<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 24, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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 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. RICHARD A. BOEHMER, ESQ.
IRELL & MANELLA LLP O'MELVENY & MYERS LLP
333 SOUTH HOPE STREET, SUITE 3300 400 SOUTH HOPE STREET, SUITE 1060
LOS ANGELES, CA 90071 LOS ANGELES, CA 90071
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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
under the Securities Act, check the following box. [_]
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<PAGE>
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED(1) REGISTERED(1) PER UNIT(2) PRICE(2)(3)(4) 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 Purchase
Rights(7)................. -- (10) -- --
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Preferred Stock ($1 par val-
ue)(8).................... -- (10) -- --
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Depositary Shares(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(11) (10) $350,000,000(11) $106,061(11)
</TABLE>
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(1) Subject to Footnote (3), there are being registered hereunder (i) an
indeterminate amount of Common Stock, Preferred Stock, Debt Securities,
Warrants, Depositary Shares and Units issuable in primary offerings, (ii)
an indeterminate amount of Common Stock, Preferred Stock and Depositary
Shares issuable upon conversion or exchange of Debt Securities, Preferred
Stock or Depositary Shares, as the case may be, registered hereunder,
(iii) an indeterminate amount of Common Stock, Preferred Stock,
Depositary Shares 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.
Subject to Footnote (11), 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)
under the Securities Act.
(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 and/or Depositary Shares 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.
(11) Pursuant to Rule 429 under the Securities Act, the unissued securities
previously registered under the Company's Registration Statement on Form
S-3 No. 333-1307 are being carried forward to this Registration
Statement. A filing fee of $120,690 associated with such previously
registered securities was previously paid in connection with the initial
filing of such previous Registration Statement on February 29, 1996.
Pursuant to Rule 429 under the Securities Act, the Prospectus contained in
this Registration Statement also relates to the securities of the registrant
remaining unissued under Registration Statement No. 333-1307.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<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 OCTOBER 24, 1997
[LOGO OF MATTEL, INC.]
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
DEBT SECURITIES
WARRANTS OR RIGHTS
UNITS OF SECURITIES
----------
Mattel, Inc. ("Mattel" or 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) depositary shares ("Depositary Shares") representing a
fractional interest in a share of Preferred Stock, (iv) debt securities of the
Company ("Debt Securities"), which may be convertible into shares of Common
Stock, Preferred Stock and/or Depositary Shares, (v) warrants or rights
("Warrants") to acquire Common Stock, Preferred Stock, Depositary Shares and/or
Debt Securities, and (vi) 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,
Depositary Shares, 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 and Depositary Shares, 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, the offering price and, if Depositary Shares are offered, the fraction
of a share of Preferred Stock represented by each Depositary Share; (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, Depositary Shares 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.
----------
, 1997
<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.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 3
Incorporation of Certain Documents by Reference........................... 3
The Company............................................................... 4
Use of Proceeds........................................................... 4
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges
and Preferred Stock Dividends............................................ 5
Description of Debt Securities............................................ 5
Description of Capital Stock.............................................. 14
Description of Depositary Shares.......................................... 18
Description of Securities Warrants........................................ 21
Description of Units of Securities........................................ 23
Plan of Distribution...................................................... 24
Legal Matters............................................................. 25
Experts................................................................... 25
</TABLE>
2
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act") relating to the
Securities offered hereby. This Prospectus and any Prospectus Supplement does
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. Statements contained herein
concerning the provisions of certain documents are not necessarily complete,
and in each instance, reference is made to the copy of such document filed as
an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such
reference.
Mattel is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and the rules and
regulations thereunder, 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 Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the Commission: Suite 1400, Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661-2511; and 13th Floor, 7 World
Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Such reports, proxy statements and other information concerning the Company
are also available for inspection at the offices of the New York Stock
Exchange, Inc. (the "NYSE"), at 20 Broad Street, New York, New York 10005 and
The Pacific Exchange, Inc. at 301 Pine Street, San Francisco, California
94104, on which exchanges certain securities of Mattel are listed. The
Commission also maintains a website that contains reports, proxy, registration
and information statements and other information filed electronically with the
Commission at http://www.sec.gov.
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:
(i) Mattel's Annual Report on Form 10-K for the year ended December 31,
1996;
(ii) Mattel's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997;
(iii) Mattel's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997;
(iv) Current Reports on Form 8-K filed by Mattel with the Commission
dated February 5, 1997; February 14, 1997; March 5, 1997; March 19, 1997;
March 20, 1997; March 27, 1997; April 17, 1997; April 25, 1997; May 15,
1997; July 25, 1997; July 30, 1997; October 9, 1997 and October 21, 1997;
(v) The description of the Company's Series B Voting Convertible
Exchangeable Preferred Stock, par value $1.00 per share (the "Series B
Preferred Stock") and Series C Mandatorily Convertible Redeemable Preferred
Stock, par value $1.00 per share (the "Series C Preferred Stock") and
Series C Depositary Shares set forth in Mattel's and Tyco Toys, Inc.'s
("Tyco") joint proxy statement and prospectus filed with the Commission on
Form S-4 dated February 14, 1997; and
(vi) The description of the Company's Common Stock contained in the
Company's Current Report on Form 8-K filed with the Commission on July 22,
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
3
<PAGE>
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 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the foregoing
documents which have been incorporated by reference herein (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference therein). Requests for such copies should be directed to:
Secretary, Mattel, Inc., 333 Continental Boulevard, El Segundo, California
90245-5012, telephone (310) 252-2000.
THE COMPANY
Mattel, Inc. designs, manufactures, markets and distributes a broad variety
of toy products on a worldwide basis. The Company's business is dependent in
great part on its ability each year to redesign, restyle and extend existing
core products and product lines and to design and develop innovative new toys
and product lines. New products have limited lives, ranging from one to three
years, and generally must be updated and refreshed each year.
Core brands have historically provided the Company with relatively stable
growth. Among the Company's major core brands are BARBIE fashion dolls and
doll clothing and accessories; the Company's Disney-licensed toys; FISHER-
PRICE toys and juvenile products; SESAME STREET characters; HOT WHEELS
vehicles and playsets; MATCHBOX; CABBAGE PATCH KIDS; Tyco Electric Racing and
Tyco Radio Control; the UNO and SKIP-BO card games; and the SCRABBLE game,
which the Company markets outside of the United States and Canada.
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.
