EXHIBIT 10.2
Employment Agreement
EMPLOYMENT AGREEMENT, dated as of August 13, 1996, between Marvel
Entertainment Group, Inc., a Delaware corporation (the "Company") and Xxxxx X.
Xxxxxxx (the "Executive").
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.
Accordingly, the Company and the Executive hereby agree as follows:
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 Operating Officer or
in such other executive position as may be mutually agreed upon by the Company
and the Executive, and to perform such other duties consistent with such
position as may be assigned to the Executive by the Chairman of the Board, the
Chief Executive Officer and the 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 best 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 office of the Company in New
York City, subject to reasonable travel requirements on behalf of the Company.
2. Term of Employment; Certain Post-Term Bene-
fits.
2.1 The Term. The term of the Executive's employment under
this Agreement (the "Term") shall commence on September 4, 1996 and shall end
on December 31, 1999, or such later date to which the Term is extended
pursuant to Section 2.2.
2.2 End-of-Term Provisions. At any time on or after December
31, 1998 the Company shall have the right to give written notice of
non-renewal of the Term. In the event the Company gives such notice of
non-renewal, the Term automatically shall be extended so that it ends twelve
months after the last day of the month in which the Company gives such notice.
From and after January 1, 2000, unless and until the Company gives written
notice of non-renewal as provided in this Section 2.2, the Term automatically
shall be extended day-by-day; upon the giving of such notice by the Company,
the Term automatically shall be extended so that it ends twelve months after
the last day of the month in which the Company gives such notice.
2.3 Special Curtailment. The Term shall end earlier than the
original December 31, 1999 termination date provided in Section 2.1 or any
extended termination date provided in Section 2.2, in either case if sooner
terminated pursuant to Section 4. Non-extension of the Term shall not be
deemed to be a wrongful termination of the Term or this Agreement by the
Company pursuant to Section 4.4.
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 semi-monthly in arrears, at the annual rate of not
less than $900,000 commencing September 4, 1996; $950,000 commencing September
4, 1997; and $1,000,000 commencing September 4, 1998, in each case less such
deductions or amounts to be withheld as required by applicable law and
regulations (the "Base Salary"). In the event that the Company, in its sole
discretion, from time to time determines to increase the Base Salary, such
increased amount shall, from and after the effective date of the increase,
constitute "Base Salary" for purposes of this Agreement.
3.2 Discretionary Bonus. In addition to the amounts to be paid
to the Executive pursuant to Section 3.1, the Executive will be eligible to
participate in a performance bonus plan to be adopted by the Company which
will permit the Executive to receive, upon achievement of operating goals to
be agreed upon with respect to each year of the Term, a bonus of up to 100% of
Base Salary. Any bonus
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payable pursuant to such bonus plan shall be reduced (i) during the first year
of the Term by $166,667, (ii) during the second year of the Term by $333,333
less the amount of the reduction (pursuant to clause (i)) in the first year of
the Term; and (iii) during the third year of the Term by $500,000 less the
amount of the reduction (pursuant to clauses (i) and (ii)) in the first and
second years of the Term.
3.3 Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred 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 provided, however, that the maximum amount available for such
expenses during any period may be fixed in advance by the Chairman or Vice
Chairman of the Board of Directors or the Board of Directors.
3.4 Vacation. During the Term, the Executive shall be entitled
to a vacation period or periods of four 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 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 senior executive
officers generally, together with executive medical benefits for the
Executive, the Executive's spouse and the Executive's children as from time to
time in effect for senior officers of the Company generally.
3.6 Additional Benefits. During the Term,
the Executive shall be entitled to such other benefits as are
specified in Appendix I to this Agreement.
4. Termination.
4.1 Death. If the Executive shall die during the Term, the
Term shall terminate and no further amounts or benefits shall be payable
hereunder, except that the Executive's legal representatives shall be entitled
to receive continued payments in an amount equal to 60% of the Base Salary, in
the manner specified in Section 3.1, until the end of the Term (as in effect
immediately prior to the Executive's death) or, if the Company has not then
given written notice of non-renewal pursuant to Section 2.2, for a
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period of twelve months after the last day of the month in which termination
described in this Section 4.1 occurred, whichever is longer.
