EMPLOYMENT AGREEMENT

Exhibit 10.3

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, dated as of 10 December 2008 (the “Effective Date”), between Marvel Entertainment International Ltd (“Marvel International”), a limited company (Company Number: 04955607) formed under the laws of the United Kingdom that is wholly owned by Marvel Entertainment, Inc., a corporation formed under the laws of the state of Delaware, United States (the “Company”), and Simon Philips (the “Employee”).

WHEREAS, Marvel International and the Employee entered into a contract of employment dated 28 September 2006 (the “2006 Agreement”).

WHEREAS, Marvel International and the Employee now wish to replace the 2006 Agreement with the terms and conditions set forth in this agreement (this “Agreement”).

NOW, THEREFORE, in consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows:

1. Employment, Duties and Acceptance .

1.1 Employment, Duties . Marvel International hereby employs the Employee for the Term (as defined in Section 2.1), to render exclusive and full-time services to Marvel International as President, World Wide Consumer Products and CEO of Marvel Animation or in such other position as may be mutually agreed upon by the Company and the Employee. The Employee shall report to the Company’s chief executive officer or his designee and Board of Directors and shall perform such other duties consistent with such positions as may be assigned to the Employee by the Company’s chief executive officer or his designee or the Board of Directors.

1.2 Acceptance . The Employee hereby accepts such employment and agrees to render the services described above. During the Term, the Employee agrees to serve Marvel International and the Company faithfully and to the best of the Employee’s ability, to devote the Employee’s entire business time, energy and skill to such employment and to use the Employee’s professional efforts, skill and ability to promote Marvel International’s and the Company’s interests. The Employee further agrees to accept election, and to serve during all or any part of the Term, as an officer or director of Marvel International or the Company and of any subsidiary or affiliate of Marvel International or the Company, without any compensation therefor other than that specified in this Agreement, if elected to any such position by the stockholders or by the Board of Directors of Marvel International or the Company or of any subsidiary or affiliate, as the case may be. Unless otherwise agreed to in writing by Marvel International or the Company (as applicable) and the Employee, the Employee shall upon the expiration of the Term, immediately resign any such officer or director position.

1.3 Location . The duties to be performed by the Employee hereunder shall be performed primarily at the offices of Marvel International in London, England. The Employee may be required to work on a temporary basis at any of the Company’s or its affiliates’ other locations in Europe or the US. The Employee may also be required to travel on business within and outside the UK; this may involve travelling outside normal business hours and at weekends and Bank or public holidays should the need arise.

1.4 Hours . The Employee’s business hours shall be the hours between 9:00 a.m. and 5:30 p.m., Monday to Friday (excluding bank and other public holidays in England), and such further time as shall be necessary for the proper performance by the Employee of his duties under this Agreement. The Employee acknowledges and agrees that he is exempt from the Working Time Regulations 1998 on account of his duties and powers. 

1.5 Disciplinary Procedures . There are no formal disciplinary rules specific to the Employee’s employment. If the Employee is dissatisfied with any disciplinary decision or if he has any grievance relating to his employment he should submit a written memorandum giving particulars of such dissatisfaction or grievance to Marvel International’s Board of Directors and the matter shall be dealt with by discussion and a majority decision of the directors present at the next convened meeting of the Board of Directors.    

1.6 Particulars of Employment . This Agreement contains the particulars required to be given under Section 1 of the U.K. Employment Rights Act 1996 (“ERA”) to the intent that, as at the date of this Agreement, Marvel International shall not be required to deliver to the Employee a separate written statement pursuant to Section 1 of the ERA.

1.7 Effect upon 2006 Employment Agreement . Upon the effectiveness of this Agreement, the 2006 Employment Agreement will be of no further force or effect.    

1.8 Section 409A of U.S. Tax Code . The Employee acknowledges that, were he to become subject to United States federal income tax, he could, as a “specified employee” under U.S. tax laws, be subject to potentially adverse tax consequences under U.S. Internal Revenue Code Section 409A (“Section 409A”). The Company has established policies for compliance with Section 409A that are intended to prevent “specified employees” from suffering those adverse consequences.  The Employee therefore agrees that, to the extent necessary to avoid such adverse consequences to himself, this Agreement will be subject to the Company’s  policies for compliance with Section 409A.

2. Term of Employment

2.1 The Term . The Employee will commence employment under this Agreement as from the Effective Date. The term of the Employee’s employment under this Agreement (the “Term”) shall continue until 31 December 2010 and thereafter unless and until terminated by either party’s giving notice pursuant to Section 4.2 or 4.3 hereof as the case may be.