4
<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
FOR THE SIX ENDED DECEMBER
MONTHS ENDED 31,(A)(B)
------------------- ------------------------
JUNE 30, JUNE 30,
1997 1996 1996 1995 1994 1993 1992
-------- -------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(c)........................ -- (d) 3.27 5.40 5.09 4.49 2.50 4.21
Ratio of earnings to combined fixed
charges and preferred stock
dividends(c)...................... -- (d) 3.17 5.09 4.84 4.21 2.39 4.01
</TABLE>
- --------
(a) The consolidated ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends for all periods
presented have been restated for the effects of the March 1997 merger of
Tyco into the Company, accounted for as a pooling of interests.
(b) The consolidated ratios of earnings to fixed charges and earnings to
combined fixed charges and preferred stock dividends for 1993 and 1992
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.
(c) 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
(c), "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.
(d) As a result of an approximately $275 million restructuring charge to
earnings taken in the first quarter of 1997, $175 million of which related
to the March 1997 merger of Tyco into the Company, earnings did not cover
fixed charges and fixed charges plus preferred stock dividends by $160.2
million and $165.9 million, respectively, for the six-month period ended
June 30, 1997.
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 the Company and Chase
Trust Company of California (formerly 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 either rank equally with all other unsecured and
unsubordinated indebtedness of the Company or, if so provided in the
Prospectus Supplement, be subordinated to other obligations of the Company.
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 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
5
<PAGE>
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, or the method of such
payment; (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 in
whole or in part at the option of the Company; (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 also 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 ("DTC" or 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 the Company 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 the Company or the
Trustee of the old certificate to the new Holder or the issuance by the
Company or the Trustee of a new certificate to the new Holder.
6
<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 the Company, the Trustee or any other agent of the Company
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.
The Company 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. The Company
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 (i) 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 the Company within 90 days, (ii) the Company
determines, at any time and in its sole discretion, not to have any of the
Book-Entry Debt Securities represented by one or more Global Debt Securities
or (iii) an event shall have happened and be continuing which is or after
notice or lapse of time or both, would be an Event of Default (as defined),
the Company 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.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the United States Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants ("Direct Participants") deposit
with DTC. DTC also facilitates the settlement among Direct Participants of
securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in such Direct
Participant's accounts, eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations.
DTC is owned by a number of its Direct Participants and by the NYSE, The
American Stock Exchange, Inc. and The National Association of Securities
Dealers, Inc. Access to DTC's Book-Entry System is also available to others
such as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants"). The rules applicable to DTC
and its Direct and Indirect Participants are on file with the Commission.
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 THE COMPANY
Limitation on Liens. The Company shall not and shall not permit any
Subsidiary to create, 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 if limited to the same property subject
to, and securing not more than the amount secured by, the Lien extended,
renewed or replaced; (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
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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.
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:
"Capitalized Lease" means any lease of property where the obligations of the
lease are required to be classified and accounted for as a capitalized lease
on a balance sheet of such lessee under generally accepted accounting
principles.
"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.
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"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).
"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 the Company 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 (or the
payment of which is guaranteed by the Company or a Subsidiary), whether such
Indebtedness or guarantee 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
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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. The occurrence of an
Event of Default would constitute an event of default under certain of the
Company'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 the Company.
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 the Company (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 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 the Company, 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
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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 the
Company 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 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 the Company 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) the Company 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;
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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) the Company may omit to comply
with certain covenants, including the restrictive covenants described above
under the caption "Certain Covenants of the Company"; and (ii) the Events of
Default described in clause (e) of the first paragraph under "Events of
Default" 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)
Defeasance and Events of Default. In the event the Company 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, the Company 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
The Company 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.
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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 (as amended, the "Certificate of Incorporation") and Bylaws, as
amended (the "Bylaws"), the Rights Agreement (as defined below) and the
Deposit 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 Bylaws, the Rights Agreement and the Deposit
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 600,000,000 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. 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 and Preferred Stock are 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. 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"). There are 1,500,000 shares of Series E Preference Shares
authorized for issuance. There are currently no Series E Preference Shares
outstanding. See "--Description of Preference Share Purchase Rights."
The registrar and transfer agent for the Common Stock is The First National
Bank of Boston.
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
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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.
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
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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, 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
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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.
PREFERRED 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 Preference Stock
are now outstanding.
SERIES B VOTING CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
Mattel is authorized to and has issued 53,631 shares of Series B Preferred
Stock.
Holders of Series B Preferred Stock are entitled to receive, when and as
dividends on the Series B Preferred Stock are declared by the Board of
Directors out of funds legally available therefor, cash dividends, accruing at
the rate per share of 6% of the liquidation preference per annum. The Series B
Preferred Stock has a liquidation preference of $1,050 per share and will be
convertible, at the option of the holder, into shares of Common Stock at a
conversion price per share of approximately $20.46 subject to certain
adjustments set forth in the Certificate of Designations for the Series B
Preferred Stock. Commencing in April 1999, the shares of Series B Preferred
Stock will be convertible into Common Stock for designated periods at the then
market price, but not less than a price per share of approximately $10.23.
Holders of Series B Preferred Stock are entitled to vote (on an as-converted
basis) with the holders of Common Stock and Series C Preferred Stock as a
single class on all matters on which the holders of Common Stock may vote. The
Company has the option, at any time, to exchange Series B Preferred Stock for
6% convertible subordinated notes due 2004 of Mattel. The Company may redeem
Series B Preferred Stock, in whole or in part, at any time for an amount equal
to 105.25% of its liquidation value if the average closing price (as defined
in the Certificate of Designations relating to the Series B Preferred Stock)
of Common Stock exceeds 175% of the then current conversion price of the
Series B Preferred Stock. The 175% threshold is reduced to 150% for
redemptions after April 15, 1998 and eliminated for redemptions commencing
April 15, 1999. In addition, the redemption price is reduced over time from
105.25% of the liquidation value to 100% in 2004. On April 15, 2004, the
Company is required to redeem all outstanding shares of Series B Preferred
Stock and the redemption price shall be paid, at the Company's option, in cash
or in shares of Common Stock.
Pursuant to the terms of a registration rights agreement among the Company
and the holders of the Series B Preferred Stock, the Company has granted the
holders thereof certain demand and incidental registration rights with respect
to the Series B Preferred Stock, any Common Stock issued upon conversion of
such preferred stock or any notes issued in exchange for such preferred stock.
The shares issued upon conversion of the Series B Preferred Stock will be duly
issued, fully paid and nonassessable.
SERIES C MANDATORILY CONVERTIBLE REDEEMABLE PREFERRED STOCK; SERIES C
DEPOSITARY SHARES
The Company is authorized to and has issued 772,800 shares of Series C
Preferred Stock. In addition, the Company has outstanding 19,320,000 Series C
Depositary Shares. The shares of Series C Preferred Stock are represented by
Series C Depositary Shares, each such share representing one twenty-fifth of a
share of Mattel Series C Preferred Stock. Subject to the terms of such deposit
agreement, each owner of a Series C Depositary Share is entitled to all the
rights and preferences of the Series C Preferred Stock represented thereby,
and subject, proportionately, to all of the limitations of the Series C
Preferred Stock represented thereby, contained in the Certificate of
Designation related to the Series C Preferred Stock summarized below.
