Employment Agreement - Marvel Enterprises Inc. and John N. Turitzin
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 24, 2004, between Marvel
Enterprises, Inc., a Delaware corporation (the "Company") and John N. Turitzin
(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 Executive Vice President and General Counsel 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 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 the Board of Directors. Notwithstanding the first sentence hereof,
Executive's services from the Effective Date (as defined below) through March 1,
2004 will be on a part-time basis, to be determined after consultation between
the Executive and the Company's Chief Executive Officer.
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 customary travel requirements on behalf of the
Company.
2. Term of Employment
2.1 The Term. The term of the Executive's employment under this
Agreement (the "Term") shall commence on February 24, 2004 (the "Effective
Date") and 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.
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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
Fifty Thousand Dollars ($350,000) less such deductions or amounts to be withheld
as required by applicable law and regulations and deductions authorized by the
Executive in writing. The Executive's base salary shall be reviewed no less
frequently than annually by the Board of Directors and may be increased, but not
decreased, by the Board of Directors. The Executive's base salary as in effect
from time to time is referred to in this Agreement as the "Base Salary". In
recognition of the temporarily less-than-full-time service to be provided by the
Executive pursuant to the last sentence of Section 1.1 hereof, the Executive
shall receive no Base Salary for that portion of the Term that extends from
February 24, 2004 through February 29, 2004.
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 2004 and thereafter based in whole or in part
upon the attainment of performance goals set by the Board of Directors (the
"Bonus Performance Goals"). The Executive's target annual bonus amount shall be
50% of his base salary for the year. Each annual bonus shall be paid when annual
bonuses are paid generally to the Company's other senior executive officers but
in no event later than the ninetieth day of the next calendar year.
3.3 Business Expenses. The Company shall pay for or reimburse the
Executive for all reasonable expenses actually incurred by or paid by the
Executive during the Term in the performance of the Executive's services under
this Agreement, upon presentation of expense statements or vouchers or such
other supporting information as the Company customarily may require of its
officers.
3.4 Vacation. During the Term, the Executive shall be entitled to a
vacation period or periods of four (4) weeks per year taken in accordance with
the vacation policy of the Company during each year of the Term. Vacation time
not used by the end of a calendar year shall be forfeited.
3.5 Fringe Benefits. During the Term, the Executive shall be entitled
to all benefits for which the Executive shall be eligible under any qualified
pension plan, 401(k) plan, group insurance or other so-called "fringe" benefit
plan which the Company provides to its employees generally, together with
executive medical benefits for the Executive, as from time to time in effect for
executive employees of the Company generally.
3.6 Additional Benefits. During the Term, the Executive shall be
entitled to such other benefits as are specified in Schedule I to this
Agreement.
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4. Termination.
4.1 Death. If the Executive shall die during the Term, the Term shall
terminate immediately.
4.2 Disability. If during the Term the Executive shall become
physically or mentally disabled, whether totally or partially, such that the
Executive is unable to perform the Executive's principal services hereunder for
(i) a period of four consecutive months or (ii) for shorter periods aggregating
four months during any twelve month period, the Company may at any time after
the last day of the four consecutive months of disability or the day on which
the shorter periods of disability shall have equaled an aggregate of four
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 Executive of any of his obligations under
Section 5 hereof; (iii) any willful and intentional acts of the Executive
involving fraud, theft, misappropriation of funds, embezzlement or material
dishonesty affecting the Company or willful misconduct by the Executive which
has, or could reasonably be expected to have, a material adverse effect on the
Company; or (iv) the Executive's conviction of, or plea of guilty or nolo
contendre to, an offense which is a felony in the jurisdiction involved.
4.4 Permitted Termination by the Executive. (a) The Term may be
terminated by the Executive upon notice to the Company of any event constituting
"Good Reason" as defined herein. As used herein, the term "Good Reason" means
the occurrence of any of the following, without the prior written consent of the
Executive: (i) assignment of the Executive to duties materially inconsistent
with the Executive's positions as described in Section 1.1 hereof, or any
significant diminution in the Executive's duties or responsibilities, other than
in connection with the termination of the Executive's employment for Cause or
disability or by the Executive other than for Good Reason; (ii) any material
breach of this Agreement by the Company which is continuing; or (iii) a change
in the location of the Executive's principal place of employment to a location
other than as specified in Section 1.3 hereof; provided, however, that the
Executive 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.
