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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5 )
Marvel Enterprises, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
57383M108
- --------------------------------------------------------------------------------
(CUSIP Number)
Bruce Bromberg
Morgan Stanley Dean Witter & Co.
1585 Broadway
New York, NY 10036
(212) 761-4000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 29, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement of Schedule 13G to report
the acquisition which is the subject of the Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
<PAGE>
Cusip No. 57383M108 13D Page 2
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Morgan Stanley Dean Witter & Co.
IRS #39-314-5972
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The state of organization is Delaware.
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER **
EACH 5,106,897
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,106,897
- ---=----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,106,897
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.07%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA, CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Morgan Stanley & Co. Incorporated, a wholly owned
subsidiary of the Reporting Person, has executed a
Stockholders' Agreement where shared voting power with the
signatories equals 33,284,378 shares, or approximately 64%
of the voting capital stock of the issuer.
<PAGE>
Cusip No. 57383M108 13D Page 3
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON(S)
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON(S)
Morgan Stanley & Co. Incorporated
IRS # 13-265-5996
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [x]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The state of organization is Delaware.
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER **
EACH 5,106,703
REPORTING --------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
--------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,106,703
- ---=----------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,106,703
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.07%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
BD, CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
** The Reporting Person has executed a Stockholders'
Agreement where shared voting power with the signatories
equals 33,284,378 shares, or approximately 64% of the voting
capital stock of the issuer.
<PAGE>
Cusip No. 57383M108 13D Page 4
Item 1. Security and Issuer
The class of equity securities to which this statement relates is the
common shares (the "Common Stock"), of Marvel Enterprises, Inc., a
Delaware corporation (the "Issuer"). The principal executive offices
of the Issuer are located at 685 Third Avenue, New York, NY 10017.
Item 2. Identity and Background
(a) Morgan Stanley Dean Witter & Co. is (e) an Investment Adviser
registered under Section 203 of the Investment Advisers Act
of 1940.
(b) Morgan Stanley & Co. Incorporated is (a) a Broker Dealer
registered under section 15 of the Securities Exchange Act of
1934.
Item 3. Source and Amount of Funds or Other Consideration
The 385,296 shares of 8% Convertible Preferred Stock(convertible into
400,322 shares of Common Stock) of Marvel Enterprises purchased by
Morgan Stanley & Co. Incorporated were acquired on October 29, 1999
from Dickstein & Co., LP for $6.375 per share. The total cash purchase
price was $2,456,262.
Item 4. Purpose of Transaction
Investment Purposes.
Item 5. Interest in Securities of the Issuer
Under the Stockholder's Agreement, the Reporting Persons may be deemed
to beneficially own an aggregate of 33,284,378 shares of Capital Stock
(Capital Stock includes Common Stock and the shares of Common Stock
underlying 8% Convertible Preferred Stock), representing approximately
64% of the outstanding Capital Stock (on a diluted basis) as members
of the 13(d) Group (as defined below).
To the best of the Reporting Persons' knowledge, Avi Arad own 4,400,000 shares
of Common Stock; the Dickstein Entities, prior to the subject transaction
(consisting of Dickstein & Co., L.P., Dickstein Focus Fund L.P., Dickstein
International Limited, Elyssa Dickstein, Jeffrey Schwarz and Alan Cooper as
Trustees U/T/A/D 12/27/88, Mark Dickstein, Grantor, Mark Dickstein and Elyssa
Dickstein, as Trustees of The Mark and Elyssa Dickstein Foundation and Elyssa
Dickstein) own 4,867,394 shares of Capital Stock; the Perlmutter Entities
(consisting of Isaac Perlmutter, Isaac Perlmutter T.A., The Laura & Isaac
Perlmutter Foundation, Inc., Object Trading Corp., Zib Inc.) own 9,700,726
shares of Common Stock and shares of Common Stock underlying 3,706,643 shares of
8% Convertible Preferred Stock (the Perlmutter Entities together with Avi Arad
and the Dickstein Entities, the "Investor Group"), Whippoorwill Associates,
Incorporated ("Whippoorwill") owns 3,654,019 shares of Capital Stock which
includes shares of Common Stock underlying 2,187,822 shares of 8% Convertible
Preferred Stock, which numbers also include 74,869 shares of Capital Stock which
includes Common Stock underlying 44,738 shares of 8% Convertible Preferred Stock
owned by Whippoorwill that are not subject to the Stockholders' Agreement (as
defined herein), and Chase Manhattan Bank ("CMB") owns 1,320,945 shares of
Common Stock and the Common Stock underlying 824,772 shares of 8% Convertible
Preferred Stock, (the Reporting Person, Whippoorwill and CMB together, the
"Lender Group," and collectively with the Investor Group, the "13(d) Group").
The above information with respect to each of the members of the 13(d) Group,
other than with respect to the Reporting Persons, was provided by the respective
member of the 13(d) Group and was not independently verified by the Reporting
Persons. The Reporting Persons do not have any pecuniary interest nor do they
have any dispositive power over the shares of Capital Stock owned by the other
members of the 13(d) Group. Morgan Stanley & Co. Incorporated is a party to the
Stockholders' Agreement and reference is made to Item 7 with respect to the
terms thereof. The Reporting Persons may be deemed to share power to vote or
direct the vote with respect to all the shares of Capital Stock owned by the
other members of the 13(d) Group solely as a result of Morgan Stanley & Co.
Incorporated's participation in the Stockholders' Agreement.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Pursuant to the Stockholders Agreement, Morgan Stanley & Co.
Incorporated and Morgan Stanley Dean Witter & Co., or units thereof,
("MSDW") are part of a group of shareholders which has agreed to vote
as a group for Board members and committee memberships of the Issuer.
Morgan Stanley & Co. Incorporated has designated an employee who has
been elected as a member of the Board of the Issuer.
Item 7. Material to be Filed as Exhibits
Exhibit "3" - Stockholders agreement
<PAGE>
Cusip No. 57383M108 13D Page 5
Signature.
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct.
Date: November 3, 1999
Signature: /s/ Robert G. Koppenol
-----------------------------------------------------------------
Name/Title Robert G. Koppenol / Principal Morgan Stanley & Co. Incorporated
-----------------------------------------------------------------
MORGAN STANLEY DEAN WITTER & CO.
Date: November 3, 1999
Signature: /s/ Robert G. Koppenol
-----------------------------------------------------------------
Name/Title Robert G. Koppenol / Principal Morgan Stanley & Co. Incorporated
-----------------------------------------------------------------
MORGAN STANLEY & CO. INCORPORATED
INDEX TO EXHIBITS PAGE
----------------- ----
EXHIBIT 1 Agreement to Make a Joint Filing 6
EXHIBIT 2 Secretary's Certificate Authorizing Robert G. Koppenol 7
to Sign on behalf of Morgan Stanley Dean Witter & Co.
EXHIBIT 3 Stockholders' Agreement 8
* Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
(022597DTI)
<PAGE>
CUSIP No. 57383M108 13D Page 6
EXHIBIT 1 TO SCHEDULE 13D
---------------------------------------------------
November 3, 1999
---------------------------------------------------
MORGAN STANLEY DEAN WITTER & CO. and MORGAN STANLEY & CO.