Holders of Series C Preferred Stock are entitled to receive, when and as
dividends on the Series C Preferred Stock are declared by the Board of
Directors out of funds legally available therefor, cash dividends from the
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issue date, accruing at the rate per share of 8.25% per annum. The Series C
Preferred Stock has a liquidation preference of $125 per share. On July 1, 2000
(the "Mandatory Conversion Date"), each outstanding share of Series C Preferred
Stock will automatically convert into (i) 13.5753 shares of Common Stock (the
"Mandatory Conversion Rate"), and (ii) the right to receive cash in an amount
equal to all accrued and unpaid dividends on such Series C Preferred Stock
(other than previously declared dividends payable to a holder of record as of a
prior date) to the Mandatory Conversion Date, whether or not declared, out of
funds legally available for the payment of dividends, subject to (1) the right
of the Company to redeem the Series C Preferred Stock on or after July 1, 1999
(the "First Call Date") and before the Mandatory Conversion Date and (2) the
conversion of the Series C Preferred Stock to Common Stock at the option of the
holder at any time before the Mandatory Conversion Date. The Mandatory
Conversion Rate is subject to adjustment in certain circumstances. The shares
of Series C Preferred Stock are not redeemable prior to the First Call Date. At
any time and from time to time on or after that date until immediately before
the Mandatory Conversion Date, the Company may redeem, in whole or in part, the
outstanding Series C Preferred Stock. Shares of Series C Preferred Stock are
convertible in whole or in part, at the option of the holder thereof at any
time before the Mandatory Conversion Date, unless previously redeemed, into
shares of Common Stock at the rate of 10.0159 (which rate is subject to
adjustment) shares of Common Stock per share of Series C Preferred Stock. The
holders of Series C Preferred Stock have the right with the holders of Common
Stock to vote in the election of directors and upon each other matter coming
before any meeting of the holders of Common Stock. Each share of Series C
Preferred Stock is entitled to 12.219 votes. The holders of Series C Preferred
Stock, Common Stock and Series B Preferred Stock vote together as one class on
such matters except as otherwise provided by law or by the Certificate of
Incorporation of the Company.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and the Depositary Receipts does not purport to be complete and is
subject to and qualified in its entirety by reference to the Deposit Agreement
and Depositary Receipts relating to each series of the Preferred Stock which
will be filed with the Commission and incorporated by reference as an exhibit
to the Registration Statement of which this Prospectus is a part at or prior to
the time of the issuance of such series of the Preferred Stock. The forms of
Deposit Agreement and Depositary Receipt are filed as exhibits to, or
incorporated by reference in, the Registration Statement of which this
Prospectus is a part.
GENERAL
The Company may, at its option, elect to offer fractional shares of Preferred
Stock rather than full shares of Preferred Stock. In the event such option is
exercised, the Company will issue to the public receipts for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of the Preferred Stock) of a share
of a particular series of the Preferred Stock as described below.
The shares of any series of the Preferred Stock represented by Depositary
Shares will be deposited under a separate deposit agreement (the "Deposit
Agreement") among the Company, a bank or trust company selected by the Company
(the "Depositary") and the holders from time to time of the Depositary
Receipts. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will in general be entitled, in proportion to the applicable
fraction of a share of Preferred Stock represented by such Depositary Share, to
all the rights and preferences of the Preferred Stock represented thereby
(including dividend, voting, redemption and liquidation rights).
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The Depositary Shares relating to any series of the Preferred Stock will be
evidenced by Depositary Receipts issued pursuant to the related Deposit
Agreement. Depositary Receipts will be distributed to those persons purchasing
such Depositary Shares in accordance with the terms of the offering made by
the related Prospectus Supplement.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to
the terms thereof, a holder of Depositary Receipts is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts. However, there may be no market for the underlying Preferred Stock
and once the underlying Preferred Stock is withdrawn from the Depositary, it
may not be redeposited.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Receipts relating to such Preferred Stock in proportion, insofar
as practicable, to the respective numbers of Depositary Shares evidenced by
such Depositary Receipts held by such holders on the relevant record date. The
Depositary will distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Receipts a fraction of one
cent, and any balance not so distributed will be added to and treated as part
of the next sum received by the Depositary for distribution to record holders
of Depositary Receipts then outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute such amounts of the securities or property received by it as are,
as nearly as practicable, in proportion to the respective numbers of
Depositary Shares evidenced by the Depositary Receipts held by such holders on
the relevant record date, unless the Depositary determines that it is not
feasible to make such distribution, in which case the Depositary may, with the
approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
of such securities or property.
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock will be made available to holders of Depositary Receipts.
The amount distributed in all of the foregoing cases will be reduced by any
amounts required to be withheld by the Company or the Depositary on account of
taxes and governmental charges.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock represented by Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Depositary resulting from the redemption, in whole or
in part, of such series of the Preferred Stock held by the Depositary. The
Depositary will mail notice of redemption not less than 30 and not more than
60 days prior to the date fixed for redemption to the record holders of the
Depositary Receipts evidencing the Depositary Shares to be so redeemed at
their respective addresses appearing in the Depositary's books. The redemption
price per Depositary Share will be equal to the applicable fraction of the
redemption price per share payable with respect to such series of the
Preferred Stock plus all money and other property, if any, payable with
respect to such Depositary Share, including all amounts payable by the Company
in respect of any accumulated but unpaid dividends. Whenever the Company
redeems shares of Preferred Stock held by the Depositary, the Depositary will
redeem as of the same redemption date the number of Depositary Shares
representing shares of Preferred Stock so redeemed. If less than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected by lot or pro rata (subject to rounding to avoid fractions of
Depositary Shares) as may be determined by the Depositary.
