<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 1996
REGISTRATION NO. 333-1307
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
MATTEL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-1567322
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
333 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-5012 (310) 252-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
LELAND P. SMITH, ESQ.
ASSISTANT GENERAL COUNSEL AND ASSISTANT SECRETARY
MATTEL, INC.
333 CONTINENTAL BOULEVARD, EL SEGUNDO, CALIFORNIA 90245-5012 (310) 252-4821
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
RONALD M. LOEB, ESQ. BRIAN G. CARTWRIGHT, ESQ.
LATHAM & WATKINS
IRELL & MANELLA LLP
333 SO. HOPE STREET, SUITE 3300 633 W. FIFTH STREET
LOS ANGELES, CA 90071 LOS ANGELES, CA 90071
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED(1) REGISTERED(1) UNIT(2) PRICE(2)(3)(4) REGISTRATION FEE(5)
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<S> <C> <C> <C> <C>
Common Stock ($1 par
value)(6)(7).......... -- (10) -- --
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Preference Share Pur-
chase Rights(7)........ -- (10) -- --
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Preferred Stock ($1 par
value)(8)............. -- (10) -- --
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Debt Securities(9)..... -- (10) -- --
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Warrants............... -- (10) -- --
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Units.................. -- (10) -- --
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Total.................. $350,000,000 (10) $350,000,000 $120,690
========================================================================================================
</TABLE>
(1) Subject to Footnote (3), there are being registered hereunder (i) an
indeterminate amount of Common Stock, Preferred Stock, Debt Securities,
Warrants and Units issuable in primary offerings, (ii) an indeterminate
amount of Common Stock and Preferred Stock issuable upon conversion of
Debt Securities and Preferred Stock registered hereunder, (iii) an
indeterminate amount of Common Stock, Preferred Stock and Debt Securities
issuable upon exercise of Warrants registered hereunder, and (iv) an
indeterminate amount of Preference Share Purchase Rights, which are
evidenced by certificates for, and are transferred along with and only
with, the Company's Common Stock until the occurrence of certain
prescribed events (see Footnote (7) below).
(2) In U.S. dollars or the equivalent thereof in one or more foreign
currencies or composite currencies. The proposed maximum offering price
per unit will be determined from time to time by the Registrant in
connection with the issuance of the securities registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee. In
no event will the aggregate maximum offering price of all securities
issued under this Registration Statement exceed $350,000,000 or the
equivalent thereof in one or more foreign currencies or composite
currencies or, if any Debt Securities are issued with original issue
discount, such greater amount as shall result in proceeds of $350,000,000
to the Registrant.
(4) With respect to Debt Securities, excluding accrued interest and accrued
amortization of discount, if any, to the date of delivery.
(5) The registration fee has been calculated in accordance with Rule 457(o)
of the Securities Act. The full amount of the registration fee was
previously paid in connection with the initial filing of the Registration
Statement on February 29, 1996.
(6) Shares of Common Stock may be issued in primary offerings, upon
conversion of Debt Securities and/or Preferred Stock registered hereby,
and/or upon exercise of Warrants registered hereby. The aggregate amount
of Common Stock registered hereby is limited to that which is permissible
under Rule 415(a)(4) under the Securities Act.
(7) The Company's Preference Share Purchase Rights accompany shares of the
Company's Common Stock and, until the occurrence of any of certain
prescribed events, are not exercisable, are evidenced by the certificates
for the Common Stock and are transferred along with and only with the
Company's Common Stock.
(8) Shares of Preferred Stock may be issued in primary offerings, upon
conversion of Debt Securities registered hereby, and/or upon exercise of
Warrants registered hereby.
(9) Debt Securities may be issued in primary offerings and/or upon exercise
of Warrants registered hereby.
(10) Omitted pursuant to General Instruction II(D) of Form S-3 under the
Securities Act.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED APRIL 1, 1996
[LOGO OF MATTEL, INC.]
COMMON STOCK
PREFERRED STOCK
DEBT SECURITIES
WARRANTS OR RIGHTS
UNITS OF SECURITIES
-----------
The Company may offer from time to time under this Prospectus in one or more
series (i) shares of its common stock, $1.00 par value per share ("Common
Stock"), (ii) shares of its preferred stock, $1.00 par value per share
("Preferred Stock"), which may be convertible into shares of Common Stock,
(iii) debt securities of the Company ("Debt Securities"), which may be
convertible into shares of Common Stock and/or Preferred Stock, (iv) warrants
or rights ("Warrants") to acquire Common Stock, Preferred Stock and/or Debt
Securities, and (v) units ("Units") consisting of two or more of the foregoing
securities, with an aggregate initial public offering price of up to
$350,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies. The Common Stock, Preferred Stock, Debt Securities,
Warrants and Units (collectively, the "Securities") may be offered separately
or together, in separate series, in amounts, at prices and on terms to be
determined at the time of each offering hereunder and to be set forth in one or
more supplements to this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in the applicable Prospectus Supplement and will
include, where applicable, (i) in the case of Common Stock, the aggregate
number of shares offered and the offering price; (ii) in the case of Preferred
Stock, the specific designation and stated value per share, the aggregate
number of shares offered, any dividend (including the method of calculating
payment of dividends), liquidation, redemption, voting and other rights, any
terms for conversion or exchange into shares of Common Stock, and the offering
price; (iii) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking, priority, currency, denominations,
maturity (which may be fixed or extendible), any security, any premium or
discount, interest rate (or manner of calculation thereof) and time of payment
of interest, terms for redemption at the option of the Company or repayment at
the option of the holder, terms for sinking fund payments, terms for conversion
or exchange into Preferred Stock or Common Stock, form (which may be bearer or
registered, certificated or global), covenants and the offering price; (iv) in
the case of Warrants, the number and terms thereof, the designation of the
number and type of securities issuable upon their exercise, the exercise price,
the duration and detachability thereof, and the offering price; and (v) in the
case of Units, a description of the securities comprising such Units and the
offering price thereof.
The applicable Prospectus Supplement will also contain information, where
appropriate, about certain United States federal income tax considerations
relating to the Securities covered thereby, any listing on a securities
exchange of the Securities covered thereby, in the case of Debt Securities or
Warrants for Debt Securities, any relationships between the Company and the
applicable trustee or any other terms, as applicable.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Securities may be offered directly by the Company or to or through
agents, underwriters or dealers designated from time to time by the Company, as
set forth in an accompanying Prospectus Supplement. See "Plan of Distribution."
No Securities may be sold without delivery of a Prospectus Supplement
describing the method and terms of the offering of such Securities.
-----------
, 1996
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND THEREIN, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER, DEALER OR
AGENT. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN OFFERING
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY
THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR IN ANY
PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF
OR OF SUCH PROSPECTUS SUPPLEMENT.
AVAILABLE INFORMATION
Mattel, Inc. ("Mattel" or the "Company") has filed with the Securities and
Exchange Commission (the "Commission") in Washington, D.C. a Registration
Statement on Form S-3 (including all amendments thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Securities offered hereby. This Prospectus and any
Prospectus Supplement do not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Securities, reference is hereby made to the
Registration Statement and the exhibits and schedules thereto.
Mattel is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by
Mattel can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at the Commission's regional offices located
at Seven World Trade Center, 13th Floor, New York, New York 10048, and in
Chicago at 500 West Madison Street, Room 1400, Chicago, Illinois 60661. Copies
of such materials can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549. Reports, proxy statements and other information concerning Mattel
can also be inspected and copied at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and the Pacific Stock
Exchange, 115 Sansome Street, 2nd Floor, San Francisco, California 94104, on
which exchanges certain securities of Mattel are listed.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which Mattel has filed with the Commission pursuant
to the Exchange Act, are hereby incorporated by reference in, and shall be
deemed to be a part of, this Prospectus: Mattel's Annual Report on Form 10-K
for the year ended December 31, 1995, its Notice of Annual Meeting of
Stockholders and Proxy Statement, dated March 23, 1996, and the description of
the Company's Common Stock contained in the Company's Registration Statement
on Form 8-A filed with the Commission on February 28, 1996.
All documents filed by Mattel pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part thereof from the respective
dates of filing of such documents. Any statement contained in this Prospectus
or in any Prospectus Supplement or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and any Prospectus Supplement to the extent
that a statement contained herein or in any Prospectus Supplement (or in any
other subsequently filed document which also is incorporated or deemed
2
<PAGE>
to be incorporated by reference in this Prospectus) modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed to constitute a part of this Prospectus or any Prospectus Supplement
except as so modified or superseded.
