<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
MATTEL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
MATTEL, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the contrary pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
- --------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:_________________________________________________
(2) Form, Schedule or Registration Statement No.:___________________________
(3) Filing Party:___________________________________________________________
(4) Date Filed:_____________________________________________________________
Notes:
<PAGE>
[LETTERHEAD OF MATTEL, INC.]
- --------------------------------------------------------------------------------
JOHN W. AMERMAN MATTEL, INC.
Chairman and Chief Executive Officer 333 Continental Boulevard
El Segundo, CA 90245-5012
Telephone 310 524 2000
March 28, 1994
To Our Stockholders:
On behalf of the Board of Directors, I am pleased to invite you to the Annual
Meeting of Stockholders of Mattel, Inc. to be held May 11, 1994 at 10:00 a.m.,
local time, in the Manhattan Ballroom of the Radisson Plaza Hotel, 1400
Parkview Avenue, Manhattan Beach, California. I look forward to greeting you
personally and reporting on the progress of your company.
The items of business to be acted on during the meeting are listed in the
Notice of Annual Meeting of Stockholders and are described more fully in the
Proxy Statement. The formal business of the meeting will also include a report
on operations followed by a question and discussion period.
To ensure that your shares will be represented, I urge you to vote, date,
sign and mail the enclosed proxy in the envelope which is provided whether or
not you expect to be present. You may, of course, attend the Annual Meeting and
vote in person even if you have previously returned your proxy card.
I hope to see you at the meeting.
Sincerely,
/s/ JOHN W. AMERMAN
John W. Amerman
Chairman and Chief Executive Officer
<PAGE>
MATTEL, INC.
333 Continental Boulevard
El Segundo, California 90245
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 11, 1994
The Annual Meeting of the Stockholders of MATTEL, INC. will be held
Wednesday, May 11, 1994 at 10:00 a.m., local time, in the Manhattan Ballroom of
the Radisson Plaza Hotel, 1400 Parkview Avenue, Manhattan Beach, California, to
consider and act upon the following matters:
1. The election of directors;
2. The approval of the Mattel Management Incentive Plan;
3. The approval of the Mattel Long-Term Incentive Plan;
4. The ratification of the selection of Price Waterhouse as the
Company's independent accountants for the year ending December 31,
1994; and
5. Such other business as may properly come before the meeting or any
adjournment thereof.
Shares represented by properly executed proxies hereby solicited by the Board
of Directors of Mattel will be voted in accordance with instructions specified
therein. It is the intention of the Board of Directors that shares represented
by proxies which are not limited to the contrary will be voted in favor of the
election as directors of the persons named in the accompanying Proxy Statement,
for proposals 2, 3 and 4 and on other matters as recommended by the Board.
The Board of Directors has fixed the close of business on March 22, 1994 as
the record date for determination of stockholders entitled to receive notice
of, and to vote at, the meeting and any adjournment thereof.
By Order of the Board of Directors
N. Ned Mansour, Secretary
March 28, 1994
IT IS DESIRABLE THAT AS LARGE A PROPORTION AS POSSIBLE OF THE STOCKHOLDERS'
INTEREST BE REPRESENTED AT THE MEETING. THEREFORE, IF YOU ARE UNABLE TO BE
PRESENT IN PERSON OR OTHERWISE REPRESENTED AT THE MEETING, YOU ARE REQUESTED TO
SIGN AND RETURN THE ENCLOSED PROXY IN ORDER THAT YOUR STOCK WILL BE
REPRESENTED.
<PAGE>
MATTEL, INC.
333 Continental Boulevard
El Segundo, CA 90245
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Mattel, Inc. ("Mattel" or the "Company"),
a Delaware corporation, to be used in voting at the Annual Meeting of
Stockholders to be held at 10:00 a.m., local time, Wednesday, May 11, 1994 in
the Manhattan Ballroom of the Radisson Plaza Hotel, 1400 Parkview Avenue,
Manhattan Beach, California, and at any adjournment of such meeting.
A form of proxy is enclosed for use at this meeting. Any proxy given may be
revoked by a stockholder at any time before it is voted at the meeting or any
adjournment thereof by filing with the Secretary of Mattel a notice in writing
revoking it or by duly executing and delivering to the Secretary of Mattel or
the inspectors of election a proxy bearing a later date. Proxies may also be
revoked by any stockholder present at the meeting who expresses a desire to
vote his shares in person. Unless contrary instructions are indicated on the
proxy, all shares represented by valid proxies received pursuant to this
solicitation (and not revoked before they are voted) will be voted in favor of
the election as directors of the persons named below, to approve the Mattel
Management Incentive Plan (Proposal No. 2), to approve the Mattel Long-Term
Incentive Plan (Proposal No. 3), and for the ratification of the appointment of
Price Waterhouse as the Company's independent accountants (Proposal No. 4).
With respect to the election of directors, the votes represented by a proxy
may, in the discretion of the person or persons acting under the proxy, be
cumulated and voted for one or more director(s) or voted equally for all
directors.
Only stockholders of record at the close of business on March 22, 1994 are
entitled to receive notice of and to vote at the Annual Meeting and any
adjournment thereof. On that date, Mattel had outstanding approximately 178
million shares of $1 par value Common Stock ("Common Stock") and 864,293 shares
of Convertible Preference Stock, Series F, par value $0.01 per share ("Series F
Stock"). The holder of each share of Common Stock is entitled to one vote and
the holders of each share of Series F Stock is entitled to 1.875 votes, on each
matter to be considered at the meeting other than the election of directors.
The holders of such shares vote together as a single class. In electing
directors, each stockholder has the unconditional right to cumulate his votes
and give one candidate the number of votes equal to the number of directors to
be elected multiplied by the number of votes per share of such stock held in
his name or to distribute his votes among as many candidates as he sees fit. A
stockholder may cumulate his votes by writing the name or names of the nominee
or nominees with respect to whom he is withholding his vote in the space
provided on the proxy card and the shares voted will be cumulated in the manner
described above and voted for the remaining director or spread equally,
adjusted to whole votes, among the remaining directors. The presence, in person
or by properly executed proxy, of holders of a majority of all of the shares of
Common Stock and Series F Stock entitled to vote is necessary to constitute a
quorum at the Annual Meeting. The eleven persons receiving the most votes will
be elected directors of the Company (Proposal No. 1) provided that a quorum is
present at the Annual Meeting. The approval of each of Proposal No. 2 and
Proposal No. 3 and the ratification of Proposal No. 4 requires the affirmative
vote of a majority of the votes cast on that item, provided that a quorum is
present at the Annual Meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions
are counted in tabulating the votes cast on proposals presented to
stockholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
<PAGE>
ELECTION OF DIRECTORS
A Board of eleven directors is to be elected at the meeting. Unless otherwise
directed, the persons named in the accompanying proxy will vote the shares
represented thereby for the election as directors of the eleven nominees named
below. The directors elected will serve until the next Annual Meeting of
Stockholders and until their respective successors have been duly elected and
qualified.