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After the date fixed for redemption, the Depositary Shares so called for
redemption will not longer be deemed to be outstanding and all rights of the
holders of Depositary Receipts evidencing such Depositary Shares will cease,
except the right to receive the moneys payable upon such redemption and any
moneys or other property to which such holders were entitled upon such
redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting or action to be taken by written
consent at or as to which the holders of the Preferred Stock are entitled to
vote or consent, the Depositary will mail the information contained in such
notice of meeting or action to the record holders of the Depositary Receipts
evidencing the Depositary Shares relating to such Preferred Stock. Each record
holder of such Depositary Receipts on the record date (which will be the same
date as the record date for the Preferred Stock) will be entitled to instruct
the Depositary as to the exercise of the voting rights or the giving or
refusal of consent, as the case may be, pertaining to the number of shares of
the Preferred Stock represented by the Depositary Shares evidenced by such
holder's Depositary Receipts. The Depositary will endeavor, insofar as
practicable, to vote, or give or withhold consent with respect to, the maximum
number of whole shares of the Preferred Stock represented by all Depositary
Shares as to which any particular voting or consent instructions are received,
and the Company will agree to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting, or giving consents with respect to, shares of the
Preferred Stock to the extent it does not receive specific instructions from
the holders of Depositary Receipts evidencing Depositary Shares representing
such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares relating to
any series of Preferred Stock and any provision of the related Deposit
Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect which they may deem
necessary or desirable. However, any amendment which imposes or increases any
fees, taxes or charges upon holders of Depositary Shares or Depositary
Receipts relating to any series of Preferred Stock or which materially and
adversely alters the existing rights of such holders will not be effective
unless such amendment has been approved by the record holders of Depositary
Receipts evidencing at least a majority of such Depositary Shares then
outstanding. Notwithstanding the foregoing, no such amendment may impair the
right of any holder of Depositary Shares or Depositary Receipts to receive any
moneys or other property to which such holder may be entitled under the terms
of such Depositary Receipts or the Deposit Agreement at the times and in the
manner and amount provided for therein. A Deposit Agreement may be terminated
by the Company or the Depositary only after (a) all outstanding Depositary
Shares relating thereto have been redeemed and any accumulated and unpaid
dividends on the Preferred Stock represented by the Depositary Shares,
together with all other moneys and property, if any, to which holders of the
related Depositary Receipts are entitled under the terms of such Depositary
Receipts or the related Deposit Agreement, have been paid or distributed as
provided in the Deposit Agreement or provision therefor has been duly made,
(b) there has been a final distribution in respect of the Preferred Stock of
the relevant series in connection with any liquidation, dissolution or winding
up of the Company and such distribution has been distributed to the holders of
the related Depositary Receipts, or (c) in the event the Depositary Shares
relate to a series of Preferred Stock which is convertible into shares of
Common Stock or another series of Preferred Stock, all outstanding Depositary
Shares have been converted into shares of Common Stock or another series of
Preferred Stock.
MISCELLANEOUS
The Depositary will forward to record holders of Depositary Receipts, at
their respective addresses appearing in the Depositary's books, all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock
or Depositary Receipts.
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The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of
the Preferred Stock and the initial issuance of the Depositary Receipts
evidencing the Depositary Shares, any redemption of the Preferred Stock and
any withdrawals of Preferred Stock by the holders of Depositary Shares.
Holders of Depositary Shares will pay other transfer and other taxes and
governmental charges and such other charges as are expressly provided in the
Deposit Agreement to be for their accounts.
The Deposit Agreement will contain provisions relating to adjustments in the
fraction of a share of Preferred Stock represented by a Depositary Share in
the event of a change in par value, split-up, combination or other
reclassification of the Preferred Stock or upon any recapitalization, merger
or sale of substantially all of the assets of the Company as an entirety.
Neither the Depositary nor any of its agents nor any registrar nor the
Company will be (a) liable if it is prevented or delayed by law or any
circumstance beyond its control in performing its obligations under the
Deposit Agreement, (b) subject to any liability under the Deposit Agreement to
holders of Depositary Receipts other than for the relevant party's gross
negligence or willful misconduct, or (c) obligated to prosecute or defend any
legal proceeding in respect of any Depositary Receipts, Depositary Shares or
the Preferred Stock unless satisfactory indemnity is furnished. They may rely
upon written advice of counsel or accountants, or information provided by
holders of Depositary Receipts or other persons in good faith believed to be
competent and on documents reasonably believed to be genuine.
RESIGNATION OR REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Warrants for the purchase of Debt Securities ("Debt
Warrants"), Preferred Stock ("Preferred Stock Warrants"), Depositary Shares
("Depositary Share 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.
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
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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") or Depositary Shares (the "Underlying Depositary Shares"),
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 or Depositary Share 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 or Underlying Depositary
Shares; (iii) the number of shares of Preferred Stock or Depositary Shares
that may be purchased on exercise of each Preferred Stock Warrant or
Depositary Share 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
or Depositary Share 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 or Depositary Share Warrants; (vi) the time or times,
or period or periods, in which the Preferred Stock Warrants or Depositary
Share 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 or Depositary Share 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, Depositary Share 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, Depositary Shares 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, Depositary Shares and Common Stock Warrants, the
right to receive payments of dividends, if any, on the Preferred Stock,
Depositary Shares or Common Stock, as the case may be, purchasable upon such
exercise or to exercise any applicable right to vote.
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, Depositary
Shares 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,
22
<PAGE>
Depositary Shares 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, Depositary Shares 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, Depositary Shares 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, DEPOSITARY SHARES AND COMMON STOCK WARRANT ADJUSTMENT
The terms and conditions on which the exercise price of and/or the number of
shares of Preferred Stock, Depositary Shares or Common Stock covered by a
Preferred Stock Warrant, Depositary Share Warrant or Common Stock Warrant,
respectively, are subject to adjustment will be set forth in the Preferred
Stock Warrant Certificate, Depositary Share 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, Depositary Shares or
Common Stock covered by such Preferred Stock Warrant, Depositary Share 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, Depositary Share 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, Depositary Share 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, Depositary Shares or Common Stock, as the case may be.
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.
23
<PAGE>
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.
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.
24
<PAGE>
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
beneficial owner of 98,795 shares of Common Stock, including 15,000 shares of
Common Stock which may be acquired immediately upon the exercise of options.
Certain legal matters will be passed upon for any underwriters or agents by
O'Melveny & Myers LLP, Los Angeles, California.
EXPERTS
The historical financial statements of the Company as of December 31, 1996
and 1995 and for each of the three years in the period ended December 31, 1996
incorporated by reference in this Prospectus to the Company's Annual Report on
Form 10-K and the audited financial statements, restated to give effect to the
merger with Tyco accounted for as a pooling of interests, for the
aforementioned periods incorporated by reference in this Prospectus to the
Company's Current Report on Form 8-K dated July 30, 1997 have been so
incorporated in reliance on the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting and, with respect to the historical financial statements of Tyco
for the aforementioned periods, in reliance on the report of Deloitte & Touche
LLP, independent auditors, given upon their authority as experts in accounting
and auditing.
25
<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................................................ $106,061
Rating agency fees.............................................. 90,000
Printing and engraving expenses................................. 25,000
Accounting fees and expenses.................................... 50,000
Legal fees and expenses......................................... 50,000
Blue sky fees and expenses...................................... 15,000
Fees and expenses of Trustee.................................... 10,000
Miscellaneous................................................... 3,939
--------
Total.......................................................... $350,000
========
</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.
