Severance and Consulting Agreement - Mattel Inc. and Ned Mansour


                      SEVERANCE AND CONSULTING AGREEMENT


     1.  PARTIES:  The parties to this Severance and Consulting Agreement
(herein 'Agreement') are Ned Mansour ('Mansour') and MATTEL, INC. ('Mattel').

     2.  RECITALS:  This Agreement is made with reference to the following
facts:

          2.1  Mansour has been employed by Mattel, Inc. as its President
     pursuant to an Amended and Restated Employment Agreement dated as of
     November 11, 1993, as amended September 1, 1995, as made subject to an
     Interpretive Rider dated September 20, 1995, and as amended and restated as
     of July 29, 1996 (herein 'Employment Agreement').

          2.2  Mattel and Mansour have agreed that, effective as of March 31,
     2000 (the 'Termination Date'), Mansour will resign all of his positions as
     an officer (including, without limitation, President) and employee of
     Mattel, and will resign all of his positions as an officer and/or employee
     of any and all subsidiaries and affiliates of Mattel.  In this connection
     Mansour will execute the letter of resignation, a copy of which is attached
     as Exhibit 'A' hereto.  In addition, Mattel and Mansour have agreed that,
     beginning with the first annual meeting of Mattel's stockholders following
     the date of this Agreement, Mansour will not seek re-election as a member
     of the Board of Directors of Mattel (the 'Board').

          2.3  Certain issues have arisen with respect to Mansour's right to
     receive certain payments and other benefits upon the termination of his
     employment pursuant to the provisions of his Employment Agreement.

          2.4  It is the intention of the parties hereto to settle and dispose
     of, fully and completely, any and all claims, demands and cause or causes
     of action each may have against the other, heretofore or hereafter arising
     out of, connected with or incidental to the dealings between the parties
     hereto prior to the Termination Date, including, without limitation on the
     generality of the foregoing, any and all claims, demands and cause or
     causes of action arising out of the employment or termination of Mansour's
     employment with Mattel, or the interpretation or application of any
     provision of his Employment Agreement, or with respect to any reason
     whatsoever, including any matters not related to those claims.

     3.  TERMINATION OF EMPLOYMENT AND DIRECTORSHIP; CONSULTING SERVICES:

          3.1  Except as expressly set forth herein, effective as of the
     Termination Date, the Employment Agreement shall terminate and Mattel and
     its subsidiaries and affiliates shall have no further obligation or
     liability thereunder.

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          3.3  Beginning with the first annual meeting of Mattel's stockholders
     following the date of this Agreement, Mansour shall not seek re-election as
     a member of the Board, and Mattel shall have no obligation to nominate or
     cause Mansour to be elected as a member of the Board.

          3.4 Effective as of the Termination Date, Mansour's status as an
     officer and employee of Mattel shall terminate, and Mattel shall engage
     Mansour as a non-exclusive consultant to Mattel for the period commencing
     on the Termination Date and ending on December 31, 2000 (the 'Consulting
     Period'). As a consultant, Mansour shall provide services from his office
     located at his residence, unless requested by the Chief Executive Officer
     of Mattel, or his designee, to travel within the United States, or appear
     at Mattel's offices, in the ordinary course of completing assignments,
     which Mattel agrees to assign with reasonable notice provided, and
     consisting of expectations consistent with Mansour's experience and
     expertise. In no event shall the services requested of Mansour during the
     Consulting Period require performance which exceeds 20 hours in any one
     month. As consideration for actual services rendered and/or Mansour's
     continuing agreement to remain available for assignments on an 'on-call'
     basis, Mattel shall pay Mansour $8,000 on a monthly (less all amounts
     required to be withheld under applicable law) during the Consulting Period.
     Mansour's eligibility for Mattel-provided benefits during the Consulting
     Period shall be limited to those benefits expressly set forth herein.
     Mansour specifically agrees and acknowledges that as of the Termination
     Date, Mansour shall be ineligible for the receipt of stock option grants,
     participation in any incentive programs, including Mattel's Management
     Incentive Plan and Mattel's Long Term Incentive Plan, paid vacations or
     paid holidays. During the Consulting Period, Mansour shall be entitled to
     receive reimbursement for all reasonable expenses incurred by Mansour in
     accordance with the policies and practices of Mattel as in effect from time
     to time with respect to consultants of Mattel.