Each of the nominees named herein has consented to be named in this Proxy
Statement and has consented to serve as a director if elected. However, should
any nominee named herein for the office of director become unable or unwilling
to accept nomination or election, it is intended that the person or persons
acting under the proxies will vote for the election in his stead of such other
person, if any, as the Board of Directors may recommend.
The following table sets forth certain information as of March 15, 1994 with
respect to those persons who are nominees for election as directors.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND PRINCIPAL DIRECTOR OF COMMON STOCK
OCCUPATION OR POSITION SINCE OWNED BENEFICIALLY(1)
---------------------- -------- ---------------------
<S> <C> <C>
John W. Amerman................................ 1985 609,387(2)
Chairman of the Board and Chief Executive Of-
ficer, (also a Director of Unocal, Inc.) age
62
Jill E. Barad.................................. 1991 222,962(2)
President and Chief Operating Officer, (also a
Director of Reebok International Ltd.) age 42
Dr. Harold Brown............................... 1991 1,961,723(3)(4)
Senior Managing Director of E.M. Warburg, Pin-
cus & Co., Inc. (also a Director of Interna-
tional Business Machines Corporation, CBS
Inc., Cummins Engine Company, AMAX, Inc. and
Philip Morris Companies, Inc.) age 66
James A. Eskridge.............................. 1993 181,171(2)
President of Fisher-Price, Inc. (also a Direc-
tor of Vestar, Inc.) age 51
Tully M. Friedman ............................. 1984 16,505
Co-Managing Partner of Hellman & Friedman, a
private investment firm (also a Director of
Levi Strauss Associates, Inc., McKesson Corpo-
ration and General Cellular Corporation) age
52
Ronald M. Loeb................................. 1970 53,631
Partner in the law firm of Irell & Manella,
age 61
Edward H. Malone............................... 1984 1,241
Retired Vice President of General Electric Co.
(also a Director of Allegheny Power System,
Inc., Corporate Property Investors, General Re
Corporation, and a Trustee of the Fidelity
group of mutual funds) age 69
Edward N. Ney.................................. 1993 5,000
Chairman, Board of Advisors, Burson-Marsteller
(also a Director of American Barrick, Fortune
Bank and The Horsham Corporation) age 68
William D. Rollnick............................ 1984 178,926
Chairman and a Director of Genstar Rental
Electronics, Inc., age 62
John L. Vogelstein............................. 1983 2,308,598(3)(5)
Vice Chairman and a Director of E.M. Warburg,
Pincus & Co., Inc. (also a director of All
Star Inns G.P., Inc., ADVO-System, Inc.,
Community Newspapers, Inc. and Magma Copper
Company) age 59
Lindsey F. Williams............................ 1991 265,312(2)(6)
President, Mattel International, age 57
</TABLE>
2
<PAGE>
- --------
(1) See "Security Ownership of Certain Beneficial Owners and Management" for
additional information regarding the ownership of shares listed.
(2) Includes shares which the following named directors currently have the
right to acquire by exercise of options under the Company's stock option
plan: Amerman 109,387; Barad 31,261; Eskridge 23,438; and Williams 18,750.
(3) Warburg, Pincus Capital Partners ("WPCP") owns 1,933,598 shares of Common
Stock. The sole general partner of WPCP is Warburg, Pincus & Co., a New
York general partnership ("WP"). E.M. Warburg, Pincus & Co., Inc. ("EMW"),
through a wholly owned subsidiary, manages WPCP. WP owns all of the
outstanding stock of EMW and, as the sole general partner of WPCP, has a
20% interest in the profits of WPCP. EMW owns 1.5% of the limited
partnership interests in WPCP. Messrs. Vogelstein and Brown, directors of
the Company, are Vice Chairman and Senior Managing Director, respectively,
of EMW and general partners of WP. As such, Messrs. Vogelstein and Brown
may be deemed to have an indirect pecuniary interest (within the meaning
of Rule 16a-1 under the Securities Exchange Act of 1934) in an
indeterminate portion of the shares beneficially owned by WPCP, EMW and
WP. See Notes 4 and 5 below.
(4) 28,125 of the shares indicated above are owned directly by Dr. Brown. The
remaining 1,933,598 shares indicated as owned by Dr. Brown are owned
directly by WPCP and are included because of Dr. Brown's affiliation with
WPCP. Dr. Brown disclaims "beneficial ownership" of these shares within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934. See
Note 3 above.
(5) 375,000 of the shares indicated above are owned directly by Mr.
Vogelstein. The remaining 1,933,598 shares indicated as owned by Mr.
Vogelstein are owned directly by WPCP and are included because of Mr.
Vogelstein's affiliation with WPCP. Mr. Vogelstein disclaims "beneficial
ownership" of these shares within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934. See Note 3 above.
(6) Includes 37,500 shares of Common Stock held in trust for Mr. Williams'
children and as to which he disclaims beneficial ownership.
Except as set forth below, each of the directors has served in the capacity
indicated in the table for the past five years. Ms. Barad has served in the
capacity indicated since August 1992. Prior to that, she served as an
executive officer of Mattel for more than five years. Mr. Eskridge has served
in the capacity indicated since November 1993. Prior to that, he was Executive
Vice President-Chief Financial Officer of Mattel from December 1988 through
November 1993. Mr. Ney has served in the capacity indicated since 1992. From
March 1989 through July 1992 he was U.S. Ambassador to Canada.
Mattel has an Audit Committee chaired by Mr. Rollnick and having Messrs.
Friedman, Loeb and Vogelstein as members. During 1993, the Committee held four
meetings. The primary functions which it performs are: (1) review of periodic
financial statements and certain financial information before publication; (2)
discussion of the scope of the independent accountants' engagement and review
of the independent accountants' performance, reports and fees; (3) review of
the scope and adequacy of Mattel's financial controls, internal audit plans
and the findings of internal audit examinations; and (4) recommendation of the
selection of independent accountants.
