EXHIBIT 10.10
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of July 29,
1996 (the "Agreement"), is between Mattel, Inc., a Delaware corporation
("Mattel"), and ▇▇▇▇ ▇. ▇▇▇▇▇ (the "Executive").
The Executive and Mattel are parties to an Amended and Restated
Employment Agreement, dated as of November 30, 1993, as amended (the
"Existing Employment Agreement"), providing for the employment of the
Executive.
The Executive and Mattel desire to clarify certain provisions of the
Existing Employment Agreement that govern the respective rights and
obligations of the Executive and Mattel, as the case may be, upon a
termination of the Executive's employment and therefore deem it appropriate
to amend and restate the Existing Employment Agreement in its entirety.
In consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Executive
and Mattel agree to amend and restate the Existing Employment Agreement in
its entirety as follows:
1. Employment Period. Mattel hereby agrees to employ and continue
in its employ the Executive, and the Executive hereby accepts such
employment and agrees to remain in the employ of Mattel, for the period
commencing on the date of this Agreement and ending on the fifth
anniversary of such date (the "Employment Period"); provided that
commencing on the first day of the month
next following the effective date hereof, and on the first day of each
month thereafter (the most recent of such dates is hereinafter referred
to as the "Renewal Date"), the Employment Period shall be automatically
extended so as to terminate five years from such Renewal Date, unless at
least 60 days prior to any Renewal Date Mattel or the Executive shall give
notice to the other that the Employment Period shall not be so extended.
2. Duties.
(a) Executive's Position and Duties. During the Employment
Period, the Executive's positions (including titles) shall be as follows:
(i) President & Chief Operating Officer of Mattel Inc.,
reporting to the Chief Executive Officer, for the period commencing on the
date of this Agreement and ending on December 31, 1996, when Executive will
be appointed by the Board of Directors to assume the position of President
and Chief Executive Officer, Mattel, Inc. on January 1, 1997; and
(ii) President and Chief Executive Officer, Mattel, Inc.,
reporting to the Board of Directors, for the period commencing on the date
Executive is so appointed, and continuing until her title is expanded (I)
on a date in 1997 when Executive elects to assume the additional position
of Chairman of the Board of Directors, or (II) prior to the end of 1997,
when ▇▇▇▇ ▇. ▇▇▇▇▇▇▇'▇ term as Chairman of the Board of Directors will
expire
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and Executive is thereupon appointed to the position of Chairman of
the Board of Directors, whichever comes first.
Upon Executive's appointment as President and Chief Executive Officer,
Mattel, Inc., the Executive's duties, responsibilities, and authority shall
include a shared responsibility with the President, Mattel-Worldwide for
overseeing the President-Worldwide Manufacturing Operations and Mattel's
overall manufacturing functions, and a shared responsibility with the
President, Corporate Operations for overseeing the Chief Financial Officer
and Mattel's overall financial functions, and the Executive shall report
directly to the Board of Directors on a continuing and uninterrupted basis.
Throughout the Employment Period, the Executive's duties,
responsibilities, and authority shall not be less than those held by the
Executive on the date she becomes entitled to her various positions and any
additions and modifications thereto shall be consistent with duties,
responsibilities, and authority generally assigned to chief executive
officers of Mattel as the Board of Directors of Mattel may in its
discretion and acting in good faith, assign to the Executive. The
Executive's services shall be performed in Los Angeles, California and the
Executive shall not be transferred outside the area without the Executive's
consent, other than for normal business travel and temporary assignments.
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(b) Full Time. The Executive agrees to devote her full business
time to the business and affairs of Mattel and to use her best efforts to
perform faithfully and efficiently the responsibilities assigned to her
hereunder to the extent necessary to discharge such responsibilities,
except for (i) services on corporate, civic or charitable boards or
committees not significantly interfering with the performance of such
responsibilities; (ii) periods of vacation and sick leave to which she is
entitled; and (iii) the management of personal investments and affairs.
The Executive will not engage in any outside business activity (as
distinguished from personal investment activity and affairs), including,
but not limited to, activity as a consultant, agent, partner or officer, or
provide business services of any nature directly or indirectly to a
corporation or other business enterprise.
3. Compensation.
(a) Base Salary. During the Employment Period, the Executive
shall receive a base salary ("Base Salary") at a bi-weekly rate at least
equal to the bi-weekly salary paid to the Executive by Mattel on the date
of this Agreement. The Base Salary shall be reviewed at least every two
years and may be increased at any time and from time to time by action of
the Board of Directors of Mattel or any committee thereof or any individual
having authority to take such action in accordance with Mattel's regular
practices. Any increase in the Base Salary shall not serve to limit or
reduce any other obligation of Mattel
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hereunder, and after any such increase, the Base Salary shall not be reduced.
