<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>



<TABLE WIDTH=600><TR><TD>
<HR ALIGN=LEFT WIDTH=100% SIZE=4 noshade>
<HR ALIGN=LEFT WIDTH=100% SIZE=1 noshade>
</TD></TR></TABLE>
<BR><BR><BR>
<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>



<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=5><B>UNITED STATES <BR>


SECURITIES AND EXCHANGE COMMISSION </B></FONT><BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<FONT FACE="Times New Roman, Times, Serif" SIZE=4><B>WASHINGTON, D.C. 20549</B> </FONT><BR><BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<FONT FACE="Times New Roman, Times, Serif" SIZE=5><B>FORM 8-K </B></FONT></P>

<P align=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>CURRENT REPORT<BR><BR> PURSUANT TO SECTION 13
OR 15 (d) OF THE <BR>SECURITIES EXCHANGE ACT OF 1934</B></FONT></p>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Date
of Report (Date of earliest event reported): <B>December 15, 2006</B> </FONT></P>

</TD>
</TR>
</TABLE>
<BR>

<p><table width=600><tr><td  align=center><font size=2><B>Commission file number 0-7843</B></font></td></tr></table>


<p><table width=600><tr>
    <td  align=center><font size=2><B><font size="6">4Kids Entertainment, Inc.
      </font></B></font>
      <hr noshade align="center" size="1" width="50%">
      <font size=2> (Exact name of Registrant as specified in its charter)</font></td>
  </tr></table>

<p>
<table width=600>
  <tr>
    <td  align=center width="292"><font size=2><B>New York</B></font>
      <hr noshade align="center" size="1" width="50%">
      <font size=2><B> </B>(State or other jurisdiction of <br>
      incorporation or organization) </font></td>
    <td  align=center width="296"><font size=2><b>13-2691380</b></font>
      <hr noshade align="center" size="1" width="50%">
      <font size=2><b> </b>(I.R.S. Employer<br>
      Identification No.)</font></td>
  </tr>
</table>
<p>
<p><table width=600><tr>
    <td  align=center><font size=2><B>1414 Avenue of the Americas <BR>
      New York, New York 10019 <BR>
      (212) 758-7666 </B></font>
      <hr noshade align="center" size="1" width="50%">
      <font size=2><B> (</B>Address, including zip code, and telephone number,
      including area code,<br>
      of Registrant&#146;s principal executive offices)</font></td>
  </tr></table>
<BR>


<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT SIZE="1">&nbsp;</FONT></P>


<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>



<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR><TR><TD>&nbsp;</TD></TR></TABLE>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR><TR><TD>&nbsp;</TD></TR></TABLE>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR><TR><TD>&nbsp;</TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%"> <TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE>



<BR><BR><BR>


<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>

<BR>
<HR ALIGN=LEFT WIDTH=100% SIZE=1 noshade>
<HR ALIGN=LEFT WIDTH=100% SIZE=4 noshade>


