{"id":39337,"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-harry-j-pearce.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-mattel-inc-and-harry-j-pearce","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-mattel-inc-and-harry-j-pearce.html","title":{"rendered":"Employment Agreement &#8211; Mattel Inc. and Harry J. Pearce"},"content":{"rendered":"<pre>\n                             EMPLOYMENT AGREEMENT\n\n          THIS EMPLOYMENT AGREEMENT (the 'Agreement') between Mattel, Inc., a\nDelaware corporation ('Mattel'), and HARRY J. PEARCE (the 'Executive'), dated as\nof the 14th day of April, 1997.\n\n     1.  Employment Period.  Mattel hereby agrees to employ and continue in\n         -----------------                                                 \nits employ 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,\n               -------------------------------                                \nthe Executive's position (including titles), authority and responsibilities\nshall be similar to, but no less than those held by the Executive on the date\nhereof with such 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. Executive is herewith appointed Chief\nFinancial Officer of Mattel, Inc., reporting to the CEO, with overall\nresponsibility, authority and accountability for financial matters relating to\nthe business of the corporation and any of its subsidiaries.  It is further\nprovided that Executive shall be the next insider appointed to serve as a member\nof the Board of Directors of Mattel, Inc., immediately following Gary Baughman's\nappointment, or unrealized appointment as the case may be.\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 \n\n                                      -2-\n \nbusiness services of any nature directly or indirectly to a corporation or other\nbusiness 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\nbe increased at any time and from time to time by action of the Board of\nDirectors of Mattel or the Compensation\/Options Committee thereof or any\nindividual having authority to take such action in accordance with Mattel's\nregular practices.  Any increase in the Base Salary shall not serve to limit or\nreduce any other obligation of Mattel hereunder and, after any such increase,\nthe Base Salary shall not be reduced.\n\n          (b)  Bonus Programs.  In addition to the Base Salary, the Executive\n               --------------                                                \nshall participate throughout the Employment Period in Mattel's cash or deferred\nbonus incentive plans and programs ('Bonus Programs') as may be in effect from\ntime to time with respect to executives employed by Mattel at a participation\nlevel reflecting the Executive's responsibilities, including, but not limited\nto, the Management Incentive Plan ('MIP') and the Long-Term Incentive Plan\n('LTIP') as they may be modified from time to \n\n                                      -3-\n \ntime and any plans or programs substituted therefor; provided that, except as\nprovided in Section 5(f) hereof, the determination of the amounts to be paid\npursuant to such plans or programs shall be made by the Board of Directors of\nMattel or a committee thereof authorized to take such action and shall be made\nin accordance with Mattel's compensation practice and the terms and provisions\nof such plans or programs; provided further that the Executive's eligibility for\nand participation in each of the Bonus Programs shall be at a level and on terms\nand conditions no less favorable than those available to any other comparably\nsituated executive or consultant. Notwithstanding the foregoing, it is expressly\nand specifically provided that Executive's participation in the Mattel 1996-1998\nLong-Term Incentive Plan shall be at a target award level of $1,500,000 and on a\nfull term, non-prorated basis as if Executive had been employed upon inception\nof this particular Plan, with the only exception and omission being the interim\npayment applicable to 1996 performance under the Plan, the latter having been\npreviously disbursed to participants prior to execution of this Agreement. It is\nfurther provided that for the 1997 Plan year, Executive shall receive a\nguaranteed minimum Management Incentive Plan ('MIP') award of not less than\n$200,000, payable the earlier of: (i) on the date that such awards are\ndistributed to other eligible participants at a comparable level as Executive,\nor (ii) on April 10, 1998, whichever occurs first.\n\n                                      -4-\n \n          (c)  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, upon commencement of Executive's\nemployment, shall grant to Executive an initial grant of 200,000 stock options\nunder the terms of the 1996 Mattel Stock Option Plan.  Over the initial 3-year\nperiod of Executive's employment, it is agreed that Executive shall receive\nstock option grants of not less than an aggregate of 500,000 stock options\nissued under the terms of the 1996 Mattel Stock Option Plan or any successor\nplan.  In ensuing years, Executive shall receive annual grants of stock options\nunder one or more of Mattel's Stock Option Plans as in effect from time to time\nin accordance with Mattel's policies and practices for other executives.  