(b) Bonus Programs. In addition to the Base Salary, the
Executive shall participate throughout the Employment Period in Mattel's
cash, deferred bonus, incentive plans and programs ("Bonus Programs") as
may be in effect from time to time with respect to executives employed by
Mattel at a participation level reflecting the Executive's
responsibilities, including, but not limited to, the Management Incentive
Plan ("MIP") and the Long-Term Incentive Plan ("LTIP") as they may be
modified from time to time and any plans or programs substituted therefor;
provided that, except as provided in Section 5(f) hereof, the determination
of the amounts to be paid pursuant to such plans or programs shall be made
by the Board of Directors of Mattel or a committee thereof authorized to
take such action and shall be made in accordance with Mattel's compensation
practice and the terms and provisions of such plans or programs; provided
further that the Executive's eligibility for and participation in each of
the Bonus Programs shall be at a level and on terms and conditions no less
favorable than those available to any other comparably situated executive
or consultant.
(c) Incentive and Savings Plans. In addition to the Base Salary
and participation in the Bonus Programs, during the Employment Period the
Executive shall be entitled to participate in all incentive and savings
plans and programs, including, but
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not limited to, stock option plans and retirement plans, as may be in effect
from time to time with respect to executives employed by Mattel. It is hereby
provided that in consideration of Executive's agreement herein to waive and
renounce any and all rights and benefits under the 1990 Supplemental Executive
Retirement Plan, Executive shall become vested in the 1994 Supplemental
Executive Retirement Plan ("SERP") upon attaining age 50, provided however,
that Executive's eligibility to receive benefits under the SERP shall be
postponed until Executive attains age 55, at which time, the benefit component
attributable to Executive's age shall be based on an early retirement benefit
(full benefit reduced by 25%) as if the Executive had attained age 55 upon
retirement.
(d) Benefit Plans. The Executive and/or her family, as the case
may be, shall be entitled to receive all amounts which she or her family is
or would have been entitled to receive as benefits under all medical,
dental, disability, group life, accidental death and travel accident
insurance plans and programs of Mattel in which the Executive is a
participant as in effect from time to time with respect to executives
employed by Mattel.
(e) Expenses. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the policies and practices of
Mattel as in effect from time to time with respect to executives employed
by Mattel.
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(f) Fringe Benefits. The Executive shall be entitled to fringe
benefits, commensurate with those available to comparable level executives,
including an automobile and related expenses as well as the use of a
company-issued gasoline credit card, club memberships and related expenses,
and financial and legal counseling in accordance with the policies of
Mattel as in effect from time to time with respect to executives employed
by Mattel. It is further agreed and understood that Executive is entitled
to purchase all of her office furnishings for $1.00, upon her termination
from Mattel, irrespective of the reason for termination.
(g) Vacation. During the Employment Period, the Executive shall
be entitled to paid vacation in accordance with the policies of Mattel as
in effect from time to time with respect to executives employed by Mattel.
(h) Home Mortgage Loan. Mattel agrees that the existing
provisions of the home mortgage loan, which was previously provided to
Executive pursuant to terms and conditions memorialized in the Amended and
Restated Employment Agreement dated as of November 30, 1993, shall remain
in effect, except that if Executive's employment is terminated for reasons
other than "Cause" by Mattel, or for "Good Reason" by the Executive, or in
connection with a "Change in Control" (as such terms are
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hereinafter defined), the principal amount of the loan and all accrued
unpaid interest shall be forgiven and forever canceled.
(i) Certain Amendments. Nothing herein shall be construed to
prevent Mattel from amending, altering, eliminating or reducing any plans,
benefits or programs so long as the Executive continues to have the
opportunity to receive compensation and benefits consistent with Sections
3(a) through (h).
4. Termination.
(a) Death or Disability. This Agreement shall terminate
automatically upon the Executive's death; provided that Base Salary, all
bonuses and earned benefits will be continued and paid for a period of six
(6) months thereafter, unless a longer period is otherwise specified.
Mattel may terminate this Agreement, after having established the
Executive's Disability, by giving to the Executive written notice of its
intention to terminate her employment, and her employment with Mattel shall
terminate effective on the 90th day after receipt of such notice (the
"Disability Effective Date"). For purposes of this Agreement, the
Executive's Disability shall occur and shall be deemed to have occurred
only when the Executive becomes entitled to receive disability benefits
under the Mattel Long-Term Disability Plan for exempt employees.