INCORPORATED hereby agree that, unless differentiated, this
Schedule 13D is filed on behalf of each of the parties.
MORGAN STANLEY DEAN WITTER & CO.
BY: /s/ Robert G. Koppenol
--------------------------------------------------------------------
Robert G. Koppenol / Principal Morgan Stanley & Co. Incorporated
MORGAN STANLEY & CO. INCORPORATED
BY: /s/ Robert G. Koppenol
--------------------------------------------------------------------
Robert G. Koppenol / Principal Morgan Stanley & Co. Incorporated
* Attention. Intentional misstatements or omissions of fact constitute federal
criminal violations (see 18 U.S.C. 1001).
<PAGE>
PAGE 7
EXHIBIT 2
MORGAN STANLEY, DEAN WITTER, DISCOVER & CO.
SECRETARY'S CERTIFICATE
I, Charlene R. Herzer, a duly elected and acting Assistant Secretary of
Morgan Stanley, Dean Witter, Discover & Co., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), certify
that as approved by a Unanimous Consent of Directors in Lieu of a Meeting dated
as of May 31, 1997, the following persons are each authorized to sign reports to
be filed under Sections 13 and 16 of the Securities Exchange Act of 1934 on
behalf of the Corporation, and such authorizations are in full force and effect
as of this date:
Stuart J.M. Breslow
Robert G. Koppenol
Bruce Bromberg
Robin Sherak
IN WITNESS WHEREOF, I have hereunto set my name and affixed the seal of
the Corporation as of the 3rd day of June, 1997.
/s/ Charlene R. Herzer
------------------------
Charlene R. Herzer
Assistant Secretary
(120496DTI)
<PAGE>
PAGE 8
EXHIBIT 3
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of
October 1, 1998 among Avi Arad ("Arad"); the various Dickstein entities and
individuals listed on the signature pages hereto (the "Dickstein Entities");
Isaac Perlmutter ("Perlmutter"); Isaac Perlmutter T.A., a Florida trust (the
"Trust"); the Laura & Isaac Perlmutter Foundation Inc., a Florida corporation
(the "Foundation"); Object Trading Corp., a Delaware corporation ("Object
Trading"); Zib Inc., a Delaware corporation ("Zib" and together with Perlmutter,
the Trust, the Foundation, and Object Trading, the "Perlmutter Entities"; the
Perlmutter Entities together with Arad, the "Perlmutter/Arad Group"; the
Perlmutter/Arad Group together with the Dickstein Entities, the "Investor
Group"); The Chase Manhattan Bank ("Chase"); Morgan Stanley & Co. Incorporated
("Morgan Stanley"); Whippoorwill Associates, Incorporated, as agent for or
general partner of each institution (a "Whippoorwill Account") set forth on
Schedule 1 (collectively, "Whippoorwill"); and Toy Biz, Inc., a Delaware
corporation (the "Company"). Each of Chase, Morgan Stanley and each Whippoorwill
Account shall be a "Secured Lender" for so long as each remains bound hereby,
and all Secured Lenders bound hereby shall collectively constitute, the "Lender
Group"). The Secured Lenders are some of the "Secured Lenders" referred to in
the Fourth Amended Joint Plan of Reorganization Proposed by those "Secured
Lenders" and the Company in the bankruptcy matter of In Re: Marvel Entertainment
Group, Inc. et al. (case No. 97-638-RRM) in the United States District Court for
the District of Delaware (the "Plan"); and all of the "Secured Lenders" as that
term
674683.23
1
<PAGE>
is defined more broadly in the Plan (other than any Dickstein Entity or any of
its Affiliates) are referred to in this Agreement collectively as the "Plan
Secured Lender Group".
W I T N E S S E T H
WHEREAS, the Perlmutter Entities, Arad and the Dickstein
Entities will own shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"), and the Perlmutter Entities and the Dickstein
Entities will own shares of 8% Cumulative Convertible Exchangeable Preferred
Stock of the Company (the "Preferred Stock"; together with the Common Stock and
any other security of the Company which is then currently convertible or
exchangeable for Common Stock without the payment of additional consideration,
the "Capital Stock"), immediately after the consummation of the Plan;
WHEREAS, immediately after the consummation of the Plan, the
Secured Lenders will own shares of Common Stock and Preferred Stock;
WHEREAS, pursuant to the Plan, the Board of Directors of the
Company (the "Board") shall consist of eleven (11) Directors, six (6) of whom,
subject to Section 2.2 hereof, are to be designated by the Investor Group (the
"Investor Group Designees"), and five (5) of whom, subject to Section 2.2
hereof, are to be designated by the Lender Group (the "Lender Group Designees");
provided, that unless and until the occurrence of a Dickstein Forfeiture Event,
one (1) of the Investor Group Designees is to be designated by the Dickstein
Entities (the "Dickstein Designee");
674683.23
2
<PAGE>
WHEREAS, each of the parties hereto desires to enter into this
Agreement in order to set forth certain provisions regarding the management of
the Company.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants herein contained, the parties hereto agree as follows:
ARTICLE I DEFINITIONS Section 1.1. Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
"Affiliate" and "Affiliated" shall have the meanings set forth in Rule
12b-2 of the Securities Exchange Act of 1934, as amended, and any successor
regulation thereto.
"Agreement" shall have the meaning set forth in the Preamble hereto.
"Arad" shall have the meaning set forth in the Preamble hereto.
"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 of
the Securities Exchange Act of 1934, as amended, and any successor regulation
thereto; provided that, a person shall not be deemed to be a Beneficial Owner of
a security merely because that person has the right to acquire Beneficial
Ownership of that security if that right may be exercised only upon the payment
of consideration (other than solely by conversion or exchange of Capital Stock)
nor shall a person be deemed to be a Beneficial Owner of a security merely
because of the provisions of this Agreement. For the purposes of this
definition, "Beneficial Ownership" and "Beneficially Own" shall refer to the
ownership interest of a Beneficial Owner. With respect to Whippoorwill,
"Beneficially Owned" shall mean only such Capital
674683.23
3
<PAGE>
Stock Beneficially Owned by Whippoorwill Accounts with respect to which
Whippoorwill Associates, Incorporated has the power to direct the vote.
"Board" shall have the meaning set forth in the Preamble hereto.
"Capital Stock" shall have the meaning set forth in the Recitals
hereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Equivalent Shares" Beneficially Owned by any person shall mean
the number of shares of Common Stock Beneficially Owned by such person.
"Common Stock" shall have the meaning set forth in the Recitals hereto,
together with any other security of the Company for which the Common Stock shall
have been exchanged in any recapitalization or similar transaction.
"Designee" and "Designees" shall have the meaning set forth in Section
2.1(a) hereof.
"Dickstein Designator" shall mean Mark Dickstein or, upon the death or
other incapacity of Mark Dickstein, Elyssa Dickstein or, upon the death or other
incapacity of Elyssa Dickstein, such other person identified by Dickstein
Partners Inc. by written notice to the Secretary of the Company.
