EXHIBIT 10.25

 

[Letterhead of Mattel, Inc.]

 

August 22, 2000

 

Mr. Bryan Stockton

 

Dear Bryan:

 

We are pleased to confirm our offer of employment for the position of Executive
Vice President Business Planning & Development, and to outline the various
benefits that are available to you as a member of Mattel’s executive team. This
offer is contingent upon a start date no later than November 1, 2000.

 

COMPENSATION

 

Salary

 

Your annual base salary will be $500,000 payable on a biweekly basis. You will
be eligible for merit increase consideration 18 months from your date of hire.

 

Signing Bonus

 

You will receive a signing bonus in the amount of $500,000, less applicable
federal and state taxes, to be paid no later than 30 days following your date of
hire. If you choose to voluntarily terminate your employment within (2) two
years from your date of hire, you will be required to repay this amount based on
an annualized proration.

 

Management Incentive Plan

 

You will be eligible to participate in the 2000 Management Incentive Plan. Under
this plan, you will have the opportunity to earn an annual bonus of up to 75% of
your earned salary, with a target of 50%. Awards are paid during the first
quarter of the following year and are based on both the performance of the
Company and your own individual performance. Since you are joining the Company
after January 1, 2000, your incentive will be prorated, based on your earned
salary for the year.

 

Long-Term Incentive Plan

 

You will be recommended to the Board of Directors’ Compensation/Options
Committee for participation in the Long-Term Incentive Plan with a target of
$750,000 and a maximum of $1,500,000. This plan is designed to reward Company
performance against specific financial objectives.

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Mr. Bryan Stockton

Page 2

 

Stock Options

 

You will be eligible for an initial stock option grant in the amount of 100,000
shares, subject to approval by the Board of Directors’ Compensation/Options
Committee. The exercise price will be established as the closing market value of
Mattel’s common stock as of your date of hire.

 

In addition, you will be eligible to participate in the Accelerated Option
Program and will be issued a front-loaded two-year grant of 125,000 shares,
subject to approval by the Board of Directors’ Compensation/Options Committee.
The exercise price will be the closing price on the first trading day that the
stock price exceeds a 15% premium from the closing stock price as of your date
of hire. The options vest semi-annually over three years and include accelerated
stock performance vesting provisions. Your next stock option grant would be in
the first quarter 2003.

 

Supplemental Executive Retirement Plan

 

You will be eligible for a special retirement plan which provides for a maximum
benefit of 35% of the average of your final three years’ compensation (including
both base salary and management incentive bonus), payable at age 60 with at
least twenty years of service. Reduced benefits are available as early as age 55
with a minimum of five years of service. The benefit is paid over your lifetime
with alternative payment elections available.

 

Car Allowance

 

You will be eligible for a Company car with a value of up to $40,000. You may
select a vehicle of greater value; however, you must defray the amount in excess
of the limit. The Company will also provide a gasoline credit card and will
cover maintenance and insurance costs on the vehicle. As an alternative, you may
receive a monthly auto allowance in the amount of $1,150, along with a gasoline
credit card. At year-end, the value of this benefit will be reported on your
W-2, as required by IRS regulations.

 

Financial Counseling

 

You will be eligible to participate in the Company’s financial counseling
program, currently administered by The AYCO Company.

 

Deferred Compensation

 

As an executive, you are eligible to participate in the Company’s Deferred
Compensation Plan. Under this plan, you may elect to defer a portion of your
salary or bonus, with various investment and payment options available.

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Mr. Bryan Stockton

Page 3

 

BENEFITS

 

You, and your eligible dependents, if applicable, will be eligible for the
following coverages:

 

•   Medical

  

•   Life Insurance – 2 x base salary

•   Dental

  

•   Accidental Death & Dismemberment – 2 x base salary

•   Vision

  

•   Business Travel Coverage — $1,000,000

•   Prescription

  

•   Short & Long-Term Disability

 

You will be enrolled in the Mattel Personal Investment Plan (PIP), which is a
401(k) retirement/savings plan. The plan offers both Company Automatic and
Matching contribution provisions as outlined below:

 

  •   Company Automatic Contributions

 

The Company will make automatic contributions to your account ranging from 3% to
8% of your salary, based on age.

 

  •   Company Matching Provision

 

The Company will match up to the first 6% of pay you contribute to your PIP
account on a dollar-for-dollar basis up to 2% of your annual salary and on a
fifty-cents-on-the-dollar basis for up to the next 4% of your salary.

 

As an executive, you are eligible for an annual, comprehensive physical
examination at the Company’s expense.