<BR><BR>

<hr size=5 noshade width=600 align=LEFT>


<BR>





<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 5.02.  Departure of Directors or Certain Officers;
 Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers</FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(e)  On December 15, 2006, 4Kids Entertainment Licensing,
Inc. (&#147;4KEL&#148;), a subsidiary of 4Kids Entertainment, Inc. (&#147;4Kids&#148; or the
&#147;Company&#148;) and Alfred R. Kahn entered into a Second Amended and Restated Employment
Agreement pertaining to Mr. Kahn&#146;s service as 4Kids&#146; Chairman of the Board and Chief Executive Officer (the &#147;Agreement&#148;). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the Agreement, Mr. Kahn&#146;s employment with 4Kids will continue until December 31, 2012 (the &#147;Initial Term&#148;).
The Initial Term will be automatically extended for one (1) year periods (each an &#147;Additional Term&#148;) unless either the Company or Mr. Kahn provides a
written notice at least six (6) months prior to the expiration of the then-current term that such party does not
intend to extend the Term. Mr. Kahn&#146;s annual base salary as of December 15, 2006 has been increased from $700,000
to $900,000 and he will be eligible to receive salary increases, grants of additional stock options and awards
under 4Kids&#146; long term incentive compensation plan at the discretion of the Compensation Committee of the Board
of Directors of 4Kids (&#147;Compensation Committee&#148;) and an annual cash bonus in an amount, if any, to be determined
in the sole discretion of the Compensation Committee.  In addition, Mr. Kahn became entitled to receive a bonus
upon execution of the agreement in an amount equal to $225,000.
 </FONT></P>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr. Kahn&#146;s prior Employment Agreement provided for Mr. Kahn to have a five year rolling &#147;term&#148; (i.e., the term
was automatically extended for one year at the end of every calendar year resulting in the term remaining at five
years in duration). Mr. Kahn&#146;s prior Employment Agreement also provided for him to receive a bonus equal to 10%
of the Company&#146;s pre-tax profits. The rolling term and the bonus, pegged at 10% of pretax profits, have been
eliminated in the Agreement. The Compensation Committee determined that an increase in salary for Mr. Kahn was
warranted given the substantial increase in Mr. Kahn&#146;s responsibilities. Mr. Kahn has assumed some of the
responsibilities previously discharged by the former Chief Operating Officer of the Company whose employment was terminated in April 2006 and
who has not been replaced. Additionally,  Mr. Kahn will be serving as Chairman of the Company&#146;s new trading card and website ventures, TC
Digital Games LLC and TC Websites LLC. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Agreement provides that in the event that (a) other than for &#147;cause&#148; (as defined in the Agreement), 4Kids
notifies Mr. Kahn at least 6 months prior to the end of the Initial Term or any Additional Term of its intent not
to extend the Agreement for an Additional Term, or (b) 4Kids and Mr. Kahn fail to reach an agreement on the terms
applicable to Mr. Kahn&#146;s employment during any Additional Term by the expiration of the then-current term, Mr.
Kahn will be entitled to receive a "Retirement Benefit" equal to the greater of (i) 2.99 times Mr. Kahn&#146;s average
annual compensation during the five (5) calendar years prior to the event triggering the payment of the
Retirement Benefit (determined on the basis of the salary and all bonuses to which Mr. Kahn was entitled to
receive during such period, without accounting for any waiver by Mr. Kahn of his right to receive any such
amounts) and (ii) $5 million. The Retirement Benefit will be payable ratably over an 18 month period. In
addition, Mr. Kahn will be able to receive all group health benefits Mr. Kahn was receiving at the date of
termination of the Agreement to the extent permissible under such plans for a period equal to three (3) years
following the expiration of the Agreement (the &#147;Health Benefits&#148;).  Assuming the occurrence of an event
triggering the payment of the Retirement Benefit on the date hereof, the Retirement Benefit would be equal to
$6.8 million.</FONT></P>




<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the event that Mr. Kahn&#146;s employment (a) terminates due to his death, Mr. Kahn&#146;s estate will be entitled to
receive the Retirement Benefit, payable in a lump sum within 90 days thereafter, (b) terminates due to his
physical or mental disability, Mr. Kahn will be entitled to receive the Retirement Benefit, payable ratably over
an 18 month period, and the Health Benefits, (c) is terminated by 4Kids without &#147;cause&#148;, Mr. Kahn will be
entitled to receive the Retirement Benefit, payable ratably over an 18 month period, and the Health Benefits or
(d) is terminated by Mr. Kahn within 6 months after the occurrence of a &#147;Change In Control&#148; (as defined in the
Agreement) or because of 4Kids&#146; material breach of the Agreement, Mr. Kahn will be entitled to receive the
Retirement Benefit, payable in a lump sum upon the date of such termination, and the Health Benefits.
</FONT></P>