     4.  PAYMENT AND OTHER BENEFITS UPON TERMINATION:

          4.1  On the Termination Date, Mattel shall pay or cause to be paid to
     Mansour a lump-sum cash payment (the 'Payment') in an amount equal to
     $5,780,062.00, less all applicable withholding taxes.  The Payment is
     exclusive of any amounts to which Mansour may be entitled under any
     deferred compensation plan, pension plan or other retirement plan
     maintained by Mattel.  At Mansour's election, any or all of the Payment may
     be deferred by Mansour pursuant to any deferred compensation plan
     maintained by Mattel in which Mansour is eligible to participate, subject
     to the terms and conditions of such plan.

          4.2    For the period beginning on the Termination Date and ending on
     the earlier to occur of the third anniversary of the Termination Date or
     the date upon which Mansour accepts other full-time employment (such
     period, the 'Benefits Continuation Period'), Mattel shall provide to
     Mansour at Mattel's expense medical, dental, prescription drug and vision
     care group insurance in accordance with the coverage in effect immediately
     prior to the Termination Date (the last 18 months of Mansour's coverage
     under such insurance shall be deemed to be participation under an election
     to continue such benefits under the Consolidated Omnibus Budget
     Reconciliation Act at 

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     Mattel's expense). From and after the third anniversary of the Termination
     Date, Mattel shall provide health insurance to Mansour and his dependents
     in accordance with the terms and conditions of Mattel's Retiree Medical
     Plan.

          4.3  Exhibit 'B' hereto sets forth a list of outstanding stock options
     held by Mansour under Mattel's stock option plans. Mansour shall be
     entitled to continue to hold and exercise stock options previously granted
     to him as provided for in Mattel's stock option plans and applicable stock
     option agreements (as modified or amended from time to time and Alan Kaye's
     letter dated February 10, 2000) and, with respect to 'premium price stock
     options,' as modified by the provisions of Exhibit 'B' hereto. In the event
     that any previously granted stock options shall be repriced prior to the
     expiration date for any Mattel senior executives, options granted to
     Mansour shall be similarly repriced.

          4.4  Mansour may continue to use the car leased by Mattel that is in
     Mansour's possession on the Termination Date until the third anniversary of
     the Termination Date, at which time Mansour may purchase the car for $1.00.
     Except as set forth in the following sentence, as of the Termination Date,
     all expenses related to such leased car, including but not limited to
     repairs and maintenance, shall be the sole responsibility of Mansour.
     Notwithstanding the foregoing, Mansour may continue to use the Company's
     credit card for gasoline and associated expenses and Mattel shall pay
     Mansour's car phone expenses during the Consulting Period.

          4.5  Upon the termination of the Consulting Period, Mansour agrees to
     return to Mattel all credit cards in his possession which were provided to
     him by Mattel for any purpose.

          4.6  Upon the Termination Date, Mattel agrees to transfer to Mansour
     the PC computers currently provided to Mansour for business purposes.
     Thereafter Mansour will be responsible for costs of maintenance and all
     modem connections.  Mansour shall not be required to reimburse Mattel for
     such transfer.

          4.7  Effective as of the Termination Date, Mattel shall credit Mansour
     with enhanced benefits under Mattel's 1994 Supplemental Executive
     Retirement Plan (the 'SERP') in accordance with the terms set forth on
     Exhibit 'C' hereto.  Notwithstanding anything contained in the SERP or any
     applicable election form delivered by Mansour thereunder, Mansour's
     benefits under the SERP shall commence as of the Termination Date.

