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As filed with the Securities and Exchange Commission on March 2, 1999
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)
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Delaware 95-1567322
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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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)
Lee B. Essner, Esq.
Assistant General Counsel and Assistant Secretary
333 Continental Boulevard
El Segundo, California 90245-5012
(310) 252-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Thomas C. Sadler, Esq.
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
(213) 485-1234
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
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, 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, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement of 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,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed maximum
maximum aggregate Amount of
Title of each class of Amount to be offering price offering registration
securities to be registered registered per share(1) price(2) fee
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<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per
share (including the Preference
Share Purchase Rights attached
thereto)(3).................... 10,734,400(4) $26.25 $281,778,000 $78,335
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(1) Based upon the average of the high and low prices of our common stock
reported on the New York Stock Exchange on February 23, 1999, pursuant to
Rule 457(c) of the Securities Act of 1933, as amended.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 of the Securities Act.
(3) Shares of our common stock being registered hereby are accompanied by
preference share purchase rights. Until the occurrence of specific
prescribed events, such rights are not exercisable, are evidenced by the
certificates for our common stock and will be transferred along with and
only with our common stock.
(4) Includes (a) the shares of our common stock issuable upon exchange or
redemption of outstanding Exchangeable Non-Voting Shares of Softkey
Software Products Inc. and (b) the shares of our common stock initially
issuable upon conversion of our 5- 1/2% Senior Convertible Notes due 2000
and, pursuant to Rule 416 under the Securities Act, an indeterminate number
of shares of our common stock that may be issued upon either exchange or
redemption of exchangeable shares by reason of adjustment of the exchange
ratio due to anti-dilution provisions or upon conversion of the notes by
reason of the adjustment of the conversion price due to anti-dilution
provisions.
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, or until the registration statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not issue these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 2, 1999
PROSPECTUS
Mattel, Inc.
10,734,400 Shares of Common Stock
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This prospectus relates to the shares of Mattel common stock, $1.00 par value
per share, that we must issue to you:
. if you elect to exchange your Exchangeable Non-Voting Shares issued by our
Canadian subsidiary, Softkey Software Products Inc. for shares of our
common stock; or
. if you elect to convert your 5 -1/2% Senior Convertible Notes due 2000 of
Mattel into shares of our common stock.
Holders of Exchangeable Shares.
You may exchange your exchangeable shares for shares of our common stock at
any time. When you exchange your exchangeable shares for our common stock, you
will receive shares of our common stock for each exchangeable share. You
also will receive a cash amount equal to any declared and unpaid dividends on
the exchangeable shares if the record date is prior to the date of exchange.
To exchange your exchangeable shares for our common stock, you will need to
complete and execute a notice of retraction. A form of this notice of
retraction may be obtained from Softkey's transfer agent, CIBC Mellon Trust
Company. You will need to deliver a notice of retraction, together with the
certificates representing your exchangeable shares, to CIBC Mellon Trust
Company.
February 4, 2005 is the automatic redemption date. On that date, Softkey will
redeem or we will acquire all of the then outstanding exchangeable shares by
delivering, for each exchangeable share, shares of our common stock
plus a cash amount equal to any declared and unpaid dividends. In this
prospectus, we use the word "exchange" to refer to an exchange by you, a
redemption by Softkey and the acquisition of your exchangeable shares by
Mattel.
Holders of Notes.
You may convert your notes into shares of our common stock at any time prior
to November 1, 2000, the maturity date for the notes. Subject to some
adjustments, the conversion price is $53 per share. We may redeem the notes
prior to November 1, 2000. If we call the notes for redemption, your conversion
rights generally expire on the day immediately prior to the redemption date. To
convert your notes, you will need to deliver your notes and other required
documents to State Street Bank and Trust Company, the trustee for the notes.
Our common stock is listed on the New York Stock Exchange and the Pacific
Exchange, Inc. under the symbol "MAT." On February 26, 1999, the last reported
sales price of our common stock on the New York Stock Exchange was $26.375 per
share.
We have not engaged any broker, dealer or underwriter in connection with this
offering of our common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined
that this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
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The date of this prospectus is , 1999.
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TABLE OF CONTENTS
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Page
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About This Prospectus.................................................. 1
Forward-Looking Statements............................................. 1
The Company............................................................ 2
Use of Proceeds........................................................ 2
Plan of Distribution Relating to Exchange of the Exchangeable Shares... 3
Plan of Distribution Relating to Conversion of Notes................... 8
Description of Mattel Capital Stock.................................... 11
Income Tax Considerations Regarding the Exchangeable Shares............ 14
Where You Can Find More Information.................................... 27
Incorporation of Certain Documents by Reference........................ 27
Legal Matters.......................................................... 28
Experts................................................................ 28
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ABOUT THIS PROSPECTUS
Certain important business and financial information about us that is not
included in this prospectus is considered to be a part of this prospectus
because it is included in other documents that are incorporated by reference in
this prospectus. Among such documents are our and The Learning Company, Inc.'s
most recently filed Annual Reports on Form 10-K and Quarterly Reports on Forms
10-Q and 10-Q/A filed since those Annual Reports on Form 10-K were filed. For a
complete list of the documents incorporated by reference, see "Where You Can
Find More Information" on page 27.
At your request, we will provide to you, without charge, a copy of any or all
of the documents that are incorporated by reference in this prospectus other
than exhibits to such documents. Requests for documents shall be directed to
Mattel, Inc., 333 Continental Boulevard, El Segundo, California, 90245-5012,
attention: Corporate Secretary; Telephone No.: (310) 252-2703.
All dollar amounts referred to in this prospectus are in U.S. dollars.
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Mattel, Inc. has not authorized any person to give you any information or to
make any representation not contained or incorporated by reference in this
prospectus. You must not rely upon any information or representation not
contained or incorporated by reference in this prospectus as if we had
authorized it. This prospectus is not an offer to sell or the solicitation of
an offer to buy any securities other than the registered securities to which it
relates and this prospectus is not an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction where, or to any person to whom, it
is unlawful to make such offer or solicitation. You should not assume that the
information contained in this prospectus is correct on any date after the date
of this prospectus, even though this prospectus is delivered or shares are sold
pursuant to this prospectus on a later date.
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FORWARD-LOOKING STATEMENTS
This prospectus and the documents that we incorporate by reference may
contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements involve
numerous risks and uncertainties and you should not rely on them as predictions
of future events. We do not guarantee that the transactions and events
described in forward-looking statements will happen as described or that they
will happen at all. You can identify forward-looking statements by the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"should," "seeks," "approximately," "intends," "plans," "pro forma,"
"estimates" or "anticipates" or the negative of these words and phrases or
similar words or phrases.
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "we," "us," "our," the "Company" or "Mattel"
mean Mattel, Inc.
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THE COMPANY
General.
Mattel designs, manufactures, and markets a broad variety of children's
products on a worldwide basis through both sales to retailers and direct to
consumers. Our business is dependent in great part on our ability each year to
redesign, restyle and extend existing core products and product lines, to
design and develop innovative new products and product lines and to expand our
marketing capability. Our portfolio of brands can be grouped in the following
four categories:
. Girls - including Barbie(R) fashion dolls and accessories, collector
dolls, Fashion Magic(R) American Girl(R), Cabbage Patch Kids(R), and
Polly Pocket(R);
. Infant and Preschool - including Fisher Price(R), Disney preschool and
plush, Power Wheels(R), Sesame Street(R), See "N Say(R), Magna Doodle(R)
and View-Master(R);
. Entertainment - including Disney, Nickelodeon, games and puzzles; and
. Wheels - including Hot Wheels(R), Matchbox(R), Tyco Electric Racing(R),
and Tyco Radio Control(R).
As a result of our recent merger with The Learning Company, Inc. we now also
develop and publish a broad range of high-quality branded consumer software for
personal computers that educate across every age category, from young children
to adults. Our primary emphasis is in education and productivity software, but
we also offer a selection of lifestyle and to a lesser extent, entertainment
products, both in North America and internationally.
Our principal executive offices are located at 333 Continental Boulevard, El
Segundo, California 90245-5012. Our telephone number is (310) 252-2703.
USE OF PROCEEDS
We will not receive any cash proceeds when you exchange exchangeable shares
for shares of our common stock or when you convert notes into shares of our
common stock.
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PLAN OF DISTRIBUTION RELATING TO EXCHANGE
OF EXCHANGEABLE SHARES
General.
Our common stock may be issued to you as follows:
. you may require at any time that your exchangeable shares be exchanged
for shares of our common stock at a rate of shares of our common
stock for each exchangeable share;
. Softkey may redeem the outstanding exchangeable shares on February 4,
2005 for shares of our common stock for each exchangeable share;
and
. upon liquidation of Mattel or Softkey, you may be required to, or may
elect to, exchange your exchangeable shares for shares of our
common stock for each exchangeable share.
We have not engaged any broker, dealer or underwriter in connection with this
offering of our common stock.
The following is a summary that highlights some of the rights, privileges,
restrictions and conditions relating to the terms on which our common stock may
be issued to you in exchange for your exchangeable shares. The specific
provisions governing the exchangeable shares are set forth in the Articles of
Arrangement of Softkey Software Products Inc. and the Voting and Exchange Trust
Agreement as amended and supplemented by the Voting and Exchange Trust
Supplement, each of which is included as an exhibit to the registration
statement of which this prospectus is a part. You should read the Articles of
Arrangement, the Voting and Exchange Trust Agreement and the Voting and
Exchange Trust Supplement for a more complete understanding of the exchangeable
shares.
Election by holders to exchange.
As a holder of exchangeable shares, you have the right at any time to retract
(that is, to require Softkey to redeem) any or all of the exchangeable shares
you hold. If you decide to retract your exchangeable shares you will receive
shares of our common stock for each exchangeable share plus a cash amount
equal to any declared and unpaid dividends if the record date for the dividend
is prior to the date of exchange. You may elect to retract your exchangeable
shares by presenting to Softkey's transfer agent:
. a certificate or certificates representing the number of exchangeable
shares to be retracted;
. a written notice of retraction, the form of which you may obtain from
Softkey or its transfer agent, specifying the number of exchangeable
shares you want to retract and the retraction date; and
. such other documents as Softkey or its transfer agent may require to
effect the retraction of the exchangeable shares.
