{"id":39336,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-mattel-inc-and-gary-baughman.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-mattel-inc-and-gary-baughman","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-mattel-inc-and-gary-baughman.html","title":{"rendered":"Employment Agreement &#8211; Mattel Inc. and Gary Baughman"},"content":{"rendered":"<pre>\n                                 EMPLOYMENT AGREEMENT\n\n  THIS EMPLOYMENT AGREEMENT (the 'Agreement') between Mattel, Inc., a Delaware\ncorporation ('Mattel'), and GARY BAUGHMAN (the 'Executive'), dated as of the 5th\nday of May, 1997.\n\n  1.  Employment Period.  Mattel hereby agrees to employ and continue in its\n      -----------------                                                     \nemploy the Executive, and the Executive hereby accepts such employment and\nagrees to remain in the employ of Mattel, for the period commencing on the date\nof this Agreement and ending on the third anniversary of such date (the\n'Employment Period'); provided that commencing on the first day of the month\nnext following the effective date hereof, and on the first day of each month\nthereafter (the most recent of such dates is hereinafter referred to as the\n'Renewal Date'), the Employment Period shall be automatically extended so as to\nterminate three years from such Renewal Date, unless at least 60 days prior to\nany Renewal Date Mattel or the Executive shall give notice to the other that the\nEmployment Period shall not be so extended.\n\n  2.  Duties.\n      ------ \n\n      (a)  Executive's Position and Duties.  During the Employment Period, the\n           -------------------------------                                    \nExecutive's position (including titles), authority and responsibilities shall be\nsimilar to, but no less than those held by the Executive on the date hereof with\nsuch additions and modifications consistent with responsibilities\n \ngenerally assigned to executive officers of Mattel as the Chief Executive\nOfficer of Mattel ('CEO') may in her discretion and acting in good faith from\ntime to time assign to the Executive. It is herein provided that Executive shall\ninitially report to the CEO and upon an appropriate future date, most likely in\nand around the month of September, in the year 1997, Executive shall commence\nreporting to the Chief Operating Officer of Mattel ('COO').  During the initial\nperiod, while Executive is reporting to the CEO, he shall have responsibility\nover the Tyco Preschool group and the Fisher-Price Infant &amp; Preschool lines of\nbusinesses, as well as other lines of businesses currently under the dominion of\nthe Fisher-Price brand, including Power Wheels.  Upon commencement of a\nreporting relationship to the COO as previously noted, Executive shall assume\nadded responsibility for the balance of the Company's Infant &amp; Preschool lines\nof businesses, including Disney Infant &amp; Preschool, Pooh and See'N Say.  The\nExecutive's services shall be performed in the general area in which the\nExecutive was employed on the date of this Agreement and the Executive will not\nbe transferred outside the area without the Executive's consent, other than for\nnormal business travel and temporary assignments.  It is further agreed that\nExecutive shall be the next Mattel employee duly appointed and slated for\nelection to the Board of Directors of Mattel, Inc. pursuant to the next ensuing\nannual meeting of Mattel, Inc.'s shareholders.\n\n                                      -2-\n \n      (b)  Full Time.  The Executive agrees to devote his full business time \n           ---------                                                           \nto the business and affairs of Mattel and to use his best efforts to perform\nfaithfully and efficiently the responsibilities assigned to him hereunder to the\nextent necessary to discharge such responsibilities, except for (i) services on\ncorporate, civic or charitable boards or committees not significantly\ninterfering with the performance of such responsibilities; (ii) periods of\nvacation and sick leave to which he is entitled; and (iii) the management of\npersonal investments and affairs. The Executive will not engage in any outside\nbusiness activity (as distinguished from personal investment activity and\naffairs) including, but not limited to, activity as a consultant, agent, partner\nor officer, or provide business services of any nature directly or indirectly to\na corporation or other business enterprise.\n\n  3.  Compensation.\n      ------------ \n\n      (a)  Base Salary.  During the Employment Period, the Executive shall \n           -----------                                                        \nreceive a base salary ('Base Salary') at a bi-weekly rate at least equal to the\nbi-weekly salary paid to the Executive by Mattel on the date of this Agreement\n($21,154). The Base Salary shall be reviewed at least every 18 months and may be\nincreased at any time and from time to time by action of the Board of Directors\nof Mattel or the Compensation\/Options\n\n                                      -3-\n \nCommittee thereof or any individual having authority to take such action in\naccordance with Mattel's regular practices.  Any increase in the Base Salary\nshall not serve to limit or reduce any other obligation of Mattel hereunder and,\nafter any such increase, the Base Salary shall not be reduced.\n\n      (b)  Hiring Bonus.  Executive shall be paid a hiring bonus in the lump sum\n           ------------                                                         \namount of $1,100,000, less applicable taxes, as an inducement to join the\nCompany and not one of its competitors following the merger of Tyco Toys, Inc.\nand Mattel, Inc., and such hiring bonus shall be paid to Executive not later\nthan ten (10) days following the commencement of Executive's employment with the\nCompany, and further Executive agrees to refrain for at least one year, from\nvoluntarily resigning to join a competitor, lest he incur an obligation to\npromptly repay to the Company, the full amount of the proceeds as attributable\nto previous receipt of said hiring bonus.\n\n      (c)  Bonus Programs.  