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September 7, 2009

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Marvel to pay Disney penalty if deal aborted

MARVEL Entertainment Inc would have to pay the Walt Disney Co a termination fee of US$140 million if it terminates a proposed merger with Disney, according to a securities filing.

The US$4 billion merger agreement, announced on August 31, contains termination rights for Disney and Marvel, including Marvel's right to stop the merger to pursue a "superior deal," Marvel said in a filing to the United States Securities and Exchange Commission last Friday.

Marvel has agreed, however, not to solicit other merger offers, the filing said. It may be required to pay Disney a termination fee of US$140 million under "specified circumstances," the filing said.

The agreement also amends Marvel Chief Executive Isaac Perlmutter's employment contract to provide that Perlmutter could not resign for "good reason" over a change in his duties and still collect severance benefits, the filing said.

Under the proposed merger agreement Perlmutter will report to Disney's Chief Executive Bob Iger.

If the merger is completed, Perlmutter would get a planned 2009 bonus, or about US$4.3 million, the filing said.




 

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