Mattel's Executive/Finance Committee, chaired by Mr. Vogelstein and having
Messrs. Amerman, Friedman, Malone and Rollnick as members, also functions as a
Nominating Committee. During 1993, the Executive/Finance Committee held three
meetings. The Executive/Finance Committee has all the powers of the Board of
Directors subject to limitations of applicable law. Sitting as a Nominating
Committee, its primary functions are to: (1) submit to the Board for
consideration nominees for membership to be presented to the stockholders for
their election at the Annual Meeting of Stockholders; (2) solicit
recommendations and select persons as candidates to fill vacancies on the
Board; and (3) present to the Board its recommendations for committee
assignments. The Committee will consider nominee recommendations by the
stockholders. The names of any such nominee should be sent to the Corporate
Secretary, Mattel, Inc., 333 Continental Boulevard, El Segundo, CA 90245.
Mattel has a Compensation/Options Committee which is chaired by Mr.
Vogelstein and of which Messrs. Malone and Rollnick are members. During 1993,
the Compensation/Options Committee held six meetings. Its primary functions
are to: (1) review compensation levels of members of management, evaluate the
performance of management and consider management succession and related
matters; and (2) develop and administer the various incentive plans, including
the Company's stock option plan and incentive compensation plans.
During 1993, the Board of Directors of Mattel held four meetings. Each
director attended at least 75% of (1) the total number of Board meetings and
(2) the total number of meetings held by all committees of the Board on which
the Board member served during such year.
3
<PAGE>
REPORT OF THE COMPENSATION/OPTIONS COMMITTEE
To: The Board of Directors
The Compensation/Options Committee (the "Committee"), a committee composed
entirely of directors who have never served as officers of the Company,
develops and administers the Company's various incentive plans, including its
stock option plan, its Management Incentive Plan and its Long-Term Incentive
Plan. In addition, the Committee reviews compensation levels of members of
management, evaluates the performance of management and considers management
succession and related matters. In evaluating the performance of members of
management, the Committee consults with the Chief Executive Officer except when
reviewing his performance, in which case the Committee meets independently. The
Committee reviews with the Board in detail all aspects of compensation for the
senior executives, including the five individuals named in the Summary
Compensation Table (the "Compensation Table"). The Committee met six times
during 1993.
In establishing and evaluating the effectiveness of compensation programs for
executive officers, as well as other employees of the Company, the Committee is
guided by three basic principles:
. The Company must offer competitive salaries to be able to attract and
retain highly-qualified and experienced executives and other management
personnel;
. Executive cash compensation in excess of base salaries should be tied to
Company and individual performance; and
. The financial interests of the Company's senior executives should be
aligned with the financial interests of the stockholders, primarily
through stock option grants, restricted stock and a Long-Term Incentive
Plan.
The Company has retained the services of Hewitt Associates, a compensation
consulting firm, to assist the Committee in connection with the performance of
its various duties including developing compensation plans to achieve this
policy. Hewitt Associates has been retained by the Company in this capacity
since 1987.
Hewitt Associates also provides data and advice to the Committee with respect
to the compensation paid to senior officers of the Company. In doing so, that
firm takes into account the manner in which such compensation compares to
compensation paid by other companies in the toy and related industries as well
as the Company's performance. The group of companies surveyed for compensation
analysis includes two toy companies, one of which is included in the peer group
index in the Performance Graph in this Proxy Statement and three other
companies included in such index. Reflecting the performance of the Company,
which significantly exceeded that of its peer group and companies that comprise
the S&P 500, the Company's compensation package, when performance based
compensation is included, is above the average of the survey range.
Hewitt Associates has reviewed the compensation plans in which each of the
officers named in the Compensation Table participate and the compensation for
each of such officers in 1993 and has reported to the Committee that in Hewitt
Associates' opinion, the plans and the amounts paid thereunder meet the
objectives of motivating the officers to continue to achieve the superior
stockholder return the Company has experienced. In Hewitt Associates' opinion,
the plans also achieve the objective of attracting and retaining qualified
officers.
Base salaries for the Chief Executive Officer and other executive officers
are established at levels considered appropriate in light of the duties and
scope of responsibilities of each officer's position. Salaries are reviewed
periodically and adjusted as warranted to reflect sustained individual officer
performance. The Committee measures executive officer performance and
contribution against total annual compensation, including incentive awards,
rather than base salary alone.
Under the Company's annual bonus plan, incentive compensation is earned based
on current year's performance as compared to business and financial goals for
the year. These annual goals are established by the Committee at the beginning
of the period. The goals include an increase in earnings over the prior year
and improvement in operating cash flow. In 1993, the Company reported record
sales and earnings for the fifth consecutive year. In determining individual
awards under the annual bonus plan, the Committee also considers individual
accomplishments.
4
<PAGE>
The individuals listed in the Compensation Table participate in the
Company's Long-Term Incentive Plan. Awards under the Plan are based on
Mattel's financial performance over three year performance cycles with
performance targets which relate to the long-range financial goals of the
Company. The performance targets used to determine awards under the Plan are
based primarily on Cash Flow Return on Investment ("CFROI"), earnings and
revenue growth. Objectives for CFROI, earnings and revenue growth and the
level of each executive's participation are established by the Committee at
the beginning of the period. CFROI is a measure of the cash flow generated by
the Company's assets and is based on a formula developed by an independent
financial consultant. This formula is related to the economic performance of a
company and an increase in CFROI is believed to be correlated to improvement
in stock price. During the three-year period covered by the Compensation
Table, Mattel's Common Stock price, adjusted for stock splits, increased from
$8.58 to $22.10, a 158% increase.
The 1990 Stock Option Plan authorizes the Committee to make grants and
awards of stock options, stock appreciation rights, restricted stock and other
stock-based awards. Stock options are granted with an exercise price equal to
the market price of Mattel's Common Stock on the date of grant and generally
vest over four years. This approach is designed to increase stockholder value
over the long term since the full benefit of the compensation package cannot
be realized unless stock price appreciation occurs over a number of years. In
determining the number of options awarded, the Committee considers the amount
and terms of options already held by management. The Committee believes that
significant equity interests in the Company held by the Company's management
more closely align the interests of stockholders and management.
As one of the factors in its review of compensation matters, the Committee
considers the anticipated tax treatment to the Company and to the executives
of various payments and benefits. Some types of compensation payments and
their deductibility depend upon the timing of an executive's vesting or
exercise of previously granted rights. Further, interpretations of and changes
in the tax laws and other factors beyond the Committee's control also affect
the deductibility of compensation. For these and other reasons, the Committee
will not necessarily limit executive compensation to that deductible under
Section 162(m) of the Internal Revenue Code. The Committee will consider
various alternatives to preserving the deductibility of compensation payments
and benefits to the extent reasonably practicable and to the extent consistent
with its other compensation objectives.
