EXHIBIT 10.37
MATTEL, INC.
AMENDED AND RESTATED
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
MAY 1, 1996
TABLE OF CONTENTS
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Page
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ARTICLE I - NAME AND PLAN PURPOSES.......................... 1
1.1 Name and Plan Purposes..................... 1
ARTICLE II - DEFINITIONS..................................... 2
2.1 Actuarial Equivalent or Actuarial
Equivalence................................ 2
2.2 Administrative Committee................... 2
2.3 Beneficiary................................ 2
2.4 Board of Directors......................... 2
2.5 Cause...................................... 2
2.6 Change of Control.......................... 2
2.7 Code....................................... 3
2.8 Company.................................... 3
2.9 Compensation............................... 3
2.10 Disability................................. 4
2.11 Effective Date............................. 4
2.12 Employee................................... 4
2.13 Employer................................... 4
2.14 ERISA...................................... 5
2.15 Final Average Compensation................. 5
2.16 Month of Service............................ 5
2.17 Participant................................ 5
2.18 Plan....................................... 5
2.19 Plan Year.................................. 5
2.20 Related Company............................ 5
2.21 Service.................................... 5
2.22 Termination................................ 6
ARTICLE III - ELIGIBILITY AND PARTICIPATION................... 7
3.1 Eligibility to Participate................. 7
3.2 Effect of Participating in Plan............ 7
ARTICLE IV - FUNDING OF BENEFITS............................. 8
4.1 Funded Status of Benefits.................. 8
4.2 Rights of Participants..................... 8
4.3 No Participant Contributions............... 8
ARTICLE V - BENEFITS ....................................... 9
5.1 Benefit Accrual............................ 9
5.2 Normal Form of Distributions............... 9
5.3 Optional Forms of Distribution ............. 9
5.4 Vesting................................... 10
5.5 Change of Control......................... 10
TABLE OF CONTENTS
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ARTICLE VI - PAYMENT OF BENEFITS............................ 12
6.1 In-Service Withdrawals Prohibited......... 12
6.2 Loans..................................... 12
6.3 Distributions Following Termination....... 12
6.4 Death Benefits............................ 12
6.5 Disability................................ 13
6.6 Designation of Beneficiary................ 13
6.7 Mailing of Payments....................... 13
6.8 Payees under Legal Disability............. 13
6.9 Withholding For Taxes..................... 14
ARTICLE VII - OPERATION AND ADMINISTRATION OF THE PLAN....... 15
7.1 Administrative Committee Powers........... 15
7.2 Composition of Administrative Committee... 15
7.3 Administrative Committee Procedure........ 16
7.4 Reporting and Disclosure.................. 16
7.5 Notices and Communications................ 16
7.6 Indemnification........................... 16
ARTICLE VIII - APPLICATION FOR BENEFITS....................... 18
8.1 Application for Benefits.................. 18
8.2 Content of Denial......................... 18
8.3 Appeals................................... 18
8.4 Exhaustion of Remedies.................... 19
ARTICLE IX MISCELLANEOUS MATTERS.......................... 20
9.1 Amendment or Termination.................. 20
9.2 Effect of Merger of Company............... 20
9.3 No Enlargement of Employee Rights......... 20
9.4 Restrictions Against Alienation........... 21
9.5 Employment Agreements..................... 21
9.6 Interpretation............................ 21
ARTICLE I
NAME AND PLAN PURPOSES
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1.1 NAME AND PLAN PURPOSES.
(a) The plan established and adopted hereunder shall be known as
the Mattel, Inc. Amended and Restated Supplemental Executive
Retirement Plan, dated as of May 1, 1996 (the "Plan"). This Plan
amends and supercedes the Mattel, Inc. Supplemental Executive
Retirement Plan, dated as of April 1, 1994. This Plan does not amend
or supersede the Supplemental Executive Retirement Plan dated October
31, 1991 (the "1991 SERP"). However, as set forth in Section 3.2
hereof, the participants of the 1991 SERP who retire after April 1,
1994 shall have the option of receiving benefits under this Plan or
the 1991 SERP.
(b) The Plan was established for the purpose of providing
pension benefits to a select group of executives or highly compensated
employees. The benefits under the Plan shall be funded solely out of
the general assets of the Company. Accordingly, it is intended that
the Plan be exempt from the requirements of Parts II, III, and IV of
Title I of ERISA pursuant to Sections 201(2), 301(a)(3), and 401(a)(1)
of ERISA. It is expressly intended that ERISA preempt the application
of state laws to this Plan, to the maximum extent permitted by Section
514 of ERISA.
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ARTICLE II
DEFINITIONS
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Whenever the following terms are used in this Plan, they shall have
the meaning set forth in this Article II.