Mattel will provide without charge to any person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
of the foregoing documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference therein). Requests should be directed to the attention of the
Corporate Secretary, Mattel, Inc., 333 Continental Boulevard, El Segundo,
California 90245-5012, or by telephone at (310) 252-3616.
IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF SUCH SECURITIES OR OTHER SECURITIES OF THE COMPANY AT LEVELS ABOVE
THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY
BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Mattel is a leading worldwide designer, manufacturer and marketer of toys.
The Company's four principal core brands are BARBIE fashion dolls and doll
clothing and accessories; FISHER-PRICE toys and juvenile products, including
the POWER WHEELS line of battery-powered, ride-on vehicles; the Company's
Disney-licensed toys; and die cast HOT WHEELS vehicles and playsets, each of
which has broad worldwide appeal. Additional core product lines consist of
large dolls, including CABBAGE PATCH KIDS; preschool toys, including SEE 'N
SAY talking toys; the UNO and SKIP-BO card games; and the SCRABBLE game, which
the Company owns in markets outside of the United States and Canada.
Mattel management has implemented three complementary business strategies
designed to achieve consistent, profitable growth: first, a concentration on
leveraging the consumer franchises of Mattel's time-tested core product lines;
second, expansion of the Company's international marketing and distribution
network; and third, organization of the Company's manufacturing capabilities
to maximize overall efficiency and flexibility and minimize risk. Mattel
management has also pursued a financial strategy of reducing risk through the
implementation of strict financial controls. These include the control of
expenses and the aggressive management of working capital, foreign exchange
risk and the financial risk associated with new product introductions. In
addition, management's objective is to minimize the cost of capital to the
Company by blending the sources of funds through the control of long-term
leverage, and the maintenance of sufficient operating cash and short-term
credit lines to finance the Company's seasonal working capital requirements.
Mattel was incorporated in California in 1948 and reincorporated in Delaware
in 1968. Its executive offices are located at 333 Continental Boulevard, El
Segundo, California 90245-5012, telephone(310) 252-2000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, which may include additions to working capital,
reduction of indebtedness of the Company, financing of capital expenditures,
potential acquisitions and the repurchase by the Company of its Common Stock.
Funds not required immediately for such purposes may be invested temporarily
in short-term marketable securities.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's unaudited ratios of earnings to
fixed charges and earnings to combined fixed charges and preferred stock
dividends for the periods indicated.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,(A)
---------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(b)(c)......................... 7.01 6.88 4.20 4.51 4.00
Ratio of earnings to combined fixed
charges and preferred stock
dividends(b)(c)....................... 6.76 6.43 3.94 4.25 3.71
</TABLE>
- --------
(a) The consolidated ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends for 1993, 1992 and
1991 have been restated for the effects of the November 1993 merger of
Fisher-Price, Inc. into a wholly-owned subsidiary of the Company,
accounted for as a pooling of interests. Fisher-Price, Inc. was excluded
from periods prior to July 1, 1991, while its business was operated as a
division of The Quaker Oats Company.
(b) The ratio of earnings to fixed charges is computed by dividing income
before taxes, extraordinary items, cumulative effect of changes in
accounting principles, fixed charges, minority interest and undistributed
income of less-than-majority-owned affiliates (as used in this footnote
(b), "earnings") by fixed charges. Fixed charges are the sum of interest
costs (whether expensed or capitalized) and the portion of aggregate
rental expense (one-third) which is estimated to represent the interest
factor in such rentals. The ratio of earnings to combined fixed charges
and preferred stock dividends is computed by dividing earnings by the sum
of fixed charges plus dividends on the Company's outstanding shares of
preferred stock during the indicated period. The Company currently has no
outstanding shares of preferred stock.
(c) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely; thus the associated fixed charges have been excluded from
computation of the ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million in 1991.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities offered hereby are to be issued under an indenture,
dated as of February 15, 1996 (the "Indenture"), between Mattel and Chemical
Trust Company of California, as Trustee (the "Trustee"), which Indenture may
be supplemented from time to time by supplemental indentures. The following
summary of certain provisions of the Indenture, a copy of which was filed as
an exhibit to the Registration Statement, does not purport to be complete and
is subject to, and is qualified in its entirety by reference to, all
provisions of the Indenture, including the definition therein of certain
terms. Wherever particular sections or defined terms of the Indenture are
referred to, it is intended that such sections or defined terms shall be
incorporated herein by reference.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated indebtedness of Mattel.
The Debt Securities that may be offered under the Indenture are not limited
in amount. The Debt Securities may be issued in one or more series with the
same or various maturities, at par, at a premium, or with an original
4
<PAGE>
issue discount. The Prospectus Supplement will set forth the initial offering
price, the aggregate principal amount and the following terms of the Debt
Securities in respect of which this Prospectus is delivered: (1) the title of
such Debt Securities; (2) any limit on the aggregate principal amount of such
Debt Securities; (3) the date or dates on which principal on such Debt
Securities will be payable; (4) the rate or rates and, if applicable, the
method used to determine the rate including any commodity, commodity index,
stock exchange index or financial index, at which such Debt Securities will
bear interest, if any, the date or dates from which such interest will accrue,
the dates on which such interest shall be payable and the record date for the
interest payable on any interest payment date; (5) the place or places where
principal of, premium, if any, and interest on such Debt Securities will be
payable; (6) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Debt Securities may be redeemed;
(7) the obligation, if any, of the Company to redeem or purchase the Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a holder thereof; (8) the denominations of such Debt Securities, if
other than denominations of $1,000 and any integral multiple thereof; (9) the
portion of principal amount of such Debt Securities that shall be payable upon
acceleration, if other than the principal amount thereof; (10) the currency of
denomination of such Debt Securities; (11) the designation of the currency or
currencies in which payment of principal of and interest on such Debt
Securities will be made; (12) if payments of principal of, premium, if any, or
interest on the Debt Securities are to be made in currency other than the
denominated currency, the manner in which the exchange rate with respect to
such payments will be determined; (13) the manner in which the amounts of
payment of principal of, premium, if any, or interest on such Debt Securities
will be determined, if such amounts may be determined by reference to an index
based on a currency or currencies other than that in which the Debt Securities
are denominated or designated to be payable or by reference to a commodity,
commodity index, stock exchange index or financial index; (14) the
subordination provisions, if any, relating to such Debt Securities; (15) any
provision for the conversion or exchange of such Debt Securities; (16) if such
Debt Securities are to be issued upon the exercise of Warrants, the
authentication and delivery provisions relating to such Debt Securities; (17)
the provisions, if any, relating to any security provided for such Debt
Securities; (18) any addition to or change in the Events of Default described
herein or in the Indenture with respect to such Debt Securities and any change
in the acceleration provisions described herein or in the Indenture with
respect to such Debt Securities; (19) any addition to or change in the
covenants described herein or in the Indenture with respect to such Debt
Securities; (20) any other terms of such Debt Securities, which other terms
will not be inconsistent with the provisions of the Indenture; and (21) any
depositaries, interest rate calculation agents, exchange rate calculation
agents or other agents with respect to the Debt Securities other than those
originally appointed. (Indenture (S) 2.2) The Prospectus Supplement will set
forth any federal income tax, accounting or special considerations applicable
to the Debt Securities.
PAYMENT OF INTEREST AND EXCHANGE
Each Debt Security will be represented by either a global security (a
"Global Debt Security") registered in the name of The Depository Trust
Company, as Depository (the "Depository") or a nominee of the Depository (each
such Debt Security represented by a Global Debt Security being herein referred
to as a "Book-Entry Debt Security") or a certificate issued in definitive
registered form (a "Certificated Debt Security"), as set forth in the
applicable Prospectus Supplement. Except as set forth under "Global Debt
Securities and Book-Entry System" below, Book-Entry Debt Securities will not
be issuable in certificated form.
Certificated Debt Securities. Certificated Debt Securities may be
transferred or exchanged at the Trustee's office or paying agencies in
accordance with the terms of the Indenture. No service charge will be made for
any transfer or exchange of Certificated Debt Securities, but Mattel may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Certificated Debt Securities will not
be exchangeable for Book-Entry Debt Securities, except under the circumstances
described below under "Global Debt Securities and Book-Entry System."
(Indenture (S)(S) 2.4 and 2.7)
The transfer of Certificated Debt Securities and the right to the principal
of, premium, if any, and interest on such Certificated Debt Securities may be
effected only by surrender of the old certificate representing such
Certificated Debt Securities and either reissuance by Mattel or the Trustee of
the old certificate to the new Holder or the issuance by Mattel or the Trustee
of a new certificate to the new Holder.
