Exhibit 10.11
AMENDMENT
TO
EXECUTIVE EMPLOYMENT
AGREEMENT
WHEREAS, Mattel, Inc. (“ Mattel ”) and
Robert A. Eckert (the “ Executive ”) have
entered into an Executive Employment Agreement dated
October 18, 2000, as amended March 18, 2005 (the “
Agreement ”);
WHEREAS, pursuant to Section 13 of the Agreement,
Mattel and the Executive may amend the Agreement pursuant to a
written instrument executed by the Executive and Mattel;
and
WHEREAS, as a result of the enactment in 2004 of
Section 409A of the Internal Revenue Code of 1986, as amended
from time to time (the “ Code ”), the Company
and the Executive desire to amend the Agreement to evidence the
intention that the terms of the Agreement be exempt from or comply
with Section 409A of the Code.
NOW, THEREFORE,
pursuant to Section 13 of the
Agreement, the Agreement is hereby amended, effective as of
December 31, 2008, as follows:
1. Capitalized Terms .
Capitalized terms that are not defined in this Amendment shall have
the meanings ascribed thereto in the Agreement.
2. The reference to
Section 14(b) in Sections 1 and 4(f) of the Agreement shall be
amended to reference Section 15(b).
3. The second sentence of
Section 3(e)(ii) of the Agreement shall be amended in its
entirety to read as follows:
“The shares issuable as a
result of the vesting of such restricted stock units before
January 1, 2005 shall be delivered by Mattel to the Executive
by the earlier of: (A) April 1 of the year that next
follows the end of the calendar year during which the Executive
ceases to be employed by Mattel; or (B) thirteen
(13) months following the earliest date when the entire
payment would be tax deductible under all pertinent federal tax
laws, including Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”), without affecting the
deductibility of $1 million of the Executive’s Base Salary in
any year, as determined by the reasonable belief of the
Board’s Compensation Committee.”
4. Section 3(e)(ii) of the
Agreement shall be amended by adding the following language at the
end thereof to read as follows:
“The shares issuable as a
result of the restricted stock units vesting on June 30, 2008
shall be delivered by Mattel to the Executive upon the later of:
(1) April 1 of the calendar year following the end of the
calendar year in which the Executive experiences a
“separation from service” as defined for purposes of
Section 409A of the Code (a “Separation from
Service”); or (2) the date that is six (6) calendar
months following the Executive’s Separation from
Service.”
5. The first sentence of
Section 3(g)(i) of the Agreement shall be amended in its
entirety to read as follows:
“Upon termination of
employment, the Executive will be entitled to receive from Mattel a
supplemental retirement benefit which, when expressed as a single
life annuity and added to any benefits payable under the Mattel,
Inc. 2005 Supplemental Executive Retirement Plan (also expressed as
a single life annuity), will produce an aggregate annual pension
benefit at age 60 (the “Age 60 Pension”) which is not
less than 35% of (i) the Executive’s average annual
compensation or, if greater, (ii) $2,500,000, the sum of the
Executive’s initial annual Base Salary under
Section 3(a) and initial target annual bonus under
Section 3(c), subject to the possible reductions described in
paragraph (ii), below.”
6. Section 3(g)(iii) of the
Agreement shall be amended in its entirety to read as
follows:
“(iii) Actuarial Reduction
of Supplemental Pension . In the event Executive’s Age 60
Pension commences prior to age 60 in accordance with
Section 3(g)(iv), the Age 60 Pension shall be subject to a
reduction of 3% for each full year that the pension commences prior
to age 60. In the event of a Change of Control, the 3% discount for
early commencement will be measured from age 55.”
7. Section 3(g)(iv) of the
Agreement shall be amended in its entirety to read as
follows:
“(iv) Form and Time of
Payment of Supplemental Pension and Survivor Benefits . The Age
60 Pension shall be paid in the same form and at the same time as
the Executive’s benefit under Mattel’s Supplemental
Executive Retirement Plan is paid. In the event of the
Executive’s death before the Age 60 Pension becomes payable,
his wife
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will receive, commencing as soon as
practicable after the Executive’s death during the calendar
year in which the Executive’s death occurred, a survivor
annuity for her life equal to 50% of the amount which would have
been payable to the Executive if he had terminated his employment
for Good Reason immediately prior to the date of his death, subject
to possible reduction in accordance with Section 3(g)(iii).