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(b) Cause. Mattel may terminate the Executive's employment for
"Cause" if a majority, consisting of at least 2/3 of the non-management
members of the Board of Directors of Mattel, determines that "Cause"
exists. For purposes of this Agreement, "Cause" means (i) an act or acts of
dishonesty on the Executive's part which are intended to result in her
substantial personal enrichment at the expense of Mattel; (ii) repeated
violations by the Executive of her obligations under Section 2 of this
Agreement which are demonstrably willful and deliberate on the Executive's
part and which resulted in material injury to Mattel; (iii) conduct of a
criminal nature which has or which is more likely than not to have a
material adverse effect on Mattel's reputation or standing in the community
or on its continuing relationships with its customers or those who purchase
or use its products; or (iv) fraudulent conduct in connection with the
business or affairs of Mattel, regardless of whether said conduct is
designed to defraud Mattel or others; provided that, in each case, the
Executive has received written notice of the described activity, has been
afforded a reasonable opportunity to cure or correct the activity described
in the notice, and has failed to substantially cure, correct or cease the
activity, as appropriate.
(c) Good Reason. The Executive may terminate her employment at
any time for Good Reason. For purposes of this Agreement, "Good Reason"
means the good faith determination by
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the Executive that any one or more of the following have occurred:
(i) without the express written consent of the Executive,
any change(s) in any of the duties, authority, or responsibilities of the
Executive which is (are) inconsistent in any substantial respect with the
Executive's position, authority, duties, or responsibilities as
contemplated by Section 2 of this Agreement;
(ii) any failure by Mattel to comply with any of the
provisions of Section 3 of this Agreement, other than an insubstantial and
inadvertent failure remedied by Mattel promptly after receipt of notice
thereof given by the Executive;
(iii) without the Executive's consent, any requirement by
Mattel that Executive be based at any office or location other than an
office or location in Los Angeles, California, except for travel reasonably
required in the performance of the Executive's responsibilities;
(iv) any proposed termination by Mattel of the Executive's
employment otherwise than as permitted by this Agreement; or
(v) any failure by Mattel to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by
Section 12(b).
(d) Change of Control. A "Change of Control" shall be deemed to
have occurred if:
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(i) any "Person," which shall mean a "person" as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), (other than Mattel, any trustee or other
fiduciary holding securities under an employee benefit plan of Mattel) is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of Mattel representing
20% or more of the combined voting power of Mattel's then outstanding
voting securities;
(ii) during any period of 24 consecutive months,
individuals, who at the beginning of such period constitute the Board of
Directors of Mattel, and any new director whose election by the Board of
Directors, or whose nomination for election by Mattel's stockholders, was
approved by a vote of at least one-half (1/2) of the directors then in
office (other than in connection with a contested election), cease for any
reason to constitute at least a majority of the Board of Directors;
(iii) the stockholders of Mattel approve (I) a plan of
complete liquidation of Mattel or (II) the sale or other disposition by
Mattel of all or substantially all of Mattel's assets unless the acquirer
of the assets or its board of directors shall meet the conditions for a
merger or consolidation in subparagraphs (iv)(I) or (iv)(II) below; or
(iv) the consummation of a merger or consolidation of
Mattel with any other entity other than:
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(I) a merger or consolidation which results in the
voting securities of Mattel outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of
the combined voting power of the surviving entity's outstanding voting
securities immediately after such merger or consolidation; or
(II) a merger or consolidation which would result in
the directors of Mattel (who were directors immediately prior thereto)
continuing to constitute at least 50% of all directors of the surviving
entity immediately after such merger or consolidation.
In this paragraph (iv), "surviving entity" shall mean only an entity
in which all of Mattel's stockholders immediately before such merger or
consolidation (determined without taking into account any stockholders
properly exercising appraisal or similar rights) become stockholders by the
terms of such merger or consolidation, and the phrase "directors of Mattel
(who were directors immediately prior thereto)" shall include only
individuals who were directors of Mattel at the beginning of the 24
consecutive month period preceding the date of such merger or
consolidation.
(e) Notice of Termination. Any termination of the Executive's
employment by Mattel for Cause or following a Change of Control or by the
Executive for Good Reason shall be
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communicated by Notice of Termination to the other party hereto given in
accordance with Section 14(b). Any termination by Mattel due to Disability
shall be given in accordance with Section 4(a). For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon; (ii) except
in the event of a termination following a Change of Control, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated; and
(iii) specifies the Date of Termination (defined below).
