When the WWE lawyers come calling, Michael Bianco has agreed to place them on hold.
Bianco, the No. 4 executive at Jakks Pacific Inc., exited the company just days before World Wrestling Entertainment Inc. filed a lawsuit against the toymaker accusing its three top executives of bribing a WWE official to win a licensing agreement.
Bianco held the title of executive vice president and chief merchandising officer, pulling in $700,000 a year (plus incentives) until Oct. 13, when he signed a 27-page termination agreement that makes for fascinating reading.
As part of the agreement, Bianco will provide marketing and consulting services to the toymaker at the annual toy fair in New York. In exchange, Jakks agreed to pay Bianco a total of $1.3 million through September 2007 $400,000 for signing the document and another $80,000 quarterly.
There are some other provisions a non-compete clause and new requirements on 96,000 restricted shares of Jakks Pacific stock that was granted in January. Bianco also gave up 222,279 vested and unvested stock options whose value plunged after the WWE lawsuit was filed.
But the most interesting part is the language that could potentially help Jakks defend itself against the WWE case.
The section compels Bianco to inform the company if he “becomes legally compelled (by deposition, interrogatory, request of documents, subpoena, civil investigative demand or similar process) to disclose any of the confidential information” he possesses about Jakks “so that it may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this agreement.”
If the company can’t get a protective order or even if it waives compliance, it states, Bianco “agrees to furnish only such portion of the confidential information that is legally required to be furnished.”
Neither his lawyer, Karen Corman at Skadden Arps Slate Meagher & Flom in Los Angeles, nor Jakks’ lawyer, Murray Skala at Feder Kaszovitz Isaacson Weber Skala Bass & Rhine in New York, would comment on the agreement. Skala, a Jakks board member, replied “no comment” and hung up the phone when a reporter called.
The agreement is laid out in an 8-K form filed with the Securities and Exchange Commission on Oct. 15, two business days before the WWE lawsuit naming Jakks Chief Executive Jack Friedman, President Stephen Berman and Chief Financial Officer Joel Bennett was announced.
The WWE lawsuit seeks to void a videogame license between Jakks and game maker THQ Inc. Before joining Jakks in 1995, Friedman was president, chief executive and a director at THQ.
Bianco joined Jakks in 1999 as senior vice president of sales and development following Jakks’ acquisition of Flying Colors Toys Inc., of which Bianco was a founder.
Kate Berry
Net Comeback
Internet marketing firm Intermix Media Inc., formerly known as eUniverse Inc., said last week that the Securities and Exchange Commission had closed an informal probe into the company’s May 2003 accounting problems.
Intermix, which traded last week at $2.85 a share on the Pink Sheets, also received approval to move to the American Stock Exchange. The company was delisted from the Nasdaq in August 2003 after an earnings restatement. Company executives had to return bonuses that had been based on the company’s overstated earnings.
Richard Rosenblatt, the company’s chief executive, rattled off a list of accomplishments at the restructured firm including settling several lawsuits, unloading its SkillJam and Body Dome units and launching a new gaming unit.
Intermix agreed to purchase Rosenblatt’s former company, Supernation LLC, in July for $2 million. Intermix’s board granted Rosenblatt, who owned a 25 percent stake in Supernation, a waiver from the company’s conflict-of-interest policy and “financial code of professional conduct” so the acquisition could take place.
Meantime, Brad Greenspan, the former chairman and chief executive who resigned last year, still retains a 16.2 percent stake in Intermix. He launched a failed proxy fight earlier this year to replace the company’s board, and is still trying to get the firm to pay $320,000 in attorneys’ fees, according to the latest proxy.
Kate Berry