2.1 ACTUARIAL EQUIVALENT OR ACTUARIAL EQUIVALENCE. For purposes of
determining the actuarial equivalence of optional forms of benefit payments
the 1983 group annuity mortality tables (compiled on a unisex basis
weighted 50% male and 50% female) shall be used, and for purposes of
calculating the amount of a lump sum, interest equal to the yield on the
thirty (30) year treasury bond with a maturity date closest to the calendar
date on which the calculation is made shall be used.
2.2 ADMINISTRATIVE COMMITTEE. "Administrative Committee" shall mean
the Mattel, Inc. Supplemental Executive Retirement Plan Administrative
Committee described in Article VII.
2.3 BENEFICIARY. "Beneficiary" shall mean the person or persons
designated under Section 6.6 to receive the benefit payable in the event of
the death of a Participant.
2.4 BOARD OF DIRECTORS. "Board of Directors" shall mean the Board of
Directors of the Company or any committee of the Board of Directors
empowered to act on behalf of the Board of Directors.
2.5 CAUSE. "Cause" shall mean (a) an act or acts of dishonesty on
the Participant's part that are intended to result in his substantial
personal enrichment at the expense of the Employer (b) repeated violations
by the Participant of his duties which are demonstrably willful and
deliberate on the Participant's part and which resulted in material injury
to the Employer, (c) conduct of a criminal nature which may or which is
likely to have an adverse impact on the Employer's reputation or standing
in the community or on its relationship with its customers or those who
purchase or use its products, or (d) fraudulent conduct in connection with
the business or affairs of the Employer, regardless of whether said conduct
is designed to defraud the Employer or others.
2.6 CHANGE OF CONTROL. A "Change of Control" shall be deemed to have
occurred on:
(a) the "Distribution Date" as that term is defined in Section 1(h)
of the Company's Rights Agreement dated February 7, 1992, as it
may be amended from time to time. The definition of "Distribution
Date" contained in the Company's Rights Agreement shall continue
to apply, notwithstanding the expiration or termination of that
agreement; or
(b) the date (during any period of two (2) consecutive calendar
years) that individuals who at the beginning of such period
constituted the Company's Board of Directors, cease for any
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reason (other than natural causes, including death, disability or
retirement) to constitute a majority thereof; or
(c) The date the stockholders of the Company approve:
(i) a plan of complete liquidation of the Company;
(ii) an agreement for the sale or disposition of all or
substantially all the assets of the Company; or
(iii) a merger, consolidation, or reorganization of the Company
with or involving any other corporation, other than a
merger, consolidation, or reorganization that would result
in the voting stock of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting stock of the
surviving entity) at least eighty percent (80%) of the
combined voting power of the stock which is outstanding
immediately after such merger, consolidation or
reorganization, unless the Board of Directors of the
Company determines by a majority vote prior to the merger,
consolidation or reorganization that no Change in Control
will occur as a result of such transaction.
2.7 CODE. "Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time. Where the context requires, a reference
to a particular Code section shall refer to a successor Code provision.
2.8 COMPANY. "Company" shall mean Mattel, Inc., and its successors
and assigns.
2.9 COMPENSATION. "Compensation" means a Participant's Base Salary,
Short Term Bonus and Special Achievement Bonus, as determined on the basis
of the calendar year in accordance with the following rules.
(a) "Base Salary" shall mean the full salary and wages
(including overtime, shift differential and holiday, vacation and sick
pay) paid by an Employer by reason of services performed by an
Employee, subject however to the following special rules:
(i) Except as specified in (ii) below, fringe benefits
and contributions by the Employer to and benefits under any
employee benefit shall not be taken into account in determining
Compensation;
(ii) Amounts deducted pursuant to authorization by an
Employee or pursuant to requirements of law shall be included in
"Compensation";
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(iii) Amounts deferred by the Employee pursuant to non-
qualified deferred compensation plans, regardless of whether such
amounts are includable in the Employee's gross income for his
current taxable year, shall be taken into account in determining
Compensation; provided, however, that amounts deferred more than
three (3) years prior to Termination shall not be taken into
account in determining Compensation; and
(iv) Amounts included in any Employee's gross income
with respect to fringe benefits, including but not limited to car
allowances, life insurance and financial planning, shall not be
taken into account in determining Compensation.
(b) "Short Term Bonus" means the amount paid during the year
under the Mattel, Inc. Management Incentive Plan.
(c) "Special Achievement Bonus" means the amount paid during
the year at the discretion of the Compensation/Options Committee of
the Board of Directors.