In determining the compensation of Mr. Amerman, the Chief Executive Officer,
the Committee meets without him to evaluate his performance, and reports on
that evaluation to the independent directors of the Board. Factors considered
by the Committee focus on the performance of the Company and the attainment of
financial and business goals. Specific objectives include operating profit and
cash flow, earnings, sales growth, CFROI and stockholder return. The Committee
also considered Mr. Amerman's individual accomplishments, including his
efforts in bringing about the merger of Fisher-Price with the Company, his
effective leadership in expanding the Company's core brands while at the same
time establishing effective cost controls, efficient working capital
management and a high quality work force.
In accordance with the compensation philosophy and process described above
and in recognition of the individual accomplishments described in the
preceding paragraph and the overall performance of the Company as shown in the
Performance Graph, the Committee set Mr. Amerman's compensation package. That
package includes a base salary of $950,000, which includes an increase in
November 1993 of 19% (Mr. Amerman's base salary is reviewed in two-year
cycles), a grant in February and December 1993 of options to acquire 156,250
and 200,000 shares, respectively, of Mattel's Common stock, a grant of 250,000
shares of restricted stock, the terms of which are detailed in this Proxy
Statement, in February 1994, an award under the Management Incentive Plan and
the Long-Term Incentive Plan of $825,000 and $300,000, respectively. In
December 1993, acknowledging the need to maintain management continuity, the
Company paid Mr. Amerman a retention award of $600,000.
COMPENSATION/OPTIONS COMMITTEE
John L. Vogelstein (Chairman)
Edward H. Malone
William D. Rollnick
5
<PAGE>
The following table sets forth information regarding Executive Compensation
for the three year period ended December 31, 1993. The report of the
Compensation/Options Committee included herein should be read in connection
with the information set forth below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------- ------------ ------------
SECURITIES LTIP ALL OTHER
NAME AND BONUS UNDERLYING PAYOUT COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($)(2) OPTIONS(3) ($)(2) ($)(4)
------------------ ---- -------------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
John W. Amerman......... 1993 828,759 825,000 356,250 300,000 706,053
Chairman and 1992 812,306 600,000 -0- -0- 101,455
Chief Exec. Officer 1991 689,423 800,000 468,750 1,155,938 --
Jill E. Barad........... 1993 628,237 620,000 275,000 250,000 485,329
President and Chief 1992 535,384 450,000 -0- -0- 44,343
Operating Officer 1991 411,539 500,000 375,000 655,031 --
James A. Eskridge....... 1993 421,667 340,000 218,750 183,333 394,720
Exec. Vice President 1992 406,154 275,000 -0- -0- 38,640
and Chief Financial 1991 351,154 320,000 375,000 655,031 --
Officer (1)
Joseph C. Gandolfo...... 1993 357,450 260,000 287,500 150,000 336,128
President 1992 315,385 200,000 28,125 -0- 33,396
Mattel Operations 1991 284,615 225,000 -0- 539,438 --
Lindsey F. Williams..... 1993 468,958 375,000 175,000 183,333 455,905
President 1992 456,922 225,000 -0- -0- 53,841
Mattel International 1991 405,769 320,000 375,000 770,625 --
</TABLE>
- --------
(1) Served in the capacity indicated until November 30, 1993, when he became
President and Chief Executive Officer of the Company's Fisher-Price
subsidiary.
(2) For information regarding the Company's annual and long-term incentive
plans, including the basis for determining payments thereunder, see "Report
of the Compensation/Options Committee," "Approval of the Mattel Management
Incentive Plan" and "Approval of the Mattel Long-Term Incentive Plan"
herein. Amounts were earned in the years indicated. The annual bonus is
generally paid in the first quarter of the following year and long-term
incentive plan payouts are based on one-third of the three-year target
amount and paid in two equal annual installments commencing in the first
quarter of the following year with the second payment being at risk and
subject to achieving second year goals.
(3) Adjusted for five-for-four stock split payable as a stock dividend declared
November 30, 1993 and issued January 7, 1994.
(4) Includes taxable portion of premiums on Company-provided life insurance for
Messrs. Amerman, Eskridge, Gandolfo and Williams and Ms. Barad in the
amounts of $16,149, $3,277, $2,936, $5,770 and $1,832, respectively,
contributions to the Company's Personal Investment Plan to the named
individuals in the amounts of $89,904, $41,443, $33,192, $50,135 and
$33,497, respectively, and retention award payments to the named
individuals in the amounts of $600,000, $350,000, $300,000, $400,000 and
$450,000, respectively.
6
<PAGE>
The following table sets forth certain information relating to options and
SARs granted to the named executive officers in the 1993 fiscal year.
OPTION/SAR GRANTS TABLE
Option/SAR Grants In Last Fiscal Year
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- --------------------------------------------------------------------------- ----------------------------
(A) (B) (C) (D) (E) (F) (G)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE 5%($)(2) 10%($)(2)
- ------------------------ -------------- ------------ ----------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
John W. Amerman......... 156,250 3.2 18.10 02/09/03 1,781,250 4,496,875
200,000 4.1 21.90 12/15/03 2,760,000 6,964,000
Jill E. Barad........... 125,000 2.6 18.10 02/09/03 1,425,000 3,597,500
150,000 3.1 21.90 12/15/03 2,070,000 5,223,000
James A. Eskridge....... 93,750 1.9 18.10 02/09/03 1,068,750 2,698,125
125,000 2.6 21.90 12/15/03 1,725,000 4,352,500
Joseph C. Gandolfo...... 100,000 2.1 21.90 12/15/03 1,380,000 3,482,000
93,750(3) 2.0 10.67 03/15/95 2,225,950 2,449,950
93,750(3) 2.0 10.67 03/15/96 2,583,543 2,944,481
Lindsey F. Williams..... 75,000 1.6 18.10 02/09/03 855,000 2,158,500
100,000 2.1 21.90 12/15/03 1,380,000 3,482,000
</TABLE>
- --------
(1) Adjusted for five-for-four stock split payable as a stock dividend declared
November 30, 1993 and issued January 7, 1994. Options granted in 1993 were
granted at fair market value on the date of grant, were for a term of ten
years and vest in four equal annual installments commencing one year and
one day after the date of grant.
(2) The actual value, if any, an executive may realize will depend upon the
excess of the stock price over the exercise price on the date the option is
exercised, so there is no assurance that the value realized by the
executive will be at or near the amount shown. In order to realize the
potential value set forth in the 5% and 10% columns, the per share price of
the Common Stock would be approximately $29.50 and $46.88, respectively,
for options granted at $18.10 per share and approximately $35.70 and
$56.72, respectively, for options granted at $21.90 per share.