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The retraction date is the date you indicate in your notice of retraction
that you want the retraction to occur. The date you indicate may not be less
than five nor more than ten business days after Softkey receives your notice of
retraction. The address to send your exchangeable shares, notice of retraction
and other documents is listed under "Delivery of our common stock" on page 7.
Softkey will not be required to redeem exchangeable shares if the redemption
would be contrary to solvency requirements or other provisions of applicable
law. In that event, we will purchase each exchangeable share not redeemed by
Softkey for shares of our common stock plus a cash amount equal to any
declared and unpaid dividends if the record date for the dividend is prior to
the date of purchase.
Softkey must immediately notify Mattel of the receipt of any notice of
retraction because we have an overriding "retraction call right" to purchase
all of the exchangeable shares specified in any notice of retraction. If we
exercise our retraction call right, we will deliver to the transfer agent for
payment to you, for each exchangeable share presented for retraction,
shares of our common stock plus a cash amount equal to any declared and unpaid
dividends if the record date for the dividend is prior to the date of purchase.
We will advise Softkey within two business days of Softkey's receipt of the
notice of retraction whether we will exercise the retraction call right.
Softkey will advise you if we do not exercise our retraction call right.
You may revoke your notice of retraction at any time prior to the close of
business on the business day preceding the retraction date. If you revoke your
notice of retraction, your exchangeable shares will not be purchased by Mattel
or redeemed by Softkey. If you do not revoke your notice of retraction, each
exchangeable share that you requested Softkey to redeem will be, as described
above, either:
. acquired by Mattel if we exercise our retraction call right; or
. redeemed by Softkey.
Automatic redemption of exchangeable shares.
February 4, 2005 is the automatic redemption date. On that date, Softkey may
redeem all of the then outstanding exchangeable shares by delivering, for each
exchangeable share, shares of our common stock plus a cash amount equal
to any declared and unpaid dividends. Softkey will, at least 120 days prior to
the automatic redemption date, provide the registered holders of the
exchangeable shares with written notice of the proposed redemption of the
exchangeable shares. This automatic redemption is subject to applicable law and
to our redemption call right described below.
On at least 60 days' prior written notice to holders of the exchangeable
shares, the board of directors of Softkey may:
. extend the automatic redemption date to a later date; or
. accelerate the automatic redemption date to an earlier date if less than
500,000 exchangeable shares are outstanding, other than exchangeable
shares held by Mattel and entities controlled by or under common control
with Mattel, and subject to permitted anti-dilutive adjustments.
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Notwithstanding any proposed redemption of the exchangeable shares, we have
an overriding redemption call right to purchase, on the automatic redemption
date, all but not less than all of the exchangeable shares then outstanding. We
may exercise our redemption call right by notifying Softkey and the transfer
agent for the exchangeable shares of our intention to exercise such right at
least 125 days prior to the automatic redemption date. The transfer agent will
notify you whether or not we exercise our redemption call right. If we exercise
our redemption call right, we will deliver to the transfer agent for payment to
you on the automatic redemption date, for each exchangeable share, shares
of our common stock plus a cash amount equal to any declared and unpaid
dividends.
Liquidation rights.
Softkey's liquidation. If Softkey liquidates, dissolves or winds-up or
otherwise distributes its assets among its shareholders for purposes of winding
up its affairs, you will receive from Softkey, for each exchangeable share, a
liquidation payment equal to shares of our common stock plus a cash amount
equal to any declared and unpaid dividends if the record date for the dividend
is prior to the date of payment. The liquidation payment will be paid to you as
a holder of exchangeable shares before payment is made to any holder of any
class of stock ranking junior to the exchangeable shares. The payment of the
liquidation payment is subject to applicable law and to our liquidation call
right described below.
We may exercise our liquidation call right by notifying Softkey and the
transfer agent for the exchangeable shares of our intention to exercise such
right at least 55 days prior to the date of Softkey's voluntary liquidation,
dissolution or winding-up and at least 5 business days prior to Softkey's
involuntary liquidation, dissolution or winding-up. The transfer agent will
notify you whether or not we exercise our liquidation call right. If we
exercise our liquidation call right, we will deliver to the transfer agent for
payment to you, for each exchangeable share, shares of our common stock
plus a cash amount equal to any declared and unpaid dividends if the record
date for the dividend is prior to the date of payment.
If there is a Softkey insolvency event, as a holder of exchangeable shares
you may instruct CIBC Mellon Trust Company, the trustee under the Voting and
Exchange Trust Agreement, to exercise the trustee's exchange right and require
Mattel to purchase any or all of your exchangeable shares for the liquidation
payment. A Softkey insolvency event means:
. the institution by Softkey of any proceeding asking that Softkey be
adjudicated as bankrupt or insolvent or to be dissolved or wound up, or
the consent of Softkey to the institution of bankruptcy, insolvency,
dissolution or winding up proceedings against it;
. the filing of a petition, answer or consent seeking dissolution or
winding up under any bankruptcy, insolvency or analogous laws, and
Softkey's failure to contest in good faith any such proceedings
commenced within 15 days of becoming aware of it;
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. Softkey's consent to the filing of any such petition or to the
appointment of a receiver;
. Softkey's making of a general assignment for the benefit of creditors;
. Softkey's admission in writing of its inability to pay its debts
generally as they become due; or
. Softkey's not being permitted, pursuant to solvency requirements of
applicable law, to redeem any exchangeable shares presented for
retraction.
Upon notice from the trustee of the exercise of the exchange right, we will
deliver to the trustee for payment to you, for each outstanding exchangeable
share, shares of our common stock plus a cash amount equal to any
declared and unpaid dividends if the record date for the dividend is prior to
the date of purchase.
Liquidation of Mattel. If there is a Mattel insolvency event, in order for
you to participate on an equal basis with the holders of our common stock, each
outstanding exchangeable share will be automatically exchanged for
shares of our common stock plus a cash amount equal to any declared and unpaid
dividends. A Mattel insolvency event means:
. our board of directors decides to institute voluntary liquidation,
dissolution, or winding-up proceedings or to effect any other
distribution of our assets among our stockholders for the purpose of
winding up our affairs; or
. our receipt of notice of, or our otherwise becoming aware of, any
threatened or instituted claim, suit or other proceedings with respect
to our involuntary liquidation, dissolution or winding-up or to effect
any other distribution of our assets among our stockholders for the
purpose of winding up our affairs.
To effect the automatic exchange of exchangeable shares for shares of our
common stock, we will be deemed to have purchased each exchangeable share
outstanding on the fifth business day prior to the time of the Mattel
insolvency event.
Adjustments.
The number of shares of our common stock for which each exchangeable share is
exchangeable will be adjusted to reflect any:
. stock split;
. reverse split;
. stock dividend, including any dividend or distribution of securities
convertible into our common stock;
. amalgamation, merger or reorganization;
. recapitalization;
. reclassification; or
. other similar change regarding our common stock.
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Fractional shares of our common stock.
We will not issue you fractional shares of our common stock upon exchange of
exchangeable shares. Instead we will pay you cash for any fractional portion
based on the market price of the shares of our common stock.
Delivery of our common stock.
To retract your exchangeable shares, follow the instructions listed under
"Election by holders to exchange" on page 3.
As described above, you may also receive shares of our common stock plus any
additional cash amount payable if or when:
. Softkey redeems or we exercise our redemption call right to acquire all
of the outstanding exchangeable shares on the automatic redemption date;
or
. Softkey liquidates or we exercise our liquidation call right.
To receive shares of our common stock and any additional cash amount payable
in the above listed circumstances you must present to Softkey's transfer agent,
CIBC Mellon Trust Company:
. a certificate or certificates representing the number of exchangeable
shares to be retracted or purchased; and
. such other documents as Softkey or the transfer agent may require to
effect the transfer of your exchangeable shares.
If you instruct the trustee under the Voting and Exchange Trust Agreement to
exercise the trustee's exchange right, in addition to the certificates and
other documents described above, you must also present to CIBC Mellon Trust
Company, as trustee, a notice of exercise of the exchange right in the form
contained on the reverse side of the exchangeable share certificates.
The address to mail your certificates and other documents is: CIBC Mellon
Trust Company, P.O. Box 7010, Adelaide Street Postal Station, Toronto, ON, M5C
2W9. The address to hand deliver, or send by messenger, your certificates and
other documents is: CIBC Mellon Trust Company, 199 Bay Street, Securities
Level, Toronto, ON, M5L 169, Attn: Courier Window.
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PLAN OF DISTRIBUTION RELATING TO CONVERSION OF NOTES
The notes will mature on November 1, 2000 unless previously redeemed or
converted. You are entitled through the close of business on November 1, 2000,
subject to prior redemption, to convert your notes or portions of your notes
(in denominations of $1,000 or multiples of $1,000) into our common stock, at a
conversion price of $53 per share, subject to adjustment as described below.
However, if notes are called for redemption, the conversion rights will expire
at the close of business on the business day immediately prior to the date
fixed for redemption, unless we default in payment of the redemption price. If
you exercise your option to require us to repurchase the notes upon a change of
control, a note or portion of a note may be converted only if you withdraw your
election to require us to repurchase your notes.
Except as described below, we will not make any adjustments on conversion of
notes for any interest accrued or for dividends on any common stock issued. If
you surrender your notes for conversion after a record date for the payment of
interest and prior to the next succeeding interest payment date, your notes
must be accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount converted. We are not required to
issue fractional shares of common stock upon conversion of notes. Instead we
will pay cash for any fractional shares based upon the market price of our
common stock on the last business day prior to the date of conversion.