(f) Date of Termination. "Date of Termination" means the date
of actual receipt of the Notice of Termination or any later date specified
therein (but not more than fifteen (15) days after the giving of the Notice
of Termination), as the case may be; provided that (i) if the Executive's
employment is terminated by Mattel for any reason other than Cause or
Disability, the Date of Termination is the date on which Mattel notifies
the Executive of such termination; (ii) if the Executive's employment is
terminated due to Disability, the Date of Termination is the Disability
Effective Date; and (iii) if the Executive's employment is terminated due
to the Executive's death, the Date of Termination shall be the date of
death.
5. Obligations of Mattel upon Termination. Other than as
specifically set forth or referenced in this Agreement, the
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Executive shall not be entitled to any benefits on or after the Date of
Termination.
(a) Death. If the Executive's employment is terminated by
reason of the Executive's death, this Agreement shall terminate without
further obligations by Mattel to the Executive's legal representatives
under this Agreement other than those obligations accrued hereunder or
under the terms of the applicable Mattel plan or program which takes effect
at the date of her death or as otherwise provided in Section 4(a) or this
Section 5(a). As of the Date of Termination, the Executive's family shall
be entitled to (i) the Executive's benefits on the terms described in
Section 5(d)(vi)(I), except that healthcare insurance coverage and
financial and legal counseling services shall terminate on the third
anniversary of the Date of Termination and (ii) retirement benefits payable
to Executive's surviving spouse or other named beneficiaries under the
provisions of the "SERP" in accordance with Executive's eligibility for
"SERP" as provided for under Section 5(d)(vii). The Executive's country
club membership must be converted or sold, as the case may be, by the
Executive's successor-in-interest within one year after the Date of
Termination on the terms described in Section 5(d)(vi)(III); provided that
no such conversion or sale shall be required and Mattel shall cause the
membership to be transferred to the Executive's spouse at no cost to the
spouse if the Executive has had the membership for at least three years.
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(b) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability, the Executive shall be entitled to
receive after the Disability Effective Date (i) disability benefits, if
any, at least equal to those then provided by Mattel to disabled executives
and/or their families and (ii) those other benefits on the terms described
in Section 5(d)(vi).
(c) Cause. If the Executive's employment is terminated for
Cause or if the Executive terminates her employment without Good Reason,
Mattel shall pay the Executive her full Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given, and Mattel shall have no further obligations to the Executive under
this Agreement.
(d) Good Reason; Other Than for Cause or Disability. If Mattel
terminates the Executive's employment other than for Cause or Disability or
the Executive terminates her employment for Good Reason (in each case,
other than within 18 months following a Change of Control as provided in
Section 5(e)):
(i) Mattel shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
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(A) if not theretofore paid, the Executive's Base
Salary through the Date of Termination at the rate in effect at the time of
Notice of Termination was given;
(B) a current year MIP bonus equal to the average of
the greatest two out of the three most recent annual MIP bonuses received
by the Executive (which two greatest MIP bonuses need not represent
consecutive years) (the "Average Annual Bonus") and prorated to reflect the
total number of full months the Executive is employed in the year in which
termination occurs;
(C) an LTIP payment reflective of the Executive's
participation in the three-year plan, so that at the time that final
performance under the LTIP is determinable and individual payouts
calculated, the Executive shall promptly receive an amount equivalent to
what she would have received if she had remained employed through the date
of such payouts, less any interim payments already made pursuant to the
Executive's continuing eligibility for full participation in the LTIP; and
(D) five times the sum of (x) the Executive's annual
Base Salary at the rate in effect at the time the Notice of Termination is
given and (y) the Average Annual Bonus defined in Section 5(d)(i)(B), but
without proration (and, in each such case, without regard to any
contributions by Mattel for the Executive's benefit to the Mattel Personal
Investment Plan ("PIP")).
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(ii) Options granted to the Executive under Mattel's stock
option plans (the "Stock Option Plans") which options have been granted for
more than six months shall become immediately exercisable and the Executive
shall have a period of 90 days following the Date of Termination (but in no
event past the expiration of the term of the option grant) to exercise all
options granted under the Stock Option Plans then exercisable or which
become exercisable pursuant to this clause (ii). In the event the
Executive is age 52 or older on the Date of Termination, she will be
treated as a retiree under the Stock Option Plans, which will enable the
Executive to vest in and exercise stock options theretofore granted
thereunder, at the election of the Executive, (x) in the manner described
in the immediately preceding sentence, or (y) for a period of up to five
years after the Date of Termination (but in no event past the expiration of
the term of the option grant).
(iii) Awards of restricted stock granted to the Executive
shall become distributable as of the Date of Termination in the same manner
as they would have been distributable had the Executive remained an
executive of Mattel to the date the restrictions lapse under the grants,
except that if termination occurs prior to full vesting on January 1, 1997,
the measurement period for determining whether the performance goals have
been satisfied shall be the period commencing on January 1, 1994 and ending
on the last day of Mattel's most recent fiscal quarter ending immediately
prior to the Date of Termination.