 

RELOCATION

 

The Company will assist you with your relocation including providing the
services of a corporate-based relocation specialist, Janice Solis. Janice will
be available to assist you with the sale of your home as well as travel
arrangements, temporary accommodations, movement of household goods, expense
reimbursements, etc. Please contact her at (310) 252-3135, as needed.

 

Traveling to New Location

 

The Company will provide round-trip coach airfare for you and your spouse for
house hunting in your new location. Subsequently, coach airfare for you, (your
spouse and eligible dependents) will be provided when you move to your new
location. Reasonable airfare to the new location will be reimbursed for you up
to a period of one year or until your family permanently relocates – whichever
is earlier.

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Mr. Bryan Stockton

Page 4

 

Movement of Household Goods

 

The Company will pay for packing and shipping a maximum of 18,000 pounds of
household goods and personal belongings to your new location. In addition, the
Company will provide for the shipment of two (2) automobiles.

 

Storage

 

In the event permanent housing is not available, the Company will pay for
temporary storage of household goods at the point of destination for a maximum
of 60 days. One pick-up and one delivery of goods will be authorized.

 

Temporary Living

 

In the event permanent housing is not ready upon your arrival in your new
location, the Company will provide temporary housing for you and your family for
up to 60 days. In order to cover the incremental expenses associated with this
type of arrangement, the Company will pay a weekly subsidy of up to $250, based
on the number of persons living in the temporary arrangement at any given time,
for a maximum of eight weeks. If necessary, the Company will provide you with a
rental car for a maximum of 60 days.

 

Sale of Present Home

 

The Company will reimburse you for the real estate commission and certain other
closing costs involved in the sale of your current home, if you sell it within
one year from your date of hire. The Company also offers marketing assistance
designed to help you and your real estate agent market your home within a
reasonable timeframe.

 

If you obtain an offer that results in the sale of your present home, an
incentive in the amount of 3% of the final sales price up to a maximum of
$20,000, less applicable taxes will be paid to you. If you are unable to sell
your home, the Company will guarantee the sale via a home buying service. This
guaranteed offer would be based on two independent appraisals.

 

Purchase of Home at New Location

 

The Company will reimburse you for certain closing costs involved in the
purchase of a home at the new location, if purchased within one year from your
date of hire.

 

Miscellaneous Expense Allowance

 

In order to cover incidentals and miscellaneous expenses associated with your
relocation and move, the company will provide a miscellaneous expense allowance
in the amount of one months gross salary, up to a maximum of $15,000, less
federal and state taxes, at the time you move into your permanent housing.

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Mr. Bryan Stockton

Page 5

 

Taxation of Relocation Benefits

 

Internal Revenue Service regulations require that all reimbursed expenses for
relocation be “reported as income and that appropriate taxes be withheld at the
time payment is made.” You will be able to declare a deduction for some of these
reimbursed expenses when you file your annual income tax return. A record of all
relocation expenses will be provided to you at the end of the tax year.

 

In order to assist you in alleviating your tax burden, the company will pay
federal, state and Medicare withholding taxes based on your annual salary for
relocation expenses which are nondeductible, based on IRS interpretations.
Payroll will allocate this withholding to the applicable tax office and will
report it to you as extra income and as tax withheld.

 

If you voluntarily terminate your employment within one year from your
relocation date, you will be required to reimburse the Company for any
relocation expenses incurred by the Company on your behalf.

 

SEVERANCE ARRANGEMENT

 

In the event your employment is involuntarily terminated from Mattel for reasons
other than for cause, you will be provided with a severance package equal to two
years of base salary plus twice the average of your last two years’ MIP bonus.
If you have not completed two years, the severance would be twice the first
years’ MIP. Receipt of the severance package is contingent upon your signing a
general release at the time of your termination.

 

Of course, this offer is contingent upon satisfactory verification of all
information as to previous employers and academic institutions attended as well
as the signing of a Confidential Information and Inventions Agreement.

 

Specific compensation and benefits details and plan limitations are provided in
Summary Plan Descriptions or Plan Documents and are subject to periodic
modification and revision.

 

You understand that this letter does not imply employment for a specific term
and thus your employment is at will; either you or the Company can terminate it
at any time, with or without cause. This letter acknowledges there are no oral
or written side agreements or representations concerning the term or conditions
of employment. Additional details of your employment relationship are contained
in our Employment Application.

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Mr. Bryan Stockton

Page 6

 

Bryan, we are sincerely pleased to extend this offer of employment to you and
look forward to hearing from you as soon as possible. If I can answer any
questions, please don’t hesitate to call me.

 

Sincerely,

 

/s/    ALAN KAYE

Alan Kaye

Senior Vice President

Human Resources & Administration

 

Agreed and Accepted:

   

/s/    BRYAN G. STOCKTON

  8/20/2000

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Bryan G. Stockton

 

Date