The conversion price may be adjusted under the indenture if we take some
types of actions, including if we:
. issue our common stock as a dividend or distribution on our common
stock;
. issue to all holders of our common stock some types of rights or
warrants to purchase our common stock at less than the current market
price;
. subdivide, combine or reclassify our common stock under some
circumstances;
. distribute to all holders of our common stock (1) our capital stock
(other than common stock), (2) evidences of indebtedness of Mattel or
(3) assets, including securities, but excluding:
(a) the dividends, rights, warrants and distributions referred to above;
(b) dividends and distributions in connection with Mattel's liquidation,
dissolution or winding up; and
(c) dividends and distributions paid exclusively in cash (other than as
described below);
. make an all cash distribution to all holders of our common stock in an
aggregate amount that, combined with all other all-cash distributions we
made within the preceding 12 months for which no adjustment was made,
exceeds 20% of Mattel's market capitalization; and
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. purchase our common stock pursuant to a tender offer made by us or any
of our subsidiaries involving an aggregate amount of consideration that,
together with:
(a) any cash and the fair market value of any other consideration
payable in any other tender offer by us or any of our subsidiaries
for our common stock expiring within the 12 months preceding the
tender offer for which no adjustment was made, and
(b) the aggregate amount of any such all-cash distributions referred to
in the immediately preceding bullet point to all holders of our
common stock within the 12 months preceding the expiration of the
tender offer for which no adjustment was made,
exceeds 20% of Mattel's market capitalization on the expiration of the
tender offer.
Except as stated above, we will not adjust the conversion price:
. if we issue our common stock or any securities convertible into or
exchangeable for our common stock or carrying the right to purchase any
of the foregoing;
. unless the adjustments would require a change of at least 1% of the
conversion price then in effect; except that any adjustment that would
otherwise be required to be made will be carried forward and taken into
account in any subsequent adjustment; and
. for shares of common stock issued pursuant to a plan for reinvestment of
dividends or interest.
If we:
. reclassify or change our common stock, other than changes in par value
or from par value to no par value, or resulting from a subdivision or a
combination, or
. consolidate or merge or sell or convey to another corporation all or
substantially all of our property and assets,
and as a result, holders of our common stock are entitled to receive stock,
other securities, other property or assets, including cash, in exchange for our
common stock, then you may thereafter convert your notes into the kind and
amount of stock, other securities or other property or assets which you would
have owned or been entitled to receive upon the reclassification, change,
consolidation, merger, sale or conveyance had you converted your notes into
common stock immediately prior to the reclassification, change, consolidation,
merger, sale or conveyance.
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In the event of a taxable distribution to holders of our common stock or
other transaction resulting in any adjustment of the conversion price, you may,
in some circumstances, be deemed to have received a distribution subject to the
United States income tax as a dividend. In some other circumstances, the
absence of such an adjustment may result in a taxable dividend to the holders
of our common stock.
We may, to the extent permitted by law, reduce the conversion price by any
amount for any period of at least 20 days. We will give you at least 15 days'
notice of such decrease. However, we can only reduce the conversion price if
our board of directors determines that the decrease is in our best interests.
Their determination will be conclusive. If we determine it is advisable, we may
also reduce the conversion price to avoid or diminish any income tax to our
stockholders resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.
Delivery of our common stock.
To receive shares of our common stock plus any cash payable for fractional
shares upon conversion of your notes you must present and/or surrender to State
Street Bank and Trust Company, the trustee for the notes:
. your note, duly endorsed, along with any funds required if you
surrender after a record date for payment of interest and prior to the
next succeeding payment of interest date; and
. a written notice of conversion in the form provided with the notes, or
such other notice that is acceptable to Mattel, that:
(a) states that you elect to convert your notes;
(b) indicates the name(s) and address(es) in which the
certificate(s) for shares of our common stock should be
issued; and
(c) is accompanied by transfer taxes, if any.
If you want Mattel to issue shares of common stock in a name other than that
registered for your note, your note must be duly endorsed by the registered
holder or accompanied by instruments of transfer in a form satisfactory to
Mattel and executed by the person surrendering the note for conversion.
Once you have satisfied the requirements for conversion, and subject to any
restrictions on transfers if the shares issued are in a name other than that of
the registered holder, we will issue and deliver to you at our office a
certificate or certificates for the number of full shares issuable upon
conversion and a check or cash for any amount of declared but unpaid dividends.
To convert any beneficial interest in a note in global form you must complete
the instruction form for conversion required by The Depository Trust Company's
book-entry conversion program and comply with any additional requirements.
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DESCRIPTION OF MATTEL CAPITAL STOCK
The following is a summary of the material terms of our capital stock.
Because it is only a summary, it does not contain all information that may be
important to you. Therefore, you should read carefully the more detailed
provisions of our certificate of incorporation, our bylaws, as amended, the
Rights Agreement described below and the Deposit Agreement, dated June 24,
1996, among Tyco Toys, Inc., Midatlantic Bank, N.A., as depositary, and all
holders from time to time of depositary receipts thereunder, as amended on
March 27, 1997.
General.
As of the date of this prospectus, our authorized capital stock consists of:
. 1,000,000,000 shares of common stock, par value $1.00 per share;
. 3,000,000 shares of preferred stock, par value $1.00 per share, of which
772,800 shares have been designated as Series C preferred stock and one
share has been designated as special voting preferred stock, par value
$1.00 per share; and
. 20,000,000 shares of preference stock, par value $.01 per share, of
which 2,000,000 shares have been designated Series E junior
participating preference stock.
No other classes of capital stock are authorized under our certificate of
incorporation. The issued and outstanding shares of common stock and preferred
stock are duly authorized, validly issued, fully paid and nonassessable.
Common Stock.
Holders of our common stock have no preemptive, redemption or conversion
rights. The holders of our common stock are entitled to receive dividends when
and as declared by our board of directors out of funds legally available for
the payments. Upon liquidation, dissolution or winding up, the holders of our
common stock may share ratably in our net assets after payment of liquidating
distributions to holders of our preferred stock or our preference stock, if
any. Each holder of our 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 our common stock is
accompanied by a right to purchase 128/37,500ths, as adjusted to reflect a
series of stock splits, of a Series E preference share. Our board has reserved
1,924,900 Series E preference shares for issuance. There are currently no
Series E preference shares outstanding. See "--Description of preference share
purchase rights."
The registrar and transfer agent for our common stock is BankBoston, N.A.
Description of preference share purchase rights.
On February 7, 1992, our board of directors declared a dividend of one
preference share purchase right for each outstanding share of our common stock.
The description and terms of the purchase rights are set forth in a Rights
Agreement dated as of February 7, 1992, between Mattel and BankBoston, N.A.,
formerly The First National Bank of Boston, as rights agent. The purchase
rights have anti-takeover effects that are intended to discourage
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coercive or unfair takeover tactics and to encourage any potential acquirer to
negotiate a price fair for all our stockholders. The purchase rights may cause
substantial dilution to an acquiring party that attempts to acquire Mattel on
terms not approved by our board of directors, but the purchase rights will not
interfere with any negotiated merger or other business combination. See "Where
You Can Find More Information" on page 27.
If any person or group acquires beneficial ownership of 20% or more of the
outstanding shares of our common stock and the exchangeable shares, each holder
of a purchase right, other than a purchase right beneficially owned by the
acquiring person, will thereafter have the right to receive upon exercise that
number of shares of our common stock having a market value of two-times the
exercise price of the purchase right. In addition, if after such acquisition of
20% or more of the outstanding shares of our common stock and the exchangeable
shares, we are acquired in a merger or other business combination or
transaction of 50% or more of our consolidated assets or earning power are
sold, other than resulting from a qualifying offer, each holder of a purchase
right will receive, upon exercise of that purchase right at the prevailing
exercise price of the purchase 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 purchase right.
Preferred Stock.
Our board of directors has the power, without further vote of stockholders,
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. This power includes the authority to establish
voting, dividend, redemption, conversion, liquidation and other rights of any
such shares. Other than as described in this prospectus, there are no shares of
our preferred stock or our preference stock currently outstanding.
Series C Mandatorily Convertible Redeemable Preferred Stock; Series C
Depositary Shares.
We have issued and outstanding 771,920 shares of Series C preferred stock. In
addition, there are 19,298,000 of Series C depositary shares outstanding. The
shares of Series C preferred stock are represented by the Series C depositary
shares, each such share representing one twenty-fifth of a share of Series C
preferred stock. Subject to the terms of a 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 relating to the 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
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to 12.219 votes and each Series C depositary share has 0.48876 votes. The
holders of Series C preferred stock and common stock vote together as one class
on such matter except as otherwise provided by law or by our certificate of
incorporation.
Special Voting Preferred Stock.
We issued a single share of special voting preferred stock to the trustee
under the Voting and Exchange Trust Supplement pursuant to which each holder of
exchangeable shares, other than us, our subsidiaries or any other entity we
control, will be entitled to instruct the trustee to cast a number of votes
attached to the share of special voting preferred stock equal to the number of
shares of our common stock for which the exchangeable shares held by such
holder are exchangeable. Except as otherwise required by law or our certificate
of incorporation, the holder of record of the special voting preferred stock
will have a number of votes equal to multiplied by the number of
exchangeable shares outstanding from time to time which are not owned by us,
our subsidiaries or any other entity we control. The holder of the share of
special voting preferred stock will vote together with the holders of our
common stock and Series C preferred stock as a single class on all matters,
except as may be required by applicable law or our certificate of
incorporation. The holder of the share of special voting preferred stock will
be entitled to receive $10.00 upon Mattel's liquidation, dissolution or winding
up out of any of Mattel's assets available for distribution to stockholders.
The share of special voting preferred stock is senior to our common stock upon
liquidation, dissolution or winding up. The holder of the share of special
voting preferred stock will not be entitled to receive dividends. When the
share of special voting preferred stock has no votes attached to it because
there are no exchangeable shares outstanding not owned by us, our subsidiaries
or any other entity we control, and there are no shares of stock, debt, options
or other agreements of Softkey that could give rise to the issuance of any
exchangeable share, to any person, other than to Mattel or any entity we
control, we are required to redeem the share of special voting preferred stock
for $10.00.
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INCOME TAX CONSIDERATIONS REGARDINGTHE EXCHANGEABLE SHARES
Canadian federal income tax considerations.
In the opinion of Osler, Hoskin & Harcourt, counsel for Mattel and Softkey,
the following is a summary of the principal Canadian federal income tax
considerations generally applicable under the Income Tax Act (Canada) to
holders of exchangeable shares who acquire our common stock upon the exchange
of exchangeable shares.
This summary is based on the current provisions of the Canadian Tax Act, the
regulations thereunder and counsel's understanding of the current
administrative practices of Revenue Canada, Customs, Excise and Taxation. This
summary also takes into account the proposed amendments to the Canadian Tax Act
and the regulations thereunder publicly announced by the Minister of Finance
prior to the date of this prospectus and assumes that all such proposed
amendments will be enacted in their present form. However, we cannot assure you
that the proposed amendments will be enacted in the form proposed, or at all.