In addition to the Base Salary, the Executive shall\n           --------------                                                      \nparticipate throughout the Employment Period in Mattel's cash or deferred bonus\nincentive plans and programs ('Bonus Programs') as may be in effect from time to\ntime with respect to executives employed by Mattel at a participation level\nreflecting the Executive's responsibilities, including, but not limited to, the\nManagement Incentive Plan ('MIP') and the Long-\n\n                                      -4-\n \nTerm Incentive Plan ('LTIP') as they may be modified from time to time and any\nplans or programs substituted therefor; provided that, except as provided in\nSection 5(f) hereof, the determination of the amounts to be paid pursuant to\nsuch plans or programs shall be made by the Board of Directors of Mattel or a\ncommittee thereof authorized to take such action and shall be made in accordance\nwith Mattel's compensation practice and the terms and provisions of such plans\nor programs; provided further that the Executive's eligibility for and\nparticipation in each of the Bonus Programs shall be at a level and on terms and\nconditions no less favorable than those available to any other comparably\nsituated executive or consultant.  Notwithstanding the foregoing, it is\nexpressly and specifically provided that Executive's participation in the Mattel\n1996-1998 Long-Term Incentive Plan shall be on a full term, non-prorated basis\nas if Executive had been employed upon inception of this particular Plan, with\nthe only exception and omission being the interim payment applicable to 1996\nperformance under the Plan, the latter having been previously disbursed to\nparticipants prior to execution of this Agreement.  It is further provided that\nfor the 1997 Plan year, Executive shall receive a guaranteed minimum 'MIP' award\nof not less than $200,000, payable the earlier of: (i) on the date that such\nawards are distributed to other eligible participants at a comparable level as\nExecutive, or (ii) on April 10, 1998, whichever occurs first.\n\n                                      -5-\n \n      (d)  Incentive and Savings Plans.  In addition to the Base Salary and\n           ---------------------------                                     \nparticipation in the Bonus Programs, during the Employment Period the Executive\nshall be entitled to participate in all incentive and savings plans and\nprograms, including, but not limited, to stock option plans and retirement\nplans, as may be in effect from time to time with respect to executives employed\nby Mattel at the Executive's level so as to reflect the Executive's\nresponsibilities.  Notwithstanding the foregoing, it is expressly and\nspecifically provided that the Company shall cause to be effected an initial\ngrant of 200,000 stock options to Executive upon commencement of his employment\nwith the Company and further, over the initial 3-year period of his employment,\nExecutive shall receive grants of not less than an aggregate of 500,000 stock\noptions, inclusive of the aforestated initial grant and pursuant to Executive's\neligibility for annual grants of stock options.  Executive shall be accorded\nfull Mattel credit for all prior service accrued while in the employ of Tyco\nToys, Inc., and such credit shall be applicable in the computation of all of\nMattel's benefits-related plans and programs, specifically including the Mattel\n1994 Supplemental Executive Retirement Plan ('SERP'), which provide thereupon\nfor a service-related component in the computation of Executive's eligibility\nfor benefits and\/or receipt thereof.\n\n      (e)  Benefit Plans.  The Executive and\/or his family, as the case may be,\n           -------------                                                       \nshall be entitled to receive all amounts which he or his family is or would have\nbeen entitled to receive as benefits under all medical, dental, disability,\ngroup life,\n\n                                      -6-\n \naccidental death and travel accident insurance plans and programs of Mattel in\nwhich the Executive is a participant as in effect from time to time with respect\nto executives employed by Mattel.\n\n      (f)  Expenses.  During the Employment Period, the Executive shall be \n           --------                                                            \nentitled to receive prompt reimbursement for all reasonable expenses incurred by\nthe Executive in accordance with the policies and practices of Mattel as in\neffect from time to time with respect to executives employed by Mattel.\n\n      (g)  Fringe Benefits.  The Executive shall be entitled to fringe benefits,\n           ---------------                                                      \ncommensurate with those available to comparable level executives, including an\nautomobile and related expenses as well as the use of a company-issued gasoline\ncredit card, club memberships and related expenses, and financial counseling,\nincluding tax preparation and a one-time estate planning service, in accordance\nwith the policies of Mattel as in effect from time to time with respect to\nexecutives employed by Mattel.\n\n      (h)  Vacation.  During the Employment Period, the Executive shall be \n           --------                                                            \nentitled to paid vacation in accordance with the policies of Mattel as in effect\nfrom time to time with respect to executives employed by Mattel.\n\n                                      -7-\n \n      (i)  Certain Amendments.  Nothing herein shall be construed to prevent \n           ------------------                                                  \nMattel from amending, altering, eliminating or reducing any plans, benefits or\nprograms so long as the Executive continues to have the opportunity to receive\ncompensation and benefits consistent with Sections 3(a) through (h).\n\n  4.  Termination.\n      ----------- \n\n      (a)  Death or Disability. This Agreement shall terminate automatically \n           -------------------                                                \nupon the Executive's death; provided that Base Salary, all bonuses and earned\nbenefits will be continued and paid for a period of six (6) months thereafter,\nunless a longer period is otherwise specified.  Mattel may terminate this\nAgreement, after having established the Executive's Disability, by giving to the\nExecutive written notice of its intention to terminate his employment, and his\nemployment with Mattel shall terminate effective on the 90th day after receipt\nof such notice (the 'Disability Effective Date').  For purposes of this\nAgreement, the Executive's Disability shall occur and shall be deemed to have\noccurred only when the Executive becomes entitled to receive disability benefits\nunder the Mattel Long-Term Disability Plan for exempt employees.