2.10 DISABILITY.
(a) A Participant will be deemed to be "Disabled" if there is
a determination to that effect under the group long-term disability
plan of the Company or a Related Company and the Participant is also
approved for permanent disability benefits by the Social Security
Administration.
(b) However, in no event will a participant be considered to
be disabled for purposes of this Plan if the participant's incapacity
is a result of--
(i) Intentionally self-inflicted injuries (while sane
or insane),
(ii) Alcohol or drug abuse, or
(iii) A criminal act for which he is convicted or to
which he pleads guilty or nolo contendere.
2.11 EFFECTIVE DATE. The effective date of the Plan is
April 1, 1994.
2.12 EMPLOYEE. "Employee" shall mean each person qualifying as
a common law employee of the Company or of a Related Company and scheduled
to work full-time (at least forty (40) hours per week).
2.13 EMPLOYER. "Employer" means the Company and any Related
Company which, with the approval of the Board of Directors, elects to
become a party to the Plan by adopting, by a resolution of its board of
directors, the Plan for the benefit of its employees, or any one or more of
them, as the context indicates.
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2.14 ERISA. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
2.15 FINAL AVERAGE COMPENSATION. "Final Average Compensation" means
the average of the Participant's Compensation during the final three (3)
years of employment with the Employer, or the entire period during which he
was a Participant in the Plan, if less.
2.16 MONTH OF SERVICE. "Month of Service" shall mean a one (1)
month period of Service (stated in terms of calendar months with credit
given for the actual time served during partial months and not counted as
full months).
2.17 PARTICIPANT. "Participant" shall mean any Employee who
has been enrolled in this Plan in accordance with the provisions of Article
III below.
2.18 PLAN. "Plan" shall mean the Mattel, Inc. Supplemental
Executive Retirement Plan.
2.19 PLAN YEAR. The "Plan Year" shall mean the calendar year.
2.20 RELATED COMPANY. An entity shall be a "Related Company"
if--
(a) Fifty percent (50%) or more of the interests in the entity
are owned by the Company; and
(b) The entity is so designated by the Board of Directors of
the Company.
2.21 SERVICE. "Service" means the period of time (stated in
terms of Months of Service) during which the employment relation between
the Participant and an Employer has been maintained, and shall include
periods of paid absence (not to exceed six (6) months) and unpaid leave of
absence (not to exceed six (6) months) granted by the Employer (including
leaves approved for military service or for birth or adoption of a child).
Participants shall receive Service credit for prior Service for any period
between a Termination and rehire of less than twelve (12) months and shall
receive Service credit for prior Service for any period prior to a
Termination so long as the rehire occurs within sixty (60) months of the
date of Termination, provided such period does not exceed the original
period of employment. However, periods of service as a consultant,
independent contractor or part-time employee (scheduled to work less than
forty (40) hours per week) shall not count as Service. An Employee shall,
if approved by the Board of Directors, receive credit for service with a
Related Company upon becoming a Participant hereunder, with credit measured
from the date such Related Company was acquired, and may receive credit for
periods of employment with prior employers, but only at the discretion of
the Board of Directors and only if the Employee is made a Participant
within ninety (90) days of the later of his date of hire or the date of
acquisition of the Related Company.
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2.22 TERMINATION.
(a) "Termination" shall mean the termination of an Employee's
employment with the Company or a Related Company by reason of the
Employee's retirement, death, Disability, resignation, dismissal, or
otherwise.
(b) Subject to the provisions of Section 2.21, an Employee
shall not be considered to have incurred a Termination by means of a
leave of absence that is approved by the Company or a Related Company
(whichever is applicable) and is for a period of less than two (2)
years.
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
-----------------------------
3.1 ELIGIBILITY TO PARTICIPATE.
(a) The only Employees who are eligible to participate in the Plan are
those executives or highly compensated employees of the Company or a Related
Company that are designated by the Chief Executive Officer of the Company (or
officer serving in a substantially similar capacity if there is no Chief
Executive Officer).
(b) An employee who becomes a Participant shall remain a Participant
hereunder until all benefits under Article 5 have been paid.
(c) In the event that it is determined that allowing any individual to
continue participating in the Plan could cause the Plan to violate ERISA, the
Committee may elect to pay the entire present value of the Participant's
vested benefit to him in a lump sum distribution as soon as administratively
possible. The amount of the lump sum distribution shall be the Actuarial
Equivalent of the Participant's vested benefit.
3.2 EFFECT OF PARTICIPATING IN PLAN. A Participant may receive a benefit
under this Plan only if he does not also receive a benefit under the Mattel
Financial Security Plan or the 1991 SERP. Participants who have earned a benefit
under either of such plans shall have the right to make an irrevocable election,
at any time prior to Termination, to forfeit any benefit to which they may have
become entitled under either or both such plans, and if such an election is
made, shall thereupon become entitled instead to the benefit provided by this
Plan.