Except for the foregoing, this summary does not take into account or anticipate
any changes in law, whether by legislative, administrative or judicial decision
or action, nor does it take into account provincial, territorial or foreign tax
legislation or considerations, which may differ from the Canadian federal
income tax considerations described herein. No assurances can be given that
subsequent changes in law or administrative policy will not affect or modify
the opinions expressed herein. This summary summarizes the opinion of Osler,
Hoskin & Harcourt included as exhibit 8.2 to the registration statement of
which this prospectus forms a part.
The Canadian federal income tax considerations applicable to each Softkey
shareholder will vary according to each Softkey shareholder's particular
circumstances. This summary is of a general nature only and is not intended to
be, and should not be construed to be, legal or tax advice to any particular
Softkey shareholder. Accordingly, Softkey shareholders should consult with
their own tax advisors as to the tax consequences to them of exchanging their
exchangeable shares for our common stock in their particular circumstances. No
advance income tax ruling has been obtained from revenue Canada customs, excise
and taxation to confirm the tax consequences of any of the transactions
described herein.
For the purposes of the Canadian Tax Act, all amounts relating to the
acquisition, holding or disposition of our common stock, including dividends,
adjusted cost base and proceeds of disposition, must be converted into Canadian
dollars based on the prevailing United States dollar exchange rate at the time
that such amounts arise.
Softkey shareholders resident in Canada.
The following portion of the summary is applicable only to Softkey
shareholders who, for purposes of the Canadian Tax Act and any relevant
bilateral tax treaty, and at all relevant times, are resident or deemed to be
resident in Canada, hold their exchangeable shares and will hold their shares
of our common stock as capital property and deal at arm's length with
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Softkey and Mattel. This summary does not apply to a shareholder with respect
to whom we are or will be a foreign affiliate within the meaning of the
Canadian Tax Act or who holds more than 10% of the exchangeable shares.
The exchangeable shares and our common stock will generally be considered to
be capital property to a holder thereof provided that the holder does not hold
any such shares in the course of carrying on a business of buying and selling
shares and has not acquired such shares in a transaction considered to be an
adventure in the nature of trade. Certain holders who might not otherwise be
considered to hold their exchangeable shares as capital property may be
entitled, in some circumstances, to have them treated as capital property by
making the election provided by subsection 39(4) of the Canadian Tax Act. This
election will not, however, be available where a Softkey shareholder has made
an election under subsection 85(1) or subsection 85(2) of the Canadian Tax Act
in connection with the acquisition of the exchangeable shares. In addition, the
mark-to-market rules contained in the Canadian Tax Act relating to financial
institutions, including some financial institutions, registered securities
dealers and corporations controlled by one or more of the foregoing, will deem
such financial institutions not to hold their exchangeable shares or our common
stock as capital property for the purposes of the Canadian Tax Act. Softkey
shareholders that are financial institutions should consult their own tax
advisors to determine the tax consequences to them of the application of the
mark-to-market rules.
Redemption or exchange of exchangeable shares. A Softkey shareholder will be
considered under the Canadian Tax Act to have disposed of exchangeable shares
on:
. a redemption (including pursuant to a notice of retraction) of such
exchangeable shares by Softkey; or
. our acquisition of such exchangeable shares pursuant to:
(a) our liquidation, redemption or retraction call rights;
(b) the exercise by a shareholder of an exchange right if there is a
Softkey insolvency event; or
(c) an automatic exchange if there is a Mattel insolvency.
The Canadian federal income tax consequences of such a disposition are
significantly different for the holder depending on whether the event giving
rise to the disposition is a redemption by Softkey or an acquisition by Mattel.
A Softkey shareholder who exercises the right to require redemption of an
exchangeable share by giving a notice of retraction cannot control whether the
exchangeable share will be acquired by Mattel under the retraction call right
or redeemed by Softkey. The holder will, however, be notified if the retraction
call right will not be exercised in which case the holder may cancel the notice
of retraction and retain the exchangeable share.
On the redemption, including pursuant to a notice of retraction, of an
exchangeable share by Softkey, the holder of an exchangeable share will be
deemed to have received a
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taxable dividend equal to the amount, if any, by which the redemption proceeds
exceeds the paid-up capital, for purposes of the Canadian Tax Act, at that
time, of the exchangeable share so redeemed. The redemption proceeds are the
fair market value at that time of our common stock received by the holder from
Softkey on the redemption plus the amount of any accrued but unpaid dividends
on the exchangeable share.
A shareholder who is an individual will be required to include in income
dividends deemed to be received on the exchangeable shares, subject to the
gross-up and dividend tax credit rules normally applicable to taxable dividends
received from taxable Canadian corporations.
Subject to the discussion below as to the denial of the dividend deduction,
in the case of a shareholder that is a corporation, other than a "specified
financial institution" as defined in the Canadian Tax Act, dividends deemed to
be received on the exchangeable shares will be included in computing the
corporation's income and will generally be deductible in computing its taxable
income. A corporation is a specified financial institution for purposes of the
Canadian Tax Act if it is a bank, a trust company, a credit union, an insurance
corporation or a corporation whose principal business is the lending of money
to persons with whom the corporation is dealing at arm's length or the
purchasing of debt obligations issued by such persons or a combination thereof,
and corporations controlled by or related to such entities.
In the case of a shareholder that is a specified financial institution, such
a dividend will be deductible in computing its taxable income only if either:
. the specified financial institution did not acquire the exchangeable
shares in the ordinary course of the business carried on by such
institution; or
. at the time of the deemed receipt of the dividend by the specified
financial institution, the exchangeable shares are listed on a
prescribed stock exchange in Canada, which currently includes the
Toronto Stock Exchange, and the specified financial institution, either
alone or together with persons with whom it does not deal at arm's
length, is not deemed to receive dividends in respect of more than 10%
of the issued and outstanding exchangeable shares.
A shareholder that is a "private corporation," as defined in the Canadian Tax
Act, or any other corporation resident in Canada and controlled or deemed to be
controlled by or for the benefit of an individual or related group of
individuals may be liable under Part IV of the Canadian Tax Act to pay a
refundable tax of 33- 1/3% on dividends deemed to be received on the
exchangeable shares to the extent that such dividends are deductible in
computing the shareholder's taxable income.
If we or any other person with whom we do not deal at arm's length is a
specified financial institution at a point in time that a dividend is deemed to
be paid on an exchangeable share, then, subject to the exemption described
below, dividends deemed to be received by a shareholder that is a corporation
will not be deductible in computing taxable income but will be fully includable
in taxable income under Part I of the Canadian Tax Act.
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A shareholder that is a "Canadian-controlled private corporation," as defined
in the Canadian Tax Act, may be liable to pay an additional refundable tax of
6- 2/3% on deemed dividends that are not deductible in computing taxable
income. This denial of the dividend deduction for a corporate shareholder will
not in any event apply if:
. at the time a dividend is deemed to be received, the exchangeable shares
are listed on a prescribed stock exchange, which currently includes the
Toronto Stock Exchange;
. we are "related" to Softkey for the purpose of the Canadian Tax Act;
. the recipient, together with persons with whom the recipient does not
deal at arm's length or any partnership or trust of which the recipient
or person is a member or beneficiary, respectively, is not deemed to
receive dividends on more than 10% of the issued and outstanding
exchangeable share.
The exchangeable shares will be "taxable preferred shares" and "short-term
preferred shares" for purposes of the Canadian Tax Act. Accordingly, Softkey
will be subject to a 66- 2/3% tax under Part VI.1 of the Canadian Tax Act on
dividends deemed to be paid on the exchangeable shares and will be entitled to
deduct 9/4 of the tax payable in computing its taxable income under Part I of
the Canadian Tax Act.
On the redemption, the holder of an exchangeable share will also be
considered to have disposed of the exchangeable share for proceeds of
disposition equal to the redemption proceeds less the amount of such deemed
dividend. A holder will in general realize a capital loss or a capital gain
equal to the amount by which the adjusted cost base to the holder of the
exchangeable share exceeds or is less than such proceeds of disposition. The
general tax treatment of capital gains and capital losses is discussed below
under the heading "Capital gains and capital losses." In the case of a
shareholder that is a corporation, in some circumstances the amount of any such
deemed dividend may be treated as proceeds of disposition and not as a
dividend.
On the exchange of an exchangeable share by the holder thereof with us for
our common stock such holder will be considered to have disposed of the
exchangeable share for proceeds of disposition equal to the fair market value
at that time of our common stock received on such exchange plus any declared
and unpaid dividends in respect of such exchangeable share. Such holder will in
general realize a capital gain or a capital loss equal to the amount by which
the proceeds of disposition of the exchangeable share, net of any reasonable
costs of disposition, exceed or are less than the adjusted cost base to the
holder of the exchangeable share. The general tax treatment of capital gains
and capital losses is discussed below under the heading "Capital gains and
losses."
The cost of our common stock received on the redemption of an exchangeable
share by Softkey will be equal to the fair market value of our common stock
received on the redemption. The cost of our common stock received on the
exchange of an exchangeable share with us will be equal to the fair market
value of our common stock received on the exchange. The cost of any of our such
common stock will be averaged with the adjusted cost base of any of our other
common stock held by the Softkey shareholder immediately before that time for
the purposes of determining the holder's adjusted cost base of our common
stock.
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Dividends on our common stock. Dividends on our common stock must be included
in the recipient's income for the purposes of the Canadian Tax Act. Such
dividends received by a holder who is an individual will not be subject to the
gross-up and dividend tax credit rules in the Canadian Tax Act. A holder that
is a corporation will include such dividends in computing its taxable income. A
holder that is a Canadian controlled private corporation may be liable to pay
an additional refundable tax of 6- 2/3% on such dividends. United States non-
resident withholding tax paid in respect of such dividends, as discussed under
the heading "United States Federal Tax Considerations" below, will be eligible
for foreign tax credit or deduction treatment where applicable under the
Canadian Tax Act.
Disposition of our common stock. A disposition or deemed disposition of our
common stock by a holder will generally result in a capital gain or capital
loss equal to the amount by which the proceeds of disposition, net of any
reasonable costs of disposition, exceed or are less than the adjusted cost base
to the holder of our common stock. The general tax treatment of capital gains
and capital losses is discussed below under the heading "Capital gains and
losses."