It is\nfurther provided that Executive shall be accorded full Mattel credit for all\nprior service accrued while in the employ of Tyco Toys, Inc., and such credit\nshall be applicable in the computation of all of Mattel's benefits-related plans\nand programs, specifically including the Mattel 1994 Supplemental Executive\nRetirement Plan ('SERP'), which provide \n\n                                      -5-\n \nthereupon for a service-related component in the computation of Executive's\neligibility for benefits and\/or the receipt thereof.\n\n          (d)  Benefit Plans.  The Executive and\/or his family, as the case may\n               -------------                                                   \nbe, shall be entitled to receive all amounts which he or his family is or would\nhave been entitled to receive as benefits under all medical, dental, disability,\ngroup life, accidental death and travel accident insurance plans and programs of\nMattel in which the Executive is a participant as in effect from time to time\nwith respect to executives employed by Mattel.\n\n          (e)  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          (f)  Fringe Benefits.  The Executive shall be entitled to fringe\n               ---------------                                            \nbenefits, commensurate with those available to comparable level executives,\nincluding an automobile and related expenses as well as the use of a company-\nissued gasoline credit card, club memberships and related expenses, and\nfinancial counseling, including tax preparation and a one-time estate planning\nservice, in accordance with the policies of Mattel as in \n\n                                      -6-\n \neffect from time to time with respect to executives employed by Mattel.\n\n          (g)  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          (h)  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 (g).\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 \n\n                                      -7-\n \n(the 'Disability Effective Date'). For purposes of this Agreement, the\nExecutive's Disability shall occur and shall be deemed to have occurred only\nwhen the Executive becomes entitled to receive disability benefits under the\nMattel Long-Term Disability Plan for exempt employees.\n\n          (b)  Cause. Mattel may terminate the Executive's employment for\n               -----                                                     \n'Cause' if a majority, consisting of at least 2\/3 of the non-management members\nof the Board of Directors of Mattel, determines that 'Cause' exists. For\npurposes of this Agreement, 'Cause' means (i) an act or acts of dishonesty on\nthe Executive's part which are intended to result in his substantial personal\nenrichment at the expense of Mattel; (ii) repeated violations by the Executive\nof his obligations under Section 2 of this Agreement which are demonstrably\nwillful and deliberate on the Executive's part and which resulted in material\ninjury to Mattel; (iii) conduct of a criminal nature which has or which is more\nlikely than not to have a material adverse effect on Mattel's reputation or\nstanding in the community or on its continuing relationships with its customers\nor those who purchase or use its products; or (iv) fraudulent conduct in\nconnection with the business or affairs of Mattel, regardless of whether said\nconduct is designed to defraud Mattel or others; provided that, in each case,\nthe Executive has received written notice of the described activity, has been\nafforded a reasonable \n\n                                      -8-\n \nopportunity to cure or correct the activity described in the notice, and has\nfailed to substantially cure, 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 the Executive that any one or more of the following\nhave occurred:\n\n               (i) without the express written consent of the Executive, any\nchange(s) in any of the duties, authority, or responsibilities of the Executive\nwhich is (are) inconsistent in any substantial respect with the Executive's\nposition, authority, duties, or responsibilities as contemplated by Section 2 of\nthis Agreement;\n\n               (ii)  any failure by Mattel to comply with any of the provisions\nof Section 3 of this Agreement, other than an insubstantial and inadvertent\nfailure remedied by Mattel promptly after receipt of notice thereof given by the\nExecutive;\n\n               (iii) without the Executive's consent, any requirement by Mattel\nthat Executive be based at any office or location other than an office or\nlocation in Los Angeles, California except for travel reasonably required in the\nperformance of the Executive's responsibilities;\n\n                                      -9-\n \n               (iv) any proposed termination by Mattel of the Executive's\nemployment otherwise than as permitted by this Agreement; or\n\n               (v) any failure by Mattel to obtain the assumption and agreement\nto perform this Agreement by a successor as contemplated by Section 11(b).