5
<PAGE>
Global Debt Securities and Book-Entry System. Each Global Debt Security
representing Book-Entry Debt Securities will be deposited with, or on behalf
of, the Depository, and registered in the name of the Depository or a nominee
of the Depository. Except as set forth below, Book-Entry Debt Securities will
not be exchangeable for Certificated Debt Securities and will not otherwise be
issuable as Certificated Debt Securities.
The procedures that the Depository has indicated it intends to follow with
respect to Book-Entry Debt Securities are set forth below.
Ownership of beneficial interests in Book-Entry Debt Securities will be
limited to persons that have accounts with the Depository for the related
Global Debt Security ("participants") or persons that may hold interests
through participants. Upon the issuance of a Global Debt Security, the
Depository will credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal amounts of the Book-
Entry Debt Securities represented by such Global Debt Security beneficially
owned by such participants. The accounts to be credited shall be designated by
any dealers, underwriters or agents participating in the distribution of such
Book-Entry Debt Securities. Ownership of Book-Entry Debt Securities will be
shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the Depository for the related Global Debt
Security (with respect to interests of participants) and on the records of
participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, transfer or pledge
beneficial interests in Book-Entry Debt Securities.
So long as the Depository for a Global Debt Security, or its nominee, is the
registered owner of such Global Debt Security, such Depository or such
nominee, as the case may be, will be considered the sole owner or holder of
the Book-Entry Debt Securities represented by such Global Debt Security for
all purposes under the Indenture. Except as set forth below, owners of Book-
Entry Debt Securities will not be entitled to have such securities registered
in their names, will not receive or be entitled to receive physical delivery
of a certificate in definitive form representing such securities and will not
be considered the owners or holders thereof under the Indenture. Accordingly,
each person owning Book-Entry Debt Securities must rely on the procedures of
the Depository for the related Global Debt Security and, if such person is not
a participant, on the procedures of the participant through which such person
owns its interest, to exercise any rights of a holder under the Indenture.
The Company understands, however, that under existing industry practice, the
Depository will authorize the persons on whose behalf it holds a Global Debt
Security to exercise certain rights of holders of Debt Securities, and the
Indenture provides that the Company, the Trustee and their respective agents
will treat as the holder of a Debt Security the persons specified in a written
statement of the Depository with respect to such Global Debt Security for
purposes of obtaining any consents or directions required to be given by
holders of the Debt Securities pursuant to the Indenture. (Indenture
(S) 2.14.6)
Payments of principal, premium, if any, and interest on Book-Entry Debt
Securities will be made to the Depository or its nominee, as the case may be,
as the registered holder of the related Global Debt Security. (Indenture
(S) 2.14.5) None of Mattel, the Trustee or any other agent of Mattel or agent
of the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Global Debt Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Mattel expects that the Depository, upon receipt of any payment of
principal, premium, if any, or interest on a Global Debt Security, will
immediately credit participants' accounts with payments in amounts
proportionate to the respective amounts of Book-Entry Debt Securities held by
each such participant as shown on the records of such Depository. Mattel also
expects that payments by participants to owners of beneficial interests in
Book-Entry Debt Securities held through such participants will be governed by
standing customer instructions and customary practices, as is now the case
with the securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants.
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If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange
Act, and a successor Depository registered as a clearing agency under the
Exchange Act is not appointed by Mattel within 90 days, Mattel will issue
Certificated Debt Securities in exchange for such Global Debt Security. In
addition, Mattel may at any time and in its sole discretion determine not to
have any of the Book-Entry Debt Securities represented by one or more Global
Debt Securities and, in such event, will issue Certificated Debt Securities in
exchange for such Global Debt Security or Securities. Any Certificated Debt
Securities issued in exchange for a Global Debt Security will be registered in
such name or names as the Depository shall instruct the Trustee. It is
expected that such instructions will be based upon directions received by the
Depository from participants with respect to ownership of Book-Entry Debt
Securities relating to such Global Debt Security.
The foregoing information in this section concerning the Depository and the
Depository's Book-Entry System has been obtained from sources the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
NO PROTECTION IN THE EVENT OF A CHANGE OF CONTROL
Unless otherwise set forth in the Prospectus Supplement, the Debt Securities
will not contain any provisions which may afford holders of the Debt
Securities protection in the event of a change in control of the Company or in
the event of a highly leveraged transaction (whether or not such transaction
results in a change in control of the Company).
CERTAIN COVENANTS OF MATTEL
Limitation on Liens. The Company shall not and shall not permit any
Subsidiary to create, incur, assume or suffer to exist any Lien (as defined)
upon any of the their respective assets, except for: (i) Liens existing on the
date of the Indenture or arising under the Indenture; (ii) any extension,
renewal or replacement (or successive extensions, renewals or replacements) of
any Lien existing on the date of the Indenture; (iii) Liens on Current Assets
(as defined) (or on any promissory notes received in satisfaction of any of
the accounts receivable of the Company or any of its Subsidiaries) securing
Indebtedness (as defined) incurred to finance working capital requirements,
provided, however, that the Indebtedness secured by such Lien does not mature
later than 36 months from the date incurred; (iv) certain Liens incurred in
the ordinary course of business; (v) Liens on property that are in existence
at the time the Company or its Subsidiaries acquire such property, provided
that such Liens (A) are not incurred in connection with, or in contemplation
of, the acquisition of the property acquired and (B) do not extend to or cover
any property or assets of the Company or any Subsidiary other than the
property so acquired; (vi) purchase money Liens upon or in any real or
personal property (including fixtures and other equipment) acquired or held by
the Company or any Subsidiary in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness incurred solely for
the purpose of financing or refinancing the acquisition or improvement of or
construction costs related to such property, provided that no such Lien shall
extend to or cover any property other than the property being acquired or
improved; (vii) any interest or title of a lessor in the property subject to
any Capitalized Lease or Sale/Leaseback Transaction that is permitted under
the restrictions described below under "--Limitation on Sale/Leaseback
Transactions;" or (viii) other Liens securing Indebtedness in an aggregate
principal amount which, together with the aggregate outstanding principal
amount of all other Indebtedness of the Company and its Subsidiaries secured
by Liens permitted under the terms of this subsection (viii) and the aggregate
amount of the Sale/Leaseback Transactions which would otherwise be permitted
under the restrictions described below in clause (i) under the caption"--
Limitation on Sale/Leaseback Transactions," does not at the time any such Lien
is incurred exceed ten percent of the Consolidated Net Tangible Assets (as
defined) as shown in the latest audited consolidated balance sheet of the
Company and its Subsidiaries.
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Limitation on Sale/Leaseback Transactions. The Company shall not, and shall
not permit any Subsidiary, to enter into any Sale/Leaseback Transaction,
unless either (i) the Company or such Subsidiary would be entitled, pursuant
to subsection (viii) under "--Limitation on Liens," to incur Indebtedness in a
principal amount equal to or exceeding the amount of such Sale/Leaseback
Transaction, secured by a Lien on the property to be leased; or (ii) the
Company or such Subsidiary, within 90 days after the effective date of such
transaction, applies or unconditionally agrees to apply to the retirement of
Indebtedness an amount equal to the greater of the net proceeds of the
Sale/Leaseback Transaction or the fair value, in the opinion of the Board of
Directors, of such property at the time of such transaction (in either case
adjusted to reflect the remaining term of the lease).
Merger, Consolidation, or Sale of Assets. The Company may not consolidate or
merge with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets to, another corporation, person or entity
unless (i) the Company is the surviving person or the successor or transferee
is a corporation organized under the laws of the United States, any state
thereof or the District of Columbia, (ii) the successor assumes all the
obligations of the Company under the Debt Securities and the Indenture, and
(iii) immediately after such transaction no Event of Default (as defined)
exists.
CERTAIN DEFINITIONS
Set forth below are certain significant terms which are defined in Section
1.1 of the Indenture:
"Consolidated Net Tangible Assets" means the total amount of assets of the
Company and its Subsidiaries on a consolidated basis (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups occurring after January 1, 1988 of capital assets
(excluding in any case write-ups in connection with accounting for
acquisitions in conformity with generally accepted accounting principles),
after deducting therefrom (i) all current liabilities of the Company and its
Subsidiaries, (ii) all investments in unconsolidated Subsidiaries of the
Company and in persons which are not Subsidiaries of the Company (except, in
each case, investments in marketable securities) and (iii) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other
intangible items, all as set forth on the most recently available consolidated
balance sheet of the Company and its Subsidiaries, prepared in conformity with
generally accepted accounting principles.