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(iv) Mattel shall, promptly upon submission by the
Executive of supporting documentation, pay or reimburse to the Executive
any costs and expenses paid or incurred by the Executive which would have
been payable under Section 3(e) if her employment had not terminated.
(v) The Executive shall be entitled to purchase her office
furnishings from Mattel for $1.00.
(vi) Until the earlier of (x) the third anniversary of the
Date of Termination or (y) the date the Executive accepts other employment,
Mattel shall provide to the Executive at Mattel's expense:
(I) medical, dental, prescription drug and vision care
group insurance in accordance with the coverage in effect immediately prior
to the Date of Termination (the last 18 months of the Executive's coverage
under such insurance shall be deemed to be participation under an election
to continue such benefits under the Consolidated Omnibus Budget
Reconciliation Act at Mattel's expense);
(II) outplacement services at the expense of Mattel
commensurate with those provided to terminated executives of comparable
level and made available through and at the facilities of a reputable and
experienced vendor; and
(III) continuation of country-club membership
"signatory/representative" status as in effect immediately prior to the
Date of Termination; and within ninety (90) days following the Date of
Termination, Mattel shall cause the membership to be
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transferred to the Executive at no cost to the Executive (but subject to
tax reporting as imputed income applicable to the year in which the membership
is transferred).
For the three-year period after the Date of Termination, the Executive
shall remain eligible for use of personal financial and legal counseling
services through the vendor engaged and paid for by Mattel. The Executive
may continue to use the car leased by Mattel that is in the Executive's
possession on the Date of Termination until the earlier of (x) the end of
the lease term or (y) the third anniversary of the Date of Termination, at
which time the Executive may purchase the car for $1.00 (if at the end of
the lease term) or Mattel's book value (if on the third anniversary of the
Date of Termination). As of the Date of Termination, all expenses related
to such leased car, including but not limited to repairs, maintenance,
gasoline, and car phone and associated expenses, shall be the sole
responsibility of the Executive.
(vii) Credit shall be given for three years of service
(in addition to actual service) and for three years of attained age to be
added to the Executive's actual age for purposes of computing any service
and age-related benefits for which the Executive is eligible under the
plans and programs of Mattel, including but not limited to the 1994
Supplemental Executive Retirement Plan (including any successor plan
thereto in which the Executive is a participant, the "SERP"), the Mattel
Deferred Compensation Plan, the PIP, the Mattel Retiree Medical
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Plan, and the Stock Option Plans. In the event of an applicable termination
under the provisions of Sections 5 (d) or (e), and pursuant to the terms of
Section 3.(c) which includes a waiver and renunciation of rights under the
1990 Supplemental Executive Retirement Plan which therein provided for
benefits eligibility at age 50, the Executive shall be accorded eligibility
under the SERP as early as age 47, based on the three additional years of
age-related credit under this paragraph; however, such premature
eligibility shall be limited in application to the extent that it shall
qualify the Executive to receive benefits under the SERP as early as age 52
upon having attained at least age 47 on the Date of Termination. For
purposes of benefits calculation in the event of an applicable termination
after attaining age 47, Executive shall be treated as if she had actually
attained age 52 on the Date of Termination. Further, with regard to
computing the Executive's benefit under the SERP, the formula described in
Section 5(d)(i)(B) shall be utilized in calculating the maximum benefit,
namely: the formula shall be 25% of the average of the final three years
of annual Base Salary (including the calendar year in which the Date of
Termination occurs), plus the average of the greatest two of the three most
recent annual MIP bonuses received by the Executive.
(e) Change of Control. If, within 18 months following a Change
of Control, the Executive terminates her employment for Good Reason or
Mattel or the surviving entity terminates the Executive's employment other
than for Cause or Disability:
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(i) Mattel shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:
(A) if not theretofore paid, the Executive's Base
Salary through the Date of Termination at the rate in effect at the time of
Notice of Termination was given;
(B) an amount equal to the MIP bonus that would have
been payable to executives of Mattel in the same bonus category as the
Executive pursuant to the Bonus Programs provided in Section 3(b) assuming,
for purposes of calculating the amount of the bonus pool under the plan,
that the "maximum" amount, as that term is used in the plan, was achieved
for the current plan year (the "Maximum Annual Bonus"), with such amount
prorated to reflect the number of full months the Executive is employed in
the year in which termination occurs;
(C) an LTIP payment for the current year, assuming
achievement of the three-year maximum award, prorated to reflect the total
number of full months the Executive is employed in the year in which
termination occurs;
(D) five times the sum of (x) the Executive's annual
Base Salary at the rate in effect at the time the Notice of Termination is
given and (y) the Maximum Annual Bonus defined in Section 5(e)(i)(B), but
without proration (and, in each such case, without regard to any
contributions by Mattel for the Executive's benefit to the PIP); and
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(E) two times the full term payout for the three-year
period of the LTIP, assuming for purposes of calculating the amount earned
under the LTIP, achievement of the three-year maximum award (including the
full amount of the premium), less any interim payments previously received
by the Executive.