\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\nused in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as\namended (the 'Exchange Act'), (other than Mattel, any trustee or other fiduciary\nholding securities 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               (ii)  during any period of 24 consecutive months, individuals,\nwho at the beginning of such period constitute the Board of Directors of Mattel,\nand any new director whose election by the Board of Directors, or whose\nnomination for election by Mattel's stockholders, was approved by a vote of at\nleast one-half (1\/2) of the directors then in office (other than in \n\n                                      -10-\n \nconnection with a contested election), cease for any reason to constitute at\nleast a majority of the Board of Directors;\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 directors shall meet the conditions for a merger or consolidation in\nsubparagraphs (iv)(I) or (iv)(II) below; or\n               (iv)  the consummation of a merger or consolidation of Mattel\nwith any other 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\ndirectors of 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                                      -11-\n \n     In this paragraph (iv), 'surviving entity' shall mean only an entity in\nwhich all of Mattel's stockholders immediately before such merger or\nconsolidation (determined without taking into account any stockholders properly\nexercising appraisal or similar rights) become stockholders by the terms of such\nmerger or consolidation, and the phrase 'directors of Mattel (who were directors\nimmediately prior thereto)' shall include only individuals who were directors of\nMattel at the beginning of the 24 consecutive month period preceding the date of\nsuch 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                                      -12-\n \n          (f)  Date of Termination.  'Date of Termination' means the date of\n               -------------------                                          \nactual receipt of the Notice of Termination or any later date specified therein\n(but not more than fifteen (15) days after the giving of the Notice of\nTermination), as the case may be; provided that (i) if the Executive's\nemployment is terminated by Mattel for any reason other than Cause or\nDisability, the Date of Termination is the date on which Mattel notifies the\nExecutive of such termination; (ii) if the Executive's employment is terminated\ndue to Disability, the Date of Termination is the Disability Effective Date; and\n(iii) if the Executive's employment is terminated due to the Executive's death,\nthe Date of Termination 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\n              -----                                                           \nthe Executive's death, this Agreement shall terminate without further\nobligations by Mattel to the Executive's legal representatives under this\nAgreement other than those obligations accrued hereunder or under the terms of\nthe applicable Mattel plan or program which takes effect at the date of his\ndeath or as otherwise provided in Section 4(a) or this \n\n                                      -13-\n \nSection 5(a). As of the Date of Termination, the Executive's family shall be\nentitled to the Executive's benefits on the terms described in Section 5(d)(iv)\n(other than outplacement services and leased car benefits, which are excluded),\nexcept that healthcare insurance coverage and financial and legal counseling\nservices shall terminate on the third anniversary of the Date of Termination.\nThe Executive's country club membership must be converted or sold, as the case\nmay be, by the Executive's successor-in-interest within one year after the Date\nof Termination on the terms described in Section 5(d)(iv)(III); provided that no\nsuch conversion or sale shall be required and Mattel shall cause the membership\nto be transferred to the Executive's spouse at no cost to the spouse if the\nExecutive 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\n              -----                                                           \nif the Executive terminates his \n\n                                      -14-\n \nemployment without Good Reason, Mattel shall pay the Executive his full Base\nSalary through the Date of Termination at the rate in effect at the time Notice\nof Termination is given, and Mattel shall have no further obligations to the\nExecutive under this Agreement, except that if Executive is duly vested under\nthe express terms of the SERP, he shall be entitled to receive SERP benefits in\naccordance with the terms and conditions of the SERP.\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\nwithin 30 days after the Date of Termination the aggregate of the following\namounts:\n\n                     (A)  if not theretofore paid, the Executive's Base Salary\nthrough the Date of Termination at the rate in effect at the time of Notice of\nTermination was given;\n                     (B) a current year MIP bonus equal to the average of the\ngreatest two out of the three most recent annual MIP bonuses received by the\nExecutive (which two greatest MIP bonuses need not represent consecutive years)\n(the 'Average \n\n                                      -15-\n \nAnnual Bonus') and if Executive has been eligible to receive only one prior MIP\nbonus, the latter shall serve as the sole basis for determining the Average\nAnnual Bonus. The applicable Average Annual Bonus shall then be prorated to\nreflect the total number of full months the Executive was employed in the year\nin which termination occurs;\n                     (C)  an LTIP payment reflective of the Executive's\nparticipation in the three-year plan, so that at the time that final performance\nunder the LTIP is determinable and individual payouts calculated, the Executive\nshall promptly receive an amount equivalent to what he would have received if he\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                     (D)  three times the sum of (x) the Executive's annual Base\nSalary at the rate in effect at the time the Notice of Termination is given and\n(y) if eligible, the Average Annual Bonus defined in Section 5(d)(i)(B), but\nwithout proration (and, in each such case, without regard to any contributions\nby Mattel for the Executive's benefit to the Mattel Personal Investment Plan\n('PIP')).