Capital gains and losses. A Softkey shareholder's taxable capital gain (or
allowable capital loss) from the disposition of exchangeable shares or our
common stock will be equal to three-quarters of the amount of the shareholder's
capital gain (or capital loss) in respect of such disposition. A Softkey
shareholder must include any such taxable capital gain in income for the
taxation year of disposition, and may, subject to the detailed provisions of
the Canadian Tax Act, deduct any such allowable capital loss from taxable
capital gains in the year in which such allowable capital loss is realized.
Under the detailed rules contained in the Canadian Tax Act, any remaining
allowable capital loss may generally be applied to reduce net taxable capital
gains realized by the holder in the three preceding taxation years or in any
subsequent taxation year.
If the holder of an exchangeable share is a corporation, the amount of any
capital loss arising from a disposition or deemed disposition of an
exchangeable share may be reduced by the amount of dividends received or deemed
to have been received by it on such an exchangeable share to the extent and
under circumstances prescribed by the Canadian Tax Act. Similar rules may apply
where a corporation is a member of a partnership or a beneficiary of a trust
that owns exchangeable shares or where a trust or partnership of which a
corporation is a beneficiary or a member is a member of a partnership or a
beneficiary of a trust that owns exchangeable shares.
Capital gains realized by an individual may be subject to alternative minimum
tax under the Canadian Tax Act depending on the individual's circumstances.
Softkey shareholders that are "Canadian controlled private corporations," as
defined in the Canadian Tax Act, may be liable to pay an additional 6- 2/3%
refundable tax in respect of taxable capital gains realized.
Eligibility for investment. We have indicated to counsel that we will
maintain the listing of our common stock on the New York Stock Exchange or
another prescribed exchange.
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Qualified Investments. Provided our common stock is listed on a prescribed
stock exchange, which currently includes the New York Stock Exchange, our
common stock and our purchase rights will be qualified investments under the
Canadian Tax Act for trusts governed by registered retirement savings plans,
registered retirement income funds and deferred profit sharing plans. Under
proposed amendments to the Canadian Tax Act, our common stock will also be a
qualified investment for trusts governed by a registered education savings
plan.
Our common stock and the purchase rights will be foreign property under the
Canadian Tax Act.
Softkey shareholders not resident in Canada.
The following portion of the summary is applicable only to Softkey
shareholders:
. who, for purposes of the Canadian Tax Act or any relevant bilateral
treaty, have not been and will not be resident or deemed to be resident
in Canada at any time while they have held exchangeable shares or will
hold our common stock;
. to whom exchangeable shares are not "taxable Canadian property" as
defined in the Canadian Tax Act; and
. who do not use or hold and are not deemed to use or hold such shares in
connection with carrying on a business in Canada and, who do not carry
on an insurance business in Canada.
Generally, the exchangeable shares and our common stock will not be taxable
Canadian property if:
. such shares are listed on a prescribed stock exchange, which currently
includes the Toronto Stock Exchange and the New York Stock Exchange;
. the holder does not use or hold, and is not deemed to use or hold, such
shares in connection with carrying on a business in Canada; and
. none of the holder, persons with whom the holder does not deal at arm's
length or the holder together with such persons owned or had under
option at any time during the immediately preceding five year period,
25% or more of the issued shares of any class or series of the capital
stock of Softkey or Mattel, as the case may be.
The exchangeable shares are listed on the Toronto Stock Exchange and we
intend to use our best efforts to cause Softkey to maintain such listing. We
also intend to maintain the listing of our common stock on the New York Stock
Exchange or another prescribed stock exchange.
A non-resident shareholder will not be subject to tax under the Canadian Tax
Act, on the exchange of an exchangeable share for our common stock, except to
the extent the exchange results in a redemption of a exchangeable share, or on
the sale or other disposition of our common stock. A holder whose exchangeable
shares are redeemed either under Softkey's redemption right or pursuant to a
notice of retraction will be deemed to receive a dividend as described above
for shareholders resident in Canada under the heading "Redemption or exchange
of exchangeable shares." The amount of such deemed dividend will be subject to
the tax treatment accorded to dividends described below.
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Dividends deemed to be paid on the exchangeable shares are subject to non-
resident withholding tax under the Canadian Tax Act at the rate of 25% although
such rate may be reduced under the provisions of an applicable income tax
treaty. Under the Income Tax Treaty between Canada and the United States
effective August 16, 1984, as amended, the rate is generally reduced to 15% in
respect of dividends paid to a person who is the beneficial owner of such
shares and who is resident in the United States for purposes of the Income Tax
Treaty.
United States federal tax considerations.
The following is a summary of some material United States federal income and
estate tax considerations relating to the conversion of the notes, the exchange
of exchangeable shares for our common stock and the acquisition, ownership and
disposition of our common stock, but does not purport to be a complete analysis
of all the potential tax considerations relating thereto. This summary is based
on the provisions of the Internal Revenue Code of 1986, as amended, the
applicable Treasury Regulations promulgated or proposed thereunder, judicial
authority and current administrative rulings and practice, all of which are
subject to change, possibly on a retroactive basis. This summary deals only
with holders that hold notes or exchangeable shares, or will hold our common
stock, as "capital assets" within the meaning of Section 1221 of the Code. This
summary does not address tax considerations applicable to investors that may be
subject to special tax rules, such as banks, tax-exempt organizations,
insurance companies, dealers in securities or currencies, persons that will
hold exchangeable shares or our common stock as a position in a hedging
transaction, "straddle" or "conversion transaction" for tax purposes, or
persons that have a "functional currency" other than the United States dollar.
We have not sought any ruling from the Internal Revenue Service with respect to
the statements made and the conclusions reached in the following summary, and
there can be no assurance that the Internal Revenue Service will agree with
such statements and conclusions.
Investors considering the conversion of their notes or exchange of
exchangeable shares for our common stock should consult their tax advisors with
respect to the application of United States federal income and estate tax laws
to their particular circumstances, as well as any tax consequences arising
under the laws of any state, local or foreign taxing jurisdiction or under any
applicable tax treaty.
United States holder.
As used herein, the term "United States holder" means a beneficial owner of
notes, exchangeable shares or common stock that is a "United States person" for
United States federal income tax purposes. A "United States person" is:
. a citizen or resident of the United States, including an alien
individual who is a lawful permanent resident of the United States or
who meets the "substantial presence" test under Section 7701(b) of the
Code;
. a corporation or partnership, including entities treated as corporations
or partnerships for federal income tax purposes, created or organized in
the United States or under the laws of the United States, any state, or
the District of Columbia;
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. an estate the income of which is subject to Unites States federal income
taxation regardless of its source; or
. a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who
have the authority to control all substantial decisions of the trust.
Conversion of notes. A United States holder will generally not recognize gain
or loss upon conversion of notes into our common stock except with respect to
cash received in lieu of fractional shares, or any amounts attributable to
accrued and unpaid interest on the notes, which latter amounts will be treated
as interest for United States federal income tax purposes. Cash paid in lieu of
a fractional share of common stock upon a conversion of notes will result in a
United States holder recognizing gain or loss, which will be capital gain or
loss to the extent that the amount of such cash exceeds or is exceeded by the
portion of the adjusted tax basis of a note allocable to such fractional share.
The United States holder's tax basis in the common stock received upon such
conversion will be the same as such holder's adjusted tax basis in the notes at
the time of the conversion, reduced by the portion of the holder's adjusted tax
basis in the notes allocated to any fractional share of common stock exchanged
for cash, and the holding period for the common stock received upon the
conversion will include the holding period of the notes that were converted.
Exchange of exchangeable shares. A United States holder will generally
recognize capital gain or loss upon the exchange of exchangeable shares for
shares of our common stock equal to the difference between the fair market
value of shares of common stock received, other than common stock received for
declared but unpaid dividends, and such holder's adjusted tax basis in the
exchangeable shares surrendered in the exchange. Alternatively, an exchange by
a United States holder of exchangeable shares for common stock may be
characterized as a tax-free exchange, except to the extent of common stock
received for declared but unpaid dividends, if the exchangeable shares are
treated as our stock or are treated as having been acquired by Mattel in
exchange for common stock in a transaction that qualifies as a reorganization
under the Code. It is not possible to predict whether the exchangeable shares
would be characterized as our stock, or whether an exchange of exchangeable
shares for common stock would otherwise qualify as a tax-free exchange, because
such characterization may be dependent upon future events. If an exchange of
exchangeable shares for common stock qualifies as a tax-free exchange, a United
States holder will not recognize gain or loss upon the exchange, will have a
tax basis in the common stock received in the exchange equal to such holder's
adjusted tax basis in the exchangeable shares surrendered, and will have a
holding period in the common stock which includes the holding period in the
exchangeable shares.
Regardless of whether an exchange of exchangeable shares for common stock is
taxable or tax-free, a United States holder will recognize ordinary income to
the extent of common stock received in the exchange for declared but unpaid
dividends on the exchangeable shares. A United States holder's holding period
in shares of common stock received for declared but unpaid dividends on the
exchangeable shares will begin on the day after the exchange.
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Canadian tax, if any, imposed on an exchange of exchangeable shares for
common stock may be available as a credit against a United States holder's
United States federal income tax liability, subject to applicable limitations.
A United States holder who is not eligible for a credit may be able to deduct
the Canadian taxes paid, if any, in computing United States federal income
subject to tax.
Dividends on common stock. The amount of any distribution by us in respect of
our common stock will be equal to the amount of cash and the fair market value,
on the date of distribution, of any property distributed. Generally, any such
distributions to a United States holder of our common stock will be treated:
. first, as a dividend to the extent of our current and accumulated
earnings and profits;
. next, as a tax-free return of capital to the extent of the holder's
adjusted tax basis in our common stock; and
. thereafter as gain from the sale of exchange of such stock.
A United States holder will generally recognize ordinary income to the extent
that any distribution we make is treated as a dividend, and will generally
recognize capital gain to the extent that any distribution we make is treated
as gain from the sale or exchange of the holder's common stock.
Non-United States holders.
As used herein, the term "Non-United States holder" means any beneficial
owner of our common stock that is not a United States holder.
