Employment Agreement - Mattel Inc. and Neil B. Friedman


                         EXECUTIVE EMPLOYMENT AGREEMENT  THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is entered into onJanuary 31, 2000 and effective as of April 1, 1999 (the "Effective Date")between Mattel, Inc., a Delaware corporation ("Mattel") and Neil B. Friedman(the "Executive").     1.  Employment Period.  Mattel hereby agrees to employ and continue in its         -----------------                                                     employ the Executive, and the Executive hereby accepts such employment andagrees to remain in the employ of Mattel, for the period commencing on theEffective Date and ending on the third anniversary of such date, subject toearlier termination as provided herein (the "Employment Period"); provided thatcommencing on the first day of the month next following the effective datehereof, and on the first day of each month thereafter (the most recent of suchdates is hereinafter referred to as the "Renewal Date"), the Employment Periodshall be automatically extended so as to terminate three years from such RenewalDate, unless at least 60 days prior to any Renewal Date Mattel or the Executiveshall give notice to the other that the Employment Period shall not be soextended and shall be terminated.     2.  Duties.         ------          (a)  Executive's Position and Duties.  During the Employment Period,              -------------------------------   the Executive's position (including titles), authority and responsibilitiesshall be similar to those held by the Executive on the date hereof with suchadditions and modifications, and consistent with responsibilities generallyassigned to officers of Mattel as the Chief Executive Officer of Mattel may inher discretion and acting in good faith from time to time assign to theExecutive. The Executive's services shall be performed in the greater New York,New York area, provided, however, that the Executive may be required to travelon business from time to time generally consistent with the Executive's travelrequirements as of the date of this Agreement.        (b)  Full Time.  The Executive agrees to devote the Executive's full             ---------             business time to the business and affairs of Mattel and to use the Executive'sbest efforts to perform faithfully and efficiently the responsibilities assignedto the Executive hereunder to the extent necessary to discharge suchresponsibilities, except for (i) services on corporate, civic or charitableboards or committees not significantly interfering with the performance of suchresponsibilities which services have been approved by the Chief ExecutiveOfficer; (ii) periods of vacation and sick leave to which the Executive isentitled; and (iii) the management of personal investments and affairs. TheExecutive will not engage in any outside business activity (as distinguishedfrom personal investment activity and affairs), including, but not limited to,activity as a consultant, agent, partner or officer, director or providebusiness services of any nature directly or indirectly to a corporation or otherbusiness enterprise.      3.  Compensation and Benefits.         -------------------------          (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 thebi-weekly salary paid to the Executive by Mattel on the date of this Agreement.The Base Salary shall be reviewed from time to time in accordance with Mattel'spolicies and practices, but no less frequently than once every eighteen (18)months and may be increased at any time and from time to time by action of theBoard of Directors of Mattel or the Compensation/Options Committee thereof orany individual having authority to take such action in accordance with Mattel'sregular practices. Any increase in the Base Salary shall not serve to limit orreduce 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 be eligible to participate throughout the Employment Period in such cash,deferred bonus, annual bonus and long term bonus plans and programs ("BonusPrograms"), such as Mattel's Management Incentive Plan (the "MIP") and LongTerm Incentive Plan (the "LTIP"), as may be in effect from time to time inaccordance with Mattel's compensation practices and the terms and provisionsof any such plans or programs as in effect from time to time; provided thatthe Executive's eligibility for and participation in each of the Bonus Programsshall be at a level and on terms and conditions no less favorable than thoseavailable to any other comparably situated executive or consultant.         (c)  Incentive Plans.  In addition to the Base Salary and               ---------------    participation in the Bonus Programs, during the Employment Period the Executive,shall be eligible to participate, subject to the terms and conditions thereof,in all incentive plans and programs, including, but not limited to, stock optionplans and other equity based incentive plans, as may be in effect from time totime with respect to executives employed by Mattel at the Executive's level soas to reflect the Executive's responsibilities.         (d)  Pension and Welfare Benefit Plans.  During the Employment Period,              ---------------------------------    the Executive and/or the Executive's dependents, as the case may be, shall beeligible to participate in, subject to the terms and conditions thereof, allpension, profit sharing, medical, dental, disability, group life, accidentaldeath and travel accident insurance plans and programs of Mattel as in effectfrom time to time with respect to executives employed by Mattel at theExecutive's level so as to reflect the Executive's responsibilities.         (e)  Expenses.  During the Employment Period, the Executive shall be              --------       entitled to receive prompt reimbursement for all reasonable expenses incurredby the Executive in accordance with the policies and practices of Mattel as ineffect from time to time.         (f)  Fringe Benefits.  During the Employment Period, the Executive              ---------------  shall be entitled to fringe benefits (including automobile benefits, financialcounseling, membership in one city or country club and related expenses) of thekind and quality which are provided to executives at the Executive's level inaccordance with the policies of Mattel as in effect from                                       2 time to time with respect to executives employed by Mattel at the Executive'slevel so as to reflect the Executive's responsibilities.         (g)  Vacation.  During the Employment Period, the Executive shall be              --------          entitled to paid vacation in accordance with the policies and practices ofMattel as in effect from time to time.         (h)  Stock Options.  During the Employment Period, the Executive shall              -------------         be entitled to participate in Mattel's stock option plans in accordance with thepolicies and practices of Mattel as in effect from time to time with respect toexecutives employed by Mattel at the Executive's level so as to reflect theExecutive's responsibilities.         (i)  Certain Amendments.  Nothing herein shall be construed to              ------------------      prevent Mattel from amending, altering, eliminating or reducing any plans,benefits or programs set forth in Sections 3(b) through (h) so long as suchactions do not result in a material diminution in the aggregate value of suchcompensation and benefits, except for across-the-board compensation andbenefit reductions to which the Executive agrees and which affect allsimilarly situated executives of Mattel.         (j) Retention Loan.  Mattel and the Executive have entered into that             --------------                                                  certain Loan Agreement (the "Loan Agreement") dated as of October 29, 1999,which provided, among other things, that the definitions of "Cause," "Change ofControl," "Disability" and "Good Reason" contained in this Agreement supercedethe definitions of such terms as set forth in the Loan Agreement.     4.  Termination.         -----------          (a)  Death or Disability. This Agreement shall terminate automatically              -------------------        upon the Executive's death; provided that the Executive's Base Salary will be continued and paid for a period of six months thereafter. Mattel may terminatethis Agreement, after having established the Executive's Disability, by givingto the Executive written notice of its intention to terminate the Executive'semployment, and the Executive's employment with Mattel shall terminate effectiveon the 90th day after receipt of such notice (the "Disability Effective Date").For purposes of this Agreement, the Executive's Disability shall occur and shallbe deemed to have occurred only in the event that the Executive suffers adisability due to illness or injury which substantially and materially limitsthe Executive from performing each of the essential functions of the Executive'sjob, even with reasonable accommodation and becomes entitled to receivedisability benefits under the Mattel Long-Term Disability Plan for exemptemployees.         (b)  Cause.  Mattel may terminate the Executive's employment for              -----          "Cause" upon a determination of the Chief Executive Officer of Mattel that"Cause" exists. For purposes of this Agreement, "Cause" means (i) one or morefactually substantiated willful acts of dishonesty on the Executive's part whichare intended to result in the Executive's substantial personal enrichment at theexpense of Mattel; (ii) repeated violations by the Executive of the                                       3 Executive's obligations under Section 2 of this Agreement which aredemonstrably willful and deliberate on the Executive's part and which resultedin material injury to Mattel; (iii) conduct of a factually substantiatedcriminal nature (commonly defined as a "felony" in criminal statutes) which hasor which is more likely than not to have a material adverse effect on Mattel'sreputation or standing in the community or on its continuing relationships withits customers or those who purchase or use its products; or (iv) factuallysubstantiated fraudulent conduct in connection with the business or affairs ofMattel, regardless of whether said conduct is designed to defraud Mattel orothers; provided that, in each case, the Executive has received written noticeof the described activity, has been afforded a reasonable opportunity to cure orcorrect the activity described in the notice, and has failed to substantiallycure, correct or cease the activity, as appropriate.         (c)  Good Reason.  The Executive may terminate the Executive's              -----------         employment at any time for Good Reason.  For purposes of this Agreement, "GoodReason" means the good faith determination by the Executive that any one ormore of the following have occurred:              (i)  without the express written consent of the Executive, anychange(s) in any of the duties, authority, or responsibilities of the Executivewhich is (are) inconsistent in any substantial respect with the Executive'sposition, authority, duties, or responsibilities as contemplated by Section2 of this Agreement;              (ii) any failure by Mattel to comply with any of the provisionsof Section 3 of this Agreement, other than an insubstantial and inadvertentfailure remedied by Mattel promptly after receipt of notice thereof given by theExecutive;              (iii)  any proposed termination by Mattel of the Executive'semployment other than as permitted by this Agreement;              (iv) any failure by Mattel to obtain the assumption and agreementto perform this Agreement by a successor as contemplated by Section 11(b); or              (v)  transferring the Executive outside of the greater New York,New York area without the Executive's express written consent.         (d)  Change of Control.  "Change of Control" means:              -----------------                                           (i)  the acquisition by any individual, entity or group (withinthe meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% ormore of either (i) the then outstanding shares of common stock of Mattel,including the shares of common stock of Mattel issuable upon an exchange ofSoftkey Exchangeable Shares that are not owned by Mattel or any corporationcontrolled by Mattel (the "Outstanding Company Common Stock") or (ii) thecombined voting power of the then outstanding voting securities of Mattelentitled to vote generally in the election                                       4 of directors (the "Outstanding Company Voting Securities"); provided, however,that for purposes of this subsection (i), the following shall not constitute aChange of Control: (a) any acquisition directly from Mattel, (b) any acquisitionby Mattel or any corporation controlled by Mattel, (c) any acquisition by anyemployee benefit plan (or related trust) sponsored or maintained by Mattel orany corporation controlled by Mattel, (d) any acquisition by a Person of 20% ofeither the Outstanding Company Common Stock or the Outstanding Company VotingSecurities as a result of an acquisition of common stock of Mattel by Mattel orof Softkey Exchangeable Shares by Softkey which, by reducing the number ofshares of common stock of Mattel or Softkey Exchangeable Shares outstanding,increases the proportionate number of shares beneficially owned by such Personto 20% or more of either the Outstanding Company Common Stock or the OutstandingCompany Voting Securities; provided, however, that if a Person shall become thebeneficial owner of 20% or more of either the Outstanding Company Common Stockor the Outstanding Company Voting Securities by reason of a share acquisition byMattel or by Softkey as described above and shall, after such share acquisitionby Mattel or Softkey, become the beneficial owner of any additional shares ofcommon stock of Mattel, then such acquisition shall constitute a Change ofControl or (e) any acquisition pursuant to a transaction which complies withclauses (a), (b) and (c) of subsection (iii) of this Section 4(d); provided,further, however, that for purposes of this subsection (i), any Investing Person(as such term is defined in the Rights Agreement) shall be deemed not to be abeneficial owner of any Investment Shares (as such term is defined in the RightsAgreement) and the holder of the Mattel Special Voting Preferred Share (as suchterm is defined in the Rights Agreement) shall be deemed not to be a beneficialowner of such Mattel Special Voting Preferred Share; or              (ii) individuals who, as of the date hereof, constitute the Board(the "Incumbent Board") cease for any reason to constitute at least a majorityof the Board; provided, however, that any individual becoming a directorsubsequent to the date hereof whose election, or nomination for election byMattel's shareholders, was approved by a vote of at least a majority of thedirectors then comprising the Incumbent Board shall be considered as throughsuch individual were a member of the Incumbent Board, but excluding, for thispurpose, any such individual whose initial assumption of office occurs as aresult of an actual or threatened election contest with respect to the electionor removal of directors or other actual or threatened solicitation of proxies orconsents by or on behalf of a Person other than the Board; or              (iii)  consummation by Mattel of a reorganization, merger orconsolidation or sale or other disposition of all or substantially all of theassets of Mattel or the acquisition of assets of another entity (a "BusinessCombination"), in each case, unless, following such Business Combination, (a)all or substantially all of the individuals and entities who were the beneficialowners, respectively, of the Outstanding Company Common Stock and OutstandingCompany Voting Securities immediately prior to such Business Combinationbeneficially own, directly or indirectly, more than 50% of, respectively, thethen outstanding shares of common stock and the combined voting power of thethen outstanding voting securities entitled to vote generally in the election ofdirectors, as the case may be, of the corporation resulting from such BusinessCombination (including, without limitation, a corporation which as a result ofsuch transaction owns Mattel or all or substantially all of Mattel's assetseither directly                                       5 or through one or more subsidiaries) in substantially the same proportions astheir ownership immediately prior to such Business Combination of theOutstanding Company Common Stock and Outstanding Company Voting Securities, asthe case may be, (b) no Person (excluding any employee benefit plan (or relatedtrust) of Mattel or such corporation resulting from such Business Combination)beneficially owns, directly or indirectly, 20% or more of, respectively, thethen outstanding share of common stock of the corporation resulting from suchBusiness Combination or the combined voting power of the then outstanding votingsecurities of such corporation except to the extent that such ownership existedprior to the Business Combination and (c) at least a majority of the members ofthe board of directors of the corporation resulting from such BusinessCombination were members of the Incumbent Board at the time of the execution ofthe initial agreement, or of the action of the Board, providing for suchBusiness Combination; or              (iv)  approval by the shareholders of Mattel of a completeliquidation or dissolution of Mattel.         