\n\n      (b)  Cause. Mattel may terminate the Executive's employment for 'Cause' \n           -----                                                               \nif a majority, consisting of at least 2\/3\n\n                                      -8-\n \nof the non-management members of the Board of Directors of Mattel, determines\nthat 'Cause' exists. For purposes of this Agreement, 'Cause' means (i) an act or\nacts of dishonesty on the Executive's part which are intended to result in his\nsubstantial personal enrichment at the expense of Mattel; (ii) repeated\nviolations by the Executive of his obligations under Section 2 of this Agreement\nwhich are demonstrably willful and deliberate on the Executive's part and which\nresulted in material injury to Mattel; (iii) conduct of a criminal nature which\nhas or which is more likely than not to have a material adverse effect on\nMattel's reputation or standing in the community or on its continuing\nrelationships with its customers or those who purchase or use its products; or\n(iv) fraudulent conduct in connection with the business or affairs of Mattel,\nregardless of whether said conduct is designed to defraud Mattel or others;\nprovided that, in each case, the Executive has received written notice of the\ndescribed activity, has been afforded a reasonable opportunity to cure or\ncorrect the activity described in the notice, and has failed to substantially\ncure, correct or cease the activity, as appropriate.\n\n      (c)  Good Reason.  The Executive may terminate his employment at any \n           -----------                                                         \ntime for Good Reason. For purposes of this Agreement, 'Good Reason' means the\ngood faith determination by\n\n                                      -9-\n \nthe Executive that any one or more of the following have occurred:\n\n        (i)  without the express written consent of the Executive, any change(s)\nin any of the duties, authority, or responsibilities of the Executive which is\n(are) inconsistent in any substantial respect with the Executive's position,\nauthority, duties, or responsibilities as contemplated by Section 2 of this\nAgreement;\n\n        (ii)  any failure by Mattel to comply with any of the provisions of\nSection 3 of this Agreement, other than an insubstantial and inadvertent failure\nremedied by Mattel promptly after receipt of notice thereof given by the\nExecutive;\n\n        (iii)  without the Executive's consent, any requirement by Mattel that\nExecutive be based at any office or location other than an office or location in\nEast Aurora, New York, except for travel reasonably required in the performance\nof the Executive's responsibilities;\n\n        (iv)  any proposed termination by Mattel of the Executive's employment\notherwise than as permitted by this Agreement; or\n\n        (v)  any failure by Mattel to obtain the assumption and agreement to\nperform this Agreement by a successor as contemplated by Section 11(b).\n\n                                      -10-\n \n      (d)  Change of Control.  A 'Change of Control' shall be deemed to have\n           -----------------                                                \noccurred if:\n\n        (i)  any 'Person,' which shall mean a 'person' as such term is used in\nSections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the\n'Exchange Act'), (other than Mattel, any trustee or other fiduciary holding\nsecurities under an employee benefit plan of Mattel) is or becomes the\n'beneficial owner' (as defined in Rule 13d-3 under the Exchange Act), directly\nor indirectly, of securities of Mattel representing 20% or more of the combined\nvoting power of Mattel's then outstanding voting securities;\n\n        (ii)  during any period of 24 consecutive months, individuals, who at\nthe beginning of such period constitute the Board of Directors of Mattel, and\nany new director whose election by the Board of Directors, or whose nomination\nfor election by Mattel's stockholders, was approved by a vote of at least one-\nhalf (1\/2) of the directors then in office (other than in connection with a\ncontested election), cease for any reason to constitute at least a majority of\nthe Board of Directors;\n\n        (iii) the stockholders of Mattel approve (I) a plan of complete\nliquidation of Mattel or (II) the sale or other disposition by Mattel of all or\nsubstantially all of Mattel's assets unless the acquirer of the assets or its\nboard of\n\n                                      -11-\n \ndirectors shall meet the conditions for a merger or consolidation in\nsubparagraphs (iv)(I) or (iv)(II) below; or\n\n        (iv)  the consummation of a merger or consolidation of Mattel with any\nother entity other than:\n\n            (I)  a merger or consolidation which results in the voting\nsecurities of Mattel outstanding immediately prior thereto continuing to\nrepresent (either by remaining outstanding or by being converted into voting\nsecurities of the surviving entity) more than 50% of the combined voting power\nof the surviving entity's outstanding voting securities immediately after such\nmerger or consolidation; or\n\n            (II)  a merger or consolidation which would result in the directors\nof Mattel (who were directors immediately prior thereto) continuing to\nconstitute at least 50% of all directors of the surviving entity immediately\nafter such merger or consolidation.\n\n  In this paragraph (iv), 'surviving entity' shall mean only an entity in which\nall of Mattel's stockholders immediately before such merger or consolidation\n(determined without taking into account any stockholders properly exercising\nappraisal or similar rights) become stockholders by the terms of such merger or\nconsolidation, and the phrase 'directors of Mattel (who were directors\nimmediately prior thereto)' shall include only\n\n                                      -12-\n \nindividuals who were directors of Mattel at the beginning of the 24 consecutive\nmonth period preceding the date of such merger or consolidation.\n\n      (e) Notice of Termination.  Any termination of the Executive's \n          ---------------------                                                 \nemployment by Mattel for Cause following a Change of Control or by the Executive\nfor Good Reason shall be communicated by Notice of Termination to the other\nparty hereto given in accordance with Section 13(b). Any termination by Mattel\ndue to Disability shall be given in accordance with Section 4(a). For purposes\nof this Agreement, a 'Notice of Termination' means a written notice which (i)\nindicates the specific termination provision in this Agreement relied upon; (ii)\nexcept in the event of a termination following a Change of Control, sets forth\nin reasonable detail the facts and circumstances claimed to provide a basis for\ntermination of the Executive's employment under the provision so indicated; and\n(iii) specifies the Date of Termination (defined below).