Conversion of notes. A Non-United States holder will generally not recognize
gain or loss upon a conversion of notes into our common stock. However, cash
paid in lieu of a fractional share of our common stock upon a conversion of
notes may result in recognition of gain or loss that would be subject to rules
discussed below applicable to a Non-United States holder's sale, exchange or
other disposition of, or exchange of exchangeable shares for, common stock.
Dividends on common stock. Dividends paid to a Non-United States holder of
our common stock, excluding any dividends that are effectively connected with
the holder's conduct of a trade or business in the United States, will be
subject to United States federal withholding tax at a 30% rate or lower rate
provided under an applicable income tax treaty. Under current Treasury
Regulations, dividends paid to an address in a foreign country are presumed to
be paid to a resident of that country, unless the payor has knowledge to the
contrary, for purposes of the 30% withholding tax discussed above and, under
the current interpretation of Treasury Regulations, for purposes of determining
the applicability of a tax treaty rate. Under Treasury Regulations that are
effective for payments made after December 31, 1999, however, Non-United States
holders wishing to claim the benefit of an applicable treaty rate would be
required to satisfy some certification requirements. A Non-United States holder
that is eligible for a reduced rate of United States withholding tax pursuant
to a tax treaty may obtain a refund of any excess amounts currently withheld by
making an appropriate claim for refund with the Internal Revenue Service.
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<PAGE>
Except to the extent that an applicable tax treaty otherwise provides, a Non-
United States holder will be taxed in the same manner as a United States holder
on dividends paid that are effectively connected with the conduct of a trade or
business in the United States by the Non-United States holder. If such Non-
United States holder is a foreign corporation, it may also be subject to a
United States branch profits tax on such effectively connected income at a 30%
rate or such lower rate as may be specified by an applicable income tax treaty.
Even though such effectively connected dividends are subject to United States
federal income tax, and may be subject to the branch profits tax, they will not
be subject to United States withholding tax if the holder delivers a properly
completed IRS Form 4224 to us or our paying agent.
Disposition of common stock; exchange of exchangeable shares. A Non-United
States holder generally will not be subject to United States federal income tax
or withholding tax on any gain recognized on the sale, exchange or other
disposition of our common stock, or upon the exchange of exchangeable shares
for common stock, unless:
(a) such gain is effectively connected with the conduct of a United States
trade or business by the Non-United States holder and, if a tax treaty
applies, attributable to a United States permanent establishment
maintained by the Non-United States holder;
(b) in the case of a Non-United States holder who is an individual, such
holder is present in the United States for a period or periods
aggregating 183 days or more during the taxable year of the
disposition and the individual either has a "tax home" in the United
States or the gain is attributable to an office or other fixed place
of business maintained by the individual in the United States; or
(c) the holder is subject to tax pursuant to the provisions of the Code
applicable to some United States expatriates.
If an individual Non-United States holder is described in (a) or (c) above,
the holder will be taxed on the net gain derived from the sale, exchange, or
other disposition under regular United States federal income tax rates. If an
individual Non-United States holder is described in (b) above, the holder
generally will be subject to withholding tax at a 30% rate on the gain derived
from the sale, exchange, or other disposition, which gain may be offset by such
holder's United States capital losses. If a Non-United States holder that is a
corporation is described under (a) above, it will be taxed on such gain under
regular graduated United States federal income tax rates and, in addition,
under some circumstances will be subject to the 30% branch profits tax
discussed above, unless it qualifies for a lower rate under an applicable
income tax treaty.
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<PAGE>
Our discussion of the United States federal income tax consequences of a sale
or other disposition of our common stock by a Non-United States holder assumes
that we are not and have not been at any time a "United States real property
holding corporation" (a "USRPHC"), and our stock does not constitute a "United
States real property interest" (a "USRPI"), as each are defined in Section
897(c) of the Code. Under present law, we would be a USRPHC if (i) the fair
market value of our United Stated real property interests is at least equal to
(ii) 50% of the sum of the fair market value of our United States real property
interests, our interests in real property located outside the United States,
and our other assets which are used or held or use in a trade or business.
We have determined that we are not a USRPHC and do not expect to become one
in the future. However, if we were a USRPHC at any time during the shorter of
the five-year period preceding a Non-United States holder's disposition of
common stock and the period during which such holder held the common stock, and
provided the common stock is "regularly traded on an established securities
market" for tax purposes, our common stock would constitute a USRPI to the Non-
United States holder if such holder held, directly or indirectly, common stock
with a fair market value in excess of 5% of the fair market value of all our
common stock outstanding at any time during the shorter of the periods
described above. In such a case, the Non-United States holder would be subject
to a withholding tax of 10% of the proceeds of any disposition of the holder's
common stock.
Federal estate tax consequences to a Non-United States holder. Shares of our
common stock actually or beneficially held (other than through a foreign
corporation) by an individual Non-United States holder at the time of his or
her death, or previously transferred subject to some retained rights or powers,
will be included in the value of such holder's gross estate for United States
federal estate tax purposes unless otherwise provided by an applicable estate
tax treaty.
Information reporting and backup withholding.
General. Certain "reportable payments" we make with respect to our common
stock may be subject to information reporting requirements and backup
withholding tax at a rate of 31%. We must annually report to the Internal
Revenue Service and to each United States and Non-United States holder the
amount of dividends paid to such holder and the amount of tax withheld on such
amounts. These information reporting requirements apply regardless of whether
we are required to withhold tax on any dividends we pay to any holder.
Additionally, copies of the information returns reporting any dividends paid
and backup withholding tax collected may be made available to the tax
authorities in the country in which a Non-United States holder resides,
pursuant to an applicable income tax treaty.
United States holders. United States holders are generally not subject to
backup withholding tax unless the United States holder:
. fails to furnish or certify a proper taxpayer identification number to
the payor in the manner requested;
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. is notified by the Internal Revenue Service of a failure to report
payment of dividends and interest properly; or
. under some circumstances, fails to certify that the holder has not been
notified by the Internal Revenue Service that the holder is subject to
backup withholding for failure to report dividend and interest payments.
Non-United States holders. Dividends paid to a Non-United States holder that
are subject to the 30% or reduced treaty rate of withholding previously
discussed will be exempt from backup withholding. Otherwise, backup withholding
may apply to dividends paid to Non-United States holders that are not "exempt
recipients" and that fail to provide some information regarding their foreign
status in the manner required by the Code and applicable Treasury Regulations.
If paid to an address outside the United States, dividends on common stock held
by a Non-United States holder will generally not be subject to backup
withholding. However, under Treasury Regulations generally applicable to
dividend payments made after December 31, 1999, dividend payments to a Non-
United States holder will be subject to backup withholding unless applicable
certification requirements are satisfied.
Information reporting requirements and backup withholding will not apply to
any exchange of exchangeable shares or the payment of the proceeds of the sale
of our common stock by a Non-United States holder effected outside the United
States by a foreign office of a "broker" (as defined in applicable Treasury
Regulations), unless such broker:
(a) is a United States person;
(b) is a foreign person that derives 50% or more of its gross income for
some periods from the conduct of a trade or business in the United
States;
(c) is a controlled foreign corporation for United States federal income
tax purposes; or
(d) for taxable years beginning after December 31, 1999, is a partnership
in which one or more United States persons in the aggregate own more
than 50% of the income or capital interests, or the partnership is
engaged in a trade or business in the United States.
Payment of the proceeds of any such sale effected outside the United States
by a foreign office of any broker that is described in (a) through (d) above
will not be subject to backup withholding, but will be subject to information
reporting requirements unless such broker has documentary evidence in its
records that the beneficial owner is a Non-United States holder and some other
conditions are met, or the beneficial owner otherwise establishes an exemption.
Payment of the proceeds of any such sale to or through the United States office
of a broker is subject to information reporting and backup withholding, unless
the beneficial owner of common stock:
. provides a Form W-8 (or a suitable substitute form) signed under
penalties of perjury that includes its name and address and certifies as
to its Non-United States holder status; or
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<PAGE>
. is a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of
its trade or business and provides a statement to us or its agent under
penalties of perjury in which it certifies that a Form W-8 (or a
suitable substitute form) has been received by it from the Non-United
States holder or qualifying intermediary and furnishes us or its agent
with a copy thereof.
Backup withholding is not an additional tax. Any amounts withheld from a
payment to a holder of our common stock under the backup withholding rules will
be allowed as a credit against such holder's United States federal income tax
and may entitle the holder to a refund, provided that the holder furnishes
required information to the Internal Revenue Service.
New withholding regulations. New Treasury Regulations regarding the
information reporting and withholding rules applicable to Non-United States
holders are generally effective for payments made after December 31, 1999,
subject to some transition rules. These new Treasury Regulations do not
significantly alter the substantive withholding and information reporting
requirements but rather unify current certification procedures and forms and
clarify reliance standards. These regulations also alter the procedures for
claiming benefits of an income tax treaty, clarify the duties of United States
payors making payments to foreign persons and modify the rules concerning
withholding on payments made to foreign persons through foreign intermediaries.
On January 15, 1999 the Internal Revenue Service issued Notice 99-8, proposing
some changes to these new Treasury Regulations for non-resident aliens and
foreign corporations and providing a model "qualified intermediary" withholding
agreement to be entered into with the Internal Revenue Service to allow some
institutions to certify on behalf of their Non-United States person customers
or account holders investing in United States securities. Non-United States
holders should consult their tax advisors regarding the impact, if any, of
these new Treasury Regulations on their acquisition, holding, and disposition
of our common stock.
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<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements and other information we file with the SEC at the SEC's
public reference rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices in New York, New York
and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from commercial document retrieval services and at the web site
maintained by the SEC at http://www.sec.gov. Our common stock is listed on both
the New York Stock Exchange and the Pacific Exchange, Inc. You may obtain
information and reports about us from each of these exchanges.
We have filed a registration statement on Form S-3 with the SEC under the
Securities Act of 1933, as amended. This prospectus is part of that
registration statement. As allowed by SEC rules, this prospectus does not
contain all the information you can find in the registration statement or the
exhibits to the registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The
information incorporated by reference is an important part of this prospectus.