For the purposes of this Section 4(d), (a) "Rights Agreement" meansthe Rights Agreement, dated as of February 7, 1992, as amended by an amendmentdated as of May 13, 1999 and an amendment dated as of November 4, 1999 by andbetween Mattel and BankBoston N.A., a national banking association, formerly,The First National Bank of Boston, and not giving effect to any amendmentssubsequent to November 4, 1999, (b) "Softkey" means Softkey Software ProductsInc., an Ontario corporation, and (c) "Softkey Exchangeable Shares" means theExchangeable Shares in the capital stock of Softkey.         (e)  Notice of Termination.  Any termination of the Executive's              ---------------------   employment by Mattel for Cause or following a Change of Control or by theExecutive for Good Reason shall be communicated by Notice of Termination to theother party hereto given in accordance with Section 15(b). Any termination byMattel due to Disability shall be given in accordance with Section 4(a). Forpurposes of this Agreement, a "Notice of Termination" means a written noticewhich (i) indicates the specific termination provision in this Agreement reliedupon; (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 abasis for termination of the Executive's employment under the provision soindicated; 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 ofTermination), as the case may be; provided that (i) if the Executive'semployment is terminated by Mattel for any reason other than Cause orDisability, the Date of Termination is the date on which Mattel notifies theExecutive of such termination; (ii) if the Executive's employment is terminateddue 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.                                       6      5.  Obligations of Mattel upon Termination.  Other than as specifically set         --------------------------------------                                 forth or referenced in this Agreement, the Executive shall not be entitled toany 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 furtherobligations by Mattel to the Executive's legal representatives under thisAgreement other than those obligations accrued hereunder or under the terms ofthe applicable Mattel plan or program which takes effect at the date of theExecutive's 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 tohealthcare coverage and financial counseling benefits until the thirdanniversary of the Date of Termination.         (b)  Disability.  If the Executive's employment is terminated by               ----------              reason of to Executive's Disability, the Executive shall be entitled to receiveafter the Disability Effective Date (i) disability benefits, if any, at leastequal to those then provided by Mattel to disabled executives and/or theirfamilies and (ii) until the earlier of the third anniversary of the Date ofTermination or the date the Executive accepts other employment, those otherbenefits on the terms described in Section 5(d)(v).         (c)  Cause.  If the Executive's employment is terminated for Cause or              -----             if the Executive terminates the Executive's employment without Good Reason,Mattel shall pay the Executive the Executive's full Base Salary through the Dateof 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 thisAgreement.         (d)  Good Reason; Other Than for Cause or Disability.  If Mattel              ----------------------------------------------- terminates the Executive's employment other than for Cause or Disability or theExecutive terminates the Executive's employment for Good Reason (in each case,other than within 18 months following a Change of Control as provided in Section5(e):              (i)  Mattel shall pay to the Executive in a lump sum in cashwithin 30 days after the Date of Termination the aggregate of the followingamounts:                   (A)  if not theretofore paid, the Executive's Base Salarythrough the Date of Termination at the rate in effect at the time of Notice ofTermination was given;                   (B)  a current year bonus (the "Bonus") equal to the greaterof (x) the average of the two highest annual bonuses received by the Executiveunder the MIP, or any successor plan, in the three years prior to the Date ofTermination, including any years in which the Executive was paid no bonus, (the"Average Annual Bonus") and prorated to reflect the total number of full monthsthe Executive is employed on an active and full time basis in the year in whichtermination occurs, (y) the annual bonus paid to the Executive, under the MIP orany successor plan, if any, for the 2000 or 2001 calendar year, whichever isgreater, without                                       7 proration, or (z) the target annual bonus for the Executive under the MIP forthe 2000 calendar year;                     (C)  three times the sum of (x) the Executive's annual BaseSalary at the rate in effect at the time the Notice of Termination is given and(y) the Bonus defined in Section 5(d)(i)(B), but without proration (and, in eachsuch case, without regard to any contributions by Mattel for the Executive'sbenefit to any retirement or other investment plans).              (ii)   Mattel shall pay the Executive a portion of any long-termincentive compensation that Executive would have received under the LTIP withrespect to any performance period which is pending as of the Executive's Date ofTermination as if the Executive had remained employed for the entire performanceperiod, pro rated based on the number of full months of Executive's employmentduring the performance period over the total number of months in the performanceperiod, which amount shall be payable at the end of the period in accordancewith the terms of the LTIP and shall be net of any interim payments previouslymade to the Executive.              (iii)  Any options granted to the Executive under Mattel's stockoption plans, other than Mattel's 1997 Premium Price Stock Option Plan or anysuccessor thereto (the "Stock Option Plans"), shall become immediatelyexercisable and the Executive shall have a period of 90 days following the Dateof Termination (but in no event past the expiration of the term of the optiongrant) to exercise all options granted under the Stock Option Plans thenexercisable or which become exercisable pursuant to this clause (iii).               (iv)  Mattel shall, promptly upon submission by the Executive ofsupporting documentation, pay or reimburse to the Executive any costs andexpenses paid or incurred by the Executive which would have been payable underSection 3(e) if the Executive's employment had not terminated.               (v)   Until the earlier of (x) the third anniversary of the Dateof Termination or (y) the date the Executive becomes gainfully employed in asubstantially similar employment position, Mattel shall provide to the Executiveat Mattel's expense:                     (A)  coverage under Mattel's medical, dental, prescriptiondrug and vision care group insurance as in effect from time to time on the sameterms and conditions as such insurance is available to active employees ofMattel (the last 18 months of the Executive's coverage under such insuranceshall be deemed to be participation under an election to continue such benefitsunder the Consolidated Omnibus Budget Reconciliation Act at Mattel's expense);                     (B)  outplacement services at the expense of Mattelcommensurate with those provided to terminated executives of comparable leveland made available through and at the facilities of a reputable and experiencedvendor;                                       8                      (C)  financial counseling and tax preparation servicesthrough the vendor engaged and paid for by Mattel;                     (D)  automobile benefits; provided however, that if suchautomobile is leased by Mattel, such benefits shall expire upon expiration ofsuch lease. Upon expiration of the automobile benefits, at which time theExecutive may purchase the car for either $100, if the automobile benefitsterminate at the end of the lease term, or Mattel's book value, if theautomobile benefits terminate on either the third anniversary of the Date ofTermination or the date on which the Executive accepts other employment. As ofthe Date of Termination, all expenses related to such automobile, including butnot limited to insurance, repairs, maintenance, gasoline, and car phone andassociated expenses, shall be the sole responsibility of the Executive; and                     (E)  membership in one city or country club and relatedexpenses. Mattel shall cause the membership to be transferred to the Executiveat no cost to the Executive.               (vi)  If the Executive is a participant in the MattelSupplemental Executive Retirement Plan, the Mattel Deferred Compensation Plan orthe Mattel Retiree Medical Plan, the Executive shall be given credit for threeyears of service (in addition to actual service) and for three years of attainedage to be added to the Executive's actual age for purposes of computing anyservice and age-related benefits for which the Executive is eligible under suchplans.Notwithstanding the foregoing, if Mattel terminates the Executive's employmentother than for Cause or Disability or if the Executive terminates theExecutive's employment for Good Reason and such termination occurs within 18months after the date upon which Mattel changes the person to whom the Executiveimmediately reports, then (a) the Executive's "Average Annual Bonus" for thepurpose of calculating the amounts provided by clauses (d)(i)(B) and (d)(i)(C)above shall be equal to the Executive's maximum targeted MIP bonus for the yearin which the termination of employment occurs and (b) the amount payable to theExecutive under clause (d)(ii) above shall be based on the maximum LTIP paymentthat the Executive could have received with respect to the pending performanceperiod, rather than amount which would have been payable to the Executive hadthe Executive remained employed for the entire performance period.Notwithstanding the foregoing, the amounts payable with respect to a terminationof employment which is subject to the preceding sentence shall be prorated asset forth in clauses (d)(i)(B) and (d)(ii).         (e)  Change of Control.  If, within 18 months following a Change of              -----------------       Control, the Executive terminates the Executive's employment for Good Reason orMattel or the surviving entity terminates the Executive's employment other thanfor Cause or Disability or within the 30 day period immediately following thesix (6) month anniversary of a Change of Control the Executive terminates theExecutive's employment for any reason:                                       9                (i)   Mattel shall pay to the Executive in a lump sum in cashwithin 30 days after the Date of Termination the aggregate of the followingamounts:                     (A)  if not theretofore paid, the Executive's Base Salarythrough the Date of Termination at the rate in effect at the time of Notice ofTermination was given;                     (B)  a current year bonus (the "Bonus Amount") equal to thegreater of (x) the average of the two highest annual bonuses received by theExecutive under the MIP, or any successor plan, in the three years prior to theDate of Termination, including any years in which the Executive was paid nobonus, and prorated to reflect the total number of full months the Executive isemployed on an active and full time basis in the year in which terminationoccurs, (y) the annual bonus paid to the Executive, under the MIP or anysuccessor plan, if any, for the 2000 or 2001 calendar year, whichever isgreater, without proration, or (z) the target annual bonus for the Executiveunder the MIP for the 2000 calendar year;                     (C)  three times the sum of (x) the Executive's annual BaseSalary at the rate in effect at the time the Notice of Termination is given and(y) the Bonus Amount defined in Section 5(e)(i)(B), but without proration (and,in each such case, without regard to any contributions by Mattel for theExecutive's benefit to any retirement or other investment plans).               (ii)   Any options granted to the Executive under Mattel's stockoption plans, other than Mattel's 1997 Premium Price Stock Option Plan or anysuccessor thereto (the "Stock Option Plans"), shall become immediatelyexercisable and the Executive shall have a period of 90 days or such longerperiod of time as specified in the Stock Option Plans following the Date ofTermination (but in no event past the expiration of the term of the optiongrant) to exercise all options granted under the Stock Option Plans thenexercisable or which become exercisable pursuant to this clause (ii).               (iii)  Mattel shall, promptly upon submission by the Executive ofsupporting documentation, pay or reimburse to the Executive any costs andexpenses paid or incurred by the Executive which would have been payable underSection 3(e) if the Executive's employment had not terminated.               (iv)   Until the earlier of (x) the third anniversary of the Dateof Termination or (y) the date the Executive becomes gainfully employed in asubstantially similar employment position, Mattel shall provide to the Executiveat Mattel's expense:                      (A)  coverage under Mattel's medical, dental, prescriptiondrug and vision care group insurance as in effect from time to time on the sameterms and conditions as such insurance is available to active employees ofMattel (the last 18 months of the Executive's coverage under such insuranceshall be deemed to be participation under an election to continue such benefitsunder the Consolidated Omnibus Budget Reconciliation Act at Mattel's expense);                                       10                       (B)  outplacement services at the expense of Mattelcommensurate with those provided to terminated executives of comparable leveland made available through and at the facilities of a reputable and experiencedvendor;                      (C)  financial counseling and tax preparation servicesthrough the vendor engaged and paid for by Mattel;                      (D)  automobile benefits; provided however, that if suchautomobile is leased by Mattel, such benefits shall expire upon expiration ofsuch lease. Upon expiration of the automobile benefits, at which time theExecutive may purchase the car for either $100, if the automobile benefitsterminate at the end of the lease term, or Mattel's book value, if theautomobile benefits terminate on either the third anniversary of the Date ofTermination or the date on which the Executive accepts other employment. As ofthe Date of Termination, all expenses related to such automobile, including butnot limited to insurance, repairs, maintenance, gasoline, and car phone andassociated expenses, shall be the sole responsibility of the Executive; and                      (E)  membership in one city or country club and relatedexpenses. Mattel shall cause the membership to be transferred to the Executiveat no cost to the Executive.               (v)    If the Executive is a participant in the MattelSupplemental Executive Retirement Plan, the Mattel Deferred Compensation Plan orthe Mattel Retiree Medical Plan, the Executive shall be given credit for threeyears of service (in addition to actual service) and for three years of attainedage to be added to the Executive's actual age for purposes of computing anyservice and age-related benefits for which the Executive is eligible under suchplans.     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 theExecutive may qualify, nor shall anything herein limit or otherwise affect suchrights as the Executive may have under any stock option or other agreement withMattel or any of its affiliated companies. Except as otherwise provided herein,amounts which are vested benefits or which the Executive is otherwise entitledto receive under any plan or program of Mattel at or subsequent to the Date ofTermination shall be payable in accordance with such plan or program.     7.  No Set Off, Payment of Fees.  Except as provided herein, Mattel's         ---------------------------                                      obligation to make the payments provided for in this Agreement and otherwise toperform its obligations hereunder shall not be affected by any circumstances,including without limitation any set-off, counterclaim, recoupment, defense orother right which Mattel may have against the Executive or others.  Mattelagrees to pay, to the full extent permitted by law, all legal fees and expenseswhich the Executive may reasonably incur as a result of any contest (regardlessof the outcome                                       11 thereof) by Mattel or others of the validity or enforceability of, or liabilityunder, any provision of this Agreement other than expenses relating to a claimby the Executive that the Executive terminated for Good Reason or that thetermination for Cause was improper, in which case such fees and expenses shallbe paid only if the Executive prevails in whole or in part. In the event thatthe Executive shall in good faith give a Notice of Termination for Good Reasonand it shall thereafter be determined that Good Reason did not exist, theemployment of the Executive shall, unless Mattel and the Executive shallotherwise mutually agree, be deemed to have terminated at the Date ofTermination specified in such purported Notice of Termination by mutual consentof Mattel and the Executive and thereupon, the Executive shall be entitled toreceive only those payments and benefits which the Executive would have beenentitled to receive at such date.     8.  Arbitration of Disputes.         -----------------------          (a)  The parties agree that any disputes, controversies or claims whicharise out of or relate to this Agreement, the Executive's employment or thetermination of the Executive's employment, including, but not limited to, anyclaim relating to the purported validity, interpretation, enforceability orbreach of this Agreement, and/or any other claim or controversy arising out ofthe relationship between the Executive and Mattel (or the nature of therelationship) or the continuation or termination of that relationship,including, but not limited to, claims that a termination was for Cause, or forGood Reason, claims for breach of covenant, breach of an implied covenant ofgood faith and fair dealing, wrongful termination, breach of contract, orintentional infliction of emotional distress, defamation, breach of right ofprivacy, interference with advantageous or contractual relations, fraud,conspiracy or other tort or property claims of any kind, which are not settledby agreement between the parties, shall be settled by expedited arbitrationunder the then applicable arbitration rules of JAMS/Endispute (or any othermutually agreed arbitrator) before a board of three arbitrators, as selectedthereunder.           One arbitrator shall be selected by the Executive, one by Mattel andthe third by the two persons so selected, all in accordance with the thenapplicable arbitration rules of JAMS/Endispute then in effect. In the event thatthe arbitrator selected by the Executive and the arbitrator selected by Mattelare unable to agree upon a third arbitrator, then the third arbitrator shall beselected from a list of seven (each of whom shall be a member of the"Independent List" of retired judges with experience in resolving employmentdisputes) provided by the New York, New York office of JAMS/Endispute with theparties striking names in order and the party striking first to be determined bythe flip of a coin. The arbitration shall be held in a location mutually agreedupon by the parties. In the absence of agreement, the arbitration shall be heldin New York, New York.           (b)  In consideration of the parties' agreement to submit toarbitration all disputes with regard to this Agreement and/or with regard to anyalleged contract, or any other claim arising out of their conduct, therelationship existing hereunder or the continuation or termination of thatrelationship, and in further consideration of the anticipated expedition and theminimizing of expense resulting from this arbitration remedy, the arbitrationprovisions of this                                       12 Agreement shall provide the exclusive remedy, and each party expressly waivesany right the Executive or it may have to seek redress in any other forum.           (c)  Any claim which either party has against the other party whichcould be submitted for resolution pursuant to this Section 8 must be presentedin writing by the claiming party to the other within the period of theapplicable statue of limitations.           (d)  Mattel will pay all costs and expenses of the arbitration.           (e)  Any decision and award or order of a majority of the arbitratorsshall be binding upon the parties hereto and judgment thereon may be entered inthe Superior Court of the State of California or any other court havingjurisdiction.           (f)  Each of the above terms and conditions of this Section 8 shallhave separate validity and the invalidity of any part thereof shall not affectthe remaining parts.           (g)  Any decision and award or order of a majority of the arbitratorsshall be final and binding between the parties as to all claims which wereraised in connection with the dispute to the full extent permitted by law. Inall other cases, the parties agree that a decision of a majority of arbitratorsshall be a condition precedent to the institution or maintenance of any legal,equitable, administrative, or other formal proceeding by Mattel or the Executivein connection with the dispute, and that the decision and opinion of the boardof 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 partieswith regard to the Executive's employment, the termination thereof during theEmployment Period, and all amounts to which the Executive shall be entitledwhether during the term of employment or upon termination thereof.  TheExecutive also acknowledges and agrees that the Executive's right to receiveseverance pay and other benefits pursuant to subsections (b), (d) and (e) ofSection 5 of this Agreement is contingent upon the Executive's compliance withthe covenants set forth in Section 10 of this Agreement and the Executive'sexecution and acceptance of the terms and conditions of, and the effectivenessof the General Release of All Claims (the "Release") attached hereto as Exhibit"A."  If the Executive fails to comply with the covenants set forth in Section10 or if the Executive fails to execute the Release within twenty-one (21) daysof receipt of such Release, then the Executive shall not be entitled to anyseverance payments or other benefits to which the Executive would otherwise beentitled under subsections (b), (d) and (e) of Section 5 of this Agreement.     10.   The Executive's Covenants.           -------------------------            (a)  The Executive acknowledges that in the Executive's capacity inmanagement, the Executive has had a great deal of exposure and access to a broadvariety of commercially valuable proprietary information which is vital to thesuccess of Mattel's business                                       13 including, by way of illustration, past, current and future products and productconcepts, marketing strategies, research and plans and information regardingemployees. The Executive acknowledges that as a result of the Executive'sknowledge of the above information and in consideration for the benefits offeredby Mattel under this Agreement, the Executive hereby agrees to reaffirm andrecognize the Executive's continuing obligations with respect to the use anddisclosure of confidential and proprietary information of Mattel pursuant to theMattel's policies as set forth in Mattel's form Executive Patent and ConfidenceAgreement, as revised from time to time, and by this reference made a parthereof. Pursuant thereto, the Executive acknowledges and agrees that Mattelshall be entitled to injunctive relief to prevent a threatened misappropriationof one or more of the Mattel's trade secrets or to halt an actualmisappropriation of such trade secrets. The Executive shall hold in a fiduciarycapacity for the benefit of Mattel all secret or confidential information,knowledge or data relating to Mattel or any of its affiliated companies, andtheir respective businesses, which shall have been obtained by the Executiveduring the Executive's employment by Mattel or any of its affiliated companiesand which shall not be public knowledge. After termination of the Executive'semployment with Mattel, the Executive shall not, without the prior writtenconsent of Mattel, communicate or divulge any such information, knowledge ordata to anyone other than Mattel and those designated by it. The Executivefurther represents and agrees that, unless otherwise required by law, theExecutive will keep the terms, amount and fact of this Agreement completelyconfidential, and that the Executive will not hereafter disclose any informationconcerning this Agreement to anyone other than Executive's immediate family andprofessional representatives who will be informed of and bound by thisconfidentiality clause.           (b)  If the termination of the Executive's employment occurs prior toa Change of Control, the Executive agrees that eligibility for severancepayments and other benefits under this Agreement are contingent upon theExecutive's agreement and compliance with Mattel's requirement that theExecutive does not accept employment nor an engagement as a consultant with acompetitor whereupon such position is comparable to the position the Executiveheld with Mattel and where the Executive can not reasonably satisfy Mattel thatthe new employer is prepared to and/or does take adequate steps to preclude andto prevent inevitable disclosure of trade secrets, as prohibited under theMattel's policies with respect to the use and disclosure of confidential andproprietary information, as set forth in Mattel's form Executive Patent andConfidence Agreement, as revised from time to time, and by this reference made apart hereof. If the Executive accepts employment or a consulting relationshipwith a competitor as described above, no further payments nor eligibility forbenefits continuation will be available to the Executive as of the date theExecutive commences such employment/consulting. It is a specific condition ofthis Agreement that so long as the Executive is receiving any payments orbenefits under this Agreement with respect to a termination of the Executive'semployment prior to a Change of Control, the Executive is obligated toimmediately notify Mattel as to the specifics of the new position that theExecutive is planing to commence as an employee or consultant for any companywhich is a competitor of Mattel.           (c)  The Executive agrees that so long as the Executive is receivingany payments or benefits under this Agreement and for a period of 12 monthsthereafter, the Executive                                       14 will not participate in recruiting any of Mattel's employees or in thesolicitation of Mattel's employees, and the Executive will not communicate toany other person or entity, about the nature, quality or quantity of work, orany special knowledge or personal characteristics of any person employed byMattel. If the Executive should wish to discuss possible employment with anythen-current Mattel employee during the 12-month period set forth above, theExecutive may request written permission to do so from the senior humanresources officer of Mattel who may, in his/her discretion, grant a writtenexception to the no solicitation agreement set forth above, provided, however,the Executive agrees that the Executive will not discuss any such employmentpossibility with such employees prior to securing Mattel's permission. If Mattelshould decline to grant such permission, the Executive agrees that the Executivewill not at any time, either during or after the non-solicitation period setforth above, advise the employee concerned that he/she was the subject of arequest under this paragraph or that Mattel refused to grant the Executive theright to discuss an employment possibility with him/her.     11.   Successors.           ----------            (a)  This Agreement is personal to the Executive and without theprior written consent of Mattel shall not be assignable by the Executiveotherwise than by will or the laws of descent and distribution. This Agreementshall inure to the benefit of and be enforceable by the Executive's legalrepresentatives.           (b)  This Agreement shall inure to the benefit of and be binding uponMattel and its successors. Mattel shall require any successor to all orsubstantially all of the business and/or assets of Mattel, whether direct orindirect, by purchase, merger, consolidation, acquisition of stock, orotherwise, by an agreement in form and substance satisfactory to the Executive,expressly to assume and agree to perform this Agreement in the same manner andto the same extent as Mattel would be required to perform if no such successionhad taken place.     12.   Amendment; Waiver.  This Agreement contains the entire agreement           ---------  ------     between the parties with respect to the subject matter hereof and may beamended, modified or changed only by a written instrument executed by theExecutive and Mattel. No provision of this Agreement may be waived except by awriting executed and delivered by the party sought to be charged. Any suchwritten waiver will be effective only with respect to the event or circumstancedescribed therein and not with respect to any other event or circumstance,unless such waiver expressly provides to the contrary.     13.   Long Term Incentive Compensation Plan Payments After a Change of           ----------------------------------------------------------------           Control.            -------                  (a)  In the event of a Change of Control during the EmploymentPeriod, Mattel shall pay the Executive a cash payment as provided under theprovisions of the LTIP, as in effect immediately prior to the Change of Control.           (b) In addition, in the event of a Change of Control during theEmployment Period, within thirty (30) days after the date of such Change ofControl, Mattel shall pay the                                       15 Executive any unpaid amounts to which the Executive is entitled with respect toany performance period under the LTIP, or any other successor long-termincentive compensation plan of Mattel, that has been completed as of the date ofthe Change of Control.     14.  Certain Additional Payments by Mattel.          -------------------------------------           (a)   Anything in this Agreement to the contrary notwithstanding andexcept as set forth below, in the event it shall be determined that any Payment(as defined below) would be subject to the Excise Tax (as defined below), thenthe Executive shall be entitled to receive an additional payment (a "Gross-UpPayment") 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 penaltiesimposed 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 Taximposed upon the Payments. Notwithstanding the foregoing provisions of thisSection 14(a), if it shall be determined that the Executive is entitled to aGross-Up Payment, but that the Parachute Value of Payments (as defined below)does not exceed 110% of the Safe Harbor Amount (as defined below), then no Gross-Up Payment shall be made to the Executive and the Agreement Payments (asdefined below), in the aggregate, shall be reduced to (but not below zero) suchthat the Parachute Value of all Payments equals the Safe Harbor Amount,determined in such a manner as to maximize the Value of all Payments (as definedbelow) actually made to the Executive.          (b)   Subject to the provisions of Section 14(c), all determinationsrequired to be made under this Section 14, including whether and when a Gross-UpPayment is required and the amount of such Gross-Up Payment and the assumptionsto be utilized in arriving at such determination, shall be made byPricewaterhouseCooper LLP or such other nationally recognized certified publicaccounting firm as may be designated by the Executive (the "Accounting Firm")which shall provide detailed supporting calculations both to Mattel and theExecutive within 15 business days of the receipt of notice from the Executivethat there has been a Payment, or such earlier time as is requested by Mattel.All fees and expenses of the Accounting Firm shall be borne solely by Mattel.Subject to Section 14(e) below, any Gross-Up Payment, as determined pursuant tothis Section 14, shall be paid by Mattel to the Executive within five days ofthe receipt of the Accounting Firm's determination. Any determination by theAccounting Firm shall be binding upon Mattel and the Executive. As a result ofthe uncertainty in the application of Section 4999 of the Internal Revenue Codeof 1986, as amended (the "Code") at the time of the initial determination by theAccounting Firm hereunder, it is possible that Gross-Up Payments which will nothave been made by Mattel should have been made ("Underpayment"), consistent withthe calculations required to be made hereunder. In the event that Mattelexhausts its remedies pursuant to Section 14(c) and the Executive thereafter isrequired to make a payment of any Excise Tax, the Accounting Firm shalldetermine the amount of the Underpayment that has                                       16 occurred and any such Underpayment shall be promptly paid by Mattel to or forthe benefit of the Executive.          (c)   The Executive shall notify Mattel in writing of any claim by theInternal Revenue Service that, if successful, would require the payment byMattel of the Gross-Up Payment.  Such notification shall be given as soon aspracticable but no later than ten business days after the Executive is informedin writing of such claim and shall apprise Mattel of the nature of such claimand the date on which such claim is requested to be paid.  The Executive shallnot pay such claim prior to the expiration of the 30-day period following thedate on which it gives such notice to Mattel (or such shorter period ending onthe date that any payment of taxes with respect to such claim is due).  IfMattel notifies the Executive in writing prior to the expiration of such periodthat it desires to contest such claim, the Executive shall:                (i)   give Mattel any information reasonably requested by Mattelrelating to such claim,                (ii)  take such action in connection with contesting such claimas Mattel shall reasonably request in writing from time to time, including,without limitation, accepting legal representation with respect to such claim byan attorney reasonably selected by Mattel,                (iii  cooperate with Mattel in good faith in order effectivelyto contest such claim, and                (iv)  permit Mattel to participate in any proceedings relatingto such claim;provided, however, that Mattel shall bear and pay directly all costs andexpenses (including additional interest and penalties) incurred in connectionwith such contest and shall indemnify and hold the Executive harmless, on anafter-tax basis, for any Excise Tax or income tax (including interest andpenalties with respect thereto) imposed as a result of such representation andpayment of costs and expenses.  Without limitation on the foregoing provisionsof this Section 14(c), Mattel shall control all proceedings taken in connectionwith such contest and, at its sole option, may pursue or forgo any and alladministrative appeals, proceedings, hearings and conferences with the taxingauthority in respect of such claim and may, at its sole option, either directthe Executive to pay the tax claimed and sue for a refund or contest the claimin any permissible manner, and the Executive agrees to prosecute such contest toa determination before any administrative tribunal, in a court of initialjurisdiction and in one or more appellate courts, as Mattel shall determine;provided, however, that if Mattel directs the Executive to pay such claim andsue for a refund, Mattel shall advance the amount of such payment to theExecutive, on an interest-free basis and shall indemnify and hold the Executiveharmless, on an after-tax basis, from any Excise Tax or income tax (includinginterest or penalties with respect thereto) imposed with respect to such advanceor with respect to any imputed income with respect to such advance; and furtherprovided that any extension of the statute of limitations relating to payment oftaxes for the taxable year of the Executive with respect to which such contestedamount is claimed to be due is limited solely to such contested amount.Furthermore, Mattel's control of                                       17 the contest shall be limited to issues with respect to which a Gross-Up Paymentwould be payable hereunder and the Executive shall be entitled to settle orcontest, as the case may be, any other issue raised by the Internal RevenueService or any other taxing authority.          (d)   If, after the receipt by the Executive of an amount advanced byMattel pursuant to Section 14(c), the Executive becomes entitled to receive anyrefund with respect to such claim, the Executive shall (subject to Mattel'scomplying with the requirements of Section 14(c)) promptly pay to Mattel theamount of such refund (together with any interest paid or credited thereon aftertaxes applicable thereto). If, after the receipt by the Executive of an amountadvanced by Mattel pursuant to Section 14(c), a determination is made that theExecutive shall not be entitled to any refund with respect to such claim andMattel does not notify the Executive in writing of its intent to contest suchdenial of refund prior to the expiration of 30 days after such determination,then such advance shall be forgiven and shall not be required to be repaid andthe amount of such advance shall offset, to the extent thereof, the amount ofGross-Up Payment required to be paid.          (e)   Notwithstanding any other provision of this Section 14, Mattelmay withhold and pay over to the Internal Revenue Service for the benefit of theExecutive all or any portion of the Gross-Up Payment that it determines in goodfaith that it is or may be in the future required to withhold, and the Executivehereby consents to such withholding.          (f)   Definitions.  The following terms shall have the following                -----------                                               meanings for purposes of this Section 14.                (i)     An "Agreement Payment" shall mean a Payment paid orpayable pursuant to this Agreement (disregarding this Section 14) and anypayment relating to the Loan Agreement.                (ii)    "Excise Tax" shall mean the excise tax imposed bySection 4999 of the Code, together with any interest or penalties imposed withrespect to such excise tax.                (iii)   The "Net After-Tax Amount" of a Payment shall mean theValue of a Payment net of all taxes imposed on the Executive with respectthereto under Sections 1 and 4999 of the Code and applicable state and locallaw, determined by applying the highest marginal rates that are expected toapply to the Executive's taxable income for the taxable year in which thePayment is made.                (iv)    "Parachute Value" of a Payment shall mean the presentvalue as of the date of the change of control for purposes of Section 280G ofthe Code of the portion of such Payment that constitutes a "parachute payment"under Section 280G(b)(2), as determined by the Accounting Firm for purposes ofdetermining whether and to what extent the Excise Tax will apply to suchPayment.                                       18                 (v)     A "Payment" shall mean any payment or distribution inthe nature of compensation (within the meaning of Section 280G(b)(2) of theCode) to or for the benefit of the Executive, whether paid or payable pursuantto this Agreement or otherwise.                (vi)    The "Safe Harbor Amount" means the maximum ParachuteValue of all Payments that the Executive can receive without any Payments beingsubject to the Excise Tax.                (vii)   "Value" of a Payment shall mean the economic presentvalue of a Payment as of the date of the change of control for purposes ofSection 280G of the Code, as determined by the Accounting Firm using thediscount rate required by Section 280G(d)(4) of the Code.     15.   Miscellaneous.           -------------            (a)  This Agreement shall be governed by and construed in accordancewith the laws of the State of California, without reference to principles ofconflict of laws. The captions of this Agreement are not part of the provisionshereof and shall have no force or effect.           (b)  All notices and other communications hereunder shall be inwriting; shall be delivered by hand delivery to the other party or mailed byregistered or certified mail, return receipt requested, postage prepaid; shallbe deemed delivered upon actual receipt; and shall be addressed as follows:           If to Mattel:           ------------                              MATTEL, INC.                             333 Continental Blvd.                             El Segundo, CA 90245           If to Executive:           ---------------                              Mr. Neil B. Friedman                             TYCO PRESCHOOL                             675 Avenue of Americas, 2/nd/ Floor                             New York, NY 10010or to such other address as either party shall have furnished to the other inwriting in accordance herewith.           (c)  Any provision of this Agreement which is prohibited orunenforceable in any jurisdiction will, as to such jurisdiction, be ineffectiveto the extent of such prohibition or unenforceability without invalidating theremaining provisions hereof, and any such prohibition or unenforceability in anyjurisdiction will not invalidate or render unenforceable such provision in anyother jurisdiction.                                       19            (d)  Mattel may withhold from any amounts payable under thisAgreement such Federal, state or local taxes as shall be required to be withheldpursuant to any applicable law or regulation.                                       20      IN WITNESS WHEREOF, each of the parties hereto has duly executed thisAgreement as of the date first set forth above.EXECUTIVE:                                     NEIL B. FRIEDMAN                                     /s/ Neil B. Friedman                                     -----------------------------------MATTEL:                                                                    MATTEL, INC.,                                     a Delaware corporation                                     By:   /s/ Jill E. Barad    1/31/00                                        --------------------------------                                     Its:  Chief Executive Officer                                         -------------------------------ATTEST:---------------------------Assistant Secretary                                          Form for Executive Employment Agreement                                         ---------------------------------------                                  Exhibit "A"                                GENERAL RELEASE                                 OF ALL CLAIMS                                        1.  For valuable consideration, the receipt and adequacy of which are herebyacknowledged, the undersigned ("Executive") does hereby  on behalf of Executiveand Executive's successors, assigns, heirs and any and all other personsclaiming through Executive, if any, and each of them, forever relieve, release,and discharge Mattel, Inc. ("Mattel") and its respective predecessors,successors, assigns, owners, attorneys, representatives, affiliates, Mattelcorporations, subsidiaries (whether or not wholly-owned), divisions, partnersand their officers, directors, agents, employees, servants, executors,administrators, accountants, investigators, insurers, and any and all otherrelated individuals and entities, if any, and each of them, in any and allcapacities from any and all claims, debts, liabilities, demands, obligations,liens, promises, acts, agreements, costs and expenses (including, but notlimited to attorneys' fees), damages, actions and causes of action, of whateverkind or nature, including, without limiting the generality of the foregoing, anyclaims arising out of, based upon, or relating to the hire, employment,remuneration (including salary; bonus; incentive or other compensation;vacation, sick leave or medical insurance benefits; or other benefits) ortermination of Executive's employment with Mattel.2.  This release includes a release of any rights or claims Executive may haveunder the Age Discrimination in Employment Act, which prohibits agediscrimination in employment as to individuals forty years of age and older; theOlder Workers Benefit Protection Act, which prohibits discrimination againstolder workers in all Executive benefits; Title VII of the Civil Rights Act of1964, as amended in 1991, which prohibits discrimination in employment based onrace, color, national origin, religion or sex; the California Fair Employmentand Housing Act, which prohibits discrimination based on race, color, religion,national origin, ancestry, physical or mental disability, medical condition,sex, pregnancy-related condition, marital status, age or sexual orientation; theEqual Pay Act, which prohibits paying men and women unequal pay for equal work;the Americans with Disabilities Act, which prohibits discrimination againstqualified individuals with disabilities; or any other federal, state or locallaws or regulations which prohibit employment discrimination, restrict anemployer's right to terminate Executives, or otherwise regulate employment.This also includes a release by Executive of any claims for breach of contract,wrongful discharge and all claims for alleged physical or personal injury,emotional distress relating to or arising out of Executive's employment withMattel or the termination of that employment; any claims under the WARN Act orany similar law, which requires, among other things, that advance notice begiven of certain work force reductions; and all claims under the EmployeeRetirement Income Security Act, such as claims relating to pension or healthplan benefits. 3.  Notwithstanding any other provision of this Agreement, this release does notapply to any rights or claims which arise after the execution of this Agreementor to any rights or claims with respect to any breach of that certain ExecutiveEmployment Agreement (the "Employment Agreement") by between Executive andMattel.4.  