"Current Assets" means any asset of the Company or any of its Subsidiaries
that would be classified as a current asset on an audited consolidated balance
sheet of the Company prepared, in accordance with generally accepted
accounting principles, on the date any Lien on such asset is incurred.
"Discount Security" means any Debt Security that provides for an amount less
than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to the terms of
the Indenture.
"Indebtedness" means, with respect to any person, and without duplication:
(1) any liability of such person (A) for borrowed money, or (B) for any
letter of credit for the account of such person supporting obligations of
such person or other persons, or (C) evidenced by a bond, note, debenture
or similar instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses, properties or assets of
any kind (other than a trade payable or a current liability arising in the
ordinary course of business), or (D) for the payment of money relating to a
Capitalized Lease;
(2) any liability of others described in the preceding clause (1) that
the person has guaranteed or that is otherwise its legal liability; and
(3) any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (1) and
(2) above.
"Lien" means any lien, security interest, charge, mortgage, pledge or other
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to
give any security interest).
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"Sale/Leaseback Transaction" means any arrangement with any person (other
than the Company or any of its Subsidiaries) providing for the leasing by the
Company or any of its Subsidiaries of any property which has been or is to be
sold or transferred by the Company or such Subsidiary to such person or to any
person (other than the Company or any of its Subsidiaries) to which funds have
been or are to be advanced by such person on the security of the leased
property.
"Subsidiary" of any specified person means (i) a corporation a majority of
whose capital stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such person or by
such person and a subsidiary or subsidiaries of such person or by a subsidiary
or subsidiaries of such person or (ii) any other person (other than a
corporation) in which such person or such person and a subsidiary or
subsidiaries of such person or a subsidiary or subsidiaries of such person
directly or indirectly, at the date of determination thereof has at least
majority ownership interest.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Debt Securities of any series: (a) default in the payment of any interest upon
any Debt Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; (b) default in the
payment of principal of or premium, if any, on any Debt Security of that
series when due; (c) default in the deposit of any sinking fund payment, when
and as due in respect of any Debt Security of that series; (d) default in the
performance or breach of any other covenant or warranty of Mattel in the
Indenture (other than a covenant or warranty that has been included in the
Indenture solely for the benefit of a series of Debt Securities other than
that series), which default continues uncured for a period of 60 days after
written notice to the Company by the Trustee or to the Company and the Trustee
by the holders of at least 25% in principal amount of the outstanding Debt
Securities of that series as provided in the Indenture; (e) unless the terms
of such series otherwise provide, an event of default under any Indebtedness
for money borrowed by the Company (including a default with respect to Debt
Securities of any series other than that series) or any Subsidiary, whether
such Indebtedness now exists or shall hereafter be created, if (A) such
default either (1) results from the failure to pay any such Indebtedness at
its stated final maturity or (2) relates to an obligation other than the
obligation to pay such Indebtedness at its stated final maturity and results
in the holder or holders of such Indebtedness causing such Indebtedness to
become due prior to its stated maturity and (B) the principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at stated final maturity
or the maturity of which has been so accelerated, aggregates $25 million or
more at any one time outstanding; (f) certain events of bankruptcy, insolvency
or reorganization; and (g) any other Event of Default provided with respect to
Debt Securities of that series that is described in the Prospectus Supplement
accompanying this Prospectus. No Event of Default with respect to a particular
series of Debt Securities (except as to the certain events in bankruptcy,
insolvency or reorganization) necessarily constitutes an Event of Default with
respect to any other series of Debt Securities. (Indenture (S) 6.1) The
occurrence of an Event of Default would constitute an event of default under
certain of Mattel's existing bank lines. In addition, the occurrence of
certain Events of Default or an acceleration under the Indenture would
constitute an event of default under certain other indebtedness of Mattel.
If an Event of Default with respect to Debt Securities of any series at the
time outstanding occurs and is continuing, then in every such case the Trustee
or the holders of not less than 25% in principal amount of the outstanding
Debt Securities of that series may, by a notice in writing to Mattel (and to
the Trustee if given by the holders), declare to be due and payable
immediately the principal (or, if the Debt Securities of that series are
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) and premium, if any, of all Debt Securities of
that series. In the case of an Event of Default resulting from certain events
of bankruptcy, insolvency or reorganization, the principal (or such specified
amount) and premium, if any, of all outstanding Debt Securities shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any holder of outstanding Debt
Securities. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree
for payment of the money due has been obtained by the Trustee, the holders of
a majority in principal
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amount of the outstanding Debt Securities of that series may, subject to the
Company having paid or deposited with the Trustee a sum sufficient to pay
overdue interest and principal which has become due other than by acceleration
and certain other conditions, rescind and annul such acceleration if all
Events of Default, other than the non-payment of accelerated principal and
premium, if any, with respect to Debt Securities of that series, have been
cured or waived as provided in the Indenture. (Indenture (S) 6.2) For
information as to waiver of defaults see the discussion set forth below under
"--Modification and Waiver." Reference is made to the Prospectus Supplement
relating to any series of Debt Securities that are Discount Securities for the
particular provisions relating to acceleration of a portion of the principal
amount of such Discount Securities upon the occurrence of an Event of Default
and the continuation thereof.
The Indenture provides that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of any
holder of outstanding Debt Securities, unless the Trustee receives indemnity
satisfactory to it against any loss, liability or expense. (Indenture (S) 7.1
(e)) Subject to certain rights of the Trustee, the holders of a majority in
principal amount of the outstanding Debt Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Debt Securities of that series.
(Indenture (S) 6.12)
No holder of any Debt Security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to the Indenture
or for the appointment of a receiver or trustee, or for any remedy under the
Indenture, unless such holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt
Securities of that series and unless also the holders of at least 25% in
principal amount of the outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in principal amount of the outstanding Debt
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Indenture (S) 6.7)
Notwithstanding the foregoing, the holder of any Debt Security will have an
absolute and unconditional right to receive payment of the principal of,
premium, if any, and any interest on such Debt Security on or after the due
dates expressed in such Debt Security and to institute suit for the
enforcement of any such payment.(Indenture (S) 6.8)
The Indenture requires Mattel, within 90 days after the end of each of its
fiscal years, to furnish to the Trustee a statement as to compliance with the
Indenture. (Indenture (S) 4.3) The Indenture provides that the Trustee may
withhold notice to the holders of Debt Securities of any series of any Default
or Event of Default (except in payment on any Debt Securities of such series)
with respect to Debt Securities of such series if it in good faith determines
that withholding such notice is in the interest of the holders of Debt
Securities.(Indenture (S) 7.5)
MODIFICATION AND WAIVER
Modifications to, and amendments of, the Indenture may be made by Mattel and
the Trustee with the consent of the holders of at least a majority in
principal amount of the outstanding Debt Securities of each series affected by
such modifications or amendments, provided, however, that no such modification
or amendment may, without the consent of the holder of each outstanding Debt
Security affected thereby: (a) change the amount of Debt Securities whose
holders must consent to an amendment or waiver; (b) reduce the rate of or
extend the time for payment of interest (including default interest) on any
Debt Security; (c) reduce the principal or premium, if any, or change the
fixed maturity of any Debt Security or reduce the amount of, or postpone the
date fixed for, the payment of any sinking fund or analogous obligation with
respect to any series of Debt Securities; (d) waive a default in the payment
of the principal of, premium, if any, or interest on any Debt Security (except
a rescission of acceleration of the Debt Securities of any series by the
holders of at least a majority in aggregate principal amount of the then
outstanding Debt Securities of such series and a waiver of the payment default
that resulted from such acceleration); (e) make the Debt Security payable in
currency other than
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that stated in the Debt Security; (f) make any change to certain provisions of
the Indenture relating to, among other things, the right of holders of Debt
Securities to receive payment of the principal, premium, if any, and interest
on such Debt Securities and to institute suit for the enforcement of any such
payment and to waivers or amendments; or (g) waive a redemption payment with
respect to any Debt Security or change any of the provisions with respect to
the redemption of any Debt Securities. (Indenture (S) 9.3)
The holders of at least a majority in principal amount of the outstanding
Debt Securities of any series may on behalf of the holders of all Debt
Securities of that series waive, insofar as that series is concerned,
compliance by Mattel with provisions of the Indenture other than certain
specified provisions. (Indenture (S) 9.2) The holders of a majority in
principal amount of the outstanding Debt Securities of any series may on
behalf of the holders of all the Debt Securities of such series waive any past
default under the Indenture with respect to such series and its consequences,
except a default in the payment of the principal of, premium, if any, or any
interest on any Debt Security of that series or in respect of a provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Debt Security of that series affected.