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 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 equalled an aggregate of six months,
by written notice to the Executive (but before the Executive has recovered
from such disability), terminate the Term and no further amounts or benefits
shall be payable hereunder, except that the Executive shall be entitled to
receive (i) continued payments in an amount equal to 60% of the Base Salary,
in the manner specified in Section 3.1, until the end of the Term (as in
effect immediately prior to such termination) or, if the Company has not then
given notice of non-renewal pursuant to Section 2.2, for a period of twelve
months after the last day of the month in which termination described in this
Section 4.2 occurred, whichever is longer and (ii) such amounts and benefits,
if any, specified in Paragraph 9 of Appendix I. If the Executive shall die
before receiving all payments to be made by the Company in accordance with the
foregoing, such payments shall be made to a beneficiary designated by the
Executive on a form prescribed for such purpose by the Company, or in the
absence of such designation to the Executive's legal representative.
4.3 Cause. In the event of gross neglect by the Executive of
the Executive's duties hereunder, conviction of the Executive of any felony,
conviction of the Executive of any lesser crime or offense involving the
property of the Company or any of its subsidiaries or affiliates, willful
misconduct by the Executive in connection with the performance of any material
portion of the Executive's duties hereunder, breach by the Executive of any
material provision of this Agreement or any other conduct on the part of the
Executive which would make the Executive's continued employment by the Company
materially prejudicial to the best interests of the Company, the Company may
at any time by written notice (which, in the case of conduct which would make
the Executive's continued employment by the Company materially prejudicial to
the best interests of the Company, shall describe the particular conduct by
the Executive which is the basis for such cause) to the Executive terminate
the Term and, upon such termination, this Agreement shall term-
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inate and the Executive shall be entitled to receive no further amounts or
benefits hereunder, except any as shall have been earned to the date of such
termination.
4.4 Company Breach. In the event of the breach of any material
provision of this Agreement by the Company, the Executive shall be entitled to
terminate the Term upon 60 days' prior written notice to the Company. Upon
such termination, or in the event the Company terminates the Term or this
Agreement other than pursuant to the provisions of Section 4.2 or 4.3, the
Company shall continue to provide the Executive (i) payments of Base Salary,
in the manner and amount specified in Section 3.1 and (ii) fringe benefits and
additional benefits in the manner and amounts specified in Sections 3.5 and
3.6 until the end of the Term (as in effect immediately prior to such
termination) or, if the Company has not then given written notice of
non-renewal pursuant to Section 2.2, for a period of twelve months after the
last day of the month in which termination described in this Section 4.4
occurred, whichever is longer (the "Damage Period"). The Company's obligations
pursuant to this Section 4.4 are subject to the Executive's duty to mitigate
damages by seeking other employment provided, however, that the Executive
shall not be required to accept a position of lesser importance or of
substantially different character than the position held with the Company
immediately prior to the effective date of termination or in a location
outside of the New York City metropolitan area. To the extent that the
Executive shall earn compensation during the Damage Period (without regard to
when such compensation is paid), the Base Salary payments to be made by the
Company pursuant to this Section 4.4 shall be correspondingly reduced.
4.5 Litigation Expenses. Except as provided for in Section
5.7, if the Company and the Executive become involved in any action, suit or
proceeding relating to the alleged breach of this Agreement by the Company or
the Executive, and if a judgment in such action, suit or proceeding is
rendered in favor of the Executive, the Company shall reimburse the Executive
for all expenses (including reasonable attorneys' fees) incurred by the
Executive in connection with such action, suit or proceeding. Such costs shall
be paid to the Executive promptly upon presentation of expense statements or
other supporting information evidencing the incurrence of such expenses.
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
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contact with many confidential affairs of the Company not readily available to
the public, and plans for future developments, 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, learned by the Executive heretofore or
hereafter, and not to 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. The foregoing prohibitions shall include, without
limitation, directly or indirectly publishing (or causing, participating in,
assisting or providing any statement, opinion or information in connection
with the publication of) any diary, memoir, letter, story, photograph,
interview, article, essay, account or description (whether fictionalized or
not) concerning any of the foregoing, publication being deemed to include any
presentation or reproduction of any written, verbal or visual material in any
communication medium, including any book, magazine, newspaper, theatrical
production or movie, or television or radio programming or commercial; 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 During the Term, 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.
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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 the preceding paragraph, 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,
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,
or any part thereof, are held to be unenforceable because of the duration of
such provision or the area covered thereby, the parties 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 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
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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 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.
6.1 The Executive agrees that all processes, technologies and
inventions (collectively, "Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during the Term 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 in any
manner 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
further: (a) promptly disclose such Inventions to the Company; (b) assign to
the Company, without additional compensation, all patent and other rights to
such Inventions for the United States and foreign countries; (c) sign all
papers necessary to carry out the foregoing; and (d) give testimony in support
of the Executive's inventorship.