          4.8  For the three year period immediately following the Termination
     Date, Mattel shall provide Mansour with financial planning services in
     accordance with the policies of Mattel as in effect from time to time with
     respect to executives employed by Mattel.

          4.9  Mattel shall continue to provide Mansour with life insurance
     coverage under Mattel's Key Executive Life Insurance Program (in which he
     is vested for life) on 

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     substantially the same terms and conditions as such insurance coverage is
     provided to Mansour immediately prior to the Termination Date, subject to
     the terms and conditions of such program as in effect from time to time.

          4.10  In lieu of providing Mansour with outplacement services, Mattel
     shall pay Mansour a lump-sum cash payment in an amount equal to $20,000
     (less all applicable withholding taxes) on the Termination Date.

          4.11 During the Benefits Continuation Period, Mattel shall provide to
     Mansour, at Mattel's expense, continuation of country-club membership
     'signatory/representative' status as in effect immediately prior to the
     Termination Date (including the payment by Mattel of normal club dues, fees
     and any assessments and the un-spent quarterly minimum expenses. Mansour
     will be responsible for green fees, cart fees, and the purchase of any
     product and food). Upon the termination of the Benefits Continuation
     Period, Mattel shall cause the membership to be transferred to Mansour at
     no cost to Mansour (but subject to tax reporting as imputed income
     applicable to the year in which the membership is transferred).

          4.12  For the three year period immediately following the Termination
     Date, Mattel shall reimburse Mansour for the actual cost incurred by
     Mansour in maintaining the home security system existing at Mansour's
     residence as of the date hereof.

     5.  COSTS AND FEES:  Mattel shall promptly pay or reimburse Mansour for all
costs and fees actually incurred by Mansour in the negotiation, preparation and
delivery of this Agreement, including, without limitation, reasonable attorneys
fees; provided, however, that the aggregate amount of Mattel's obligation under
this paragraph 5 shall not exceed Five Thousand Dollars ($5,000).  Except as
otherwise provided herein, each party hereto shall bear their own costs and
attorney's fees.

     6. RELEASE OF CLAIMS: In consideration of the payments and promises
provided for herein, and except for rights created by this Agreement, and except
for any indemnification rights Mansour may have as an officer and/or director of
Mattel under Delaware law, the Mattel Articles of Incorporation or By-laws, 
any Directors and Officers liability insurance, or otherwise, Mansour hereby
releases, remises and forever discharges Mattel, its affiliates, subsidiaries,
subsidiary entitles and the owners, stockholders, predecessors, successors,
assigns, employees, officers, directors, counsel, and agents and Mattel hereby
releases, remises and forever discharges Mansour, and his successors, assignees,
counsel, and agents from any and all claims, demands, and cause or causes of
action heretofore arising out of, connected with or incidental to the dealings
between the parties hereto prior to the effective date hereof, including,
without limitation on the generality of the foregoing, any and all claims,
demands and cause or causes of action arising out of the employment, or
termination of employment of Mansour. This includes a release of any rights or
claims Mansour may have under Title VII of the Civil Rights Act of 1964, as
amended by the Civil Rights Act of 1991, which prohibits discrimination in
employment based on race, color, national origin, religion or sex; the
California Fair Employment and Housing Act, which prohibits discrimination based
on race, color, national origin, ancestry, physical handicap, medical condition,
marital status, sex or age; the Age
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Discrimination in Employment Act which prohibits age discrimination over the age
of forty (40); the Americans With Disability Act, which prohibits discrimination
based on physical handicap; the Equal Pay Act, which prohibits paying men and
women unequal pay for equal work; or any other federal, state or local laws or
regulations prohibiting employment discrimination.

          6.1  Mansour shall have a period of twenty-one (21) days to review and
     consider this Agreement before signing it.

          6.2  Mansour may revoke this Agreement within seven (7) days after he
     signs it by delivering a written notice of revocation to Mattel's Senior
     Vice President of Human Resources at Mattel's headquarters so that it is
     received by him not later than the close of business on that day.  In the
     event of such revocation, it shall not be effective and Mansour shall not
     receive the payments and other benefits provided for herein.