\n\n               (ii)  Options granted to the Executive under Mattel's stock\noption plans (the 'Stock Option Plans') which options have been granted for more\nthan six months shall become \n\n                                      -16-\n \nimmediately exercisable and the Executive shall have a period of 90 days\nfollowing the Date of Termination (but in no event past the expiration of the\nterm of the option grant) to exercise all options granted under the Stock Option\nPlans then exercisable or which become exercisable pursuant to this clause (ii).\nIn the event the Executive is age 52 or older on the Date of Termination, he\nwill be treated as a retiree under the Stock Option Plans, which will enable the\nExecutive to vest in and exercise stock options theretofore granted thereunder,\nat the election of the Executive, (x) in the manner described in the immediately\npreceding sentence, or (y) for a period of up to five years after the Date of\nTermination (but in no event past the expiration of the term of the option\ngrant).\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               (iv)  Until the earlier of (x) the third anniversary of the Date\nof Termination or (y) the date the Executive accepts other employment, Mattel\nshall provide to the Executive at Mattel's expense:\n\n                     (I)  medical, dental, prescription drug and vision care\ngroup insurance in accordance with the coverage in \n\n                                      -17-\n \neffect immediately prior to the Date of Termination (the last 18 months of the\nExecutive's coverage under such insurance shall be deemed to be participation\nunder an election to continue such benefits under the Consolidated Omnibus\nBudget Reconciliation Act at Mattel's expense);\n                     (II)  outplacement services at the expense of Mattel\ncommensurate with those provided to terminated executives of comparable level\nand made available through and at the facilities of a reputable and experienced\nvendor; and\n                     (III) continuation of country-club membership\n'signatory\/representative' status as in effect immediately prior to the Date of\nTermination; provided that within one year after Mattel ceases to provide such\nbenefit, the Executive shall (a) convert the country-club membership from\n'signatory\/representa-tive' status under the membership provided and paid for by\nMattel to sole and personal ownership status by paying to Mattel the fair market\nvalue of that membership as of the date Mattel ceases to provide such benefit,\nless any transfer\/reconveyance fees that may be required by and paid directly to\nthe country club by the Executive, or (b) comply with club rules in consummating\na fair, reasonable and expeditious sale of the membership and any proceeds\nderived therefrom which are payable to the Executive shall belong to and must be\npromptly delivered to Mattel; provided further that no such conversion or sale\nshall be required and Mattel shall cause the membership to be transferred \n\n                                      -18-\n \nto the Executive at no cost to the Executive (but subject to tax reporting as\nimputed income applicable to the year in which the membership is transferred),\nif the Executive has had the membership for at least three years.\n\n     For the three-year period after the Date of Termination, the Executive\nshall remain eligible for use of personal financial and legal counseling\nservices through the vendor engaged and paid for by Mattel.  The Executive may\ncontinue to use the car leased by Mattel that is in the Executive's possession\non the Date of Termination until the earlier of (x) the end of the lease term or\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\naddition to actual service) and for three years of attained age to be added to\nthe Executive'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 \n\n                                      -19-\n \nExecutive Retirement Plan (the 'SERP'), the Mattel Deferred Compensation Plan,\nthe PIP, the Mattel Retiree Medical Plan, and the Stock Option Plans. Further,\nwith regard to computing the Executive's benefit under the SERP, the formula\ndescribed in Section 5(d)(i)(B) shall be utilized in calculating the maximum\nbenefit, namely: the formula shall be 25% of the average of the final three\nyears of annual Base Salary (including the calendar year in which the Date of\nTermination occurs), plus the average of the greatest two out of the three most\nrecent annual MIP bonuses received by the Executive.