6.2 If any Invention is described in a patent application or
is disclosed to third parties, directly or indirectly, by the Executive within
two years after the termination of the Executive's employment by the Company,
it is to be presumed that the Invention was conceived or made during the Term.
6.3 The Executive agrees that the Executive
will not assert any rights to any Invention as having been
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made or acquired by the Executive prior to the date of this Agreement, except
for Inventions, if any, disclosed to the Company in writing prior to the date
hereof.
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
the Term, 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.
The Company will indemnify the Executive, to the maximum extent
permitted by applicable law, against all costs, charges and expenses incurred
or sustained by the Executive in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of the
Executive being an officer, director or employee of the Company or of any
subsidiary or affiliate of the Company.
9. 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 Entertainment Group, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx
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Executive Vice President,
Chief Administrative Officer
and General Counsel
If to the Executive, to:
Xxxxx X. Xxxxxxx
0 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
10. General.
10.1 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.
10.2 The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
10.3 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.
10.4 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.
10.5 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
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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.
10.6 The Executive represents to the Company that execution,
delivery and performance of this Agreement by the Executive will not conflict
with or violate any agreement binding upon the Executive.
11. Subsidiaries and Affiliates.
11.1 As used herein, the term "subsidiary" shall mean any
corporation or other business entity controlled directly or indirectly by the
corporation 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
corporation or other business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
MARVEL ENTERTAINMENT GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive
Officer
/s/ Xxxxx X. Xxxxxxx
----------------------------------
XXXXX X. XXXXXXX
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APPENDIX I
Additional Benefits:
1. Medical Examination. The Executive shall be reimbursed by the
Company for the reasonable cost of one annual medical examination upon
presentation of an expense statement.
2. Automobile. The Company shall afford the Executive the right to
use an automobile on a continuing basis and shall provide garaging near the
Executive's residence, on the same basis as other senior executive officers of
the Company. Upon the expiration of the Term, the Executive promptly shall
return the automobile to the Company.
3. Stock Options. The Executive shall be eligible to participate in
the Marvel Entertainment Group, Inc. Stock Option Plan (the "Stock Option
Plan") and to receive options to purchase shares of the common stock, par
value $.01 per share ("Common Stock"), of Marvel Entertainment Group, Inc.
("Marvel"), pursuant to the terms of the Stock Option Plan and related Stock
Option Agreement in the amounts set forth below:
250,000 upon commencement of the Term
250,000 on or about January 5, 1997
250,000 on or about January 5, 1998
subject to the terms and conditions approved by the committee of the Board of
Directors of Marvel which administers the Stock Option Plan.
4. Signing Bonus. The Company shall pay the Executive, upon
execution of this Agreement, an amount equal to $500,000.
5. Insurance. The Company agrees to provide the Executive with
additional term life insurance coverage with a face amount of $5,000,000
subject to the insurer's satisfaction with the results of any required medical
examination to which the Executive hereby agrees to submit, on the following
basis. The Executive may select a plan of his choice and may designate the
beneficiary of such plan. The Company shall pay, upon presentation of an
expense statement, the periodic premiums relating to such additional term life
insurance payable during the Term.
6. Tax Advisor. The Executive shall be reimbursed by the Company,
upon presentation of an expense
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statement, for the reasonable fees and disbursements of a personal tax advisor
to be selected by the Executive.
7. Club Membership. The Company shall reimburse the Executive, upon
presentation of an expense statement, for all reasonable initiation fees and
periodic dues for membership in a club of the Executive's choice. The Company
shall pay on behalf of the Executive the annual, national chapter, local
chapter and local forum dues of the Young President's Organization.
8. Estate Planning. The Executive shall be xxxx-
bursed by the Company, upon presentation of an expense state-
ment, for the reasonable fees and disbursements of an estate
planning advisor to be selected by the Executive.
9. Disability. If the Company elects to terminate the Term pursuant
to Section 4.2 of the Agreement, in addition to the amounts payable under such
Section, for the shorter of the period the Executive remains disabled or until
the Executive has attained the age of 65, the Company shall continue to
provide benefits for the Executive under the corporate group life insurance
plan and for the Executive, his spouse and children under the corporate group
medical (including the executive medical plan) insurance plan, to the extent
permitted by such plans and to the extent such benefits continue to be
provided to the Company's employees or officers, as applicable, generally.
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