Any such survivor benefit will be reduced by the amount of any
pre-retirement survivor benefit payable to the Executive’s
wife under the Mattel, Inc. 2005 Supplemental Executive Retirement
Plan.”
8. Section 3(k) of the
Agreement is amended in its entirety to read as follows:
“(k) Fringe Benefits .
During the Term, the Executive shall be entitled to fringe benefits
at a level at or above those available to other senior executives
of Mattel, including a leased automobile, car and driver (at his
disposal whenever required by him), personal and home security, and
related expenses, as well as first class travel expenses while
traveling on Mattel business, the use of a company-issued gasoline
credit card, club memberships and related expenses, and financial
counseling and tax preparation services in accordance with the
policies of Mattel as in effect from time to time with respect to
senior executives employed by Mattel. In addition, Executive shall
be entitled to the use of company-owned aircraft for personal use
up to sixty (60) hours per year, to the extent available,
while he serves as chief executive officer of Mattel. In the event
Mattel ceases to own an interest in aircraft during the Term,
Mattel shall provide instead for charter flights arranged by Mattel
at its expense on equivalent aircraft. Mattel shall promptly make
cash payments to the Executive in the amounts necessary to make him
whole for all applicable federal, state and local income, social
security, employment and similar taxes (collectively,
“Taxes”) imposed on him as a result of his use of the
company aircraft (or charter flights, as applicable) pursuant to
the foregoing, as well as for all Taxes on such cash payments;
provided, however, that any such Tax gross-up payment shall in all
events be paid no later than the end of the Executive’s
taxable year immediately following the Executive’s taxable
year in which the Taxes are remitted to the Internal Revenue
Service or any other applicable taxing authority.”
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9. Section 3(l) of the
Agreement is amended in its entirety to read as follows:
“(l) Vacation . During
the Term, the Executive shall be entitled to paid vacation in
accordance with the policies and practices of Mattel as in effect
from time to time with respect to senior executives employed by
Mattel.”
10. The first sentence of
Section 4(a) of the Agreement shall be amended by adding the
following proviso at the end thereof to read as follows:
“; provided,
further, that all such payments in respect of the Executive’s
death pursuant to this Section 4(a) shall be paid to the
Executive’s estate no later than March 15th of the
calendar year following the calendar year in which the Executive
dies, including, if applicable, a final lump sum payment on
March 15 th (or the last business day
immediately prior thereto) of the calendar year following the
Executive’s death, such that the aggregate of such payments
in respect of the continued Base Salary equals 50% of the
Executive’s annual Base Salary at the rate in effect at the
time of death.”
11. The first paragraph of
Section 4(c) of the Agreement shall be amended in its entirety
to read as follows:
“(c) Good Reason . The
Executive may terminate his employment for Good Reason. For
purposes of this Agreement, “Good Reason” means the
good faith determination by the Executive that any one or more of
the following have occurred, provided that (i) the Executive
provides Mattel with written notice of the Good Reason event within
ninety (90) days of the initial existence of such event,
(ii) such event is not remedied by Mattel within thirty
(30) days following the delivery of written notice of such
Good Reason event, and (iii) the Executive actually terminates
his employment within two (2) years following the initial
existence of such Good Reason event:”
12. Section 4(c)(i) of the
Agreement shall be amended in its entirety to read as
follows:
“(i) without the express
written consent of the Executive, any material diminution in any of
the duties, authority, or responsibilities of the Executive as
contemplated by this Agreement;”
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13. Section 4(c)(iii) of the
Agreement shall be amended in its entirety to read as
follows:
“(iii) any other action or
inaction that constitutes a material breach of this Agreement by
Mattel;”
14. Section 4(c)(iv) of the
Agreement shall be amended in its entirety to read as
follows:
“(iv) any failure by Mattel to
obtain the assumption and agreement to perform this Agreement by a
successor as contemplated by Section 12(b), except where such
assumption and agreement occurs by operation of law;
or”
15. Section 4(c)(vi) of the
Agreement shall be deleted in its entirety.