\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\nwithin 30 days after the Date of Termination the aggregate of the following\namounts:\n\n                     (A) if not theretofore paid, the Executive's Base Salary\nthrough the Date of Termination at the rate in effect at the time of Notice of\nTermination was given;\n                     (B) an amount equal to the MIP bonus that would have been\npayable to executives of Mattel in the same bonus \n\n                                      -20-\n \ncategory as the Executive pursuant to the Bonus Programs provided in Section\n3(b) assuming, for purposes of calculating the amount of the bonus pool under\nthe plan, that the 'maximum' amount, as that term is used in the plan, was\nachieved for the current plan year (the 'Maximum Annual Bonus'), with such\namount prorated to reflect the number of full months the Executive is employed\nin the year in which termination occurs;\n\n                     (C)  an LTIP payment for the current year, assuming\nachievement of the three-year maximum award, prorated to reflect the total\nnumber of full months the Executive is employed in the year in which termination\noccurs;\n                     (D)  three times the sum of (x) the Executive's annual Base\nSalary at the rate in effect at the time the Notice of Termination is given and\n(y) the Maximum Annual Bonus defined in Section 5(e)(i)(B), but without\nproration (and, in each such case, without regard to any contributions by Mattel\nfor the Executive's benefit to the PIP); and\n                     (E)  the full term payout for the three-year period of the\nLTIP, assuming 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\nMattel to the Executive pursuant to Section 5(e) \n\n                                      -21-\n \n(determined without regard to any additional payments required pursuant to this\nsentence) (a 'Payment') would be subject to the excise tax imposed by Section\n4999 of the Internal Revenue Code of 1986, as amended (the 'Code'), or any\ninterest or penalties are incurred by the Executive with respect to such excise\ntax (such excise tax, together with any such interest and penalties, are\nhereinafter collectively referred to as the 'Excise Tax'), then the Executive\nshall be entitled to receive with respect to each Payment an additional payment\n(a 'Gross-Up Payment') in an amount such that after payment by the Executive of\nall taxes (including any interest or penalties imposed with respect to such\ntaxes), including, without limitation, any income taxes (and any interest and\npenalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up\nPayment, the Executive retains an amount of the Gross-Up Payment equal to the\nExcise Tax imposed upon the Payments.\n               (iii)  In addition, the Executive shall receive the amounts and\nbe entitled 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\n              --------------------------------                         \nExecutive that 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,\n\n                                      -22-\n \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     6.  Non-exclusivity of Rights.  Nothing in this Agreement shall\n         -------------------------                                  \nprevent or limit the Executive's continuing or future participation in any\nbenefit, bonus, incentive or other plan or program provided by Mattel and for\nwhich the Executive may qualify, nor shall anything herein limit or otherwise\naffect such rights as the Executive may have under any stock option or other\nagreement with Mattel or any of its affiliated companies.  Except as otherwise\nprovided herein, amounts which are vested benefits or which the Executive is\notherwise entitled to receive under any plan or program of Mattel at or\nsubsequent to the Date of Termination shall be payable in accordance with such\nplan or program.\n\n     7.  No Set Off, Payment of Fees.  Except as provided here-in, Mattel's\n         ---------------------------                                       \nobligation to make the payments provided for in this \n\n                                      -23-\n \nAgreement and otherwise to perform its obligations hereunder shall not be\naffected by any circumstances, including without limitation any set-off,\ncounterclaim, recoupment, defense or other right which Mattel may have against\nthe Executive or others. Mattel agrees to pay, to the full extent permitted by\nlaw, all legal fees and expenses which the Executive may reasonably incur as a\nresult of any contest (regardless of the outcome thereof) by Mattel or others of\nthe validity or enforceability of, or liability under, any provision of this\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 of\nTermination 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 \n\n                                      -24-\n \nNotice of Termination by mutual consent of Mattel and the Executive and\nthereupon, the Executive shall be entitled to receive only those payments and\nbenefits which he would have been entitled to receive at such date.\n\n     8.  