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4.5 Severance. (a) If the Term is terminated pursuant to Section 4.1,
4.2 or 4.3 hereof, or by the Executive other than pursuant to Section 4.4(a),
the Executive shall be entitled to receive his Base Salary, benefits and
reimbursements provided hereunder at the rates provided in Sections 3.1, 3.5 and
3.6 hereof to the date on which such termination shall take effect. In addition,
if the Term is terminated pursuant to Section 4.1 or 4.2, the Executive shall
also be entitled to receive any bonus which has been awarded 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, shall be determined by reference to the
attainment of the performance goals referred to in Section 3.2 as of the end of
the fiscal year in which termination of employment occurs and shall be paid when
bonuses in respect of that year are generally paid to the Company's other
executives but in no event later than the ninetieth day of the next fiscal year.
(b) Except as provided in Section 4.5(c), if the Term is terminated by
the Executive pursuant to clauses (i), (ii) or (iii) of Section 4.4(a) or by the
Company other than pursuant to Section 4.1, 4.2 or 4.3, the Company shall
continue thereafter to provide the Executive (i) payments of Base Salary in the
manner and amounts specified in Section 3.1 until the one (1) year 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 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 one (1) year
after the date of termination. In addition, all equity arrangements provided to
the Executive hereunder or under any employee benefit plan of the Company, other
than with respect to restricted stock, shall continue to vest for the period
specified in clause (iv) of this Section 4.5(b) (unless vesting is accelerated
upon the occurrence of a Third Party Change in Control as described in Section
4.5(d)) and shall remain exercisable for ninety days after the end of that
period. Bonuses payable pursuant to this Section 4.5(b), other than the Pro Rata
Bonus, shall be payable in the manner described in Section 3.2. 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 one (1) year after the date of
termination, the Base Salary payable to the Executive pursuant to this Section
4.5(b) shall be reduced by an amount equal to the amount earned from such
employment with respect to that period (and the Executive shall be required to
return to the Company, without interest, any amount by which such payments
pursuant to this Section 4.5(b) exceed the Base Salary to which the Executive is
entitled after giving effect to that reduction) and, if the Executive becomes
eligible to receive medical or other welfare benefits under another employer
provided plan, the corresponding medical and other welfare benefits provided
under this Section 4.5(b) shall be terminated. As a condition to the Executive
receiving the payments under Section 4.5(b), the Executive agrees to permit
verification of his employment records and Federal income tax returns by an
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independent attorney or accountant, selected by the Company but reasonably
acceptable to the Executive, who agrees to preserve the confidentiality of the
information disclosed by the Executive except to the extent required to permit
the Company to verify the amount received by Executive from other active
employment.
(c) If the Term is terminated by the Executive pursuant to Section
4.4(a), or by the Company other than pursuant to Section 4.1, 4.2 or 4.3, and,
in any such event, the termination shall occur upon or within 12 months
following the occurrence of a Third Party Change in Control (as defined in
Section 4.5(d)) or in contemplation of a Third Party Change in Control, the
Company shall thereafter provide the Executive (i) an amount equal to two (2)
times the sum of (x) the then current Base Salary and (y) the average of the two
most recent annual bonuses paid (treating any annual bonus which is not paid as
a result of the Executive's failure to attain the Bonus Performance Goals as
having been paid in an amount equal to zero) to the Executive during the Term
(or if only one annual bonus has been paid, the amount of that annual bonus, to
be paid in a lump sum within 30 days after the date of termination), and (ii)
benefits in the manner and amounts specified in Section 3.5 until twelve (12)
months after the date of termination or, with respect to medical and other
welfare benefits, when the Executive becomes eligible to receive medical or
other welfare benefits under another employer provided plan if sooner than
twelve (12) months after the date of termination. In addition, all equity
arrangements provided to the Executive hereunder or under any employee benefit
plan of the Company shall continue to vest until twelve (12) months after the
date of termination unless vesting is accelerated upon the occurrence of the
Third Party Change in Control as described in subparagraph (d) below.