\n\n      (f)  Date of Termination.  'Date of Termination' means the date of actual\n           -------------------                                                 \nreceipt of the Notice of Termination or any later date specified therein (but\nnot more than fifteen (15) days after the giving of the Notice of Termination),\nas the case may be; provided that (i) if the Executive's employment is\nterminated by Mattel for any reason other than Cause or Disability, the Date\n\n                                      -13-\n \nof Termination is the date on which Mattel notifies the Executive of such\ntermination; (ii) if the Executive's employment is terminated due to Disability,\nthe Date of Termination is the Disability Effective Date; and (iii) if the\nExecutive's employment is terminated due to the Executive's death, the Date of\nTermination shall be the date of death.\n\n  5.  Obligations of Mattel upon Termination.  Other than as specifically set\n      --------------------------------------                                 \nforth or referenced in this Agreement, the Executive shall not be entitled to\nany benefits on or after the Date of Termination.\n\n      (a)  Death.  If the Executive's employment is terminated by reason of the\n           -----                                                               \nExecutive's death, this Agreement shall terminate without further obligations by\nMattel to the Executive's legal representatives under this Agreement other than\nthose obligations accrued hereunder or under the terms of the applicable Mattel\nplan or program which takes effect at the date of his death or as otherwise\nprovided in Section 4(a) or this Section 5(a). As of the Date of Termination,\nthe Executive's family shall be entitled to the Executive's benefits on the\nterms described in Section 5(d)(iv) (other than outplacement services and leased\ncar benefits, which are excluded), except that healthcare insurance coverage and\nfinancial and legal counseling services shall terminate on the third anniversary\nof the Date of\n\n                                      -14-\n \nTermination. The Executive's country club membership must be converted or sold,\nas the case may be, by the Executive's successor-in-interest within one year\nafter the Date of Termination on the terms described in Section 5(d)(iv)(III);\nprovided that no such conversion or sale shall be required and Mattel shall\ncause the membership to be transferred to the Executive's spouse at no cost to\nthe spouse if the Executive has had the membership for at least three years.\n\n      (b)  Disability.  If the Executive's employment is terminated by reason \n           ----------                                                           \nof the Executive's Disability, the Executive shall be entitled to receive after\nthe Disability Effective Date (i) disability benefits, if any, at least equal to\nthose then provided by Mattel to disabled employees and\/or their families and\n(ii) other benefits on the terms described in Section 5(d)(iv).\n\n      (c)  Cause.  If the Executive's employment is terminated for Cause or if \n           -----                                                               \nthe Executive terminates his employment without Good Reason, Mattel shall pay\nthe Executive his full Base Salary through the Date of Termination at the rate\nin effect at the time Notice of Termination is given, and Mattel shall have no\nfurther obligations to the Executive under this Agreement.\n\n                                      -15-\n \n      (d)  Good Reason; Other Than for Cause or Disability.  If Mattel \n           -----------------------------------------------                    \nterminates the Executive's employment other than for Cause or Disability, or the\nExecutive terminates his employment for Good Reason (in each case, other than\nwithin 18 months following a Change of Control as provided in Section 5(e)):\n\n      (i)  Mattel shall pay to the Executive in a lump sum in cash within 30\ndays after the Date of Termination the aggregate of the following amounts:\n\n           (A)  if not theretofore paid, the Executive's Base Salary through the\nDate of Termination at the rate in effect at the time of Notice of Termination\nwas given;\n\n           (B)  a current year MIP bonus equal to the average of the greatest\ntwo out of the three most recent annual MIP bonuses received by the Executive\n(which two greatest MIP bonuses need not represent consecutive years) (the\n'Average Annual Bonus') and prorated to reflect the total number of full months\nthe Executive is employed in the year in which termination occurs;\n\n           (C)  an LTIP payment reflective of the Executive's participation in\nthe three-year plan, so that at the time that final performance under the LTIP\nis determinable and individual payouts calculated, the Executive shall promptly\nreceive an amount equivalent to what he would have received if he \n\n                                      -16-\n \nhad remained employed through the date of such payouts, less any interim\npayments already made pursuant to the Executive's continuing eligibility for\nfull participation in the LTIP; and\n\n           (D)  three times the sum of (x) the Executive's annual Base Salary at\nthe rate in effect at the time the Notice of Termination is given and (y) if\neligible, the Average Annual Bonus defined in Section 5(d)(i)(B), but without\nproration (and, in each such case, without regard to any contributions by Mattel\nfor the Executive's benefit to the Mattel Personal Investment Plan ('PIP')).\n\n      (ii)  Options granted to the Executive under Mattel's stock option plans\n(the 'Stock Option Plans') which options have been granted for more than six\nmonths shall become immediately exercisable and the Executive shall have a\nperiod of 90 days following the Date of Termination (but in no event past the\nexpiration of the term of the option grant) to exercise all options granted\nunder the Stock Option Plans then exercisable or which become exercisable\npursuant to this clause (ii). In the event the Executive is age 52 or older on\nthe Date of Termination, he will be treated as a retiree under the Stock Option\nPlans, which will enable the Executive to vest in and exercise stock options\ntheretofore granted thereunder, at the election of the Executive, (x) in the\nmanner described in the immediately preceding sentence, or (y) for a period of\nup to five\n\n                                      -17-\n \nyears after the Date of Termination (but in no event past the expiration of the\nterm of the option grant).