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Non-Tech : MAT - Mattel - toysRthem -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (555)	5/12/2000 3:54:00 PM
From: Mike 2.0	Read Replies (1) \| Respond to of 706

"I am particularly disturbed that the board decided to forgive a $3 million loan granted for the purchase of a home and to provide payments on a $5 million life insurance policy," McCall wrote. He added that he was "outraged" by an agreement for the company to continue to pay for outplacement services, memberships and financial counseling services. Jill isn't the only one to have had a very sweet termination package lined up. Check out the employment and severance agreements beginning on page 21 of the proxy statement for Adrienne Fontanella, Matthew Bousquette and Neil Friedman. According to the proxy, in addition to specific severance, bonus and retirement plan ("SERP") benefits under their severance agreements, they each also have $3.0m in loans which would be forgiven under different circumstances. Now help me out with this text from the proxy statement (below). Question: Is the only way these executives will have to pay back these loans if (1) they quit during the loan term without "good cause" (such as having to relocate--read the proxy) or (2) they are terminated during the loan term by Mattel "with cause" (not sure how they define "cause"-an indefensible act of misconduct?) Notice also if they are still on board as of the end of the term of the loan the loan is forgiven and Mattel will reimburse taxes if still employed come April 2, 2003. Am I reading this correctly? And, since possibilities (1) and (2) seem remote, why should these loans not be expensed now? I got out of Mattel at 11 13/16 and am lucky to have recovered some of the loss on the reinvested proceeds. Sincere wishes for good luck, but I would not be surprised to see this is not the end of the mess for Mattel. Excerpt from Proxy follows: (page 23) In addition, Ms. Fontanella, Mr. Bousquette and Mr. Friedman each received a loan from Mattel on October 29, 1999, in the principal amount of $1.0 million and a second loan from Mattel on April 7, 2000 in the principal amount of $2.0 million, which are all due and payable on or before October 29, 2002, with interest to accrue annually at 7% per annum. With respect to each executive, if his or her employment with Mattel is terminated for cause prior to October 30, 2002, then the loans to such executive will become due and payable, including interest accrued, 30 days after such termination date. If an executive is employed by Mattel on October 29, 2002, or if an executive's employment with Mattel is terminated without cause by Mattel, for good reason by the executive, or in connection with a change of control, the principal amount of the loans to such executive and all accrued unpaid interest will be forgiven. In addition, if a loan is forgiven and the executive continues to be employed by Mattel on April 1, 2003, or a change of control occurs, the executive will be given an additional payment to fully reimburse the executive for all Federal, state and local income taxes and employment taxes with respect to the forgiveness of the loan and with respect to such taxes. Such payment will also be made earlier if such executive shall be required to pay taxes on such loan forgiveness before April 1, 2003, if the executive is still employed by Mattel at such time.