This release, as contained within this Agreement, covers both claims thatExecutive knows about and those Executive may not know about.  Executiveexpressly waives all rights afforded by any statute (such as Section 1542 of theCivil Code of the State of California) which limits the effect of a release withrespect to unknown claims.  Executive understands the significance ofExecutive's release of unknown claims and Executive's waiver of statutoryprotection against a release of unknown claims (such as under Section 1542).Section 1542 of the Civil Code of the State of California states 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."Notwithstanding the provisions of Section 1542, Executive expressly acknowledgesthat this release is intended to include both claims that Executive knows aboutand those Executive does not know or suspect to exist.5.  The provisions of this Agreement are severable, and if any part of it isfound to be unenforceable, the other paragraphs shall remain fully valid andenforceable.  This Agreement shall be construed in accordance with its fairmeaning and in accordance with the laws of the state of California, withoutregard to conflicts of laws principles thereof.6.  Executive is strongly encouraged to consult with an attorney before signingthis Agreement.  Executive acknowledges that Executive has been advised of thisright to consult an attorney and Executive understands that whether to do so isExecutive's decision.  Executive acknowledges that Mattel has advised Executivethat Executive has twenty-one (21) days in which to consider whether Executiveshould sign this Release and has advised Executive that if Executive signs thisRelease, Executive has seven (7) days following the date on which Executivesigns the Release to revoke it and that the Release will not be effective untilafter this seven-day period had lapsed.PLEASE READ THIS AGREEMENT CAREFULLY.  IT CONTAINS A RELEASE OF ALL KNOWN ANDUNKNOWN CLAIMS.Date:  ______________________      _______________________________                                       Executive                                    2 of 2EX-10.1310LOAN AGREEMENT DATED 10/29/1999 - NEIL B. FRIEDMAN                                                                    EXHIBIT 10.13                                  LOAN AGREEMENT          THIS LOAN AGREEMENT (the "Agreement") is entered into as of October29, 1999, by and between Mattel, Inc., a Delaware corporation ("Lender") andNeil B. Friedman ("Borrower").  Borrower and Lender are sometimes referred to inthis Agreement as a "Party" or, collectively, as the "Parties."                                    RECITALS                                    --------                                                  WHEREAS, Borrower desires to obtain from Lender a loan in theprincipal amount of One Million Dollars ($1,000,000.00) (the "Loan"); and          WHEREAS, as an additional incentive to retain Borrower in the employof Lender for a period of at least two years from the date hereof, Lenderdesires to grant Borrower the Loan.          NOW, THEREFORE, in consideration of the terms and conditions hereincontained and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereto agree asfollows:                                   AGREEMENT                                   ---------                                                  1.  Loan Terms.              ----------               (a) Principal Amount. Lender shall pay to the order of Borrower,                  ----------------    on October 29, 1999 (the "Loan Date"), the principal sum of One Million    Dollars ($1,000,000.00) (the "Principal").              (b) Interest.  Interest shall accrue on the outstanding Principal                  --------                                                     amount at the rate of seven percent (7%) per annum, compounded annually.              (c) Promissory Note. Borrower's obligation to repay the Loan shall                  ---------------be evidenced by a promissory note substantially in the form attached asExhibit A hereto (the "Note"). Borrower shall execute and deliver to---------Lender the Note concurrently with execution and delivery of thisAgreement.              (d) Repayment.  Borrower shall pay to the order of Lender the                  ---------Principal and accrued interest under the Note on October 30, 2002, provided,however, that all Principal and accrued, but unpaid, interest shall becomeimmediately due and payable upon Borrower's termination of employment withLender for any reason prior to the Loan Date and shall be subject to forgivenessas provided below.  The Loan shall be unsecured but with full recourse againstBorrower.              (e) Forgiveness.  The Loan, and Borrower's obligation to repay all                  -----------outstanding Principal and accrued interest thereunder, shall be forgiven andcancelled by Lender and the Note shall be cancelled on October 29, 2002 ifBorrower is employed by Lender on October 29, 2002, or earlier upon the date ofthe termination of Borrower's employment with Lender prior to October 29, 2002 if such termination is by Lender without Cause(as defined below), by Borrower for Good Reason (as defined below) or by reasonof Borrower's death or Disability (as defined below). In addition, if the Loanis forgiven pursuant to the preceding sentence and if Borrower is employed byLender on October 29, 2002 and continues to be employed by Lender, on April 1,2003, or such earlier date as Borrower shall be required to pay federal, stateor local income taxes with respect to the forgiveness of the Loan, Lender shallpay Borrower an additional payment (the "Gross-Up Payment") in an amountrequired to fully reimburse Borrower with respect to all federal, state andlocal income taxes and employment taxes with respect to the forgiveness of theLoan and with respect to such taxes, such that upon receipt of the Gross-UpPayment Borrower shall have no remaining obligations with respect to such taxes.In addition, the Loan shall be forgiven by Lender on the date of a Change ofControl (as defined below) of Lender if Borrower is employed by Lender on suchdate and Lender shall pay Borrower the Gross-Up Payment with respect to theforgiveness of the Loan.              (f) Definitions.  For purposes of this Agreement, the following                   -----------                                                terms shall have the meanings indicated below:          "Cause" shall mean a reasonable determination of the Chief ExecutiveOfficer of Lender that at least one of the following has occurred: (i) one ormore factually substantiated willful acts of dishonesty on Borrower's part whichare intended to result in Borrower's substantial personal enrichment at theexpense of Lender; (ii) repeated violations by Borrower of Borrower's employmentobligations to Lender which are demonstrably willful and deliberate onBorrower's part and which resulted in material injury to Lender; (iii) conductof a factually substantiated criminal nature (commonly defined as a "felony" incriminal statutes) which has or which is more likely than not to have a materialadverse effect on Lender's reputation or standing in the community or on itscontinuing relationships with its customers or those who purchase or use itsproducts; or (iv) factually substantiated fraudulent conduct in connection withthe business or affairs of Lender, regardless of whether said conduct isdesigned to defraud Lender or others; provided that, in each case, Borrower hasreceived written notice of the described activity, has been afforded areasonable opportunity to cure or correct the activity described in the notice,and has failed to substantially cure, correct or cease the activity, asappropriate.          "Change of Control" shall be deemed to have occurred if:                  (i) any "Person," which shall mean a "person" as such term isused in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, asamended (the "Exchange Act"), (other than Lender, any trustee or other fiduciaryholding securities under an employee benefit plan of Lender) is or becomes the"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directlyor indirectly, of securities of Lender representing 20% or more of the combinedvoting power of Lender'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 Lender,and any new director whose election by the Board of Directors, or whosenomination for election by Lender's stockholders, was approved by a vote of atleast one-half (1/2) of the directors then in office                                        2 (other than in connection with a contested election), cease for any reason toconstitute at least a majority of the Board of Directors;                  (iii) the stockholders of Lender approve (I) a plan ofcomplete liquidation of Lender or (II) the sale or other disposition by Lenderof all or substantially all of Lender's assets unless the acquirer of the assetsor its board of directors shall meet the conditions for a merger orconsolidation in subparagraphs (iv)(I) or (iv)(II) below; or                  (iv) the consummation of a merger or consolidation of Lenderwith any other entity other than:                      (I) a merger or consolidation which results in the votingsecurities of Lender outstanding immediately prior thereto continuing torepresent (either by remaining outstanding or by being converted into votingsecurities of the surviving entity) more than 50% of the combined voting powerof the surviving entity's outstanding voting securities immediately after suchmerger or consolidation; or                      (II) a merger or consolidation which would result in thedirectors of Lender (who were directors immediately prior thereto) continuing toconstitute at least 50% of all directors of the surviving entity immediatelyafter such merger or consolidation.                  In this paragraph (iv), "surviving entity" shall mean only anentity in which all of Lender's stockholders immediately before such merger orconsolidation (determined without taking into account any stockholders properlyexercising appraisal or similar rights) become stockholders by the terms of suchmerger or consolidation, and the phrase "directors of Lender (who were directorsimmediately prior thereto)" shall include only individuals who were directors ofLender at the beginning of the 24 consecutive month period preceding the date ofsuch merger or consolidation.          "Disability" shall mean that Borrower suffers a disability due toillness or injury which substantially and materially limits Borrower fromperforming each of the essential functions of Borrower's job, even withreasonable accommodation and becomes entitled to receive disability benefitsunder Lender's Long-Term Disability Plan for exempt employees.          "Good Reason" shall mean the good faith determination by Borrower thatany one or more of the following have occurred:                  (i)  without the express written consent of Borrower, anychange(s) in any of the employment duties, authority, or responsibilities ofBorrower which is (are) inconsistent in any substantial respect with Borrower'sposition, authority, duties, or responsibilities as of the date of thisAgreement;                  (ii) any failure by Lender to pay Borrower Borrower's salaryor earned bonuses, other than an insubstantial and inadvertent failure remediedby Lender promptly after receipt of notice thereof given by Borrower; or                                       3                   (iii) transferring Borrower outside of the greater New York,New York area without Borrower's express written consent.             (g) Notwithstanding any other provision in this Agreement, in theevent that Borrower and Lender enter into an amendment to the EmploymentAgreement, dated as of October 26, 1999, after the date of this Agreement, thedefinition of "Cause," "Change of Control," "Disability," and "Good Reason" asprovided in such Employment Agreement, as amended, shall supercede thedefinitions in Section 1(f) of this Agreement.          2.  Transfer of Notes.   Borrower shall not assign or transfer any of              -----------------                                                Borrower's benefits or obligations arising under the Notes.   Lender reservesthe right to assign or transfer all or any part of, or any interest in, Lender'srights and benefits under this Agreement or the Note to any successor to all orpart of its business or assets so long as any assignee or transferee expresslyagrees to assume and perform this Agreement in the same manner and to the sameextent as Lender would be required to perform if no such assignment or transferhad taken place.          3.  Amendment; Waiver.  This Agreement and the Note contain the entire              -----------------                                                 agreement between the Parties with respect to the subject matter hereof and maybe amended, modified or changed only by a written instrument executed by theParties.  No provision of this Agreement or the Note may be waived except by awriting executed and delivered by the Party sought to be charged.  Any suchwritten waiver will be effective only with respect to the event or circumstancedescribed therein and not with respect to any other event or circumstance,unless such waiver expressly provides to the contrary.          4.  Choice of Law.  This Agreement shall be construed in accordance              -------------                                                  with and governed by the internal laws of the State of California, withoutreference to principles of conflict of laws.          5.  Headings.  The paragraph headings contained in this Agreement are              --------                                                         for reference purposes only and shall not affect in any way the meaning orinterpretation of the provisions hereof.          6.  Notices.  All notices and other communications hereunder shall be              -------                                                          in writing; shall be delivered by hand delivery to the other party or mailed byregistered or certified mail, return receipt requested, postage prepaid; shallbe deemed delivered upon actual receipt; and shall be addressed as follows:          If to Lender:          ------------                            MATTEL, INC.                           333 Continental Blvd.                           El Segundo, CA 90245          If to Borrower:          --------------                            Mr. Neil B. Friedman                           TYCO PRESCHOOL.                           675 Avenue of the Americas, 2nd                           New York, NY 10010                                       4 or to such other address as either party shall have furnished to the other inwriting in accordance herewith.          7.  Counterparts.  This Agreement may be executed in one or more              ------------                                                counterparts, each of which shall be deemed to be an original, but all of whichtogether shall constitute one and the same instrument.          8.  Severability.  If any provision in or obligation under this              ------------                                               Agreement shall be invalid, illegal or unenforceable in any jurisdiction, thevalidity, legality and enforceability of the remaining provisions orobligations, or of such provision or obligation in any other jurisdiction, shallnot in any way be affected or impaired thereby.          9.  No Third-Party Beneficiary Rights.  The Parties do not intend to              ---------------------------------                               confer and this Agreement shall not be construed to confer any rights orbenefits to  any person, firm, group, corporation or entity other than theParties.                            [Signature Page Follows]                                       5           IN WITNESS WHEREOF, this Agreement has been duly executed by theParties on the date first written above.                                 