<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the event that Mr. Kahn resigns, retires or otherwise voluntarily terminates his employment (&#147;Resigns&#148;), he
will be entitled to receive (a) an amount equal to the &#147;Special Retirement Benefit&#148; and (b) the Health Benefits.
If Mr. Kahn Resigns prior to his 62nd birthday, the Special Retirement Benefit will be an amount equal to his
average annual compensation with respect to the five (5) calendar years prior to the resignation (determined in
the same manner as for the determination of the Retirement Benefit), payable ratably over a one year period.  If
Mr. Kahn Resigns after his 62nd birthday but before his 65th birthday, the Special Retirement Benefit will be an
amount equal to twice the amount set forth in the immediately preceding sentence, payable over a two year period,
and if he Resigns after his 65th birthday, the Special Retirement Benefit will be equal to the Retirement
Benefit, payable over a three year period. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the event that any payment of the Retirement Benefit or the Special Retirement Benefit is (a) required to be
made by 4Kids in installments, such installments will not begin to be paid during the first six months following
the applicable termination date (the &#147;Six Month Period&#148;) and will instead during such period accrue (together
with interest thereon at the Prime Rate of Citibank N.A. in effect from time to time during such period) and be
paid in a lump sum payment at the end of the Six Month Period, or (b) payable in a lump sum, such lump sum
(together with interest thereon at the Prime Rate of Citibank N.A. in effect from time to time during such six
month period) shall not be payable until the end of the Six Month Period, unless Mr. Kahn and 4Kids determine
that, under Section 409A of the Internal Revenue Code of 1986, additional taxes, and interest will not apply if
such installments or lump sum, are paid prior to the expiration of the Six Month Period. </FONT></P>






<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The definitive amendment described
above are furnished as exhibit 99.1 to this Report and incorporated by reference herein.
The preceding descriptions of this amendment is summary in nature and do not purport to
be complete. This summary should be read in connection with the exhibit hereto. </FONT></P>



<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 9.01.  Financial Statements and Exhibits.</FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Sub 3 Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
Exhibits</I></FONT></P>



<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Workstation" -->
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 2- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       <U>   Exhibit</U> </FONT></TD>
<TD ALIGN=RIGHT WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  &nbsp;  </FONT></TD>
<TD ALIGN=LEFT WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<U>Description</U> </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 2- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>          99.1  </FONT></TD>
<TD ALIGN=RIGHT WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  &nbsp;  </FONT></TD>
<TD ALIGN=LEFT WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Second Amended and Restated Employment Agreement, dated as of December 15, 2006, among 4Kids Licensing, Inc., 4Kids Entertainment, Inc. and Alfred R. Kahn. </FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Workstation" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>






<!-- MARKER PAGE="sheet: 3; page: 3" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>



<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date:&nbsp;&nbsp;December 21, 2006 </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Project" -->
</TD>
</TR>
</TABLE>
<BR>



<!-- MARKER FORMAT-SHEET="Signature (Single)" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4KIDS ENTERTAINMENT, INC.</B><BR><BR>
<BR>BY: <U><I>/s/
Bruce R. Foster </I></U><BR><BR>
Bruce R. Foster<BR>Executive Vice President, Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Page Width Begin" FSL="Project" -->
<TABLE WIDTH=600 CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD>


<HR SIZE=5 COLOR=GRAY NOSHADE>






<!-- MARKER FORMAT-SHEET="Head Sub 3 Left-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>
Exhibit Index</U></FONT></P>



<!-- MARKER FORMAT-SHEET="Page Width End" FSL="Workstation" -->
</TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 2- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>       <U>   Exhibit</U> </FONT></TD>
<TD ALIGN=RIGHT WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  &nbsp;  </FONT></TD>
<TD ALIGN=LEFT WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<U>Description</U> </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 2- TNR" FSL="Workstation" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD ALIGN=RIGHT WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>          99.1  </FONT></TD>
<TD ALIGN=RIGHT WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  &nbsp;  </FONT></TD>
<TD ALIGN=LEFT WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Second Amended and Restated Employment Agreement, dated as of December 15, 2006, among 4Kids Licensing, Inc., 4Kids Entertainment, Inc. and Alfred R. Kahn.</FONT></TD>
</TR>
</TABLE>
<BR>