(Indenture (S) 6.13)
DEFEASANCE OF DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN CIRCUMSTANCES
Defeasance and Discharge. The Indenture provides that Mattel may be
discharged from any and all obligations in respect of the Debt Securities of
any series (except for certain obligations to register the transfer or
exchange of Debt Securities of such series, to replace stolen, lost or
mutilated Debt Securities of such series, to maintain paying agencies and the
treatment of funds held by paying agents) upon the deposit with the Trustee,
in trust, of money and/or government obligations in the same currency as such
series that, through the payment of interest and principal in respect thereof
in accordance with their terms, will provide money in an amount sufficient in
the opinion of a nationally recognized firm of independent public accountants
to pay and discharge each installment of principal (and premium, if any) and
interest on and any mandatory sinking fund payments in respect of the Debt
Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. Such
discharge may occur only if, among other things, (a) Mattel has received from,
or there has been published by, the United States Internal Revenue Service a
ruling, or, since the date of execution of the Indenture, there has been a
change in the applicable United States federal income tax law, in either case
to the effect that holders of the Debt Securities of such series will not
recognize income, gain or loss for United States federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to
United States federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit, defeasance and
discharge had not occurred; and (b) such discharge will not be applicable to
any Debt Securities of such series then listed on the New York Stock Exchange
or any other securities exchange if such discharge would cause said Debt
Securities to be de-listed as a result thereof. (Indenture (S) 8.3)
Defeasance of Certain Covenants. The Indenture provides that unless
otherwise provided by the terms of the applicable series of Debt Securities,
upon compliance with certain conditions, (i) Mattel may omit to comply with
the restrictive covenants contained in Sections 4.2 (except as to corporate
existence), 4.3 through 4.8 and Section 5.1 of the Indenture, including the
restrictive covenants described above under the caption "Certain Covenants of
Mattel"; and (ii) cross accelerations constituting Events of Default under
Section 6.1(e) shall be inapplicable to such series. The conditions include:
the deposit with the Trustee of money and/or government obligations in the
same currency as such series that, through the payment of interest and
principal in respect thereof in accordance with their terms, will provide
money in an amount sufficient in the opinion of a nationally recognized firm
of independent public accountants to pay principal, premium, if any, and
interest on and any mandatory sinking fund payments in respect of the Debt
Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities; and the
delivery to the Trustee of an opinion of counsel to the effect that the
holders of the Debt Securities of such series will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
deposit and related covenant defeasance and will be subject to United States
federal income tax in the same amount and in the same manner and at the same
times as would have been the case if such deposit and related covenant
defeasance had not occurred. (Indenture (S) 8.4)
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Defeasance and Events of Default. In the event Mattel exercises its option
to omit compliance with certain covenants of the Indenture with respect to any
series of Debt Securities and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default, the amount
of money and government obligations on deposit with the Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the
time of their stated maturity but may not be sufficient to pay amounts due on
the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, Mattel shall remain liable for such
payments.
CONVERSION INTO CAPITAL STOCK OF THE COMPANY
If and to the extent set forth in the Indenture and described in the
applicable Prospectus Supplement, any portion of the principal amount of any
Debt Securities of any series that is $1,000 or an integral multiple thereof
may be converted into shares of Common Stock and/or Preferred Stock of the
Company at any time prior to redemption (if applicable) or maturity, following
the date set forth in the applicable Prospectus Supplement. The specific class
of capital stock of the Company into which Debt Securities are convertible and
the other terms pertaining to such conversion right will be set forth in the
applicable Prospectus Supplement.
CONCERNING THE TRUSTEE
Mattel maintains banking relationships in the ordinary course of business
with one or more affiliates of the Trustee. The trustee also serves as trustee
under the Company's indenture dated as of August 1, 1994.
DESCRIPTION OF CAPITAL STOCK
The following statements with respect to the Company's capital stock are
subject to the detailed provisions of the Company's Restated Certificate of
Incorporation (the "Certificate of Incorporation") and By-laws, as amended
(the "By-laws"), and the Rights Agreement (as defined below). These statements
do not purport to be complete and are qualified in their entirety by reference
to the terms of the Certificate of Incorporation, the By-laws and the Rights
Agreement, which are incorporated by reference as exhibits to the Registration
Statement.
GENERAL
Mattel's authorized capital stock as of the date of this Prospectus consists
of 300,000,000 shares of Common Stock, $1.00 par value per share, 3,000,000
shares of Preferred Stock, $1.00 par value per share, and 20,000,000 shares of
Preference Stock, $.01 par value per share. No shares of Preferred Stock are
presently outstanding. Mattel does not presently have outstanding, and
Mattel's Certificate of Incorporation does not authorize, any other classes of
capital stock. The issued and outstanding shares of Common Stock are, and any
shares of Common Stock issued as Securities and any shares of Common Stock
issuable upon the exercise of Warrants for Common Stock or upon conversion or
exchange of Debt Securities or Preferred Stock that are convertible into or
exchangeable for Common Stock will be, duly authorized, validly issued, fully
paid and nonassessable.
COMMON STOCK
Holders of shares of Common Stock have no preemptive, redemption or
conversion rights. The holders of Common Stock are entitled to receive
dividends when and as declared by the Mattel Board of Directors out of funds
legally available therefor. Upon liquidation, dissolution or winding up of
Mattel, the holders of Common Stock may share ratably in the net assets of
Mattel and liquidating distributions to holders of Preferred Stock or
Preference Stock, if any. Each holder of Common Stock is entitled to one vote
per share of Common Stock held of record by such holder and may cumulate its
votes in the election of directors. As of February 15, 1996, there were
279,067,715 shares of Common Stock issued (as adjusted to reflect the five-
for-four stock split payable as a stock dividend declared February 6, 1996).
Each outstanding share of Common Stock is accompanied by a right to purchase
one one-hundredth (128/37,500ths as adjusted to reflect a series of stock
splits) of a share of Mattel Series E Junior Participating Preference Stock,
$.01 par value per share (the "Series E Preference Shares"). See "--Preferred
and Preference Stock."
The registrar and transfer agent for the Common Stock is The First National
Bank of Boston.
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PREFERRED AND PREFERENCE STOCK
The Mattel Board of Directors has the power, without further vote of
shareholders, to authorize the issuance of up to 3,000,000 shares of Preferred
Stock and 20,000,000 shares of Preference Stock and to fix and determine the
terms, limitations and relative rights and preferences of any shares of
Preferred Stock or Preference Stock that it causes to be issued. This power
includes the authority to establish voting, dividend, redemption, conversion,
liquidation and other rights of any such shares. No shares of Preferred Stock
or Preference Stock are now outstanding.
If and to the extent set forth in the applicable Prospectus Supplement,
shares of Preferred Stock may be convertible into shares of Common Stock in
accordance with the terms of such Preferred Stock. The specific terms
pertaining to any such conversion right will be set forth in the applicable
Prospectus Supplement.
Each outstanding share of Common Stock is accompanied by a right to purchase
one one-hundredth (128/37,500ths as adjusted) of a Series E Preference Share
under certain circumstances. There are 1,500,000 shares of Series E Preference
Shares authorized for issuance. There are currently no Series E Preference
Shares outstanding.
DESCRIPTION OF PREFERENCE SHARE PURCHASE RIGHTS
On February 7, 1992, the Mattel Board of Directors declared a dividend of
one preference share purchase right (a "Right") for each outstanding share of
Common Stock. The dividend was paid on February 17, 1992 (the "Record Date")
to the stockholders of record on that date. At the date the dividend was
declared and paid, each Right entitled the registered holder to purchase from
the Company one one-hundredth of a Series E Preference Share at a price per
share of $150 (the "Purchase Price"), subject to adjustment. Subsequent to the
Record Date, and pursuant to the terms of the Rights, the number of one one-
hundredths of a share of Series E Preference Shares purchasable from the
Company upon exercise of a Right was adjusted to 128/37,500ths of a share of
Series E Preference Shares, reflecting a series of stock splits in the
underlying Common Stock paid in the form of a series of dividends on the
Common Stock. The description and terms of the Rights are set forth in a
Rights Agreement dated as of February 7, 1992 (the "Rights Agreement") between
the Company and The First National Bank of Boston, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") have acquired beneficial ownership of 20% or more of the outstanding
Common Stock or (ii) 10 business days (or such later date as may be determined
by action of the Board of Directors prior to such time as any person or group
of affiliated persons becomes an Acquiring Person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 20% or more of the outstanding Common Stock (the earlier of such
dates being called the "Distribution Date"), the Rights are evidenced, with
respect to any Common Stock certificate outstanding as of the Record Date, by
such Common Stock certificate with a copy of the Summary of Rights pertaining
to such Rights (the "Summary of Rights") attached thereto.