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 Chase
Trust Company of California, as Trustee, relating to the Debt Securities
(incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-3 dated April 1, 1996)
4.2 Form of Floating Rate Note (incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3 dated April 1, 1996)
4.3 Form of Fixed Rate Note (incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form S-3 dated April 1, 1996)
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 Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to Exhibit B to the Company's Proxy Statement
dated March 23, 1996)
4.6 By-laws of the Company, as amended to date (incorporated by reference to
Exhibit 4.3 to the Company's Registration Statement on Form S-3 filed with
the Securities and Exchange Commission on September 26, 1997)
4.7 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)
4.8 Specimen Stock Certificate with respect to Common Stock (incorporated by
reference to the Company's Current Report on Form 8-K filed on July 22,
1996)
4.9 Certificate of Designation of Preferred Stock*
4.10 Specimen Stock Certificate with respect to Preferred Stock*
4.11 Form of Warrant Agreement pertaining to Common Stock (including the form of
Certificate representing a Warrant for Common Stock)*
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
4.12 Form of Warrant Agreement pertaining to Preferred Stock (including the form
of Certificate representing a Warrant for Preferred Stock)*
4.13 Form of Warrant Agreement pertaining to Debt Securities (including the form
of Certificate representing a Warrant for Debt Securities)*
4.14 Form of Deposit Agreement pertaining to Depositary Shares (including the
form of Depositary Receipts relating to Preferred Stock)*
4.15 Certificate of Designation of Series B Preferred Stock dated March 26, 1997
(incorporated by reference to the Company's Registration Statement on Form
S-3 filed with the Securities and Exchange Commission on August 21, 1997)
4.16 Certificate of Designation of Series C Preferred Stock dated March 26, 1997
(incorporated by reference to the Company's Registration Statement on Form
S-3 filed with the Securities and Exchange Commission on August 21, 1997)
4.17 Deposit Agreement dated June 24, 1996 among Tyco, Midlantic Bank, N.A., as
Depositary, and all holders from time to time of depositary receipts
issued thereunder (incorporated by reference to Exhibit 4.2 to Tyco Toys,
Inc.'s Registration Statement on Form S-3, dated June 20, 1996)
4.18 Amendment to Deposit Agreement dated as March 27, 1997 between the Company,
as successor to Tyco and The First National Bank of Boston (incorporated
by reference to Exhibit 4.9 to the Company's Registration on Form S-3
filed with the Securities and Exchange Commission on September 26, 1997)
4.19 Registration Rights Agreement dated April 15, 1994 among Tyco, Corporate
Partners, L.P., Corporate Offshore Partners, L.P., the State Board of
Administration of Florida and Corporate Advisors, L.P. (incorporated by
reference to Tyco's Annual Report on
Form 10-K for the year ended December 31, 1994)
4.20 Amendment to Registration Rights Agreement dated as of March 27, 1997 among
the Company, Corporate Partners, L.P., Corporate Offshore Partners, L.P.
and the State Board of Administration of Florida (incorporated by
reference to Exhibit 4.11 to the Company's Registration Statement on Form
S-3 filed with the Commission on September 26, 1997)
5 Opinion of Irell & Manella LLP 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+
23.2 Consent of Deloitte and Touche LLP+
23.3 Consent of Irell & Manella LLP (included in their opinion)
24 Power of Attorney with respect to the Company (see page II-5)+
25 Form T-1 Statement of Eligibility and Qualification of the Trustee Under
the Trust Indenture Act of 1939+
</TABLE>
- --------
* 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.
+ Filed herewith.
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. Notwithstanding the foregoing any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective 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.
(4) 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 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
October 24, 1997.
MATTEL, INC.
By: /s/ Harry Pearce
___________________________________
Name: Harry Pearce
Title: Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below on this registration statement hereby constitutes and appoints Jill E.
Barad, Ned Mansour, Robert Normile, Leland P. Smith and John L. Vogelstein,
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for them and in their name, place and stead,
in any and all capacities (unless revoked in writing) to sign any and all
amendments to this registration statement to which this power of attorney is
attached, including any post-effective amendments as well as any related
registration statement (or amendment thereto) filed in reliance upon Rule
462(b) under the Securities Act of 1933, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, granting to such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in connection therewith, as fully to all
intents and purposes as they might and could do in person hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John W. Amerman Director October 24, 1997
____________________________________
John W. Amerman
/s/ Jill E. Barad Chairman of the Board, October 24, 1997
____________________________________ President and Chief
Jill E. Barad Executive Officer
/s/ Harry Pearce Chief Financial Officer October 24, 1997
____________________________________ (Principal Financial
Harry Pearce Officer)
/s/ Kevin M. Farr Senior Vice President and October 24, 1997
____________________________________ Controller (Chief Accounting
Kevin M. Farr Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Dr. Harold Brown Director October 24, 1997
____________________________________
Dr. Harold Brown
/s/ Tully M. Friedman Director October 24, 1997
____________________________________
Tully M. Friedman
/s/ Joseph C. Gandolfo Director and President, October 24, 1997
____________________________________ Worldwide Manufacturing
Joseph C. Gandolfo Operations
/s/ Ronald M. Loeb Director October 24, 1997
____________________________________
Ronald M. Loeb
/s/ Ned Mansour Director and President, October 24, 1997
____________________________________ Corporate Operations
Ned Mansour
/s/ Edward N. Ney Director October 24, 1997
____________________________________
Edward N. Ney
/s/ William D. Rollnick Director October 24, 1997
____________________________________
William D. Rollnick
/s/ Christopher A. Sinclair Director October 24, 1997
____________________________________
Christopher A. Sinclair
/s/ Bruce L. Stein Director and President, October 24, 1997
____________________________________ Mattel Worldwide
Bruce L. Stein and Chief Operating Officer
/s/ John L. Vogelstein Director October 24, 1997
____________________________________
John L. Vogelstein
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF 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
Chase Trust Company of California, as Trustee, relating to the Debt
Securities (incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3 dated April 1, 1996)
4.2 Form of Floating Rate Note (incorporated by reference to Exhibit 4.2
to the Company's Registration Statement on Form S-3 dated April 1,
1996)
4.3 Form of Fixed Rate Note (incorporated by reference to Exhibit 4.3 to
the Company's Registration Statement on Form S-3 dated April 1, 1996)
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 Certificate of Amendment of Restated Certificate of Incorporation
(incorporated by reference to Exhibit B to the Company's Proxy