<BR>




</BODY>
</HTML>
[{"type": "8-K", "sequence": "1", "filename": "form8k12072006.htm", "description": "FORM 8-K DATED DECEMBER 15, 2006", "secsgml_size_bytes": 18705}]
{"company-data": {"conformed-name": "4 KIDS ENTERTAINMENT INC", "cik": "0000058592", "assigned-sic": "6794", "irs-number": "132691380", "state-of-incorporation": "NY", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-16117", "film-number": "061294016"}, "business-address": {"street1": "1414 AVE OF THE AMERICAS", "city": "NEW YORK", "state": "NY", "zip": "10019", "phone": "2127587666"}, "mail-address": {"street1": "1414 AVENUE OF THE AMERICAS", "city": "NEW YORK", "state": "NY", "zip": "10019"}, "former-company": [{"former-conformed-name": "LEISURE CONCEPTS INC", "date-changed": "19920703"}, {"former-conformed-name": "AMERICAN LEISURE INDUSTRIES INC", "date-changed": "19740822"}]}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13
OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
December 15, 2006
Commission file number 0-7843
4Kids Entertainment, Inc.
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of
incorporation or organization)
13-2691380
(I.R.S. Employer
Identification No.)
1414 Avenue of the Americas
New York, New York 10019
(212) 758-7666
(
Address, including zip code, and telephone number,
      including area code,
of Registrant's principal executive offices)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02.  Departure of Directors or Certain Officers;
 Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain Officers
(e)  On December 15, 2006, 4Kids Entertainment Licensing,
Inc. ("4KEL"), a subsidiary of 4Kids Entertainment, Inc. ("4Kids" or the
"Company") and Alfred R. Kahn entered into a Second Amended and Restated Employment
Agreement pertaining to Mr. Kahn's service as 4Kids' Chairman of the Board and Chief Executive Officer (the "Agreement").
Under the Agreement, Mr. Kahn's employment with 4Kids will continue until December 31, 2012 (the "Initial Term").
The Initial Term will be automatically extended for one (1) year periods (each an "Additional Term") unless either the Company or Mr. Kahn provides a
written notice at least six (6) months prior to the expiration of the then-current term that such party does not
intend to extend the Term. Mr. Kahn's annual base salary as of December 15, 2006 has been increased from $700,000
to $900,000 and he will be eligible to receive salary increases, grants of additional stock options and awards
under 4Kids' long term incentive compensation plan at the discretion of the Compensation Committee of the Board
of Directors of 4Kids ("Compensation Committee") and an annual cash bonus in an amount, if any, to be determined
in the sole discretion of the Compensation Committee.  In addition, Mr. Kahn became entitled to receive a bonus
upon execution of the agreement in an amount equal to $225,000.
Mr. Kahn's prior Employment Agreement provided for Mr. Kahn to have a five year rolling "term" (i.e., the term
was automatically extended for one year at the end of every calendar year resulting in the term remaining at five
years in duration). Mr. Kahn's prior Employment Agreement also provided for him to receive a bonus equal to 10%
of the Company's pre-tax profits. The rolling term and the bonus, pegged at 10% of pretax profits, have been
eliminated in the Agreement. The Compensation Committee determined that an increase in salary for Mr. Kahn was
warranted given the substantial increase in Mr. Kahn's responsibilities. Mr. Kahn has assumed some of the
responsibilities previously discharged by the former Chief Operating Officer of the Company whose employment was terminated in April 2006 and
who has not been replaced. Additionally,  Mr. Kahn will be serving as Chairman of the Company's new trading card and website ventures, TC
Digital Games LLC and TC Websites LLC.
The Agreement provides that in the event that (a) other than for "cause" (as defined in the Agreement), 4Kids
notifies Mr. Kahn at least 6 months prior to the end of the Initial Term or any Additional Term of its intent not
to extend the Agreement for an Additional Term, or (b) 4Kids and Mr. Kahn fail to reach an agreement on the terms
applicable to Mr. Kahn's employment during any Additional Term by the expiration of the then-current term, Mr.
Kahn will be entitled to receive a "Retirement Benefit" equal to the greater of (i) 2.99 times Mr. Kahn's average
annual compensation during the five (5) calendar years prior to the event triggering the payment of the