(ii) If it is determined that any payment or distribution
by Mattel to the Executive pursuant to Section 5(e) (determined without
regard to any additional payments required pursuant to this sentence) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"), or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive with respect to each Payment an
additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
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(iii) In addition, the Executive shall receive the amounts
and be entitled to the benefits provided in clauses (ii), (iii), (iv), (v),
(vi) and (vii) of Section 5(d).
(f) Bonus During Cancellation Period. If Mattel notifies the
Executive that the Employment Period provided in Section 1 hereof will not
be automatically extended as provided therein, the compensation of the
Executive shall continue as provided in this Agreement for the period
provided therein, except that the amount of MIP compensation payable under
the Bonus Programs with respect to each fiscal year during such period
(including the year in which the notice was given) shall be the Average
Annual Bonus as determined in Section 5(d)(i)(B). Amounts payable with
respect to the year in which the term specified in Section 1 expires shall
be prorated based on a fraction the numerator of which is the number of
full months from the beginning of such year until the date of the
expiration of this Agreement and denominator of which is 12.
6. Election of Executive.
(a) Time and Capacity. Mattel and Executive expect that
Executive will continue to report to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman of the Board
and that on or before December 31, 1996, Mattel, through its Board of
Directors, shall cause Executive to be elected President and Chief
Executive Officer of Mattel with responsibilities for all functional areas
of Mattel including, but not limited to, the USA and International
Divisions,
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Operations, ▇▇▇▇▇▇-▇▇▇▇▇ or any after acquired company, Administration
and the Corporate Staff.
(b) Termination. In the event that (w) on or before January 31,
1997, Executive is not elected President and Chief Executive Officer with
responsibilities for all functions of Mattel as outlined in Section 6(a),
or (x) if at any time on, before or after January 31, 1997, a person other
than ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is elected Chairman of the Board, Executive may
terminate her employment at any time (y) during the 180-day period
beginning on February 1, 1997 if Executive is not elected to one of the
offices described in clause (w) of this Section 6(b), or (z) during the
180-day period beginning on the date a person other than ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is
elected Chairman of the Board. Any termination by Executive shall be given
by Notice of Termination in accordance with the provisions of Section 4(e)
and the Date of Termination shall be the date determined in accordance with
Section 4(f).
(c) Obligation of Mattel Upon Termination. If Executive shall
terminate her employment as provided in this Section 6, it shall be deemed
a termination for Good Reason within the meaning of Section 4(c) and Mattel
shall pay to Executive the amount specified in Section 5(d) hereof.
(d) Payments Exclusive. The amounts payable pursuant to this
Section 6 are in lieu of and not in addition to amounts
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payable under Section 5. In the event it is determined that payments are
due under this Section 6 and Section 5, payments shall be determined
pursuant to this Section 6.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by Mattel and
for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any stock
option or other agreement with Mattel or any of its affiliated companies.
Except as otherwise provided herein, amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan or
program of Mattel at or subsequent to the Date of Termination shall be
payable in accordance with such plan or program.
8. No Set Off, Payment of Fees. Except as provided herein, Mattel's
obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
circumstances, including without limitation any set-off, counterclaim,
recoupment, defense or other right which Mattel may have against the
Executive or others. Mattel agrees to pay, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably incur
as a result of any contest (regardless of the outcome thereof) by Mattel or
others of the validity or
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enforceability of, or liability under, any
provision of this Agreement other than expenses relating to a claim by the
Executive that she terminated for Good Reason or that the termination for
Cause was improper, in which case such fees and expenses shall be paid only
if the Executive prevails in whole or in part. All amounts provided herein
shall include, in each case, interest, compounded quarterly, on the total
unpaid amount determined to be payable under this Agreement, such interest
to be calculated on the basis of the prime commercial lending rate
announced by Bank of America National Trust and Savings Association in
effect from time to time during the period of such nonpayment. In the
event that the Executive shall in good faith give a Notice of Termination
for Good Reason and it shall thereafter be determined that Good Reason did
not exist, the employment of the Executive shall, unless Mattel and the
Executive shall otherwise mutually agree, be deemed to have terminated at
the Date of Termination specified in such purported Notice of Termination
by mutual consent of Mattel and the Executive and thereupon, the Executive
shall be entitled to receive only those payments and benefits which she
would have been entitled to receive at such date.