16. Section 4(e)(i) of the
Agreement shall be amended in its entirety to read as
follows:
“(i) the acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
either (i) the then-outstanding shares of common stock of
Mattel (the “Outstanding Company Common Stock”) or
(ii) the combined voting power of the then outstanding voting
securities of Mattel entitled to vote generally in the election of
directors (the “Outstanding Company Voting
Securities”); provided, however , that for purposes of
this subsection (i), the following shall not constitute a Change of
Control: (a) any acquisition directly from Mattel,
(b) any acquisition by Mattel or any corporation controlled by
Mattel, (c) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Mattel or any corporation
controlled by Mattel, (d) any acquisition by a Person of 35%
or more of either the Outstanding Company Common Stock or the
Outstanding Company Voting Securities as a result of an acquisition
of common stock of Mattel by Mattel which, by reducing the number
of shares of common stock of Mattel outstanding, increases the
proportionate number of shares beneficially owned by such Person to
35% or more of either the Outstanding Company Common Stock or the
Outstanding Company Voting Securities; provided, however ,
that if a Person shall become the beneficial owner of 35% or more
of either the
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Outstanding Company Common Stock or
the Outstanding Company Voting Securities by reason of a share
acquisition by Mattel as described above and shall, after such
share acquisition by Mattel, become the beneficial owner of any
additional shares of common stock of Mattel, then such acquisition
shall constitute a Change of Control or (e) any acquisition
pursuant to a transaction which complies with clauses (a),
(b) and (c) of subsection (iii) of this
Section 4(e); or”
17. Section 4(e)(iii)(b) of the
Agreement shall be amended in its entirety to read as
follows:
“(b) no Person (excluding any
employee benefit plan (or related trust) of Mattel or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 35% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination and”
18. The final paragraph of
Section 4(e) of the Agreement shall be deleted in its
entirety.
19. Section 5(a)(i) of the
Agreement shall be amended in its entirety to read as
follows:
“(i) As of the Date of
Termination, the Executive’s family shall be entitled to
continued healthcare coverage as in effect from time to time on the
same terms and conditions as such insurance is available to active
employees of Mattel and financial counseling benefits through the
vendor engaged and paid for by Mattel until the third anniversary
of the Date of Termination;”
20. Section 5(a)(ii) of the
Agreement shall be amended in its entirety to read as
follows:
“(ii) From and after the Date
of Termination, the Executive’s beneficiaries shall be
entitled to receive those benefits payable to the Executive’s
surviving spouse or other named beneficiaries under the provisions
of any applicable Mattel plan or program and/or as provided for
under Section 3(g), above, including, without
limitation,
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any benefits commencing immediately
upon the Executive’s death;”
21. Section 5(a)(iii) of the
Agreement shall be amended in its entirety to read as
follows:
“(iii) On the Date of
Termination, all options to purchase stock of Mattel theretofore
granted to the Executive (“Options”) and not exercised
by the Executive shall become fully vested and shall be exercisable
by his legal representatives for a period of ten (10) years
from the date each such Option was granted (but in no event beyond
the stated term of such Option); and”
22. The reference to
Section 5(d)(v) in Section 5(b)(ii) of the Agreement
shall be amended to reference Section 5(d)(vi).
23. Section 5(b)(iii) of the
Agreement shall be amended in its entirety to read as
follows:
“(iii) all supplemental
retirement benefits for which the Executive is or shall become
eligible shall be paid in accordance with the terms and conditions
of such arrangements;”
24. Section 5(b)(iv) of the
Agreement shall be amended in its entirety to read as
follows:
“(iv) on the Disability
Effective Date, all Options theretofore granted to the Executive
and not exercised by the Executive shall become fully vested and
shall be exercisable for a period of ten (10) years from the
date each such Option was granted (but in no event beyond the
stated term of such Option); and”
25. The first paragraph of
Sections 5(d)(i) of the Agreement shall be amended in its
entirety to read as follows:
“(i) Mattel shall pay to the
Executive in a lump sum in cash on the 55th day after the Date of
Termination (or the first business day thereafter) the aggregate of
the following amounts:”
26. Sections 5(d)(i)(B),
5(d)(i)(C) and 5(d)(ii) of the Agreement shall be amended by adding
the phrase, “subject to Section 5(e),” at the
beginning of such provisions.
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27. Section 5(d)(iii) of the
Agreement shall be amended in its entirety to read as
follows:
“(iii) Any Options theretofore
granted to the Executive under Mattel’s stock option plans,
other than Mattel’s 1997 Premium Price Stock Option Plan or
any successor thereto, shall become immediately exercisable and the
Executive shall have until the date which is ten (10) years
from the date each such Option was granted to exercise each such
Option (but in no event beyond the stated