Retirement Benefit (determined on the basis of the salary and all bonuses to which Mr. Kahn was entitled to
receive during such period, without accounting for any waiver by Mr. Kahn of his right to receive any such
amounts) and (ii) $5 million. The Retirement Benefit will be payable ratably over an 18 month period. In
addition, Mr. Kahn will be able to receive all group health benefits Mr. Kahn was receiving at the date of
termination of the Agreement to the extent permissible under such plans for a period equal to three (3) years
following the expiration of the Agreement (the "Health Benefits").  Assuming the occurrence of an event
triggering the payment of the Retirement Benefit on the date hereof, the Retirement Benefit would be equal to
$6.8 million.
In the event that Mr. Kahn's employment (a) terminates due to his death, Mr. Kahn's estate will be entitled to
receive the Retirement Benefit, payable in a lump sum within 90 days thereafter, (b) terminates due to his
physical or mental disability, Mr. Kahn will be entitled to receive the Retirement Benefit, payable ratably over
an 18 month period, and the Health Benefits, (c) is terminated by 4Kids without "cause", Mr. Kahn will be
entitled to receive the Retirement Benefit, payable ratably over an 18 month period, and the Health Benefits or
(d) is terminated by Mr. Kahn within 6 months after the occurrence of a "Change In Control" (as defined in the
Agreement) or because of 4Kids' material breach of the Agreement, Mr. Kahn will be entitled to receive the
Retirement Benefit, payable in a lump sum upon the date of such termination, and the Health Benefits.
In the event that Mr. Kahn resigns, retires or otherwise voluntarily terminates his employment ("Resigns"), he
will be entitled to receive (a) an amount equal to the "Special Retirement Benefit" and (b) the Health Benefits.
If Mr. Kahn Resigns prior to his 62nd birthday, the Special Retirement Benefit will be an amount equal to his
average annual compensation with respect to the five (5) calendar years prior to the resignation (determined in
the same manner as for the determination of the Retirement Benefit), payable ratably over a one year period.  If
Mr. Kahn Resigns after his 62nd birthday but before his 65th birthday, the Special Retirement Benefit will be an
amount equal to twice the amount set forth in the immediately preceding sentence, payable over a two year period,
and if he Resigns after his 65th birthday, the Special Retirement Benefit will be equal to the Retirement
Benefit, payable over a three year period.
In the event that any payment of the Retirement Benefit or the Special Retirement Benefit is (a) required to be
made by 4Kids in installments, such installments will not begin to be paid during the first six months following
the applicable termination date (the "Six Month Period") and will instead during such period accrue (together
with interest thereon at the Prime Rate of Citibank N.A. in effect from time to time during such period) and be
paid in a lump sum payment at the end of the Six Month Period, or (b) payable in a lump sum, such lump sum
(together with interest thereon at the Prime Rate of Citibank N.A. in effect from time to time during such six
month period) shall not be payable until the end of the Six Month Period, unless Mr. Kahn and 4Kids determine
that, under Section 409A of the Internal Revenue Code of 1986, additional taxes, and interest will not apply if
such installments or lump sum, are paid prior to the expiration of the Six Month Period.
The definitive amendment described
above are furnished as exhibit 99.1 to this Report and incorporated by reference herein.
The preceding descriptions of this amendment is summary in nature and do not purport to
be complete. This summary should be read in connection with the exhibit hereto.
Item 9.01.  Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
Description
99.1
Second Amended and Restated Employment Agreement, dated as of December 15, 2006, among 4Kids Licensing, Inc., 4Kids Entertainment, Inc. and Alfred R. Kahn.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date:  December 21, 2006
4KIDS ENTERTAINMENT, INC.
BY:
/s/
Bruce R. Foster
Bruce R. Foster
Executive Vice President, Chief Financial Officer
Exhibit Index
Exhibit
Description
99.1
Second Amended and Restated Employment Agreement, dated as of December 15, 2006, among 4Kids Licensing, Inc., 4Kids Entertainment, Inc. and Alfred R. Kahn.