Document:

<PAGE>

                                                                   EXHIBIT 10.34

July 20, 2000

Mr. Kevin Farr
Chief Financial Officer
Mattel, Inc.
333 Continental Boulevard
El Segundo, California  90245-5012

Re:  Amendment to Your Employment Agreement and Stock Option Grant Agreements
     ------------------------------------------------------------------------

Dear Kevin:

          Pursuant to action taken by Mattel's Board of Directors and
Compensation Committee on March 30, 2000 to amend Mattel's 1990 and 1996 Stock
Option Plans (the "Plans") and to amend the Grant Agreements for Non-Qualified
Stock Options ("Grant Agreements") with respect to all of the stock options
which you hold under the Plans and which are outstanding as of March 30, 2000
(the "Outstanding Options"), this letter agreement constitutes an amendment to
each of your Grant Agreements and your Employment Agreement with Mattel.

          Notwithstanding any provision of your Grant Agreements or of your
Employment Agreement to the contrary, in the event that your employment with
Mattel is terminated (i) by Mattel without Cause (as defined in your Employment
Agreement), (ii) by you for Good Reason (as defined in your Employment
Agreement), (iii) by you for any reason during the 30-day period immediately
following the six (6) month anniversary of a Change of Control (as defined in
your Employment Agreement) or (iv) by reason of your death or Disability (as
defined in your Employment Agreement), all of the Outstanding Options shall
become immediately exercisable and you shall have until the date which is ten
(10) years from the date each Outstanding Option was granted to exercise such
Outstanding Option.

          I would appreciate it if you would sign, date and return a copy of
this letter agreement to me.  As such, it will constitute a written amendment to
your Grant Agreements and your Employment Agreement.

                              Sincerely yours,

                              MATTEL, INC.

                              By /s/ Alan Kaye
                                 -------------------------------------
                                 Alan Kaye, Senior Vice President
                                 Human Resources & Administration

Agreed to and accepted by:

/s/ Kevin M. Farr
________________________      Dated:  July 21, 2000
Kevin Farr                            -------<PAGE>

                                                                   EXHIBIT 10.35

                                 LOAN AGREEMENT

          THIS LOAN AGREEMENT (the "Agreement") is entered into as of February
3, 2000, by and between Mattel, Inc., a Delaware corporation ("Lender") and
Kevin M. Farr ("Borrower").  Borrower and Lender are sometimes referred to in
this Agreement as a "Party" or, collectively, as the "Parties."

                                    RECITALS
                                    --------

          WHEREAS, Borrower desires to obtain from Lender a loan in the
principal amount of Five Hundred Thousand Dollars ($500,000.00) (the "Loan");
and

          WHEREAS, as an additional incentive to retain Borrower in the employ
of Lender for a period of at least three years from the date hereof, Lender
desires to grant Borrower the Loan.

          NOW, THEREFORE, in consideration of the terms and conditions herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   AGREEMENT
                                   ---------

          1.  Loan Terms.
              ----------

             (a) Principal Amount.  Lender shall pay to the order of Borrower,
                 ----------------
on February 3, 2000, the principal sum of Five Hundred Thousand Dollars
($500,000.00) (the "Principal").

             (b) Interest.  Interest shall accrue on the outstanding Principal
                 --------
amount at the rate of seven percent (7%) per annum, compounded annually.

             (c) Promissory Note.  Borrower's obligation to repay the Loan shall
                 ---------------
be evidenced by a promissory note substantially in the form attached as Exhibit
                                                                        -------
A hereto (the "Note"). Borrower shall execute and deliver to Lender the Note
-
concurrently with execution and delivery of this Agreement.

             (d) Repayment.  Borrower shall pay to the order of Lender the
                 ---------
Principal and accrued interest under the Note on February 4, 2003, provided,
however, that all Principal and accrued but unpaid interest shall become
immediately due and payable thirty (30) days after the date of Borrower's
termination of employment with Lender for any reason prior to February 4, 2003,
unless Borrower commences arbitration with respect to the grounds for such
termination of employment within such thirty (30) day period, in which case all
Principal and accrued but unpaid interest shall be due and payable five (5) days
after notice to Borrower of the entry of a final judgement in such arbitration.
Interest shall continue to accrue during any such arbitration. The Loan shall be
subject to forgiveness as provided below.  The Loan shall be unsecured but with
full recourse against Borrower.
<PAGE>