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ARTICLE IV
FUNDING OF BENEFITS
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4.1 FUNDED STATUS OF BENEFITS. The benefits under the Plan shall not
be funded, but shall be payable out of the general assets of the Company
(or a Related Company) when due.
4.2 RIGHTS OF PARTICIPANTS.
(a) No Participant shall have a preferred claim on, or a
beneficial ownership interest in, any assets of the Company (or a
Related Company) prior to the time such assets are paid to him in the
form of benefits.
(b) All rights created under the Plan shall be unsecured
contractual rights of Participants against the Company or a Related
Company. However, nothing in this document shall in any way diminish
any rights of a Participant to pursue his rights as a general creditor
of Company or a Related Company with respect to his benefits under the
Plan.
4.3 NO PARTICIPANT CONTRIBUTIONS. No Participant contributions to
the Plan are permitted.
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ARTICLE V
BENEFITS
---------
5.1 BENEFIT ACCRUAL. Each employee who becomes a Participant under
Section 3.1 and who remains in the employ of the Employer until age 60 and
until he becomes vested under Section 5.4 shall be entitled to a monthly
benefit beginning at age sixty (60) (or when there is a Termination, if
later) and continuing for fifteen (15) years. Such monthly amount,
determined as of any Determination Date (as defined below), shall equal
one-twelfth (1/12th) of (a) times (b) below, rounded to the nearest dollar,
where
(a) is twenty-five percent (25%) of the Participant's Final
Average Compensation, determined as of the Determination Date, and
(b) is the fraction, not in excess of one (1), equal to the
number of Months of Service credited to the Participant as of the
Determination Date divided by one hundred eighty (180).
"Determination Date" shall mean the date of Termination or the date
the Participant is no longer a full-time employee (scheduled to work a
forty (40) hour work week).
5.2 NORMAL FORM OF DISTRIBUTION. Unless a Participant elects
otherwise as provided in Section 5.3, he shall receive his benefit for his
life only in the form of a single life annuity paid in monthly installments
in the amount determined under Section 5.1.
5.3 OPTIONAL FORMS OF DISTRIBUTIONS. In lieu of receiving the
benefit described in Section 5.2, a Participant may irrevocably elect, at
any time prior to Termination, to receive the Actuarial Equivalent of such
benefit in one of the following optional period-certain and life benefit
forms:
(a) 15 year certain - A benefit paid in the form of monthly
installments over a period of 15 years. If a Participant dies after
receiving his first payment, the designated Beneficiary shall be
entitled to such payments, if any, that remain to be made following
the date of death.
(b) 10 year certain - A benefit paid in the form of monthly
installments over a period of 10 years. If a Participant dies after
receiving his first payment, the designated Beneficiary shall be
entitled to such payments, if any, that remain to be made following
the date of death.
(c) 100% Joint and Survivor Annuity - A benefit which is
payable for the life of the Participant and upon the Participant's
death, if such Participant is survived by the spouse to whom such
Participant was married at the annuity starting date, for the life of
such spouse, in an amount equal to 100% of the benefit payable to such
Participant. The benefit payable to such spouse shall not be
terminated on account of such spouse's subsequent remarriage.
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(d) 50% Joint and Survivor Annuity - A benefit which is
Payable for the life of the Participant and upon the Participant's
death, if such Participant is survived by the spouse to whom such
Participant was married at the annuity starting date, for the life of
such spouse, in an amount equal to 50% of the benefit payable to such
Participant. The benefit payable to such spouse shall not be
terminated on account of such spouse's subsequent remarriage.
Except as may be provided in Sections 3.1(c) and 5.5, Participants
shall not be entitled to be paid their benefits in the form of lump sum
distributions. Notwithstanding the preceding sentence, if the Actuarial
Equivalent of the amount payable to a Participant or Beneficiary is fifty
thousand dollars ($50,000) or less, it will automatically be paid in the
form of a lump sum distribution.
5.4 VESTING. Each Participant shall fully vest in his benefits under
Section 5.1 upon:
(a) completing sixty (60) or more Months of Service with the
Employer, and
(b) attaining age fifty-five (55).
A person whose employment with the Employer is terminated for any
reason prior to fulfilling both requirements for vesting hereunder shall
not receive a benefit. Any Participant who has his employment terminated
for Cause shall forfeit any right to a benefit notwithstanding the fact
that he may have attained a vested interest in that benefit. Any
Participant who, in the opinion of the Administrative Committee and within
five (5) years of Termination, competes in any way with the Company or a
Related Company, either as an employee of a competitor, or as a consultant
or advisor to a competitor, shall not receive any unpaid benefits.
