Marvel Enterprises said yesterday that it had settled its legal battle with Stan Lee, its chairman emeritus and a co-creator of Marvel characters like Spider-Man and the Fantastic Four.

Mr. Lee sued the company in November 2002, arguing that it had failed to honor a contract promising 10 percent of profits from television and film productions like "Spider-Man," "X-Men" and "Hulk" as well as from some related merchandise.

This January, a federal judge in Manhattan sided with Mr. Lee but the judge also said he could not resolve some issues, suggesting that parts of the case could go before a jury. Under the settlement, Marvel dropped its plan to appeal the ruling.

Although terms were not disclosed, Marvel said in a financial report released yesterday that it took a one-time charge of $10 million to finance past and future payments claimed by Mr. Lee.