Statement dated March 23, 1996)
4.6 By-laws of the Company, as amended to date (incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement on Form S-3
filed with the Securities and Exchange Commission on September 26,
1997)
4.7 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)
4.8 Specimen Stock Certificate with respect to Common Stock (incorporated
by reference to the Company's Current Report on Form 8-K filed on
July 22, 1996)
4.9 Certificate of Designation of Preferred Stock*
4.10 Specimen Stock Certificate with respect to Preferred Stock*
4.11 Form of Warrant Agreement pertaining to Common Stock (including the
form of Certificate representing a Warrant for Common Stock)*
4.12 Form of Warrant Agreement pertaining to Preferred Stock (including the
form of Certificate representing a Warrant for Preferred Stock)*
4.13 Form of Warrant Agreement pertaining to Debt Securities (including the
form of Certificate representing a Warrant for Debt Securities)*
4.14 Form of Deposit Agreement pertaining to Depositary Shares (including
the form of Depositary Receipts relating to Preferred Stock)*
4.15 Certificate of Designation of Series B Preferred Stock dated March 26,
1997 (incorporated by reference to the Company's Registration
Statement on Form S-3 filed with the Securities and Exchange
Commission on August 21, 1997)
4.16 Certificate of Designation of Series C Preferred Stock dated March 26,
1997 (incorporated by reference to the Company's Registration
Statement on Form S-3 filed with the Securities and Exchange
Commission on August 21, 1997)
4.17 Deposit Agreement dated June 24, 1996 among Tyco, Midlantic Bank,
N.A., as Depositary, and all holders from time to time of depositary
receipts issued thereunder (incorporated by reference to Exhibit 4.2
to Tyco Toys, Inc.'s Registration Statement on Form S-3, dated June
20, 1996)
</TABLE>
<PAGE>
INDEX TO EXHIBITS--(CONTINUED)
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
4.18 Amendment to Deposit Agreement dated as March 27, 1997 between the
Company, as successor to Tyco and The First National Bank of Boston
(incorporated by reference to Exhibit 4.9 to the Company's
Registration on Form S-3 filed with the Securities and Exchange
Commission on September 26, 1997)
4.19 Registration Rights Agreement dated April 15, 1994 among Tyco,
Corporate Partners, L.P., Corporate Offshore Partners, L.P., the
State Board of Administration of Florida and Corporate Advisors,
L.P. (incorporated by reference to Tyco's Annual Report on Form 10-K
for the year ended December 31, 1994)
4.20 Amendment to Registration Rights Agreement dated as of March 27, 1997
among the Company, Corporate Partners, L.P., Corporate Offshore
Partners, L.P. and the State Board of Administration of Florida
(incorporated by reference to Exhibit 4.11 to the Company's
Registration Statement on Form S-3 filed with the Commission on
September 26, 1997)
5 Opinion of Irell & Manella LLP 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+
23.2 Consent of Deloitte and Touche LLP+
23.3 Consent of Irell & Manella LLP (included in their opinion)
24 Power of Attorney with respect to the Company (see page II-5)+
25 Form T-1 Statement of Eligibility and Qualification of the Trustee
Under the Trust Indenture Act of 1939+
</TABLE>
- --------
* 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.
+ Filed herewith.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF IRELL & MANELLA LLP]
October 24, 1997
Mattel, Inc.
333 Continental Boulevard
El Segundo, California 90245-5012
Ladies and Gentlemen:
We have acted as counsel to Mattel, Inc., a Delaware corporation (the
"Company"), in connection with the Company's Registration Statement on Form S-
3 (the "Registration Statement"), to be filed with the Securities and Exchange
Commission with respect to the registration under the Securities Act of 1933,
as amended (the "Act"), of up to $350,000,000 (exclusive of unissued
securities under the Company's Registration Statement on Form S-3, dated
February 29, 1996, which securities may be issued under the Registration
Statement in reliance on Rule 429 under the Act) aggregate initial offering
price of an indeterminate amount of the following: (i) shares of the Company's
common stock, $1.00 par value per share ("Common Stock"), (ii) shares of the
Company's preferred stock, $1.00 par value per share ("Preferred Stock"),
which may be convertible into shares of Common Stock, (iii) depositary shares
of the Company ("Depositary Shares"), representing a fractional interest in a
share of Preferred Stock, which Depositary Shares are represented by
depositary receipts (the "Depositary Receipts") to be issued pursuant to a
deposit agreement (the "Deposit Agreement") between the Company and a bank or
trust company to be selected by the Company (the "Depositary"), (iv) the
Company's debt securities (the "Debt Securities"), which may be convertible
into shares of Common Stock, Preferred Stock and/or Depositary Shares, and
which are to be issued pursuant to an Indenture (the "Indenture") between the
Company and Chase Trust Company of California (formerly Chemical Trust Company
of California), as trustee (the "Trustee"), (v) warrants or rights
("Warrants") to acquire Common Stock, Preferred Stock, Depositary Shares
and/or Debt Securities, and (vi) units ("Units") consisting of two or more of
the foregoing securities. The Common Stock, Preferred Stock, Depositary
Shares, Debt Securities, Warrants and Units (collectively, the "Securities")
may be issued from time to time pursuant to Rule 415 under the Act and will be
subject to specific terms pertaining to each respective series of Securities
as determined at the time of sale and as set forth in one or more supplements
to the Prospectus constituting part of the Registration Statement.
As such counsel, we have examined the Registration Statement, the Indenture
and such records of the Company's corporate proceedings and such other
documents and have made such other factual and legal investigations as we
deemed necessary or appropriate in order to render this opinion.
Based upon such examinations and investigations and subject to (i) the
occurrence of such additional corporate procedures as are now contemplated
prior to the issuance of any Securities or which we, as the Company's counsel,
advise the Company to undertake in connection with any such issuance, (ii) the
effectiveness of the Registration Statement under the Act, (iii) the
establishment of the terms of each series of Securities in accordance with the
terms of (a) the Company's Restated Certificate of Incorporation and Bylaws,
(b) any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company, (c) any agreement, indenture, mortgage,
deed of trust, undertaking or other instrument that is binding upon the
Company, and (d) applicable law, and (iv) the due authorization, execution and
delivery of the Indenture and the Securities, and, as applicable, the
authentication of and payment for the Securities, it is our opinion that:
1. The Common Stock (including any Common Stock that may be issuable
pursuant to the conversion of any Preferred Stock or Depositary Shares or
Debt Securities or the exercise of any Warrants or as part of
<PAGE>
any Units) will, upon the issuance and sale thereof in the manner
contemplated by the Registration Statement, be validly issued, fully paid
and nonassessable.
2. The Preferred Stock (including any Preferred Stock that may be
issuable pursuant to the conversion or exchange of any Depositary Shares or
Debt Securities or the exercise of any Warrants or as part of any Units)
will, upon the issuance and sale thereof in the manner contemplated by the
Registration Statement, be validly issued, fully paid and nonassessable.