A Participant who is reclassified to a management level that is not
eligible for participation under this Plan shall forfeit any entitlement
to a benefit under this Plan, except that a vested Participant who is so
reclassified may be entitled to the benefit described under Section 5.1,
based on Months of Service and Compensation to the date of such
reclassification, but only upon review and approval by the Administrative
Committee.
5.5 CHANGE OF CONTROL.
(a) All benefits under the Plan shall become vested upon a
Change of Control of the Company. The provisions of this Section
5.5(a) shall only apply to those Participants who are employed by the
Company or a Related Company on the date of the Change of Control.
(b) Except as otherwise provided by resolutions adopted by the
Board of Directors prior to the date of a Change of Control, all
benefits payable to all Participants, (determined after the
application of Section 5.5(a) above), shall become
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payable no later than thirty (30) days following a Change of Control,
in the form of a lump sum distribution.
(i) The provisions of this Section 5.5(b) shall apply
to all Participants, regardless of whether they--
(A) Are currently receiving benefits under the Plan,
(B) Have terminated employment, but not yet commenced
receiving benefits, or
(C) Are still employed by the Company or a Related
Company.
(ii) The amount of the lump sum distribution payable to
a Participant under this Section 5.5(b) shall be the Actuarial
Equivalent of the Participant's vested benefit. This amount
shall be reduced by the amount (if any) of the benefit that has
already been paid to the Participant.
(c) If the Board of Directors elects to delay or suspend
payment of benefits following a Change in Control pursuant to Section
5.5(b), and a Participant whose benefits were fully vested upon such
Change of Control pursuant to Section 5.5(a) is terminated without
Cause within five (5) years following such Change of Control, then all
benefits payable to such Participant shall become immediately payable
in the form of a lump sum distribution. In calculating such benefit,
the Participant shall receive credit for all Months of Service
following such Change in Control. A Participant's employment will be
considered to have been terminated for Cause within five (5) years
following a Change of Control only if there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the entire membership of the Board of
Directors.
(i) This resolution must be adopted at a meeting of
the Board of Directors called and held for such purpose after
reasonable notice to the Participant.
(ii) There must be an opportunity for the Participant,
together with counsel, to be heard before the Board.
(iii) The resolution must find that, in the good faith
opinion of the Board of Directors, the Participant was terminated
for Cause and specifying the particulars thereof in detail.
(d) The provisions of Section 5.5(c) above shall not apply in
determining whether a Participant has been terminated for Cause in a
situation that is not subject to the provisions of this Section 5.5.
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ARTICLE VI
PAYMENT OF BENEFITS
-------------------
6.1 IN-SERVICE WITHDRAWALS PROHIBITED. Participants are not entitled
to receive their benefits prior to Termination.
6.2 LOANS. Participants may not borrow funds from the Plan.
6.3 DISTRIBUTIONS FOLLOWING TERMINATION. A vested Participant may
terminate employment and begin to receive a benefit in the unreduced amount
specified in Section 5.1 upon or after attaining age sixty (60).
A vested Participant who terminates employment prior to age sixty (60)
but after age fifty-five (55) shall receive a benefit commencing the first
day of the month following Termination, provided that the amount specified
under Section 5.1 shall be reduced by 0.4167% for each month by which the
Participant's age at commencement is less than age sixty (60). (See
Example A attached hereto and incorporated herein by this reference.)
(a) Payments may not commence until the first day of the month
following the later of the Participant's--
(i) Termination, or
(ii) Attainment of age fifty-five (55).
(b) With the consent of the Administrative Committee,
Participants may elect to defer the commencement of their benefits for
up to one (1) year; provided, however, that the benefit paid shall be
fixed at the time of deferral.
6.4 DEATH BENEFITS. If a Participant dies while employed by the
Company or a Related Company at a time when he is at least age forty-five
(45) with sixty (60) or more Months of Service, the Participant's
designated Beneficiary shall be entitled to a monthly benefit for fifteen
(15) years, commencing on the date as soon as practicable after the
Participant's death, in an amount equal to fifty-five percent (55%) of the
amount accrued to the Participant under Section 5.1; provided, however,
that for every month of age over age forty-five (45), the benefit paid
shall be increased by .1667% per Month of Service. (See Example B attached
hereto and incorporated herein by this reference.)
If a Participant dies while employed by the Company or a Related
Company at a time when he has become vested under Section 5.4 above, the
Participant's Beneficiary shall be entitled to a monthly benefit for
fifteen (15) years, commencing on the date of death in an amount equal to
one hundred percent (100%) of the amount accrued by the Participant under
Section 5.1, reduced as provided in Section 6.3 for each month by which the
first payment precedes the date upon which the Participant would have
reached age sixty (60).