"Dickstein Designee" shall have the meaning set forth in the Recitals
hereto.
"Dickstein Entities" shall have the meaning set forth in the Preamble
hereto.
"Dickstein Forfeiture Event" shall mean a decrease in the Dickstein
Entities' Beneficial Ownership of Capital Stock to less than 1,500,000 Common
Equivalent Shares, calculated in accordance with Section 2.4 hereof and
appropriately adjusted for any stock splits, reverse stock splits,
recapitalization of the Capital Stock or capital transaction of a similar
nature.
"Director" shall mean a member of the Board of Directors of the
Company.
674683.23
4
<PAGE>
"Effective Date" shall mean the date on which the Agreement becomes
effective in accordance with Section 4.1 hereof.
"Election Meeting" shall have the meaning set forth in Section 2.1(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Independent Director" shall mean either Investor Group Designees or
Lender Group Designees who satisfy the requirements of Paragraph 303.00 of the
New York Stock Exchange Listed Company Manual (or any successor provision) and
who are (a) "non-employee directors" or any related successor concepts under
Rule 16b-3 (or any successor provision) promulgated pursuant to Section 16 of
the Exchange Act, and (b) "outside directors" or any related successor concepts
under Section 162(m) (or any successor provision) of the Code.
"Investor Group" shall have the meaning set forth in the Recitals
hereto.
"Investor Group Designator" shall mean Isaac Perlmutter until his
death, disability or resignation. The person serving at any time as Investor
Group Designator shall have the right to appoint (or to change), by written
notice to the Secretary of the Company, a successor Investor Group Designator
who shall become the Investor Group Designator upon the death, disability, or
resignation of the Investor Group Designator.
"Investor Group Designee" shall have the meaning set forth in the
Recitals hereto.
"Lender Group" shall have the meaning set forth in the Preamble hereto.
"Lender Group Designator" shall mean (i) with respect to the initial
configuration of the Board following the Effective Time, a subcommittee of the
Lender Group consisting of Chase, Morgan Stanley and Whippoorwill, and (ii)
thereafter, any one or more Secured Lenders that Beneficially Own a majority of
the Common Equivalent Shares Beneficially
674683.23
5
<PAGE>
Owned by the Lender Group; provided however that, whenever the Company is
required to deliver a notice under this Agreement to the Lender Group
Designator, such notice shall be delivered to Morgan Stanley, and Morgan Stanley
shall promptly deliver a copy thereof to each other Secured Lender still bound
hereby.
"Lender Group Designee" shall have the meaning set forth in the
Preamble hereto.
"Notice of Designee" shall have the meaning set forth in Section 2.1(b)
hereof.
"Perlmutter Entities" shall have the meaning set forth in the Preamble
hereto.
"Perlmutter/Arad Group" shall have the meaning set forth in the
Preamble hereto.
"Plan" shall have the meaning set forth in the Recitals hereto.
"Plan Secured Lender Group" shall have the meaning set forth in the
Preamble hereto.
"Preferred Stock" shall have the meaning set forth in the Recitals
hereto, together with any other security of the Company for which the Preferred
Stock shall have been exchanged in any recapitalization or similar transaction.
"Secured Lenders" shall have the meaning set forth in the Preamble
hereto.
"Stockholder Group Designators" shall mean the Investor Group
Designator, the Lender Group Designator and the Dickstein Designator.
"Stockholder Groups" shall mean the Investor Group, the Lender Group
and the Dickstein Entities.
"Whippoorwill Account" shall have the meaning set forth in the
Preamble.
674683.23
6
<PAGE>
ARTICLE II
MANAGEMENT
Section 2.1. Board Representation.
(a) Subject to Section 2.2 hereof, at and following the
Effective Date, each party to this agreement will take such action as may
reasonably be in its power to cause the Board to include (i) six (6) Investor
Group Designees, one (1) of whom, unless and until a Dickstein Forfeiture Event
has occurred, shall be the Dickstein Designee, and (ii) five (5) Lender Group
Designees. The Investor Group Designees (including the Dickstein Designee) and
the Lender Group Designees are sometimes collectively referred to herein as the
"Designees" and individually as a "Designee."
(b)
(i) The Investor Group Designator, the Lender Group
Designator and the Dickstein Designator shall each give the Company
timely notice (the "Notice of Designee") of the name of each person
whom the relevant Stockholder Group wishes to be nominated by the
Company for election or re-election to the Board at the next meeting of
stockholders, or taking of action by written consent of stockholders,
at which Directors are to be elected (an "Election Meeting"). At the
option of any Stockholder Group Designator, the Notice of Designee may
also specify one or more alternates (an "Alternate Designee") to serve
in the event of the incapacity or other inability to serve of a
Designee, as provided herein. The Investor Group Designees and the
Lender Group Designees shall at all times include such number of
Independent Directors as shall be required to comply with the
provisions of Sections 2.3(b) and
674683.23
7
<PAGE>
2.3(c) hereof. Each Notice of Designee shall be in writing and shall be
timely if delivered to the Secretary of the Company at the Company's
principal executive offices not later than the close of business on the
60th day prior to the first anniversary of the preceding year's annual
meeting; provided, however, that in the event that the date of the
Election Meeting is more than 30 days before or after such anniversary
date, the Notice of Designee to be timely must be so delivered not
later than the later of (x) the close of business on the later of the
60th day prior to the Election Meeting and (y) the 20th day following
the day on which public announcement of the date of the Election
Meeting is first made by the Company. In no event shall the public
announcement of an adjournment of an Election Meeting commence a new
time period for the giving of the Notice of Designee as described
above. If the Company has not received a Notice of Designee from any
Stockholder Group Designator at a time when the relevant Stockholder
Group is entitled to name one or more Designee on or before the 10th
day before the latest date for delivery of the Notice of Designee
specified in the proviso to the next preceding sentence, the Company
shall so inform the relevant Stockholder Group Designator by written
notice. If the Company has not received a Notice of Designee from any
Stockholder Group Designator at a time when the relevant Stockholder
Group is entitled to name one or more Designee on or before the latest
date for delivery of such Notice, then such Stockholder Group
Designator shall be deemed to have delivered on such date a Notice of
Designee designating the Designees specified in the most recently
delivered Notice of Designee for any prior Election Meeting, or, if
674683.23
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<PAGE>
any such Designee is unable to serve and an Alternate Designee has been
specified therefor, such Alternate Designee.
(ii) By means of written notice given to a Stockholder
Group Designator within ten days of the Company's receipt of a Notice
of Designee sent by that Stockholder Group Designator, the Board may
reject a Designee if, in the exercise of its fiduciary duties, it
reasonably determines that such Designee fails to meet the moral or
professional standards required of a director of a public corporation
such as the Company. The Company's notice of rejection shall specify
the basis for such rejection in accordance with this subsection in
reasonable detail. If the Board shall reject any Designee as aforesaid,
the relevant Stockholder Group Designator may send a supplemental
Notice of Designee designating a replacement for the rejected Designee,
which notice shall be timely if received by the Company within fifteen
days of that Stockholder Group Designator's receipt of a notice of
rejection under the first sentence of this paragraph. If the
Stockholder Group Designator does not send a supplemental Notice of
Designee within the aforesaid time period and an Alternate Designee was
designated for the rejected Designee in the original Notice of
Designee, the Alternate Designee, unless rejected in accordance with
this subsection, shall be deemed nominated by the Stockholder Group
Designator in replacement of the rejected Designee.
