EXHIBIT 10.1

 

"* * * * * * * * * * * * * " DENOTES MATERIAL THAT HAS BEEN OMITTED PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.

 

 

May 30, 2006

Dear Avi:

 

Reference is made to the amended and restated employment agreement between you
and Marvel Entertainment, Inc. (the “Company”) dated as of May 17, 2005 (the
“Employment Agreement”) and to the Master License, as defined in Section 12 of
the Employment Agreement. All capitalized terms used in this letter but not
defined here shall have the same meanings here as in the Employment Agreement.

 

You have informed the Company that you wish to resign from your various
positions with the Company (other than as set forth below) as of December 31,
2006 (the “Termination Date”), which is also the last date of the term of the
Employment Agreement and to change your position with the Company as of May 31,
2006 (the “Effective Date”).

 

You and the Company now hereby agree to amend the Employment Agreement and the
Master License as follows:

 

 

1.

Your obligation to devote your exclusive and full-time services to the Company
(subject to the permitted activities related to Productions and Associates set
forth in Section 1.1 of the Employment Agreement) shall cease on the Effective
Date. On the Effective Date, you will cease to serve as Chairman or Chief
Executive Officer of Marvel Studios, Inc. and as an officer of the Company but
you will serve the Company as Creative Advisor until the Termination Date. As
Creative Advisor, you will continue to assist the Company, at its reasonable
request and direction, in public relations efforts relating to its Marvel
Studios operations and in maintaining and expanding its relationships with
licensees, major retailers and studios. The provisions of this paragraph
function as an amendment to Section 1.1 of the Employment Agreement.

 

 

2.

You will continue, through the Termination Date, to receive your Base Salary. In
addition, you will be eligible to receive a Company Performance Bonus, Annual
Producer Fee Bonus and Net Sales Bonus for 2006 as if you were employed by the
Company through the respective payment dates of those bonuses (i.e., you will
receive those bonuses for the full 2006 period, and the bonuses will be paid in
early 2007 or earlier, as applicable) and an Annual Producer Fee Bonus for 2007
in respect of either Ghost Rider or Spider-Man 3 (not both), if one of those
movies achieves the box-office receipt targets set forth in the Award Letter.

 

 

3.

(a)

From and after the Termination Date, you will serve as a consultant at the
direction of the Company as a Company liaison with Sony Pictures in

 

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connection with the production of Spider-Man 3 and Spider-Man 4 (if the latter
movie is produced) and the Company will instruct Sony to designate you as an
executive producer of those motion pictures. With respect to Spider-Man 4, you
shall be entitled to whatever additional compensation may be separately agreed
to you between you and Sony or its affiliates for your service as executive
producer.

 

 

(b)

From and after the Termination Date, you will serve as producer of the Company’s
self-produced Iron Man and Hulk live-action movies. The Company will have
controls over the Iron Man and Hulk movies not less favorable to the Company
than the customary controls of a major studio over films with similar budgets.
Your producer agreement will provide for a producer fee of * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * for your services
as producer on each of Iron Man and Hulk, and that agreement will provide for
you to have customary first-negotiation rights to serve as producer of any
sequels of Iron Man and Hulk that are produced by the Company. The * * * * * *
producer fee shall be payable as follows: 20% during pre-production, 60% over
the course of principal photography, 10% over the course of scheduled
post-production and 10% on delivery and acceptance of the completed film. Your
producer agreement will provide for a fee, in the event that the Company ends
your service as producer prior to greenlighting the film in question, of * * * *
* * * * * * * * * * * * (for example, if your services are terminated on both
films prior to the greenlighting of either film, your total fee for the two
films will be * * * * * * * ); and, in the event of the Company ending your
service as producer on either film, the non-compete obligations in Section 5 of
this letter and under the Employment Agreement shall immediately terminate.
Although it is contemplated that you and the Company will enter into a more
detailed producer agreement consistent with the terms of this paragraph, and you
and the Company agree to negotiate in good faith to prepare such an agreement,
you and the Company agree that, in the absence of such an agreement, this
paragraph shall constitute a binding agreement of the parties on the terms set
forth herein for you to act as producer of the Company’s self-produced Iron Man
and Hulk live-action movies. For the avoidance of doubt, your service as a
producer under this Section 3 shall constitute “service to the Company” under
Section 6.3 of the Stock Option Agreement dated as of May 4, 2004 between you
and the Company and, so long as you are providing that service, your “employment
with or service to the Company” shall not be deemed to have been terminated and
therefore the options granted under that agreement will continue to vest.

 

 

4.

You will have continued use of your current office and current assistant through
the Termination Date. Thereafter, through the period in which you serve as

 

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producer under Section 3(b) above, the Company will provide you with use of an
office.

 

 

5.

(a)  Section 5.2 of the Employment Agreement (the “non-compete” section) shall
be unchanged through December 31, 2006 except that a new clause “C” shall be
added within clause “(iii)” of Section 5.2(b) (“Restricted Activities”) so that
clause “(iii)” reads in its entirety as follows:

 

(iii) services on Media Activities, internet entertainment or video games, if
those Media Activities, entertainment or games are based on (A) comic book
characters of the action-adventure type (i.e., not characters such as those in
the Archie Comics), (B) characters described in (y) above or (C) other
fantasy-based (not reality-based) action-adventure characters, but this clause
“(C)” shall apply only if the Media Activity, entertainment or game is targeted
at males aged 16 to 30. By way of example only, movies of the following types
would not be restricted: Shrek, Winnie the Pooh, Over the Hedge, War of the
Worlds, Minority Report, Finding Nemo, Cars, The Day After Tomorrow, James Bond,
Alexander or Frankenstein, but movies of the following types would be
restricted: Lord of the Rings, Star Wars, Conan the Barbarian, and I Robot.

