of the execution of this Letter  Agreement,  each of the
            above  options to vest in the year of granting and be for five years
            from date of issuance.

     (d)  Set-Off

                  If, after  November 1, 2002, you  personally  receive,  or any
         company wholly owned or wholly  controlled by you receives revenue from
         competing  business  activities,  then the Company shall be entitled to
         set-off  from the amounts due as Base Salary  hereunder an amount equal
         to 25% of such competing business revenue (before deduction of expenses
         and on a pre-tax  basis) to a maximum of $190,000 in any contract  year
         (i.e.,  November  1,  through  October  31).  You agree each year after
         November 1, 2002 to furnish a certified  accountant's  statement  (with
         appropriate  support) to the Company  detailing the computation of said
         Set-Off.  Where the maximum  set-off of  $190,000 is being  permitted a
         simple statement shall be sufficient.



     (e)  Expenses/Fringe Benefits

          (i)  You are to receive  prompt  reimbursement  for all  ordinary  and
               necessary  business  expenses  incurred by you in connection with
               your  activities  on behalf of the Company upon  presentation  of
               appropriate  documentation  (included  expenses  shall  be a cell
               phone) in accordance with Company  policy,  except that you shall
               be permitted your customary style of business travel (which shall
               be first class with limousine and stay in luxury hotels).

          (ii) You also  continue  to have  the  benefit  of a single  full-time
               assistant. (f) In addition, you shall be paid participation equal
               to 10%  of  the  profits  derived  during  your  life  by  Marvel
               (including  subsidiaries  and affiliates) from the profits of any
               live action or animation television or movie (including ancillary
               rights)   productions    utilizing   Marvel   characters.    This
               participation is not to be derived from the fee charged by Marvel
               for  the  licensing  of  the  product  or of the  characters  for
               merchandise or otherwise. Marvel will compute, account and pay to
               you your  participation  due, if any, on account of said profits,
               for the annual  period  ending each March 31 during your life, on
               an annual basis  within a  reasonable  time after the end of each
               such period.

     (g)  You will have the right to continue to author the syndicated newspaper
          comic  strip  "Spider  Man" and  receive  the same extra  compensation
          therefrom  that you have been  receiving,  to wit,  $125,000  annually
          pursuant to your  agreement  with Marvel.  All such comic strips shall
          continue to be published as is done in the current circumstances.

5.   Subject to paragraph 5(f) below, in express consideration for and expressly
     dependent  upon the faithful  performance  of the foregoing  obligations of
     Marvel, you, Stan Lee, residing at                                         
          , agree as follows:



     (a)  Except for your name, likeness and the integration of either your name
          or likeness with a specific  phrase,  such as "Stan's Soap Box", "Stan
          Lee  presents",  and  except  for the term  "Excelsior,"  (as to which
          Marvel shall have non-exclusive  rights of use, in accordance with the
          terms hereof, the "Non-Exclusive  Rights"),  you hereby assign, convey
          and grant (without representations or warranties of any kind except as
          set forth herein) to Marvel forever throughout the universe all right,
          title  and  interest  solely  and  exclusively  which  you may have or
          control or which you may have had or controlled in the following:  Any
          and all ideas, names, titles,  characters,  symbols,  logos,  designs,
          likenesses, visual representations,  artwork, stories, plots, scripts,
          comic books or comic  strips,  episodes,  literary  property,  and the
          conceptual  universe  related thereto which will or have been in whole
          or  in  part  disclosed  in  writing  to,   published,   merchandised,
          advertised,  and/or  licensed  by  Marvel,  its  affiliates  or  their
          predecessors  and  successors  in  interest  and  licensees  (which by
          agreement inures to Marvel's  benefit) or any of them (the "Property")
          and  any  copyrights,   trademarks,   statutory  rights,  common  law,
          goodwill, moral rights and any other rights whatsoever in the Property
          in any and all manner and media and/or fields, including all rights to
          renewal or extensions  of copyright or  trademarks  and to recover for
          past  infringement  and make  application or institute  suits therefor
          (the  "Rights").   With  respect  to  the  Non-Exclusive  Rights,  the
          foregoing  rights of Marvel shall extend solely to the uses heretofore
          utilized by Marvel;  changes thereto may be made with your permission.
          Such prior uses may continue in perpetuity. Specifically excepted from
          above, you have represented that you have been receiving  royalties on
          a  number  of  publications  to  Marvel's   knowledge   directly  from
          third-party  publishers.  Specifically  excepted from the above is the
          right during your life to continue receiving such royalties unimpeded.
          You have also represented  that Marvel has heretofore  assigned to you
          the character(s) The Femizons.  You may continue forever in perpetuity
          to so own and exploit the Femizons  character(s) for your own benefit.
          Notwithstanding  what is set forth  herein,  you may,  for  publicity,
          advertising, public relation, historical and any related purposes (but
          excluding  any  use  coupled  o  commercial  usage)  refer  to or hold
          yourself  out as founder  and/or  creator of whatever  characters  and
          images you created or founded on behalf of Marvel,  provided such uses
          do not confuse ownership or source of origin.  Such image uses may not
          be story-related, must be substantially identical to prior Marvel uses
          and must give full  attribution  of trademark  and copyright to Marvel
          and the use of he images must be substantially minor in context.



     (b)  You hereby  warrant that you have not assigned,  licensed,  pledged or
          otherwise hypothecated, nor attempted to do so any of the Property and
          Rights to anyone other than Marvel,  its  affiliates,  predecessors or
          their designees and will not do so in the future.