3. Assuming the due authorization, execution and delivery of the Deposit
Agreement by the Depositary and the Company, each Depositary Share
(including any Depositary Shares that may be issuable pursuant to the
conversion of any Debt Securities or the exercise of any Warrants or as
part of any Units), when issued in accordance with the Deposit Agreement
against deposit of the shares of Preferred Stock, will represent a
beneficial interest in the applicable fraction of a validly issued, fully
paid and nonassessable share of Preferred Stock and assuming the due
execution and delivery of the Depositary Receipts by the Depositary
pursuant to the Deposit Agreement and upon payment for and delivery of the
Depositary Shares as contemplated by the Registration Statement, the
Depositary Receipts will entitle the holders thereof to the benefits
provided therein and in the Deposit Agreement.
4. The Debt Securities (including any Debt Securities that may be
issuable pursuant to the exercise of any Warrants or as part of any Units)
will, upon the issuance and sale thereof in the manner contemplated by the
Registration Statement, constitute legally valid and binding obligations of
the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and subject, as to the binding and enforceable nature of such
obligations, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
5. The Warrants (including any Warrants that may be issuable as part of
any Units) will, upon the issuance and sale thereof in the manner
contemplated by the Registration Statement, constitute legally valid and
binding obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to the binding and enforceable nature
of such obligations, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
This opinion is rendered solely for your benefit in connection with the
transactions described above. This opinion may not be used or relied upon by
any other person and may not be disclosed, quoted, filed with a governmental
agency or otherwise referred to without our prior written consent. However, we
hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the use of our name under the heading "Legal Matters" in the
Prospectus constituting part of the Registration Statement.
Sincerely,
/s/ Irell & Manella LLP
<PAGE>
MATTEL, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,(A)(B)
------------------- ------------------------------------------------
JUNE 30, JUNE 30,
1997 1996 1996 1995 1994 1993 1992
--------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income (loss) before
income taxes,
cumulative effect of
changes in accounting
principles and
extraordinary item... $(159,675) $121,387 $536,756 $504,668 $362,157 $153,306 $313,081
Less (plus) minority
interest and
undistributed income
(loss) of less-than-
majority-owned
affiliates, net...... 7 236 303 (36) (649) 124 (23)
Add:
Interest expense..... 38,150 41,883 100,226 102,983 87,071 86,101 81,990
Appropriate portion
of rents(c)......... 9,744 9,658 19,527 19,450 16,224 16,221 15,609
--------- -------- -------- -------- -------- -------- --------
Earnings available for
fixed charges........ $(111,774) $173,164 $656,812 $627,065 $464,803 $255,752 $410,657
========= ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense...... $ 38,150 $ 41,883 $100,226 $102,983 $ 87,071 $ 86,101 $ 81,990
Capitalized interest.. 577 1,417 1,789 693 285 -- --
Appropriate portion of
rents(c)............. 9,744 9,658 19,527 19,450 16,224 16,221 15,609
--------- -------- -------- -------- -------- -------- --------
Fixed charges......... $ 48,471 $ 52,958 $121,542 $123,126 $103,580 $102,322 $ 97,599
========= ======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges(d)....... -- 3.27x 5.40x 5.09x 4.49x 2.50x 4.21x
========= ======== ======== ======== ======== ======== ========
</TABLE>
- --------
(a) Consolidated financial information for all periods presented has been
restated for the effects of the March 1997 merger of Tyco Toys, Inc. into
the Company, accounted for as a pooling of interests.
(b) Consolidated financial information for 1993 and 1992 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.
(c) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(d) Earnings did not cover fixed charges by $160.2 million for the six-month
period ended June 30, 1997.
<PAGE>
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
SIX MONTHS ENDED FOR THE YEARS ENDED DECEMBER 31,(A) (B)
------------------- ------------------------------------------------
JUNE 30, JUNE 30,
1997 1996 1996 1995 1994 1993 1992
--------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS AVAILABLE FOR
FIXED CHARGES:
Income (loss) before
income taxes,
cumulative effect of
changes in accounting
principles and
extraordinary item... $(159,675) $121,387 $536,756 $504,668 $362,157 $153,306 $313,081
Less (plus) minority
interest and
undistributed income
(loss) of less-than-
majority-owned
affiliates, net...... 7 236 303 (36) (649) 124 (23)
Add:
Interest expense.... 38,150 41,883 100,226 102,983 87,071 86,101 81,990
Appropriate portion
of rents(c) ....... 9,744 9,658 19,527 19,450 16,224 16,221 15,609
--------- -------- -------- -------- -------- -------- --------
Earnings available for
fixed charges........ $(111,774) $173,164 $656,812 $627,065 $464,803 $255,752 $410,657
========= ======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest expense...... $ 38,150 $ 41,883 $100,226 $102,983 $ 87,071 $ 86,101 $ 81,990
Capitalized interest.. 577 1,417 1,789 693 285 -- --
Dividends--Series B
preferred stock ..... 1,692 1,716 3,406 3,200 2,157 -- --
Dividends--Series C
preferred stock...... 3,985 -- 3,985 -- -- -- --
Dividends--Series F
preference stock..... -- -- -- 3,342 4,689 4,894 4,826
Appropriate portion of
rents(c)............. 9,744 9,658 19,527 19,450 16,224 16,221 15,609
--------- -------- -------- -------- -------- -------- --------
Fixed charges......... $ 54,148 $ 54,674 $128,933 $129,668 $110,426 $107,216 $102,425
========= ======== ======== ======== ======== ======== ========
Ratio of earnings to
fixed charges(d)....... -- 3.17x 5.09x 4.84x 4.21x 2.39x 4.01x
========= ======== ======== ======== ======== ======== ========
</TABLE>
- --------
(a) Consolidated financial information for all periods presented has been
restated for the effects of the March 1997 merger of Tyco Toys, Inc. into
the Company, accounted for as a pooling of interests.
(b) Consolidated financial information for 1993 and 1992 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.
(c) Portion of rental expenses which is deemed representative of an interest
factor, not to exceed one-third of total rental expense.
(d) Earnings did not cover fixed charges plus preferred stock dividends by
$165.9 million for the six-month period ended June 30, 1997.
