EXHIBIT 10.12
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of September
9, 1996 (the "Agreement"), is between Mattel, Inc., a Delaware corporation
("Mattel"), and Xxxxxx X. Xxxxxxxx (the "Executive").
The Executive and Mattel are parties to an Amended and Restated
Employment Agreement dated as of November 11, 1993, which was made subject
to an Interpretive Rider dated as of September 20, 1995 (collectively, 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 third 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 three
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 position (including titles), authority and
responsibilities shall be similar to those held by the Executive on the
date hereof with such additions and modifications, and consistent with
responsibilities generally assigned to executive officers of Mattel as the
Chief Executive Officer of Mattel may in his discretion and acting in good
faith from time to time assign to the Executive. The Executive's services
shall be performed in the general area in which the Executive was employed
on the date of this Agreement and the Executive will 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 his full business
time to the business and affairs of Mattel and to use his best efforts to
perform faithfully and efficiently the responsibilities assigned to him
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 he 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 the Compensation/Options
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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
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.
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(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 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 at the Executive's level so as to reflect the
Executive's responsibilities.
(d) Benefit Plans. The Executive and/or his family, as the case
may be, shall be entitled to receive all amounts which he or his 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.
(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) 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 (g).
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
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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 his employment, and his 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.
(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 his
substantial personal enrichment at the expense of Mattel; (ii) repeated
violations by the Executive of his 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
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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 his employment at
any time for Good Reason. For purposes of this Agreement, "Good Reason"
means the good faith determination by 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
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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 11(b).
(d) Change of Control. A "Change of Control" shall be deemed to
have occurred if:
(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
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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:
(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
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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 following a Change of Control or by the
Executive for Good Reason shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 13(b). Any
termination by Mattel due to Disability shall be given in accordance with
Section 4(a). For
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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 his 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 the Executive's benefits on the terms described in Section
5(d)(iv) (other than outplacement services and leased car benefits, which
are excluded), except that healthcare insurance coverage and financial and
legal counseling services shall terminate on the third anniversary of the
Date of Termination. 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)(iv)(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)(iv).
(c) Cause. If the Executive's employment is terminated for
Cause or if the Executive terminates his employment without Good Reason,
Mattel shall pay the Executive his 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 his 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 he would have received if he 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) three 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
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for the Executive's benefit to the Mattel Personal Investment Plan ("PIP")).
(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, he 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) 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 his employment had not terminated.
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(iv) 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; provided that within one year after Mattel ceases to
provide such benefit, the Executive shall (a) convert the country-club
membership from "signatory/representative" status under the membership
provided and paid for by Mattel to sole and personal ownership status by
paying to Mattel the fair market value of that membership as of the date
Mattel ceases to provide such benefit, less any transfer/reconveyance fees
that
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may be required by and paid directly to the country club by the
Executive, or (b) comply with club rules in consummating a fair, reasonable
and expeditious sale of the membership and any proceeds derived therefrom
which are payable to the Executive shall belong to and must be promptly
delivered to Mattel; provided further that no such conversion or sale shall
be required and Mattel shall cause the membership to be 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), if the Executive has had the membership for at least three
years.
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
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and associated expenses, shall be the sole responsibility of the Executive.
(v) 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 Plan, and
the Stock Option Plans. 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 two years of annual Base Salary
(including the calendar year in which the Date of Termination occurs), plus
the average of the greatest two out 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 his 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) three 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,
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in each such case, without regard to any contributions by Mattel for the
Executive's benefit to the PIP); and
(E) 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
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amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments
(iii) In addition, the Executive shall receive the amounts
and be entitled to the benefits provided in clauses (ii), (iii), (iv) and
(v) 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. 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
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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.
7. No Set Off, Payment of Fees. Except as provided here-in,
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 enforceability of, or liability under, any
provision of this Agreement other than expenses relating to a claim by the
Executive that he 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
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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 he would have been
entitled to receive at such date.
8. 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 his employment, including, but not limited to, any
claim relating to the 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
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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 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
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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 he 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 8 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 him 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 8. 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 8
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
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the full extent permitted by law. In all other cases, the parties agree that
a decision of a majority of arbitrators shall be a 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.
9. 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 himself and his
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
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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 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
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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.
Upon Mattel's fulfilling its obligations to the Executive here-under,
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 HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
10. 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,
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which shall have been obtained by the Executive during his 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, he shall not, without the prior
written consent of Mattel, communicate or divulge any such information,
knowledge or data to anyone other than Mattel and those designated by it.
11. 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
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same manner and to the same extent as Mattel would be required to
perform if no such succession had taken place.
12. 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 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.
13. 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
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receipt requested, postage prepaid; shall be deemed delivered upon actual
receipt; and shall be addressed as follows:
if to the Executive:
Xxxxxx X. Xxxxxxxx
*
*
if to Mattel:
MATTEL, INC.
000 Xxxxxxxxxxx Xxxx.
Xx Xxxxxxx, XX 00000
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 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.
* CONFIDENTIAL
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(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/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx
MATTEL: MATTEL, INC.,
a Delaware corporation
By:/s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
President and Chief Operating
Officer
ATTEST:
/s/ Xxxx X. Xxxxxx
-------------------------
Assistant Secretary
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