\n\n      (iii)  Mattel shall, promptly upon submission by the Executive of\nsupporting documentation, pay or reimburse to the Executive any costs and\nexpenses paid or incurred by the Executive which would have been payable under\nSection 3(e) if his employment had not terminated.\n\n      (iv)  Until the earlier of (x) the third anniversary of the Date of\nTermination or (y) the date the Executive accepts other employment, Mattel shall\nprovide to the Executive at Mattel's expense:\n\n            (I)  medical, dental, prescription drug and vision care group\ninsurance in accordance with the coverage in effect immediately prior to the\nDate of Termination (the last 18 months of the Executive's coverage under such\ninsurance shall be deemed to be participation under an election to continue such\nbenefits under the Consolidated Omnibus Budget Reconciliation Act at Mattel's\nexpense);\n\n            (II)  outplacement services at the expense of Mattel commensurate\nwith those provided to terminated executives of comparable level and made\navailable through and at the facilities of a reputable and experienced vendor;\nand\n\n            (III) continuation of country-club membership\n'signatory\/representative' status as in effect immediately prior \n\n                                      -18-\n \nto the Date of Termination; provided that within one year after Mattel ceases to\nprovide such benefit, the Executive shall (a) convert the country-club\nmembership from 'signatory\/representative' status under the membership provided\nand paid for by Mattel to sole and personal ownership status by paying to Mattel\nthe fair market value of that membership as of the date Mattel ceases to provide\nsuch benefit, less any transfer\/reconveyance fees that may be required by and\npaid directly to the country club by the Executive, or (b) comply with club\nrules in consummating a fair, reasonable and expeditious sale of the membership\nand any proceeds derived therefrom which are payable to the Executive shall\nbelong to and must be promptly delivered to Mattel; provided further that no\nsuch conversion or sale shall be required and Mattel shall cause the membership\nto be transferred to the Executive at no cost to the Executive (but subject to\ntax reporting as imputed income applicable to the year in which the membership\nis transferred), if the Executive has had the membership for at least three\nyears.\n\n  For the three-year period after the Date of Termination, the Executive shall\nremain eligible for use of personal financial and legal counseling services\nthrough the vendor engaged and paid for by Mattel.  The Executive may continue\nto use the car leased by Mattel that is in the Executive's possession on the\nDate of Termination until the earlier of (x) the end of the lease term or\n\n                                      -19-\n \n(y) the third anniversary of the Date of Termination, at which time the\nExecutive may purchase the car for $1.00 (if at the end of the lease term) or\nMattel's book value (if on the third anniversary of the Date of Termination).\nAs of the Date of Termination, all expenses related to such leased car,\nincluding but not limited to repairs, maintenance, gasoline, and car phone and\nassociated expenses, shall be the sole responsibility of the Executive.\n\n      (v)  Credit shall be given for three years of service (in addition to\nactual service) and for three years of attained age to be added to the\nExecutive's actual age for purposes of computing any service and age-related\nbenefits for which the Executive is eligible under the plans and programs of\nMattel, including but not limited to the 1994 Supplemental Executive Retirement\nPlan (including any successor plan thereto in which the Executive is a\nparticipant, the 'SERP'), the Mattel Deferred Compensation Plan, the PIP, the\nMattel Retiree Medical Plan, and the Stock Option Plans. Further, with regard to\ncomputing the Executive's benefit under the SERP, the formula described in\nSection 5(d)(i)(B) shall be utilized in calculating the maximum benefit, namely:\nthe formula shall be 25% of the average of the final three years of annual Base\nSalary (including the calendar year in which the Date of Termination occurs),\nplus the average of the greatest two out of the three most recent annual MIP\nbonuses received by the Executive.\n\n                                      -20-\n \n      (e)  Change of Control.  If, within 18 months following a Change of \n           -----------------                                                  \nControl, the Executive terminates his employment for Good Reason or Mattel or\nthe surviving entity terminates the Executive's employment other than for Cause\nor Disability:\n\n          (i)  Mattel shall pay to the Executive in a lump sum in cash within 30\ndays after the Date of Termination the aggregate of the following amounts:\n\n             (A)  if not theretofore paid, the Executive's Base Salary through\nthe Date of Termination at the rate in effect at the time of Notice of\nTermination was given;\n\n             (B)  an amount equal to the MIP bonus that would have been payable\nto executives of Mattel in the same bonus category as the Executive pursuant to\nthe Bonus Programs provided in Section 3(c) assuming, for purposes of\ncalculating the amount of the bonus pool under the plan, that the 'maximum'\namount, as that term is used in the plan, was achieved for the current plan year\n(the 'Maximum Annual Bonus'), with such amount prorated to reflect the number of\nfull months the Executive is employed in the year in which termination occurs;\n\n             (C)  an LTIP payment for the current year, assuming achievement of\nthe three-year maximum award, prorated to \n\n                                      -21-\n \nreflect the total number of full months the Executive is employed in the year in\nwhich termination occurs;\n\n             (D)  three times the sum of (x) the Executive's annual Base Salary\nat the rate in effect at the time the Notice of Termination is given and (y) the\nMaximum Annual Bonus defined in Section 5(e)(i)(B), but without proration (and,\nin each such case, without regard to any contributions by Mattel for the\nExecutive's benefit to the PIP); and\n\n             (E)  the full term payout for the three-year period of the LTIP,\nassuming for purposes of calculating the amount earned under the LTIP,\nachievement of the three-year maximum award (including the full amount of the\npremium), less any interim payments previously received by the Executive.