<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 5, 1997 (July 18, 1997 with respect to the merger with Tyco
Toys, Inc. and other subsequent events described in Note 11), which appears in
the Current Report on Form 8-K dated July 30, 1997. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Los Angeles, California
October 21, 1997
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Mattel, Inc. on Form S-3 of our report dated February 4, 1997 except for
note 15, as to which the date is March 27, 1997 (relating to the financial
statements of Tyco Toys, Inc. and subsidiaries not presented separately
herein), appearing in Mattel's Current Report on Form 8-K dated July 30, 1997,
and to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
October 21, 1997
<PAGE>
_____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________
FORM T-l
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(B)(2)_________
___________________________
CHASE TRUST COMPANY OF CALIFORNIA
(formerly Chemical Trust Company of California,
formerly Manufacturers Hanover Trust Company of California)
(Exact name of trustee as specified in its charter)
CALIFORNIA 94-2926573
(State of incorporation I.R.S. employer
if not a national bank) identification No.)
101 CALIFORNIA STREET, SUITE 2725
SAN FRANCISCO, CALIFORNIA 94111
(Address of principal executive offices) (Zip Code)
Francis J. Farrell
Vice President & Manager
101 California Street, Suite 2725
San Francisco, CA 94111
Tel: (415) 954-9525
(name, address and telephone number of agent for service)
___________________________
MATTEL, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 95-1567322
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
333 CONTINENTAL BOULEVARD
EL SEGUNDO, CALIFORNIA 90245-5012
(Address of principal executive offices) (Zip Code)
___________________________
Debt Securities
(Title of the indenture securities)
__________________________________
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Superintendent of Banks of the State of California,
235 Montgomery Street, San Francisco, California 94104-2980.
Board of Governors of the Federal Reserve System,
Washington, DC 20551
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES
a) Title of the securities outstanding under each such other indenture.
$250,000,000 Series A Medium Term Notes issued under Indenture dated
as of 8-1-94
$350,000,000 Series B Medium Term Notes issued under Indenture dated
as of 2-15-96
b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310 (b) (1) of the
Act arises as a result of the trusteeship under any such other indenture,
including a statement as to how the indenture securities will rank as compared
with the securities issued under such other indenture.
The Trustee is not deemed to have a conflicting interest within the
meaning of Section 310 (b) (1) of the Act because (i) the indenture securities
referenced in (a) above (the "Prior Securities") are not in default and (ii)
proviso (i) under 310 (b) (1) is applicable and excludes the operations of 310
(b) (1) as the indenture to be qualified and the indenture entered into in
connection with the Prior Securities (the "Prior Indenture") are wholly
unsecured and rank equally and the Prior Indenture is specifically described in
the indenture to be qualified.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
ITEM 16. LIST OF EXHIBITS
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Incorporation of the Trustee as now in
effect, including the Restated Articles of Incorporation dated December 23, 1986
and the Certificate of Amendment dated March 26, 1992 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 33-55136, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (See Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-55136, which is incorporated by reference).
2
<PAGE>
3. Authorization to exercise corporate trust powers (Contained in
Exhibit 2).
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form
T-1 filed in connection with Registration Statement No. 33-55136, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 21(b) of the Act (See
Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-
55136, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chase Trust Company of California, a corporation organized and existing
under the laws of the State of California, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of San Francisco and State of California, on the
17th day of October, 1997.
CHASE TRUST COMPANY OF CALIFORNIA
By /s/ Paula Oswald
-----------------------
PAULA OSWALD
Assistant Vice President
4
<PAGE>
EXHIBIT 7. Report of Condition of the Trustee.
- --------------------------------------------------------------------------------
TRUST COMPANY
<TABLE>
<CAPTION>
CONSOLIDATED REPORT OF CONDITION OF CHASE TRUST COMPANY of CALIFORNIA
----------------------------------
(Legal Title)
<S> <C> <C> <C> <C>
LOCATED AT San Francisco San Francisco CA 94111
-------------------------------------------- ----------------- --------------- --------
(City) (County) (State) (Zip)
AS OF CLOSE OF BUSINESS ON June 30, 1997 BANK NO. 1476
-------------- --------
===================================================================================================================================
===================================================================================================================================
ASSETS DOLLAR AMOUNT IN THOUSANDS
1. Cash and due from banks 12,386
2. U.S. Treasury securities 10,125
3. Obligations of other U.S. Government agencies and corporations
4. Obligations of States and political subdivisions
5. Other securities (including $ corporate stock
-----------------
(a) Loans
(b) Less: Reserve for possible loan losses
(c) Loans (Net)
7. Bank Premises, furniture and fixtures and other assets representing bank
premises (including $ -0- capital leases) 157
--------------------
8. Real estate owned other than bank premises
9. Investments in subsidiaries not consolidated
10. Other assets (complete schedule on reverse) (including $intangibles) 517
-------------
11. TOTAL ASSETS 23,185
LIABILITIES
12. Liabilities For borrowed money
13. Mortgage indebtedness (including $capital leases)
--------------
14. Other liabilities (complete on schedule on reverse 3,199
15. TOTAL LIABILITIES 3,199
16. Capital notes and debentures
SHAREHOLDERS EQUITY
17. Preferred stock--
(Number shares outstanding ) Amount $
-----------------
18. Common stock-- 10
(Number shares authorized 100 ) Amount $ 100
-----------------
(Number shares outstanding 100 ) Amount $ 100
-----------------
19. Surplus Amount $ 9,990
20. TOTAL CONTRIBUTED CAPITAL 10,000
21. Retained earnings and other capital reserves 9,986
22. TOTAL SHAREHOLDERS EQUITY 19,986
23. TOTAL LIABILITIES AND CAPITAL ACCOUNTS 23,185
========
</TABLE>
5
<PAGE>
MEMORANDA
1. Assets deposited with State Treasurer to qualify for exercise of fiduciary
powers (market value) 620
-----------------------------------------------------------------------------
Francis J. Farrell, VP & Manager and C. Scott Boone, Senior
The undersigned, Vice President
---------------------------------------------------------------
(Name and Title) (Name and Title)
of the above named trust company, each declares, for himself alone and not for
the other: I have a personal knowledge of the matters contained in this report
(including the reverse side hereof), and I believe that each statement in said
report is true. Each of the undersigned, for himself alone and not for the
other, certifies under penalty of perjury that the foregoing is true and
correct.
Executed on 7/30/97, at San Francisco, California
----------- -------------
(Date) (City)
s/Francis J. Farrell s/C. Scott Boone
-------------------- ----------------
(Signature) (Signature)
<TABLE>
<CAPTION>
SCHEDULE OF OTHER ASSETS
<S> <C>
Accounts Receivable $ (12)
Deferred Taxes 396
Other 133
------
Total (same as Item 10) $ 517
SCHEDULE OF OTHER LIABILITIES
Accrued Income Taxes $1,847
Accrued Expenses & A/P 27
Accrued Pension & Benefits 963
Accrued Incentive Expense
All Other Liabilities 362
------
Total (same as Item 14) $3,199
</TABLE>
6