(iii) Each Notice of Designee shall set forth, as to each
person whom the Stockholder Group wishes the Company to nominate for
election or re-election as a Director, all information relating to such
person that is required to be disclosed in
674683.23
9
<PAGE>
solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation
14A under the Exchange Act and Rule 14a-11 thereunder (including such
person's written consent to being named in the proxy statement as a
nominee and to serving as a Director if elected); provided, however,
that a Notice of Designee shall not be deemed defective for failure to
supply such information unless, after request therefor by the Company
to the relevant Stockholder Group Designator, such Stockholder Group
Designator fails to supply such information on a timely basis for
inclusion in the proxy materials for the relevant Election Meeting.
(iv) If the parties to this Agreement have received
notice from the Company that there are any directorships to be filled
at a forthcoming Election Meeting as to which no timely Notice of
Designee was received or deemed received, the parties to this Agreement
may vote their shares as to those directorships without constraint by
this Agreement.
(c) The Company shall nominate and recommend those Designees
as to whom it has received or is deemed to have received a timely Notice of
Designee to the stock holders of the Company for election or re-election as
Directors and shall otherwise use its best efforts to cause those Designees to
be elected to the Board. Each party to this Agreement agrees to vote, or cause
to be voted, all of the shares of Capital Stock Beneficially Owned by it at any
Election Meeting and agrees to take all actions otherwise reasonably in its
power as a stockholder of the Company to cause the Investor Group Designees
(including, in the absence of a Dickstein Forfeiture Event, the Dickstein
Designee) and the Lender Group Designees to be elected to the Board as described
herein.
674683.23
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<PAGE>
(d)
(i) If, following his election to the Board, a Lender
Group Designee shall vacate his position on the Board for any reason,
including, but not limited to, the death, removal or retirement of that
Designee, but excluding any changes in Board representation pursuant to
Section 2.2 hereof, then the Lender Group Designator shall have the
right to nominate a successor Designee to fill the vacancy.
(ii) If, following his election to the Board, the
Dickstein Designee shall vacate his position on the Board for any
reason, including, but not limited to, the death, removal or retirement
of that Designee, but excluding any changes in Board representation
pursuant to Section 2.2 hereof, then the Dickstein Designator shall
have the right to nominate a successor Designee to fill the vacancy.
(iii) If, following his election to the Board, an Investor
Group Designee shall vacate his position on the Board for any reason,
including, but not limited to, the death, removal or retirement of that
Designee, or the occurrence of a Dickstein Forfeiture Event, but
excluding any other changes in Board representation pursuant to Section
2.2 hereof, then the Investor Group Designator, except in cases covered
by Section 2.1(d)(ii), shall have the right to nominate a successor
Designee to fill the vacancy.
(iv) The Company shall cause any successor Designee
nominated pursuant to Section 2.1(d)(i)-(iii) (a "Nominated Successor")
to be elected to fill such vacancy as promptly as practicable at a
special meeting of the Board called for that purpose or by action of
the Board by unanimous written consent. If for any reason the
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Nominated Successor is not made a Director as aforesaid, the parties
hereto shall promptly use their respective best efforts (i) to bring
about a special meeting of stockholders for the purpose of (A) removing
from the Board any Director appointed instead of the Nominated
Successor and/or (B) electing the Nominated Successor to the Board or
(ii) to execute a written consent in lieu of a meeting of stockholders
(A) to remove from the Board any Director appointed instead of the
Nominated Successor and/or (B) to elect the Nominated Successor to the
Board.
(e) Each Stockholder Group Designator shall have the right, at
any time, to identify any of that Stockholder Group's Designees whom that
Stockholder Group wishes to have removed from his position on the Board and to
nominate a successor Designee to fill the resulting vacancy. The parties hereto
shall promptly use their respective best efforts (i) to bring about a special
meeting of stockholders, and each shall vote, or cause to be voted, all of the
shares of Capital Stock Beneficially Owned by it at that meeting, for the
purpose of removing from the Board any such Designee(s) so identified and
electing the nominated successor(s) to the Board or (ii) to execute a written
consent in lieu of a meeting of stockholders to remove from the Board any such
Designees so identified and to elect the nominated successor(s) to the Board.
(f) The parties to this Agreement shall not, and shall use
their best efforts to cause their respective Designees not to, take any action
to change from eleven (11) the number of Directors which shall constitute the
entire Board without the unanimous written agreement of the Investor Group
Designator, the Lender Group Designator and, unless and until a Dickstein
Forfeiture Event has occurred, the Dickstein Designator.
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Section 2.2. Loss of Board Representation.
(a) Decreases in Beneficial Ownership of Capital Stock
(including decreases occurring prior to the expiration of twenty-one months
after the date of the consummation of the Plan) shall cause decreases in the
Stockholder Groups' right to designate Directors, and shall cause forfeitures of
Board seats, in accordance with this Section 2.2(a); provided, that such
decreases in Stockholder Groups' right to designate Directors, and such
forfeitures of Board seats, shall take effect on the first day after the
expiration of twenty-one months after the consummation of the Plan and not
before. For purposes of this Section 2.2 and Section 2.3(e) hereof, the parties
have agreed that such decreases in the Beneficial Ownership of Capital Stock of
the Plan Secured Lender Group in the aggregate shall cause such decreases in the
Lender Group's right to designate Directors and such forfeitures of Board seats
as provided in those sections.
(i) If either the Investor Group or the Plan Secured
Lender Group, as the case may be, shall decrease its Beneficial
Ownership of Common Equivalent Shares at least twenty percent (20%),
but less than forty percent (40%), then the Investor Group or the
Lender Group, as the case may be, shall forfeit one (1) Board seat.
(ii) If either the Investor Group or the Plan Secured
Lender Group, as the case may be, shall decrease its Beneficial
Ownership of Common Equivalent Shares at least forty percent (40%), but
less than sixty percent (60%), then the Investor Group or the Lender
Group, as the case may be, shall forfeit two (2) Board seats.
(iii) If either the Investor Group or the Plan Secured
Lender Group, as the case may be, shall decrease its Beneficial
Ownership of Common Equivalent Shares at
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least sixty percent (60%), but less than eighty percent (80%), then the
Investor Group or the Lender Group, as the case may be, shall forfeit
three (3) Board seats.
(iv) If either the Investor Group or the Plan Secured
Lender Group, as the case may be, shall decrease its Beneficial
Ownership of Common Equivalent Shares at least eighty percent (80%),
but less than ninety percent (90%), then the Investor Group or the
Lender Group, as the case may be, shall forfeit four (4) Board seats.
