EXHIBIT 10.63
MATTEL,INC.
AWARD CANCELLATION AGREEMENT
This Award Cancellation Agreement (this "Agreement"), is made and
entered into as of February 10, 1994, by and between ____________________
("Grantee"), and Mattel, Inc. ("Mattel"), with reference to the following facts:
A. Grantee was granted an award of stock appreciation rights under the
Mattel 1990 Stock Option Plan (the "Plan"), which was evidenced by that certain
Award Agreement dated February 12, 1991, as amended May 11, 1993 (as amended,
the "Award");
B. Pursuant to the Award, Grantee is entitled to certain cash payments on
two future payment dates based upon the appreciation of the price of Mattel
Common Stock;
C. If the value of the Award were determined based on the value of Mattel
Common Stock on the date hereof rather than on the Award's future payment dates,
Grantee would be entitled to a substantial cash payment;
D. The Award has resulted in the recognition of certain financial
accounting charges against the earnings of Mattel, and Mattel desires to
eliminate future charges against its earnings that would likely result from the
continuance of the Award;
E. Grantee desires to accommodate Mattel's wishes and is willing to allow
Mattel to cancel the Award in exchange for the certainty of a fixed sum cash
payment by Mattel, and the receipt of certain stock options from Mattel; and
F. Mattel and Grantee have agreed that it is in their mutual best
interests to cancel the Award in consideration of the payment to Grantee of the
cash sum of $_______________ and the separate issuance to Grantee, under the
Plan, of nonqualified options to purchase __________ shares of Common Stock of
Mattel.
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In consideration of the premises and for good and valuable
consideration, the receipt of which by each party is hereby acknowledged, the
parties agree as follows:
1. Cancellation. The Award is hereby cancelled and the agreement
evidencing the Award and all amendments thereof, are terminated and shall be of
no further force or effect.
2. Cash Payments. Subject to the provisions of Section 4, Mattel shall
pay to Grantee, or to Grantee's heirs or legal representatives, the sum of
$__________ on March 15, 1995 (the "First Cash Payment"), and the sum of
$_________ on March 15, 1996 (the "Second Cash Payment"; the First Cash Payment
and the Second Cash Payment referred to collectively as the "Cash Payments").
3. Grant of Option. Effective as of the date hereof, Mattel shall grant
to Grantee under the Plan an option to purchase __________ shares of common
stock of Mattel, at a price of $24.625 per share (the "Option"), which Option
shall vest 50% on March 15, 1995, and 50% on March 15, 1996, and shall have a
term of 10 years from the date hereof. The Option shall be evidenced by the
Option Agreement of even date herewith, in the form delivered to Grantee by
Mattel concurrently herewith (the "Option Agreement"), and shall be subject to
all of the terms and conditions in the Option Agreement. In the event of a
conflict or inconsistency between the terms of the Option Agreement and this
Agreement, the terms of the Option Agreement shall govern.
4. Other Provisions. Notwithstanding any other provision of the Plan to
the contrary, the following shall apply:
(a) Termination of Employment. This Agreement supersedes Xxxxxxx 0,
Xxxxxxxxx (x), Xxxxxxxxxxxx (x), Xxxxxx (XXX) of the Amended and Restated
Employment Agreement dated as of November ___, 1993, between Mattel and Grantee
(the "Employment Agreement"), insofar as it refers to awards of "share units,"
it being agreed and acknowledged that the "share units" constitute the Award
which is cancelled hereby. If the employment of Grantee terminates in accordance
with Xxxxxxx 0, Xxxxxxxxx (x), Xxxxxxxxxxxx (x), or Section 5, Paragraph (e), of
the Employment Agreement, then the Cash Payments shall both be made (or, if the
First Cash Payment has already been made, the Second Cash Payment shall be
made,) no later than the 15th day following the Date of Termination (as defined
in the Employment Agreement) unless paid sooner pursuant to the provisions of
paragraph (c) below; provided, however, that if such Date of Termination occurs
before March 15, 1995, then (A) the First Cash Payment shall be reduced to an
amount equal to the product of $__________ times a fraction the numerator of
which shall be the number of full months that have elapsed
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since February 12, 1991, and the denominator of which shall be the number 49
(this number being the number of full months between February 12, 1991, and
March 15, 1995), and (B) the Second Cash Payment shall be reduced to an amount
equal to the product of $__________ times a fraction the numerator of which
shall be the number of full months that have elapsed since February 12, 1991,
and the denominator of which shall be the number 61 (this number being the
number of full months between February 12, 1991, and March 15, 1996); provided,
further, that if such Date of Termination occurs on or after March 15, 1995, but
before March 15, 1996, then the First Cash Payment shall not be reduced or
rebated and the Second Cash Payment shall be reduced to an amount equal to the
product of $_________ times a fraction the numerator of which shall be the
number of full months that have elapsed since February 12, 1991, and the
denominator of which shall be the number 61. Subject to the foregoing, if the
employment of Grantee terminates, other than for reasons of death or disability,
all unpaid awards shall be cancelled immediately and no further amounts shall be
due or payable hereunder. In the event of the death or disability of Grantee,
the Cash Payments shall both be made, or if the First Cash Payment has already
been made, the Second Cash Payment shall be made, no later than the 15th day
following the date of death or disability. For purposes of this Agreement, the
date of disability shall be the date Grantee becomes entitled to receive
disability benefits under the Mattel Long-Term Disability Plan for exempt
employees or any successor plan.
(b) Deferral of Payments - The Cash Payments under this
Agreement may, at the option of the Grantee, be deferred and paid either in the
form of installments or in future lump sum payments. Such deferral shall be in
accordance with and under the terms of the Mattel Executive Deferred
Compensation Plan.
(c) Change of Control - The Cash Payments shall become vested
and payable on the Distribution Date as that term is defined in the Company's
Rights Agreement dated as of February 7, 1992 ("Rights Agreement"), or, if the
Rights Agreement has terminated or the Rights have been redeemed, on the date
the Distribution Date would have occurred under Section 3 of the Rights
Agreement had the Rights Agreement not terminated or the Rights not been
redeemed.
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Grantee and Mattel agree that the Cash Payments and Options are governed
by the terms and conditions of this Agreement and the Plan.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
as of February 10, 1994.
GRANTEE MATTEL, INC.
________________________ By: __________________________
Name: ________________________
Title: _______________________
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