(3) Successor to Stock Appreciation Rights ("SAR") originally awarded to a
former senior officer on February 19, 1991. Assuming no appreciation in
the Mattel Common Stock to the SAR maturity date, and based on the market
value of the Mattel Common Stock on the transfer date, February 4, 1993
($19.20), the potential realizable value would be $1,999,950.
7
<PAGE>
The following table shows exercises and values of options and stock
appreciation rights ("SARs") held by the named executive officers.
OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
Aggregated Option/SAR Exercises in Last Fiscal Year and
FY-End Option/SAR Values (1)
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/
OPTIONS/SARS AT FY-END SARS AT FY-END
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE(2) EXERCISABLE UNEXERCISABLE(2)
NAME (#) ($) (#) (#) ($) ($)
---- --------------- --------- ----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
John W. Amerman......... 15,129 180,436 281,758 731,249 4,102,985 6,626,079
Jill E. Barad........... 4,101 54,765 73,253 567,969 1,053,068 5,213,985
James A. Eskridge....... 58,594 718,422 11,719 511,719 141,487 5,083,985
Joseph C. Gandolfo...... 43,375 563,448 20,252 367,186 221,342 4,174,672
Lindsey F. Williams..... 137,696 1,727,084 58,605 470,898 778,717 5,039,348
</TABLE>
- --------
(1) Adjusted for five-for-four stock split payable as a stock dividend
declared November 30, 1993 and issued January 7, 1994. The value of
underlying securities is determined at exercise date or year-end, as the
case may be, minus the exercise price or base price of "in-the-money"
Options. There were no SAR exercises during 1993.
(2) Includes Stock Appreciation Rights for Mr. Amerman of 234,375 units and
Messrs. Eskridge, Gandolfo and Williams and Ms. Barad of 187,500 units
each. In 1994 the value of the units were fixed under a formula using the
current market price of Mattel Common Stock.
LONG-TERM INCENTIVE PLAN AWARD TABLE
Long-Term Incentive Plan--Awards in Last Fiscal Year
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE-BASED PLANS
-------------------------------
(A) (B) (C) (D) (E) (F)
PERFORMANCE OR
NUMBER OF OTHER PERIOD
SHARES, UNITS UNTIL
OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#) PAYOUT ($) ($) ($)
---- ------------- --------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
John W. Amerman......... -- 1/1/93-12/31/95(1) $900,000 $1,800,000 $3,600,000
250,000 1/1/97 -- -- (2)
Jill E. Barad........... -- 1/1/93-12/31/95(1) $750,000 $1,500,000 $3,000,000
187,500 1/1/97 -- -- (2)
James A. Eskridge....... -- 1/1/93-12/31/95(1) $550,000 $1,100,000 $2,200,000
156,250 1/1/97 -- -- (2)
Joseph C. Gandolfo...... -- 1/1/93-12/31/95(1) $450,000 $ 900,000 $1,800,000
Lindsey F. Williams..... -- 1/1/93-12/31/95(1) $550,000 $1,100,000 $2,200,000
</TABLE>
- --------
(1) Reflects awards under Mattel's Long-Term Incentive Plan ("LTIP"). Awards
under the LTIP are based on a combination of factors, including cash flow
return on investment, earnings and revenue growth. For additional
information regarding the LTIP including the material terms and conditions
of the award and a general description of the formula used in determining
the amounts payable under that plan, see "Approval of the Mattel Long-Term
Incentive Plan," and Report of the Compensation/Options Committee.
(2) The issuance of stock in 1993 pursuant to the awards was approved by the
stockholders on November 30, 1993. The vesting of the shares on January 1,
1997 is conditional upon the attainment of goals and objectives and the
continued employment of the named executive. Those goals and objectives
include achieving a specified average Cash Flow Return on Invested Capital
or a total shareholder return equal to or greater than that of the S&P
500, in each instance for the three-year period ended December 31, 1996.
The aggregated value of the shares, based on the closing price of the
Mattel Common Stock on December 31, 1993 without adjustment for the
diminution in value attributable to the restrictions applicable to the
shares, was, for Messrs. Amerman and Eskridge and Ms. Barad, $5,525,000,
$3,453,125 and $4,143,750, respectively. The number of shares reflected
are adjusted for the five-for-four stock split payable as a stock dividend
declared November 30, 1993 and issued January 7, 1994.
8
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the Mattel Common Stock
beneficially owned as of March 15, 1994 by members of Mattel's Board of
Directors, the Executive Officers named in the Compensation Table and all
Directors and Executive Officers as a group.
<TABLE>
<CAPTION>
NAME OF BENEFICIAL AMOUNT AND NATURE
OWNER OF BENEFICIAL OWNERSHIP(1)
------------------ --------------------------
<S> <C> <C>
John W. Amerman Chairman & Chief Exec. Officer 609,387(2)
Jill E. Barad President, COO & a Director 222,962(2)
Dr. Harold Brown Director 1,961,723(3)(4)
James A. Eskridge President, Fisher-Price, Inc. & a Director 181,171(2)
Tully M. Friedman Director 16,505
Joseph C. Gandolfo President, Mattel Operations 73,906(2)
Ronald J. Jackson Director 2,010,818(5)
E. Robert Kinney Director 12,752
Ronald M. Loeb Director 53,631
Edward H. Malone Director 1,241
John H. Mullin III Director 21,551
Edward N. Ney Director 5,000
William D. Rollnick Director 178,926
John L. Vogelstein Director 2,308,598(3)(6)
Lindsey F. Williams President, Mattel Int'l & a Director 265,312(2)(7)
All Executive Officers
and Directors as a group(20) 6,169,266(8)
</TABLE>
- --------
(1) Except as set forth in notes (3) and (5) below, no director or executive
officer owns or controls or may be deemed to beneficially own or control 1%
or more of any class of capital stock of the Company.
(2) Includes shares which the following named officers and directors have the
right to acquire by exercise of options under the Company's stock option
plan: Amerman 109,387; Barad 31,261; Eskridge 23,438; Gandolfo 65,625; and
Williams 18,750.