(v) (A) If the Investor Group shall decrease its
Beneficial Ownership of Common Equivalent Shares at least ninety
percent (90%), but less than ninety-five percent (95%), then the
Investor Group shall forfeit five (5) Board seats, and (B) if the Plan
Secured Lender Group shall decrease its Beneficial Ownership of Common
Equivalent Shares at least ninety percent (90%), then the Lender Group
shall forfeit all five (5) of its Board seats.
(vi) Upon the occurrence of a Dickstein Forfeiture Event,
the Dickstein Entities shall forfeit their one (1) Board seat, but that
forfeiture shall not cause a reduction in the number of Directors which
the Investor Group has the right to designate unless the Investor Group
shall have decreased its Beneficial Ownership of Common Equivalent
Shares at least ninety-five percent (95%), in which case the Investor
Group shall forfeit all six (6) of its Board seats. If a Dickstein
Forfeiture Event has not occurred, none of the Board seats forfeited by
the Investor Group under Section 2.2(a)(i)-(v) shall be the Board seat
of the Dickstein Designee.
(b) In the event of a decrease in Beneficial Ownership that
decreases a Stockholder Group's right to name Directors under Section 2.2(a)
hereof, that Stockholder
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Group's Designator shall name the Designee(s) to be removed from the Board in
accordance with that section and the parties to this Agreement shall use their
respective best efforts to cause the resignations from the Board of any
Designee(s) so named. If the number of Designees of a Stockholder Group serving
on the Board is not promptly decreased in accordance with Section 2.2(a) hereof,
the parties hereto shall promptly use their respective best efforts (i) to bring
about a special meeting of stockholders, and each shall vote, or cause to be
voted, all of the shares of Capital Stock Beneficially Owned by it at that
meeting, for the purpose of removing from the Board such number of the Designees
of that Stockholder Group as shall be required in order to comply with Section
2.2(a) or (ii) to execute a written consent in lieu of a meeting of stockholders
to remove from the Board such number of Designees of that Stockholder Group.
Section 2.3. Committee Representation.
(a) Each party to this Agreement shall vote, or cause to be
voted, its Capital Stock Beneficially Owned, and shall use its best efforts to
cause its respective Stockholder Group's Designees on the Board, subject to the
exercise of their fiduciary obligations, to establish the following committees
of the Board and to cause those committees of the Board to be comprised and have
the functions, powers and authorizations, as set forth below.
(b) The Audit Committee shall consist of five (5) Independent
Directors, three (3) of whom will be Lender Group Designees named by a majority
of the Lender Group Designees then serving on the Board and two (2) of whom will
be Investor Group Designees named by a majority of the Investor Group Designees
then serving on the Board. The Audit Committee shall exercise, subject to
applicable provisions of laws, the functions regularly
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administered by committees of such type including, without limitation, (A) to
review the professional services and independence of the Company's independent
auditors and the scope of the annual external audit as recommended by the
independent auditors, (B) to ensure that the scope of the annual external audit
by the independent auditors of the Company is sufficiently comprehensive, (C) to
review, in consultation with the independent auditors and the internal auditors,
the plan and results of the annual external audit, the adequacy of the Company's
internal control systems and the results of the Company's internal audits, (D)
to review with management and the independent auditors, the Company's annual
financial statements, financial reporting practices and the results of each
external audit, and (E) to consider the qualification of the Company's
independent auditors, to make recommendations to the Board as to their selection
and to review the relationship between such independent auditors and management.
(c) The Compensation and Nominating Committee shall consist of
five (5) Directors, two (2) of whom shall be Lender Group Designees named by a
majority of the Lender Group Designees then serving on the Board and three (3)
of whom shall be Investor Group Designees named, subject to the following
sentence, by a majority of the Investor Group Designees then serving on the
Board. Unless a Dickstein Forfeiture Event has occurred, one (1) of the three
Investor Group Designees on the Compensation and Nominating Committee shall be
the Dickstein Designee. At least one of the Lender Group Designees and at least
one of the Investor Group Designees (other than the Dickstein Designee) serving
on the Compensation and Nominating Committee shall be an Independent Director.
The Compensation and Nominating Committee shall exercise, subject to applicable
provisions of
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law, the functions regularly administered by committees of such type including,
without limitation, the power to review and recommend to the Board the
compensation and benefit arrangements for the officers of the Company, the
administering of the stock option plans and executive compensation programs of
the Company, including bonus and incentive plans applicable to officers and key
employees of the Company and to recommend to the Board nominees for election as
Directors.
(d) The Finance Committee shall consist of five (5) Directors,
two (2) of whom will be Lender Group Designees named by a majority of the Lender
Group Designees then serving on the Board and three (3) of whom will be Investor
Group Designees named by a majority of the Investor Group Designees then serving
on the Board. The Finance Committee shall exercise, subject to applicable
provisions of law, the functions regularly administered by committees of such
type including, without limitation, to make recommendations to the Board with
respect to the Company's credit arrangements, the issuance of equity and long
term debt instruments and other financial matters.
(e)
(i) If the Investor Group shall decrease its Beneficial
Ownership of Common Equivalent Shares by more than (331/3%), it will
forfeit one Audit Committee Seat. If the Investor Group shall decrease
its Beneficial Ownership of Common Equivalent Shares by more than sixty
six and two thirds percent (662/3%), it will forfeit both of its Audit
Committee seats. If the Plan Secured Lender Group shall decrease its
Beneficial Ownership of Common Equivalent Shares by more than twenty
five percent (25%), the Lender Group will forfeit one Audit Committee
seat. If the Plan Secured
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Lender Group shall decrease its Beneficial Ownership of Common
Equivalent Shares by more than fifty percent (50%), the Lender Group
will forfeit two Audit Committee seats. If the Plan Secured Lender
Group shall decrease its Beneficial Ownership of Common Equivalent
Shares by more than seventy five percent (75%), the Lender Group will
forfeit all three of its Audit Committee seats.
(ii) If the Plan Secured Lender Group shall decrease its
Beneficial Owner ship of Common Equivalent Shares by more than
(331/3%), the Lender Group will forfeit one Compensation and Nominating
Committee seat. If the Plan Secured Lender Group shall decrease its
Beneficial Ownership of Common Equivalent Shares by more than sixty six
and two thirds percent (662/3%), the Lender Group will forfeit both of
its Compensation and Nominating Committee seats. If the Investor Group
shall decrease its Beneficial Ownership of Common Equivalent Shares by
more than twenty five percent (25%), it will forfeit one Compensation
and Nominating Committee seat. If the Investor Group shall decrease its
Beneficial Ownership of Common Equivalent Shares by more than fifty
percent (50%), it will forfeit two Compensation and Nominating
Committee seats. If the Investor Group shall decrease its Beneficial
Ownership of Common Equivalent Shares by more than seventy five percent
(75%) and a Dickstein Forfeiture Event shall have occurred, it will
forfeit all three of its Compensation and Nominating Committee seats.
If a Dickstein Forfeiture Event has not occurred, none of the
Compensation and Nominating Committee seats forfeited by the Investor
Group under this Section 2.3(e)(ii) shall be the Compensation and
Nominating Committee seat of the Dickstein Designee.