     (c)  Subject to a material  breach of this  agreement,  you hereby agree to
          execute upon request.  from Marvel any  documents it deems  reasonably
          necessary to effect the purposes of this assignment.

     (d)  Subject to a material  breach of this  agreement,  you will never file
          with the U.S. Copyright Office or the U.S. Patent and Trademark Office
          or any  governmental or public agency  throughout the world,  and will
          never  assert or assist on your  behalf or  cooperate  with  others in
          asserting on your behalf or in claiming  rights through you, any claim
          to  ownership  (except to  Non-Exclusive  Rights,  subject to Marvel's
          license) of the Rights in the Property,  or in making any objection to
          Marvel's  complete  and  unrestricted  right to use and  exploit  said
          Property or Rights  throughout the world in any form, manner or medium
          Marvel may desire now or hereafter known or devised.

     (e)  Subject  to a  material  breach  of this  agreement,  you agree not to
          contest either directly or indirectly the full and complete  ownership
          by Marvel, its affiliates,  designees,  or successors in interest,  of
          all right, title and interest in and to the Property and Rights or the
          validity  of the  Rights,  which  may be  conferred  on Marvel by this
          Agreement,  or  to  assist  others  in  so  doing.  Examples  of  such
          prohibited  contestation  would be, without  limitation,  applying for



          copyright, renewal copyright, trademarks, service marks, patents, etc.
          for the Property and/or Rights herein  specified or the publication by
          you or your  assigns  or  agents  of  literary  property  which  would
          infringe  upon,  violate or be  confusingly  similar to such  Property
          and/or  Rights.

     (f)  It is agreed that the failure to pay pursuant to Paragraphs 4(a)--4(c)
          hereof for any reason, after notice and a thirty (30) day cure period,
          shall be a material  breach  which shall  permit you at your option to
          vitiate  Paragraphs  5(a)--(5(e) (the Assignment)  above and place the
          parties to the "Assignment" in the condition that existed between them
          just prior to the date of  execution  of this  Agreement  and  nothing
          contained herein, including the existence of the conveyances contained
          herein,  shall be used as evidence in any  subsequent  proceeding  nor
          shall it prevent the parties from taking any position  with respect to
          the ownership of the Property or the Rights. It is further agreed that
          as to all other  breaches of this  agreement,  you shall be  relegated
          exclusively to a suit for either specific performance or money damages
          or both, if appropriate,  at your option.

     (g)  It is acknowledged and agreed that so long as the Company continues to
          make the  payments  required in  paragraphs  4(a) - 4(c) and upon full
          payment of the amounts  required by Paragraphs 4(a) - 4(c) none of the
          heirs, executors,  estates, or other  successors-in-interest of any of
          Stan Lee, Joan Lee, or Joan C. Lee shall be entitled to make any claim
          for  payments  under  Paragraphs  4(a) - 4(c) and neither Joan Lee nor
          Joan C. Lee shall have the right to contest,  challenge  or  otherwise
          dispute the grant of Rights in the Property (or Assignment)  hereunder
          or the rights to the Non-Exclusive Rights.



6.   This Agreement, including the assignment set forth herein, shall be binding
     upon  the  parties  hereto,   their  affiliates  and  subsidiaries,   legal
     representatives, successors and predecessors in interest, and assigns.

7.   The invalidity of any provision or part hereof or obligation hereunder,  or
     the contravention  thereby of any law, rule or regulation of any State, the
     Federal  Government  or any  agency,  shall not  relieve any party from its
     obligation  under,  nor deprive any party of the  advantages  of, any other
     provision or part of this Agreement.

8.   Other Provisions.  This Agreement will constitute the entire  understanding
     between the parties in connection with Stan Lee's  relationship with Marvel
     from the date hereof,  shall supersede any and all previous  agreements and
     may not be amended or modified  except by a writing  signed by the party to
     be charged.  This agreement will be governed by and construed in accordance
     with the laws of the State of New York, N.Y.  jurisdiction.  All notices to
     Marvel  shall be given by you at the above  address  and all notices to you
     shall be given to you at                                                  ,
     with a copy to Arthur M. Lieberman at 461 Fifth Avenue,  New York, New York
     10017,  or to such substitute  address as a party  otherwise  designates in

9.   Marvel  and the  Company  agree to  submit  this  agreement  together  with
     appropriate  supporting papers to the court overseeing  Marvel's bankruptcy
     prior  to  November  25th,  1998 and to  obtain  court's  approval  of this
     agreement  prior to  December  5th , 1998.  Should the court fail to act on
     this agreement,  it shall be binding between the parties.  Should the court
     disapprove this agreement,  then paragraph 5(f) shall control and place the
     parties in the condition  that existed  between them just prior to the date
     of execution of this agreement.



10.  The  Company  agrees to pay your  reasonable  legal  fees and  expenses  in
     connection with the  negotiation of this agreement.  Signed at Los Angeles,
     California this 17th day of November, 1998.
                                                          /s/ Stan Lee
                                                          Stan Lee

Signed at New York, New York this      day of November, 1998

     For good and valuable consideration, the receipt and sufficiency of which I
hereby  acknowledge,  Joan Lee and Joan C. Lee hereby confirm their agreement to
the foregoing  insofar as it concerns the present or future contingent rights in
the foregoing including,  but not limited to any renewals or extensions to which
they or either of them are entitled after the death of Stan Lee or Joan Lee.

                                                          /s/ Joan Lee
                                                          Joan Lee

                                                          /s/ Joan C. Lee
                                                          Joan C. Lee

Signed at New York, New York this       day of November, 1998