 

 

(b)

Section 5.2 of the Employment Agreement (the “non-compete” section) is hereby
amended, effective January 1, 2007, to read in its entirety as follows:

 

5.2 The Executive agrees that, through the completion of post-production of the
Company’s self-produced Iron Man and Hulk live-action movies (but no later than
through June 30, 2008, even if post-production on either or both of those movies
has not yet been completed), he shall not, directly or indirectly, render any
services on or in connection with (A) any motion picture based on (i) comic book
characters of the action-adventure type (i.e., not characters such as those in
the Archie Comics), (ii) fictional characters with superhuman abilities (e.g.
Super Heroes) that would be considered part of the fantasy, science fiction or
action-adventure genre or (iii) other fantasy-based (not reality-based) action
characters, but this clause “(iii)” shall apply only if where the motion picture
is targeted at males aged 16 to 30 or (B) media activities (e.g., video games)
based on motion pictures of the type described in clause “A” of this sentence.
By way of example only, movies of the following types would not be restricted:
Shrek, Winnie the Pooh, Over the Hedge, War of the Worlds, Minority Report,
Finding Nemo, Cars, The Day After Tomorrow, James Bond, Alexander or
Frankenstein, but movies of the following types would be restricted: Lord of the
Rings, Star Wars, Conan the Barbarian, and I Robot. For example, this section
would bar the Executive from working on a video game or other media activity
based on a Batman movie but not from working on a video game based on a TV
series or from working on a Frankenstein movie.

 

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You acknowledge and agree that, so long as you are providing services in
accordance with Paragraph 3(b) hereof, you will have access to various items of
confidential information, proprietary concepts and properties and trade secrets
of the Company, and that any services provided by you to any competing company
in violation of this Section 5 and of Section 5.2 of the Employment Agreement,
as amended by this letter, would inevitably result in the unauthorized
disclosure of such confidential information, proprietary concepts and properties
and trade secrets of the Company, and that the restrictions of this Section 5
and of Section 5.2 of the Employment Agreement, as amended by this letter, are
necessary to protect the Company against such unauthorized disclosure.

 

 

6.

Section 5.8 of the Employment Agreement (concerning restrictions on your
soliciting employees of the Company other than your immediate family) shall not
apply to your personal assistant or to Ari Arad or as may otherwise be agreed
between you and the Company.

 

 

7.

Your rights to indemnification under the Company’s by-laws and the Employment
Agreement will continue in accordance with the terms of those documents.

 

 

8.

The Master License is hereby amended to be a perpetual, royalty-free license.

 

 

9.

You hereby resign, as of the Effective Date, from your position as an officer of
the Company and from your position as a director of the Company and from all
positions as an officer or director of any of the Company’s subsidiary
companies.

 

 

10.

A press release and public statement concerning the matters addressed in this
letter will be mutually agreed upon by you and the Company and shall be
substantially in the form attached as Exhibit A hereto. No public statement or
release of information made or encouraged by you or the Company shall be
inconsistent with the press release as mutually agreed to (or, as applicable, as
attached). Nothing herein, however, shall prohibit the Company from making such
disclosures as are required of it under federal securities laws and regulations.

 

 

11.

You shall not intentionally make any public statements, encourage others to make
statements or release information intended to disparage or defame the Company,
any of its affiliates or any of their respective directors or officers. The
Company shall cause its senior executives and directors not to intentionally
make, or cause or encourage others to make, any public statements or release
information intended to disparage or defame your reputation, and the Company
shall not take any such action on its own behalf. Notwithstanding the foregoing,
nothing in herein shall prohibit any person from making truthful statements when
required by order of a court or other body having jurisdiction or as required by
law, regulation or stock-exchange rule.

 

 

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12.

(a)

This letter 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.

 

 

(b)

The Employment Agreement and the Master License, as amended by this letter, and
the Award Letter set forth the entire agreement and understanding of the parties
relating to the subject matter hereof and supersede all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. Except as expressly changed by this letter, the Employment Agreement and
Master License remain in full force in accordance with their terms.

 

 

(c)

The Employment Agreement and the Master License as amended by this letter, and
this letter itself, may be amended, modified, superseded, canceled, renewed or
extended and the terms or covenants thereof or hereof may be waived, only by a
written instrument manually 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 the Employment
Agreement, the Master License or this letter, 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 the Employment Agreement, the Master License or
this letter.

 

 

(d)

This letter may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this letter and all of which, when taken
together, will be deemed to constitute one and the same letter.

 

If the foregoing accurately reflects your understanding of our agreement, please
so indicate by signing below.

 

 

Very truly yours,

 

 

MARVEL ENTERTAINMENT, INC.

 

 

By: /s/ John Turitzin

 

_____________________

 

 

John Turitzin

 

 

Executive Vice President

 

 

Accepted and Agreed:

 

/s/ Avi Arad

____________________________

Avi Arad

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