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(iii) If the Plan Secured Lender Group shall decrease its
Beneficial Owner ship of Common Equivalent Shares by more than
(331/3%), the Lender Group will forfeit one Finance Committee seat. If
the Plan Secured Lender Group shall decrease its Beneficial Ownership
of Common Equivalent Shares by more than sixty six and two thirds
percent (662/3%), the Lender Group will forfeit both of its Finance
Committee seats. If the Investor Group shall decrease its Beneficial
Ownership of Common Equivalent Shares by more than twenty five percent
(25%), it will forfeit one Finance Committee seat. If the Investor
Group shall decrease its Beneficial Ownership of Common Equivalent
Shares by more than fifty percent (50%), it will forfeit two Finance
Committee seats. If the Investor Group shall decrease its Beneficial
Ownership of Common Equivalent Shares by more than seventy five percent
(75%), it will forfeit all three of its Finance Committee seats.
(f) If a Stockholder Group's right to committee representation
decreases under Section 2.3(e) hereof, each party to this Agreement shall use
its respective best efforts to cause the required number of the Designees of
that Stockholder Group to resign their Committee(s) assignments.
(g) The parties to this Agreement shall not, and shall use
their best efforts to cause their respective Designees not to, take any action
to create any committee of the Board other than as provided in this Agreement
without the unanimous written agreement of the Investor Group Designator, the
Lender Group Designator and, unless and until a Dickstein Forfeiture Event has
occurred, the Dickstein Designator.
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Section 2.4. Computation and Notice of Common Equivalent Shares
Ownership.
(a) For the purposes of this Agreement, the Investor Group's
Beneficial Ownership of Common Equivalent Shares shall be determined with
reference only to the Perlmutter/Arad Group's Beneficial Ownership of Common
Equivalent Shares and shall not be determined by reference to, or affected by,
any change in the Dickstein Entities' Beneficial Ownership of Common Equivalent
Shares.
(b) For the purposes of Section 2.2 and Section 2.3 hereof, a
group's reduction in its Beneficial Ownership of Common Equivalent Shares shall
be determined by comparing, at any particular time, that group's Beneficial
Ownership of Common Equivalent Shares (including after-acquired Capital Stock)
to that group's Beneficial Ownership of Common Equivalent Shares immediately
following the consummation of the Plan, as adjusted for any stock splits,
reverse stock splits, recapitalization of the Common Equivalent Shares or
capital transaction of a similar nature. Any of the Investor Group, the
Dickstein Group, the Lender Group and the Plan Secured Lender Group may use the
Common Equivalent Shares held by Affiliates of its members to calculate its
total Common Equivalent Shares ownership if such Affiliates have agreed in
writing, for the benefit of all parties to this Agreement, to be bound by this
Agreement.
(c) Any reduction in Common Equivalent Shares Beneficially
Owned by any Secured Lender shall constitute a reduction in the number of Common
Equivalent Shares Beneficially Owned by the Plan Secured Lender Group for
purposes of Section 2.2, 2.3 and 4.2(e)(iii) hereof, except to the extent that
(i) any or all of the Common Equivalent Shares no
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longer so Beneficially Owned are Beneficially Owned by any member of the Plan
Secured Lender Group (or any Affiliate of such a member) who is, or who agrees
to be, bound hereby or (ii) the Lender Group Designator delivers to the Investor
Group Designator, on or prior to the date on which the Lender Group Designator
delivers a Notice of Designee with respect to an Election Meeting, an
irrevocable proxy from one or more members of the Plan Secured Lender Group
(which are not Secured Lenders), authorizing the Investor Group Designator and
the Dickstein Group Designator, acting jointly, to vote a specified number
Common Equivalent Shares Beneficially Owned by such member in the manner
required by this Agreement with respect to the election of directors at such
Election Meeting; provided that even if such an irrevocable proxy has been
delivered this clause (ii) shall not apply with respect to the Common Equivalent
Shares covered thereby with respect to any period after that meeting if such
Common Equivalent Shares fail to be voted in a manner in which such Common
Equivalent Shares would otherwise be required to be voted under this Agreement
if they were Beneficially Owned by a party to this Agreement. For example, (x)
if a Secured Lender sells two million Common Equivalent Shares to a third party
which is not and does not agree to be bound by this Agreement and does not
deliver an irrevocable proxy as provided in the preceding sentence, the number
of Common Equivalent Shares Beneficially Owned by the Plan Secured Lender Group
shall be deemed to have been reduced by two million Common Equivalent Shares,
whether or not offsetting acquisitions of Common Equivalent Shares have been
made by other members of the Plan Secured Lender Group, (y) if, the facts are
the same as in clause (x) but another member of the Plan Secured Lender Group
delivers a proxy described in the preceding sentence and after the meeting to
which the proxy relates the holder
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of those shares fails to take an action required by Section 2.1, 2.2 or 2.3 of
this Agreement, clause (ii) of Section 2.4(c) shall no longer apply with respect
to those shares.
(d) If at any time a Stockholder Group Designator has actual
knowledge (but without any duty of inquiry) that the Beneficial Ownership of
Common Equivalent Shares of the related Stockholder Group (including, for
purposes of the Lender Group Designator, the Plan Secured Lender Group) has been
reduced such that such Stockholder Group would be required to forfeit one or
more or any additional Board seats pursuant to Section 2.2 or Committee seats
pursuant to Section 2.3, it shall as promptly as practicable thereafter notify
the Company and the other parties to this Agreement.
Section 2.5. Restriction on Disposition of Stock Held by
Subsidiary. The parties to this Agreement shall not, and shall use their best
efforts to cause their respective Designees not to, (i) permit Marvel
Characters, Inc. to transfer or otherwise convey any interest in any of the
shares of Common Stock held by Marvel Characters, Inc. unless such transfer or
other conveyance (A) has been approved in writing by a majority in voting power
of each Stockholder Group, or (B) is to the Company, or (ii) allow such shares
of Common Stock to be entitled to vote with respect to matters to be voted upon
or consented to by the stockholders of the Company unless adequate provision is
made to assure that such shares of Common Stock will thereafter be voted, on all
such matters, proportionately with all other outstanding shares of Common Stock
voting on all such matters.
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ARTICLE III
REPRESENTATIONS
Section 3.1. Representations of the Dickstein Entities. The
Dickstein Entities represent to the other parties to this Agreement that they
will Beneficially Own approximately 6,115,000 Common Equivalent Shares in the
aggregate immediately following the consummation of the Plan.
Section 3.2. Representations of the Perlmutter/Arad Group. The
Perlmutter/Arad Group represents to the other parties to this Agreement that it
will Beneficially Own approximately 17,318,000 Common Equivalent Shares in the
aggregate immediately following the consummation of the Plan.
Section 3.3. Representations of the Lender Group.
(a) The Chase Manhattan Bank represents to the other
parties to this Agreement that it will Beneficially Own approximately 2,096,291
Common Equivalent Shares immediately following the consummation of the Plan and
that it does not share Beneficial Ownership of any of those shares with any
other member of the Lender Group.