If a Participant dies after Termination, then his surviving
Beneficiary shall be entitled to the payments hereunder, if any, that
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remain to be made during that portion of the original payout period
(selected by the Participant prior to Termination) following the date of
death.
A designated Beneficiary entitled to any retirement death benefit
under this Section 6.4 may elect, prior to commencement of payment, to
receive Actuarial Equivalent installments for ten (10) years.
6.5 DISABILITY. If a Participant becomes Disabled at any time
following attainment of age forty-five (45) and completion of sixty (60)
Months of Service, then such Participant shall, in lieu of any other
benefit described under this Plan, be entitled to a benefit commencing on
the final day of the twenty-fourth month of disability without regard to
the age of the Participant at the time of the disability calculated under
Section 5.1 using Compensation at the time the Participant became disabled,
in an amount equal to fifty-five percent (55%) of the amount accrued to the
Participant under Section 5.1; provided, however, that for every month of
age over age forty-five (45), the benefit paid shall be increased by .1667%
per Month of Service. (See Example B attached hereto and incorporated
herein by this reference.)
6.6 DESIGNATION OF BENEFICIARY.
(a) In the event benefits are payable under the Plan on behalf
of a deceased Participant who has a surviving spouse, the remaining
benefits will be paid to another Beneficiary only if the spouse
consents in writing to such designation.
(b) If there is no designated Beneficiary or surviving spouse,
the benefits will be paid to the Participant's estate.
6.7 MAILING OF PAYMENTS.
(a) All payments under the Plan shall be delivered in person
or mailed to the last address of the Participant (or, in the case of
the death of the Participant, to the last address of his Beneficiary).
(b) Each Participant shall be responsible for furnishing the
Administrative Committee with--
(i) His current address, and
(ii) The name and current address of his Beneficiary.
6.8 PAYEES UNDER LEGAL DISABILITY. Every person receiving or
claiming benefits under the Plan shall be conclusively presumed to be
mentally competent and of age until the Administrative Committee receives
written notice, in a form and manner acceptable to it, that such person is
incompetent or a minor, and that a guardian, conservator, statutory
committee, or other person legally vested with the care of his estate has
been appointed. In the event that the Administrative Committee finds that
any person to whom a benefit is payable under the Plan is unable to properly
care for his affairs,
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or is a minor, then any payment due (unless a prior claim therefor shall
have been made by a duly appointed legal representative) may be paid to the
spouse, a child, a parent, or a brother or sister, or to any person deemed by
the Administrative Committee to have incurred expense for such person otherwise
entitled to payment.
In the event a guardian or conservator or statutory committee of the
estate of any person receiving or claiming benefits under the Plan shall be
appointed by a court of competent jurisdiction, payment shall be made to
such guardian or conservator or statutory committee provided that proper
proof of appointment is furnished in a form and manner suitable to the
Administrative Committee.
Any payment made under the provisions of this section shall be a
complete discharge of liability therefor under the Plan.
6.9 WITHHOLDING FOR TAXES. Any payments out of the Plan shall be
reported to the applicable taxing authorities and may be subject to
withholding for taxes as may be required by any applicable federal, state
or other law.
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ARTICLE VII
OPERATION AND ADMINISTRATION OF THE PLAN
----------------------------------------
7.1 ADMINISTRATIVE COMMITTEE POWERS. The Administrative
Committee shall have all powers necessary to supervise the administration
of the Plan and control its operations. In addition to any powers and
authority conferred on the Administrative Committee elsewhere in the Plan
or by law, the Administrative Committee shall have the following powers and
authority:
(a) To designate agents to carry out responsibilities relating
to the Plan;
(b) To employ such legal, actuarial, accounting, clerical, and
other assistance as it may deem appropriate in carrying out the
provisions of this Plan;
(c) To establish rules and procedures from time to time for
the conduct of the Administrative Committee's business and the
administration of this Plan;
(d) To administer, interpret, and apply this Plan and to
decide all questions which may arise under this Plan. All
determinations by the Administrative Committee shall be binding upon
all parties, to the maximum extent permitted by law; and
(e) To perform or cause to be performed such further acts as
it may deem to be necessary, appropriate, or convenient in the
administration of the Plan.
7.2 COMPOSITION OF ADMINISTRATIVE COMMITTEE.
(a) The members of the Administrative Committee (who may, but
need not be Participants or even Employees) shall be appointed by the
Board of Directors and shall hold office until termination of such
status in accordance with the provisions of this Article VII.
