SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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December 15, 1998
Date of Report (Date of earliest event reported)
MATTEL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 001-05647 95-1567322
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
333 Continental Boulevard, El Segundo, California 90245-5012
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(Address of principal executive offices) (zip code)
(310) 252-2000
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Registrant's telephone number, including area code
Item 5. Other Events
On December 14, 1998, Mattel, Inc. ("Mattel") announced that its sales volume
and earnings for the fourth quarter and year ending December 31, 1998 will be
negatively impacted by a substantial decline in re-orders from retailers. Mattel
said it expects its 1998 sales to be flat with last year and expects its
earnings for the year to be approximately $1.20 per share, a 33% decline from
its prior estimate, before the charge related to its previously announced Power
Wheels recall.
Also on December 14, 1998, Mattel and The Learning Company, Inc. ("TLC"), the
world's second largest consumer software company, announced that they have
signed a definitive agreement for the merger of their two companies (the
"Merger"). The terms of the Merger are set forth in an Agreement and Plan of
Merger, dated as of December 13, 1998 (the "Merger Agreement"), between Mattel
and TLC. Under the terms of the Merger Agreement each share of TLC will be
exchanged for shares of Mattel having a value of $33, subject to a maximum of
1.2 shares and a minimum of 1.0 shares. The Merger Agreement provides that upon
consummation of the Merger, TLC will be merged with and into Mattel.
Consummation of the Merger is subject to various conditions set forth in the
Merger Agreement. In connection with the Merger Agreement, Mattel and TLC
entered into an Option Agreement, dated as of December 13, 1998 (the "Option
Agreement"), pursuant to which TLC granted to Mattel the right to purchase up to
18% of TLC's outstanding common stock. The option granted pursuant to the Option
Agreement is exercisable upon the occurrence of certain events, none of which
has occurred at the time of this filing. Also in connection with the Merger
Agreement, certain stockholders of TLC entered into stockholder support
agreements (the "Stockholder Support Agreements"), with Mattel, pursuant to
which such stockholders agreed to vote their shares in favor of the approval and
adoption of the Merger Agreement.
The foregoing description of the Merger, the Merger Agreement, the Option
Agreement and the Stockholder Support Agreements is qualified in its entirety by
reference to the Merger Agreement, the Option Agreement and the Stockholder
Support Agreements, copies of which are filed herein as Exhibits, and which are
incorporated herein by this reference.
Note:
Forward-looking statements included in this Report with respect to the Merger
and the financial condition, results of operations and business of Mattel, which
include, but are not limited to, Mattel's sales levels, earnings, re-orders from
retailers, special charges, costs savings, and profitability, are subject to
certain risks and uncertainties that could cause actual events and results to
differ materially from those set forth in such statements. Such risks and
uncertainties include, without limitation: the possible inability of Mattel and
TLC to complete the Merger as scheduled, if at all, and those associated with
the ability of the combined company to achieve the anticipated benefits of the
Merger; Mattel's dependence on the timely development, introduction and customer
acceptance of new products; significant changes in buying patterns of major
customers; possible weaknesses of international markets; the impact of
competition on revenues and margins; Mattel's ability to successfully integrate
the operations of TLC following the Merger; the effect of currency fluctuations
on reportable income; unanticipated negative results of litigation, governmental
proceedings or environmental matters; and other risks and uncertainties as may
be detailed from time to time in Mattel's public announcements and SEC filings.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits:
2.1 Agreement and Plan of Merger, dated as of December 13, 1998, between
Mattel, Inc. and The Learning Company, Inc.
99.1 Stock Option Agreement, dated as of December 13, 1998, between Mattel,
Inc. and The Learning Company, Inc.
99.2 Stockholder Support Agreement, dated as of December 13, 1998, between
Mattel, Inc. and certain stockholders of The Learning Company, Inc.
99.3 Stockholder Support Agreement, dated as of December 13, 1998, between
Mattel, Inc. and certain stockholders of The Learning Company, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 15, 1998
MATTEL, INC.
Registrant
By: /s/ Lee B. Essner
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Name: Lee B. Essner
Title: Assistant General Counsel
and Assistant Secretary
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