          6.3  This Agreement does not waive or release any rights or claims
     which Mansour has under the Age Discrimination in Employment Act which
     arise after the execution of this Agreement.

     7.  REPRESENTATIONS AND WARRANTIES: Each of the parties to this Agreement
represents, warrants, and agrees as follows:

          7.1  Each party has received independent legal advice from its
     attorneys, with respect to the advisability of making the settlement
     provided herein, with respect to the advisability of executing this
     Agreement, and with respect to the meaning of California Civil Code Section
     1542. By executing this Agreement, Mansour acknowledges that he has read
     it, discussed it with his attorneys, and has executed it in reliance upon
     the advice of his attorneys with respect to each of these matters.

          7.2  No party (nor any officer, agent, employee, representative, or
     attorneys of or for any party), has made any statement or representation to
     any other party regarding any fact relied upon in entering into this
     Agreement, and each party does not rely upon any statement, representation
     or promise of any other party (or of any officer, agent, employee,
     representative, or attorney for the other party), in executing this
     Agreement, or in making the settlement provided for herein, except as
     expressly stated in this Agreement.

          7.3  Each party to this Agreement has made such investigation of the
     facts pertaining to this settlement and this Agreement and of all the
     matters pertaining thereto as it deems necessary.

          7.4  Each party executing this Agreement, or in the case of Mattel, a
     responsible officer thereof, has read this Agreement and understands the
     contents hereof.  The officer executing this Agreement on behalf of Mattel
     is empowered to do so and thereby binds Mattel.

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          7.5  Neither party has heretofore exercised its sole power to assign,
     transfer, or grant, or purport to assign, transfer, or grant, any of the
     claims, demands, and cause or causes of action disposed of by this
     Agreement.

          7.6  Each term of this Agreement is contractual and not merely a
     recital.

          7.7  Mansour and Mattel are aware that they may hereafter discover
     claims or facts in addition to or different from those they now know or
     believe to be true with respect to the matters related herein.
     Nevertheless, and except as herein provided, it is their intention to
     fully, finally and forever settle and release all claims relative thereto
     which do now exist, or heretofore have existed between Mattel and Mansour.
     In furtherance of such intention, the releases given herein shall be and
     remain in effect as full and complete releases of all such matters,
     notwithstanding the discovery of existence of any additional or different
     claims or facts relative thereto.

          7.8  It is expressly understood and agreed by Mansour that the sums
     specified to be paid by or on behalf of Mattel to him, pursuant to
     paragraph 3 above, as well as the other benefits provided for in paragraphs
     4 and 5, shall be in lieu of any and all amounts of which Mansour is now or
     may become entitled to from Mattel for any and all claims released, as
     described in paragraph 6 of this Agreement.

          7.9  Mansour agrees not to initiate, or cause to be initiated against
     Mattel, its affiliates, subsidiaries and the shareholders, directors,
     officers and employees, any compliance review, suit, action, appeal,
     investigation or proceeding of any kind, or participate in same,
     individually or as a representative or member of a class, unless compelled
     by law, under any contract (express or implied), tort, law, or regulation
     (federal, state or local), pertaining in any way whatsoever to the matters
     herein released, nor shall he be entitled to receive any payment from any
     such proceeding.

          7.10  The parties hereto agree that each and every provision of Part
     10 'Confidential Information,' contained in the Employment Agreement,
     including, without limitation, the non-disclosure provisions of the
     Employee Confidential Information and Inventions Agreement, previously
     executed by Mansour, shall by this reference, be incorporated in this
     Agreement.  Any material violation of this provision by Mansour which
     causes adverse economic results to Mattel shall disqualify him from
     exercising any of the stock options he may hold under the Premium Price
     Stock Option Plan as modified by the provisions of Exhibit 'B' hereto.

