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                                                                   EXHIBIT 10.42

                              AMENDMENT NO. 2 TO
            THE AMENDED AND RESTATED MATTEL 1996 STOCK OPTION PLAN

        The Amended and Restated Mattel 1996 Stock Option Plan (the "Plan") is
hereby amended as set forth below.

1.   Section 2 of the Plan is hereby amended, effective as of November 4, 1999,
     by adding new Paragraphs (b), (t), (v), and (w), reading in their entirety
     as follows:

        (b)   "Cause" shall mean (1) "Cause" as defined in any individual
        employment agreement between the Company or an affiliate and the
        Participant, or (2) if there is no such individual employment agreement
        or if it does not define Cause: (A) an act or acts of dishonesty on the
        Participant's part which are intended to result in the Participant's
        substantial personal enrichment at the expense of the Company; (B)
        repeated violations by the Participant of the Participant's obligations
        to the Company that are demonstrably willful and deliberate on the
        Participant's part and that resulted in material injury to the Company;
        (C) conduct of a criminal nature that has or that is more likely than
        not to have a material adverse effect on the Company's reputation or
        standing in the community, or on its continuing relationships with its
        customers or those who purchase or use its products; or (D) fraudulent
        conduct in connection with the business or affairs of the Company,
        regardless of whether said conduct is designed to defraud the Company or
        others.

        (t)   "Rights Agreement" shall mean the Rights Agreement, dated as of
        February 7, 1992, as amended by an amendment dated as of May 13, 1999
        and an amendment dated as of November 4, 1999 by and between the Company
        and BankBoston N.A., a national banking association, formerly, The First
        National Bank of Boston, and not giving effect to any amendments
        subsequent to November 4, 1999.

        (v)   "Softkey" shall mean Softkey Software Products Inc., an Ontario
        corporation.

        (y)   "Softkey Exchangeable Shares" shall mean the Exchangeable Shares
        (as such term is defined in the Rights Agreement) in the capital stock
        of Softkey.

2.   Section 2 of the Plan is hereby amended, effective as of November 4,
     1999, by renumbering the current Paragraphs (b) through (r) as (c)
     through (s), (s) as (u) and (t) through (w) as (x) through (aa).

3.   Section 9 of the Plan is hereby amended, effective as of November 4,
     1999, to read in its entirety as follows:

        (a)   Except to the extent the terms of an Option require its prior
        termination, each Option shall terminate on the earliest of the
        following dates:
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              (i)   The date which is ten (10) years from the date on which
        the Option is granted or five (5) years in the case of an Incentive
        Stock Option granted to a Ten Percent Stockholder; or

              (ii)  Except to the extent the terms of an Option permit its later
        termination, the date that is ninety (90) days from the date of the
        Severance of the Participant to whom the Option was granted; provided,
        however, that if the Participant's Severance is as a result of death
        or the Participant's becoming Disabled, then the date shall be
        extended to one (1) year from the date of the Severance of the
        Participant to whom the Option was granted; or

              (iii) The date of the Participant's Severance for Cause.

        (b)   Except to the extent the terms of an Option permit its later
        termination, notwithstanding the provisions of Paragraph (a) above, in
        the case of a Participant who incurs a Severance after the attainment of
        age fifty-five (55) and the completion of five (5) years of service (as
        determined for a Participant who is also an employee of the Company in
        accordance with the terms of the Mattel, Inc. Personal Investment Plan),
        the Participant's Non-Qualified Stock Options will continue to vest for
        five (5) years following Severance, and the Participant will be able to
        exercise his or her Non-Qualified Stock Options until the earlier of (i)
        five (5) years following Severance or (ii) the date on which the Options
        would otherwise expire.

        (c)   Additionally, except to the extent the terms of an Option permit
        its later termination, notwithstanding Paragraphs (a) and (b) of this
        Section 9 and Section 20, in the case of a Participant who incurs a
        Severance other than for Cause during the 18-month period following a
        Change in Control, any Option held by such Participant may thereafter be
        exercised by the Participant, to the extent it was exercisable at the
        time of termination, or on such accelerated basis as the Committee may
        determine, for (1) the longer of (a) two years from such date of
        Severance or (b) such other period as may be provided in the Plan for
        such Severance or as the Committee may provide in the option agreement,
        or (2) until expiration of the stated term of such Option, whichever
        period is shorter.

4.   Section 19 of the Plan is hereby amended, effective as of November 4,
     1999, to read in its entirety as follows:

        (a)   In the event of a Change in Control (as defined below), all
        Options and Stock Appreciation Rights then outstanding shall become
        fully exercisable as of the date of the Change in Control and all
        restrictions and conditions of all Grants of Restricted Stock then
        outstanding shall be deemed satisfied as of the date of the Change in
        Control.