The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with
and only with the Common Stock. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock outstanding as of
the Record Date, even without such notation or a copy of the Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
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The Rights are not exercisable until the Distribution Date. The Rights will
expire on February 17, 2002 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of Series E Preference Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Series E Preference Shares, (ii) upon the grant to holders of the Series E
Preference Shares of certain rights or warrants to subscribe for or purchase
Series E Preference Shares at a price, or securities convertible into Series E
Preference Shares with a conversion price, less than the then-current market
price of the Series E Preference Shares or (iii) upon the distribution to
holders of the Series E Preference Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Series E Preference Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preference Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivision,
consolidation or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
Series E Preference Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preference Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled
to an aggregate dividend of 292.969 (as adjusted) times the dividend declared
per share of Common Stock. In the event of liquidation, the holders of the
Series E Preference Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an aggregate
payment of 292.969 (as adjusted) times the payment made per share of Common
Stock. Each Series E Preference Share will have 292.969 (as adjusted) votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each Series E Preference Share will be entitled to receive 292.969
(as adjusted) times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions.
Because of the nature of the Series E Preference Shares' dividend,
liquidation and voting rights, the value of the fractional interest
(128/37,500ths as adjusted) in a Preference Share purchasable upon exercise of
each Right should approximate the value of one share of Common Stock.
In the event that, after a person or group has become an Acquiring Person,
the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper
provisions shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void),
will thereafter have the right to receive upon exercise that number of shares
of Common Stock having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group which will have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-hundredth (128/37,500ths as adjusted) of a Series E Preference
Share (or of a share of a class or series of the Company's preference stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Series E Preference Shares will be issued
(other than fractions which are integral multiples of one one-hundredth of a
Series E Preference Share,
14
<PAGE>
which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Series E Preference Shares on the last trading date prior
to the date of exercise.
At any time prior to the time an Acquiring Person becomes such, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.0034133 per Right (as adjusted) (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage of the outstanding
shares of Common Stock then known to the Company to be beneficially owned by
any person or group of affiliated or associated persons (other than (a) the
Company, (b) any subsidiary of the Company, (c) any employee benefit plan of
the Company or any subsidiary of the Company, (d) any entity holding Common
Stock for or pursuant to the terms of any such plan or (e) E.M. Warburg,
Pincus & Co., Inc., a Delaware corporation, and its affiliates and associates)
and (ii) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the Rights.
For the purpose of calculating the various percentage ownership thresholds
contained in the Rights Agreement, shares issued in connection with the
capital investment approved by the Company's shareholders at the 1984 Annual
Meeting and still owned by the original owner, or owned by certain qualified
transferees, are excluded from the amount deemed to be beneficially owned by
such persons. However, if such original owner or qualified transferee becomes
a member of a group with certain other persons, such shares will be included
in the amount attributable to, and will be deemed to be beneficially owned by,
such other persons.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Mattel on
terms not approved by Mattel's Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights
should not interfere with any merger or other business combination approved by
the Mattel Board of Directors since the Rights may be redeemed by Mattel at
the Redemption Price prior to the time that a person or group has acquired
beneficial ownership of 20% or more of the Common Stock.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Warrants for the purchase of Debt Securities ("Debt
Warrants"), Preferred Stock ("Preferred Stock Warrants") or Common Stock
("Common Stock Warrants"). Each series of Warrants will be issued under a
separate warrant agreement (a "Warrant Agreement") to be entered into between
the Company and a bank or trust company, as Warrant Agent, all as set forth in
the applicable Prospectus Supplement relating to the particular issue of
Warrants. The Warrant Agent will act solely as an agent of the Company in
connection with the Warrant Agreement or any certificates evidencing the
Warrants ("Warrant Certificates") and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant
Certificates or beneficial owners of Warrants. Copies of the forms of Warrant
Agreements and the forms of Warrant Certificates representing the Warrants
will be filed by a post-effective amendment to the Registration Statement or
incorporated by reference in connection with the offering of any Warrants. The
following summaries of certain provisions of the forms of Warrant Agreements
and Warrant Certificates do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Warrant Agreements and the Warrant Certificates.
15
<PAGE>
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will describe
the terms of such Warrants, including, in the case of Warrants for the
purchase of Debt Securities (the "Underlying Debt Securities"), the following,
where applicable: (i) the title and aggregate number of such Debt Warrants;
(ii) the title, rank, aggregate principal amount, denominations, and terms of
the Underlying Debt Securities; (iii) the currencies in which such Debt
Warrants are being offered; (iv) the principal amount of the series of Debt
Securities purchasable upon exercise of each such Debt Warrant and the
exercise price, or the manner of determining such price, at which and
currencies in which such Debt Securities may be purchased; (v) the time or
times, or period or periods, in which such Debt Warrants may be exercised and
the date (the "Expiration Date") on which such exercise right shall expire;
(vi) United States federal income tax consequences; (vii) the terms of any
right of the Company to redeem or accelerate the exercisability of such Debt
Warrants; (viii) the offering price of such Debt Warrants; and (ix) any other
terms of such Debt Warrants.
In the case of Warrants for the purchase of Preferred Stock (the "Underlying
Preferred Stock"), the Prospectus Supplement will describe the terms of such
Warrants, including the following, where applicable: (i) the title and
aggregate number of such Preferred Stock Warrants; (ii) the specific
designation and stated value per share and any dividend (including the method
of calculating payment of dividends), liquidation, redemption, voting and
other rights of the Underlying Preferred Stock; (iii) the number of shares of
Preferred Stock that may be purchased on exercise of each Preferred Stock
Warrant; (iv) the exercise price or manner of determining such price and, if
other than cash, the property and manner in which the exercise price may be
paid and any minimum number of Preferred Stock Warrants exercisable at one
time; (v) the terms of any right of the Company to redeem or accelerate the
exercisability of such Preferred Stock Warrants; (vi) the time or times, or
period or periods, in which the Preferred Stock Warrants may be exercised and
the Expiration Date; (vii) United States federal income tax consequences; and
(viii) any other terms of such Preferred Stock Warrants.
In the case of Common Stock Warrants, the Prospectus Supplement will
describe the terms of such Warrants, including the following, where
applicable: (i) the title and aggregate number of such Common Stock Warrants;
(ii) the number of shares of Common Stock that may be purchased on exercise of
each Common Stock Warrant; (iii) the exercise price or manner of determining
such price and, if other than cash, the property and manner in which the
exercise price may be paid and any minimum number of Common Stock Warrants
exercisable at one time; (iv) the terms of any right of the Company to redeem
or accelerate the exercisability of such Common Stock Warrants; (v) the time
or times, or period or periods, in which the Common Stock Warrants may be
exercised and the Expiration Date; (vi) United States federal income tax
consequences; and (vii) any other terms of such Common Stock Warrants.
Warrants may be exchanged for new Warrants of different denominations, may
(if in registered form) be presented for registration of transfer and may be
exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable Prospectus Supplement. No service charge
will be made for any permitted transfer or exchange of Warrant Certificates,
but the Company may require payment of any tax or other governmental charge
payable in connection therewith. Prior to the exercise of any Debt Warrants,
Preferred Stock Warrants or Common Stock Warrants, holders of such Warrants,
as such, will not have any of the rights of holders of the Debt Securities,
Preferred Stock or Common Stock, respectively, purchasable upon such exercise,
including (i) in the case of Debt Warrants, the right to receive payments of
principal of (or premium, if any) or interest, if any, on the Debt Securities
purchasable upon such exercise or to enforce covenants in the applicable
indenture, or (ii) in the case of Preferred Stock and Common Stock Warrants,
the right to receive payments of dividends, if any, on the Preferred Stock or
Common Stock, as the case may be, purchasable upon such exercise or to
exercise any applicable right to vote.
16
<PAGE>
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such principal
amount of Debt Securities or number of shares of Preferred Stock or Common
Stock, as the case may be, at such exercise price as shall in each case
be set forth in, or calculable from, the Prospectus Supplement relating to the
offered Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company),
unexercised Warrants will become void.
Warrants may be exercised by delivering to the Warrant Agent payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the underlying Debt Securities, Preferred Stock or Common Stock, as
the case may be, together with certain information set forth on the reverse
side of the Warrant. Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt, within five
business days, of the Warrant Certificate evidencing such Warrants. Upon
receipt of such payment and such Warrant Certificate properly completed and
duly executed at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable Prospectus Supplement, the Company will, as
soon as practicable, issue and deliver the underlying Debt Securities,
Preferred Stock or Common Stock, as the case may be. If fewer than all of the
Warrants represented by such Warrant Certificate are exercised, a new Warrant
Certificate will be issued for the remaining amount of Warrants. The holder of
a Warrant will be required to pay any tax or other governmental charge that
may be imposed in connection with any transfer involved in the issuance of the
underlying Debt Securities, Preferred Stock or Common Stock, as the case may
be.