Arbitration of Disputes\n         -----------------------\n          (a) The parties agree that any disputes, controversies or claims which\narise out of or relate to this Agreement, the Executive's employment or the\ntermination of his employment, including, but not limited to, any claim relating\nto the purported validity, interpretation, enforceability or breach of this\nAgreement, and\/or any other claim or controversy arising out of the relationship\nbetween the Executive and Mattel (or the nature of the relationship) or the\ncontinuation or termination of that relationship, including, but not limited to,\nclaims that a termination was for Cause, including the determination of Mattel's\nBoard of Directors in accordance with Section 4(b), or for Good Reason, claims\nfor breach of covenant, breach of an implied covenant of good faith and fair\ndealing, wrongful termination, breach of contract, or intentional infliction of\nemotional distress, defamation, breach of right of privacy, interference with\nadvantageous or contractual relations, fraud, conspiracy or other tort or\nproperty claims of any kind, which are not settled by agreement between the\nparties, shall be settled by arbitration under the labor arbitration rules of\nthe \n\n                                      -25-\n \nAmerican Arbitration Association before a board of three arbitrators, as\nselected thereunder.\n\n     One arbitrator shall be selected by the Executive, one by Mattel and\nthe third by the two persons so selected, all in accordance with the labor\narbitration rules of the American Arbitration Association then in effect.  In\nthe event that the arbitrator selected by the Executive and the arbitrator\nselected by Mattel are unable to agree upon a third arbitrator, then the third\narbitrator shall be selected from a list of seven provided by the office of the\nAmerican Arbitration Association nearest to the Executive's residence with the\nparties striking names in order and the party striking first to be determined by\nthe flip of a coin.  The arbitration shall be held in a location to be mutually\nagreed upon by the parties.  In the absence of agreement, the Chairman of the\nBoard of Mattel shall determine the location.\n\n          (b) In consideration of the parties' agreement to submit to\narbitration all disputes with regard to this Agreement and\/or with regard to any\nalleged contract, or any other claim arising out of their conduct, the\nrelationship existing hereunder or the continuation or termination of that\nrelationship, and in further consideration of the anticipated expedition and the\nminimizing of expense resulting from this arbitration remedy, the \n\n                                      -26-\n \narbitration provisions of this Agreement shall provide the exclusive remedy, and\neach party expressly waives any right he or it may have to seek redress in any\nother forum. \n\n          (c) Any claim which either party has against the other party which\ncould be submitted for resolution pursuant to this Section 8 must be presented\nin writing 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 that claims arising out of or related to the termination of the\nExecutive's employment must be presented by him within one year after the Date\nof Termination. Unless the party against whom any claim is asserted waives the\ntime limits set forth above, any claim not brought within the time periods\nspecified shall 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                                      -27-\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\nhave separate validity and the invalidity of any part thereof shall not affect\nthe remaining parts.\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 \n\n                                      -28-\n \nduring 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 (whether or not\nwholly-owned), divisions, partners and their officers, directors, agents,\nemployees, servants, executors, administrators, accountants, investigators,\ninsurers, and any and all other related individuals and entities, if any, and\neach of them, in any and all capacities, from any and all claims, debts,\nliabilities, demands, obligations, liens, promises, acts, agreements, costs and\nexpenses (including, but not limited to, attorneys' fees), damages, actions and\ncauses of action, of whatever kind or nature, including, without limitation, any\nstatutory, civil or administrative claim, or any claim, arising out of acts or\nomissions occurring before the execution of this Agreement, whether known or\nunknown, suspected or unsuspected, fixed or contingent, apparent or concealed\n(collectively referred to as 'claims'), including, but not limited to, any\nclaims based on, arising out of, related to or connected with the subject matter\nof this Agreement, the Executive's employment or the termination thereof, and\nany and all facts in any manner arising \n\n                                      -29-\n \nout of, related to or connected with the Executive's employment with, or\ntermination of employment from, Mattel or any of its related entities,\nincluding, but not limited to, any claims arising from rights under federal,\nstate, and local laws prohibiting discrimination on the basis of race, national\norigin, sex, religion, age, marital status, pregnancy, handicap, ancestry,\nsexual orientation, or any other form of discrimination, and any common law\nclaims of any kind, including, but not limited to, contract, tort, and property\nrights including, but not limited to, breach of contract, breach of the implied\ncovenant of good faith and fair dealing, tortious interference with contract or\ncurrent or prospective economic advantage, fraud, deceit, misrepresentation,\ndefamation, wrongful termination, infliction of emotional distress, breach of\nfiduciary duty, and any other common law claim of any kind whatever.