Any statement contained in a document which is incorporated by reference in
this prospectus is automatically updated and superseded if information
contained in this prospectus, or information that we later file with the SEC,
modifies or replaces this information. We incorporate by reference the
following documents:
. Registration Statement on Form S-4, as amended, File No. 333-71587;
. Annual Report on Form 10-K for the year ended December 31, 1997;
. Quarterly Reports on Form 10-Q and Form 10-Q/A for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998;
. Current Reports on Form 8-K filed on January 23, 1998, February 5, 1998,
April 17, 1998, June 16, 1998, July 16, 1998, July 21, 1998, August 21,
1998, September 30, 1998, October 29, 1998, November 16, 1998, December
15, 1998 and February 3, 1999;
. Registration Statements on Form 8-A and Form 8-A/A, dated February 12,
1992 and March 9, 1992, respectively;
. Annual Report of The Learning Company, Inc. on Form 10-K and Form 10-K/A
for the fiscal year ended January 3, 1998;
. Quarterly Reports of The Learning Company, Inc. on Form 10-Q for the
fiscal quarters ended April 4, 1998, July 4, 1998 and October 3, 1998;
. Current Reports of The Learning Company, Inc. on Form 8-K and Form 8-K/A
dated March 12, 1998, March 27, 1998, June 21, 1998, July 24, 1998,
August 31, 1998, December 13, 1998 and January 11, 1999; and
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<PAGE>
. Registration Statement of The Learning Company, Inc. on Form 8-A dated
October 29, 1996.
We are also incorporating by reference all documents filed by us with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended, after the date of this prospectus and prior to the
termination of the offering.
We may have sent you some of the documents incorporated by reference, but you
can obtain any of them through us or the Securities and Exchange Commission.
Documents incorporated by reference are available from us without charge,
excluding all exhibits unless they are specifically incorporated by reference
in this document. Stockholders may obtain documents incorporated by reference
in this prospectus by requesting them in writing or by telephone from us at the
following address:
Mattel, Inc.
Attention: Robert Normile, Secretary
333 Continental Boulevard
El Segundo, CA 90245
Telephone: (310) 252-2703
LEGAL MATTERS
Certain legal matters in connection with the common stock offered hereby are
being passed upon for Mattel by Lee B. Essner, Esquire, Assistant General
Counsel and Assistant Secretary of Mattel. Certain federal U.S. tax
consequences are being passed upon for Mattel by Latham & Watkins, Los Angeles,
California. Certain Canadian federal income tax consequences are being passed
upon for Mattel by Osler, Hoskin and Harcourt, Toronto, Canada.
EXPERTS
Our consolidated financial statements incorporated into this prospectus by
reference to our Annual Report on Form 10-K for the 1997 fiscal year have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, in reliance upon the authority of said firm as experts
in auditing and accounting and, with respect to the historical financial
statements of Tyco Toys, Inc. for the years ended December 31, 1996 and 1995,
in reliance on the report of Deloitte & Touche LLP, independent auditors, in
reliance upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of The Learning Company, Inc.
incorporated by reference into this prospectus by reference to Learning
Company's Annual Report on Form 10-K/A for the 1997 fiscal year and the
audited, supplemental consolidated financial statements included in Learning
Company's Form 8-K/A filed on November 4, 1998 have been so incorporated in
reliance on the reports of PricewaterhouseCoopers LLP, independent certified
public accountants, in reliance upon the authority of said firm as experts in
auditing and accounting.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of issuance and distribution.
The expenses, other than underwriting discounts and commissions, in
connection with the offering of the securities being registered are set forth
below. All of such expenses are estimates.
<TABLE>
<S> <C>
SEC registration fee.............................................. $78,335
-------
Accounting fees and expenses...................................... *
Legal fees and expenses........................................... *
Listing fees...................................................... *
Miscellaneous..................................................... *
-------
Total........................................................... $ *
=======
</TABLE>
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* To be completed by amendment.
Item 15. Indemnification of directors and officers.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify, subject to the standards set forth therein, any
person who was or is a party in any action in connection with any action, suit
or proceeding brought or threatened by reason of the fact that the person is or
was a director, officer, employee or agent of such corporation, or is or was
serving as such with respect to another entity at the request of such
corporation. The Delaware General Corporation law also provides that a Delaware
corporation may purchase insurance on behalf of any such director, officer,
employee or agent.
We have adopted provisions in Article Seventh of our Restated Certificate of
Incorporation, as amended, which require us to indemnify any and all persons
whom we have the power to indemnify pursuant to the Delaware General
Corporation Law against any and all expenses, judgments, fines, amounts paid in
settlement, and any other liabilities to the fullest extent permitted by the
Delaware General Corporation Law.
Article Seventh of the Certificate of Incorporation also empowers us by
action of our board of directors to purchase and maintain insurance, at our
expense, to protect ourself and such persons against any such expense,
judgment, fine, amount paid in settlement or other liability, whether or not we
would have the power to indemnify any such individual under the Delaware
General Corporation Law.
In addition, Section 1 of Article VI of our Bylaws requires 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 whim he or she is the legal representative, is or was our director,
officer, employee or agent or is or was serving at our request 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
benefits plans, whether the basis of such
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<PAGE>
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 us to the
fullest extent authorized by the Delaware General Corporation Law, 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 us to provided broader
indemnification rights than the law permitted us 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 us, we shall indemnify such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by our
board of directors, Article VI of the Bylaws specifies that the right to
indemnification so provided is a contract right, sets forth some procedural and
evidentiary standards applicable to the enforcement of a claim under Article VI
of the Bylaws, entitles the persons to be indemnified to be reimbursed for the
expenses of prosecuting any such claim against us and entitles them to have all
expenses incurred in advance of the final disposition of a proceeding paid by
us. Such provisions, however, are intended to be in furtherance and not in
limitation of the general right to indemnification provided in the Certificate
of Incorporation.
We have entered into indemnity agreements with some of our directors,
including directors who are also our officers and employees, and some of our
senior officers. The indemnity agreements provide that we 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 our director
or officer. The payments to be made under the indemnity agreements include, but
are not limited to, expense of investigation, judicial or administrative
proceedings or appeals, damages, judgments, fines, amounts paid in settlement,
and attorneys' fees and disbursements, except we are not obligated to make any
payment under the indemnity agreements which we are 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 us,
(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, as amended, or similar state or common law provisions, or
(e) the indemnitee was adjudged to be deliberately dishonest.
Section 102(b)(7) of the Delaware General Corporation Law enables a Delaware
corporation to provide in its certificate of incorporation for the elimination
or limitation of the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any such provision cannot eliminate or
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<PAGE>
limit a director's liability (1) for any breach of the director's duty of
loyalty to the corporation or its stockholders; (2) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (3) under Section 174 of the Delaware General Corporation Law (which
imposes liability on directors for unlawful payment of dividends or unlawful
stock purchase or redemption); or (4) for any transaction from which the
director derived an improper personal benefit.
Article Seventh of our Certificate of Incorporation eliminates the liability
of our director to us or our stockholders for monetary damages for breach of
fiduciary duty as a director to the full extent permitted by the Delaware
General Corporation Law.
Our directors and officers and those of our subsidiaries are insured under
some insurance policies against claims made during the period of the policies
against liabilities arising out of claims for some acts in their capacities as
directors and officers of us and our subsidiaries.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
3.1 Restated Certificate of Incorporation of Mattel, Inc. (incorporated
by reference to Exhibit 3.0 to Mattel, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1993).
3.2 Certificate of Amendment of Restated Certificate of Incorporation of
Mattel, Inc. (incorporated by reference to Exhibit B to Mattel,
Inc.'s Proxy Statement dated March 23, 1996).
3.3 Certificate of Amendment of Restated Certificate of Incorporation of
Mattel, Inc. (incorporated by reference to Exhibit B to Mattel,
Inc.'s Proxy Statement dated March 30, 1998).
3.4 Bylaws of Mattel, Inc., as amended to date (incorporated by
reference to Exhibit 4.3 to Mattel, Inc.'s Registration Statement on
Form S-3, Registration No. 333-36571).
+3.5 Form of Certificate of Designations, Preferences, Rights and
Limitations of Special Voting Preferred Stock of Mattel, Inc.
4.1 Rights Agreement, dated as of February 7, 1992, between Mattel, Inc.
and The First National Bank of Boston, as Rights Agent (incorporated
by reference to Exhibit 1 to Mattel, Inc.'s Registration Statement
on Form 8-A, dated February 12, 1992).
4.2 Specimen Stock Certificate with respect to Mattel, Inc. Common Stock
(incorporated by reference to Mattel, Inc.'s Current Report on Form
8-A, dated February 28, 1996).
</TABLE>
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<PAGE>
<TABLE>
<C> <S>
4.3 Indenture dated as of October 16, 1995 between The Learning Company,
Inc. and State Street Bank and Trust Company, as Trustee for 5-1/2%
Senior Notes due 2000 (incorporated by reference to Exhibit 10.21
filed with The Learning Company, Inc.'s Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995).
4.4 First Supplemental Indenture dated as of November 22, 1995 by and
between The Learning Company, Inc. and State Street Bank and Trust
Company, as Trustee for 5-1/2% Senior Notes due 2000 (incorporated by
reference to The Learning Company, Inc.'s Registration Statement on
Form S-3, Registration No. 333-00145).
+4.5 Form of Second Supplemental Indenture to be entered into by Mattel,
Inc. and State Street Bank and Trust Company, as Trustee.
(Mattel, Inc. has not filed some long-term debt instruments under
which the principal amount of securities authorized to be issued does
not exceed 10% of the total assets of Mattel, Inc. Copies of such
agreements will be provided to the Securities and Exchange Commission
upon request.)
+5.1 Form of Opinion of Lee B. Essner, Esq. as to the validity of the
securities being registered.
+8.1 Form of Opinion of Latham & Watkins as to tax matters.
+8.2 Form of Opinion of Osler, Hoskin & Harcourt as to tax matters.
*23.1 Consent of PricewaterhouseCoopers LLP.
*23.2 Consent of Deloitte and Touche LLP.
*23.3 Consent of PricewaterhouseCoopers LLP.
+23.4 Consent of Latham & Watkins (included in Exhibit 8.1 above).
+23.5 Consent of Osler, Hoskin & Harcourt (included in Exhibit 8.2 above).
24.1 Power of Attorney with respect to Mattel, Inc. (contained in signature
page hereto).