(b) The term of the office of each member of the
Administrative Committee shall be determined in accordance with the
following rules:
(i) Any member of the Administrative Committee may
resign at any time by giving written notice to the other members
and to the Board of Directors, effective as of the date indicated
therein.
(ii) Any member of the Administrative Committee may be
removed by the Board of Directors at any time.
(iii) In the case of an Administrative Committee member
who is also an Employee of the Company or a Related Company, his
status as a Administrative Committee member shall terminate as of
the date of his Termination, except as otherwise provided in
resolutions of the Board of Directors.
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(c) Upon the death, resignation, or removal of any member of
the Administrative Committee, the Board of Directors may appoint a
successor. Notice of appointment of a successor member shall be given
by the Company in writing to the other members of the Administrative
Committee.
7.3 ADMINISTRATIVE COMMITTEE PROCEDURE.
(a) A majority of the members of the Administrative Committee
as constituted at any time shall constitute a quorum.
(b) Any action authorized by a majority of the members--
(i) Present at any meeting, or
(ii) In writing without a meeting,
shall constitute the actions of the Administrative Committee.
(c) Any member of the Administrative Committee is authorized
to execute any document or documents on behalf of the Administrative
Committee.
7.4 REPORTING AND DISCLOSURE. The Company (and not the
Administrative Committee) shall be responsible for the reporting and
disclosure of information required to be reported or disclosed pursuant to
ERISA or any other applicable law.
7.5 NOTICES AND COMMUNICATIONS.
(a) All applications, notices, designations, elections, and
other communications from Participants shall be in writing, on forms
prescribed by the Administrative Committee. These documents shall be
mailed or delivered to the office designated by the Administrative
Committee, and shall be deemed to have been given when received by
such office.
(b) Each notice, report, remittance, statement, or other
communication directed to a Participant or Beneficiary shall be in
writing and may be delivered in person or by mail. An item shall be
deemed to have been delivered and received by the Participant three
(3) days after the date when it is deposited in the United States Mail
with postage prepaid, addressed to the Participant or Beneficiary at
his last address of record with the Administrative Committee.
7.6 INDEMNIFICATION.
(a) To the maximum extent permitted by law, the Company shall
indemnify each member of the Board of Directors and of the
Administrative Committee, and every other Employee with duties under
the Plan, against expenses (including any amount paid in settlement)
reasonably incurred by him in connection with any claims against him
by reason of the performance of his duties under the Plan.
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(b) The right of indemnification specified in Section 7.6 (a)
above shall not apply with respect to matters as to which the
individual acted fraudulently or in bad faith.
(c) Notwithstanding the above, the Company shall have the
right to select counsel and to control the prosecution or defense of
the suit.
(d) Furthermore, the Company shall not be obligated to
indemnify any person for any amount incurred through any settlement or
compromise of any action unless the Company consents in writing to the
settlement or compromise.
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ARTICLE VIII
APPLICATION FOR BENEFITS
------------------------
8.1 APPLICATION FOR BENEFITS.
(a) The Administrative Committee may require any person
claiming benefits under the Plan (a "Claimant") to submit an
application therefor, together with such other documents and
information as the Administrative Committee may require.
(b) Within ninety (90) days following receipt of the
application and all necessary documents and information, the
Administrative Committee's authorized delegate reviewing the claim
shall furnish the Claimant with written notice of the decision
rendered with respect to the application.
(c) Should special circumstances require an extension of time
for processing the claim, written notice of the extension shall be
furnished to the Claimant prior to the expiration of the initial
ninety (90) day period.
(i) The notice shall indicate the--
(A) Special circumstances requiring an extension of
time, and
(B) The date by which a final decision is expected to
be rendered.
(ii) In no event shall the period of the extension
exceed ninety (90) days from the end of the initial ninety (90)
day period.
8.2 CONTENT OF DENIAL. In the case of a denial of the
Claimant's claim for benefits, the written notice shall set forth:
(a) The specific reasons for the denial;
(b) References to the Plan provisions upon which the denial is
based;
(c) A description of any additional information or material
necessary for perfection of the application (together with an
explanation of why the material or information is necessary); and
(d) An explanation of the Plan's claims review procedure.
8.3 APPEALS.
(a) In order to appeal the decision rendered with respect to
his application for benefits or with respect to the amount of his
benefits, the Claimant must follow the appeal procedures set forth in
this Section 8.3.
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(b) The appeal must be made, in writing--
(i) In the case where the claim is expressly rejected,
within sixty-five (65) days after the date of notice of the
decision with respect to the application, or
(ii) In the case where the claim has neither been
approved nor denied within the applicable period provided in
Section 8.1 above, within sixty-five (65) days after the
expiration of the period.