MODIFICATIONS
The Warrant Agreements and the terms of the Warrants may be modified or
amended by the Company and the Warrant Agent, without the consent of any
holder, for the purpose of curing any ambiguity, or of curing, correcting or
supplementing any defective or inconsistent provision contained therein, or in
any other manner that the Company deems necessary or desirable and that will
not materially adversely affect the interests of the holders of the Warrants.
The Company and the Warrant Agent may also modify or amend the Warrant
Agreement and the terms of the Warrants with the consent of the holders of not
less than a majority in number of the then outstanding unexercised Warrants
affected thereby; provided that no such modification or amendment that
accelerates the Expiration Date, increases the exercise price, reduces the
number of outstanding Warrants the consent of the holders of which is required
for any such modification or amendment, or otherwise materially adversely
affects the rights of the holders of the Warrants, may be made without the
consent of each holder affected thereby.
PREFERRED STOCK AND COMMON STOCK WARRANT ADJUSTMENT
The terms and conditions on which the exercise price of and/or the number of
shares of Preferred Stock or Common Stock covered by a Preferred Stock Warrant
or Common Stock Warrant, respectively, are subject to adjustment will be set
forth in the Preferred Stock Warrant Certificate or Common Stock Warrant
Certificate, as the case may be, and the applicable Prospectus Supplement.
Such terms will include provisions for adjusting the exercise price of and/or
the number of shares of Preferred Stock or Common Stock covered by such
Preferred Stock Warrant or Common Stock Warrant, as the case may be; the
events requiring such adjustment; the events upon which the Company may, in
lieu of making such adjustment, make proper provisions so that the holder of
such Preferred Stock Warrant or Common Stock Warrant, as the case may be, upon
exercise thereof, would be treated as if such holder had exercised such
Preferred Stock Warrant or Common Stock Warrant, as the case may be, prior to
the occurrence of such events; and provisions affecting exercise in the event
of certain events affecting the Preferred Stock or Common Stock, as the case
may be.
17
<PAGE>
DESCRIPTION OF UNITS OF SECURITIES
The Company may issue Units consisting of two or more other constituent
Securities, which Units may be issuable as, and for the period of time
specified therein may be transferable as, a single Security only, as
distinguished from the separate constituent Securities comprising such Units.
Any such Units will be offered pursuant to a Prospectus Supplement which will
(i) identify and designate the title of any series of Units; (ii) identify and
describe the separate constituent Securities comprising such Units; (iii) set
forth the price or prices at which such Units will be issued; (iv) describe, if
applicable, the date on and after which the constituent Securities comprising
the Units will become separately transferable; (v) provide information with
respect to book-entry procedures, if any; (vi) discuss applicable United States
federal income tax considerations relating to the Units; and (vii) set forth
any other terms of the Units and their constituent Securities.
PLAN OF DISTRIBUTION
GENERAL
Mattel may sell the Securities being offered hereby: (i) directly to
purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of any such methods of sale.
The distribution of the Securities may be effected from time to time in one
or more transactions either: (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Securities may be solicited directly by Mattel. Offers to
purchase Securities may also be solicited by agents designated by Mattel from
time to time. Any such agent, who may be deemed to be an "underwriter" as that
term is defined in the Securities Act, involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by Mattel to such agent will be set forth, in the
Prospectus Supplement.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, Mattel will sell such Securities to the dealer,
as principal. The dealer, who may be deemed to be an "underwriter" as that
term is defined in the Securities Act, may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of
resale.
If an underwriter is, or underwriters are, utilized in the sale, Mattel will
execute an underwriting agreement with such underwriters at the time of sale
to them and the names of the underwriters will be set forth in the Prospectus
Supplement, which will be used by the underwriters to make resales of the
Securities in respect of which this Prospectus is delivered to the public. In
connection with the sale of Securities, such underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Securities for whom they may act as agents. Underwriters may also sell
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Any
underwriting compensation paid by the Company to underwriters in connection
with the offering of Securities, and any discounts, concessions or commissions
allowed by underwriters to participating dealers, will be set forth in the
Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with Mattel, to indemnification by Mattel
against certain civil liabilities, including liabilities under the Securities
Act. Underwriters and agents may engage in transactions with, or perform
services for, the Company in the ordinary course of business.
18
<PAGE>
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, Mattel will authorize
underwriters, dealers or other persons to solicit offers by certain
institutions to purchase Securities pursuant to contracts providing for
payment and delivery on a future date or dates. Institutions with which such
contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase of
the Securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject and (b) if the
Securities are also being sold to underwriters, Mattel shall have sold to such
underwriters the Securities not sold for delayed delivery. The underwriters,
dealers and such other persons will not have any responsibility in respect of
the validity or performance of such contracts. The Prospectus Supplement
relating to such contracts will set forth the price to be paid for Securities
pursuant to such contracts, the commissions payable for solicitation of such
contracts and the date or dates in the future for delivery of Securities
pursuant to such contracts.
LEGAL MATTERS
The validity of the Securities will be passed upon for the Company by Irell
& Manella LLP, Los Angeles, California. Ronald M. Loeb, a partner of the law
firm of Irell & Manella LLP, is a Director of the Company and is the record
owner of 83,795 shares of Common Stock. Certain legal matters will be passed
upon for any underwriters or agents by Latham & Watkins, Los Angeles,
California.
EXPERTS
The consolidated financial statements and financial statement schedules of
the Company, incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (the "Form 10-
K"), have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts
in auditing and accounting.
19
<PAGE>
[LOGO OF MATTEL, INC.]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Registration fee................................................ $120,690
Rating agency fees.............................................. 180,000
Printing and engraving expenses................................. 25,000
Accounting fees and expenses.................................... 60,000
Legal fees and expenses......................................... 70,000
Blue sky fees and expenses...................................... 15,000
Fees and expenses of Trustee.................................... 10,000
Miscellaneous................................................... 9,310
--------
Total.......................................................... $490,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Mattel, Inc. (the "Company" or the "Registrant") has adopted provisions in
its Restated Certificate of Incorporation (the "Certificate") which require
the Company to indemnify any and all persons whom it has the power to
indemnify pursuant to the Delaware General Corporation Law (the "DGCL")
against any and all expenses, judgments, fines, amounts paid in settlement,
and any other liabilities to the fullest extend permitted by the DGCL.
The Certificate also empowers the Registrant by action of its Board of
Directors to purchase and maintain insurance, at its expense, to protect
itself and such persons against any such expense, judgment, fine, amount paid
in settlement or other liability, whether or not the Registrant would have the
power to indemnify any such individual under the DGCL.
In addition, the Registrant's By-laws require that each person who was or is
made a party or is threatened to be made a party to or is involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director, officer, employee or
agent of the Registrant or is or was serving at the request of the Registrant,
a director, officer, employee or agent of the Registrant as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent, or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Registrant to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the Registrant to provide broader indemnification rights than said law
permitted the Registrant to provide prior to such amendment) against all
expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and
such indemnification shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of his or
her heirs, executors and administrators; provided, however, that except for
claims by such persons for non-payment of entitled indemnification claims
against the Registrant, the Registrant shall indemnify such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the Registrant's Board of Directors. The
By-laws specify that the right to indemnification so provided is a contract
right, set forth certain procedural and evidentiary standards applicable to
the enforcement of a claim under the By-laws, entitle the persons to be
indemnified to be reimbursed for the expenses of prosecuting any such claim
against the Registrant and entitle them to have all expenses incurred in
advance of the final disposition of a proceeding paid by the Registrant. Such
provisions, however, are intended to be in furtherance and not in limitation
of the general right to indemnification provided in the By-laws.
II-1
<PAGE>
The Company has entered into indemnity agreements (the "Indemnity
Agreements") with each director of the Company, including directors who are
also officers and employees of the Company, and certain senior officers of the
Company. The Indemnity Agreements provide that the Company will pay any costs
which an indemnitee actually and reasonably incurs because of claims made
against him or her by reason of the fact that he or she is or was a director
or officer of the Company. The payments to be made under the Indemnity
Agreements include, but are not limited to, expenses of investigation,
judicial or administrative proceedings or appeals, damages, judgments, fines,
amounts paid in settlement, and attorneys' fees and disbursements, except the
Company is not obligated to make any payment under the Indemnity Agreements
which the Company is prohibited by law from paying as indemnity, or where (a)
indemnification is provided to an indemnitee under an insurance policy, except
for amounts in excess of insurance coverage, (b) the claim is one for which an
indemnitee is otherwise indemnified by the Company, (c) final determination is
rendered in a claim based upon the indemnitee obtaining a personal profit or
advantage to which he or she is not legally entitled, (d) final determination
is rendered on a claim for an accounting of profits made in connection with a
violation of Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act"), or similar state or common law provisions, (e) the indemnitee
was adjudged to be deliberately dishonest, or (f) (with respect to a director)
liability arises out of a breach of certain of his or her fiduciary duties.