2.2 The Employee’s period of continuous employment with Marvel International commenced on 6 November 2006.

3. Compensation; Benefits .

3.1 Salary . As from the Effective Date until and including 31 December 2008, as compensation for all services to be rendered pursuant to this Agreement, Marvel International agrees to pay the Employee a base salary, payable monthly in arrears, at the annual rate of £250,850, less such deductions or amounts to be withheld as are required by applicable law and regulations and deductions authorized by the Employee in writing. From 1 January 2009, as compensation for all services to be rendered pursuant to this Agreement, Marvel International agrees to pay the Employee during the Term a base salary, payable monthly in arrears, at the annual rate of £358,380, less such deductions or amounts to be withheld as are required by applicable law and regulations and deductions authorized by the Employee in writing. The Employee’s base salary shall be reviewed no less frequently than annually by the Board of Directors in accordance with the policies and procedures that apply to other similarly situated employees of the Company in order to determine whether any change to the Employee’s base salary is warranted; provided, however, that under no circumstances will the Employee’s base salary be less than the amount payable as of the Effective Date. The Employee’s base salary as in effect from time to time is referred to in this Agreement as the “Base Salary”.

3.2 Bonus . (a) In addition to the amounts to be paid to the Employee pursuant to Section 3.1 hereof, the Employee will be entitled to receive a one-time bonus of £163,100, conditional on each party’s signing this Agreement (the “Signing Bonus”). The Signing Bonus shall be paid within thirty (30) days from the Effective Date.

(b) In addition to the amounts to be paid to the Employee pursuant to Section 3.1 and Section 3.2(a) hereof, the Employee will be entitled to receive a cash bonus based in whole or in part upon the attainment of performance goals set by the Board of Directors (the “Bonus Performance Goals”). The Employee’s target annual bonus amount, in British Pounds, shall be 50% of his Base Salary received for the year. Each annual bonus shall be paid when annual bonuses are paid generally to the Company’s other employees but in no event later than March 14 of the next calendar year. Notwithstanding the foregoing, Marvel International shall continue through December 2008 to advance to the Employee, on a non-refundable basis, £4,447 per month against the Employee’s 2008 bonus.

3.3 Business Expenses . Marvel International shall pay for or reimburse the Employee for all reasonable expenses actually incurred by or paid by the Employee during the Term in the performance of the Employee’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 that those expenses were incurred and accounted for in accordance with the policies and procedures established by the Company.

3.4 Vacation . During the Term, the Employee shall be entitled to a vacation period or periods of five (5) weeks per year (provided that the Employee remains based in the United Kingdom; otherwise, four (4) weeks per year including public holidays) taken in accordance with the vacation policy of Marvel International during each year of the Term. Vacation time not used by the end of a calendar year shall be forfeited. Marvel International reserves the right to require the Employee to take any unused holiday entitlement during any period of notice of termination that has been given either by it or by the Employee. If Marvel International does not exercise this right then, on leaving its employment, the Employee will be paid a sum equivalent to the value of any accrued but unused holiday to which the Employee is entitled after deduction of tax and national insurance contributions. Upon termination of the Employee’s employment, if the Employee has taken more days of holiday than the Employee’s accrued entitlement during the relevant holiday year, the Employee will be required to pay Marvel International for any excess days taken, which sum may be deducted from his final salary or any other sums then owing to the Employee by it.

3.5 Fringe Benefits . During the Term, the Employee shall be entitled to all benefits for which the Employee shall be eligible under any qualified pension plan, 401(k) plan, group insurance or other so-called “fringe” benefit plan which the Company provides to its employees generally, together with medical benefits for the Employee, as from time to time in effect for employees of the Company generally. In the event of such benefits being limited (by law or otherwise) to residents of the United States of America, Marvel International shall provide Employee with reasonably comparable benefits. In any event, specifically, during the Term:

(a) Marvel International will not provide any pension scheme or other pension arrangements for the Employee. At the request of the Employee, Marvel International, each month, shall (by deduction from the Employee’s gross pay) pay directly to a private pension scheme nominated by the Employee a lump sum equivalent to ten percent (10%), or any lower percentage specified by the Employee, of his then current monthly salary.

(b) There is no contracting-out certificate in force under the U.K. Pensions Schemes Act 1993 in respect of the Employee’s employment with Marvel International.

(c) Subject to the Employee complying with all terms and conditions from time to time imposed by the medical insurance provider chosen by the Company (as may be varied from time to time), Marvel International shall maintain at its cost, private medical insurance at the London A scale (BUPA or PPP) arranged with such insurance provider for the Employee and his wife and dependent children under the age of 18. In lieu of the foregoing, the Employee may, at his option, be reimbursed for his own provision of medical insurance provided that Marvel International shall not be required to incur greater expense than had the Employee participated in Marvel International’s scheme.