\n\n     Upon Mattel's fulfilling its obligations to the Executive here-under,\nthe Executive expressly waives any and all rights under Section 1542 of the\nCivil Code 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 \n\n                                      -30-\n \nsimilar provision in order to prosecute or assert in any manner any claims\nreleased hereunder. Section 1542 provides as follows:\n\n          'A general release does not extend to claims which the creditor\n          does not know or suspect to exist in his favor at the time of\n          executing the release, which if known by him must have materially\n          affected his settlement with the debtor.'\n\n     10.  Confidential Information.  The Executive shall hold in a\n          ------------------------                                \nfiduciary capacity for the benefit of Mattel all secret or confidential\ninformation, knowledge or data relating to Mattel or any of its affiliated\ncompanies, and their respective businesses, which shall have been obtained by\nthe Executive during his employment by Mattel or any of its affiliated companies\nand which shall not be public knowledge and will continue to be bound by the\nprovisions of the Patent and Confidence Agreement previously executed by the\nExecutive.  After termination of the Executive's employment with Mattel, he\nshall not, without the prior written consent of Mattel, communicate or divulge\nany such information, knowledge or data to anyone other than Mattel and those\ndesignated by it.\n\n                                      -31-\n \n     11.  Successors.\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\ninure to the benefit of and be enforceable by the Executive's legal\nrepresentatives.\n\n          (b) This Agreement shall inure to the benefit of and be binding upon\nMattel and its successors.  Mattel shall require any successor to all or\nsubstantially all of the business and\/or assets of Mattel, whether direct or\nindirect, by purchase, merger, consolidation, acquisition of stock, or\notherwise, by an agreement in form and substance satisfactory to the Executive,\nexpressly to assume and agree to perform this Agreement in the same manner and\nto the same extent as Mattel would be required to perform if no such succession\nhad taken place.\n\n     12.  Amendment; Waiver.  This Agreement contains the entire agreement\n          ---------  ------                                               \nbetween the parties with respect to the subject matter hereof and may be\namended, modified or changed only by a written instrument executed by the\nExecutive and Mattel.  No provision of this Agreement may be waived except by a\nwriting executed and delivered by the party sought to be charged.  Any such\nwritten waiver will be effective only with respect to the event or \n\n                                      -32-\n \ncircumstance described therein and not with respect to any other event or\ncircumstance, unless such waiver expressly provides to the contrary.\n\n     13.  Miscellaneous.\n          ------------- \n          (a) This Agreement shall be governed by and construed in accordance\nwith the laws of the State of California, without reference to principles of\nconflict of laws.  The captions of this Agreement are not part of the provisions\nhereof and shall have no force or effect.\n\n          (b) All notices and other communications hereunder shall be in\nwriting; shall be delivered by hand delivery to the other party or mailed by\nregistered or certified mail, return receipt requested, postage prepaid; shall\nbe deemed delivered upon actual receipt; and shall be addressed as follows:\n\n                         if to the Executive:\n                         --------------------\n\n                               Harry J. Pearce\n                               c\/o Mattel, Inc.\n                               333 Continental Blvd.\n                               El Segundo, CA 90245\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                                      -33-\n \n          (c) Any provision of this Agreement which is prohibited or\nunenforceable in any jurisdiction will, as to such jurisdiction, be ineffective\nto the extent of such prohibition or unenforceability without invalidating the\nremaining provisions hereof, and any such prohibition or unenforceability in any\njurisdiction will not invalidate or render unenforceable such provision in any\nother jurisdiction.\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\/ Harry J. Pearce\n                                         -----------------------------------\n                                         Harry J. Pearce\n\nMATTEL:                                  MATTEL, INC.,\n                                         a Delaware corporation\n\n                                         By: \/s\/ Ned Mansour\n                                             -------------------------------\n                                             Ned Mansour\n                                             President, Corporate Operations\n \nATTEST:\n\n\/s\/ Mary L. Waller\n---------------------------------\nAssistant Secretary\n\n                                      -34-\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-39337","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\/39337","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=39337"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39337"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39337"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}