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        (b)   "Change in Control" shall mean:

              (1)   The acquisition by any individual, entity or group (within
     the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
     of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial
     ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
     Act) of 20% or more of either (A) the then outstanding shares of common
     stock of the Company, including the shares of common stock of the Company
     issuable upon an exchange of Softkey Exchangeable Shares that are not owned
     by the Company or any corporation controlled by the Company (the
     "Outstanding Company Common Stock") or (B) the combined voting power of the
     then outstanding voting securities of the Company entitled to vote
     generally in the election of directors (the "Outstanding Company Voting
     Securities"); provided, however, that for purposes of this subsection (1),
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     the following shall not constitute a Change in Control: (A) any acquisition
     directly from the Company, (B) any acquisition by the Company or any
     corporation controlled by the Company, (C) any acquisition by any employee
     benefit plan (or related trust) sponsored or maintained by the Company or
     any corporation controlled by the Company, (D) any acquisition by a Person
     of 20% of either the Outstanding Company Common Stock or the Outstanding
     Company Voting Securities as a result of an acquisition of common stock of
     the Company by the Company or of Softkey Exchangeable Shares by Softkey
     which, by reducing the number of shares of common stock of the Company or
     Softkey Exchangeable Shares outstanding, increases the proportionate number
     of shares beneficially owned by such Person to 20% or more of either the
     Outstanding Company Common Stock or the Outstanding Company Voting
     Securities; provided, however, that if a Person shall become the beneficial
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     owner of 20% or more of either the Outstanding Company Common Stock or the
     Outstanding Company Voting Securities by reason of a share acquisitions by
     the Company or by Softkey as described above and shall, after such share
     acquisitions by the Company or Softkey, become the beneficial owner of any
     additional shares of common stock of the Company, then such acquisition
     shall constitute a Change in Control or (E) any acquisition pursuant to a
     transaction which complies with clauses (A), (B) and (C) of subsection (3)
     of this Section; provided, further, however, that for purposes of this
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     subsection (l), any Investing Person (as such term is defined in the Rights
     Agreement) shall be deemed not to be a beneficial owner of any Investment
     Shares (as such term is defined in the Rights Agreement) and the holder of
     the Mattel Special Voting Preferred Share (as such term is defined in the
     Rights Agreement) shall be deemed not to be a beneficial owner of such
     Mattel Special Voting Preferred Share; or

              (2)   Individuals who, as of the date hereof, constitute the
     Board (the "Incumbent Board") cease for any reason to constitute at least a
     majority of the Board; provided, however, that any individual becoming a
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     director subsequent to the date hereof whose election, or nomination for
     election by the Company's shareholders, was approved by a vote of at least
     a majority of the directors then comprising the Incumbent Board shall be
     considered as though such individual

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     were a member of the Incumbent Board, but excluding, for this purpose, any
     such individual whose initial assumption of office occurs as a result of an
     actual or threatened election contest with respect to the election or
     removal of directors or other actual or threatened solicitation of proxies
     or consents by or on behalf of a Person other than the Board; or

              (3)   Consummation by the Company of a reorganization, merger or
     consolidation or sale or other disposition of all or substantially all of
     the assets of the Company or the acquisition of assets of another entity (a
     "Business Combination"), in each case, unless, following such Business
     Combination, (A) all or substantially all of the individuals and entities
     who were the beneficial owners, respectively, of the Outstanding Company
     Common Stock and Outstanding Company Voting Securities immediately prior to
     such Business Combination beneficially own, directly or indirectly, more
     than 50% of, respectively, the then outstanding shares of common stock and
     the combined voting power of the then outstanding voting securities
     entitled to vote generally in the election of directors, as the case may
     be, of the corporation resulting from such Business Combination (including,
     without limitation, a corporation which as a result of such transaction
     owns the Company or all or substantially all of the Company's assets either
     directly or through one or more subsidiaries) in substantially the same
     proportions as their ownership immediately prior to such Business
     Combination of the Outstanding Company Common Stock and Outstanding Company
     Voting Securities, as the case may be, (B) no Person (excluding any
     employee benefit plan (or related trust) of the Company or such corporation
     resulting from such Business Combination) beneficially owns, directly or
     indirectly, 20% or more of, respectively, the then outstanding share of
     common stock of the corporation resulting from such Business Combination or
     the combined voting power of the then outstanding voting securities of such
     corporation except to the extent that such ownership existed prior to the
     Business Combination and (C) at least a majority of the members of the
     board of directors of the corporation resulting from such Business
     Combination were members of the Incumbent Board at the time of the
     execution of the initial agreement, or of the action of the Board,
     providing for such Business Combination; or

              (4)   Approval by the shareholders of the Company of a complete
     liquidation or dissolution of the Company.

5.   The foregoing amendments to the Plan shall apply (i) with respect to awards
granted under the Plan on or after November 4, 1999, as of the date of grant,
and (ii) with respect to awards previously granted under the Plan, effective as
of February 10, 2000.


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          IN WITNESS WHEREOF, the Company has caused this Amendment to the Plan
to be executed, effective as set forth above.

                              MATTEL, INC.

                              By:  /s/ Alan Kaye
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                              Name:   Alan Kaye
                              Title:  Senior Vice President Human Resources

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