(3) Warburg, Pincus Capital Partners ("WPCP") owns 1,933,598 shares of Common
Stock. The sole general partner of WPCP is Warburg, Pincus & Co., a New
York general partnership ("WP").E.M. Warburg, Pincus & Co., Inc. ("EMW"),
through a wholly-owned subsidiary, manages WPCP. WP owns all of the
outstanding stock of EMW and, as the sole general partner of WPCP, has a
20% interest in the profits of WPCP. EMW owns 1.5% of the limited
partnership interests in WPCP. Messrs. Vogelstein and Brown, directors of
the Company, are Vice Chairman and Senior Managing Director, respectively,
of EMW and general partners of WP. As such, Messrs. Vogelstein and Brown
may be deemed to have an indirect pecuniary interest (within the meaning of
Rule 16a-1 under the Securities Exchange Act of 1934) in an indeterminate
portion of the shares beneficially owned by WPCP, EMW and WP. See notes (4)
and (6) below.
(4) 28,125 of the shares indicated above are owned directly by Dr. Brown. The
remaining 1,933,598 shares indicated as owned by Dr. Brown are owned
directly by WPCP and are included because of Dr. Brown's affiliation with
WPCP. Dr. Brown disclaims "beneficial ownerhship" of these shares within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934. See
note (3) above.
(5) Assuming exercise of options held by Mr. Jackson, he would own
approximately 1% of the capital stock of the Company.
(6) 375,000 of the shares indicated above are owned directly by Mr. Vogelstein.
The remaining 1,933,598 shares indicated as owned by Mr. Vogelstein are
owned directly by WPCP and are included because of Mr. Vogelstein's
affiliation with WPCP. Mr. Vogelstein disclaims "beneficial ownership" of
these shares within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934. See note (3) above.
(7) Includes 37,500 shares of Common Stock held in a trust of which Mr.
Williams is trustee for the benefit of his children and as to which he
disclaims beneficial ownership.
(8) Including the shares listed above, all directors and executive officers of
the Company could be deemed to own or control an aggregate of 6,049,149
shares of the Common Stock, including 1,611,474 shares that may be acquired
on the exercise of stock options, respectively, approximately 3.39% of the
voting power of the Company.
9
<PAGE>
PERFORMANCE GRAPH
MATTEL, INC.
Comparison of Five Year Cumulative Total Return*
Mattel, Inc., S&P 500, and Recreation Products Group 1989 to 1993
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION> RECREATION
Measurement Period S&P PRODUCTS
(Fiscal Year Covered) MATTEL, INC. 500 INDEX GROUP
- ------------------- ------------ --------- -----------
<S> <C> <C> <C>
Measurement Pt- 12/31/1988 $100 $100 $100
FYE 12/31/1989 $207.87 $131.69 $120.96
FYE 12/31/1990 $212.76 $127.60 $107.16
FYE 12/31/1991 $440.51 $166.47 $128.48
FYE 12/31/1992 $509.98 $179.15 $161.42
FYE 12/31/1993 $560.15 $197.21 $205.42
</TABLE>
* Annual Return assumes reinvestment of dividends. Cumulative Return assumes an
initial investment of $100, with the beginning of the period market
capitalization weighting.
Recreation Products Group includes the Dow Jones Recreational Entertainment,
Recreational Toys and Other Recreational groups which include the following
companies: Acclaim Entertainment, Inc., Brunswick Corp., Disney (Walt) Company,
Eastman Kodak Company, Electronic Arts Inc., Hasbro Inc., International Game
Technology Corp., King World Productions, Inc., Outboard Marine Corp, Paramount
Communications, Inc., Polaroid Corp. and Time Warner, Inc.
10
<PAGE>
RETIREMENT PLAN
The Company's Supplemental Executive Retirement Plan ("Plan") will provide
pension benefits to certain persons named in the Compensation Table and certain
other executive officers. To participate in the Plan, an executive must be at
least age 50 and be designated a participant by the Board of Directors. The
following table shows the estimated annual aggregate benefits payable at age
55, 60 and 64, which latter age reflects the maximum amount payable under the
Plan, for the various classifications of earnings and years of benefit service.
The table is based on the maximum benefit under the Plan for the indicated age
categories and the amounts are payable over a fixed fifteen-year period.
<TABLE>
<CAPTION>
FINAL AVERAGE AGE 55 & AGE 60 & AGE 64 &
EARNINGS 5 YEARS OF 5 YEARS OF 5 YEARS OF
(AS DEFINED) SERVICE SERVICE SERVICE
------------- ---------- ---------- ----------
<S> <C> <C> <C>
$ 100,000 $ 17,500 $ 25,000 $ 30,000
300,000 52,500 75,000 90,000
500,000 87,500 125,000 150,000
700,000 122,500 175,000 210,000
900,000 157,500 225,000 270,000
1,100,000 192,500 275,000 330,000
</TABLE>
Final Average Earnings is defined as the executive's final year's salary. The
amounts set forth in the above table are not offset by any social security
benefits. Messrs. Amerman, Eskridge, Gandolfo and Williams and Ms. Barad have
14, 5, 3, 25 and 13 years of service, respectively, with the Company. Messrs.
Amerman, Eskridge and Williams are fully vested under the Plan and Ms. Barad
will be fully vested at age 50. Mr. Gandolfo has 3 years of credited service
under the Plan.
EMPLOYMENT AGREEMENTS
Mattel has entered into employment agreements with the executive officers
named in the Compensation Table in order to assure the continued service of
such persons. Such agreements generally provide a three-year term of employment
of the executives, five in the case of Mr. Amerman and Ms. Barad, for salaries
at the amounts set forth in the Compensation Table and for participation in
various incentive and employee benefit plans at defined levels. The agreements
do not provide for payments in the event of a change of control of the Company
but do provide for payments due under the agreements if the executives'
employment is terminated by the Company for its convenience and without cause
or if there is a material change in executives' duties and responsibilities as
described in the agreements.
REMUNERATION OF DIRECTORS
Non-employee members of the Board of Directors receive an annual retainer of
$30,000 per year. Each Committee Chairman receives an annual fee of $4,000 per
year and each non-employee committee member receives $1,500 per committee
meeting attended. Directors may elect to defer all or part of their directors'
fees under an arrangement which provides for the investment of such fees in
Mattel Common Stock equivalents or in interest-bearing accounts with the
distribution of such amounts in a lump sum or installments over a period of
years commencing on or after the individual ceases to be a director of Mattel.
CERTAIN TRANSACTIONS
The law firm of Irell & Manella, of which Mr. Loeb is a partner, provided
legal services to the Company during 1993.
During 1993, the Company entered into an agreement for the production of a
BARBIE infomercial with Electronic Catalogue Network ("ECN") pursuant to which
ECN received a $45,000 production fee in 1993 and will receive royalties based
on resulting product sales. Thomas Barad, the husband of Jill Barad, Mattel's
President and Chief Operating Officer, and a director of the Company,
beneficially owns a 50% interest in ECN.