LENDER                                      /s/ Alan Kaye                                 By:________________________________________                                      Senior Vice President, Human Resources                                 Its:_______________________________________                                 BORROWER                                      /s/ Neil B. Friedman                                 __________________________________________                                 Neil B. Friedman                                      S-1                                    EXHIBIT A                                   ---------                                Promissory Note$1,000,000.00            Date:  October 29, 1999          Mattel, Inc. (herein referred to as "Holder") has agreed to advance toNeil B. Friedman (herein referred to as "Maker") on October 29, 1999,$1,000,000.00, and for said value received Maker promises to repay to the orderof Holder, the principal sum of $1,000,000.00 on or before October 30, 2002.Maker shall owe to Holder interest on the principal sum in an amount equal to 7%per annum, commencing on October 29, 1999, compounded annually, payable withprincipal on October 30, 2002.          If Maker fails to make any payment set forth above when due, Holdermay elect to declare the entire unpaid principal amount, including all unpaidinterest, immediately due and payable with or without notice.          In the event of the termination of Maker's employment with Holder forany reason, all outstanding principal and accrued interest hereunder isimmediately due and payable, with or without notice.          This note and the loan it evidences shall be subject to cancellationand forgiveness under certain circumstances pursuant to the terms of thatcertain Loan Agreement, dated as of October 29, 1999, between Holder and Maker.          In the event of commencement of legal action to enforce payment ofthis note, Maker agrees to pay the Holder's reasonable attorney's fees and courtcosts in connection therewith.                                          By:  /s/ Neil B. Friedman                                          ______________________________________                                          Neil B. Friedman            DateWitnessed by:  /s/ Alan Kaye            12/6/99_________________________________________                           DateEX-10.1411AMEND. EMPL. AGREE.-NEIL B. FRIEDMAN                                                                    EXHIBIT 10.14 February 10, 2000Mr. Neil FriedmanPresident Fisher-Price BrandsMattel, Inc.333 Continental BoulevardEl Segundo, California 90245-5012Re:  Amendment to Your Employment Agreement and Stock Option Grant Agreements     ------------------------------------------------------------------------Dear Neil:          Pursuant to action taken by Mattel's Board of Directors andCompensation Committee on February 1, 2000 to amend Mattel's 1990 and 1996 StockOption Plans (the "Plans") and to amend the Grant Agreements for Non-QualifiedStock Options ("Grant Agreements") with respect to all of the stock optionswhich you hold under the Plans and which are outstanding as of February 1, 2000(the "Outstanding Options"), this letter agreement constitutes an amendment toeach of your Grant Agreements and your Employment Agreement with Mattel.          Notwithstanding any provision of your Grant Agreements or of yourEmployment Agreement to the contrary, in the event that your employment withMattel is terminated (i) by Mattel without Cause (as defined in your EmploymentAgreement), (ii) by you for Good Reason (as defined in your EmploymentAgreement), (iii) by you for any reason during the 30-day period immediatelyfollowing the six (6) month anniversary of a Change of Control (as defined inyour Employment Agreement) or (iv) by reason of your death or Disability (asdefined in you Employment Agreement), all of the Outstanding Options shallbecome immediately exercisable and you shall have until the date which is ten(10) years from the date each Outstanding Option was granted to exercise suchOutstanding Option.          I would appreciate it if you would sign, date and return a copy ofthis letter agreement to me.  As such, it will constitute a written amendment toyour Grant Agreements and your Employment Agreement.Sincerely yours,Mattel, Inc.By /s/ Alan Kaye  ________________________________  Alan Kaye  Senior Vice President, Human ResourcesAgreed to and accepted by:   /s/ Neil Friedman__________________________________          Dated: February 16, 2000Neil FriedmanEX-10.1612AMEND. NO. 1 TO MANAGEMENT INCENTIVE PLAN                                                                    EXHIBIT 10.16                              AMENDMENT NO. 1 TO                  THE MATTEL, INC. MANAGEMENT INCENTIVE PLAN          The Mattel, Inc. Management Incentive Plan (the "Plan") is herebyamended, effective November 4, 1999, as set forth below:1.   Section 2 of the Plan is hereby amended by adding new Sections 2.1, 2.2,2.10, 2.11 and 2.12, reading in their entirety as follows:          2.1  Board.  "Board" shall mean the Board of Directors of the Company.               -----                                                                      2.2  Change in Control. "Change in Control" shall mean the occurrence               -----------------                                                         of any of the following:          (a)  The acquisition by any individual, entity or group (within the          meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act          of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial          ownership (within the meaning of Rule 13d-3 promulgated under the          Exchange Act) of 20% or more of either (1) the then outstanding shares          of common stock of the Company, including the shares of common stock          of the Company issuable upon an exchange of Softkey Exchangeable          Shares that are not owned by the Company or any corporation controlled          by the Company (the "Outstanding Company Common Stock") or (2) the          combined voting power of the then outstanding voting securities of the          Company entitled to vote generally in the election of directors (the          "Outstanding Company Voting Securities"); provided, however, that for                                                    --------  -------          purposes of this subsection (a), the following shall not constitute a          Change in Control: (1) any acquisition directly from the Company, (2)          any acquisition by the Company or any corporation controlled by the          Company, (3) any acquisition by any employee benefit plan (or related          trust) sponsored or maintained by the Company or any corporation          controlled by the Company, (4) any acquisition by a Person of 20% of          either the Outstanding Company Common Stock or the Outstanding Company          Voting Securities as a result of an acquisition of common stock of the          Company by the Company or of Softkey Exchangeable Shares by Softkey          which, by reducing the number of shares of common stock of the Company          or Softkey Exchangeable Shares outstanding, increases the          proportionate number of shares beneficially owned by such Person to          20% or more of either the Outstanding Company Common Stock or the          Outstanding Company Voting Securities; provided, however, that if a                                                 -----------------          Person shall become the beneficial owner of 20% or more of either the          Outstanding Company Common Stock or the Outstanding Company Voting          Securities by reason of a share acquisitions by the Company or by          Softkey as described above and shall, after such share acquisitions by          the Company or Softkey, become the beneficial owner of any additional          shares of common stock of the Company, then such acquisition shall          constitute a Change in Control or (5) any acquisition pursuant to a          transaction which complies with clauses (1), (2) and (3) of subsection          (c) of this Section; provided, further,                               -----------------           however, that for purposes of this subsection (a), any Investing          Person (as such term is defined in the Rights Agreement) shall be          deemed not to be a beneficial owner of any Investment Shares (as such          term is defined in the Rights Agreement) and the holder of the Mattel          Special Voting Preferred Share (as such term is defined in the Rights          Agreement) shall be deemed not to be a beneficial owner of such Mattel          Special Voting Preferred Share; or          (b)  Individuals who, as of the date hereof, constitute the Board (the          "Incumbent Board") cease for any reason to constitute at least a          majority of the Board; provided, however, that any individual becoming                                 -----------------          a director subsequent to the date hereof whose election, or nomination          for election by the Company's shareholders, was approved by a vote of          at least a majority of the directors then comprising the Incumbent          Board shall be considered as though such individual were a member of          the Incumbent Board, but excluding, for this purpose, any such          individual whose initial assumption of office occurs as a result of an          actual or threatened election contest with respect to the election or          removal of directors or other actual or threatened solicitation of          proxies or consents by or on behalf of a Person other than the Board;          or          (c)  Consummation by the Company of a reorganization, merger or          consolidation or sale or other disposition of all or substantially all          of the assets of the Company or the acquisition of assets of another          entity (a "Business Combination"), in each case, unless, following          such Business Combination, (1) all or substantially all of the          individuals and entities who were the beneficial owners, respectively,          of the Outstanding Company Common Stock and Outstanding Company Voting          Securities immediately prior to such Business Combination beneficially          own, directly or indirectly, more than 50% of, respectively, the then          outstanding shares of common stock and the combined voting power of          the then outstanding voting securities entitled to vote generally in          the election of directors, as the case may be, of the corporation          resulting from such Business Combination (including, without          limitation, a corporation which as a result of such transaction owns          the Company or all or substantially all of the Company's assets either          directly or through one or more subsidiaries) in substantially the          same proportions as their ownership immediately prior to such Business          Combination of the Outstanding Company Common Stock and Outstanding          Company Voting Securities, as the case may be, (2) no Person          (excluding any employee benefit plan (or related trust) of the Company          or such corporation resulting from such Business Combination)          beneficially owns, directly or indirectly, 20% or more of,          respectively, the then outstanding share of common stock of the          corporation resulting from such Business Combination or the combined          voting power of the then outstanding voting securities of such          corporation except to the extent that such ownership existed prior to          the Business Combination and (3) at least a majority of the members of          the board of directors of the corporation resulting from such Business          Combination were members of the Incumbent Board at the time of the          execution of the initial agreement, or of the action of the Board,          providing for such Business Combination; or                                      -2-           (4)  Approval by the shareholders of the Company of a complete          liquidation or dissolution of the Company.          2.10  Rights Agreement.  "Rights Agreement" shall mean the Rights                ----------------                                                     Agreement, dated as of February 7, 1992, as amended by an amendment          dated as of May 13, 1999 and an amendment dated as of November 4, 1999          by and between the Company and BankBoston N.A., a national banking          association, formerly, The First National Bank of Boston, and not          giving effect to any amendments subsequent to November 4, 1999.          2.11  Softkey.  "Softkey" shall mean Softkey Software Products Inc.,                -------                                                                 an Ontario corporation.          2.12  Softkey Exchangeable Shares.  "Softkey Exchangeable Shares"                ---------------------------                                          shall mean the Exchangeable Shares (as defined in the Rights          Agreement) in the capital stock of Softkey.2.   Current Sections 2.1 through 2.7 of the Plan are hereby renumbered as     Sections 2.3 through 2.9.3.   Section 6.1 of the Plan is hereby amended by adding an additional sentence     at the end thereof, reading in its entirety as follows: "Notwithstanding     the foregoing, following a Change in Control, no amendment or termination     of the Plan may adversely affect the rights of any Participant with respect     to bonus opportunities for years beginning before the Change in Control     without that Participant's written consent, including without limitation     such rights under Article VII."4.   The Plan is hereby amended by adding a new Article VII, reading in its     entirety as follows:                                  ARTICLE VII                               CHANGE IN CONTROL          In the event of a Change in Control, each Participant who is employedby the Company or its successor as of the date of such Change in Control (the"CIC Date") shall receive (i) within 30 days after the CIC Date, any unpaidbonus amounts to which the Participant is entitled with respect to any year thatended on or before the CIC Date, and (ii) an interim cash payment with respectto the year in which such Change in Control occurs (the "CIC Year") equal to theamount that such Participant would have received if the target performance goals(as established by the Committee pursuant to Section 3.1 hereof) for the CICYear had been achieved.  Notwithstanding the foregoing, in the case of aParticipant who is a party to any individual agreement under which theParticipant is or may become entitled to bonus payments with respect to the CICYear, the Company or its successor may make the right of such Participant toreceive such interim cash payment conditional upon the execution by suchParticipant of a waiver of the right to receive such payments under theindividual agreement to the extent they would duplicate such interim cashpayment.  Any amounts that thereafter become                                       -3- payable to a Participant with respect to the CIC Year shall be reduced, but notbelow zero, by the amount of such interim payment to such Participant.                              *        *        *          IN WITNESS WHEREOF, the Company has caused this Amendment to the Planto be executed, effective as of November 4, 1999.                               MATTEL, INC.                               By: /s/ Alan Kaye                                   -------------------------------                                   Name:  Alan Kaye                                    Title: Senior Vice President Human Resources                                      -4-                                      
/Compensation/Employment AgreementsMattel Inc.2009-10-18/compensation/employment//content/hippo/files/default.www/content/contract/contract/M/Mattel-Inc-/1932
1933Loan Agreement - Mattel Inc. and Adrienne Fontanella
          