99.1 Plan of Arrangement of Softkey Software Products Inc. under Section
182 of the Business Corporations Act (Ontario) (incorporated by
reference to Exhibit 4.4 of The Learning Company, Inc.'s Registration
Statement on Form S-3, Registration No. 333-40549).
99.2 Voting and Exchange Trust Agreement, dated as of February 4, 1994
among The Learning Company, Inc., Softkey Software Products Inc. and
R-M Trust Company, as Trustee (incorporated by reference to Exhibit
4.3 to The Learning Company, Inc.'s Registration Statement on Form S-
3, Registration No. 333-40549).
99.3 Support Agreement, dated as of February 4, 1994 between The Learning
Company, Inc. and Softkey Software Products Inc. (incorporated by
reference to Exhibit 99.4 of Mattel, Inc.'s Form S-4, Registration No.
333-71587).
</TABLE>
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<PAGE>
<TABLE>
<C> <S>
+99.4 Form of Voting and Exchange Trust Supplement to be entered into by
Mattel, Inc., The Learning Company, Inc., Softkey Software Products
Inc. and , as Trustee.
+99.5 Form of Support Agreement Amending Agreement to be entered into by
Mattel, Inc., The Learning Company, Inc. and Softkey Software Products
Inc.
+99.6 Form of Rights Agreement to be entered into by Softkey Software
Products Inc., Mattel, Inc. and , as Trustee.
</TABLE>
- --------
* Filed herewith.
+ To be filed by amendment.
Item 17. Undertakings.
(a) 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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this 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 this registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall 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 15(d) of the Securities
Exchange Act of 1934, that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act (and where
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<PAGE>
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement 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.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulations S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 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 Act and will be governed by the final
adjudication of such issue.
(e) That:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus 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.
II-6
<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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of El Segundo, State of California, on March 2,
1999.
MATTEL, INC.
/s/ Harry J. Pearce
By: _________________________________
Name: Harry J. 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, Lee B. Essner 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, as amended, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange 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/ Jill E. Barad Chairman of the Board, March 2, 1999
____________________________________ President and Chief
Jill E. Barad Executive Officer
/s/ Harry J. Pearce Chief Financial Officer March 2, 1999
____________________________________ (Principal Financial
Harry J. Pearce Officer)
/s/ Kevin M. Farr Senior Vice President and March 2, 1999
____________________________________ Corporate Controller
Kevin M. Farr (Principal Accounting
Officer)
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dr. Harold Brown Director March 2, 1999
____________________________________
Dr. Harold Brown
</TABLE>
<TABLE>
<S> <C> <C>
/s/ Tully M. Friedman Director March 2, 1999
____________________________________
Tully M. Friedman
/s/ Joseph C. Gandolfo Director and President, March 2, 1999
____________________________________ Worldwide Manufacturing
Joseph C. Gandolfo Operations
/s/ Ronald M. Loeb Director March 2, 1999
____________________________________
Ronald M. Loeb
/s/ Ned Mansour Director and President, March 2, 1999
____________________________________ Corporate Operations and
Ned Mansour General Counsel
/s/ Dr. Andrea L. Rich Director March 2, 1999
____________________________________
Dr. Andrea L. Rich
/s/ William D. Rollnick Director March 2, 1999
____________________________________
William D. Rollnick
/s/ Pleasant T. Rowland Vice-Chairman of the Board March 2, 1999
____________________________________ and President, Pleasant
Pleasant T. Rowland Company
/s/ Christopher A. Sinclair Director March 2, 1999
____________________________________
Christopher A. Sinclair
/s/ Bruce L. Stein Director, President, Mattel March 2, 1999
____________________________________ Worldwide and Chief
Bruce L. Stein Operating Officer
/s/ John L. Vogelstein Director March 2 , 1999
____________________________________
John L. Vogelstein
</TABLE>
S-2
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
3.1 Restated Certificate of Incorporation of Mattel, Inc. (incorporated
by reference to Exhibit 3.0 to Mattel, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1993).
3.2 Certificate of Amendment of Restated Certificate of Incorporation of
Mattel, Inc. (incorporated by reference to Exhibit B to Mattel,
Inc.'s Proxy Statement dated March 23, 1996).
3.3 Certificate of Amendment of Restated Certificate of Incorporation of
Mattel, Inc. (incorporated by reference to Exhibit B to Mattel,
Inc.'s Proxy Statement dated March 30, 1998).
3.4 Bylaws of Mattel, Inc., as amended to date (incorporated by
reference to Exhibit 4.3 to Mattel, Inc.'s Registration Statement on
Form S-3, Registration No. 333-36571).
+3.5 Form of Certificate of Designations, Preferences, Rights and
Limitations of Special Voting Preferred Stock of Mattel, Inc.
4.1 Rights Agreement, dated as of February 7, 1992, between Mattel, Inc.
and The First National Bank of Boston, as Rights Agent (incorporated
by reference to Exhibit 1 to Mattel, Inc.'s Registration Statement
on Form 8-A, dated February 12, 1992).
4.2 Specimen Stock Certificate with respect to Mattel, Inc. Common Stock
(incorporated by reference to Mattel, Inc.'s Current Report on Form
8-A, dated February 28, 1996).
4.3 Indenture dated as of October 16, 1995 between The Learning Company,
Inc. and State Street Bank and Trust Company, as Trustee for 5-1/2%
Senior Notes due 2000 (incorporated by reference to Exhibit 10.21
filed with The Learning Company, Inc.'s Quarterly Report on Form 10-
Q for the quarter ended September 30, 1995).
4.4 First Supplemental Indenture dated as of November 22, 1995 by and
between The Learning Company, Inc. and State Street Bank and Trust
Company, as Trustee for 5-1/2% Senior Notes due 2000 (incorporated
by reference to The Learning Company, Inc.'s Registration Statement
on Form S-3, Registration No. 333-00145).
+4.5 Form of Second Supplemental Indenture to be entered into by Mattel,
Inc. and State Street Bank and Trust Company, as Trustee.
(Mattel, Inc. has not filed some long-term debt instruments under
which the principal amount of securities authorized to be issued
does not exceed 10% of the total assets of Mattel, Inc. Copies of
such agreements will be provided to the Securities and Exchange
Commission upon request.)
+5.1 Form of Opinion of Lee B. Essner, Esq. as to the validity of the
securities being registered.
</TABLE>
<PAGE>
<TABLE>
<C> <S>
+8.1 Form of Opinion of Latham & Watkins as to tax matters.
+8.2 Form of Opinion of Osler, Hoskin & Harcourt as to tax matters.
*23.1 Consent of PricewaterhouseCoopers LLP.
*23.2 Consent of Deloitte and Touche LLP.
*23.3 Consent of PricewaterhouseCoopers LLP.
+23.4 Consent of Latham & Watkins (included in Exhibit 8.1 above).
+23.5 Consent of Osler, Hoskin & Harcourt (included in Exhibit 8.2 above).
24.1 Power of Attorney with respect to Mattel, Inc. (contained in signature
page hereto).
99.1 Plan of Arrangement of Softkey Software Products Inc. under Section
182 of the Business Corporations Act (Ontario) (incorporated by
reference to Exhibit 4.4 of The Learning Company, Inc.'s Registration
Statement on Form S-3, Registration No. 333-40549).
99.2 Voting and Exchange Trust Agreement, dated as of February 4, 1994
among The Learning Company, Inc., Softkey Software Products Inc. and
R-M Trust Company, as Trustee (incorporated by reference to Exhibit
4.3 to The Learning Company, Inc.'s Registration Statement on Form S-
3, Registration No. 333-40549).
99.3 Support Agreement, dated as of February 4, 1994 between The Learning
Company, Inc. and Softkey Software Products Inc. (incorporated by
reference to Exhibit 99.4 of Mattel, Inc.'s Form S-4, Registration No.
333-71587).
+99.4 Form of Voting and Exchange Trust Supplement to be entered into by
Mattel, Inc., The Learning Company, Inc., Softkey Software Products
Inc. and , as Trustee.
+99.5 Form of Support Agreement Amending Agreement to be entered into by
Mattel, Inc., The Learning Company, Inc. and Softkey Software Products
Inc.
+99.6 Form of Rights Agreement to be entered into by Softkey Software
Products Inc., Mattel, Inc. and , as Trustee.
</TABLE>
- --------
* Filed herewith.
+ To be filed by amendment.
<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 Mattel, Inc. of
our report dated February 2, 1998, which appears on page 55 of the 1997 Annual
Report to Shareholders, which is incorporated by reference in its Annual Report
on Form 10-K for the year ended December 31, 1997. We also consent to the
incorporation by reference of our report on the Financial Statement Schedule,
which appears in such Annual Report on Form 10-K. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PricewaterhouseCoopers LLP
/s/ PricewaterhouseCoopers LLP
Los Angeles, California
February 26, 1999
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Mattel, Inc. of our reports dated February 4, 1997
(except for note 15, as to which the date is March 27, 1997) relating to the
consolidated financial statements of Tyco Toys, Inc. and subsidiaries, not
presented separately herein, appearing in Mattel, Inc.'s Current Reports on
Form 8-K dated July 30, 1997 and April 17, 1997. We also consent to the
reference to our firm under the caption "Experts".
DELOITTE AND TOUCHE LLP
/s/ DELOITTE AND TOUCHE LLP
Philadelphia, Pennsylvania
February 25, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Mattel, Inc. on Form S-3 of our report dated October 10, 1998 which report is
included in Amendment No. 1 to Current Report on Form 8-K/A, on our audits of
the consolidated supplemental financial statements and financial statement
schedule of valuation and qualifying accounts of The Learning Company, Inc. as
of January 3, 1998 and January 4, 1997 and for each of the three fiscal years
in the period ended January 3, 1998. We also consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated
February 9, 1998 (except as to Note 12 which is as of March 6, 1998), on our
audits of the consolidated financial statements and financial statement
schedule of valuation and qualifying account of The Learning Company, Inc. as
of January 3, 1998 and January 4, 1997 and for each of the three fiscal years
in the period ended January 3, 1998, which report is included in the Company's
Annual Report on Form 10-K/A for the fiscal year ended January 3, 1998. We also
consent to the reference to our firm under the caption "Experts."
PRICEWATERHOUSECOOPERS LLP
/s/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
February 26, 1999