          (e) Forgiveness.  The Loan, and Borrower's obligation to repay all
              -----------
outstanding Principal and accrued interest thereunder, shall be forgiven and
cancelled by Lender and the Note shall be cancelled on February 3, 2003 if
Borrower is employed by Lender on February 3, 2003, or earlier upon the date of
the termination of Borrower's employment with Lender prior to February 3, 2003
if such termination is by Lender without Cause (as defined below), by Borrower
for Good Reason (as defined below) or by reason of Borrower's death or
Disability (as defined below).  In addition, if the Loan is forgiven pursuant to
the preceding sentence and if Borrower is employed by Lender on February 3, 2003
and continues to be employed by Lender, on April 1, 2004, or such earlier date
as Borrower shall be required to pay federal, state or local income taxes with
respect to the forgiveness of the Loan, Lender shall pay Borrower an additional
payment (the "Gross-Up Payment") in an amount required to fully reimburse
Borrower with respect to 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 that upon receipt of the Gross-Up Payment Borrower shall have
no remaining obligations with respect to such taxes.   In addition, the Loan
shall be forgiven by Lender on the date of a Change of Control (as defined
below) of Lender if Borrower is employed by Lender on such date and Lender shall
pay Borrower the Gross-Up Payment with respect to the forgiveness of the Loan on
April 1, of the year following the year of the Change of Control, or such
earlier date as Borrower shall be required to pay federal, state or local income
taxes with respect to the forgiveness of the Loan.

          (f) Definitions.  For purposes of this Agreement, the following terms
              -----------
shall have the meanings indicated below:

          "Cause" shall mean a reasonable determination of the Chief Executive
Officer of Lender that at least one of the following has occurred: (i) one or
more factually substantiated willful acts of dishonesty on Borrower's part which
are intended to result in Borrower's substantial personal enrichment at the
expense of Lender; (ii) repeated violations by Borrower of Borrower's employment
obligations to Lender which are demonstrably willful and deliberate on
Borrower's part and which resulted in material injury to Lender; (iii) conduct
of a factually substantiated criminal nature (commonly defined as a "felony" in
criminal statutes) which has or which is more likely than not to have a material
adverse effect on Lender's reputation or standing in the community or on its
continuing relationships with its customers or those who purchase or use its
products; or (iv) factually substantiated fraudulent conduct in connection with
the business or affairs of Lender, regardless of whether said conduct is
designed to defraud Lender or others; provided that, in each case, Borrower has
received written notice of the described activity, has been afforded a
reasonable opportunity to cure or correct the activity described in the notice,
and has failed to substantially cure, correct or cease the activity, as
appropriate.

          "Change of Control" means:

          (i)  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 (i) the then outstanding shares of common stock of Lender, including the
shares of common stock of Lender issuable upon an exchange of Softkey
Exchangeable Shares that are not owned by Lender or any corporation

                                       2
<PAGE>

controlled by Lender (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities of Lender
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (i), the following shall not constitute a Change of Control: (a) any
acquisition directly from Lender, (b) any acquisition by Lender or any
corporation controlled by Lender, (c) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Lender or any corporation
controlled by Lender, (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 Lender by Lender or of Softkey
Exchangeable Shares by Softkey which, by reducing the number of shares of common
stock of Lender 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
owner of 20% or more of either the Outstanding Company Common Stock or the
Outstanding Company Voting Securities by reason of a share acquisition by Lender
or by Softkey as described above and shall, after such share acquisition by
Lender or Softkey, become the beneficial owner of any additional shares of
common stock of Lender, then such acquisition shall constitute a Change of
Control or (e) any acquisition pursuant to a transaction which complies with
clauses (a), (b) and (c) of subsection (iii) of this Section 4(d); provided,
further, however, that for purposes of this subsection (i), 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

          (ii)  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 director
subsequent to the date hereof whose election, or nomination for election by
Lender's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as through
such individual 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

          (iii)  consummation by Lender of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of Lender 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 Lender or all or substantially all of Lender's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their

                                       3
<PAGE>

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
Lender 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

               (iv) approval by the shareholders of Lender of a complete
liquidation or dissolution of Lender.

               "Disability" shall mean that Borrower suffers a disability due to
illness or injury which substantially and materially limits Borrower from
performing each of the essential functions of Borrower's job, even with
reasonable accommodation and becomes entitled to receive disability benefits
under Lender's Long-Term Disability Plan for exempt employees.

               "Good Reason" shall mean the good faith determination by Borrower
that any one or more of the following have occurred:

               (i)    without the express written consent of Borrower, any
change(s) in any of the duties, authority, or responsibilities of Borrower which
is (are) inconsistent in any substantial respect with Borrower's position,
authority, duties, or responsibilities as of the date of this Agreement;

               (ii)   any failure by Lender to pay Borrower Borrower's salary or
earned bonuses, other than an insubstantial and inadvertent failure remedied by
Lender promptly after receipt of notice thereof given by Borrower;

               (iii)  any proposed termination by Lender of Borrower's
employment other than as permitted by the employment agreement entered into by
the Parties;

               (iv)   any failure by Lender to obtain the assumption and
agreement to perform the employment agreement entered into by the Parties by a
successor as contemplated by such employment agreement; or

               (v)    transferring Borrower outside of the greater Los Angeles,
California area without Borrower's express written consent.