          7.11  Except as to disclosures required by law, or otherwise made by
     Mattel, Mansour agrees not to disclose the terms of this Agreement to
     anyone other than the attorneys involved in this matter, his accountants or
     tax preparers or his immediate family;  and shall forthwith instruct such
     attorneys, accountants or tax preparers and his immediate family not to
     disclose the terms and conditions of this Agreement to anyone.  Mansour
     acknowledges and agrees that any disclosure of information contrary to the
     terms of this paragraph would cause Mattel injury and damage.  Any material
     violation of this provision by Mansour which causes adverse economic
     results to Mattel shall 

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     disqualify him from exercising any of the stock options he may hold under
     the Premium Price Stock Option Plan as modified by the provisions of
     Exhibit 'B' hereto.

          7.12  Mansour agrees that he will refrain from making any statements
     about Mattel or its senior executives which would disparage, or reflect
     unfavorably upon the image or reputation of Mattel or any such senior
     executives. Mattel agrees to refrain from making any statements about
     Mansour which would disparage, or reflect unfavorably upon the image or
     reputation of Mansour. Any material violation of this provision by Mansour
     which causes adverse economic results to Mattel shall disqualify him from
     exercising any of the stock options he may hold under the Premium Price
     Stock Option Plan as modified by the provisions of Exhibit 'B' hereto.

          7.13  Mansour agrees that he shall not seek employment with Mattel,
     its affiliates, or subsidiaries, which are known to him, at any time in the
     future, and that such parties have no obligation to employ, hire, rehire,
     or to consider him for hire, other than to continue his employment until
     the Termination Date, subject to the terms of the Employment Agreement, and
     his consultancy during the Consulting Period.  Mansour's forbearance from
     seeking employment is purely contractual and voluntary, and does not
     constitute discrimination or retaliation in any respect.

          7.14  Mansour agrees that for a period ending on the first anniversary
     of the Termination Date, he will not directly or indirectly, recruit or
     solicit any of Mattel's employees to accept employment with any other
     employer.  Any material violation of this provision by Mansour which causes
     adverse economic results to Mattel shall disqualify him from exercising any
     of the stock options he may hold under the Premium Price Stock Option Plan
     as modified by the provisions of Exhibit 'B' hereto.

          7.15  Mansour agrees that during the Consulting Period, he will not
     accept a position as a director, officer, employee, partner, consultant or
     otherwise with any competitor toy company of Mattel with annual sales in
     excess of $2 Billion. Nothing contained in this Section 7.15 shall in any
     way affect Mansour's convenants or obligations under the SERP or Mattel's
     stock option plans and applicable stock option agreements pursuant to which
     Mansour has been granted stock options. Any material violation of this
     provision by Mansour which causes adverse economic results to Mattel shall
     disqualify him from exercising any of the stock options he may hold under
     the Premium Price Stock Option Plan as modified by the provisions of
     Exhibit 'B' hereto.

          7.16  Mansour agrees that after the Termination Date, upon the request
     of Mattel, he shall cooperate with and assist Mattel in undertaking and
     preparing for legal and other proceedings relating to the affairs of Mattel
     and its subsidiaries. Mansour shall be reimbursed for the reasonable
     expenses he incurs in connection with any such cooperation and/or
     assistance, and, after the Termination Date, shall receive from Mattel
     reasonable per diem compensation in connection therewith.


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          7.17  The parties will execute all such further and additional
     documents consistent herewith as shall be reasonable, convenient, necessary
     or desirable to carry out the provisions of this Agreement.
 
          7.18  Mattel agrees that it will provide to Mansour, at his request,
     an appropriate letter of recommendation to prospective employers of
     Mansour. Mansour agrees to request that all prospective employers direct
     their requests for reference information to Mattel's senior human resources
     executive. Mattel agrees that requests for reference information concerning
     Mansour which it receives shall be directed to its senior human resources 
     executive.

          7.19  The parties hereto acknowledge and agree that they have
     previously entered into an Indemnity Agreement substantially in the form of
     Exhibit 'E' hereto (as amended from time to time, the 'Indemnity
     Agreement'). Each of Mattel and Mansour hereby reaffirm their respective
     rights and obligations under the Indemnity Agreement and agree to comply
     with the terms and conditions thereof.