(b) Morgan Stanley & Co. Incorporated represents to the other
parties to this Agreement that it will Beneficially Own approximately 4,020,592
Common Equivalent Shares immediately following the consummation of the Plan and
that it does not share Beneficial Ownership of any of those shares with any
other member of the Lender Group.
(c) Whippoorwill represents to the other parties to this
Agreement that each Whippoorwill Account will Beneficially Own approximately the
number of shares of Capital Stock set forth on Schedule 1 to this Agreement
immediately following the consummation of
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the Plan and that none of the Whippoorwill Accounts shares Beneficial Ownership
of any of those shares with any other member of the Lender Group.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Effective Date. This Agreement shall become
effective upon the consummation of the Plan.
Section 4.2. Termination.
(a) This Agreement shall terminate:
(i) Upon consent of all of the parties hereto who are
then subject to this Agreement;
(ii) As to the Perlmutter/Arad Group, in the event that
the Investor Group, or any of its Affiliates that have agreed to be
bound by this Agreement, shall cease to be entitled to the election of
any Designee (exclusive of the Dickstein Designee) to the Board
hereunder;
(iii) As to the Lender Group, in the event that the Lender
Group, or any of their Affiliates that have agreed to be bound by this
Agreement, shall cease to be entitled to the election of any Designee
to the Board hereunder and, with respect to any individual Secured
Lender, when the Common Equivalent Shares Beneficially Owned by such
Secured Lender have been less than 10% of the Common Equivalent Shares
Beneficially Owned by such Secured Lender immediately following the
consummation of the Plan for a period of 184 consecutive calendar days;
provided, that this Agreement shall terminate with respect to
Whippoorwill Associates, Incorporated and
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each Whippoorwill Account when the Common Equivalent Shares
Beneficially Owed by all of them in the aggregate have totaled less
than 10% of all Common Equivalent Shares Beneficially Owed by all of
them immediately following the consummation of the Plan for a period of
184 consecutive calendar days; and provided further, that the
termination of this Agreement with respect to any Secured Lender shall
be deemed to result in a reduction in the total amount of Common
Equivalent Shares Beneficially Owed by the Plan Secured Lender Group by
an amount equal to the amount of Common Equivalent Shares Beneficially
Owned by such Secured Lender at such time;
(iv) As to the Dickstein Entities, in the event that the
Dickstein Entities, or any of their Affiliates that have agreed to be
bound by this Agreement, shall cease to be entitled to the election of
their Designee to the Board hereunder.
(b) In the event that a material violation of any covenant
hereunder by a member of a Stockholder Group that is not cured within thirty
days of written notice thereof by a member of one of the other Stockholder
Groups shall occur and be continuing, the Stockholder Group of the breaching
party shall not be deemed to be the Beneficial Owner of any Capital Stock for
purposes of Board representation under Section 2.2 hereof or committee
representation under Section 2.3 hereof, and shall have no further rights under
this Agreement. Such member and such Stockholder Group shall nonetheless
continue to be deemed to Beneficially Own its Capital Stock for all other
purposes and to be bound to perform its obligations under this Agreement.
Section 4.3. Secretary to Retain Copy.
A copy of this Agreement shall be filed with the Secretary of the Company.
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Section 4.4. Further Actions. At any time and from time to
time each party agrees, at its or his expense, to take such actions and to
execute and deliver such documents as may be necessary to effectuate the
purposes of this Agreement. Each party hereto will not take any action that
would (x) result in a breach of any covenant or any other obligation of such
party under this Agreement or (y) impede, interfere with or discourage the
transactions contemplated by this Agreement.
Section 4.5. Specific Performance. The parties hereto
acknowledge that failure on any of their parts to comply with the terms of this
Agreement shall cause the other parties hereto immediate and irreparable harm
that cannot be adequately compensated by the remedies at law, and that in the
event of such breach or violation, or threatened breach or violation, the other
parties hereto shall have such provisions of this Agreement specifically
enforced by preliminary and permanent injunctive relief without having to prove
the inadequacy of the available remedies at law or any actual damages and
without posting bond or other security. Any remedy sought or obtained by a party
hereto shall not be considered either exclusive or a waiver of the rights of a
party hereto or any other person to assert any other remedies they have in law
or equity. In any proceeding upon a motion for any such injunctive relief, a
party's ability to answer in damages shall not be a bar, or be interposed as a
defense, to the granting of such injunctive relief. Any rights under this
Section 4.5 may be enforced in any appropriate court in the
State of Delaware.
Section 4.6. Entire Agreement. This Agreement contains
the entire under standing between the parties hereto with respect to the subject
matter hereof, and supersedes all
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prior and contemporaneous agreements and understandings among the parties hereto
except as herein contained, with any of the terms hereof.
Section 4.7. Notices. All notices and other communications
hereunder shall be in writing and shall be delivered personally against receipt
thereof, or transmitted by telecopier or by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
If to the Company, to
Toy Biz, Inc.
685 Third Avenue
New York, New York 10017
Attention: Secretary
Telecopy: (212) 588-5100
with a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: John Turitzin, Esq.
Telecopy: (212) 856-7813
if to Perlmutter, the Trust, the Foundation, Object Trading or Zib, to:
P.O. Box 1028
Lake Worth, Florida 33460-1028
Telecopy:
c/o Daniel Golden (212) 806-6006
and
c/o Lawrence Mittman (212) 856-7807
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with a copy to:
Stroock & Stroock & Lavan
180 Maiden Lane
New York, New York 10004
Attention: Daniel Golden
Telecopy: (212) 806-6006
and
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Lawrence Mittman, Esq.
Telecopy: (212) 856-7807
if to Arad, to:
c/o Avi Arad & Associates
1698 Post Road East
Westport, Connecticut 06880
Telecopy: (203) 254-2613
with a copy to:
Stroock & Stroock & Lavan
180 Maiden Lane
New York, New York 10004
Attention: Daniel Golden
Telecopy: (212) 806-6006
and
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Lawrence Mittman, Esq.
Telecopy: (212) 856-7807
if to any of the Dickstein Entities, to:
Dickstein Partners, Inc.
600 Madison Avenue, 16th Floor
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New York, New York 10021
Attention: Alan Cooper
Telecopy: (212) 754-5825
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Abbe Dienstag, Esq.
Telecopy: (212) 715-8000
if to The Chase Manhattan Bank, to:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Anthony J. Horan
Telecopy: (212) 270-4240
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Scott K. Charles, Esq.
Telecopy: (212) 403-1000
if to Morgan Stanley & Co. Incorporated, to:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Attention: Michael J. Petrick
Telecopy: (212) 761-0713
with a copy to:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10026
Attention: Laura DeForest, Esq.
Telecopy: (212) 762-8831
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if to any Whippoorwill Account, to:
Whippoorwill Associates, Incorporated
11 Martine Avenue
White Plains, New York 10606
Attention: Shelley Greenhaus
Telecopy: (914) 683-1242
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Thomas Mayer, Esq.
Telecopy: (212) 715-8000
Any notice shall be deemed to have been given on the date of
receipt if delivered personally or by overnight courier, the date of
transmission with confirmation back if transmitted by telecopier, or the third
day following posting if transmitted by mail.