The directors and officers of the Company and its subsidiaries are insured
under certain insurance policies against claims made during the period of the
policies against liabilities arising out of claims for certain acts in their
capacities as directors and officers of the Company and its subsidiaries.
II-2
<PAGE>
ITEM 16.
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF
NUMBER EXHIBIT
------- --------------
<C> <S>
1.1 Form of Underwriting Agreement for Debt Securities*
1.2 Form of Underwriting Agreement for Equity Securities**
1.3 Form of Underwriting Agreement for Warrants**
4.1 Indenture dated as of February 15, 1996 between the Registrant and
Chemical Trust Corporation of California, as Trustee, relating to
the Debt Securities*
4.2 Form of Floating Rate Note*
4.3 Form of Fixed Rate Note*
4.4 Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.0 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993)
4.5 By-laws of the Company, as amended to date (incorporated by reference to
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992)
4.6 Rights Agreement, dated as of February 7, 1992, between the Company and The
First National Bank of Boston, as Rights Agent (incorporated by reference
to Exhibit 1 to the Company's Registration Statement on Form 8-A, dated
February 12, 1992)
4.7 Specimen Stock Certificate with respect to Common Stock**
4.8 Certificate of Designation of Preferred Stock**
4.9 Specimen Stock Certificate with respect to Preferred Stock**
4.10 Form of Warrant Agreement pertaining to Common Stock (including the form of
Certificate representing a Warrant for Common Stock)**
4.11 Form of Warrant Agreement pertaining to Preferred Stock (including the form
of Certificate representing a Warrant for Preferred Stock)**
4.12 Form of Warrant Agreement pertaining to Debt Securities (including the form
of Certificate representing a Warrant for Debt Securities)**
5 Opinion of Irell & Manella as to the validity of the Securities*
12 Computation of Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
23.1 Consent of Price Waterhouse LLP relating to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995 (the
"Form 10-K")
23.2 Consent of Irell & Manella (included in their opinion)*
25 Form T-1 Statement of Eligibility and Qualification of the Trustee
Under the Trust Indenture Act of 1939*
</TABLE>
- --------
* Filed as an exhibit to the Company's Registration Statement on Form S-1
(Registration No. 333-1307) on February 29, 1996.
** To be filed by a post-effective amendment to the Registration Statement or
incorporated by reference in the event of an offering of the specified
Securities.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1)To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) of this section do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to section 13 or section 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of El Segundo, State of
California, on April 1, 1996.
MATTEL, INC.
By: /s/ Ned Mansour
___________________________________
Name: Ned Mansour
Title: President, Mattel USA
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
John W. Amerman* Chairman of the Board and April 1, 1996
____________________________________ Chief Executive Officer
John W. Amerman
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Francesca Luzuriaga* Executive Vice President and April 1, 1996
____________________________________ Chief Financial Officer
Francesca Luzuriaga
Gary P. Rolfes* Senior Vice President and April 1, 1996
____________________________________ Controller (Chief Accounting
Gary P. Rolfes Officer)
Jill E. Barad* Director, President and April 1, 1996
____________________________________ Chief Operating Officer
Jill E. Barad
Harold Brown* Director April 1, 1996
____________________________________
Harold Brown
James A. Eskridge* Director April 1, 1996
____________________________________
James A. Eskridge
Director
____________________________________
Tully M. Friedman
Ronald M. Loeb* Director April 1, 1996
____________________________________
Ronald M. Loeb
Edward H. Malone* Director April 1, 1996
____________________________________
Edward H. Malone
Edward N. Ney* Director April 1, 1996
____________________________________
Edward N. Ney
William D. Rollnick* Director April 1, 1996
____________________________________
William D. Rollnick
Christopher A. Sinclair* Director April 1, 1996
____________________________________
Christopher A. Sinclair
John L. Vogelstein* Director April 1, 1996
____________________________________
John L. Vogelstein
</TABLE>
*By: /s/ Leland P. Smith
----------------------------
Leland P. Smith
Attorney-in-Fact
II-6
<PAGE>
EXHIBIT 12
(Page 1 of 2)
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Amounts in thousands, except ratios)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED (a)
-------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income before income taxes,
cumulative effect of changes in
accounting principles and
extraordinary item $532,902 $393,632 $236,646 $282,945 $214,326
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 197 215 124 (23) 2,432
Add:
Interest expense 73,589 55,449 62,614 68,716 64,334
Appropriate portion of rents (b) 14,276 11,242 11,276 11,898 7,871
-------- -------- -------- -------- --------
Earnings available for fixed charges $620,964 $460,538 $310,660 $363,536 $288,963
======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $73,589 $55,449 $62,614 $68,716 $64,334
Capitalized interest 693 285 - - -
Appropriate portion of rents (b) 14,276 11,242 11,276 11,898 7,871
-------- -------- -------- -------- --------
Fixed charges (c) $88,558 $66,976 $73,890 $80,614 $72,205
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 7.01X 6.88X 4.20X 4.51X 4.00X
======== ======== ======== ======== ========
</TABLE>
(a) Consolidated financial information for 1993, 1992 and 1991 has been
restated for the effects of the November 1993 merger of Fisher-Price, Inc.
into a wholly-owned subsidiary of the Company, accounted for as a pooling
of interests. Fisher-Price, Inc. was excluded from periods prior to July 1,
1991, while its business was operated as a division of The Quaker Oats
Company.
(b) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(c) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely, thus the associated fixed charges have been excluded from
computation of the ratio of earnings to fixed charges. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million in 1991.
<PAGE>
EXHIBIT 12
(Page 2 of 2)
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Amounts in thousands, except ratios)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED (a)
---------------------------------------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income before income taxes,
cumulative effect of changes in
accounting principles and
extraordinary item $532,902 $393,632 $236,646 $282,945 $214,326
Less (plus) minority interest and
undistributed income (loss)
of less-than-majority-owned
affiliates, net 197 215 124 (23) 2,432
Add:
Interest expense 73,589 55,449 62,614 68,716 64,334
Dividends - STAR preferred stock - - - - 1,257
Appropriate portion of rents (b) 14,276 11,242 11,276 11,898 7,871
-------- -------- -------- -------- --------
Earnings available for fixed charges $620,964 $460,538 $310,660 $363,536 $290,220
======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense $73,589 $55,449 $62,614 $68,716 $64,334
Capitalized interest 693 285 - - -
Dividends - STAR preferred stock - - - - 1,257
Dividends - Series F preference stock 3,342 4,689 4,894 4,826 4,830
Appropriate portion of rents (b) 14,276 11,242 11,276 11,898 7,871
-------- -------- -------- -------- --------
Fixed charges (c) $91,900 $71,665 $78,784 $85,440 $78,292
======== ======== ======== ======== ========
Ratio of earnings to fixed charges 6.76X 6.43X 3.94X 4.25X 3.71X
======== ======== ======== ======== ========
</TABLE>
(a) Consolidated financial information for 1993, 1992 and 1991 has been
restated for the effects of the November 1993 merger of Fisher-Price, Inc.
into a wholly-owned subsidiary of the Company, accounted for as a pooling
of interests. Fisher-Price, Inc. was excluded from periods prior to July 1,
1991, while its business was operated as a division of The Quaker Oats
Company.
(b) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(c) Until July 1, 1991, the Company was a guarantor of certain foreign bank
lines of credit extended to less-than-majority-owned joint ventures.
Performance by the Company pursuant to these guarantees was deemed
unlikely, thus the associated fixed charges have been excluded from
computation of the ratio of earnings to fixed charges. The portion of fixed
charges paid by less-than-majority-owned joint ventures for which the
Company was guarantor was approximately $4.5 million in 1991.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
February 6, 1996, which appears on page 51 of the 1995 Annual Report to
Shareholders of Mattel, Inc., which is incorporated by reference in Mattel,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 25 of such Annual Report on
Form 10-K. We also consent to the reference to us under the heading "Experts"
in such Prospectus.
PRICE WATERHOUSE LLP
Los Angeles, California
April 1, 1996