\n\n        (ii) If it is determined that any payment or distribution by Mattel to\nthe Executive pursuant to Section 5(e) (determined without regard to any\nadditional payments required pursuant to this sentence) (a 'Payment') would be\nsubject to the excise tax imposed by Section 4999 of the Internal Revenue Code\nof 1986, as amended (the 'Code'), or any interest or penalties are incurred by\nthe Executive with respect to such excise tax (such excise tax, together with\nany such interest and penalties, are hereinafter collectively referred to as the\n'Excise Tax'), then the Executive shall be entitled to receive with respect to\neach Payment an additional payment (a 'Gross-Up Payment') in an \n\n                                      -22-\n \namount such that after payment by the Executive of all taxes (including any\ninterest or penalties imposed with respect to such taxes), including, without\nlimitation, any income taxes (and any interest and penalties imposed with\nrespect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive\nretains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon\nthe Payments.\n\n        (iii)  In addition, the Executive shall receive the amounts and be\nentitled to the benefits provided in clauses (ii), (iii), (iv) and (v) of\nSection 5(d).\n\n      (f)  Bonus During Cancellation Period.  If Mattel notifies the Executive \n           --------------------------------                                   \nthat the Employment Period provided in Section 1 hereof will not be\nautomatically extended as provided therein, the compensation of the Executive\nshall continue as provided in this Agreement for the period provided therein,\nexcept that the amount of MIP compensation payable under the Bonus Programs with\nrespect to each fiscal year during such period (including the year in which the\nnotice was given) shall be the Average Annual Bonus as determined in Section\n5(d)(i)(B). Amounts payable with respect to the year in which the term specified\nin Section 1 expires shall be prorated based on a fraction the numerator of\nwhich is the number of full months from the beginning of such year until the\ndate of the expiration of this Agreement and denominator of which is 12.\n\n                                      -23-\n \n  6.  Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or\n      -------------------------                                             \nlimit the Executive's continuing or future participation in any benefit, bonus,\nincentive or other plan or program provided by Mattel and for which the\nExecutive may qualify, nor shall anything herein limit or otherwise affect such\nrights as the Executive may have under any stock option or other agreement with\nMattel or any of its affiliated companies.  Except as otherwise provided herein,\namounts which are vested benefits or which the Executive is otherwise entitled\nto receive under any plan or program of Mattel at or subsequent to the Date of\nTermination shall be payable in accordance with such plan or program.\n\n  7.  No Set Off, Payment of Fees.  Except as provided herein, Mattel's\n      ---------------------------                                       \nobligation to make the payments provided for in this Agreement and otherwise to\nperform its obligations hereunder shall not be affected by any circumstances,\nincluding without limitation any set-off, counterclaim, recoupment, defense or\nother right which Mattel may have against the Executive or others.  Mattel\nagrees to pay, to the full extent permitted by law, all legal fees and expenses\nwhich the Executive may reasonably incur as a result of any contest (regardless\nof the outcome thereof) by Mattel or others of the validity or enforceability\nof, or liability under, any provision of this\n\n                                      -24-\n \nAgreement other than expenses relating to a claim by the Executive that he\nterminated for Good Reason or that the termination for Cause was improper, in\nwhich case such fees and expenses shall be paid only if the Executive prevails\nin whole or in part.  All amounts provided herein shall include, in each case,\ninterest, compounded quarterly, on the total unpaid amount determined to be\npayable under this Agreement, such interest to be calculated on the basis of the\nprime commercial lending rate announced by Bank of America National Trust and\nSavings Association in effect from time to time during the period of such\nnonpayment.  In the event that the Executive shall in good faith give a Notice\nof Termination for Good Reason and it shall thereafter be determined that Good\nReason did not exist, the employment of the Executive shall, unless Mattel and\nthe Executive shall otherwise mutually agree, be deemed to have terminated at\nthe Date of Termination specified in such purported Notice of Termination by\nmutual consent of Mattel and the Executive and thereupon, the Executive shall be\nentitled to receive only those payments and benefits which he would have been\nentitled to receive at such date.\n\n  8.  Arbitration of Disputes\n      -----------------------\n\n  (a) The parties agree that any disputes, controversies or claims which arise\nout of or relate to this Agreement, the Executive's employment or the\ntermination of his employment,\n\n                                      -25-\n \nincluding, but not limited to, any claim relating to the purported validity,\ninterpretation, enforceability or breach of this Agreement, and\/or any other\nclaim or controversy arising out of the relationship between the Executive and\nMattel (or the nature of the relationship) or the continuation or termination of\nthat relationship, including, but not limited to, claims that a termination was\nfor Cause, including the determination of Mattel's Board of Directors in\naccordance with Section 4(b), or for Good Reason, claims for breach of covenant,\nbreach of an implied covenant of good faith and fair dealing, wrongful\ntermination, breach of contract, or intentional infliction of emotional\ndistress, defamation, breach of right of privacy, interference with advantageous\nor contractual relations, fraud, conspiracy or other tort or property claims of\nany kind, which are not settled by agreement between the parties, shall be\nsettled by arbitration under the labor arbitration rules of the American\nArbitration Association before a board of three arbitrators, as selected\nthereunder.\n\n  One arbitrator shall be selected by the Executive, one by Mattel and the third\nby the two persons so selected, all in accordance with the labor arbitration\nrules of the American Arbitration Association then in effect.  