Section 4.8. Waivers; Amendment. This Agreement may not be
modified, amended or waived other than by a written instrument executed by the
parties hereto. Neither the failure nor any delay on the part of either party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof. Any waiver by any party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement.
Section 4.9. Binding Effect; Heirs and Successors.
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and shall be assignable only to an Affiliate of a party
hereto and, with respect to assignment by Secured
674683.23
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Lenders, to any member of the Plan Secured Lender Group and any Affiliate of
such a member, and only if such Affiliate of a party hereto, member of the Plan
Secured Group or Affiliate of a member of the Plan Secured Lender Group agrees
in writing to be bound by this Agreement. The provisions of this Agreement shall
be binding upon and inure to the benefit of the heirs and successors of the
parties hereto.
Section 4.10. No Third Party Beneficiaries.
This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any person not a party to this Agreement (except as
provided in Section 4.9).
Section 4.11. Separability. If any provision of this Agreement
shall be adjudicated to be invalid, illegal or unenforceable, such provision
shall be amended to delete therefrom the portion thus adjudicated to be invalid,
illegal or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made, and the balance of this Agreement shall remain in effect.
Section 4.12. Headings. The headings in this Agreement
are solely for convenience of reference and shall be given no effect in the
construction or interpretation of any provision of this Agreement.
Section 4.13. Pronouns. Any masculine personal pronoun
shall be considered to mean the corresponding feminine or neuter personal
pronoun, as the context requires.
Section 4.14. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
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Section 4.15. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the principles of the conflict of laws thereof.
Section 4.16. No Restriction on Transferability. Nothing in
this Agreement shall restrict the ability of any of the parties to this
Agreement to sell or otherwise transfer any shares of Common Stock, Preferred
Stock or other securities of the Company, nor shall a purchaser or other
transferee of any Capital Stock sold or transferred by a signatory hereto be
subject to any of the obligations created hereby unless such purchaser or
transferee has agreed in writing, for the benefit of all parties to this
Agreement, to be so bound.
Section 4.17. Whippoorwill Obligations Several and Not Joint.
With respect to any obligations hereunder assumed by any Whippoorwill Account,
such obligations shall be several and not joint and shall be limited to the
percentage held by such Whippoorwill Account of the total Common Equivalent
Shares held by all such Whippoorwill Accounts, and no such Whippoorwill Account
shall be liable for any obligation of any other Whippoorwill Account.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
Avi Arad
Mark Dickstein
DICKSTEIN & CO., L.P.
By: Dickstein Partners, L.P.
By: Dickstein Partners Inc.
By:
Name: Alan S. Cooper
Title: Vice President
DICKSTEIN FOCUS FUND L.P.
By: Dickstein Partners, L.P.
By: Dickstein Partners Inc.
By:
Name: Alan S. Cooper
Title: Vice President
DICKSTEIN INTERNATIONAL LIMITED
By: Dickstein Partners Inc.
By:
Name: Alan S. Cooper
Title: Vice President
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ELYSSA DICKSTEIN, JEFFREY SCHWARZ
AND ALAN COOPER AS TRUSTEES
U/T/A/D 12/27/88, MARK DICKSTEIN,
GRANTOR
By:
Alan S. Cooper
Trustee
MARK DICKSTEIN AND ELYSSA
DICKSTEIN, AS TRUSTEES OF THE
MARK AND ELYSSA DICKSTEIN
FOUNDATION
By:
Mark Dickstein
Trustee
Elyssa Dickstein
Isaac Perlmutter
ISAAC PERLMUTTER T.A.
By:
Isaac Perlmutter
Trustee
THE LAURA & ISAAC PERLMUTTER FOUNDA
TION, INC.
By:
Name: Isaac Perlmutter
Title: President
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OBJECT TRADING CORP.
By:
Name: Isaac Perlmutter
Title: President
ZIB INC.
By:
Name: Isaac Perlmutter
Title: President and Chief Executive Officer
THE CHASE MANHATTAN BANK
By:
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By:
Name: Mitchael J. Petrick
Title: Managing Director
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WHIPPOORWILL ASSOCIATES, INCORPORATED, as agent of and/or general partner for
the accounts listed on Schedule 1 hereto
By:
Name: Shelley Greenhaus
Title: Managing Director
TOY BIZ, INC.
By:
Name: Joseph M. Ahearn
Title: President and Chief Executive Officer
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<TABLE>
<CAPTION>
Schedule 1
Common Common Share
Fund/Account Shares Preferred Shares Equivalents
<S> <C> <C> <C>
The President and Fellows of
Harvard College 484,997 551,300 1,057,776
The Rockefeller Foundation 121,546 208,495 338,164
Vega Partners II, L.P. 137,455 234,589 381,183
Vega Partners III, L.P. 317,587 543,269 882,022
Vega Partners IV, L.P. 200,821 342,659 556,830
Vega Offshore Fund Trust 86,108 138,552 230,058
Whippoorwill Profit Sharing Plan 1,890 2,717 4,712
Total 1,350,404 2,021,581 3,450,745
</TABLE>
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EXHIBIT 99.4
STOCKHOLDERS' AGREEMENT
by and among
AVI ARAD,
VARIOUS DICKSTEIN ENTITIES AND INDIVIDUALS,
ISAAC PERLMUTTER,
ISAAC PERLMUTTER T.A.,
THE LAURA & ISAAC PERLMUTTER FOUNDATION INC.,
OBJECT TRADING CORP.,
ZIB INC.,
VARIOUS SECURED LENDERS,
and
TOY BIZ, INC.
Dated as of October 1, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.......................................3
ARTICLE II
MANAGEMENT
Section 2.1. Board Representation..............................7
Section 2.2. Loss of Board Representation.....................12
Section 2.3. Committee Representation........... .............15
Section 2.4. Computation and Notice of Common Equivalent Shares
Ownership........................................19
Section 2.5. Restriction on Disposition of Stock Held by
Subsidiary.......................................21
ARTICLE III
REPRESENTATIONS
Section 3.1. Representations of the Dickstein Entities........22
Section 3.2. Representations of the Perlmutter/Arad Group.....22
Section 3.3. Representations of the Lender Group..............22
ARTICLE IV
MISCELLANEOUS
Section 4.1. Effective Date...................................23
Section 4.2. Termination......................................23
Section 4.3. Secretary to Retain Copy.........................25
Section 4.4. Further Actions..................................25
Section 4.5. Specific Performance.............................25
Section 4.6. Entire Agreement.................................26
Section 4.7. Notices..........................................26
Section 4.8. Waivers; Amendment...............................29
Section 4.9. Binding Effect; Heirs and Successors.............29
Section 4.10. No Third Party Beneficiaries.....................30
Section 4.11. Separability.....................................30
Section 4.12. Headings.........................................30
Section 4.13. Pronouns.........................................30
Section 4.14. Counterparts.....................................30
Section 4.15. Governing Law....................................30
Section 4.16. No Restriction on Transferability................31
Section 4.17. Whippoorwill Obligations Several and Not Joint......31
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