(d) For purposes of this Agreement, a Third Party Change in Control
shall be deemed to have occurred if (i) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than an Excluded Person or Excluded Group
(as defined below) (hereinafter, a "Third Party"), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding securities
entitled to vote in the election of directors of the Company, (ii) the Company
is a party to any merger, consolidation or similar transaction as a result of
which the 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 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
Isaac Perlmutter and Avi Arad or any of their affiliates.
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(e) (i) If any payment or benefit (within the meaning of Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code")), to
the Executive or for the Executive's benefit paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise in connection
with, or arising out of, the Executive's employment with the Company or a change
in ownership or effective control of the Company or of a substantial portion of
its assets (a "Parachute Payment" or "Parachute Payments"), would be subject to
the excise tax imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive will be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Executive of all taxes (including any interest or penalties,
other than interest and penalties imposed by reason of the Executive's failure
to file timely a tax return or pay taxes shown to be due on the Executive's
return), including any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Parachute Payments.
(ii) An initial determination as to whether a Gross-Up Payment is
required pursuant to this Agreement and the amount of such Gross-Up Payment
shall be made at the Company's expense by the Company's regular outside auditors
(the "Accounting Firm"). The Accounting Firm shall provide its determination
(the "Determination"), together with detailed supporting calculations and
documentation to the Company and the Executive within ten days of the
Termination Date if applicable, or promptly upon request by the Company or by
the Executive (provided the Executive reasonably believes that any of the
Parachute Payments may be subject to the Excise Tax) and if the Accounting Firm
determines that no Excise Tax is payable by the Executive with respect to a
Parachute Payment or Parachute Payments, it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise Tax will be
imposed with respect to any such Parachute Payment or Parachute Payments. Within
ten days of the delivery of the Determination to the Executive, the Executive
shall have the right to dispute the Determination (the "Dispute"). The Gross-Up
Payment, if any, as determined pursuant to this Section 4.5(e)(ii) shall be paid
by the Company to the Executive within ten days of the receipt of the accounting
Firm's determination notwithstanding the existence of any Dispute. If there is
no Dispute, the Determination shall be binding, final and conclusive upon the
Company and the Executive subject to the application of Section 4.5(e)(iii)
below. The Company and the Executive shall resolve any Dispute in accordance
with the terms of this Agreement.
(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
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its consolidated group, on its federal income tax return) or (iv) upon the
resolution of the Dispute to the Executive's satisfaction. If an Underpayment
occurs, the Executive shall promptly notify the Company and the Company shall
promptly, but in any event, at least five days prior to the date on which the
applicable government taxing authority has requested payment, pay to the
Executive an additional Gross-Up Payment equal to the amount of the Underpayment
plus any interest and penalties (other than interest and penalties imposed by
reason of the Executive's failure to file timely a tax return or pay taxes shown
to be due on the Executive's return) imposed on the Underpayment. An Excess
Payment shall be deemed to have occurred upon a "Final Determination" (as
hereinafter defined) that the Excise Tax shall not be imposed upon a Parachute
Payment or Parachute Payments (or portion thereof) with respect to which the
Executive had previously received a Gross-Up Payment. A "Final Determination"
shall be deemed to have occurred when the Executive has received from the
applicable government taxing authority a refund of taxes or other reduction in
the Executive's tax liability by reason of the Excise Payment and upon either
(x) the date a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and conclusively
binds the Executive and such taxing authority, or in the event that a claim is
brought before a court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all appeals have been taken
and finally resolved or the time for all appeals has expired or (y) the statute
of limitations with respect to the Executive's applicable tax return has
expired. If an Excess Payment is determined to have been made, the amount of the
Excess Payment shall be treated as a loan by the Company to the Executive and
the Executive shall pay to the Company on demand (but not less than 10 days
after the determination of such Excess Payment and written notice has been
delivered to the Executive) the amount of the Excess Payment plus interest at an
annual rate equal to the Applicable Federal Rate provided for in Section 1274(d)
of the Code from the date the Gross-Up Payment (to which the Excess Payment
relates) was paid to the Executive until the date of repayment to the Company.
(iv) Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the Determination, an Excise Tax will
be imposed on any Parachute Payment or Parachute Payments, the Company shall pay
to the applicable government taxing authorities as Excise Tax withholding, the
amount of the Excise Tax that the Company has actually withheld from the
Parachute Payment or Parachute Payments or the Gross Up Payment.
