EXHIBIT 99.7
MATTEL, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
April 1, 1994
TABLE OF CONTENTS
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Page
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 . . . . . . . . . . . . . . . . . . . 4
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 Form of Distributions . . . . . . . . . . . 9
5.3 Vesting . . . . . . . . . . . . . . . . . . 9
5.4 Change of Control . . . . . . . . . . . . 10
TABLE OF CONTENTS
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Page
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 . . . . . . 14
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 . . . . . . . . . . . . . 17
ARTICLE VIII - APPLICATION FOR BENEFITS . . . . . . . . . . . 18
8.1 Application for Benefits. . . . . . . . . 18
8.2 Content of Denial . . . . . . . . . . . . 18
8.3 Appeals . . . . . . . . . . . . . . . . . 19
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. Supplemental Executive Retirement
Plan, dated as of April 1, 1994 (the "Plan"). 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 two different
forms of benefit payments, or 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
reason (other than natural causes, including death,
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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 and Short Term 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";
(iii) Amounts deferred by the Employee pursuant to
non-qualified deferred compensation plans, regardless of
3
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.
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.
2.14 ERISA. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
4
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, resigna-
tion, 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
-------------------
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 5.3 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 Form of Distributions.
(a) Benefits will be paid in the form of monthly
installments over a period of fifteen (15) years; provided,
however, that the Administrative Committee may in its sole
discretion elect to pay benefits other than monthly so long as
they are paid at least annually.
(b) A Participant may irrevocably elect, at any time
prior to Termination, to receive his benefits in installments
over ten (10) years. If the Participant elects that his
benefits be paid over ten (10) years, the amount of the monthly
installments will be adjusted so that they are the Actuarial
Equivalent of monthly installments for fifteen (15) years.
(c) Except as may be provided in Sections 3.1(c) and
5.4, 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.
5.3 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
9
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.
5.4 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 5.4(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 5.4(a) above), shall become
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 5.4(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 5.4(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.
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(c) If the Board of Directors elects to delay or suspend
payment of benefits following a Change in Control pursuant to
Section 5.4(b), and a Participant whose benefits were fully
vested upon such Change of Control pursuant to Section 5.4(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 5.4(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 5.4.
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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 5.3 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).
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If a Participant dies after Termination, then his surviving
Beneficiary shall be entitled to the payments hereunder, if any, that
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.
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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,
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.
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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.
(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.
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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.
(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 5.4, 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 5.4, 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
20
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
-------------------
E. JOSEPH MCKAY
Its: Senior Vice President
---------------------
Date: January 31, 1995
----------------
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