In the event that\nthe arbitrator selected by the Executive and the arbitrator selected by Mattel\nare unable to agree upon a third arbitrator, then the\n\n                                      -26-\n \nthird arbitrator shall be selected from a list of seven provided by the office\nof the American Arbitration Association nearest to the Executive's residence\nwith the parties striking names in order and the party striking first to be\ndetermined by the flip of a coin.  The arbitration shall be held in a location\nto be mutually agreed upon by the parties.  In the absence of agreement, the\nChairman of the Board of Mattel shall determine the location.\n\n      (b)  In consideration of the parties' agreement to submit to arbitration\nall disputes with regard to this Agreement and\/or with regard to any alleged\ncontract, or any other claim arising out of their conduct, the relationship\nexisting hereunder or the continuation or termination of that relationship, and\nin further consideration of the anticipated expedition and the minimizing of\nexpense resulting from this arbitration remedy, the arbitration provisions of\nthis Agreement shall provide the exclusive remedy, and each party expressly\nwaives any right he or it may have to seek redress in any other forum.\n\n      (c)  Any claim which either party has against the other party which could\nbe submitted for resolution pursuant to this Section 8 must be presented in\nwriting by the claiming party to the other within one year of the date the\nclaiming party knew or should have known of the facts giving rise to the claim,\nexcept \n\n                                      -27-\n \nthat claims arising out of or related to the termination of the Executive's\nemployment must be presented by him within one year after the Date of\nTermination. Unless the party against whom any claim is asserted waives the time\nlimits set forth above, any claim not brought within the time periods specified\nshall be waived and forever barred.\n\n      (d)  Mattel will pay all costs and expenses of the arbitration to the\nextent provided in this Section 8. In the event expenses are not paid by Mattel,\nand without diminishing the Executive's right to reimbursement as provided in\nthis Section, costs and expenses shall be paid as follows: (x) the expenses of\nthe neutral arbitrator and of a transcript of any arbitration proceeding shall\nbe divided equally between the Executive and Mattel; and (y) each party shall\nbear the expenses of the arbitrator selected by it and of the witnesses it\ncalls.\n\n      (e)  Any decision and award or order of a majority of the arbitrators\nshall be binding upon the parties hereto and judgment thereon may be entered in\nthe Superior Court of the State of California or any other court having\njurisdiction.\n\n      (f)  Each of the above terms and conditions of this Section 8 shall have\nseparate validity and the invalidity of any part thereof shall not affect the\nremaining parts. \n\n                                      -28-\n \n      (g)  Any decision and award or order of a majority of the arbitrators\nshall be final and binding between the parties as to all claims which were\nraised in connection with the dispute to the full extent permitted by law. In\nall other cases, the parties agree that a decision of a majority of arbitrators\nshall be a condition precedent to the institution or maintenance of any legal,\nequitable, administrative, or other formal proceeding by the Executive in\nconnection with the dispute, and that the decision and opinion of the board of\narbitrators may be presented in any other forum on the merits of the dispute.\n\n  9.  General Release.  The Executive acknowledges and agrees that this\n      ---------------                                                  \nAgreement includes the entire agreement and understanding between the parties\nwith regard to the Executive's employment, the termination thereof during the\nEmployment Period, and all amounts to which the Executive shall be entitled\nwhether during the term of employment or upon termination thereof. Accordingly,\nupon Mattel's fulfilling its obligations to the Executive hereunder, the\nExecutive, on behalf of himself and his successors, assigns, heirs and any and\nall other persons claiming through the Executive, if any, and each of them,\nshall and does hereby forever relieve, release, and discharge Mattel and its\nrespective predecessors, successors, assigns, owners, attorneys,\nrepresentatives, affiliates, parent corporations, subsidiaries\n\n                                      -29-\n \n(whether or not wholly-owned), divisions, partners and their officers,\ndirectors, agents, employees, servants, executors, administrators, accountants,\ninvestigators, insurers, and any and all other related individuals and entities,\nif any, and each of them, in any and all capacities, from any and all claims,\ndebts, liabilities, demands, obligations, liens, promises, acts, agreements,\ncosts and expenses (including, but not limited to, attorneys' fees), damages,\nactions and causes of action, of whatever kind or nature, including, without\nlimitation, any statutory, civil or administrative claim, or any claim, arising\nout of acts or omissions occurring before the execution of this Agreement,\nwhether known or unknown, suspected or unsuspected, fixed or contingent,\napparent or concealed (collectively referred to as 'claims'), including, but not\nlimited to, any claims based on, arising out of, related to or connected with\nthe subject matter of this Agreement, the Executive's employment or the\ntermination thereof, and any and all facts in any manner arising out of, related\nto or connected with the Executive's employment with, or termination of\nemployment from, Mattel or any of its related entities, including, but not\nlimited to, any claims arising from rights under federal, state, and local laws\nprohibiting discrimination on the basis of race, national origin, sex, religion,\nage, marital status, pregnancy, handicap, ancestry, sexual orientation, or any\nother form of discrimination, and any common law claims of any kind, including,\n\n                                      -30-\n \nbut not limited to, contract, tort, and property rights including, but not\nlimited to, breach of contract, breach of the implied covenant of good faith and\nfair dealing, tortious interference with contract or current or prospective\neconomic advantage, fraud, deceit, misrepresentation, defamation, wrongful\ntermination, infliction of emotional distress, breach of fiduciary duty, and any\nother common law claim of any kind whatever.