11
<PAGE>
APPROVAL OF MATTEL MANAGEMENT INCENTIVE PLAN
The Board of Directors, including the Compensation/Options Committee (the
"Committee") which is composed of disinterested directors, has approved and
recommends for stockholder approval, the Mattel Management Incentive Plan. The
Management Incentive Plan, which has been in effect since 1974, has as its
principal objective achieving specified performance targets in the current
year. In light of Mattel's significant stockholder returns which have
substantially outperformed those of the peer group companies and the S&P 500,
as reflected in the Performance Graph, the Board has determined that it is in
the best interest of the Company to continue the Management Incentive Plan.
Description Of Mattel Management Incentive Plan
Under Mattel's Management Incentive Plan ("MIP"), certain key employees of
Mattel may receive incentive compensation based upon the achievement of
specific performance targets of Mattel during the year, and the accomplishment
by such key employees of certain individual performance objectives and
otherwise satisfactory performance. The performance targets used to determine
payments under the MIP are based primarily on net income, division operating
profit and Cash Flow Return on Investment ("CFROI"). CFROI is a measure of cash
flow generated by the Company's assets and is based on a formula developed by
an independent financial consultant. Each year, the Committee establishes, in
writing, specific targets which must be achieved before incentive payments are
generated and maximum levels which provide a ceiling on the total amount
payable under the MIP. The Committee also establishes participation guidelines.
Under the terms of the MIP, eligible participants include officers of the
Company and its subsidiaries and other employees of the Company or its
subsidiaries at or above a specific salary grade that are determined by the
Committee to have a measurable impact on the Company's financial results. An
individual's level of award is based on corporate and divisional results,
position in the Company and individual performance. At the present time,
approximately 650 employees are eligible to participate in the MIP.
The MIP is administered by the Committee which includes only directors who
are considered outside directors for purposes of Section 162 (m) of the
Internal Revenue Code (the "Code"). Under the terms of the MIP, the Committee
retains discretion, subject to plan limits, to modify the performance
objectives to take into account the effect of unforseen or extraordinary events
and accounting changes. However, the Committee cannot change the performance
objectives as they apply to the Chief Executive Officer of Mattel and the four
other most highly compensated executives ("Covered Employees") if the effect of
such changes is to increase the compensation those individuals would otherwise
receive. The maximum annual amounts that Covered Employees are eligible to
receive under the MIP ranges from 75% to 100% of base salary. The Covered
Employees will be those named each year in the Summary Compensation Table.
The performance objectives for the year 1994 have been established in writing
by the Committee and include achieving a specific target for net income,
division operating profit and CFROI levels. The class of eligible participants
has been selected as well as their level of participation. Participants include
the employees named in the Summary Compensation Table. Under the formula
established by the Committee, and based on the level of accomplishment of
performance objective by the Company and its divisions, an incentive pool may
be established and allocated by the Committee among the participants based on
the accomplishments of their individual goals. Payments of performance awards
are determined at the end of each year and usually paid in the first quarter of
the following year. If the performance objectives are satisfied, the Committee
will certify in writing, prior to the payment of any performance award, that
such objectives were satisfied. Amounts payable under the MIP for the year 1994
cannot be determined until completion of the performance period. See "Bonus" in
the "Summary Compensation Table" for amounts paid under the MIP in the prior
three years.
12
<PAGE>
The approval by stockholders of the MIP is required in order to exclude
compensation payable under the MIP to the Covered Employees from the deduction
limitations imposed by Section 162 (m) of the Code. If the stockholders do not
approve the MIP, the Committee will not make payments to such individuals and
will consider other alternatives.
THE MATTEL BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE MATTEL
---
MANAGEMENT INCENTIVE PLAN.
APPROVAL OF MATTEL LONG-TERM INCENTIVE PLAN
The Board of Directors, including the Compensation/Options Committee (the
"Committee") which is composed of "disinterested" directors, has approved and
recommends for stockholder approval, the Mattel Long-Term Incentive Plan
("Plan"). The Plan, which was originally adopted by the Board for a performance
period beginning in 1987, was developed with the assistance of an independent
compensation consultant. The Plan had as its principal objective increasing
Mattel's strategic focus on long-term goals. The Board and the Committee
believe the Plan was instrumental in producing the excellent financial
performance achieved by Mattel since 1987.
In light of Mattel's significant stockholder returns, which have
substantially outperformed those of the peer group companies and the S&P 500,
as reflected in the Performance Graph, the Board has determined that it is in
the best interest of the Company to continue the Plan.
Description Of The Plan
Incentive Compensation under the Plan is based on achieving performance
objectives established by the Committee measured over a three-year performance
period. The performance targets used to determine payments under the Plan are
based primarily on Cash Flow Return on Investment ("CFROI"), earnings and
revenue growth. CFROI is a measure of cash flow generated by the Company's
assets and is based on a formula developed by an independent financial
consultant. Prior to April 1 of the first year of the performance period, the
Committee establishes, in writing, target levels for CFROI, earnings and
revenue growth which must be achieved before incentive payments are awarded.
Targets are based on specific levels of accomplishment and include maximum
targets above which no additional awards will be earned. The Committee also
selects the participants and their level of participation.
The Plan is administered by the Committee, which includes only directors who
are considered outside directors for purposes of Section 162 (m) of the
Internal Revenue Code (the "Code"). Under the terms of the Plan, eligible
participants include executive officers of the Company and its subsidiaries and
any other officer of the Company or its subsidiaries that are determined by the
Committee to have a direct, significant and measurable impact on the Company's
long-term growth and profitability. The actual selection of participants is
within the discretion of the Committee. At the present time, approximately 28
officers are eligible to participate in the Plan. Under the terms of the Plan,
the Committee retains discretion subject to plan limits, to modify established
targets to take into account the effect of unforseen or extraordinary events or
accounting changes. However, the targets cannot be changed as they apply to the
Chief Executive Officer of Mattel and the four most highly compensated
executives ("Covered Employees") if the effect of such change is to increase
the compensation those individuals would otherwise receive. The Covered
Employees will be named each year in the Summary Compensation Table. The Plan
permits the Committee to add participants and make additional awards to
participants who are determined by the Committee to have assumed additional
responsibility or to have otherwise positively impacted directly on the
attainment of the performance objectives established by the Committee beyond
that originally anticipated.