     8.  SETTLEMENT:  This Agreement affects the settlement of claims which are
denied and contested, and nothing contained herein shall be construed as an
admission by any party hereto of any liability of any kind to any other party.
Each of the parties hereto denies any liability in connection with any claim and
intends merely to avoid litigation and buy its peace.

     9.  MISCELLANEOUS:

          9.1  This Agreement shall be deemed to have been executed and
     delivered within the State of California, and the rights and obligations of
     the parties hereto shall be construed and enforced in accordance with, and
     governed by, the laws of the State of California.

          9.2  Mansour acknowledges and agrees that this Agreement includes the
     entire agreement and understanding between the parties with regard to
     Mansour's employment, the termination thereof, and all amounts to which
     Mansour shall be entitled whether during the term of employment or upon
     termination thereof.  Except as expressly provided herein, this Agreement
     supersedes all prior and contemporaneous oral and written agreements and
     discussions, including, without limitation, the Employment Agreement.  This
     Agreement may be amended only by an agreement in writing signed by all
     parties.  Mansour also acknowledges and agrees that his right to receive
     the payments and other benefits set forth in Sections 3, 4 and 5 of this
     Agreement is contingent upon Mansour's execution and acceptance, on the
     Termination Date, of the terms and conditions of, and the effectiveness of
     the General Release of All Claims (the 'Release') attached hereto as
     Exhibit 'D.'  If Mansour fails to execute the Release on the Termination
     Date and/or Mansour revokes the Release within seven (7) days after such
     execution,, then Mansour shall not thereafter be entitled to any payments
     or other benefits to which Mansour would otherwise be entitled under
     Sections 3, 4 and 5 of this Agreement.

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          9.3  This Agreement is binding upon and shall inure to the benefit of
     the parties hereto, their respective agents, employees, representatives,
     officers, directors, divisions, subsidiaries, affiliates, heirs,
     predecessors, successors in interest and shareholders.

          9.4  Each party has cooperated in the drafting and preparation of this
     Agreement.  Hence, in any construction to be made of this Agreement, the
     same shall not be construed against any party.

          9.5  Should any provisions of this Agreement be declared or determined
     by any court to be illegal or invalid, the validity of the remaining parts,
     terms or provisions shall not be affected thereby and said illegal or
     invalid part, term or provision shall be deemed not to be a part of this
     Agreement.

          9.6  Mattel and Mansour each specifically waive the benefit of the
     provisions of Section 1542 of the Civil Code of the State of California, 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.'

          9.7  The parties hereto agree that each and every provision of Part 8
     'Arbitration of Disputes' contained in the Employment Agreement, shall by
     this reference, be incorporated in this Agreement and shall apply to any
     issue, controversy or dispute which may arise with respect to the
     interpretation or application of this Agreement.

          9.8  All notices and other communications shall be in writing; shall
     be delivered by hand or mailed by registered or certified mail, return
     receipt requested, postage prepaid, to the other party; and shall be deemed
     delivered upon actual receipt; and shall be addressed as follows:


               To Mattel:

                Mattel Inc.
                333 Continental Blvd.
                El Segundo, California  90245
                Attention:  Senior Vice President, Human Resources


               To Mansour:

                Mr. Ned Mansour

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          or to such other address as either party, in writing shall have
          furnished to the other.

          9.9  This Agreement consisting of ___ pages is made and entered into
     on and as of March 22, 2000 in Los Angeles County, California and is
     effective as of this date.


   3/23/2000                            /s/ Ned Mansour        
------------                        --------------------------------------------
Date                                        NED MANSOUR



                                    MATTEL, INC.

   3/23/2000                            
------------                        By   /s/ Alan Kaye 
Date                                     ----------------------
                                         Alan Kaye

                                    Its  Senior Vice President, Human Resources
                                         --------------------------------------

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