\n\n  Upon Mattel's fulfilling its obligations to the Executive here-under, the\nExecutive expressly waives any and all rights under Section 1542 of the Civil\nCode of the State of California, and all other federal or state statutory\nrights, rules, and principles of common law or equity, including without\nlimitation those of any jurisdiction, government, or political subdivision\nthereof, similar to Section 1542 ('similar provision'). Thus the Executive may\nnot invoke the benefits of Section 1542 or any similar provision in order to\nprosecute or assert in any manner any claims released hereunder. Section 1542\nprovides as follows:\n\n        'A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT\n        KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE\n        RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS\n        SETTLEMENT WITH THE DEBTOR.' \n\n                                      -31-\n \n  10.  Confidential Information.  The Executive shall hold in a fiduciary\n       ------------------------                                          \ncapacity for the benefit of Mattel all secret or confidential information,\nknowledge or data relating to Mattel or any of its affiliated companies, and\ntheir respective businesses, which shall have been obtained by the Executive\nduring his employment by Mattel or any of its affiliated companies and which\nshall not be public knowledge and will continue to be bound by the provisions of\nthe Patent and Confidence Agreement previously executed by the Executive.  After\ntermination of the Executive's employment with Mattel, he shall not, without the\nprior written consent of Mattel, communicate or divulge any such information,\nknowledge or data to anyone other than Mattel and those designated by it.\n\n  11.  Successors.\n       ---------- \n\n       (a)  This Agreement is personal to the Executive and without the prior\nwritten consent of Mattel shall not be assignable by the Executive otherwise\nthan by will or the laws of descent and distribution. This Agreement shall inure\nto the benefit of and be enforceable by the Executive's legal representatives.\n\n       (b)  This Agreement shall inure to the benefit of and be binding upon\nMattel and its successors. Mattel shall require \n\n                                      -32-\n \nany successor to all or substantially all of the business and\/or assets of\nMattel, whether direct or indirect, by purchase, merger, consolidation,\nacquisition of stock, or otherwise, by an agreement in form and substance\nsatisfactory to the Executive, expressly to assume and agree to perform this\nAgreement in the same manner and to the same extent as Mattel would be required\nto perform if no such succession had taken place.\n\n  12.  Amendment; Waiver.  This Agreement contains the entire agreement between\n       ---------  ------                                                       \nthe parties with respect to the subject matter hereof and may be amended,\nmodified or changed only by a written instrument executed by the Executive and\nMattel.  No provision of this Agreement may be waived except by a writing\nexecuted and delivered by the party sought to be charged.  Any such written\nwaiver will be effective only with respect to the event or circumstance\ndescribed therein and not with respect to any other event or circumstance,\nunless such waiver expressly provides to the contrary.\n\n  13.  Miscellaneous.\n       ------------- \n       (a)  This Agreement shall be governed by and construed in accordance with\nthe laws of the State of California, without reference to principles of conflict\nof laws. The captions of this Agreement are not part of the provisi ons hereof\nand shall have no force or effect.\n\n                                      -33-\n \n      (b)  All notices and other communications hereunder shall be in writing;\nshall be delivered by hand delivery to the other party or mailed by registered\nor certified mail, return receipt requested, postage prepaid; shall be deemed\ndelivered upon actual receipt; and shall be addressed as follows:\n\n               if to the Executive:\n               --------------------\n\n                     Gary Baughman\n                     471 Windrow Cluster Drive\n                     Moorestown, NJ   08057\n\n               if to Mattel:\n               -------------\n\n                     MATTEL, INC.\n                     333 Continental Blvd.\n                     El Segundo, CA 90245\n                     ATTENTION: Ned Mansour\n\nor to such other address as either party shall have furnished to the other in\nwriting in accordance herewith.\n\n      (c)  Any provision of this Agreement which is prohibited or unenforceable\nin any jurisdiction will, as to such jurisdiction, be ineffective to the extent\nof such prohibition or unenforceability without invalidating the remaining\nprovisions hereof, and any such prohibition or unenforceability in any\njurisdiction will not invalidate or render unenforceable such provision in any\nother jurisdiction.\n\n                                      -34-\n \n      (d)  Mattel may withhold from any amounts payable under this Agreement\nsuch Federal, state or local taxes as shall be required to be withheld pursuant\nto any applicable law or regulation.\n\n  IN WITNESS WHEREOF, each of the parties hereto has duly executed this\nAgreement as of the date first set forth above.\n\nEXECUTIVE:\n\n                                     \/s\/ Gary Baughman\n                                     -----------------------------------       \n                                     Gary Baughman \n\n\nMATTEL:                              MATTEL, INC.,\n                                     a Delaware corporation\n\n\n                                     By:\/s\/ Ned Mansour\n                                        ________________________________  \n                                        Ned Mansour\n                                        President, Corporate Operations  \n\nATTEST:\n\n\n\/s\/ Stephen Hartley\n---------------------------------\nAssistant Secretary\n\n                                      -35-\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8145],"corporate_contracts_industries":[9403],"corporate_contracts_types":[9539,9544],"class_list":["post-39336","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-mattel-inc","corporate_contracts_industries-consumer__toys","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39336"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39336"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39336"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}