9. Arbitration of Disputes.
(a) The parties agree that any disputes, controversies or claims
which arise out of or relate to this Agreement, the Executive's employment
or the termination of her employment, including, but not limited to, any
claim relating to the
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purported validity, interpretation, enforceability or
breach of this Agreement, and/or any other claim or controversy arising out
of the relationship between the Executive and Mattel (or the nature of the
relationship) or the continuation or termination of that relationship,
including, but not limited to, claims that a termination was for Cause,
including the determination of Mattel's Board of Directors in accordance
with Section 4(b), or for Good Reason, claims for breach of covenant,
breach of an implied covenant of good faith and fair dealing, wrongful
termination, breach of contract, or intentional infliction of emotional
distress, defamation, breach of right of privacy, interference with
advantageous or contractual relations, fraud, conspiracy or other tort or
property claims of any kind, which are not settled by agreement between the
parties, shall be settled by arbitration under the labor arbitration rules
of the American Arbitration Association before a board of three
arbitrators, as selected thereunder.
One arbitrator shall be selected by the Executive, one by Mattel and
the third by the two persons so selected, all in accordance with the labor
arbitration rules of the American Arbitration Association then in effect.
In the event that the arbitrator selected by the Executive and the
arbitrator selected by Mattel are unable to agree upon a third arbitrator,
then the third arbitrator shall be selected from a list of seven provided
by the office of the American Arbitration Association nearest to the
Executive's residence with the parties striking names in
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order and the party striking first to be determined by the flip of a coin.
The arbitration shall be held in a location to be mutually agreed upon by the
parties. In the absence of agreement, the Chairman of the Board of Mattel
shall determine the location.
(b) In consideration of the parties' agreement to submit to
arbitration all disputes with regard to this Agreement and/or with regard
to any alleged contract, or any other claim arising out of their conduct,
the relationship existing hereunder or the continuation or termination of
that relationship, and in further consideration of the anticipated
expedition and the minimizing of expense resulting from this arbitration
remedy, the arbitration provisions of this Agreement shall provide the
exclusive remedy, and each party expressly waives any right she or it may
have to seek redress in any other forum.
(c) Any claim which either party has against the other party
which could be submitted for resolution pursuant to this Section 9 must be
presented in writing by the claiming party to the other within one year of
the date the claiming party knew or should have known of the facts giving
rise to the claim, except that claims arising out of or related to the
termination of the Executive's employment must be presented by her within
one year after the Date of Termination. Unless the party against whom any
claim is asserted waives the time limits set forth above, any
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claim not brought within the time periods specified shall be waived and
forever barred.
(d) Mattel will pay all costs and expenses of the arbitration to
the extent provided in this Section 9. In the event expenses are not paid
by Mattel, and without diminishing the Executive's right to reimbursement
as provided in this Section, costs and expenses shall be paid as follows:
(x) the expenses of the neutral arbitrator and of a transcript of any
arbitration proceeding shall be divided equally between the Executive and
Mattel; and (y) each party shall bear the expenses of the arbitrator
selected by it and of the witnesses it calls.
(e) Any decision and award or order of a majority of the
arbitrators shall be binding upon the parties hereto and judgment thereon
may be entered in the Superior Court of the State of California or any
other court having jurisdiction.
(f) Each of the above terms and conditions of this Section 9
shall have separate validity and the invalidity of any part thereof shall
not affect the remaining parts.
(g) Any decision and award or order of a majority of the
arbitrators shall be final and binding between the parties as to all claims
which were raised in connection with the dispute to the full extent
permitted by law. In all other cases, the parties agree that a decision of
a majority of arbitrators shall be a
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condition precedent to the institution or maintenance of any legal, equitable,
administrative, or other formal proceeding by the Executive in connection with
the dispute, and that the decision and opinion of the board of arbitrators may
be presented in any other forum on the merits of the dispute.