(d) Marvel International shall provide the Employee with, or, at the Employee’s option, will reimburse the Employee for the cost of his directly obtaining, permanent health insurance cover, which in the event of serious illness, will provide the Employee, after six months’ absence, with financial support. Marvel International intends for this support to be in the range of 75% of the Employee’s Base Salary or at any other level typical of executives in London, but cannot commit to the particulars of the terms before consulting with an insurance provider.

(e) Marvel International shall provide the Employee with life assurance cover of three times the Employee’s Base Salary, subject to any customary terms imposed by the insurance provider.

(f) If a scheme provider refuses for any reason to provide any benefits to the Employee (or where appropriate to the Employee’s spouse, partner or dependant children) Marvel International is not liable to provide any replacement benefit of the same or similar kind or compensation in lieu of such benefit.

(g) Marvel International at its absolute discretion reserves the right reasonably to vary or amend any scheme provided for the benefit of the Employee or the Employee’s family at any time but only where the resulting arrangements are no less favorable than those provided by Marvel International or the Company in general to similarly situated employees; and Marvel International will not be liable to provide any replacement benefit of the same or similar kind, or compensation in lieu of such benefit.

(h) Nothing in this Section 3.5 will prevent Marvel International terminating the Employee’s employment for whatever reason in accordance with the terms of this Agreement even if such termination results in the Employee losing any existing or prospective benefits as detailed in Section 3.5.

3.6 Additional Benefits . During the Term, the Employee shall be entitled to such other benefits as are specified in Schedule I to this Agreement.

3.7 Sick Pay . If the Employee is absent from work because of illness or accident, Marvel International will pay to the Employee his Base Salary for up to an aggregate of one hundred and eighty (180) working days in any period of twelve (12) months. Any sums payable to the Employee under this Section shall be inclusive of any Statutory Sick Pay payable.

4. Termination .

4.1 Death . If the Employee shall die during the Term, the Term shall terminate immediately.

4.2 Permitted Termination by the Employer . (a) Cause . The Term may be immediately terminated by Marvel International upon notice to the Employee upon the occurrence of any event constituting “Cause” as defined herein. For purposes of this Agreement, the term “Cause” shall mean any of the following: (A) the Employee’s indictment for, or conviction of an indictable offence or any crime involving theft, fraud, dishonesty or moral turpitude or any violation of applicable securities laws; (B) the Employee’s failure (except as a result of illness or injury) to follow the Company’s or Marvel International’s lawful directions or to perform his employment duties that continues for five (5) business days after notice from Marvel International of such failure, specifying that the failure constitutes Cause; (C) the Employee’s engaging in conduct constituting embezzlement, willful assistance to a competitor, fraud, misappropriation, material violation of Marvel International’s or the Company’s anti-discrimination, equal employment opportunity, prohibition against harassment or similar policies or material violation of Marvel International’s or the Company’s insider trading policy, corporate code of business conduct and ethics or other material policy, or the Employee’s engaging in conduct tending to bring Marvel International or the Company into public disgrace or disrepute; (D) the Employee’s failure (including, but not limited to, the Employee’s refusal to be deposed or to provide accurate and complete testimony at any trial or inquiry) to participate, if requested by the Board of Directors, in any investigation or inquiry, whether internal or external, into the Employee’s actions (or inactions) or Marvel International’s or the Company’s business practices; (E) the Employee’s possession on Marvel International’s or the Company’s premises of any prohibited drug or substance that would amount to a criminal offence, or the Employee’s being under the influence of any such substance while on Marvel International’s or the Company’s premises; (F) the Employee’s gross misconduct or gross negligence in connection with the business of Marvel International or any affiliate; or (G) the Employee’s material breach of this Employment Agreement.

(b) The Term may be terminated by Marvel International for any reason by the giving of not less than six months’ notice to the Employee by Marvel International or by the Company.

4.3 Permitted Termination by the Employee . (a) The Term may be immediately terminated by the Employee upon notice to Marvel International (given within one week of the expiration of the cure period described at the end of this Section 4.3(a)) of any event constituting “Good Reason” as defined herein. As used herein, the term “Good Reason” means the occurrence of any of the following, without the prior written consent of the Employee: (i) assignment of the Employee to duties materially inconsistent with the Employee’s positions as described in Section 1.1 hereof, or any significant diminution in the Employee’s duties or responsibilities, other than in connection with any disability of the Employee; (ii) any material breach of this Agreement by Marvel International which is continuing; or (iii) a change in the location of the Employee’s principal place of employment to a location more than fifty (50) miles from the location specified in Section 1.3 hereof; provided , however , that the Employee shall not be deemed to have Good Reason unless (a) within thirty (30) days after the occurrence of the event in question, the Employee gives Marvel International and the Company written notice that the specified event has occurred, making specific reference to this Section 4.3 and requesting Marvel International and the Company to cure the event, and (b) Marvel International and the Company fail to cure the event w