                                LOAN AGREEMENT

          THIS LOAN AGREEMENT (the 'Agreement') is entered into as of October
29, 1999, by and between Mattel, Inc., a Delaware corporation ('Lender') and
Adrienne Fontanella ('Borrower').  Borrower and Lender are sometimes referred to
in this Agreement as a 'Party' or, collectively, as the 'Parties.'

                                   RECITALS
                                   --------
                                        
          WHEREAS, Borrower desires to obtain from Lender a loan in the
principal amount of One Million Dollars ($1,000,000.00) (the 'Loan'); and

          WHEREAS, as an additional incentive to retain Borrower in the employ
of Lender for a period of at three years from the date hereof, Lender desires to
grant Borrower the Loan.

          NOW, THEREFORE, in consideration of the terms and conditions herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   AGREEMENT
                                   ---------
                                        
          1.  Loan Terms.
              ---------- 

              (a)   Principal Amount. Lender shall pay to the order of Borrower,
                    ---------------- 
on October 29, 1999, the principal sum of One Million Dollars ($1,000,000.00)
(the 'Principal').

          (b) Interest.  Interest shall accrue on the outstanding Principal
              --------                                                     
amount at the rate of seven percent (7%) per annum, compounded annually.

          (c) Promissory Note.  Borrower's obligation to repay the Loan shall be
              ---------------                                                   
evidenced by a promissory note substantially in the form attached as Exhibit A
                                                                     ---------
hereto (the 'Note').  Borrower shall execute and deliver to Lender the Note
concurrently with execution and delivery of this Agreement.

          (d) Repayment.  Borrower shall pay to the order of Lender the
              ---------                                                
Principal and accrued interest under the Note on October 30, 2002, provided,
however, that all Principal and accrued but unpaid interest shall become
immediately due and payable thirty (30) days after the date of Borrower's
termination of employment with Lender for any reason prior to October 30, 2002,
unless Borrower commences arbitration with respect to the grounds for such
termination of employment within such thirty (30) day period, in which case all
Principal and accrued but unpaid interest shall be due and payable five (5) days
after notice to Borrower of the entry of a final judgement in such arbitration.
Interest shall continue to accrue during any such arbitration. The Loan shall be
subject to forgiveness as provided below.  The Loan shall be unsecured but with
full recourse against Borrower.
 