10. General Release. The Executive acknowledges and agrees that this
Agreement includes the entire agreement and understanding between the
parties with regard to the Executive's employment, the termination thereof
during the Employment Period, and all amounts to which the Executive shall
be entitled whether during the term of employment or upon termination
thereof. Accordingly, upon Mattel's fulfilling its obligations to the
Executive hereunder, the Executive, on behalf of herself and her
successors, assigns, heirs and any and all other persons claiming through
the Executive, if any, and each of them, shall and does hereby forever
relieve, release, and discharge Mattel and its respective predecessors,
successors, assigns, owners, attorneys, representatives, affiliates, parent
corporations, subsidiaries (whether or not wholly-owned), divisions,
partners and their officers, directors, agents, employees, servants,
executors, administrators, accountants, investigators, insurers, and any
and all other related individuals and entities, if any, and each of them,
in any and all capacities, from any and all claims, debts, liabilities,
demands, obligations, liens, promises, acts, agreements, costs and expenses
(including, but not limited to, attorneys' fees), damages, actions and
causes of action, of
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whatever kind or nature, including, without
limitation, any statutory, civil or administrative claim, or any claim,
arising out of acts or omissions occurring before the execution of this
Agreement, whether known or unknown, suspected or unsuspected, fixed or
contingent, apparent or concealed (collectively referred to as "claims"),
including, but not limited to, any claims based on, arising out of, related
to or connected with the subject matter of this Agreement, the Executive's
employment or the termination thereof, and any and all facts in any manner
arising out of, related to or connected with the Executive's employment
with, or termination of employment from, Mattel or any of its related
entities, including, but not limited to, any claims arising from rights
under federal, state, and local laws prohibiting discrimination on the
basis of race, national origin, sex, religion, age, marital status,
pregnancy, handicap, ancestry, sexual orientation, or any other form of
discrimination, and any common law claims of any kind, including, but not
limited to, contract, tort, and property rights including, but not limited
to, breach of contract, breach of the implied covenant of good faith and
fair dealing, tortious interference with contract or current or prospective
economic advantage, fraud, deceit, misrepresentation, defamation, wrongful
termination, infliction of emotional distress, breach of fiduciary duty,
and any other common law claim of any kind whatever.
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Upon Mattel's fulfilling its obligations to the Executive hereunder,
the Executive expressly waives any and all rights under Section 1542 of the
Civil Code of the State of California, and all other federal or state
statutory rights, rules, and principles of common law or equity, including
without limitation those of any jurisdiction, government, or political
subdivision thereof, similar to Section 1542 ("similar provision"). Thus
the Executive may not invoke the benefits of Section 1542 or any similar
provision in order to prosecute or assert in any manner any claims released
hereunder. Section 1542 provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HER MUST HAVE MATERIALLY
AFFECTED HER SETTLEMENT WITH THE DEBTOR."
11. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of Mattel all secret or confidential
information, knowledge or data relating to Mattel or any of its affiliated
companies, and their respective businesses, which shall have been obtained
by the Executive during her employment by Mattel or any of its affiliated
companies and which shall not be public knowledge and will continue to be
bound by the provisions of the Patent and Confidence Agreement previously
executed by the Executive. After termination of the Executive's employment
with Mattel, she shall not, without the prior written consent of Mattel,
communicate or divulge any such information,
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knowledge or data to anyone other than Mattel and those designated by it.
12. Successors.
(a) This Agreement is personal to the Executive and without the
prior written consent of Mattel shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon Mattel and its successors. Mattel shall require any successor to all
or substantially all of the business and/or assets of Mattel, whether
direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise, by an agreement in form and substance satisfactory to
the Executive, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent as Mattel would be required to
perform if no such succession had taken place.
13. Amendment; Waiver. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and may be
amended, modified or changed only by a written instrument executed by the
Executive and Mattel. No provision of this Agreement may be waived except
by a writing executed and
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delivered by the party sought to be charged. Any such written waiver will
be effective only with respect to the event or circumstance described
therein and not with respect to any other event or circumstance, unless
such waiver expressly provides to the contrary.
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14. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to
principles of conflict of laws. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.
(b) All notices and other communications hereunder shall be in
writing; shall be delivered by hand delivery to the other party or mailed
by registered or certified mail, return receipt requested, postage prepaid;
shall be deemed delivered upon actual receipt; and shall be addressed as
follows:
if to the Executive:
▇▇▇▇ ▇. ▇▇▇▇▇
*
*
if to Mattel:
MATTEL, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: General Counsel
or to such other address as either party shall have furnished to the other
in writing in accordance herewith.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be
ineffective to the extent of such prohibition or
* CONFIDENTIAL
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unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction will not
invalidate or render unenforceable such provision in any other jurisdiction.
(d) Mattel may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first set forth above.
EXECUTIVE:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
▇▇▇▇ ▇. ▇▇▇▇▇
MATTEL: MATTEL, INC.,
a Delaware corporation
By:/s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------
▇▇▇ ▇▇▇▇▇▇▇
ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Assistant Secretary
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