In February 1993, the Committee selected 23 persons including the individuals
listed in the Summary Compensation Table as participants in the Plan for the
three-year performance period ending in 1995. Subsequently, the Committee added
five participants to the Plan. For information regarding the awards to
13
<PAGE>
the Covered Employees and the target and maximum amounts payable for such
three-year period, see "Long-Term Incentive Plan Award Table." The performance
objectives for the three-year period have been established in writing by the
Committee and include achieving a specific target CFROI level, earnings and
revenue growth. Payments of performance awards for achieving performance
objectives are determined at the end of each annual performance period. The
amount is paid in two equal annual installments commencing in the first quarter
of the following year with the second payment being at risk and subject to
achieving the next year's goals. If the performance objectives are satisfied,
the Committee will certify in writing, prior to the payment of any performance
award, that such objectives were satisfied. Amounts payable under the Plan for
the years 1994 and 1995 cannot be determined until completion of the
performance period. See "LTIP Payouts" in the "Summary Compensation Table" for
amounts paid under the Plan in 1994 in respect of the year 1993 and in prior
years.
The approval by stockholders of the Plan is required in order to exclude
compensation payable under the Plan to the Covered Employees from the deduction
limitations imposed by Section 162 (m) of the Code. If the stockholders do not
approve the Plan, the Committee will not make further payments to such
individuals under the Plan and will consider other alternatives.
THE MATTEL BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
---
MATTEL LONG-TERM INCENTIVE PLAN.
INDEPENDENT ACCOUNTANTS
Price Waterhouse has served as the Company's independent accountants since
their appointment for fiscal 1975. The Board of Directors, on the unanimous
recommendation of the Audit Committee, has selected Price Waterhouse as
Mattel's independent accountants for the year ending December 31, 1994.
Representatives of Price Waterhouse are expected to be present at the meeting
to respond to questions and will have an opportunity to make a statement if
they desire to do so.
All services provided to Mattel by Price Waterhouse were approved by the
Audit Committee which also considered the possible effect on the independence
of Price Waterhouse by rendering such services.
Audit services of Price Waterhouse for 1993 included the examination of the
consolidated financial statements, services related to filings with the
Securities and Exchange Commission, and the performance of limited reviews of
Mattel's quarterly unaudited financial information.
THE MATTEL BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY
---
THE SELECTION OF PRICE WATERHOUSE AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR
THE YEAR ENDING DECEMBER 31, 1994.
PRINCIPAL STOCKHOLDERS
As of March 15, 1994, the only persons known by the Company to own
beneficially or that may be deemed to own beneficially more than 5% of any
class of its voting stock were:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------- ------------------- -------------------- --------
<S> <C> <C> <C>
Series F Stock The Trustees of the 864,293 100%
International Games Employee
Stock Ownership Trust
c/o Standard Bank & Trust Co.
Hickory Hills, IL 60457
</TABLE>
14
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain of its officers, and persons who own more than 10 percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership of such securities with the Securities and
Exchange Commission (the "SEC"). Officers, directors and greater than 10
percent stockholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that during the year ended
December 31, 1993, all filing requirements applicable to its officers,
directors and greater than 10 percent beneficial owners were complied with
except as follows: a Form 4 report, covering two transactions, was filed late
by Mr. Ney, a Director of the Company, and a Form 4 report was filed late by
Mr. Loeb, a Director of the Company.
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
As of the date of this Proxy Statement, the Board of Directors knows of no
other business that will be presented by management for consideration at the
meeting. If any other business properly comes before the meeting, the proxy
holders intend to vote the proxies as recommended by the Board.
STOCKHOLDER PROPOSALS FOR 1995 ANNUAL MEETING
Stockholder proposals intended to be presented at the 1995 Annual Meeting of
Stockholders must be received by the Company not later than November 22, 1994.
Such proposals should be addressed to the Secretary of the Company.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by Mattel. It is contemplated
that proxies will be solicited principally through the use of the mail, but
officers and regular employees of Mattel may solicit proxies personally or by
telephone, telegraph or special letter. Such officers and employees shall
receive no additional compensation in connection with such efforts.
In addition, the Company has retained Georgeson & Co., Inc. to assist in
connection with the solicitation of proxies from stockholders whose shares are
held in nominee name by various brokerage firms. The cost of such solicitation
is estimated to be $7,000 plus out-of-pocket costs and expenses.
Mattel will reimburse banks, brokerage houses and other custodians, nominees
and fiduciaries for their reasonable expenses in forwarding proxy materials to
the beneficial owners of the shares held by them.
By Order of the Board of Directors
N. Ned Mansour, Secretary
15
<PAGE>
[Proxy Card]
[Side 1]
MATTEL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS MAY 11, 1994
JOHN W. AMERMAN, N. NED MANSOUR and JOHN L. VOGELSTEIN, or any of them,
each with power of substitution, are hereby appointed proxies to represent and
vote as designated hereon all shares of Common Stock of Mattel, Inc. which the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
the Company to be held in the Manhattan Ballroom of the Radisson Plaza Hotel,
1400 Parkview Avenue, Manhattan Beach, California, at 10:00 a.m. on the 11th day
of May 1994, or any adjournment thereof, with all powers the undersigned would
possess if personally present.
Election of all Directors listed below:
NOMINEES:
John W. Amerman, Jill E. Barad, Harold Brown, James A. Eskridge,
Tully M. Friedman, Ronald M. Loeb, Edward H. Malone, Edward N. Ney, William
D. Rollnick, John L. Vogelstein and Lindsey F. Williams
SEE REVERSE SIDE. If you wish to vote in accordance with the Board of
Directors' recommendations, just sign on the reverse side. You need not mark
any boxes.
<PAGE>
[Side 2]
PLEASE MARK, SIGN, DATE AND RETURN THIS FORM OF WRITTEN CONSENT PROMPTLY, USING
THE ENCLOSED ENVELOPE.
1. ELECTION OF DIRECTORS For Withheld
(name on reverse).
For, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
2. APPROVAL OF THE MATTEL MANAGEMENT
INCENTIVE PLAN For Against Abstain
3. APPROVAL OF THE MATTEL LONG-TERM
INCENTIVE PLAN For Against Abstain
4. RATIFICATION OF THE SELECTION OF
PRICE WATERHOUSE AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS. For Against Abstain
5. TO CONSIDER AND ACT UPON SUCH OTHER BUSINESS MATTERS OR
PROPOSALS AS MAY PROPERLY COME BEFORE THE MEETING.
Please sign exactly as your name appears hereon. Joint owners should each sign.
When signing as attorney, executor, trustee or guardian, please give full title
as such.