          (e) Forgiveness.  The Loan, and Borrower's obligation to repay all
              -----------                                                   
outstanding Principal and accrued interest thereunder, shall be forgiven and
cancelled by Lender and the Note shall be cancelled on October 29, 2002 if
Borrower is employed by Lender on October 29, 2002, or earlier upon the date of
the termination of Borrower's employment with Lender prior to October 29, 2002
if such termination is by Lender without Cause (as defined below), by Borrower
for Good Reason (as defined below) or by reason of Borrower's death or
Disability (as defined below).  In addition, if the Loan is forgiven pursuant to
the preceding sentence and if Borrower is employed by Lender on October 29, 2002
and continues to be employed by Lender, on April 1, 2003, or such earlier date
as Borrower shall be required to pay federal, state or local income taxes with
respect to the forgiveness of the Loan, Lender shall pay Borrower an additional
payment (the 'Gross-Up Payment') in an amount required to fully reimburse
Borrower with respect to all federal, state and local income taxes and
employment taxes with respect to the forgiveness of the Loan and with respect to
such taxes, such that upon receipt of the Gross-Up Payment Borrower shall have
no remaining obligations with respect to such taxes.   In addition, the Loan
shall be forgiven by Lender on the date of a Change of Control (as defined
below) of Lender if Borrower is employed by Lender on such date and Lender shall
pay Borrower the Gross-Up Payment with respect to the forgiveness of the Loan on
April 1, of the year following the year of the Change of Control, or such
earlier date as Borrower shall be required to pay federal, state or local income
taxes with respect to the forgiveness of the Loan.

          (f) Definitions.  For purposes of this Agreement, the following
              -----------                                                
terms shall have the meanings indicated below:

          'Cause' shall mean a reasonable determination of the Chief Executive
Officer of Lender that at least one of the following has occurred: (i) one or
more factually substantiated willful acts of dishonesty on Borrower's part which
are intended to result in Borrower's substantial personal enrichment at the
expense of Lender; (ii) repeated violations by Borrower of Borrower's employment
obligations to Lender which are demonstrably willful and deliberate on
Borrower's part and which resulted in material injury to Lender; (iii) conduct
of a factually substantiated criminal nature (commonly defined as a 'felony' in
criminal statutes) which has or which is more likely than not to have a material
adverse effect on Lender'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) factually substantiated fraudulent conduct in connection with
the business or affairs of Lender, regardless of whether said conduct is
designed to defraud Lender or others; provided that, in each case, Borrower 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.

          '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 Lender, any trustee or other fiduciary
holding securities under an employee benefit plan of Lender) is or becomes the
'beneficial owner' (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Lender representing 20% or more of the combined
voting power of Lender's then outstanding voting securities;

                                       2
 
                    (ii) during any period of 24 consecutive months,
individuals, who at the beginning of such period constitute the Board of
Directors of Lender, and any new director whose election by the Board of
Directors, or whose nomination for election by Lender'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 Lender approve (I) a plan of
complete liquidation of Lender or (II) the sale or other disposition by Lender
of all or substantially all of Lender'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 Lender
with any other entity other than:

                         (I)  a merger or consolidation which results in the
voting securities of Lender 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 Lender (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 Lender'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 Lender (who were directors
immediately prior thereto)' shall include only individuals who were directors of
Lender at the beginning of the 24 consecutive month period preceding the date of
such merger or consolidation.

              'Disability' shall mean that Borrower suffers a disability due to
illness or injury which substantially and materially limits Borrower from
performing each of the essential functions of Borrower's job, even with
reasonable accommodation and becomes entitled to receive disability benefits
under Lender's Long-Term Disability Plan for exempt employees.

              'Good Reason' shall mean the good faith determination by Borrower
that any one or more of the following have occurred:

                    (i)  without the express written consent of Borrower, any
change(s) in any of the employment duties, authority, or responsibilities of
Borrower which is (are) inconsistent in any substantial respect with Borrower's
position, authority, duties, or responsibilities as of the date of this
Agreement;

                                       3
 
                    (ii)  any failure by Lender to pay Borrower Borrower's
salary or earned bonuses, other than an insubstantial and inadvertent failure
remedied by Lender promptly after receipt of notice thereof given by Borrower;
or

                    (iii)  transferring Borrower outside of the greater Los
Angeles, California area without Borrower's express written consent.

              (g) Notwithstanding any other provision in this Agreement, in the
event Borrower and Lender enter into an employment agreement after the date of
this Agreement, the definition of 'Cause,' 'Change of Control,' 'Disability,'
and 'Good Reason' as provided in such employment agreement (or any amendments
thereto) shall supercede the definitions in Section 1(f) of this Agreement.

          2.  Transfer of Notes.   Borrower shall not assign or transfer any of
              -----------------                                                
Borrower's benefits or obligations arising under the Notes.   Lender reserves
the right to assign or transfer all or any part of, or any interest in, Lender's
rights and benefits under this Agreement or the Note to any successor to all or
part of its business or assets so long as any assignee or transferee expressly
agrees to assume and perform this Agreement in the same manner and to the same
extent as Lender would be required to perform if no such assignment or transfer
had taken place.

          3.  Amendment; Waiver.  This Agreement and the Note contain 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
Parties.  No provision of this Agreement or the Note 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.

          4.  Choice of Law.  This Agreement shall be construed in accordance
              -------------                                                  
with and governed by the internal laws of the State of California, without
reference to principles of conflict of laws.

          5.  Headings.  The paragraph headings contained in this Agreement are
              --------                                                         
for reference purposes only and shall not affect in any way the meaning or
interpretation of the provisions hereof.

          6.  Notices.  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 Lender:
          ------------ 
                              MATTEL, INC.
                              333 Continental Blvd.
                              El Segundo, CA 90245
 

                                       4
 
          If to Borrower:
          -------------- 
                              Ms. Adrienne Fontanella
                              MATTEL, INC.
                              333 Continental Blvd.
                              El Segundo, CA 90245

                              and

                              Ms. Jennifer Freeman, Esq.
                              Freeman Forrest & Levy LLP
                              415 Madison Avenue
                              New York, NY 10017
 
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.

          7.  Counterparts.  This Agreement may be executed in one or more
              ------------                                                
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

          8.  Severability.  If any provision in or obligation under this
              ------------                                               
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

          9.  No Third-Party Beneficiary Rights.  The Parties do not intend to
              ---------------------------------                               
confer and this Agreement shall not be construed to confer any rights or
benefits to any person, firm, group, corporation or entity other than the
Parties.



                           [Signature Page Follows]

                                       5
 
          IN WITNESS WHEREOF, this Agreement has been duly executed by the
Parties on the date first written above.


                              LENDER



                              By: /s/ Alan Kaye
                                 -------------------------------------------
                                 
                              Its:  Senior Vice President, Human Resources
                                  ------------------------------------------


                              BORROWER


                               /s/ Adrienne Fontanella
                               ---------------------------------------------
                                   Adrienne Fontanella



                                      S-1
 
                                   EXHIBIT A
                                   ---------

                                Promissory Note


$1,000,000.00                                            Date:  October 29, 1999

          Mattel, Inc. (herein referred to as 'Holder') has agreed to advance to
Adrienne Fontanella (herein referred to as 'Maker') on October 29, 1999,
$1,000,000.00, and for said value received Maker promises to repay to the order
of Holder, the principal sum of $1,000,000.00 on or before October 30, 2002.
Maker shall owe to Holder interest on the principal sum in an amount equal to 7%
per annum, commencing on October 29, 1999, compounded annually, payable with
principal on October 30, 2002.

          If Maker fails to make any payment set forth above when due, Holder
may elect to declare the entire unpaid principal amount, including all unpaid
interest, immediately due and payable with or without notice.

          In the event of the termination of Maker's employment with Holder for
any reason, all outstanding principal and accrued interest hereunder is
immediately due and payable, with or without notice, thirty (30) days after the
date of such termination  unless Maker commences arbitration as provided in that
certain Loan Agreement (the 'Loan Agreement'), dated as of October 29, 1999,
between Holder and Maker, unless this note and the loan it evidences shall have
been cancelled and forgiven pursuant to the terms of the Loan Agreement.

          In the event of commencement of legal action to enforce payment of
this note, the non-prevailing party agrees to pay the prevailing party's
reasonable attorney's fees and court costs in connection therewith.



                              By: /s/ Adrienne Fontanella    12/21/99
                                 ----------------------------------------
                                      Adrienne Fontanella      Date

Witnessed by:

  /s/ Alan Kaye       12-21-99
----------------------------------
                        Date



 TYPE:  EX-10.8
 SEQUENCE:  5
 DESCRIPTION:  AMENDED EMPL. AGREE.-ADRIENNE FONTANELLA


 
                                                                    EXHIBIT 10.8
 
February 10, 2000

Ms. Adrienne Fontanella
President Girls/Barbie
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012

Re:  Amendment to Your Employment Agreement and Stock Option Grant Agreements
     ------------------------------------------------------------------------

Dear Adrienne:

          Pursuant to action taken by Mattel's Board of Directors and
Compensation Committee on February 1, 2000 to amend Mattel's 1990 and 1996 Stock
Option Plans (the 'Plans') and to amend the Grant Agreements for Non-Qualified
Stock Options ('Grant Agreements') with respect to all of the stock options
which you hold under the Plans and which are outstanding as of February 1, 2000
(the 'Outstanding Options'), this letter agreement constitutes an amendment to
each of your Grant Agreements and your Employment Agreement with Mattel.

          Notwithstanding any provision of your Grant Agreements or of your
Employment Agreement to the contrary, in the event that your employment with
Mattel is terminated (i) by Mattel without Cause (as defined in your Employment
Agreement), (ii) by you for Good Reason (as defined in your Employment
Agreement), (iii) by you for any reason during the 30-day period immediately
following the six (6) month anniversary of a Change of Control (as defined in
your Employment Agreement) or (iv) by reason of your death or Disability (as
defined in you Employment Agreement), all of the Outstanding Options shall
become immediately exercisable and you shall have until the date which is ten
(10) years from the date each Outstanding Option was granted to exercise such
Outstanding Option.

          I would appreciate it if you would sign, date and return a copy of
this letter agreement to me.  As such, it will constitute a written amendment to
your Grant Agreements and your Employment Agreement.

Sincerely yours,
Mattel, Inc.

By: /s/ Alan Kaye
   ------------------------- 
   Alan Kaye
   Senior Vice President, Human Resources

Agreed to and accepted by:

 /s/ Adrienne Fontanella        Dated: February 16, 2000
----------------------------                    
Adrienne Fontanella