(c) The Claimant may request that his application be given
full and fair review by the Administrative Committee. The Claimant
may review all pertinent documents and submit issues and comments in
writing in connection with the appeal.
(d) The decision of the Administrative Committee shall be made
promptly, and not later than sixty (60) days after the Administrative
Committee's receipt of a request for review, unless special
circumstances require an extension of time for processing. In such a
case, a decision shall be rendered as soon as possible, but not later
than one hundred twenty (120) days after receipt of the request for
review.
(e) The decision on review shall--
(i) Be in writing,
(ii) Include specific reasons for the decision,
(iii) Be written in a manner designed to be understood
by the Claimant, and
(iv) Contain specific references to the pertinent Plan
provisions upon which the decision is based.
8.4 EXHAUSTION OF REMEDIES. No legal action for benefits
under the Plan may be brought unless and until the Claimant has exhausted
his remedies under this Article VIII.
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ARTICLE IX
MISCELLANEOUS MATTERS
---------------------
9.1 AMENDMENT OR TERMINATION.
(a) The Board of Directors may amend or terminate the Plan at
any time by an instrument in writing executed in the name of the
Company. However, no amendment may be adopted that would (i) reduce
the dollar value of a Participant's vested benefit (ii) eliminate a
form of benefit payment, or (iii) delay the date on which a
Participant's vested benefit becomes payable. A reduction in a
Participant's benefit resulting from a change in the interest rate
used in determining Actuarial Equivalence shall not be precluded by
reason of the prior sentence.
(b) After the occurrence of a Change in Control, no amendment
may be adopted that would affect (i) Section 2.6, (ii) Section 5.5, or
(iii) this Section 9.1(b).
(c) In the event of the termination of the Plan, all
Participants who are employed by the Company or a Related Company on
that date become fully vested. However, termination of the Plan will
not accelerate the date on which benefits become payable under the
Plan, except as otherwise provided in--
(i) Section 5.5, or
(ii) Resolutions of the Board of Directors.
9.2 EFFECT OF MERGER OF COMPANY.
(a) In the event of a consolidation, merger, sale,
liquidation, or other transfer of substantially all of the operating
assets of the Company to any other company, the ultimate successor or
successors to the business of the Company shall automatically be
deemed to have elected to continue this Plan in full force and effect,
in the same manner as if the Plan had been adopted by resolution of
its board of directors.
(b) The presumption set forth in Section 9.2(a) above shall
not apply if the successor, by resolution of its board of directors,
elects not to so continue this Plan in effect. In such a case, the
Plan shall terminate as of the effective date set forth in the board
resolution.
9.3 NO ENLARGEMENT OF EMPLOYEE RIGHTS.
(a) This Plan is strictly a voluntary undertaking on the part
of the Company and shall not be deemed to constitute a contract
between the Company (or a Related Company) and any Employee, or to be
consideration for, or an inducement to, or a condition of, the
employment of any Employee.
(b) Nothing contained in the Plan shall be deemed to give any
Employee the right to be retained in the employ of the Company (or a
Related Company) or to interfere with the right of
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the Company (or a Related Company) to discharge any Employee at any time.
9.4 RESTRICTIONS AGAINST ALIENATION. A Participant's benefit under
the Plan may not be assigned or alienated, either voluntarily or
involuntarily. However, the preceding sentence will not preclude the Plan
from reducing a Participant's benefit by the amount he owes to the Company
or a Related Company. Such a reduction will apply whether the benefit is
payable to the Participant or to his Beneficiary.
9.5 EMPLOYMENT AGREEMENTS. In the case of a Participant whose terms
of employment with the Company or a Related Company are subject to the
provisions of an employment agreement, to the extent that the terms of the
employment contract provide the Participant with greater benefits than
would otherwise be determined under the provisions of the Plan, the terms
of the employment contract shall prevail.
9.6 INTERPRETATION.
(a) Article and Section headings are for reference only and
shall not be deemed to be part of the substance of this instrument or
to enlarge or limit the contents of any Article or Section.
(b) Unless the context clearly indicates otherwise, masculine
gender shall include the feminine, the singular shall include the
plural, and the plural shall include the singular.
(c) In the case of any ambiguity, the Plan shall be construed
in such a manner so as to comply with the provisions of ERISA,
including the fact that it is intended that the Plan be exempt from
the requirements of Parts II, III, and IV of Title I of ERISA pursuant
to Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA.
IN WITNESS WHEREOF, Mattel, Inc. has caused this instrument to be
executed by its duly authorized officer.
MATTEL, INC.
BY: /s/ E. Joseph McKay
-------------------------
ITS: Senior Vice President,
Human Resources
--------------------------
DATE: July 2, 1996
--------------------------
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