(f) Except as provided in this Section 4.5, pursuant to the Marvel
Enterprises, Inc. Stock Incentive Plan as provided in Schedule I to this
Agreement and as required by law, the Company shall have no further obligation
to the Executive after termination of the Term.
5. Protection of Confidential Information; Non-Competition
5.1 In view of the fact that the Executive's work for the Company will
bring the Executive into close contact with many confidential affairs of the
Company not readily available to the public, as well as plans for future
developments by the Company, the Executive agrees:
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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 one (1) year after he ceases to be employed by the
Company under this Agreement or otherwise, if such cessation arises pursuant to
Section 4.3, or as a result of termination by the Executive which is not
pursuant to Section 4.4(a) 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 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.
5.3 If the Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Section 5.1 or Section 5.2 hereof, the
Company shall have the following rights and remedies:
5.3.1 The right and remedy to 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.
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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 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 Section 5.1 or
Section 5.2 hereof or to obtain money damages for the breach thereof, and such
action results in the award of a judgment for money damages or in the granting
of any injunction in favor of the Company, all expenses (including reasonable
attorneys' fees) of the Company in such action, suit or other proceeding shall
(on demand of the Company) be paid by the Executive. In the event the Company
fails to obtain a judgment for money damages or an injunction in favor of the
Company, all expenses (including reasonable attorneys' fees) of the Executive in
such action, suit or other proceeding shall (on demand of the Executive) be paid
by the Company.
6. Prior Restrictions; Promise Not to Solicit.
(a) The Executive represents that he is free to enter into this
Agreement is not restricted in any manner from performing under this Agreement
by any prior agreement, commitment, or understanding with any third party. If
Executive has acquired confidential or proprietary information in the course of
his prior employment or as a consultant, he will fully comply with any duties
not to disclose such information then applicable to him during the Term.
(b) 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, other than the Executive's
legal assistant, 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 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 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 (notices sent
by overnight courier shall be deemed to have been given on the scheduled
delivery date) or mailed first class, postage prepaid, by registered or
certified mail (notices mailed shall be deemed to have been given on the third
business day after mailing), 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.
10 East 40th Street
New York, New York 10016
Attention: President
If to the Executive, to:
John N. Turitzin
16 Hitching Post Lane
Chappaqua, New York 10514
11. General.
11.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in New York, without regard to the conflict of law
principles of such state.
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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/ Allen S. Lipson /s/ John N. Turitzin
-------------------------- --------------------------
Allen S. Lipson John N. Turitzin
President and Chief Executive Officer
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SCHEDULE I
Additional Benefits:
1. Automobile Allowance. The Executive shall be eligible for an automobile
allowance in the amount of One Thousand Dollars ($1,000) per month in
accordance with the Company's policy.
2. 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 (i) options to purchase Fifty Thousand (50,000)
shares (the "Option 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 and (ii) Fifteen Thousand
(15,000) shares of Common Stock subject to trading restrictions and the
risk of forfeiture (the "Restricted Shares"), in each case subject to the
terms and conditions approved by the committee of the Board of Directors of
the Company which administers the Stock Incentive Plan. The options and the
Restricted 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 Option Shares, and one-third of
the Restricted Shares shall be scheduled to vest and become
non-forfeitable, on each of the first, second and third anniversaries of
the date they are granted. The options shall vest as to all of the Option
Shares, and all of the Restricted Shares shall vest and become
non-forfeitable, upon a Third Party Change in Control; and the options,
Option Shares and the Restricted Shares shall be subject to all other terms
and conditions of the Stock Incentive Plan and the related Stock Option
Agreement and Restricted Stock 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 and restricted stock rights shall be governed strictly in
accordance with the Stock Incentive Plan and the related Stock Option
Agreement and Restricted Stock Agreement. In the event of any conflict
between this Agreement and the Stock Incentive Plan and the related Stock
Option Agreement and/or Restricted Stock Agreement, or any ambiguity in any
such agreements, the Stock Incentive Plan and the related Stock Option
Agreement and/or Restricted Stock Agreement shall control.
3. COBRA Reimbursements. The Company shall reimburse the Executive for COBRA
health benefits paid for the period of the Term prior to the Executive's
eligibility for medical benefits pursuant to Section 3.5 of the Agreement.
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