               "Rights Agreement" means 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 Lender and BankBoston
N.A., a national banking association,

                                       4
<PAGE>

formerly, The First National Bank of Boston, and not giving effect to any
amendments subsequent to November 4, 1999.

              "Softkey" means Softkey Software Products Inc., an Ontario
corporation.

              "Softkey Exchangeable Shares" means the Exchangeable Shares (as
defined in the Rights Agreement) in the capital stock of Softkey.

          2.  Transfer of Notes.   Borrower shall not assign or transfer any of
              -----------------
Borrower's benefits or obligations arising under the Notes.   Lender reserves
the right to assign or transfer all or any part of, or any interest in, Lender's
rights and benefits under this Agreement or the Note to any successor to all or
part of its business or assets so long as any assignee or transferee expressly
agrees to assume and perform this Agreement in the same manner and to the same
extent as Lender would be required to perform if no such assignment or transfer
had taken place.

          3.  Amendment; Waiver.  This Agreement and the Note contain the entire
              -----------------
agreement between the Parties with respect to the subject matter hereof and may
be amended, modified or changed only by a written instrument executed by the
Parties.  No provision of this Agreement or the Note may be waived except by a
writing executed and delivered by the Party sought to be charged.  Any such
written waiver will be effective only with respect to the event or circumstance
described therein and not with respect to any other event or circumstance,
unless such waiver expressly provides to the contrary.

          4.  Choice of Law.  This Agreement shall be construed in accordance
              -------------
with and governed by the internal laws of the State of California, without
reference to principles of conflict of laws.

          5.  Headings.  The paragraph headings contained in this Agreement are
              --------
for reference purposes only and shall not affect in any way the meaning or
interpretation of the provisions hereof.

          6.  Notices.  All notices and other communications hereunder shall be
              -------
in writing; shall be delivered by hand delivery to the other party or mailed by
registered or certified mail, return receipt requested, postage prepaid; shall
be deemed delivered upon actual receipt; and shall be addressed as follows:

          If to Lender:
          ------------
                                MATTEL, INC.
                                333 Continental Blvd.
                                El Segundo, CA 90245

          If to Borrower:
          --------------
                                Mr. Kevin M. Farr
                                MATTEL, INC.
                                333 Continental Blvd.
                                El Segundo, CA 90245

                                       5
<PAGE>

or to such other address as either party shall have furnished to the other in
writing in accordance herewith.

          7.  Counterparts.  This Agreement may be executed in one or more
              ------------
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

          8.  Severability.  If any provision in or obligation under this
              ------------
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

          9.  No Third-Party Beneficiary Rights.  The Parties do not intend to
              ---------------------------------
confer and this Agreement shall not be construed to confer any rights or
benefits to  any person, firm, group, corporation or entity other than the
Parties.

                            [Signature Page Follows]

                                       6
<PAGE>

          IN WITNESS WHEREOF, this Agreement has been duly executed by the
Parties on the date first written above.

                                 LENDER

                                 By: /s/ Alan Kaye
                                     -----------------------------------
                                 Its:___________________________________

                                 BORROWER

                                 /s/ Kevin M. Farr
                                 _______________________________________
                                 Kevin M. Farr

                                      S-1
<PAGE>

                                   EXHIBIT A
                                   ---------

                                Promissory Note

$500,000.00                                        Date:  February 3, 2000

          Mattel, Inc. (herein referred to as "Holder") has agreed to advance to
Kevin M. Farr (herein referred to as "Maker") on February 3, 2000,  $500,000.00,
and for said value received Maker promises to repay to the order of Holder, the
principal sum of $500,000.00 on or before February 4, 2003.  Maker shall owe to
Holder interest on the principal sum in an amount equal to 7% per annum,
commencing on February 3, 2000, compounded annually, payable with principal on
February 4, 2003.

          If Maker fails to make any payment set forth above when due, Holder
may elect to declare the entire unpaid principal amount, including all unpaid
interest, immediately due and payable with or without notice.

          In the event of the termination of Maker's employment with Holder for
any reason, all outstanding principal and accrued interest hereunder is
immediately due and payable, with or without notice, thirty (30) days after the
date of such termination  unless Maker commences arbitration as provided in that
certain Loan Agreement (the "Loan Agreement"), dated as of February 3, 2000,
between Holder and Maker, unless this note and the loan it evidences shall have
been cancelled and forgiven pursuant to the terms of the Loan Agreement.

          In the event of commencement of legal action to enforce payment of
this note, the non-prevailing party agrees to pay the prevailing party's
reasonable attorney's fees and court costs in connection therewith.

                                    By: /s/ Kevin M. Farr      2/10/2000
                                       ______________________________________
                                       Kevin M. Farr             Date

Witnessed by:

/s/ Alan Kaye            2/10/2000
_________________________________________
                           Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00022-of-00352.parquet"}]]